Post by jeffolie on Aug 20, 2011 11:38:35 GMT -6
Expect European consumer spending to decline, hurt US exports to Europe
Mish nailed this: austerity forces down consumer spending
About 25% of America's exports are sold to Europe ... expect a small decline in these
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Private Consumption in Portugal Plunges 3.4%, Biggest Drop in 30 Years; Expect Rest of Europe to Follow
Courtesy of Google translate, please consider Private consumption in Portugal is suffering the biggest drop in 30 years
The indicator of private consumption in Portugal in July recorded a fall of 3.4% compared to the homologous months of 2010, the lowest since data collection began in 1978.
According to the Bank of Portugal (BOP), this was the eighth consecutive month in which the pointer just in negative territory, which has been deteriorating gradually since December 2010.
The entry into force of some austerity measures that Portugal should apply to return for the loan of 78,000 million euros was granted the EU and the International Monetary Fund (IMF) have affected the contraction in household consumption Lusas.
Translation of that last paragraph is a bit choppy, but essentially the 78 billion "bailout" loans coupled with forced austerity measures is to blame for the massive plunge in private consumption.
Expect Rest of Europe to Follow
Contraction in Greece is arguably factored in (although hugely rising deficits are not). More importantly, worsening conditions in Spain and especially Italy are not accounted for.
The ECB forced Italy into various austerity measures in return for providing a backstop to Italian debt. That backstop has worked for now (it won't last), driving 10-year Italian government bond yields down from well over 6% to 5%, still a mighty spread vs. Germany.
Low growth for Italy is penned in. It will not happen. Expect a plunge in Italian GDP and personal consumption.
If Italy, Spain, Greece, and Portugal contract (all but Italy are already), spillover into France and Germany is a given.
Moreover, even France has pledged some budget tightening. Expect more social unrest and a huge recession in Europe because both are on the way. Germany will not be immune.
globaleconomicanalysis.blogspot.com/2011/08/private-consumption-in-portugal-plunges.html
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EUROPEAN CRISIS: the financial crisis will increase ‘austerity’ as retirement ages extend, services are privatized from higher paying government salaries to lower paying private jobs, benefits reduced. Bailouts of European banks will shift low valued debt from the banks to the IMF, FED, ECB, China via ‘swaps’, bond sales, loans, etc. Average European families will have their version of screwflation because their incomes will decline and expenses increase from governments privatizing. Political opposition to incumbents will grow beyond student riots or union actions and result in some governments changing leaders by the end of 2011. The Euro will still exist but at least one country will drop out or exit the ECB. Spain extremely large problems will be handled with bailouts, extending and pretending.
Read more: unlawflcombatnt.proboards.com/index.cgi?board=general&action=display&thread=8394#ixzz1Vaj9opa6
Mish nailed this: austerity forces down consumer spending
About 25% of America's exports are sold to Europe ... expect a small decline in these
================================================
Private Consumption in Portugal Plunges 3.4%, Biggest Drop in 30 Years; Expect Rest of Europe to Follow
Courtesy of Google translate, please consider Private consumption in Portugal is suffering the biggest drop in 30 years
The indicator of private consumption in Portugal in July recorded a fall of 3.4% compared to the homologous months of 2010, the lowest since data collection began in 1978.
According to the Bank of Portugal (BOP), this was the eighth consecutive month in which the pointer just in negative territory, which has been deteriorating gradually since December 2010.
The entry into force of some austerity measures that Portugal should apply to return for the loan of 78,000 million euros was granted the EU and the International Monetary Fund (IMF) have affected the contraction in household consumption Lusas.
Translation of that last paragraph is a bit choppy, but essentially the 78 billion "bailout" loans coupled with forced austerity measures is to blame for the massive plunge in private consumption.
Expect Rest of Europe to Follow
Contraction in Greece is arguably factored in (although hugely rising deficits are not). More importantly, worsening conditions in Spain and especially Italy are not accounted for.
The ECB forced Italy into various austerity measures in return for providing a backstop to Italian debt. That backstop has worked for now (it won't last), driving 10-year Italian government bond yields down from well over 6% to 5%, still a mighty spread vs. Germany.
Low growth for Italy is penned in. It will not happen. Expect a plunge in Italian GDP and personal consumption.
If Italy, Spain, Greece, and Portugal contract (all but Italy are already), spillover into France and Germany is a given.
Moreover, even France has pledged some budget tightening. Expect more social unrest and a huge recession in Europe because both are on the way. Germany will not be immune.
globaleconomicanalysis.blogspot.com/2011/08/private-consumption-in-portugal-plunges.html
================================
EUROPEAN CRISIS: the financial crisis will increase ‘austerity’ as retirement ages extend, services are privatized from higher paying government salaries to lower paying private jobs, benefits reduced. Bailouts of European banks will shift low valued debt from the banks to the IMF, FED, ECB, China via ‘swaps’, bond sales, loans, etc. Average European families will have their version of screwflation because their incomes will decline and expenses increase from governments privatizing. Political opposition to incumbents will grow beyond student riots or union actions and result in some governments changing leaders by the end of 2011. The Euro will still exist but at least one country will drop out or exit the ECB. Spain extremely large problems will be handled with bailouts, extending and pretending.
Read more: unlawflcombatnt.proboards.com/index.cgi?board=general&action=display&thread=8394#ixzz1Vaj9opa6