Here Comes The European Triple-Dip: Negative German GDP Sends Bunds Under 1% For The First Time EverSubmitted by Tyler Durden on 08/14/2014 07:11 -0400
The hammer finally hit for Europe when overnight both Germany and France reported Q2 GDP prints that missed expectations, the first actually contracting at a 0.2% rate with consensus looking for -0.1%, while France remained flat vs expectations for a tiny 0.1% rise. As a reminder, this GDP is the revised one, which already includes the estimated contribution of drugs and prostitution, suggesting the actual underlying economic growth is far worse than even reported. Then again, this is hardly surprising considering all the abysmal data out of Europe and the rest of the world in recent weeks, and with the Russian trade war sure to trim even more growth, look for all of Europe to join Italy in its first upcoming triple-dip recession in history.
According to a new analysis from CareerCast jobs, seven of the top 10 careers are in the healthcare industry and, as expected, require an advanced degree. As CBS reports, while these jobs are all pegged to show strong earnings growth through 2022, there is a downside: Becoming a surgeon or physician requires years of graduate school and training, which requires an investment of time and money. "There is a tradeoff for every job," Oh well, at least it doesn't require stealing from widows and orphans, and one can even sleep at night without the help of industiral amounts of horse tranquilizer. So without further ado, here are the ten top paying jobs for 2014...
Gallup's U.S. Economic Confidence Index dropped slightly to -17 for the week ending August 10th, hovering just off the lows of 2014 as only 38% of Americans believe the economy is "getting better." Perhaps even more concerning, given record high stock prices and cycle low unemployment rates, only 19% of Americans said the economy is "excellent" or "good," - the lowest in 5 months. Gallup concludes, generally speaking, Americans remain more negative than positive about the economy, but are less negative than they were in the first few years after the Great Recession - $4 trillion later.
With French government bonds trading at record low yields under 1.5%, it is hard to argue that the troubled socialist nation is 'priced' for either recovery or credit risk... but then again, thanks to Draghi's promise and domestic banks' largesse, none of that matters. With joblessness at record highs, the following chart of France's "recovery" shows near-record high bankruptcies and record-low profitability. Oh the beauty of socialism...as Europe's core diverges dramatically.
Now that even the Fed has admitted the BLS' nonfarm payroll and unemployment rate are meaningless due to the "noise" from a record number of workers dropping out of the labor force, Janet Yellen is left with one fallback "favorite" indicator, the JOLTS survey (Job Openings and Labor Turnover). It is here that something rather unexpected just happened, when moments ago the BLS reported that US employers reported a whopping 4671K job openings in the month of June, beating expectations of a 4.6MM print and well above the downward revised 4,577K in May. This was the highest openings print since February 2001, and one which suddenly puts the "hawkish" Janet Yellen back in play as it suggests that slack in the labor market, at least based on the number of job openings, has not only filled the gap, but it is now overflowing!
Despite 30% general unemployment, the majority of youths jobless, GDP forecasts already disappointing, and government asset sales at rock-bottom prices, Greek leaders are preparing to blame any missed growth expectations on Russia. As Bloomberg reports, hopes of a 2014 exit from its deepest recession in a half-century may hit a stumbling block after Russian sanctions last week. "The impact could be quite damaging for industries such as tourism and agriculture amid the fragility of a slowly recovering economy," warns one think-tank as tourist arrivals from Ukraine are expected to drop by 50% and the 'fruit-and-vegetable' embargo will "send prices falling across Europe, hitting both the volume and value of Greek exports towards other countries." Is it any wonder the Greeks are so vociferously slamming "blind obedience to the Cold War strategies of Brussels and Washington."
While the conflict in Ukraine rages on, EU member states havedecided to impose (not so much more stringent)economic sanctions against Russia, which was predictably followed by Russian counter-measures. The question which isn't being asked often enough, is whether these sanctions will actually improve the situation. Here's an analysis following four concrete questions:
1. Can things get even worse in Russia?
2. Is the West able to guide Russia and Ukraine down the right path?
3. Can the West contribute to a sharpening of the crisis?
4. How can the West protect itself against this conflict?
- Maliki digs in as U.S. pushes for new Iraq government (Reuters)
- Ukraine's forces say close to taking rebel-held Donetsk (Reuters)
- Anger Over Michael Brown Shooting Leads to Looting (WSJ)
- German Economy Backbone Bending From Lost Russia Sales (BBG)
- Kinder Morgan to Consolidate Empire (WSJ)
- Early Failure to Detect Gaza Tunnel Network Triggers Recriminations in Israel (WSJ)
- You’ll never guess how much BuzzFeed raised from Horowitz (FT)
- The dumb money is now chasing Chinese oligarchs: Norway’s Wealth Fund Buys $576 Million of Mayfair Area (BBG)
- Clinical trial to start soon on GSK Ebola vaccine (Reuters)
- No drone skeet shooting any time soon (WSJ)
Overview of the investment climate and the likey impact from data and events, delivered in dispassionate, even if dry prose.
The failure to understand money is shared by all nations and transcends politics and parties. The destructive monetary expansion undertaken during the Democratic administration of Barack Obama by then Federal Reserve chairman Ben Bernanke began in a Republican administration under Bernanke’s predecessor, Alan Greenspan. Republican Richard Nixon’s historic ending of the gold standard was a response to forces set in motion by the weak dollar policy of Democrat Lyndon Johnson. For more than 40 years, one policy mistake has followed the next. Each one has made things worse. What they don’t understand is that money does not “create” economic activity.
There were some minor fireworks in the overnight session following the worst Australian unemployment data in 12 years reported previously (and which sent the AUD crashing), most notably news that the Japanese Pension Fund would throw more pensioner money away by boosting the allocation to domestic stocks from 12% to 20%, while reducing holdings of JGBs from 60% to 40%. This in turn sent the USDJPY soaring (ironically, following yesterday's mini flash crash) if only briefly before it retraced much of the gains, even as the Pension asset reallocation news now appears to be entirely priced in. It may be all downhill from here for Japanese stocks. It was certainly downhill for Europe where after ugly German factory orders yesterday, it was the turn of Europe's growth dynamo to report just as ugly Industrial Production which missed expectations of a 1.2% print rising only 0.3%. Nonetheless, asset classes have not seen major moves yet, as today's main event is the ECB announcement due out in less than an hour. Consensus expects Draghi to do nothing, however with fresh cyclical lows in European inflation prints, and an economy which is clearly rolling over from Germany to the periphery, the ex-Goldmanite just may surprise watchers.
But... China's manufacturing PMIs said everything's great in the mal-investment capital of the world? It appears for all the record credit creation in China, none of it is spilling over into demand from its closest trading partners. Australian unemployment spiked to 6.4% - its highest since 2002, missing the 6.0% expectation by the greatest margin on record. No "qualified' economists believed the print would be above 6.1%. AUDJPY is getting battered which implicitly means S&P futures have legged lower...
Goodbye European recovery, we hardly knew you. It must have come as a huge shock to all hypnotized lemmings aka "sophisticated investors" who have been following the manipulated, artificial yields in the Italian 10Y relentlessly declining and thus suggesting at least some economic stability, when an hour ago instead of reporting a 0.1% increase for its Q2 GDP as widely expected, Italy "unexpectedly" reported a sequential contraction of -0.2% down from a -0.1% drop in Q1, and officially the start of yet another, its third since Lehman, recession. Then again, considering Italy's youth unemployment of over 40% just hit a record high, we use the term "unexpectedly" rather loosely.
Over the weekend, the Ukrainian government imposed a series of “temporary” taxes to help the war effort as Ukrainian press reports several hundred solders were left without weapons or ammunition and crossed the border into Russia. The Ukrainian government is in a hurry to raise money. For the last few months, even before the turmoil began, Ukraine has been in an inflationary cycle. Both retail and asset prices were spiraling higher. Now they’ve entered a stagflationary period. The currency has gone into freefall. Unemployment is rising. The economy is contracting (6% by phony government estimates). And inflation is a whopping 19%... and rising. These people are getting abused. And the worst is yet to come.
President Barack Obama has a direct message for the leaders of America’s biggest companies: if you have a complaint, you can keep your complaint. "If you look at what’s happened over the last four or five years, the folks who don’t have a right to complain are the folks at the top," Obama said in an interview with The Economist published over the weekend. As The WSJ adds, Obama maintained that complaints from corporate CEOs in the current environment should be taken with “a grain of salt” as most policies he has implemented have "generally been friendly towards business." In other words, thank me for the recovery, but don't blame me for the inequality - an irony we have noted numerous times.