Daily:On a bullish Empire State Survey within the synchronised global slowdown
The Empire State Manufacturing numbers showed greater growth for both production and employment than in the previous survey. These are the kind of numbers that are supportive of recovery. Nevertheless, the peak in disposable personal income and personal consumption expenditure growth in the US was over a year ago. i find it hard to believe that we could turn this cycle in the other direction absent some sort of exogenous policy change that boosted private sector net financial assets. To put that in plain speak: I think the cycle is in the process of rolling over, and has been since early 2011. Once the roll over begins, it continues until we hit a recession.
So, just weeding out all the day-to-day noise, you need to focus in on the fact that every country in the world is showing slowing growth and the US, the world’s largest economy has seen growth slow across a bevy of economic metrics for over a year.
Conclusion: It would take some serious, serious hocus-pocus to turn this ship around. I think the chances of this being just a mid-cycle slowdown are about zero. In my view, the US and the world economy are headed for recession’. Our focus therefore needs to be more on what that means than trying to disprove this thesis. I spend most of my time trying to find counterfactuals to my established macro themes and the rest of it developing an understanding of what those macro themes mean for economies, markets, politics, jobs, and businesses. Right now, however, I am going to flip that and focus on the what does it mean and focus a bit less on the disproving bit. Today’s headline story however, is just a sample of the disprove data points I like to find to keep myself honest. I don’t think it changes the macro view in isolation.
That’s it. Here are the links.
Manufacturing in New York Region Grew at a Faster Pace – Bloomberg
Chancellor Gerhard Schröder Key in Weakening the Euro Stability Pact – SPIEGEL ONLINE
BBC News – Oil prices could be rigged by traders warns G20 report
The eurozone endgame will begin in Greece | Costas Lapavitsas | Comment is free | The Guardian
The Consumerist » Woman Tries To Buy Car, Gets Flagged As Terrorist
Yahoo snags Google’s Mayer as CEO in surprise hire | Reuters
More lies ahead in the LIBOR scandal | Marketplace.org
Barton M. Biggs, Market Prognosticator, Is Dead at 79 – NYTimes.com
May business inventories climb 0.3 percent; sales drop | Reuters
ECB Shifts View on Bond Losses – WSJ.com
It’s sunk costs all the way down | A Fistful Of Euros
The eurosceptics have the best lines again – FT.com
Eurozone rescue without growth means Finland could be first to leave – Telegraph
El ajuste de Rajoy da un duro golpe a las empresas en plena recesión | Economía | EL PAÍS
Analysis: A cooling Canadian housing market still poses risks | Reuters
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