Mish's Global Economic Trend Analysis |
- I'll Believe It When I See It
- 60% of Spanish Companies are Losing Money, Social Unrest Evident; Unemployment Rate Drops
- Glass Half Missing? What About Healthcare Premiums? What's the Hit to GDP?
| Posted: 03 Jan 2013 04:04 PM PST Here's one for the "I'll Believe It When I See It" file: Backlash pushes Republicans to seek cuts. A conservative backlash against Republicans over their deal with Barack Obama to lift taxes has hardened the party leadership's resolve to demand huge spending cuts as the price for increasing the country's borrowing limit.Does anyone believe the Republicans will really hold out for budget cuts? I sure don't after all the white flag waving we have seen. I sure hope I am wrong, but what I fully expect is another can-kicking exercise in which Republicans cave in on cuts to entitlements in return for Democrats caving in on cuts to military. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| 60% of Spanish Companies are Losing Money, Social Unrest Evident; Unemployment Rate Drops Posted: 03 Jan 2013 12:00 PM PST Via Google translate from Libre Mercado, Joan Rosell, the president of the Spanish Confederation of Employer Organizations (CEOE) has estimated 60% of Spanish Companies are Losing Money. This is a Mish-modified translation of some key snips. In an interview with the newspaper La Razon, Rosell said that "social unrest is evident and the business world is no exception."Unemployment Rate Drops According to the Financial Times, Spain's unemployment rate fell in December. This is the first drop in unemployment since July. However, that drop follows heavy job losses in the prior two months. Spain saw a slight drop in the number of registered unemployed in December, in a welcome but most probably fleeting boost to the recession-plagued economy.Hyper-Regulation with Bloated Public Sector Here is the problem in a nutshell: Spain is indeed a hyper-regulated economy, with a banking system that is insolvent, a hugely bloated public sector, unemployment over 25%, and youth unemployment over 50%. Structural problems remain and over half of businesses are losing money. Don't get too excited about a seasonal rebound in hiring. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| Glass Half Missing? What About Healthcare Premiums? What's the Hit to GDP? Posted: 03 Jan 2013 09:09 AM PST I have seen Fiscal Cliff analysis written from two perspectives 1. Republicans Caved In 2. Democrats Caved In Theory number 1 (Mine and others) says Congress punted the ball and Republicans waived the white flag. Given that virtually nothing has been done about the deficit, I fail to see how there can possibly be any debate on this. Yet there is. Theory number 2 (primarily liberals) still blames Bush for the "Bush Era" tax cuts, while moaning about spending cuts that did not happen, and bitching that not enough tax hikes occurred on the wealthy. Curiously, the "Bush Era" tax cuts are now the "Obama Era" tax cuts and even the AMT problem was allegedly fixed. A subset of the proponents of perspective number 2, people are bitching the "temporary 2-percent reduction in Social Security taxes" just expired. Payroll taxes will jump from 4.2% to 6.2% of income for everyone. In the glass half missing theory, this will cause a 1% hit to GDP so it should not have been done. This set of folks wanted "temporary" to become permanent, while simultaneously bitching about the "Bush Era" tax cuts. Lost in the entire debate is how the country can possibly afford any of this. What About Healthcare Premiums? Let's assume for the moment that the expiring payroll tax cut will amount to a hit on GDP of about 1 percent. Reader Greg writes ... Hello MishI am not quite sure how to total this either, but Obamacare is having some peculiar effects to say the least. Many businesses are shifting even more to part-time employment, and given there are no incentives anywhere to reduce healthcare costs, those costs will continue to rise, taking a bite of the checks of workers, and giving employers additional reasons to not hire in the first place. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
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