Mish's Global Economic Trend Analysis |
Canadian Exports Collapse, Expect Plunge in GDP; China Factor; US Recession Factor Posted: 11 Sep 2012 07:51 PM PDT All major Canadian exports including energy, autos, agriculture, forest products and machinery-and-equipment collapsed in the latest report. Canadian analysts are shocked by the news. I sure am not. For my reason, look at happenings in China, a huge recession in Europe, and even a recession in the US that surprisingly few have even figured out yet. The Globe and Mail reports Sharp trade slowdown set to wallop GDP The high dollar and the global slowdown are crushing Canada's trade-dependent economy.Currency Issue? Sorry guys, this is not just a currency issue. This is a global recession, starting in Europe, continuing in Asia and as of June hitting the US. Few even see the US recession yet, but it is here, and Canada will be on the leading edge of it all. China Factor This is not unexpected in this corner, albeit I have for so long predicted the end of the Canadian housing bubble that no one is listening to anything else I have said about Canada. Those who want to catch up on what is happening in China and how it is guaranteed to affect Canada may consider the following posts.
All three of those pieces originate from Michael Pettis at China Financial Markets. What he suggests about China and Australia, I have long-since stated applied to Canada as well. Those posts are just the start of Canada's problems. Europe is in a massive recession that few saw coming. I commented on that silliness on January 9, 2012 in Dimwit Comment of the Day: Christine Lagarde, IMF Director says "Europe May Avoid a Recession This Year" Global Recession Heck, even the vaunted German export machine is falling apart. See Germany in Recession: Private Sector Sees Fastest Falls in Output and New Business Since June 2009; New Export Orders Collapse In the above post I commented ... Global Recession RevisitedUS Recession Factor On June 21, 2012, I gave 12 Reasons US Recession Has Arrived (Or Will Shortly) On September 7, I stated a specific belief the US entered recession in June. For my reasons, please review Household Survey: Number of Employed Declines by 119,000 as Those Not in Labor Force Rises by Spectacular 581,000; Yes, Virginia, It's a Recession The three people I am aware of sticking with a recession call right now are John Hussman, Lakshman Achuthan at the ECRI, and me. Indeed, John Hussman announced yesterday in Late-Stage, High-Risk "I continue to believe that the U.S. joined an unfolding global recession, most probably in June of this year." In Hussman's post he states a belief backdated downward revisions are coming up. I concur with his analysis. The collapse in the household survey is an indicator as is the collapse in Canadian exports to the US. Canada Housing Bubble 100% without a doubt, Canada is in the midst of an immense housing bubble. The Canadian bubble outlasted bubbles in China and Australia. Because it did, I get taunts from Canadian readers all the time. I received one just yesterday. It went something like this "So Mish, where's your Canada Housing Collapse?" The answer, as always is "I don't know". That said, bubbles pop by definition. Moreover, the longer the bubble lasts, the bigger the implosion. Australia is in the midst of a big property bubble collapse, a big retail collapse, and a big export mining collapse all at the same time. Canada will follow suit at some point and given taunts out of the blue, now is as good a time as any. Addendum: Note to All Facebook Users: If you have not yet voted for your favorite charity (it costs nothing to vote), please do so. Chase is giving away $5 million to charity, and I have a cause that I support. Please click on this this link: Facebook Users, I Have a Favor to Ask, then follow the instructions. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List |
Petroleum And Gasoline Usage Charts for June, July, August; Unemployment vs. Gasoline Usage Analysis Posted: 11 Sep 2012 09:57 AM PDT Another summer is gone. How much gasoline was used vs. the same months in prior years? These charts from Tim Wallace have the answer. Total Petroleum Usage click on chart for sharper image Gasoline Usage click on chart for sharper image General Comments
Jobs, Demographics, Attitudes
Gasoline usage mirrors the weak recovery in jobs. Forget about the falling unemployment rate because the rest of the Household Survey tells the real story. Quick Notes About the Unemployment Rate
Over the past several years people have dropped out of the labor force at an astounding, almost unbelievable rate, holding the unemployment rate artificially low. Some of this was due to major revisions last month on account of the 2010 census finally factored in. However, most of it is simply economic weakness. Unemployment vs. Gasoline Usage Analysis In terms of gasoline usage, nearly all of the above points apply, especially two through nine, eleven, and twelve. This recovery is far weaker than the decline in unemployment suggests. Gasoline usage is consistent with that thesis. Addendum: Note to All Facebook Users: If you have not yet voted for your favorite charity (it costs nothing to vote), please do so. Chase is giving away $5 million to charity, and I have a cause that I support. Please click on this this link: Facebook Users, I Have a Favor to Ask, then follow the instructions. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List |
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