News: 2013-11-29
Happy Black Friday.
Since I haven’t posted in a while, have a lot of links here. The ones to note are on retail sales in the US, economic figures in Europe and the links on China. But there are a lot of links from all over. On Europe, looking at the numbers all together, I see more weakness than when I saw them in isolation. I am still cautiously optimistic. But the data are weak. As usual, links do not equal endorsement.
Markets
Global shares near 6-year high, euro firm after inflation rebound | Reuters
“Nikkei posts best Nov since 2005, yen slumps to 5-yr low vs euro”
Tokyo Shares Hit 6-Year High – WSJ.com
Howard Marks: We’re Not at Bubble-Type Highs – Barrons.com
Newly Reformed Bull Hugh Hendry’s Eclectica Flattish In October
German watchdog starts probe into gold price-fixing: report | Reuters
BBC News – Bitcoin: Experts clash over the crypto-currency
Housing
Rising house prices do not tend to fuel greater consumption by households | EUROPP
Federal Reserve Bank San Francisco | Global Household Leverage, House Prices, and Consumption
UK house prices at 40-month high as mortgage approvals jump 34pc, says Nationwide – Telegraph
UK house prices rising 6% a year, says Nationwide | Money | theguardian.com
Housebuilders’ shares tumble after BoE scales back lending scheme – Telegraph
Bank of England steps in amid fears of a new house price bubble | Business | The Guardian
Immobilier: la baisse des prix se poursuit – LExpansion.com
French house prices are down 1.4% y-o-y. As in the Netherlands, where the fall has been much greater, house price falls are a hidden drag on the economy that is little discussed in the English-language press. Post-bubble, France was one of the few markets (with Canada and Australia) that had risen a lot before the crisis which have yet to have a significant housing downturn
Canada’s Housing Market Becoming More Polarized – Canada Real Time – WSJ
El precio de los pisos ya sube en Madrid, Baleares, Navarra y Extremadura | Economía | EL PAÍS
This article updates us on the state of the Spanish housing market. House prices are already rising again in Madrid, the Baleares, Navarra and Extremadura. Meanwhile, throughout Spain prices fell on average 4.5% y-o-y in Q3 2013. That is the lowest fall since Q4 2010. Permits for housing are down 25.9% in the year to September.
Europe
ECB says financial system stress has fallen to pre-crisis levels | Reuters
Euro-Zone Private-Sector Lending Declines Further – WSJ.com
S&P strips Netherlands of AAA credit rating – Telegraph
BBC News – S&P upgrades Spain’s economic outlook
Standard and Poor’s eleva la perspectiva de España de “negativa” a “estable” | Economía | EL PAÍS
S&P has moved Spain from negative to stable at BBB- for longer-term debt and A3 for short-term debt.
Latvia PM Dombrovskis resigns over Riga supermarket roof collapse – FT.com
“Mr Dombrovskis’ resignation leaves Latvia without a government just five weeks before the country introduces the euro, a move that he had championed in the face of deep apathy from the public.”
Switzerland racked up 1.9% GDP growth y-o-y in Q3 – not stellar but better than the eurozone
Portugal verabschiedet strengsten Sparetat seit 1977 – SPIEGEL ONLINE
Portugal delivered its toughest budget since 1977 earlier this week.
Sämre BNP–tillväxt än väntat – DN.SE
In Sweden, GDP growth figures were worse than expected at 0.1% in Q3 following a 0.3% rise in Q2. 0.4% was expected
VIDEO. Chômage: après la confusion, Hollande contraint de réaffirmer sa promesse – LExpansion.com
Hollande has reaffirmed his pledge on jobs in the wake of the first decline in unemployment in 30 months.
Merkel Reaches Agreement to Form New German Government – SPIEGEL ONLINE
“Despite the extra costs, the grand coalition government says it will not raise taxes. And beginning in 2015, it also claims it will not create new government debts.
The parties also agreed to expand the country’s use of renewable energies, with a goal of a 55 to 60 percent share of all energy coming from clean sources by 2030. The conservatives had pled for 50 to 55 percent, whereas the Social Democrats had wanted 75 percent.”
Angela Merkel secures right-left German coalition deal – FT.com
“Angela Merkel and her coalition partners have agreed on a deal that would bring pension increases, a national minimum wage, motorway tolls for foreigners – and no change in Germany’s key EU policies.”
German unemployment climbs to highest level since April 2011 | Reuters
Italy October jobless rate stable at 12.5 percent, youth unemployment at new high | Reuters
Le chômage recule dans l’Europe du Nord, mais pas encore dans le Sud
This French article says that “in an almost caricatured way, the European scene has been divided in two, between the northern countries, where employment has restarted after the crisis of 2008-2009, and the southern ones, where it stagnates though not continuing to collapse.”
El paro baja en Francia por primera vez en dos años y medio | Economía | EL PAÍS
Unemployment in France fell for the first time in 30 months, with a reduction of 0.6% of unemployed to 3,275,200
BBC News – Greek economy to shrink for seventh year, OECD says
ekathimerini.com | Greek bank deposits fall for fifth month in October
ekathimerini.com | Cyprus banks lose 1.3 pct of deposits in October
Bankers will get monthly ‘allowance’ to combat new bonus rules – Independent.ie
Independence is the right economic choice for Scotland – FT.com
This article by the cabinet secretary for finance in the Scottish government argues for Scottish independence from the UK
Public pensions in ‘death spiral’ due to ‘Madoff economics’ – Telegraph
North America
For U.S. stores it is ugly out there: in more ways than one | Reuters
Everyone assumes a poor retail season. Let’s wait and see. But this is a consistent theme.
Stores open early on Thanksgiving but shoppers in no rush | Reuters
How One Bad Thanksgiving Shaped Amazon – Gretchen Gavett – Harvard Business Review
The Senate and the filibuster: Dropping the bomb | The Economist
“Curbing the filibuster, which hands the minority party a powerful tool to thwart the majority, has long been discussed. Both parties refrained from doing it, partly out of a self-interested fear about what would happen when they next found themselves in the minority, partly from some lingering sense that the Senate ought to be a polite place where lawmakers reach across the aisle to make deals. Why did Democrats, who have a majority in the Senate, decide to break with precedent and make the change?
The move reflects general gloom at the prospect of getting anything significant done before the next electoral cycle.”
Americans back Iran deal by 2-to-1 margin: Reuters/Ipsos poll | Reuters
Quebec Pushes Back Target for Balanced Budget – Canada Real Time – WSJ
Japan
Sober Look: 3 key facts about Japan’s deteriorating demographics
Higher Prices Point to Japan Growth – WSJ.com
“The government said that the core consumer price index, which excludes fresh food prices, rose 0.9% in October from a year earlier. That was the highest since November 2008, matching the rise forecast by economists. It marked the fifth straight month of increases”
Japan Finances Worse Than at End of World War II – Real Time Economics – WSJ
“The central government’s debt-to-gross domestic product ratio stood at 204% at the end of March 1945.
More than half a century later, this ratio–a key measure of a government’s ability to pay down debt–is already above that milestone. The Ministry of Finance estimates it will reach 227% by the end of March next year.
At the end of March 2012, Japan’s central government had assets totaling some Y600 trillion, roughly half of its total liabilities projected for next March, separate MOF data show/”
China
Top Luxury Brands Losing Their Shine in China – China Real Time Report – WSJ
Stephen S. Roach praises the reform agenda endorsed by China’s Third Plenum. – Project Syndicate
“History will be the ultimate judge, but there is good reason to believe that China’s recently completed Third Plenum will come to be regarded as a pivotal moment in the country’s development. At long last, China’s senior leadership has endorsed a raft of reforms that could impel the economy’s shift from reliance on exports to consumption-led growth.”
“China’s growing geopolitical heft is emboldening its territorial creep in Asia. After laying claim to 80% of the South China Sea, it has just established a so-called air defense identification zone in the East China Sea, raising the odds of armed conflict with Japan and threatening the principle of freedom of navigation of the seas and skies. Meanwhile, the People’s Republic continues to nibble furtively at territory across the long, disputed Himalayan border with India.”
“When the one-child policy was implemented in 1979 – in an effort to alleviate social, economic, and environmental pressures following the population boom in the 1950’s and 1960’s – the fertility rate plummeted, from three children per household in 1970 to 1.2 in 1982. The household saving rate subsequently soared, from 10.4% in 1983 to a staggering 30.5% in 2011. Could the one-child policy have fueled this rise? If so, will the modified policy precipitate a reversal in this trend and, in turn, a consumption boom in the coming decade?”
Economics
Krugman disses students that want to rethink economics | LARS P. SYLL
Technology
NSA Spying Risks $35 Billion in U.S. Technology Sales – Bloomberg
NSA spygate concerns prompt Microsoft to encrypt its internet traffic — Tech News and Analysis
Apple, Inc. stock breaks $545 barrier as Samsung calls ‘Crisis Awareness’ meeting
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