Category: Economy
Ray Dalio on Deleveraging
Ray Dalio was featured in Barron’s at the weekend. He spoke about the various options available to affect a private sector deleveraging. He sees three ways which he calls austerity, restructuring, and money printing.
Below is an excerpt of his commentary
Spain: Double Barrel Disappointment
The fact that Spanish bank shares have rallied today (3.1% at pixel time) and have easily outperformed the market (IBEX up 0.3%) following Moody’s downgrade of 16 Spanish banks should be understood as a bit of a fluke. Some observers will use this price action as evidence that rating agencies are laggards. While there can be little doubt that the epithet is true, it is also true that today’s correction comes despite some other bad news as well. This was in the form of the Bank of Spain’s latest assessment that bad loans in the banking system rose in March to 8.37%
Another chart of the day: Greek bank deposits collapse
The chart below via Reuters’ Scott Barber is what an economic depression looks like. It covers Greek bank deposits from 1998 to present
Chart of the day: US Real Personal Income Growth
The ECRI released the following chart on the year-over-year growth in US real personal income. The takeaway here is that personal income growth is seriously flagging going into the fiscal cliff which promises to turn income growth decidedly to income contraction
Achuthan: The US will be in recession by the end of next month
Lakshman Achuthan is sticking to his call that the US will enter recession in the second half of 2012. He spoke to CNBC’s Squawk Box crew about it this morning. Take a look
Global Growth Is Slowing
So momentum is weakening across the entire global economy at the present point, not just in say Europe, or China. Global output is still growing but it is growing at an increasingly weaker pace. What could change that
Chart of the Day: Australian Credit Growth Has Collapsed
If you look at the rate of growth in credit, it tells you something. When it hits an inflection point i.e. when credit growth peaks and begins to decelerate, investors should take it as a harbinger of declining GDP and a signal to shift assets toward risk-off trades. Right now, Australia is demonstrating some serious softness in credit growth as the chart below attests
Spain is the New Greece
Spain has become the new Greece. Actually, in many respects Spain is now worse than Greece. The Spanish unemployment rate is already so high and unlike Athens, Madrid has made no headway in reducing its public debt levels (whereas the Greeks are close to running a primary fiscal surplus at which point they could leave and turn the problem back on to Brussels). Moreover, Spain has a huge private debt burden that is twice that of Greece
Consensus caught out by ISM Manufacturing upside surprise
The US manufacturing ISM surprised the market in a favorable direction. Rather than soften like the consensus expected, the diffusion index rose to 54.8 from 53.4. This represents the strongest showing in eleven months
Chart of the day: US Manufacturing Employment, 1960-2012
Note the peak in manufacturing jobs in June 1977, which represented 22 percent of all nonfarm payrolls, then, to fall to less than 9 percent of total employment today. It’s too earlier to claim victory with the current recovery in the manufacturing sector, but it is the the first positive slope since mid-1990′s
Chart of the Day: Eurozone retail sector’s sharp contraction
The Eurozone is experiencing a sharp contraction in the retail sector
Breaking Down First Quarter 2012 GDP Numbers
“Real final sales” and factory production continued to be supported by inventory building . Governments continued to shrink their spending, and they sucked -0.60% from the headline number. This report shows per capita disposable income is shrinking and that any improvements in consumer spending are likely unsustainable











