Data out of Brazil, Italy show slowing global growth

Happy US Independence Day

Daily commentary: economic data

The data today were pretty mixed. Brazil is showing more signs of slowing as industrial production there dropped for the third month in a row. What’s more is that this puts Brazil back to numbers from 2009 when we were recovering from a global recession. To me the numbers are a clear sign that Brazil is feeling the economic weakness elsewhere. As an aside, I would note that Uruguay has been weakening too although I don’t have a link for that.

The rest of the data outside the US also looks weak. In particular, the news that Italy’s deficits are widening cannot be seen as good news by anyone who wants to see the euro crisis resolved. We are well beyond the point of doubling down on more austerity in Italy despite the commentary we heard from Richard Koo about what German policymakers want. Now that yields have stabilised somewhat it may pay to look to Italy now more than Spain as any signs of debt deflation there would bring renewed crisis.

Elsewhere, UK retail sales were a mixed bag. But in the US, both housing and auto data were good. The question about so-called reverse decoupling where the US does well and others don’t is coming up a lot. I’m not a believer but the US data, while weak are better than Europe. With earnings season around the corner, let’s see how that translates into corporate numbers. I am expecting lower forward guidance as margins suffer.

That’s it. Here are the links.

Euro zone sales regain ground in May, trend still weak | Reuters

Brasil: tercer mes de caída industrial – 04.07.2012 – lanacion.com

Debt crisis: Italy’s deficit to double, but Germany’s to halve – Telegraph

El déficit de Italia sube hasta el 8% del PIB en el primer trimestre del año | Economía | EL PAÍS

Weak UK services data raises quantitative easing hopes | Business | guardian.co.uk

June auto sales point to best year since 2007 | Reuters

Biggest gain in Calif. home prices in 2 years – Lansner on Real Estate : The Orange County Register

Manufacturing Turns South – Tim Duy’s Fed Watch

 

Europe

FT Alphaville » Richard Koo’s semi-successful attempt to persuade Germans about balance sheet recession

The euro crisis: A just-so German story | The Economist

France slaps 7 billion euros in taxes on rich and big firms | Reuters

German CSU Leader Horst Seehofer Attacks Angela Merkel Over Euro Policy – SPIEGEL ONLINE

"Deutschland lebt auf Kosten der anderen" – Finanzen & Börse – derStandard.at › Wirtschaft

June 2012 EU Summit Verdict: A good decision that will, probably, go to waste « Yanis Varoufakis

German Dominance in Doubt after Summit Defeat – SPIEGEL ONLINE

"The Euro’s Latest Reprieve" by Joseph E. Stiglitz | Project Syndicate

Finland Firm on Collateral as Spain Aid Terms Discussed – Bloomberg

FT Alphaville » Cajas or Landesbanken?

 

China

China is probably manipulating but the house price increase was a spot of good news for China bulls who think that China can have a soft landing.

Maneet Ahuja: Hedge Fund Manager James Chanos on His Big Short Position in China

Chinese Data Said to Be Manipulated, Understating Slowdown – NYTimes.com

China Housing Prices Rise After 9 Months of Decline – WSJ.com

 

Banks

Tales abound of banks behaving badly. What’s new?

JPMorgan Probed Over Potential Power-Market Manipulation – Bloomberg

The Consumerist » Bank Of America To Pay Woman $300K It Owed For Trying To Foreclose On Her 4 Years Ago

Banks Face Foreclosure Regulation by States – WSJ.com

Barclays CEO Faced Rebellion in New York Over Scandal – Business News – CNBC

 

Technology

More on the patent wars here. That seems to be a dominant theme in the mobile sector. I think it means slowing growth.

Apple’s Bid for Emergency Ban on HTC Android Phones Bounced – John Paczkowski – News – AllThingsD

Apple Said to Plan Smaller IPad to Vie With Google Nexus – Bloomberg

Judge Denies Reprieve in Galaxy Nexus Case, Allowing Sales Ban to Take Effect – Ina Fried – News – AllThingsD

Analysis: Will RIM’s cash hold out long enough? | Reuters

 

Other threads

Stiglitz: the full transcript | Ben Chu | Independent Eagle Eye – Breaking views from commentators – Blogs

America is no longer a land of opportunity – FT.com

India’s decade: the highest housing price rise in the world | beyondbrics

Paulson Forgoes Prognostication as Greatest Trade Sequel Flops – Bloomberg

Total confirms big gas find in Azerbaijan – FT.com

US Bancorp settles overdraft fee case for $55 million | Reuters

Chicago Booth Blog: Fault Lines by Raghuram Rajan – Towards a sustainable recovery

FT Alphaville » The base money confusion

FT Alphaville » Ireland’s ‘triumphant’ return to the markets

Argentina: From frustrating to surreal – FT.com

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