Wednesday, August 14, 2013

Global Economic Crisis Update: Greek Youth Unemployment, Japan GDP, German Election, U.S Economy, Debt Ceiling, Tapering…

Greek youth unemployment hits record 65%
Overall rate at 27% but two thirds of youths can’t find a job, stats show
http://www.cbc.ca/news/business/story/2013/08/08/business-greece-unemployment.html
Bundesbank: Greece Will Need Extra Aid By Early 2014
http://www.moneynews.com/newswidget/Bundesbank-Germany-Greece-Merkel/2013/08/11/id/519788

Japan Miss On GDP, Carry Trade Totally Reversed, Nikkei Futures Down 200
The Japanese are sliding quickly towards the cliff…
There goes the tax hike (and any expectation of fiscal balance). Japanese GDP grew at a miserly 0.6% QoQ, missing expectations of +0.9% (the biggest miss in a year) and slowing from an already revised lower 0.9% growth in Q1. So much for Abenomics breathing life back into a balance-sheet-recessed nation. Typically this kind of miss would be met with cheers as bad is good but in the case of Japan where they are so far down the rabbit hole, there is no moar left. The already collapsing JPY-carry trade is unwinding in a hurry as JPY surges to a 95 handle on the news; the USD is dropping, Nikkei futures are down 200 points, S&P futures are down a few handles, and gold is holding notable gains…
German election uncertainty … Bunds selling, dragging USTs with them down!!!
Gregor Peter ‏@L0gg0l 1h
German election uncertainty … Bunds selling, dragging USTs with them down
REMINDER: The US Is Weeks Away From A Confluence Of Risky Economic Events That’s Unlike Anything We Can Recall
A couple weeks ago we wrote about the fact that the US is coming up to an unusual of significant econo-political events unlike anything we can recall.Starting sometime in September, we can expect to see the following:
  • A fight over the government’s budget, leading to a possible government shutdown.
  • A fight over the debt ceiling.
  • The beginning of Fed tapering (the reduction of large-scale asset purchases, known as Quantitative Easing)
  • A nomination for a Fed Chair to replace Ben Bernanke.
Read more: http://www.businessinsider.com/debt-ceiling-government-shutdown-fed-nomination-tapering-2013-8#ixzz2blF0j6Yl


Equity Futures Slide More On Resignation Taper Is Just Around The Corner
Despite an overnight surge in the Chinese markets, with the Shanghai Composite closing up 2.4% following reports that China will not only continue with its “liquidity tightening” operation by, paradoxically, cutting RRR for smaller banks, but launch a stimulus for several Chinese provinces and city governments “on the quiet” in the form of jumbo-sized bank loans, and GDP news in Japan that were so bad they were almost good (although not bad enough to close the Nikkei in the green) US futures continue to take on water following the second worst week of 2013 as the market now appears resigned to a Taper announcement in just over 5 weeks (as we have claimed since May). News in Europe continues to be bipolar, with the big picture confirming that only dark skies lie ahead following yesterday’s news that a new Greek bailout is just around the corner, or rather just after the Merkel reelection (even though Kotthaus perpetuated the lies and said a second cut in Greek debt is not on the agenda – although maybe he is not lying: maybe only Greek deposits will be cut this time), offset by on the margin improvements in the economic headlines, even as credit creation remains not only non-existent but as the FT reports (one year after Zero Hedge), some €3.2 trillion in financial deleveraging is still on deck meaning an unprecedented contraction in all credit-driven aggregates (one of which of course is GDP).
Taper debate and “next chairman” speculation will continue to be the primary driver of the market but in the meantime, here is the market recap via RanSquawk:
  • Germany’s Bundesbank expects Greece will need a new aid package at the beginning of 2014 at the latest according to a central bank internal document. However, German ministry said that it is not aware of Bundesbank paper on Greece.
  • Analysts at Goldman Sachs have revised up Euro-area Q2 GDP forecast to 0.2%. Also revised German Q2 GDP estimate to 0.8% Q/Q vs. Prev. 0.3% and French GDP estimate to 0.1% vs. Prev. -0.2%.
  • According to South China Morning Post, key Chinese cities and provinces are set to receive stimulus.
http://www.zerohedge.com/news/2013-08-12/equity-futures-slide-more-resignation-taper-just-around-corner
Don’t be fooled by DC’s quiet this week: Plenty is happening

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