Mish's Global Economic Trend Analysis

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Senior Eurozone Official: "As Spain Goes, So Goes Slovenia" Posted: 06 May 2013 12:37 PM PDT The spotlight is once again on Slovenia. Olli Rehn, the European commission's economic chief is unhappy with economic progress in Slovenia and is threatening to put the country into an "excessive imbalances procedure" by the end of the month. The problem is, Spain is in a similar "excessive imbalance" state prompting an unnamed eurozone official to state "As Spain Goes, So Goes Slovenia". Please consider Brussels trains its sights on Slovenia. The European Commission is being pushed to take a tougher line with Slovenia amid mounting concerns that infighting is hampering the country's ability to overhaul its banking sector and avoid becoming the next rescue target in the eurozone crisis. According to two senior eurozone officials, concerns have focused on "non-cooperation" between Slovenia's finance ministry and central bank, which is responsible for supervising the financial sector. One of the officials said the central bank was being "obstructionist" towards the new government's clean-up efforts. The central bank's role could prove particularly problematic because the three largest Slovenian banks – most in need of a rescue – are state owned, raising questions about the supervisor's ability to evaluate their needs impartially. "T Concerns about Spain, however, are hampering the commission's decision. Madrid was formally warned about its economic imbalances last month and some believe it may not be possible to impose new controls on Slovenia without doing the same for Spain – a move that commission officials worry might spark wider market unease. "As Spain goes, so goes Slovenia," a senior eurozone official said. The country has a governance problem of major proportions," the official added. Backwards Statement The senior official has things backwards. Here is the correct statement "As Slovenia Goes, So Goes Spain". And Slovenia is going the same way Cyprus, Ireland, Greece, and Portugal went. There is no hope for Slovenia or Spain, at least inside the eurozone. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Nigel Farage Jubilant After UKIP Soars in Local Elections; Cameron's Impossible Carrot Posted: 06 May 2013 10:45 AM PDT Nigel Farage, Founder of the UK Independence Party, claims a "sea of change in British politics" as UKIP Makes Big Gains in local elections. The UK Independence Party has made huge electoral gains and declared itself the "official opposition" - largely at the expense of the Tories - as Prime Minister David Cameron vowed to win back Conservative voters who had defected. With UKIP averaging 26% of the vote in county council polls, leader Nigel Farage said he was "astonished" by the party's breakthrough, and put it down to what he described as the "total disconnect" between the "career politics" of Westminster and ordinary people on the streets. Speaking in his Oxfordshire constituency, Mr Cameron said he would "work really hard" to win back voters who switched support. Asked if he stood by his "fruitcakes" attack on UKIP, Mr Cameron said: "Well, look, it is no good insulting a political party that people have chosen to vote for. Of course they should be subject and they will be subject to proper scrutiny of their policies and their plans. Cameron's Impossible Carrot UKIP wants one thing right now and that is a yes-no vote on whether the UK should stay in the EU. So, it's very simple. All Cameron has to do is hold a referendum. Instead he has promised a referendum only if he wins the next election for prime minister, and then only if he negotiates certain changes in the treaty that Europe is not going to go along with. Thus, Cameron has attempted to satisfy UKIP with the pledge of a carrot that cannot possibly be won. Earth to Cameron Those voting for UKIP left the appropriate message that Cameron's blatant lie is unacceptable. His promise to "work really hard" to win back voters has me wondering what planet he is on. If Cameron is still in this solar system and still on planet earth, then he can prove it by putting the matter to a vote. And I am pretty sure how that vote would go: The UK will rightfully kiss the EU goodbye, shedding the shackles of the nannycrats in Brussels at long last. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

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