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Post by jeffolie on Dec 28, 2012 17:15:09 GMT -6
France death spiral France's Hollaindaise Sauce topped its hopes with a bad taste ... 75% “supertax” rate my jeffolie view: France's economy will follow Spain, Italy, etc into a Great Depression level of joblessness in the coming years under socialism's embrace of confiscatory taxation. ========================================= Unemployment rate in France climbs for 19th month in row December 28, 2012, PARIS — The number of jobless in France has risen for the 19th consecutive month to hit 3.13 million, a near 15-year high. Government figures show unemployment rose by more than 29,300 in November, taking the total to about 10.7% of the working population. The data released Thursday were among several reports in the last week that cast a pall on France’s economic outlook. President François Hollande admitted Thursday that his biggest challenge in 2013 will be getting the country back to work. However, his Socialist Party government blamed the previous center-right administration, thrown out of power in May, for the increase. “These figures are a severe reminder of those who let our country decline for five years. It calls for an unprecedented mobilization by everyone to combat it,” party chief Harlem Desir said in a statement. Hollande predicted there was worse to come and admitted unemployment would be the “great battle for 2013,” but vowed to reverse the trend by the end of next year. “During this holiday period I have to say to the French that we have to all take to the bridge to work and fight against unemployment,” he said during a surprise visit to a wholesale food market in Rungis outside Paris. Hollande faces a challenge to get unions and employers to agree to changes in labor laws aimed at creating flexibility and boosting competitiveness after talks between bosses and union leaders reached a deadlock by the December deadline. Labor Minister Michel Sapin called on the parties to reach an agreement when negotiations resume Jan. 10. The jobless figures came after the national statistics agency INSEE predicted that Europe's second-largest economy would grow just 0.1% in the first and second quarters of next year, less than previously estimated. This threatens the government's pledge to rein in the public deficit and could spark further job losses. INSEE predicted that unemployment was likely to continue rising at least until mid-2013 to 10.9%. An annual report by a leading British economic think tank, the London-based Center for Economics and Business Research, suggested France would fall behind Britain in terms of gross domestic product next year. The report put France in sixth place with Britain replacing it at fifth. The United States, China, Japan and India filled the first four places in that order. The report blamed France's flagging rating on “the economic effects of President Hollande's 75% tax policy and the difficulties of the euro.” Hollande has promised to introduce in January a 75% “supertax” rate for income over $1.32 million a year. Another blow came as a survey of U.S. businesses by the American Chamber of Commerce in Paris revealed that only 22% of the heads of American companies in France view the country as an attractive place to do business. This was down from 56% in 2011. Just over half of those quizzed said the financial outlook in their sector had deteriorated. The chief reason given for the bleak view of France was Hollande's victory over the conservative Nicolas Sarkozy in May. www.latimes.com/news/world/worldnow/la-fg-wn-jobless-climbs-france-20121228,0,341472.story
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Post by jeffolie on Dec 29, 2012 17:22:26 GMT -6
2.bp.blogspot.com/-nQZkcFe0SCQ/UN2YLsboYcI/AAAAAAAATl4/XxolSNaboAA/s1600/markit%2Bfrance%2Bretail%2B2012-12-28.pngDecember 28, 2012 France Economic Implosion Underway; French Retail Sales Contract 9th Consecutive Month as Cost Inflation Surges Inquiring minds are noting the expected (at least in this corner) collapse in European retail sales as measured by PMI indices. The spotlight for this post is France, the second largest Eurozone economy following Germany. The Markit France Retail PMI® shows French retail sales fall for ninth consecutive month. Key points: •Sales fall at sharper pace on both monthly and annual measures •Purchasing costs rise at strongest rate in ten months •Stocks of goods for resale decline at faster pace Summary: French retailers reported another month-on-month decline in sales during December – the ninth in succession which is a survey record. Sales were also down on an annual basis, and fell well short of retailers’ plans. Gross margins remained under considerable pressure, partly reflecting a strong and accelerated rise in purchasing costs. The headline Retail PMI® slipped to 46.8 in December, from 48.8 in November. The latest reading was indicative of a solid rate of contraction. Anecdotal evidence suggested that a difficult economic climate and low customer footfall had contributed to the drop in sales. Actual sales at French retailers once again disappointed relative to previously set plans in December. The degree of undershoot was the greatest since August. Survey respondents are also pessimistic regarding the one-month outlook for sales. Factors expected by retailers to boost sales over the coming three months include cold weather, new product launches and promotions. Those factors expected to depress sales include a weak economy, depressed consumer confidence and increased taxes. Latest data indicated that French retailers’ gross margins remained under strong pressure in December. Margins have declined in every month since February 2008. Wholesale prices faced by French retailers continued to increase in December. The rate of inflation accelerated to the sharpest since February. Panellists reported that suppliers had generally raised prices in order to pass on higher raw material costs. France Economic Implosion Underway Retail sales in France fell for the 9th consecutive month, a new record. Deterioration is marked as well as expected. Because of the sharp rise in inflation, things are even worse than they look at first glance of the PMI numbers. The horrendous policies from president Francois Hollande and his socialist cronies including ridiculous tax hikes and inane rules on firing workers are going to cause massive heartburn (to put things mildly). I have to laugh at the comment by Markit that "low customer footfall had contributed to the drop in sales". Nearly as amusing, note that retailers expect "increased sales because of cold weather." For further reading, please consider economically insane proposal by French president Francois Hollande "Make Layoffs So Expensive For Companies That It's Not Worth It"http://globaleconomicanalysis.blogspot.com/2012/06/hollande-about-to-wreck-france-with.html Given that any clear-thinking person should quickly realize that if companies cannot fire workers they will be extremely reluctant to hire them in the first place , it should be no surprise to discover French Unemployment Highest in 14 Years (And It's Going to Get Much Worse). In France, Government spending amounts to 55% of total domestic output. For discussion, please see Hollande's Honeymoon is Over; 54% of Voters Unhappy; Unions Promise "War" in September. Looking ahead to 2013, I Expect things in France to get worse at an accelerated pace. Mike "Mish" Shedlock Read more at globaleconomicanalysis.blogspot.com/2012/12/france-economic-implosion-underway.html#wWvU6QbULmJYPKsJ.99
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Post by jeffolie on Jan 20, 2013 12:21:28 GMT -6
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Post by jeffolie on Jan 26, 2013 13:13:50 GMT -6
www.nakedcapitalism.com/wp-content/uploads/2013/01/pmi4-300x200.pngJanuary 25, 2013 German Hope, French Despair By Delusional Economics, who is determined to cleanse the daily flow of vested interests propaganda to produce a balanced counterpoint. Cross posted from MacroBusiness. Eurozone Flash PMI for January came out overnight and the news was relatively good overall, although it must be noted that contraction continues across the zone. The January flash PMI data suggest that the Eurozone economic downturn has eased at the start of 2013. While official data are likely to confirm that the region contracted at a stronger rate in the final quarter of last year, the outlook has since brightened with January seeing the smallest drop in business activity since last March. “Forward-looking indicators – such as business confidence and the new orders-to-inventory ratio – also suggest that the rate of decline will continue to slow in the coming months, and a return to growth looks to be on the cards during the first half of 2013. “Worrying signs of weakness persist, however, with companies cutting staff at a faster rate, reflecting the need to keep costs as low as possible in the face of ongoing uncertainty about the economic outlook. “Trends also remained worryingly divergent within the single currency area, creating tensions for policymakers. While Germany is reporting a strengthening upturn, France is seeing the steepest downturn since early-2009. So Germany up led by services, but France continues to slide down as austerity bites and everywhere else still deep in the mire but slightly less so: January’s Flash PMI data signal a very disappointing start to 2013 and add to concerns that the French economy is sliding towards recession. Sickly performances from both the manufacturing and service sectors resulted in the steepest drop in overall output for almost four years, while the pace of job losses gathered pace. Although it’s hard to find many positives in this gloomy set of figures, there were a couple of glimmers of hope from the service sector, where the decline in new business eased and firms signalled a modest improvement in expectations regarding activity. However, persistent strong competitive pressures resulted in another fall in overall output prices which, combined with a further rise in input costs, maintained the squeeze on company margins. I’ve argued previously that France is far more of a periphery nation than one of the ‘core’ one in terms of economic structure, so this continued slowdown isn’t a surprise. It is now doing worse than some “periphery” nations. France, however, wasn’t the only one with poor news. Spanish unemployment has reached yet another record: Spain’s unemployment rate has hit another high, with almost six million people out of work in the southern European nation. While the figures are gloomy enough, the situation looks set to deteriorate. At the end of the last quarter in 2012, Spain’s unemployment rate reached 26 percent, the national statistics body INE reported on Thursday. It climbed from a rate of 25 percent in the previous three months. This is very much in line with Spanish GDP data that came out this week: Spain’s central bank said a recession in the euro zone’s fourth-largest economy deepened in the last quarter of 2012 after Prime Minister Mariano Rajoy’s government in late September approved its fifth austerity package in a year to head off tougher conditions demanded as part of a potential European bailout. In the first estimate of fourth-quarter economic performance, the Bank of Spain said the economy contracted 1.7 percent compared with the same period a year ago and likely contracted 0.6 percent from the previous quarter. And similar news from Italy: Italy’s recession will be worse than previously expected, the country’s central bank said today as it cut its 2013 estimate for gross domestic product on weakness in the global economy and disappointing internal demand. Italian GDP will probably contract 1 percent this year, the Bank of Italy said today in its economic bulletin. That compares with a July estimate from the central bank for a 0.2 percent reduction. “In our country, internal demand still hasn’t reached an inflection point,” the Bank of Italy said. The lower GDP forecast was “due to the worsening of the international scenario and the continuation of the weakness in business activity in recent months.” And to round off the dour news, Dutch consumer spending fell 3.0% YoY. But Germany is enjoying a sharp resurgence, with services up 3.3 points to 55 and manufacturing up 2.8 points to 48.8 and close to expansion. No doubt on the improving sentiment apparent in the ZEW and perhaps external demand, though it’s not yet apparent in export official data. From the above chart you can see that the French and Germany PMIs have never diverged from each other for long so it will be interesting to watch which wins the current tug-of-war. Full Eurozone PMI report below. Eurozone Markit PMI Jan 2013 by economicdelusion Read more at www.nakedcapitalism.com/2013/01/german-hope-french-despair.html#rsgX6pDKfM8Xhpqi.99
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Post by jeffolie on Jan 26, 2013 18:09:08 GMT -6
France's richest man moves to Belgium and takes multi-billion pound fortune with him 'to avoid new socialist super-tax' Bernard Arnault, head of luxury goods group LVMH, insists that he moved the cash and assets for ‘family inheritance reasons’ It is thought he wants to avoid a 75 per cent top rate on income being introduced by President Francois Hollande 24 January 2013 Bernard Arnault, the 63-year-old head of luxury goods group LVMH, insists that he moved the cash and assets for 'family inheritance reasons The richest man in France has officially transferred his multi-billion pound fortune out of his homeland to Belgium. Bernard Arnault, head of luxury goods group LVMH, insists he has moved his assets for ‘family inheritance reasons’. But others are convinced that the 63-year-old has joined other tycoons and celebrities in wanting to avoid taxes – including a 75 per cent top rate on income – introduced by Socialist President Francois Hollande. Mr Arnault applied for a Belgian passport soon after the Socialists won elections last year. Mr Arnault, who owns numerous homes around the world including one in London, applied for a Belgian passport soon after Mr Hollande’s Socialists won presidential and parliamentary elections last year. Critics immediately attacked him for leaving the country that is associated with all the brands which made his fortune - including Louis Vuitton, Christian Dior, Guerlain, Moet & Chandon champagne and Hennessy cognac. Nicolas Demorand, the editor of national newspaper Liberation, attacked him for ‘forgetting the country which has made him King’, adding : ‘Bernard Arnault is running the risk of fuelling suspicion about him, harming the image of his brands and weakening the employees who give them life.’ Mr Arnault has transferred his 31 per cent stake in Groupe Arnault, the family holding that controls LVMH, to Pilinvest, a Belgian firm that he specifically set up for the purpose. The stake is worth around 5.5 billion pounds, and Mr Arnault insists he wants to keep it in the hands of his five children after he dies. He has established a structure destined to prevent any of them selling their shares in the event of his death. Critics have attacked him for leaving the country associated with all the brands which made his fortune - including Louis Vuitton, Christian Dior, Guerlain, Moet & Chandon champagne and Hennessy cognac It is believed he is trying to avoid taxes including a 75 per cent top rate on income being introduced by President Francois Hollande A source close to him said the structure was lawful in Belgium, but would not be so in France. ‘He has got two obsessions - controlling his group and ensuring that it survives him,’ said the source. Earlier this year, Hollywood star Gerard Depardieu became another high-profile Frenchman moving his assets abroad The Belgian Office of Foreigners has suggested it might block Mr Arnault’s request for a passport, but the final decision will be taken by the Brussels parliament. Belgium has a much more lenient tax regime than France – raising an inheritance tax of three per cent, compared to11 per cent in France. Unlike France, there is no wealth tax in Belgium either. Mr Arnault is also likely to be concerned by Mr Hollande’s plan to bring capital gains tax in line with income tax – effectively raising it from 19 per cent to 45 per cent, and possibly to 75 per cent if the Socialist President goes through with his threat to make that the top income tax rate for earnings over €1 million a year. Earlier this year, Hollywood star Gerard Depardieu became another high-profile Frenchman moving his assets abroad. The Green Card and Cyrano de Bergerac card obtained a Russian passport, bought a house in Belgium, and put his multi-million pounds Paris town house on the market. Read more: www.dailymail.co.uk/news/article-2267800/Bernard-Arnault-Frances-richest-man-moves-Belgium-avoid-new-socialist-super-tax.html#ixzz2J86M6RzX
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Post by jacquelope on Jan 27, 2013 1:03:30 GMT -6
Wait, help me out here. The Plutocrats in France got rich by bleeding the country dry and underpaying their workers, now that the time has come to pay the piper they want to leave?
The countries that coddle these greedy bastards will suffer the price. Just ask the Cayman Islands and Dubai how their low tax nonsense went.
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Post by jeffolie on Jan 28, 2013 17:48:41 GMT -6
January 28, 2013 France "Totally Bankrupt" Says Labour Minister; Inappropriate or Inaccurate? Sometimes the truth comes from the strangest of places (like ranking government officials). I must say it's refreshing to see a bit of honesty, even if it is immediately denied elsewhere. Please consider France 'totally bankrupt', says labour minister Michel Sapin. France's labour minister sent the country into a state of shock on Monday after he described the nation as “totally bankrupt”. Michel Sapin made the gaffe in a radio interview, which left French President Francois Hollande battling to undo the potential reputational damage. “There is a state but it is a totally bankrupt state,” Mr Sapin said. “That is why we had to put a deficit reduction plan in place, and nothing should make us turn away from that objective.” Pierre Moscovici, the finance minister, said the comments by Mr Sapin were “inappropriate”. Inappropriate or Inaccurate? Forced to select one of those two choices, one would have to vote for inappropriate. However, it would be better yet to admit the truth, which labour minister Sapin clearly did. Unfortunately, finance minister Moscovici was not content to step aside, allowing citizens to decipher the meaning of the word "inappropriate". Instead, he fired off a set of three blatant lies: “France is a really solvent country. France is a really credible country, France is a country that is starting to recover.”Read more at globaleconomicanalysis.blogspot.com/2013/01/france-totally-bankrupt-says-labour.html#023PojiWPIyOYCrO.99
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Post by jeffolie on Feb 1, 2013 13:42:53 GMT -6
February 01, 2013 French Retail Sales Drop 10th Month Accompanied by Sharper Drop in Employment; Italy Retail Sales Drop 23rd Month; Eurozone Sales Collapse 15th Month; Wholesale Prices Soar Is the worst over for the Eurozone? That's what the ECB and heads of state said at the recent economic summit in Davos. I offer some economic reality. Eurozone Sales Collapse 15th Month and Wholesale Prices Soar The Markit Eurozone Retail PMI shows Eurozone retail sales downturn extends to fifteenth month in January Key points: •Rate of decline remains sharp despite easing since December •Sales growth resumes in Germany •Wholesale prices rise at fastest rate in ten months Summary Markit’s Eurozone retail PMI data for the opening month of 2013 signalled a fifteenth consecutive month-on-month decline in sales values, even after accounting for the post-festive slump in trading and a resumption of growth among German retailers. The three largest Eurozone economies are covered by the retail PMI surveys. The German Retail PMI hit a seven-month high and rose above 50.0, signalling a return to growth following December’s contraction. French retailers meanwhile saw another solid fall in sales at a rate broadly similar to that seen in the final month of 2012 (adjusted for seasonal influences). French retail sales have declined for a survey-record ten successive months. In Italy, retail sales fell for the twenty-third consecutive month, and the rate of decline remained severe despite easing since December. The rate of wholesale price inflation accelerated further in January to reach a ten-month high, linked to suppliers passing on higher raw material costs. All areas of retail posted rapid increases in suppliers’ prices except for clothing & footwear. Despite this, the value of retailers’ new purchases fell sharply, as they aimed to minimise warehouse levels in the face of weak demand. Subsequently, the value of goods held in stock at retailers declined for the fifth month running, and at the fastest rate since August 2010. Pressure on retailers’ gross margins remained intense, however, most notably in Italy. The combination of falling sales, rising cost pressures and a margin squeeze resulted in a further round of job cuts at Eurozone retailers, even after accounting for the usual post-festive reductions. Employment in the sector has fallen every month since April 2012, and the rate of decline accelerated to the fastest since last July. German retailers again bucked the trend, registering sustained workforce growth. Italy Retail Sales Drop 23rd MonthThe Markit Italy Retail PMI shows further sharp drop in retail sales, despite reaching four-month high Key points: •PMI rises for second straight month, but still signals steep contraction in sales •Sharpest drop in purchasing activity among retailers since August •Wholesale price inflation accelerates to 11-month high Summary: January saw a further deterioration in the health of Italy’s retail sector, with decreased sales leading to another round of job cuts. Purchasing activity among businesses fell accordingly, contributing to a further reduction in stock levels. There was more bad news on the costs front, with purchases prices rising at the fastest rate in 11 months. Italian retail sales continued to fall at a sharp monthly rate at the start of the year, as indicated by the seasonally adjusted PMI® posting at 37.5 in January. This extended the current period of contraction to almost two years. That said, the index was the highest in four months, having risen slightly from December’s mark of 36.8. Germany Returns to Growth The Markit Germany Retail PMI shows return to growth at start of year Key points: •Marginal expansion of retail sales during January •Employment growth continues •Wholesale price inflation highest since April 2012 At 51.0 in January, the seasonally adjusted Germany Retail PMI recovered from the eight-month low of 47.6 posted during December. However, the month-on-month rate of retail sales growth was only marginal, in part reflecting reports by survey respondents of subdued underlying consumer demand at the start of 2013. ...but like-for-like sales are lower than one year earlier The marginal rise in month-on-month retail sales contrasted with a decline on an annual basis registered during January. Latest data pointed to a moderate reduction in like-for-like sales compared with one year earlier, and the pace of contraction was the sharpest since May 2010. Moreover, the index was in negative territory for the first time in nine months. January sales disappoint compared to targets Actual sales in the German retail sector fell short of initial targets during January, as has been the case in each month since April 2012. Moreover, the degree to which sales were lower than expected was the most marked for one year. Margins squeezed at slowest pace since May 2011, despite sharper pace of cost inflation. Gross operating margins in the German retail sector decreased for the twenty-sixth successive month in January. Average prices paid by retailers for their purchases increased for the thirty-seventh month running, and at the sharpest rate since April 2012. French Retail Sales Drop 10th Month Accompanied by Sharper Drop in Employment The Markit France Retail PMI shows Decline in French retail sales extends to tenth consecutive month. Key points:
•Sales continue to decline at solid pace •Sharper fall in employment •Accelerated drop in purchasing
Summary:
Latest data pointed to another drop in French retail sales at the start of 2013. Falling for a tenth consecutive month, sales contracted at a solid pace during January. Purchase price inflation remained strong, maintaining pressure on gross margins. Retailers cut their purchasing activity at a sharper rate, leading to a faster decline in inventories of goods for resale. Employment meanwhile fell at the sharpest rate in five months.
The index measuring sales versus one year ago also pointed to a sharp decrease in the latest survey period. The annual rate of contraction was the most marked since October 2012.
French retailers signalled that the average price of their purchases continued to increase during January, which they mainly attributed to suppliers passing on higher raw material costs. The rate of purchase price inflation was similar to the strong pace recorded in December.
The value of goods ordered by French retailers for resale fell again in January, extending the current period of contraction to 16 months. The latest decrease was the sharpest since October 2012.
Comment:
Jack Kennedy, Senior Economist at Markit and author of the France Retail PMI, said: “The new year failed to bring cheer to the French retail sector, with the downturn in sales extending to a tenth consecutive month in January. The deterioration in general economic conditions continues to weigh heavily on the retail sector, with consumers reining in spending and stores reporting decreased levels of footfall. There also seems to be no end in sight to the long-running theme of squeezed margins, reflecting a combination of strongly rising wholesale prices and the need to discount goods in an intensely competitive environment.” Worst of Everything
•Sales are down year-over-year across the board •Sales are down month-over-month except for a small rise in Germany •Price inflation is up across the board •Margin squeeze across the board •Employment is down •France is sinking into the abyss •Italy already in abyss
But hey ... the worst is behind (or so they say).Mike "Mish" Shedlock Read more at globaleconomicanalysis.blogspot.com/2013/02/french-retail-sales-drop-10th-month.html#J27l4d28geh9Vb28.99
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Post by jeffolie on Feb 7, 2013 9:21:25 GMT -6
[Phoenix Capital Research email to me] The European House of Cards is About to Collapse Gains Pains & Capital In this issue • Spain, Greece and Italy are embroiled in corruption scandals. • France and Germany's economies are collapsing. • Mario Draghi's dark secret. February 7, 2013 The European House of Cards is About to Collapse The following is an excerpt from our most recent issue of Private Wealth Advisory. In it we outline how the EU's economy is beginning to collapse again, at the precise moment that Spain, Italy and Greece are becoming embroiled in major corruption scandals. The house of cards that is Europe is close to collapsing as those widely held responsible for solving the Crisis (Prime Ministers, Treasurers and ECB head Mario Draghi) have all been recently implicated in corruption scandals. Those EU leaders who have yet to be implicated in scandals are not faring much better than their more corrupt counterparts. In France, socialist Prime Minister Francois Hollande, has proven yet again that socialism doesn't work by chasing after the wealthy and trying to grow France's public sector... when the public sector already accounts for 56% of French employment. France was already suffering from a lack of competitiveness. Now that wealthy businesspeople are fleeing the country (meaning investment will dry up), the economy has begun to positively implode. The first sign of this came actually came from Germany. As we noted a few months ago, Germany had prepared a working group to examine the impact of an economic collapse in France. German Finance Minister Wolfgang Schaeuble has asked a panel of advisers to look into reform proposals for France, concerned that weakness in the euro zone's second largest economy could come back to haunt Germany and the broader currency bloc. Two officials, speaking on condition of anonymity, told Reuters this week that Schaeuble asked the council of economic advisers to the German government, known as the "wise men", to consider drafting a report on what France should do... "The biggest problem at the moment in the euro zone is no longer Greece, Spain or Italy, instead it is France, because it has not undertaken anything in order to truly re-establish its competitiveness, and is even heading in the opposite direction," Feld said on Wednesday. "France needs labour market reforms, it is the country among euro zone countries that works the least each year, so how do you expect any results from that? Things won't work unless more efforts are made." uk.reuters.com/article/2012/11/09/uk-germany-france-economy-idUKBRE8A80MN20121109 This German concern has proven to be well founded, as the recent spate of French economic data has been truly horrific. Auto sales for 2012 fell 13% from those of 2011. Sales of existing homes outside of Paris fell 20% year over year for the third quarter of 2012. New home sales fell 25%. Even the high-end real estate markets are collapsing with sales for apartments in Paris that cost over €2 million collapsing an incredible 42% in 2012. Since the EU Crisis began in 2008, France and Germany have been the two key countries backstopping the implosion. The fact that France is now facing an economic implosion does not bode well for the future of the Euro or the EU. The other sovereign backdrop for the EU, Germany, is also experiencing an economic slowdown. The German economy was hit hard by the euro zone crisis in the final quarter of last year, shrinking more than at any point in nearly three years as traditionally strong exports and investment slowed, the Statistics Office said on Tuesday... Gross domestic product shrank by 0.5 percent in the final three months of 2012, the worst quarterly performance since Germany fell into a recession during the global financial crisis in 2008/2009 and only the second contraction since it ended. The parlous fourth quarter pushed overall growth for the year down to 0.7 percent, a sharp slowdown from the 3.0 percent registered in 2011 and a post-reunification record of 4.2 percent in 2010. The 2012 figure was a tad below a Reuters consensus forecast for growth of 0.8 percent. www.reuters.com/article/2013/01/15/us-germany-gdp-idUSBRE90E09Q20130115 Thus, we find that Europe's primary political market props (EU leaders including ECB head Mario Draghi) are coming unraveled at the precise time that EU banks are showing warning signs and the most important EU economies are heading sharply south. 2013 is going to be a very interesting year for Europe. Phoenix Capital Research
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Post by jeffolie on Feb 7, 2013 12:52:21 GMT -6
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Post by jeffolie on Feb 7, 2013 14:24:38 GMT -6
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Post by jeffolie on Feb 22, 2013 8:34:34 GMT -6
February 21, 2013 France Sinks Further Into Gutter; PMI Accelerates to 4-Year Low; "Core" of Europe Now Consists of Germany Only While laughing at the amusing exchange of letters between the CEO of Titan and Arnaud Montebourg, Minister of Industrial Renewal of France, I awaited the latest PMI report on France, expecting findings to be horrific. The PMI reports are out today, and inquiring minds will note the Markit Flash France PMI shows the decline in French private sector output accelerates further to reach near four-year record. Key points: •Flash France Composite Output Index drops to 42.3 (42.7 in January), 47-month low •Flash France Services Activity Index falls to 42.7 (43.6 in January), 48-month low •Flash France Manufacturing PMI climbs to 43.6 (42.9 in January), 2-month high •Flash France Manufacturing Output Index rises to 41.2 (40.8 in January), 2-month high Summary: Latest Flash PMI data indicated that the downturn in French private sector output deepened in February. January’s Markit Flash France Composite Output Index , based on around 85% of normal monthly survey replies, slipped from 42.7 in January to 42.3, its lowest reading since March 2009. The steeper fall in overall output was driven by an accelerated decline in the service sector where activity contracted at the fastest pace in four years. Manufacturers signalled a slightly slower decrease in production compared with one month previously, albeit still sharper than signalled in the service sector. New business placed with private sector companies in France fell again in February, extending the current sequence of contraction to one year. The rate of decline quickened slightly since January and was only marginally slower than December’s 45-month record. Service providers indicated that new business fell at the sharpest rate for just under four years. Survey respondent s commented that difficult business conditions and intensifying competitive pressures had conspired to depress inflows of new work. France Economic Output 4.bp.blogspot.com/-rziuMe3LvXc/USZ4IyGC3II/AAAAAAAAVK8/Lk3Htjs2VC8/s1600/france+PMI+2013-02-21.pngExpect GDP to follow the PMI far more than economists expect. Eurozone Aggregate PMIThe Markit Flash Eurozone PMI shows steepening downturn in February. Key Points: •Flash Eurozone PMI Composite Output Index at 47.3 (48.6 in January). Two-month low. •Flash Eurozone Services PMI Activity Index at 47.3 (48.6 in January). Three-month low. •Flash Eurozone Manufacturing PMI at 47.8 (47.9 in January). Two-month low. •Flash Eurozone Manufacturing PMI Output Index at 47.5 (48.7 in January). Two-month low. The Markit Eurozone PMI Composite Output Index fell to 47.3 in February from 48.6 in January, according to the flash estimate. The decline signals a steepening of the economic downturn, contrasting with the easing trend seen in the previous three months. Business activity has now declined throughout the past year-and-a-half, with the exception of a marginal increase in January last year. Output rose for the third month running in Germany, albeit at a slower rate, contrasting with accelerating, steep rates of decline in both France and across the rest of the Eurozone on average. French businesses were particularly weak, reporting the largest monthly drop in output since March 2009. Outside of France and Germany, the rate of decline was the fastest for three months, though it was weaker than the downturn seen in France. New orders fell for the nineteenth month running, with the rate of decline gathering pace having eased to the weakest for 11 months in January. However, the overall rate of loss in February remained less steep than that seen throughout much of 2012. Chris Williamson, Chief Economist at Markit said: "A steepening rate of decline in February is a disappointment, and suggests that the eurozone is on course to contract for a fourth consecutive quarter in the first three months of the year. Digging into the data shows increasing schisms within the eurozone. National divergences between France and Germany have widened so far this year to the worst seen since the survey began in 1998. Germany is on course to grow in the first quarter, recovering from the 0.6% GDP fall seen in the fourth quarter, possibly expanding by as much as 0.4%. In contrast, France’s downturn is likely to deepen, bringing the euro area’s second-largest member more in line with the periphery than with the now solitary-looking German ‘core’.” "Core" of Europe vs. Periphery 1.bp.blogspot.com/-mGmfI81cbmM/USZ7fjrO7FI/AAAAAAAAVLI/LnD8haV0SJw/s1600/eurozone+PMI+2013-02-21.pngRecall that the "core" of Europe was once Germany, France, and Italy. Italy went down the tubes long ago and the "core" became Germany and France. The "core" is now Germany.Rotten to the Core Last month the eurozone composite PMI rose from 47.2 to 48.6. Chris Williamson, Chief Economist at Markit offered this interpretation: "The eurozone is showing clear signs of healing, with the downturn easing sharply in January and the region moving closer to stabilisation in the first quarter." I offered a completely different interpretation on February 7 in Illusions of Stabilization. No Signs of Healing I disagree with Williamson. Those divergences show the eurozone is getting sicker, not healing. If there was any healing, and certainly if there was any rebalancing, manufacturing and export growth would be picking up in Spain, in Italy, and in France at the expense of Germany. Illusion of Eurozone Stabilization There is no real stabilization and there is no healing. Rather, the policies of Hollande are so disastrous that some output has shifted to Germany and elsewhere, (coupled perhaps with some inventory replenishment and a temporary stimulus-fueled increase in demand in Asia). Even that cannot last. How can it? US growth has stalled (at best) and 2% payroll tax cuts will tip the US into recession (assuming it's not there already). With employment sinking in France, Italy, and Spain, precisely who will buy German exports?Properly rebalancing will require a shift in production from Germany to the rest of Europe as well as a shift towards more consumption in Germany from the rest of Europe. That cannot and will not happen with the destructive polices of Hollande, and the lack of reforms in Spain and Italy. Something has to give. And it's something very few people see coming. Germany Will Pay a Steep Price One way or another Germany will pay a huge price. These are the only two eurozone recovery options 1.Germany gives (not lends) more bailout money to the rest of Europe 2.The eurozone breaks up Until one of those things happens, signs of stabilization are nothing but an illusion. There are no other options, and no other choices. Meanwhile, imbalances grow and German taxpayers keep funneling tax dollars to the Southern states to keep them afloat. How long German citizens are willing to put up with this sorry state of affairs remains to be seen. globaleconomicanalysis.blogspot.com/2013/02/france-sinks-further-into-gutter-france.html
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Post by jeffolie on Mar 7, 2013 14:52:16 GMT -6
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Post by jeffolie on Mar 12, 2013 13:01:12 GMT -6
Socialist French president Francois Hollande wants to build when the market does not. Americans build alternative energy projects using govt subsidities when the market does not...creating Negative Prices. " ... French president Francois Hollande thinks he knows the proper amount of houses that need to be built. Therefore, Hollande confirmed measures to support building quickly. my jeffolie view: govts can badly become the producers when markets have no profits rather than allow 'market clearing' dead zones ... this wrongly prevents much needed 'creative destruction' . Until the Politics of the Backlash create new govt the existing French president Francois Hollande will spend public money badly. ======================================== March 12, 2013 1 Housing Construction in France Lowest in 50 Years; Hollande Responds With Measures to Support Building "For the Public Good" Housing starts in France will fall to 280,000-300,000 in 2013, the lowest level in 50 years warns developer Nexity. The government wants 500,000 units per year. French president Francois Hollande thinks he knows the proper amount of houses that need to be built. Therefore, Hollande confirmed measures to support building quickly. Here is a Mish-modified translation from Les Echos... Emergency. This is the word that comes to everyone's lips about building. Housing is at its lowest level since fifty years. François Hollande confirmed in an interview yesterday that "support for building" will be amplified quickly for the "public good". The Ministry of Housing was happy about yesterday's statements from the Head of State: "This means we are moving towards an ambitious plan". We recall the campaign promise to build 500,000 homes per year, of which 150,000 will be in social housing to offset the increase in the VAT rate. France is in the midst of a deflating property bubble. Nonetheless, Hollande wants to build more houses anyway. His rationale is interesting. Hollande wants to offset the increase in the VAT, taxes that he hiked. Hollande is on a mission to wreck France, and he is succeeding spectacularly as the following history shows. June 8, 2012: Please consider economically insane proposal by French president Francois Hollande "Make Layoffs So Expensive For Companies That It's Not Worth It" August 13, 2012: In France, Government spending amounts to 55% of total domestic output. For discussion, please see Hollande's Honeymoon is Over; 54% of Voters Unhappy; Unions Promise "War" in September. November 29, 2012: Given that any clear-thinking person should quickly realize that if companies cannot fire workers they will be extremely reluctant to hire them in the first place, it should be no surprise to discover French Unemployment Highest in 14 Years (And It's Going to Get Much Worse). December 28, 2012: Economic implosion in France is underway. French Retail Sales Contract 9th Consecutive Month as Cost Inflation Surges February 6, 2013: Germany Rebounds but ... France Economic Implosion Accelerates; Record Decrease in Service Employment in Italy February 21, 2013: France Sinks Further Into Gutter; PMI Accelerates to 4-Year Low; "Core" of Europe Now Consists of Germany Only March 6, 2012: Eurozone Downturn Accelerates Despite German Growth; Divergence to France Widest in 15 Years For the public good, Hollande ought to resign along with his entire socialist government. globaleconomicanalysis.blogspot.com/2013/03/housing-construction-in-france-lowest.html
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Post by jeffolie on Mar 21, 2013 17:13:51 GMT -6
March 21, 2013 Hope vs. Reality; Eurozone Downturn Intensifies, Led by Sharpest Drop in French Private Sector Output in Four Years There are few sure bets economically speaking (especially if one has to put a timeframe on them), but some things come close. One easy call was for a continued implosion in France. Sure enough the Markit Flash France PMI shows Sharpest fall in French private sector output for four years. Key points: •Flash France Composite Output Index posts 42.1 (43.1 in February), 4-year low •Flash France Services Activity Index drops to 41.9 (43.7 in February), 49-month low •Flash France Manufacturing PMI unchanged at 43.9 •Flash France Manufacturing Output Index rises to 42.8 (41.8 in February), 3-month high Summary: Private sector firms in France reported a further steep decline in output during March. Moreover, the rate of contraction accelerated to the sharpest in four years. This was signalled by the Markit Flash France Composite Output Index, based on around 85% of normal monthly survey replies, falling from 43.1 in February, to 42.1. Dragging the composite figure down was a faster decline in service sector business activity during March. The latest fall was the steepest since February 2009. Manufacturing output was also down markedly, but the pace of decline eased slightly to the slowest in three months. Incoming new business also decreased at a sharper rate in March. Mirroring the trend seen for activity, the latest reduction in new work was the fastest in four years. Employment in the French private sector fell further during March. The pace of job shedding remained solid, despite moderating to the slowest in three months. Job losses were broad-based across services and manufacturing, and at similar rates. France Economic Activity vs. GDP 4.bp.blogspot.com/-8BIirrSdBUk/UUtS1x8SSEI/AAAAAAAAVdQ/dKOeDl57h-k/s1600/Markit+France+2012-03-21.pngCare to guess where French GDP is headed? France Drags Eurozone Lower The Markit Flash Eurozone PMI shows Eurozone downturn intensifies for second month running in March. Key Points: •Flash Eurozone PMI Composite Output Index at 46.5 (47.9 in February). Four-month low. •Flash Eurozone Services PMI Activity Index at 46.5 (47.9 in February). Five-month low. •Flash Eurozone Manufacturing PMI at 46.6 47.9 in February). Three-month low. •Flash Eurozone Manufacturing PMI Output Index at 46.5 (47.8 in February). Three-month low. Summary: The Markit Eurozone PMI ® Composite Output Index fell from 47.9 in February to 46.5 in March, according to the flash estimate. The decline signalled an acceleration in the rate of contraction of business activity for the second consecutive month to the steepest experienced for four months. With the exception of a marginal increase in January of last year, business activity has fallen continually since September 2011. Manufacturing output fell in March at the fastest rate since December, while business activity in the service sector suffered the steepest decline since October. Companies also reported that new business levels fell at the strongest rate for three months, dropping at the fastest rates since December and September in manufacturing and services respectively. Employment fell for the fifteenth successive month, reflecting the need to reduce capacity in line with the ongoing deterioration in inflows of new orders and a further marked decline in backlogs of uncompleted orders. Comments: Commenting on the flash PMI data, Chris Williamson, Chief Economist at Markit said: “Instead of the eurozone economy stabilising in the second quarter, as many – including the ECB – have been hoping to see, the downturn could therefore intensify in coming months. ... France saw the steepest downturn in business activity since March 2009, rounding off the worst quarter for four years, while Germany looks set to have enjoyed reasonable if unspectacular growth. However, even Germany showed worrying signs of growth fading in March, driven by a return to contraction of its manufacturing sector.” Hope vs. Reality Markit economist Chris Williamson wrote "Instead of the eurozone economy stabilising in the second quarter, as many – including the ECB – have been hoping to see ..." We now know the rest of the story, but the story was easy to predict in advance. Illusions of Stabilization It was not only the ECB who was "hoping", but also Markit economist Chris Williamson. Flashback, February 7, 2013: Illusions of Stabilization In Germany Rebounds but ... I noted a recovery "of sorts" in Germany, a contraction in France at the steepest rate in four years, and a record decrease in services employment in Italy. Thus, it should be no surprise to see the Markit Eurozone Composite PMI shows national divergence hits record high. Yet, in aggregate, the eurozone contraction decelerated with the eurozone composite PMI rising from 47.2 to 48.6. So, what's it all mean? Chris Williamson, Chief Economist at Markit offered this interpretation: "The eurozone is showing clear signs of healing, with the downturn easing sharply in January and the region moving closer to stabilisation in the first quarter. ...." No Signs of Healing I disagree with Williamson. Those divergences show the eurozone is getting sicker, not healing. If there was any healing, and certainly if there was any rebalancing, manufacturing and export growth would be picking up in Spain, in Italy, and in France at the expense of Germany. A quick check of the Markit Eurozone Manufacturing PMI will show that is not what's happening. Illusion of Eurozone Stabilization There is no real stabilization and there is no healing. Rather, the policies of Hollande are so disastrous that some output has shifted to Germany and elsewhere, (coupled perhaps with some inventory replenishment and a temporary stimulus-fueled increase in demand in Asia). Properly rebalancing will require a shift in production from Germany to the rest of Europe as well as a shift towards more consumption in Germany from the rest of Europe. That cannot and will not happen with the destructive polices of Hollande, and the lack of reforms in Spain and Italy. Moreover, and as I have noted on many occasions, the entire Euro construct is flawed. Until those flaws are fixed, there is only the illusion of stabilization, and that based on more unbalanced growth. The only thing that has stabilized (for now) is interest rates, and even that won't last. globaleconomicanalysis.blogspot.com/2013/03/eurozone-downturn-intensifies-led-by.html#RfjxRxiKHXbWoWBk.99
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Post by jeffolie on Apr 2, 2013 16:53:27 GMT -6
France death spiralFrance's Hollaindaise Sauce topped its hopes with a bad taste ... 75% “supertax” rate my jeffolie view: France's economy will follow Spain, Italy, etc into a Great Depression level of joblessness in the coming years under socialism's embrace of confiscatory taxation. ========================================= April 02, 2013 Sharp Deterioration in French Manufacturing; Hollande Orders Employers to Pay 75% Tax; Top Executives Join France Exodus As expected, economic news in France continues to worsen. The Markit France Manufacturing PMI final data French manufacturing sector operating conditions continue to deteriorate at marked pace. Key points: PMI remains indicative of sharp downturn despite rising to three-month high Output, new orders and employment fall further Prices charged cut at fastest rate since November 2009 Summary: Operating conditions in the French manufacturing sector continued to worsen in March. Although the headline Purchasing Managers’ Index inched up to a three-month high of 44.0, from 43.9 in February, it continued to signal a marked rate of deterioration. The level of incoming new orders placed with manufacturers in France decreased further during March, extending the current period of contraction to 21 months. Moreover, the pace of decline accelerated slightly since February. Reduced workloads prompted French manufacturers to cut staffing levels further in March. The rate of job shedding was solid, albeit the slowest in three months. Prices charged by French manufacturers for finished goods fell for the third month running during March. Furthermore, the rate of decline accelerated to the sharpest since November 2009. A number of survey respondents commented that strong competitive pressures had weighed on their pricing power. Comment: Jack Kennedy, Senior Economist at Markit said: “A very slight improvement in the headline PMI figure does little to disguise an ongoing sharp deterioration in French manufacturing sector operating conditions during March. Increasingly aggressive output price discounting failed to prevent new orders dropping steeply remained deficient. Further marked falls in employment, purchasing and stocks also bear witness to a beleaguered industry struggling in the face of a darkening economic climate in France.” Manufacturing vs. Production 4.bp.blogspot.com/-jPhkP44RIAk/UVsH0dbJXiI/AAAAAAAAVi4/F-s6V9FkbgA/s1600/markit+France+2013-04-02.pngThe manufacturing PMI leads production and by implication GDP. So guess where French GDP and the French budget deficit is headed. A trio of articles from the Financial Times will fill in a few of the expected pieces. France Misses 2012 Deficit Target As expected in this corner France Misses 2012 Deficit Target and it will miss its 2013 target as well. Official figures showed the nominal deficit last year was 4.8 per cent of gross domestic product, overshooting the government’s target of 4.5 per cent. The 2011 deficit was also revised slightly upwards to 5.3 per cent. The government has already acknowledged it will overshoot this year’s target deficit of 3 per cent previously agreed with the European Commission. With the figure now forecast to hit 3.7 per cent, France is seeking a year’s delay from the commission for reaching the target, the level at which growth in the public debt should stabilise. The figures from Insee, the national statistics agency, showed the public debt, including France’s commitments to the eurozone’s rescue funds, rose to a record 90.2 per cent of GDP in 2012, slightly higher than target and up from 85.8 per cent in 2011. France has not had a balanced budget since 1974 and is under strong pressure to cut its big public spending bill, which amounts to more than 56 per cent of GDP, the second largest in the EU. French Unemployment Hits 16-Year High Also as expected in this corner French Unemployment Hits 16-Year High French unemployment nudged a record level in February as the jobless total rose for the 22nd month in succession to a 16-year high, adding to the acute political pressure on President François Hollande as he battles a stalled economy. The number of people out of work actively seeking employment rose by 18,400 over the month to 3.18m, just shy of the record level of 3.19m reached in 1997, labour ministry figures showed. Hollande Orders Employers to Pay 75% Tax In the not expected but hardly surprising category, Hollande Orders Employers to Pay 75% TaxIn March, the French constitutional court disallowed Hollande's controversial top tax rate of 75% on individuals. Proving that you cannot keep a dedicated socialist down, Hollande switched responsibility for paying the tax to employers. It was after all a "campaign promise". Why is it that idiotic pledges are the ones most likely to be met? Supposedly tax hike will only last two years. Is it any wonder Top executives flee France for London, Belgium, and Switzerland? globaleconomicanalysis.blogspot.com/2013/04/sharp-deterioration-in-french.html
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Post by jeffolie on Apr 9, 2013 16:29:22 GMT -6
French SOCIALISTS DISGRACED, scandal will disgust votersWill this 'political event' lead to the downfall of the French govt and loss of confidence by the French masses which might turn extremist as in Italy, Greece with growing Fascism?France Faces 'Devastating Scandal' as Economy Stalls... ===================================== April 8, 2013 French president struggles in tax crisis All members of France’s socialist government have been given a week to publish full details of their wealth as President François Hollande struggles to overcome a damaging scandal over a secret Swiss bank account held by his former budget minister. In a sign of the acute sensitivity surrounding the issue, Pierre Moscovici, finance minister, signalled to Jack Lew, US Treasury secretary, that he would have to cancel a meeting they were due to hold in Paris on Tuesday. On this story Hollande approval rating hits new low Hollande promises to root out corruption France misses 2012 deficit target Storm clouds gather for Hollande French officials later said they were trying to reschedule the appointment with Mr Lew, but that it would have to be fitted around Mr Moscovici’s attendance at a government question session in the National Assembly, where ministers are expected to come under renewed attack over the tax fraud scandal. The finance minister has been under sustained fire from the centre-right opposition UMP party since Jérôme Cahuzac, budget minister under Mr Moscovici until mid-March, admitted last week that he had lied about the 20-year existence of his Swiss account. Mr Moscovici has denied charges that he did not take strong enough action to uncover the truth after allegations were first made against Mr Cahuzac in December last year. The scandal has floored Mr Hollande, a lready suffering record low approval ratings, and threatens to undermine his efforts to tackle a stalled economy and rising unemployment. In a bid to regain the initiative, Jean-Marc Ayrault, prime minister, announced that the government would draw up later this month new legislation to stiffen laws on ethical standards for elected officials and the campaign against tax fraud and tax havens. In the meantime, he said all ministers would be required to supply by April 15 a statement of their wealth and assets, to be published online by the government. “There are many countries which already do this, including the Nordic countries and the US,” Mr Ayrault said. “It is a way of restoring confidence.” The government is hoping it can ride out the crisis but the political climate remains febrile. Laurent Fabius, foreign minister, was forced to deny publicly that he also had a Swiss account after a newspaper published a rumour to that effect for which it admitted it had no evidence. Mr Lew and his team were already on the ground in Brussels for meetings with EU leaders when they heard that Mr Moscovici would likely have to cancel. The new US Treasury secretary is pressing European countries with healthy economies – such as Germany – to generate more demand in order to help the wider eurozone out of recession. That stance is well aligned with the position of Mr Moscovici and his government. Mr Lew was travelling to Frankfurt for a meeting with European Central Bank president Mario Draghi on Monday and then to Berlin to meet German finance minister Wolfgang Schäuble. “I was particularly interested in our European partners’ plans to strengthen sources of demand at a time of rising unemployment,” he said after meeting EU Council president Herman Van Rompuy. www.ft.com/intl/cms/s/0/f83f07b8-a05b-11e2-88b6-00144feabdc0.html#axzz2Q0Xyal89
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Post by jeffolie on May 7, 2013 12:22:21 GMT -6
France death spiral " ... President François Hollande's popularity has sunk to a new low of 24%. France Unemployment Rate.... [ 11% from 8% in 2009] my jeffolie view: govts can badly become the producers when markets have no profits rather than allow 'market clearing' dead zones ... this wrongly prevents much needed 'creative destruction' . Until the Politics of the Backlash create new govt the existing French president Francois Hollande will spend public money badly. ==================================== May 07, 2013 When All Else Fails, Blame Your Staff, Not Yourself President François Hollande's popularity has sunk to a new low of 24%. Rather than blame his own policies for the huge rise in unemployment and the lack of competitiveness in France, Hollande pins hopes of fresh start on cabinet reshuffle. In an interview with the French magazine Paris Match published on Wednesday, Mr Hollande warned that none of his ministers were indispensable and that all would be judged on their results. “At some point, choices and adjustments will have to be made,” he said. “No one is protected in the government. No one has immunity,” he stressed, hinting that even his close ally Jean-Marc Ayrault, prime minister, was at risk. Many people who voted for Mr Hollande a year ago have recently joined protests against his government, complaining that the French president has failed to stand up to Germany’s pro-austerity dictat in Europe. At a leftwing rally in Bastille in Paris on Sunday protesters repeatedly attacked Mr Hollande’s decision to delay the retirement age, cut child benefits and reduce capital gain taxes to finance the country’s looming €20bn pension system deficit. “A big lesson from my first year is that the legislative process is too slow for the needs of the French people and the demands of companies,” said Mr Hollande. “We must act more quickly.” Judging by Results Hollande wants to judge his appointees by their results. How about the big point? Hollande should point a finger at himself. And just look at the socialist clowns complaining about lengthening of the retirement ages and cuts in untenable pension benefits. Supposedly more taxes is the answer, but that has wealthy fleeing the country. More importantly, French businesses are already burdened with inane work rules that make it nearly impossible to fire anyone. France Unemployment Rate.... [ 11% from 8% in 2009] Are Hollande's ministers responsible for the appearance of the above chart or is Hollande's socialist agenda? globaleconomicanalysis.blogspot.com/2013/05/when-all-else-fails-blame-your-staff.html
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Post by jeffolie on May 7, 2013 13:16:29 GMT -6
France death spiral " ... French Industrial Production Confirms Hollande's Triple-Dip Fears" ... lower than expected overnight. France's output fell 2.5% YoY against an expectation of a mere 1.4% drop and manufacturing production dropped 4.9% YoY - almost its worst since the crisis. my jeffolie view: govts can badly become the producers when markets have no profits rather than allow 'market clearing' dead zones ... this wrongly prevents much needed 'creative destruction' . Until the Politics of the Backlash create new govt the existing French president Francois Hollande will spend public money badly. ==================================== French Industrial Production Confirms Hollande's Triple-Dip Fears05/07/2013 French industrial production came in considerably lower than expected overnight. France's output fell 2.5% YoY against an expectation of a mere 1.4% drop and manufacturing production dropped 4.9% YoY - almost its worst since the crisis. This data confirms what we have discussed in detail (here and here) that France is heading for a depression. After the briefest of renaissances in Q3 2012, the Gallic nation now looks set for a triple-dip recession, further stretching the core of an already tense European Union. The last few days have seen 10Y French debt yields increase a little (+17bps off the lows) but they remain (much as the rest of Europe) near record lows. www.zerohedge.com/sites/default/files/images/user3303/imageroot/2013/04-2/20130507_france_2.jpgCharts: Bloomberg www.zerohedge.com/news/2013-05-07/french-industrial-production-confirms-hollandes-triple-dip-fears
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Post by jeffolie on May 14, 2013 10:34:36 GMT -6
May 14, 2013 Social Mood Darkens in Europe, Especially France, as Eurozone Economy in Freefall A PEW study on European Attitudes shows social mood is darkening in the Eurozone, but especially in France. The 78 page study "The New Sick Man of Europe: The European Union" is worth a look in entirety, but let's turn the spotlight on France. France in Free FallThe euro crisis first undermined France’s economy, and now there is strong evidence that it has severely eroded French public attitudes toward the economy, the European project and the country’s domestic leadership. Moreover, France has always bridged Europe’s north and south. French language and culture has Latin roots, but France has historically been considered in the same economic and political league as Germany and Britain. And in their public attitudes, the French were neither Northerners nor Southerners, but a hybrid of the two. Now, measured by a number of indicators, the French look less like Germans and a lot more like the Spanish, the Italians and the Greeks. In the current poll such sentiment reaches a new low, with just 9% saying the economy is performing well. And that judgment is down 21 points since 2007. Only 11% of the French think their economy will improve over the next 12 months, making the French among the most pessimistic of Europeans. And just 9% think their children will be better off financially than their parents, by far the gloomiest forecast for the next generation. The economic downturn over the past six years has also sharply increased the portion of the French population suffering basic deprivation. And reported incidences of not having enough money to pay for food and health care over the past year have increased more in France since 2007 than in any other of the EU countries surveyed. The French have long had their doubts about whether European economic integration has been good for the French economy. In 1991, the year before creation of the single European market, a plurality of 44% feared that integration would weaken France. Today, these doubts have morphed into strong convictions. Nearly three-quarters (77%) of the French think closer business ties with the rest of Europe have undermined their overall economy. In 2004, 69% had a positive opinion about the Brussels-based institution. But by 2013, just 41% have a favorable view. Moreover, more than half (53%) of the French oppose giving more decision making power to Brussels. And only 40% would consider financial assistance to other EU nations facing economic distress, down from 53% in 2010. Nevertheless, 63% of the French want to keep the euro and not go back to the franc. Opinion Gap With Germany Widens 4.bp.blogspot.com/-9FG8GmZfFGg/UZHNGd8DuZI/AAAAAAAAV3U/Y-yn3rgJHm4/s1600/PEW+2013-05A.pngThat 33-point difference six years ago is now a 66-point difference, as just 9% of the French and 75% of Germans see their economy as good. Moreover, the French and the Germans differ so greatly over the challenges facing their economies that they look as if they live on different continents, not within a single European market. Fully 80% of the French say unemployment is a very big problem; less than a third (28%) of the Germans agree. About two-thirds (68%) of the French think inflation is a major issue, while just 31% of Germans are similarly worried about rising prices. And 71% of the French are very troubled about public debt; only 37% of the Germans share such intensity of concern. The French and the Germans also disagree on whether to help out other European Union nations in distress. And their positions have flip-flopped. In 2010, roughly half (53%) the French backed bailouts, while only 42% of Germans agreed. Today, about half (52%) of the Germans support such financial assistance, while just 40% of the French do so. French Attitudes Worsen - Look More Like Greece, Spain Italy1.bp.blogspot.com/-O3HdlTIC0-Y/UZHOCgq8mbI/AAAAAAAAV3c/8woUkVJ0s_I/s1600/PEW+2013-05B.pngMore than nine-in-ten Spanish, Italians and Greeks think their economy is doing poorly, as do roughly nine-in-ten French. About two-thirds or more in all four countries think their governmental leader has done a bad job handling the economic crisis. Nearly three-quarters of the French, Greeks and Italians believe that economic integration has been bad for their country. More than half of the French, Spanish and Greeks look unfavorably on the EU. And by all of these indicators, French attitudes have worsened dramatically since 2007, much as has sentiment in Spain and Italy, for which there are comparable data. Support For Further Integration Wanes Leaders are still committed to the eurozone project with Brussels having still more control, but the average European citizen sure isn't. Interestingly, just 18% in France back a Keynesian solution to their woes even though socialists are in control. A pair of key charts from the report shows increasing skepticism towards further integration. 1.bp.blogspot.com/-8cHaqufZfYw/UZHS6-SNdPI/AAAAAAAAV3s/Upc2he2zZHk/s1600/PEW+2013-05C.pngPeople’s confidence in the European Union as an institution is waning even faster. A median of only 45% now think favorably of the Brussels-based organization. That support is down 34 percentage points in Spain, 21 points in France and 20 points in Italy. 2.bp.blogspot.com/-siey5kNtilA/UZHUpJtfPjI/AAAAAAAAV34/ed8u96dW5Jg/s1600/PEW+2013-05D.pngFor now, the majority in France, Germany, Italy, Spain, and Greece want to remain on the euro even as distrust of the nannycrats in Brussels mounts. Given such strong sentiment against further integration, I wonder how long support for the euro can last, but it sure is not forever. Adding fat to the fire, the euro itself cannot possibly survive in its current state. globaleconomicanalysis.blogspot.com/2013/05/social-mood-darkens-in-europe.html
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Post by jeffolie on May 15, 2013 12:23:07 GMT -6
France death spiral France's Hollaindaise Sauce topped its hopes with a bad taste ... 75% “supertax” rate my jeffolie view: France's economy will follow Spain, Italy, etc into a Great Depression level of joblessness in the coming years under socialism's embrace of confiscatory taxation. ========================================= Unemployment rate in France climbs for 19th month in row December 28, 2012, LAST YEAR ... 2012 I correctly predicted last year France's troubles " ... Triple Dip Recession in France; It's Not the Weather ... France slipped into its third recession in four years as my jeffolie view: France's economy will follow Spain, Italy, etc into a Great Depression level of joblessness in the coming years under socialism's embrace of confiscatory taxation. ======================================== May 15, 2013 Triple Dip Recession in France; It's Not the Weather France slipped into its third recession in four years as Germany barely went into positive territory, underperforming general expectations. The Financial Times reports France contracts in 1st quarter as Germany returns to growth French GDP shrank by 0.2 per cent in the first quarter, the same rate of decline as the final three months of 2012, according to Insee, the national statistics office. Investment, measured by gross fixed capital formation, remained weak, falling a further 0.9 per cent after 0.8 per cent in the fourth quarter. Exports fell and construction output fell. The second consecutive quarter of contraction put France back into recession, its third in four years. Germany, by contrast, managed to swing back into growth, but only barely. First-quarter GDP grew by 0.1 per cent, up from a downwardly revised contraction of 0.7 per cent in the fourth quarter of last year, according to a preliminary estimate by the Federal Statistics Office. The German growth figures were likely to have been dragged down by poor weather and many economists are expecting it to continue to grow as exports pick up. The country’s powerful engineering union, which includes the carmaking sector, agreed a pay deal with employers on Wednesday, giving workers a pay rise of 3.4 per cent in July and a further 2.2 per cent in May 2014. It's Not the Weather Blaming the German slowdown on the weather is complete silliness. More importantly, the idea that German exports will rise given stated pay raises and a weak and weakening eurozone economy is absurd. For more on the eurozone, and France in particular, please see Social Mood Darkens in Europe, Especially France, as Eurozone Economy in Freefall. Mike "Mish" Shedlock Read more at globaleconomicanalysis.blogspot.com/2013/05/triple-dip-recession-in-france-its-not.html#CcgdmoE1uCCBztWF.99
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Post by jeffolie on Jul 1, 2013 16:24:20 GMT -6
France: rise of the RIGHT, FASCISTS Similar to Italy, France now has a significant Fascist party ... winning elections, polling = 2 governing parties my jeffolie view: the death spiral moved from economics to the POLITICS MATTERS and the EU is doomed.
===================================================== French Opposition Demands Referendum, Warns "What Are They Going To Do? Send In Tanks?" 07/01/2013 For the first time, France's Front National party (described by some as 1930s Social Nationalism) is running level with the two governing parties in post-war France - the Socialists and the Gaullistes. With all around 21%, the Front is rapidly gaining support as its leader, Marine Le-Pen exclaims, "Europe is just a great bluff. One side there is the immense power of sovereign peoples, and on the other side are a few technocrats." As The Telegraph reports, following a massive victory securing 46% of the vote in a recent by-election, her anti-euro sentiment is clearly gathering attention. "The euro ceases to exist the moment that France leaves, and that is our incredible strength. What are they going to do, send in tanks?" she notes, adding that should she be elected she will demand an EU referendum, "I will negotiate over the points on which there can be no compromise. If the result is inadequate, I will call for withdrawal." While her rhetoric is strong, it is clear by the gains and her purging of the more extreme members of her cantankerous father's party that she is serious as she concludes somewhat ominously, "France is not a country that can accept tutelage from Brussels." Via The Telegraph, [Front National Party leader Marine Le-Pen is] brimming with confidence after her party secured 46pc of the vote in a by-election earthquake a week ago. For the first time, the Front National is running level with the two governing parties of post-War France, Socialists and Gaullistes. All are near 21pc in national polls, though the Front alone has the wind in its sails. ... "The euro ceases to exist the moment that France leaves, and that is our incredible strength. What are they going to do, send in tanks?" ... "Europe is just a great bluff. One side there is the immense power of sovereign peoples, and on the other side are a few technocrats," ... Asked if she intends to pull France of the euro immediately, she said: "Yes, because the euro blocks all economic decisions. France is not a country that can accept tutelage from Brussels," she said. ... She said the EMU crisis is structural. North and South need different exchange rates. "The D-Mark would be rising if it were not for the euro, and that means Germany has a chronically undervalued currency. The euro is far too strong for France, and it is eating away our competitiveness," ... A recent Pew Foundation survey said French support for the EU Project has collapsed from 60pc to 40pc over the last year, and 77pc think economic integration has been damaging. ... France endured the same slow torture in the early 1930s under the Gold Standard, stoically accepting the "500 deflation decrees" of premier Pierre Laval. The dam broke in 1936 with the election of spurned outsiders, then the Leftist Front Populaire, with Communist support. The Gold Standard collapsed. ... "We have succumbed to a spirit of slavery in France. We have forgotten how to lead, and our voice is not heard any more," she said. It will be heard now. www.zerohedge.com/news/2013-07-01/french-opposition-demands-referendum-warns-what-are-they-going-do-send-tanks
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