Global Economics Weekly Brief
America hasn’t won the Ryder Cup since 2008. But it can console itself with the knowledge that, in each of the four years since then, the US economy has grown more quickly than Europe.
I wouldn’t bet against America making it five in a row in 2013, if the data we have so far are anything to go by. Last week was a case in point. America is adding jobs and building momentum, while the Eurozone remains mired in recession. Plus, more unemployment in the Eurozone with a rapid momentum through 2013/14!
Another strong jobs figure from the US. The US economy added an impressive 236k jobs in February. This was well above the expected rise of 165k and strong enough to put another dent in unemployment. The jobless rate is now at a five-year low of 7.7%. There's still a long way to go before 6.5% is hit (the rate at which the Fed will look to raise rates) but unemployment is heading in the right direction. But as always with economists, good news comes with a caveat. There is $85 bn of spending cuts to work their way through the economy this year, and that's on top of tax rises implemented earlier in January. These seem almost certain to drag on the economy and in turn slow job growth. But at least the US appears to be facing them with a bit of wind at its back. Excellent news and more to come on the fight back to more growth!
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US service sector adds to the good news. Last week, We reported that American manufacturing businesses were at their most confident. This week the services industry pulled off the same trick, according to the Institute of Supply Management (ISM). The ISM survey of non-manufacturing firms hit 56.0 in February – the highest seen since this time last year. Firms reported rising prices and new orders, with employment still growing strongly. Notably the real estate sector was particularly positive, chiming with reports that a property-based recovery is improving sentiment all round. More good news on its way!
Eurozone in the doldrums in Q4, yet again. The second estimate of Eurozone Q4 GDP confirmed a 0.6%q/q contraction in activity, driven by falls in consumer spending and investment. Portugal was bottom of the Eurozone league table, shrinking an alarming 1.8% over the quarter, this is a rapid decline. But weakness was widespread, with fourteen of the seventeen member states contracting (we are still waiting on data for Ireland, Greece and Malta). The Eurozone has been in recession for over a year and the results of the Italian election show how difficult this can make it to build consensus for reform in countries that are struggling. Policymakers need to do more to address longstanding growth issues or political risk will remain a stumbling block for the Eurozone. A rate cut from the European Central Bank would be a step in the right direction, though the Governing Council voted for no change at its meeting last week. The Eurozone is in rapid decline!
Q1 not looking much better for the Eurozone, with big alarm bells in France. Hot on the heels of the disappointing Eurozone GDP figures came the purchasing managers’ index (PMI). January's reading for the service sector had shown a tentative improvement but this was unwound last month as the index fell from 48.6 to 47.9 in February. A reading below 50 means that activity is contracting. France’s index edged up marginally, but remains heavily depressed at 43.7. It meant that France's composite PMI, which combines manufacturing and services, was worse than both Spain and Italy for the second month in a row. And other indicators point to increasing problems for the world's fifth biggest economy. The number of unemployed rose by 124,000 in Q4 2012, the most in three years. On a more positive note, Germany's services reading remains in healthy shape. Can Germany's economy withstand the ever-increasing strain from its neighbours?
At least Eurozone retailers get a boost. With so much bad news about the Eurozone these days, consumers decided they needed some retail therapy in January. Sales across the single currency area rose 1.2% m/m – the highest rate of growth in three years. German consumers provided a significant boost to January's retail sales as sales rose 3.1% m/m. But, in a mirror image of the Q4 GDP league table, it was Portugal that took top spot for sales growth. Much of this spend was through credit, so the fallout of how pay is the next crisis!
No change from Monetary Policy Committee, after encouraging service sector survey for the UK. There was an outside chance that the Monetary Policy Committee (MPC) would vote to re-start quantitative easing last week, after that woeful manufacturing PMI. But policy was left unchanged in March, and an encouraging increase in the service sector PMI may have been the decisive factor. The headline output index reached a five-month high of 51.8 in February and confidence continued to improve. Also, the employment index rose to the highest level since May, suggesting the recent strength of the labour market will continue. The sector is hardly shooting the lights out, but this release provides hope that the UK economy will manage to squeeze out a bit more growth this year. QE does not work! If only they read history!
Who Controls The Money? An Unelected, Unaccountable Central Bank Of The World Secretly Does
An immensely powerful international organization that most people have never even heard of secretly controls the money supply of the entire globe. It is called the Bank for International Settlements, and it is the central bank of central banks. It is located in Basel, Switzerland, but it also has branches in Hong Kong and Mexico City. It is essentially an unelected, unaccountable central bank of the world that has complete immunity from taxation and from national laws. Even Wikipedia admits that "it is not accountable to any single national government." The Bank for International Settlements was used to launder money for the Nazis during World War II, but these days the main purpose of the BIS is to guide and direct the centrally-planned global financial system. Today, 58 global central banks belong to the BIS, and it has far more power over how the U.S. economy (or any other economy for that matter) will perform over the course of the next year than any politician does. Every two months, the central bankers of the world gather in Basel for another "Global Economy Meeting". During those meetings, decisions are made which affect every man, woman and child on the planet, and yet none of us have any say in what goes on. The Bank for International Settlements is an organization that was founded by the global elite and it operates for the benefit of the global elite, and it is intended to be one of the key cornerstones of the emerging one world economic system. It is imperative that we get people educated about what this organization is and where it plans to take the global economy. (Read More....)
The United Nations Wants To Crash The World Economy In Order To Save The Environment
The United Nations says that the earth is in great danger and that the way you and I are living is the problem. In a shocking new report entitled, "Resilient People, Resilient Planet: A Future Worth Choosing" the UN declares that the entire way that we currently approach economics needs to be changed. Instead of focusing on things like "economic growth", the UN is encouraging nations all over the world to start basing measurements of economic success on the goal of achieving "sustainable development". But there is a huge problem with that. The UN says that what we are doing right now is "unsustainable" by definition, and the major industrialized nations of the western world are the biggest culprits. According to the UN, since we are the ones that create the most carbon emissions and the most pollution, we are the ones that should make the biggest sacrifices. In addition, since we have the most money, we should also be willing to finance the transition of the developing world to a "sustainable development" economy as well. As you will see detailed in the rest of this article, the United Nations basically wants to crash the world economy in order to save the environment. Considering the fact that the U.S. and Europe are in the midst of a horrible economic crisis and are already drowning in debt, this is something that we simply cannot afford. (Read More....)
Global Economic Collapse In Process: Billionaires Continue To Dump Stocks, Traders Are Betting Against The Economy, Hedge Funds Preparing For Market Sell-Off, And Now They Start Betting Against Currencies As World Plunges Into Recession
Billionaires Dumping Stocks, Economist Knows Why
Despite the 6.5% stock market rally over the last three months, a handful of billionaires are quietly dumping their American stocks . . . and fast.
Warren Buffett, who has been a cheerleader for U.S. stocks for quite some time, is dumping shares at an alarming rate. He recently complained of “disappointing performance” in dyed-in-the-wool American companies like Johnson & Johnson, Procter & Gamble, and Kraft Foods.
In the latest filing for Buffett’s holding company Berkshire Hathaway, Buffett has been drastically reducing his exposure to stocks that depend on consumer purchasing habits. Berkshire sold roughly 19 million shares of Johnson & Johnson, and reduced his overall stake in “consumer product stocks” by 21%. Berkshire Hathaway also sold its entire stake in California-based computer parts supplier Intel.
With 70% of the U.S. economy dependent on consumer spending, Buffett’s apparent lack of faith in these companies’ future prospects is worrisome.
Unfortunately Buffett isn’t alone.
Fellow billionaire John Paulson, who made a fortune betting on the subprime mortgage meltdown, is clearing out of U.S. stocks too. During the second quarter of the year, Paulson’s hedge fund, Paulson & Co., dumped 14 million shares of JPMorgan Chase. The fund also dumped its entire position in discount retailer Family Dollar and consumer-goods maker Sara Lee
No investors, let alone billionaires, will want to own stocks with falling profit margins and shrinking dividends. So if that’s why Buffett, Paulson, and Soros are dumping stocks, they have decided to cash out early and leave Main Street investors holding the bag.
Read more at http://investmentwatchblog.com/global-economic-collapse-in-process-billionaires-continue-to-dump-u-s-stocks-traders-are-betting-against-u-s-economy-hedge-funds-preparing-for-market-sell-off-and-they-start-betting-against-curr/#f3PQMD5tqzYtg8Aj.99
Global Economic Crisis
The Market Sentiment Globally
The current financial crisis is the worst the world has seen since the Great Depression of the 1930s. For younger generations, accustomed to mild recessions of the new phase of globalization, the misery of the Great Depression is hitherto nothing more than a distant legend. However, the collapse of two Bear Stearns Hedge funds in summer of 2007 exposed what came to be known as the subprime mortgage crisis, reintroducing the world to an era of bank failures, a credit crunch, private defaults and massive layoffs. In the new, globalized world of closely interdependent economies, the crisis affected almost every part of the world, receiving extensive coverage in the international media. “In an Interconnected World, American Homeowner Woes Can Be Felt from Beijing to Rio de Janeiro,” observed the International Herald Tribune at the onset of the crisis. “Chinese Steelmakers Shiver, Indian Miners Catch Flu,” noted the Hindustan Times. “US and China Must Tame Imbalances Together,” suggested Yale Global, as the frenzied search for a solution continues around the globe. Global greed to expand at any cost is the major issue.
In this special report, Yale Global offers essential information on why the crisis started, how it affected the industries and consumers around the world, and what solutions have been proposed by experts and regulators across countries. Click on each title below for comprehensive information.
Causes of the Crisis
What exactly caused the crash
Evolution, Effects and Response
The worst crisis since the Great Depression
Solutions for the future
World Economic Outlook (WEO)
Coping with High Debt and Sluggish Growth - http://www.imf.org/external/pubs/ft/weo/2012/02/pdf/text.pdf
The World Economic Outlook (WEO) assesses the prospects for the global recovery in light of such risks as the ongoing euro area crisis and the "fiscal cliff" facing U.S. policymakers. Reducing the risks to the medium-term outlook implies reducing public debt in the major advanced economies, and Chapter 3 explores 100 years of history of dealing with public debt overhangs. In emerging market and developing economies, activity has been slowed by policy tightening in response to capacity constraints, weaker demand from advanced economies, and country-specific factors, but policy improvements have raised these economies' resilience to shocks, an issue explored in depth in Chapter 4.
Plus, the `Global Risks 2013 Report - Risk Cases and Resilience` - contact us today....
Global economic outlook for 2013 revealed - United Nations ...
10-Step Double-Dip Recession Survival Guide for Entrepreneurs - click on the connection below for comprehensive information.
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