The always entertaining Nigel Farage says there is a "Gathering Electoral Storm" in his blast of European Parliament for Hopeless Positions on Youth Job Programs and Global Warming Programs.
New orders plunged 5.2 percentage points to 50.8%, barely above contraction. The Business Activity Index registered 51.7 percent, 4.8 percentage points lower than the 56.5 percent reported in May. Yet, the employment index surged to 54.7% from 50.1%.
I expect this divergence to resolve to the downside.
Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com
Egyptian President Mohammed Morsi is reportedly under house arrest after the military ultimatum expired Wednesday, reports Al Hayat TV.
Morsi's spokesman denied the report, although word of the house arrest provoked cheers in Tahrir Square.
This comes as Egypt's military moved to tighten its control on key institutions before their afternoon ultimatum expired.
The military stationed officers in the newsroom of state television on the banks of the Nile River in central Cairo. Troops were deployed in news-production areas.
Under a plan leaked to state media, the military would install a new interim leadership, the Islamist-backed constitution suspended and the Islamist-dominated parliament dissolved.
Demonstrations turned violent overnight. Clashes between supporters and opponents of Egypt's president have left at least 39 people dead since the protests began Sunday.
Meanwhile, President Barack Obama is urging Morsi to address the people's grievances and the White House is also warning Egypt's military that a coup could jeopardize relations with the United States.
The tension in Egypt is having an impact on global markets - especially the oil markets. Oil is now trading above $100 a barrel for the first time in close to a year. Egypt's Suez Canal is a major transit route for crude shipments from the Persian Gulf.
Is Obama confused? Does he like the Muslim Brotherhood? Or is Obama simply playing both sides of the setup?
Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com
Portuguese borrowing costs topped 8 percent for the first time this year after two ministers quit, signaling the government will struggle to implement further budget cuts as its bailout program enters its final 12 months.
Government Tensions
Social Security Minister Pedro Mota Soares and Agriculture Minister Assuncao Cristas will hand in their resignations to Coelho today, broadcaster TVI reported on its website last night, without saying how it obtained the information. Both ministers are from Portas's CDS party.
The EU may consider extending the deadline for Portugal to meet its deficit targets if economic conditions worsen, Jeroen Dijsselbloem, head of the group of euro-area finance ministers, said on May 27. Dijsselbloem said the government hasn't yet requested another change of timetables and targets.
On March 15, the government announced less ambitious targets for narrowing the budget deficit as it forecast the economy will shrink twice as much as previously estimated this year. It targets a deficit of 5.5 percent of gross domestic product in 2013, 4 percent in 2014 and below the EU's 3 percent limit in 2015, when it aims for a 2.5 percent gap. Portugal forecasts debt will peak at 123.7 percent of GDP in 2014.
Gaspar's resignation shows the risk of reforms faltering, Organization for Economic Cooperation and Development Chief Economist Pier Carlo Padoan said yesterday at the Lisbon Council in Brussels. "Fatigue may suddenly erupt and the temptation to go backward may be very, very strong," he said.
Portugal's beleaguered prime minister has pledged to stay in office and seek to establish a stable government despite the resignation of two key ministers and the threatened break-up of his ruling coalition.
Pedro Passos Coelho said on Tuesday night he would stay at his post and work towards a "rapid return to stability" to avert a political and economic crisis that would endanger the country's €78bn bailout.
"I will not resign or abandon my country," Mr Passos Coelho said.
However, opposition parties called for an early general election two years ahead of schedule, saying there was no possible solution for the governing coalition.
"The country needs a new government with democratic legitimacy," said António José Seguro, leader of the centre-left Socialists, the main opposition party.
The prime minister was speaking hours after his government was rocked by the resignation of Paulo Portas, foreign minister, less than 24 hours after Vítor Gaspar had quit his post as finance minister.
Mr Passos Coelho said he had refused to accept the resignation of Mr Portas, leader of the conservative Popular party (CDS-PP), the junior partner in the two-party government coalition.
The government of Portugal is now burnt toast. There is no way it can survive. But will any other government do what is needed (default and tell the EU where to go)?
Eventually some country will, as soon as the pain is severe enough.
Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com
On Monday, the Egyptian army gave Islamist President Mohamed Morsi 48 hours to meet the demands of the citizens else the military threatened it would "announce a future roadmap and measures to oversee its implementation".
From an oil perspective, this flareup should have little bearing as Egypt is not an oil exporter. However, as we have seen in the past, any flareup of any kind in the Mideast tends to drive the price of oil higher.
This time is no different. In the past week Crude has risen from $93 to $102 and is up from $86 since mid-April. To be fair, correlation is not causation, and part of the rebound came before news of trouble in Egypt.
They have been jailed and tortured, hunted in the streets and blacklisted from public life. But a year after winning the presidency and reaching the pinnacle of their 80-year quest for power, Egypt's Islamists are again facing a threat to their existence.
President Mohamed Morsi was fighting back yesterday against what his supporters have dubbed a military coup against his democratically elected government.
In a defiant late-night speech, Mr Morsi made clear he would make no concessions to his opponents and said he was prepared to shed his blood to defend "legitimacy" in Egypt. He warned repeatedly that any moves against him could lead to bloodshed – an assertion that his opponents interpreted as a threat of civil war.
But this time, the president's Muslim Brotherhood and his millions of supporters made clear, they are not about to give up.
"If the military takes any street action, we will stand in front of the tanks," vowed Gehad Haddad, an official in Mr Morsi's Freedom and Justice party.
Following huge street protests on Sunday against what critics see as the president's ever more autocratic and erratic rule, Egypt's military leapt back into politics on Monday and demanded that the president and the opposition negotiate a compromise by today or submit to the army's own political "road map".
Under a draft of that road map, leaked to the to official MENA news agency yesterday, the constitution would be suspended and the Islamist-dominated legislature dissolved, if a power-sharing agreement were not reached.
One Picture Says It All
For the third consecutive day, anti-Morsi protesters packed Tahrir Square in central Cairo.
Image courtesy of Mohamed Abd El Ghany/Reuters as posted on the New York Times.
Morsi Defies Egypt Army's Ultimatum to Bend to Protest
President Mohamed Morsi rejected an ultimatum in an angry speech Tuesday night as Egypt edged closer to a return to military rule.
Mr. Morsi insisted he was the legitimate leader of the country, hinted that any effort to remove him by force could plunge the nation into chaos, and seemed to disregard the record numbers of Egyptians who took to the streets demanding he resign.
But before the president's speech, Egypt's generals took control of the state's flagship newspaper, Al Ahram, and used it to describe on Wednesday's front page their plans to enforce a military ultimatum issued a day earlier: remove Mr. Morsi from office if he failed to satisfy protesters' demands.
As both sides maneuvered, tensions rose on the streets of Cairo and other cities, where violence erupted between groups of protesters and Mr. Morsi's defenders, primarily members of the Muslim Brotherhood. At least 11 people were killed — four shortly after Mr. Morsi's speech — and dozens more were wounded as gunfire broke out in at least two neighborhoods of the capital. Angry Islamists gathered in the street with a sheet stained with the blood of one of their allies.
Mr. Morsi refused to back down. In an impassioned, if at times rambling, midnight address broadcast on state television, he hinted that his removal would lead only to more violence.
"If the price of protecting legitimacy is my blood, I'm willing to pay it," he said. "And it would be a cheap price for the sake of protecting this country."
At a demonstration in support of Mr. Morsi near Cairo University, assailants firing birdshot wounded at least 40 Islamists. A further 35 pro-Morsi demonstrators were wounded with rocks, police officials said. Groups of Islamists began seeking the attackers, beating suspects and dragging a person along the street.
In Alexandria, 33 people were wounded by pellets in clashes between Mr. Morsi's opponents and supporters, with gunfire from both sides, police officials said.
Mr. Morsi's government appeared to crumble around him. Foreign Minister Mohamed Kamel Amr resigned. Six ministers have now announced their resignations since the mass anti-Morsi protests began Sunday.
Did We Learn Anything?
Please note that the US gives billions of dollars every year to Egypt.
Recall that president Obama supported the movement that put Morsi in power.
Recall that a US installed puppet president in Iran led to the Islamic revolution.
Recall that US troops on sacred Mideast soil was a primary reason behind Osama Bin Laden's 911 attack on the US.
So what do we do now?
I expect more meddling with similar results. And when the negative results come home to roost, expect more government surveillance, more wiretappings, more phone eavesdropping, more loss of freedoms, and more trashing of the constitution as we become more like them, all in the name of freedom.
Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com
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