Everything is down except the markets… (updated)
It makes no sense:
- ECRI indicator plummeting for a while and now negative
- Employment data were hugely disappointing
- Consumer spending down 1.2%
- Europe is embarking on massive austerity and Japan is pondering the same
- Meantime, in the US, this is really scary…
- FedEx guidance a pretty good proxy for the world economy well below expectations
- Housing starts falling
- Even the Baltic Dry Index has rolled over
And we haven’t even mentioned Europe. The IMF is in Greece and Spain. The interbank market is freezing. There are talks of a 250B rescue package for Spain, which is in an absolutely dire strait and nobody wants to lend it’s banks anymore. It looks ever more likely to be the next domino to fall. The euro is climbing, a supposed sign of confidence, but it’s actually bad for Europe.
In China, wages are growing at 30% and workers are flexing their muscles, inflation is on the rise already, soon the central bank will have to embark on tougher measures to dampen the inflation. We haven’t even mentioned the heady real-estate prices or what’s on the banks books there.
In the meantime, Matt Simmons thinks BP is leaking 120,000 barrels a day into the Gulf…
When will the economic fall-out of this start to show up into US statistics? Can’t be long..
All of this is pointing towards slower growth and deflation. And we all know what that does to public finances and private debts…
Enjoy the ride, it won’t last..