Mish's Global Economic Trend Analysis |
Posted: 01 Dec 2012 05:49 PM PST Dismal economic conditions in the eurozone accelerate to the downside as evidenced by falling retail sales. Let's take a look at the Eurozone in aggregate, as well as the three largest countries. Eurozone Retail Sales Drop Sharply The Markit Eurozone Retail PMI® shows Eurozone retail sales continue to fall sharply towards end of 2012. Key pointsItaly Retail Sales Sharpest Drop in 17 Months The Markit Italy Retail PMI® shows sharpest drop in retail sales for seven months. Key pointsGermany Retail Sales Stagnate as Margins Squeezed The Markit Germany Retail PMI® shows German retail sales continue to stagnate in November. Key points French retailers report slower fall in sales during November The Markit France Retail PMI® shows French retailers report slower fall in sales during November. Key pointsEuropean House of Cards This entire European house of cards comes crashing down the moment either Germany or France takes a sharp turn to the downside. I believe both are a given. As noted on November 29, French Unemployment Highest in 14 Years (And It's Going to Get Much Worse). Germany will follow (in a major way) the rest of Europe soon enough. It is simply impossible for the German export machine to keep humming with a massive slowdown in Asia, and an outright disaster happening in Greece, Italy, Portugal, and Spain. Warning bells are flashing loudly, but few hear the call. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
Stalemate: Obama Warns of Prolonged Talks as Republicans Rebuff Plan Posted: 01 Dec 2012 07:56 AM PST The word of the day is "stalemate". Last year the Republicans had a chance to accept spending cuts to tax hikes at a 10-1 ratio. They declined. Now president Obama does not want to bargain. Who can blame Obama (except Republicans)? We may disagree, but that is part of the platform that got him elected. The Republicans do not want to bargain either. And who can blame them (except Democrats)? Regardless, Republicans blew a golden opportunity last year and that chance is gone. Obama has the upper hand now, and nothing will change that setup. I certainly am opposed to tax hikes without something substantial in return. Yet, if Obama holds his ground, the only way to have some cuts across the board right now is for the fiscal cliff to happen. Could it be that the best political outcome may actually be the dreaded "fiscal cliff"? The fiscal cliff will hit military spending but why shouldn't it? The US could easily defend itself on half its current budget actually. While pondering those questions and thoughts, please consider Obama Warns of Prolonged Talks as Republicans Rebuff Plan. President Barack Obama and House Speaker John Boehner stood their ground with opposing plans to avert the fiscal cliff and warned there was no quick path to a solution.Stalemate Solution The stalemate "solution" comes with its own set of problems. Contrary to popular belief, the risk is not that too much is done, but rather that both sides unwind nearly the entire "fiscal cliff", achieving no budget reductions at all. Speaking of which, it's high time we "stop kidding ourselves" about what is happening. There are no budget cutbacks at all under discussion. Rather the discussion centers around reductions in assumed increases, and politicians are having a tough time even with that. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
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