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Why Nonsensical Spanish Data Is About To Make Even Less Sense
Spanish economic data does not always pass the sniff test. A simple example that JPMorgan's Michael Cembalest explains is that as unemployment rose from 10% to 25% from 2008 to Q2 2012, Spanish banks reported stable non-performing loans of 3%. The latest Mad-riddle, as he calls it, has to do with corporate profits but recent headlines from PM Rajoy, explaining his approach to solving the country's devastating youth unemployment problem just beggars belief. Simply put, as Bloomberg reports, he proposes to create a mechanism to temporarily exclude tax rebates granted to companies for hiring young people from the calculation of the government budget deficit - which, his twisted logic prompts, "would enable immediate action because we’d lower contributions to the Social Security system and this would facilitate and encourage hiring. So in summary, his suggestion to boost youth employment is... to further misreport the deficit and to underfund social security even more. With Spanish data already questionable (as we discuss below), this simply exaggerates an already farcical situation.
Via Michael Cembalest, JPMorgan,
Another Spanish Madriddle: should Spanish GDP data be taken at face value?
Sometimes, Spanish economic data don’t make sense. Example: as unemployment rose from 10% to 25% from 2008 to Q2 2012, Spanish banks reported stable non-performing loans of 3%1. The latest Mad-riddle has to do with corporate profits. Earnings for companies in the MSCI Spain Equity Index boomed during the mid 2000’s, when leverage and consumption in the eriphery were rising. They then fell sharply during the recession. On the other hand, the non-financial gross operating surplus for the Spanish private sector show a consistent rise. It’s not uncommon for non-financial operating surpluses to be less volatile than earnings of public companies, as in the U.S.
But the Spanish pair don’t even rhyme, and raise questions about Spanish data. One could discard this as a statistical aberration, except that gross operating surpluses are generally derived from the same data used to compute GDP. Other than a pick-up in exports, the rest of the picture in Spain still looks very grim: industrial production, real disposable income, domestic demand, imports, long-term unemployment, business loans, bankruptcies, etc. At some point, given the pace of decline in wages and asset prices, Spain should be able to attract foreign capital again. But you have to wonder if Spain can survive the journey.
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Lies, damn lies and Govt statistics
that translates into Spanish .....well every nation on Earth as a matter of fact
Govt : a cesspool of human sewer rats for 2,000 years
Germany has her youth in forced employment/apprenticeship/trade school forever to keep
supposedly teaching stuff in the make work schemes .
That does not serve the youngsters at all, just the statistics. No youth unemployment over there, just sweeping the floors as apprentices or attending nonsensical formerly
trade schools.
Germany`s plight is worse than her doctrine to punish her
young, she is the greatest nation acting against her behalf.
It's better than letting the kids rot on the streets and getting funny ideas. Kids learn how to work. They learn to get up, arrive on time and be present for at least 8 hours. It builds character.
The apprenticeship model is actually one of the better hallmarks of the German industry. Kids learn a trade and get paid some. Employers have a young and cheap labor pool to draw from and eventually replacing retirees. Innovation needs an ongoing supply of fresh blood.
Let's talk about the bullshit system of American Colleges. What are the kids learning there? Drinking and oregamy?
+1T for the apprenticeship model
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5 minutes of my time to give my information to a 3rd party and have a chance (what are the odds?) to potentially, possibly, maybe win a coin that's worth 25 bucks.
If I was guaranteed the coin, I might do it. Otherwise it's phishing on the cheap.
"5 minutes of my time to give my information to a 3rd party and have a chance..."
...And give your email address so you can get real spam for the next year
Mmmmm, spam, it's what's for breakfast.
Spam went out as an English breakfast not long after WWII as war rationing was replaced by some better economic weather
someone tell that to Paul 'War is an Economic Miracle' Krugman please ...or serve him Spam for breakfast every day of his remaining miserable leftie life
"But you have to wonder if Spain can survive the journey."
What, like Greece?
Yeah they lie but is still one of the best plce to live
http://vimeo.com/65209712
No wonder it rains so much there..on the plains...
the plains in Spain are covered mainly with green tek windmills and solar panels
2 sound reasons why the Spanish energy sector is bankrupt
the green electro companies have been caught hooking up diesel engines to the windmills when the wind is not blowing (often enough) to generate extra revenue...obviously their directors are not as green as represented
Spain is not important. Italy is not important. France doesn't matter. Germany is just hitting a rough patch. Look, stocks are up. All is well in the United States of Weimerica.
We all live in Weimerica.(So true .) Weimerica, Weimerica...
at least they haven't printed $4 Trillion extra dollar!
equals 3.125 trillion Euro
yes they have printed that and more
the books are all off and out of kelter
the Fed needs to print 85 billion a month to keep the gongshow going and the deficit is still growing.
Southern Europe is in DEPRESSION. France is in major recession, soon in DEPRESSION.
Yup, the ECB is printing at least 100 billion Euros a month if not more. Otherwise their gongshow can't get funded.
But what does it matter. Money is worthless. They're pulling numbers out of their ass.
Ahh, you have discovered the great secret to the information age. Simply "reporting" that you have wealth, makes you have wealth. As Madoff intuited early on, you only have a problem when someone wants to call you on it, and in this market, no one wants to shit in the punch bowl.
Our economic system is based on wagework. One has to spend time on a "job" to earn money to pay tribute to his masters (tax, interest) and to give him power to force others to work for himself (buy food, clothes). Its a hierarchical master/slavery power structure with countless levels. Money/debt is the abstract force to entitle those master/slave relationships. The only job of the employees of the state is to protect the masters and force the slaves to keep working.
If too many people are out of work, the system destabilizes. Once unemployed, the duties of these former slaves have to be fulfilled by the state, otherwise the duties are eventually rendered null and void (insolvency). Well and if the state steps in for the former slave, the power (money) has to be substituted by virtual force (fiscal debt or money out of thin air), because the state does NOT work. So in any way, the power structure breaks.
Unemployment destroys the power structure built on money/debt.
If Spain tells us that all is well irrespective of skyrocketing unemployment it simply lies. They better introduce forced labour or arm their police and military forces to keep riots and crime under control.
Or otherwise , kurzdum, you made a perfect case of not working for the state. Why , if citizens have been disenfranchised all you need is some form of force?
They may just resort to self reliance,any`s socialist nightmare.
Spanish war all over, and of course this time non violent
action, just get rid of enlightenment inspired action
and the justifications thereof.
"Economy" requires a vertical power structure. If you get rid of the power structure and/or its force (money/debt) economic activity stops immediately. Why? Because going to work makes no sense anymore - it consumes much more time than it gives in return and no one forces you to go there.
People would stop constructing complex things and would focus on things they need instead. This would not require a complex organization so people would get rid of the complex society as well. They would reorganize to smaller groups (100-200 people). We live in huge entitites (cities) nowadays requireing complex logistics. Without vertical power structure these cities would collapse immediately. Millions of people would die within weeks.
We simply cant get rid of the vertical master/slave relationships. TINA. If we still do it would be a total disaster.
There is no self-reliance in an economy. If the "force" (money/debt/repression) fades, economy fades too. Of course, not immediately, but quite fast.
If you leave the cell of a prisoner unlocked and go away, the priosoner will not immediatley flee - but be assured, he will flee quite soon.
What if I dare to screw that untouchable Tina ?
Think about infrastructure, streets for example. Why are there no animals building streets? Because building streets consumes energy and benefits you AND your enemy. Without power structure even humans would NOT build streets. Well they would - but only within the territory of their tribes, consisting of 100-200 people at its best.
Indigenous peoples do not build streets connecting their tribes. Doing so would be suicide on the long run.
Lost me there , but you are obviously on a bigger agenda.
I do follow animals on their paths, roads are roman power
structures designed to rule, not to pass on.
And , I stay away from more than 100 tribesmen...
Is "Mad" short for Madoff or Madrid?
Swastika on new 5 Euro Note
imgage:
http://homment.com/neue-euroscheine
http://www.businessinsider.com/chinese-hackers-access-us-weapons-systems...
Chinese Hackers Have Gained Access To Dozens Of Major US Weapons Systems
Chinese hackers have gained access to designs of more than two dozen major U.S. weapons systems, a U.S. report said on Monday, as Australian media said Chinese hackers had stolen the blueprints for Australia's new spy headquarters.
Citing a report prepared for the Defense Department by the Defense Science Board, the Washington Post said the compromised U.S. designs included those for combat aircraft and ships, as well as missile defenses vital for Europe, Asia and the Gulf.
Among the weapons listed in the report were the advanced Patriot missile system, the Navy's Aegis ballistic missile defense systems, the F/A-18 fighter jet, the V-22 Osprey, the Black Hawk helicopter and the F-35 Joint Strike Fighter.
The report did not specify the extent or time of the cyber-thefts or indicate if they involved computer networks of the U.S. government, contractors or subcontractors.
While Israel is trying to start WW3...
http://news.nationalpost.com/2013/05/28/israel-threatens-to-strike-russi...
Fears grow of foreign-fed arms race as Israel threatens to strike Russia’s shipments to SyriaIsrael’s defence minister on Tuesday signalled that his military is prepared to strike shipments of advanced Russian weapons to Syria, in a rare implied threat to Moscow.
Defence Minister Moshe Yaalon issued his warning shortly after a top Russian official said his government reserves the right to provide Syria with state-of-the-art S-300 air defence missiles.
http://www.reuters.com/article/2013/05/28/us-syria-crisis-russia-defence...
Russia says missile systems for Syria will deter interventionWhile the FSA is saying : if within 24 hours Hezbollah troops are not withdrawn from Syria, they will attack the Lebanese army and Hezbollah in Lebanon...
I'm getting people e-mailing me about bacteriological threats from China, that China is working on "super bugs" in order to cull the US population.
All this has one thing supporting it: China = BAD. Which further suggests that the US is going to default (after some delcaration of war?).
For the weapons system hacking, just expect there to be a call for MOAR US weapons systems to be built.
" lower contributions to the Social Security system"
They're looking for cracks in which to sneak this in. It's inevitable.
Forced buy-ins and forced buy-outs... this has the feel of stability of a wino drinking Sterno...
Well in Spain we stopped believing the official numbers quite long ago.
For example,
This is the retail trade index, it's falling 10% a year. It pretty much represents the evolution of the service sector.
http://www.ine.es/en/prensa/icm_prensa_en.htm
But GPD only falls 1.9%
http://www.ine.es/en/prensa/pib_prensa_en.htm
Spanish stats are as credible as the chinese.
Thank god that the US isn't beleaguered by any of these problems, and that the USD is still backed by something of value! (</sarc>: in case it's needed to point out the obvious)
Cave canem.
While probably there is some tuning, the place of incorporation plays a role. All car factories probably (except SEAT) are not in that graph, but in France's, and Heavy Industries (Arcelor Mittal Steel) are incorporated in Luxembourg.
The only big industry that counts is Inditex (Zara and such).
Likewise, the companies like Telefonica, Repsol when it owned YPF, Santander and BBVA heavily own subsidiaries in South America and some other European countries. And IBEX 35 is a joke of an index. So comparison with the US is anything but straightforward.
Since I began writing about the Eurocrisis, I noticed that Spanish government budget data is massaged. The numbers do not stand up to scrutiny. If you wish to learn more about the topic, I have a post for you:
http://dareconomics.wordpress.com/2013/02/22/msm-begins-reporting-actual...
Note that none of this matters. If ZH and I know the data is suspect, then the investors buying the paper must know, too, but they are just relying on central bank action to maintain the downward pressure on yields.