Mish's Global Economic Trend Analysis |
- Less Than Useless: Goldman Sachs Lowers Gold Forecast Following Plunge (Purposely Late?); Downside Risks
- Youth Vote Propels Five Star Movement Into First Place as Largest Political Party in Italy
- China Overheating? Biggest Weekly Cash Drain in History; Questions Surface Over Chinese Growth Numbers
| Posted: 26 Feb 2013 11:10 AM PST In the less than useless category, Goldman Sachs lowered its gold price targets by over $200 an ounce following the recent plunge. Goldman now says Gold's Cycle Seen Turned. The cycle for gold prices, which climbed for 12 straight years, has probably turned as the recovery in the U.S. economy gathers momentum and investment holdings collapse, according to Goldman Sachs Group Inc., which reduced forecasts for the metal.Downside Risks and QE Uncertainty In contrast to the opinion of Goldman, I would like to note there is little uncertainty about QE. Bernanke is insanely committed to the idea. In regards to downside risks to the economy I will also take the other side. Downside Risks
It is incredulous for Goldman to state diminished downside risks. Gold Action With Soros and others selling, and with Goldman (and/or JP Morgan) likely front-running the trade by shorting futures at illiquid times, perhaps we have already seen the bottom at $1554. Unlike others who believe gold is constantly manipulated lower, I believe manipulation is equal in both directions. Look at it this way: In contrast to what GATA says, Goldman and JP Morgan do not care which direction gold (or silver) is going, only that they make a profit by front-running the surge in volume. After a rebound in price, expect Goldman to change its forecast again, telling everyone why they should buy gold. This is the way Wall Street parasites work (even if in this example I am early with this forecast). A quick check now shows gold has already rebounded to $1616, up $30 on the day. Where to from here? I don't know, but with Soros and other big sellers out of the way, and with Goldman and other market makers front-running the trades lower, I like my chances here, quite a lot. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| Youth Vote Propels Five Star Movement Into First Place as Largest Political Party in Italy Posted: 26 Feb 2013 09:32 AM PST By a very slim margin Beppe Grillo's Five Star Movement is the largest political party in Italy. Young voters and first-time voters are responsible for the surge (see comments from "AC" below). Here are the official election results. Chamber
Bersani gets 55% of the Chamber seats because his center-left coalition barely beat Berlusconi's center-right coalition by a 29.54% to 29.18% margin otherwise Berlusconi would be courting Beppe Grillo (likely to no avail) to form a coalition. Senate
The center-left received a higher percentage of votes than the center-right by a 31.63% to 30.72% margin. However, Senate seats are assigned based on regional totals and the result will be something like a 119 to 117 spit with the Five Star Movement picking up 54 Seats. A majority takes 158 so no coalition is likely. Comments From "AC" Reader "AC" who is from Italy but now lives in France writes ... Final result are now available: M5S is the first political party at the Chamber of representatives, by a mere 46k voters. The Center-Left coalition scored first as coalition and therefore received a 55% majority of seats in the Chamber. There is no majority in the Senate and no possible majority even combining Bersani with Monti, so the result is a hung Parliament, exactly the forecast I made months ago.Flashback June 29, 2012: Time-Lapse Interactive Graph Shows Stunning Rise in Anti-Euro Sentiment in Italy led by Beppe Grillo Five Star Movement. Flashback June 27, 2012: Reader from Italy Explains Why Early Elections Might Lead to "Deadlock" Explaining Italian PoliticsExplaining the Surge for Grillo
There were early elections and the result was indeed a deadlock. Thanks to "AC" I have been following Beppe Grillo since early 2012. Mainstream media mostly ignored Beppe Grillo until after the election, shocked by a result we predicted long ago. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| Posted: 25 Feb 2013 11:57 PM PST In December I suggested the modest bounce in China PMI would not last. It didn't. The allegedly sustainable recovery in China is already in question. The HSBC Flash China Manufacturing PMI™ shows manufacturing conditions barely above contraction. Key pointsQuestions Surface Over Chinese Growth Numbers Those expecting China to be in some sort of sustainable recovery with Europe in a major recession and the US in a big slowdown if not outright recession are a bit delusional. Please consider China's Premature Overheating. China began this year with an off-the-charts explosion in credit issuance. Last week, it broke records again, this time for the amount of cash drained from its banking system. The record credit issuance of 2.5 trillion yuan ($400 billion) in January — comprising both bank lending and non-bank financial institutions' credit — always looked as if it was verging on the reckless.No one really knows the true state of China's GDP, but many of us do realize it's overstated, perhaps by a large amount. GDP is not a good measure of the true state of the economy anyway, with fiscal stimulus everywhere you look. Realistic Outlook
GDP aside, global rebalancing has just begun, and it may take a decade to finish. Expectations that the worst is behind us in China and in Europe is about to be shattered on the hard rocks of reality. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com "Wine Country" Economic Conference Hosted By Mish Click on Image to Learn More  |
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