Posted on 03/23/2013 11:49:39 AM PDT by blam
Europe Has A Crisis — And It's Much Bigger Than Cyprus
Joe Weisenthal
March 23, 2013
REUTERS/Christian Hartmann
In a way, Europe should be thrilled by the week that was because financial markets barely batted an eye at the crisis in Cyprus.
But Europe has a problem on its hands that's bigger than Cyprus: The economy stinks.
This week we got fresh proof that things are bad or getting worse.
In France, the Flash PMI report (which is a mid-month look at the combined services and manufacturing sectors of the economy) came in dismal, with the output index falling to a four year low.
Markiet
Meanwhile, Germany's economy is the envy of Europe, but even they are not immune to trouble.
You can see its Flash PMI jutted lower this week as well.
Markit
Meanwhile, the horror show in Italy and Spain continues unabated.
This week, Danske Bank economist Frank Øland Hansen warned that France was beginning to look more like a peripheral country than a core one.
Not only is the economy sinking, but from a labor cost/competitiveness standpoint, it's looking PIIGSish.
Danske Bank
Not only is the European economy a mess, and the second biggest country looking more and more peripheral, there isn't much action being taken to address any of it.
Cyprus hasn't made a dent in markets, and it might not. On the other hand, all of the above is a crisis.
(Excerpt) Read more at businessinsider.com ...
Usually, I just assume that much of the media is propping up the powers that be, and saying that things are good even though everyone knows its not good. The good news that one sometimes hears is probably just lies.
But there is the possibility that economists really have no fundamental understanding of things and just guess at stuff.
"According to Reuters, a 20% tax on deposits over 100K at the Bank of Cyprus would be levied. That would be coupled with a 4% tax across the board elsewhere"
Everyone I know is saying the same thing."
IMO, there is positive economic news but it is supported only/mostly by deficit spending/priming (QE).
Sell Elsass and Lothringen for €100B and France will be god for at least 12 months.
If they think they’re in trouble now, wait till they experiences 30 more years of importing Muslim welfare clients from the Middle East while continuing to have fewer and fewer babies.
I would suggest within the next 3 years you will see:
First. ECB rate cut. (this will happen very soon)
2. Bond spreads on weak members vs. US expanding
3. Protests in Spain, Italy and Greece to get more violent.
4. German citizens will find a renewed sense of Nationalism.
5. ECB, will move to remove weak nations from the Euro.
6. Protests will become even more violent.
Correct. There is a fair amount of positive economic news, but it is mostly driven by printing and not enough to offset a general decline. Also, markets are no longer, in any way, a reflection of the overall economy. QE is driving markets up in the hopes it will encourage the rest of the economy to perk up, but so far that really isn't happening. People forget, there was lots of good news during the great depression - but it was within the confines of stagnation and decline. Not every piece of economic news will be bad even in the worst of economies.
Saying that, "bears" like the folks at Zero Hedge should resist assuming everything is going to collapse tomorrow. There is lots of money to be made by smart investors right now. Lots of millionaires are made during rough economic times. The West is kicking the debt can down the road, and it is a mistake to assume we know how far that can go. At 200% debt to GDP, Japan has almost twice the burden we do yet they haven't collapsed. We simply do not know how far the powers that be can manipulate things. It is possible they can kick this debt bomb for another generation.
Muzzies move in full till in Europastan and the continent turns into the Middle East of poverty. All those free give aways in benefits are turning them into Amerika.
Your #4 is the big unknown.
I’ve recently had the opportunity to discover my German ancestors back to the 1500s (a lucky genealogy accident). This required learning about the transitions from 1789 to 1990, a subject (except for the 1945-1990 part) that I was poorly educated about.
Germans my age (b. 1950) are allergic to nationalism, and with good reason. They have taught two generations now.
On the other hand - from the ruins, the Germans have constructed a society and an economy which seems to suit them, and to serve them well. They SHOULD be proud of what they’ve achieved.
With that pride, it seems to me, should come reluctance to piss it away so Greeks can retire at age 50, etc., etc. But will it?
On the answer, much depends.
Part of the problem is that Germany replaced nationalism with supra-nationalism (i.e. the goal of a federated European state). The EU was supposed to bring about an end to the conflicts that had plagued Europe for millenia. We see now, that it simply replaced one sort of conflict with another.
Another source of problems was thinking that “multiculturalism” could be an antidote to the race-based hyper-nationalism of the Third Reich. Parts of Europe have now reached a critical mass of Muslim immigrants — the point where they stop keeping a low profile, and push for total dominance.
The golden mean was completely missed, as Germany went from hyper-nationalism to hyper-multiculturalism, and hyper-supranationalism.
Look at it from a simple 3rd grade mathematics point of view.
Gov't Debt = +$20Trillion IRS Revenue = $2.5Trillion/year Gov't Spending = $3.75 Trillion/year
What's wrong with that picture?
Regarding the USA's situation, it is very bleak
Look at it from a simple 3rd grade mathematics point of view.
Gov't Debt = +$20Trillion IRS Revenue = $2.5Trillion/year Gov't Spending = $3.75 Trillion/year
What's wrong with that picture?
Not only is the financial picture bleak, but look at the actions of Obama... he has just spent more money than all previous American Presidents who preceded him COMBINED.
This he spent in some effort at stimulating the economy. Right.
All that money and there are still some 3 million fewer jobs than that day in 2008 when he won the election.
They are out of ammunition and the walls are crumbling.
Don't believe the 'unemployment' statistics that the US Government feeds you as they are a lie. They do not count someone as unemployed once they are out of work for more than six months.
So they are counted as employed - even if they still have not found a job.
RIDICULOUS!!!
So you must instead decipher the raw numbers from the Bureau of Labor Statistics. That shows the extent of the disaster.
Some economists really have no fundamental understanding of things and just guess at stuff. Some do understand and don't guess. The latter are rarely mentioned in Congress or the media.
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