EU forecasts 2013 French slide into recession
The European Commission published its highly anticipated spring forecasts on Friday, predicting a French slide into recession this year, with its economy projected to shrink by 0.1 percent.
Euro Unemployment Just Hit A Brand New Record High
This is a devastating chart.
Eurozone unemployment hits a brand new high of 12.1%.
Click the chart to enlarge.
Portugal to cut thousands of government jobsPrime minister announces plans to make $6.3bn [...]
ASK ordinary people about their own Chinese dream, and you find owning a home is high on the list.
But years of rising house prices have put that dream out of reach of many. A slowing economy appeared to take some of the heat out.
Now, alas, the residential property market is soaring again (see chart). A new survey of developers and property firms on May 2nd showed average house prices up [...]
Economic Recovery Is Illusory, A False Sense Of Prosperity.
Sen. Paul: I’m a little worried that some of the economic recovery, if we’re getting it, is illusory, in the sense that it’s coming from quantitative easing. It’s coming from this false sense of prosperity you get when new money comes into the system, but then once it chases goods long enough, prices rise, and there was an illusion of gain, an [...]
Spanish house prices need to fall further, Goldman warns
Spanish house prices need to fall another 10pc, posing fresh problems for the country’s troubled banking sector, Goldman Sachs has warned.
Spain cuts growth forecasts but rejects reforms
Spain has downgraded its growth forecast for 2013 to -1.3pc, as the country’s deputy prime minister declared there was no need for major new reforms.
Spanish unemployment above 27pc
Spain’s unemployment rate reached a new record of 27.16pc [...]
America’s biggest banks would face losses of almost half a trillion dollars should a deep financial crisis and recession hit the US again, regulators said.
The tests also showed that both Goldman Sachs and Morgan Stanley’s key ratio was the weakest of all the banks after Ally Financial, which is still owned by the US taxpayer. Goldman’s ratio dropped to 5.8pc, with the investment bank facing a loss of $20.5bn under [...]
Six years after the onset of the traumatic US housing crisis, the optics are there that suggest a stabilization is occurring. Whether real or manufactured by record-low foreclosures, bank supply withdrawals, and fed-subsidized cash REO-to-rent trades, the sad truth is that jobs (and the GDP-enhancing multiplier effect that they create) are just not coming. Even Bob Shiller prefers the potential for 4% gains in stocks over housing risk in the [...]
1.4 million borrowers moved to positive equity (where homeowners owe less on their mortgage than their home is worth) in the year through the end of Q3. This is according to CoreLogic’s latest negative equity report.
But a whopping 10.7 million or 22 percent of all residential properties with mortgages were underwater by the end of Q3.
“The substantive gain in house prices made in 2012, partly due to tight inventory caused [...]
Hi folks. I have been researching whether ShadowStats’s (SGS) Alternate Inflation Rate is more accurate than the CPI, and I’ve found several problems with SGS inflation. I’ve only found a few of these issues partially addressed in the public section of shadowstats.com. I sent these questions to SGS through their contact form but got no reply.
The site is http://www.shadowstats.com/alternate_data/inflation-charts
1) This blog post shows US house prices deflated by CPI-U-Research, which shows [...]
Well, The Federal Reserve has been trying to combat deflation (declining prices) by generating inflation. The Fed also hopes to reduce unemployment and increase economic output (GDP). QE3, a third round of quantitative easing, was announced on September 13, 2012.
So, what has happened to prices in the last 6 months?
Energy prices have risen around 20% (second column from the right). Gold is up 7.06% while silver is up 13.87%. Corn [...]
by David McWilliams, David McWilliams:
By far the most important statistic to come out in Ireland in the past few days is yet more evidence of the relentless rise in the number of people falling into mortgage arrears. Since 2006, this column has been arguing that the inverse of a house price bubble is a debt bubble and, as night follows day, when the house price bubble bursts, so too will the [...]
From Pragmatic Capitalism:
I’ve long expressed my displeasure with the specific approach implemented by the Bernanke Fed. I am admittedly hard on Dr. Bernanke at times, but I think much of their framework is based on a flawed ideology and misunderstanding of the way the economic machine works.
In today’s press conference Q&A, Bernanke said something that I believe confirms this view. Pedro da Costa asked how the transmission mechanism works and [...]
The middle class has shrunk drastically over the last 10 years as Americans’ net worth has plunged, wages declined and standards of living slipped away, according to a report released on Wednesday.
Middle-income earners, long seen as the solid center of the country, are pessimistic and place the blame squarely on US lawmakers, banks and big business, the findings by the Pew Research Center showed.
‘America’s middle class has endured its worst [...]
From Pragmatic Capitalism:
I am beginning to see the term “housing recovery” all over the place these days. I googled “housing recovery” and narrowed the results down to the last 30 days and 3,900 results show up. It sure seems like the “housing recovery” has become a widely accepted fact.
Now, I’m no longer some big housing bear like I was for so many years. I actually don’t think there’s much downside [...]
Today’s AM fix was USD 1,614.75, EUR 1,311.95, and GBP 1,032.78 per ounce.
Yesterday’s AM fix was USD 1,622.75, EUR 1,323.29 and GBP 1,034.46 per ounce.
Silver is trading at $28.92/oz, €22.78/oz and £17.94/oz. Platinum is trading at $1,414.20/oz, palladium at $587.70/oz and rhodium at $1,100/oz.
Gold dropped $8.80 or 0.54% in New York yesterday and closed at $1,613.30/oz. Silver edged down as low as $27.89 and ended with a loss of [...]
A robust and self-sustaining U.S. recovery is not on the cards, and we should now expect below trend growth for many years to come, according to Nouriel Roubini, the economist famed for his bearish views.
Roubini, best-known for calling the 2008 economic crisis, outlined five reasons the bulls have been wrong and argued that an American economic cold will lead the rest of the world to catch pneumonia in a post [...]
Despite the world and their lemur believing that, with a self-referential EUR100 billion bailout (loan) for its banks and a ponzi guarantee scheme for its insolvent regions, all will be well and more debt fixes too much debt,Spanish 10Y yields are back near 7% and spreads over 575bps. The reason – simple – the backbone of their credit-fueled economic growth has crumbled and is now crumbling faster. As the FT reports today, [...]
New documentary reveals how money is at the root of our current social and economic crisis. Featuring economists, campaigners and former bankers, it exposes the privatised, debt-based monetary system that gives banks the power to create money, shape the economy, cause crises and push house prices out of reach.
When money drives almost all activity on the planet, it’s essential that we understand it. Yet simple questions often get overlooked – [...]
11.04 Open Europe warns that Spanish house prices may drop another 35pc, and that the country’s banking sector could need an immediate €110bn capital injection to withstand potential losses. Perhaps it’s a good thing that Spain avoided putting an exact figure on their rescue request. Open Europe’s head of economic research, Raoul Ruparel, said:
Funding for the Spanish banking sector is an incredibly fluid target and could go well beyond [...]
Ten banks in France, the Netherlands, Belgium and Luxembourg have been downgraded as Moody’s continues to cut the credit ratings of major lenders amid fears over the worsening crisis in the eurozone.
Dutch financial groups, ABN Amro and ING, were the most prominent banks to have their ratings cut yesterday with Moody’s warning it could downgrade the banks further if Greece were to exit the euro.
In total, five Dutch banks were downgraded [...]
This means a comparable drop in store for Spanish bonds and all the related securities in Europe, which courtesy of the bailout are all now daisy-chained.
“Spain’s Housing Market May Need Four More Years To Rebalance
The unwinding has begun: House prices have dropped 22% in nominal terms between first-quarter 2008 and first-quarter 2012, according to the Organization for Economic Cooperation and Development. That’s more than in any other eurozone country except [...]
by Chris Martenson
Steve Keen: Why 2012 Is Shaping Up To Be A Particularly Ugly Year
At the high level, our global economic plight is quite simple to understand says noted Australian deflationist Steve Keen.
Banks began lending money at a faster rate than the global economy grew, and we’re now at the turning point where we simply have run out of new borrowers for the ever-growing debt the system has become addicted to.
Spanish house prices may decline as much as 52 percent in a period of economic stress, according to Moody’s Investors Service.
The forecast decline is based on a model combining factors such as homes price increases in the last 10 years and unemployment rates, analysts including London-based Nitesh Shah said in a June 6 note. U.K. home prices are the second most at risk in Europe, facing the prospect of a 42 percent [...]
That former San Fran Fed chairman Janet Yellen would demand more easing is no surprise: she used to do it all the time. That Fed Vice Chairman, and Bernanke’s second in command, Janet Yellen just hinted that she is “convinced that scope remains for the FOMC to provide further policy accommodation either through its forward guidance or through additional balance-sheet actions“, and that “while my modal outlook calls for only a [...]
Europe is threatened by an acute crisis in Spain’s banking system and predictions seen by Channel 4 News suggest a 50 per cent fall in house prices could force Spain to seek an international bailout.
The focus of the crisis in Spain’s financial system is Bankia, a bank made from the forced merger of seven bankrupted savings banks, known as cajas.
The cajas were broken by a decade of reckless lending, to [...]
I have been in the investment business for more than 30 years now, so I have grown accustomed to seeing lunacy, naiveté and just plain stupidity more often than one would think possible, given that investing is supposed to be about being smart.
It seems extraordinarily obvious to me that the economy is, in essence, broken because of the stock and housing bubbles we have experienced, and that the Federal Reserve [...]
In an article for MSNBC, Bill Fleckenstein says it is time for investors to face the truth.
Where our current path is taking us has been predictable for quite some time, and I think that continues to be the case. Unfortunately, we have elected officials who are completely incompetent, if not criminal, and the Fed is even worse. None of that is going to change until change is forced upon us (i.e., them) by a [...]
When will U.S. house prices recover? Likely never. But that’s no reason not to buy.
The latest S&P / Case-Shiller numbers, reported last week, show that prices in 20 major markets declined 3.5% over the year through February. They’re now back to 2002 levels. If we subtract for inflation, they’re back to 1998 levels.
But consider: After subtracting for inflation, prices are also back to 1986 levels. And 1955 levels. And 1895 [...]