• Tag Archives France
  • Secular Stagnation?

    In today’s Outside the Box my good friend Charles Gave shares an instructive ‘Tale of Two Countries.’ Since 1981 in the UK and France, structural growth rates have diverged: The rate has fallen by two-thirds in France, while in the UK it has risen. Why? Well, to begin with, in the UK Margaret Thatcher was elected prime minister in 1979 and almost at once reduced the role of the bureaucracy in managing economic activity and dialed back government spending as a percentage of GDP. Meanwhile, in France, Franois Mitterrand was elected president in 1981 on a platform that expressly aimed to expand the scope of government.
    The effects on growth were predictable, says Charles, having been explained by Joseph Schumpeter in his 1942 book Capitalism, Socialism and Democracy.
    More recently, in the US, when government spending as a percentage of GDP shot up from 33% to 39% during the Great Recession, our growth rate fell from 2.5% to less than one percent. And that, says Charles, is the story on US stagnation – not the more fashionable narrative of ‘secular stagnation.’

    This post was published at Mauldin Economics on JUNE 21, 2017.


  • Macron Wins French Parliamentary Majority Amid Record Low Turnout: Live Feed

    Live feed:
    Despite pollsters’ projections of pro-Macron candidates receiving up to 450 seats (in France’s 577-seat lower house), a record low turnout has left Macron with just 360 seats (but still a massive majority) and Le Pen’s National Front with just 6 seats.
    French polling agencies are projecting that President Emmanuel Macron’s new centrist party will have a large majority in the powerful lower house of parliament and a clear mandate to overhaul the way France works and does business. As AP reports, the projections from Sunday’s second-round legislative elections suggest that Macron’s Republic on the Move! party handily beat the traditional left and right parties that have led the National Assembly for decades. The pollsters project that Macron’s candidates and their allies won as many as 360 seats in the 577-seat chamber. That was less than some had expected after its crushing victory in last week’s first-round vote.
    With roughly 130 seats, the Republican party is looking at a better result than initially expected: they become the biggest opposition party albeit significantly weaker according to France24.
    Pollster Kantar Sofres estimates outcome of second and final round of parliamentary election based on sampling of early votes.

    This post was published at Zero Hedge on Jun 18, 2017.


  • How Precious Metals Can Help Protect Your Wealth from Hackers

    Could your wealth be hacked? It’s a threat most investors overlook. But they do so at their own peril.
    Learn How to Exploit the Gold Frenzy! If elections can be hacked, then so can bank and brokerage accounts, as well as any online platforms for digital currencies.
    More than five months into Donald Trump’s presidency, the ‘Russia hacked the election’ conspiracy theories still won’t go away. They’re expanding to also implicate Russian hackers for meddling in elections in France and elsewhere. The latest Russian hacking story centers on Qatar.
    According to the Guardian, ‘An investigation by the FBI has concluded that Russian hackers were responsible for sending out fake messages from the Qatari government, sparking the Gulf’s biggest diplomatic crisis in decades.’
    Choose From 10-100oz Pure Silver Trusted Bullion Dealer – Buy Now! silvergoldbull.com The Russian government has repeatedly denied involvement in these hacking campaigns. Regardless of whether the news about Russian hackers is fake, the threat of cyber-attacks is very real.
    In recent months, major e-mail providers and e-commerce sites have been hit by hackers. They often take customers’ information and try to sell it on the dark web.

    This post was published at GoldSilverWorlds on June 17, 2017.


  • French Parliament Elections Tomorrow June 18th

    Macron was hoping to have a super majority that his new party would sweep the election to give him ultimate power. However, the latest poll taken by BFMTV showed a stunning 61% of French voters did not want the 39-year-old’s party to take the National Assembly. The majority of French voters have said they will vote against Macron’s party to prevent a ‘crushing’ majority in parliament. Most have responded that they would vote for a rival party in the second round in a bid to ‘rectify’ the the decision.
    It is looking more and more that the vote for Macron was not in support of him handing sovereignty to Brussels. The election point overlooked by everyone is the fact that Le Pen beat ALL mainstream parties. There is no mandate for the surrender of rights in France to a new Federalized Europe. The election is this Sunday, June 18th. We will see the results soon.

    This post was published at Armstrong Economics on Jun 17, 2017.


  • “Lynching Epidemic” Breaks Out In Venezuela

    The public-safety infrastructure in Venezuela has been degraded to such a degree that citizens now take justice into their own hands. Agence France Presse reported that lynchings have risen sharply over the last year and a half as political and economic instability in the crumbling socialist republic has worsened. Witnesses who spoke to AFP said a 22-year-old man who was set on fire at an anti-government demonstration in May was actually lynched after being accused of stealing by the crowd – not because he was a government sympathizer, as President Nicolas Maduro had suggested at the time.
    As AFP alleges, “it is not just the country’s economy and political system that are sick, but society itself, experts say. An epidemic of lynchings is one of the most gruesome symptoms.“


    This post was published at Zero Hedge on Jun 16, 2017.


  • Key Events In The Coming Busy Week: Fed, BOJ, BOE, SNB, US Inflation And Retail Sales

    After a tumultous week in the world of politics, with non-stop Trump drama in the US, a disastrous for Theresa May general election in the UK, and pro-establishment results in France and Italy, this is shaping up as another busy week ahead with multiple CB meetings, a full data calendar and even another important Eurogroup meeting for Greece. Wednesday’s FOMC will be the main event, with the Fed expected to hike 25bp (see full Goldman preview here), while the BOJ, BOE and SNB all remain on hold.
    Courtesy of BofA, here is the breakdown of key events:
    FOMC the star in a G10 Central Bank week After the eventful UK election, and less than eventful ECB meeting, the week ahead is a busy one, opening with the first round of the French parliamentary elections and with a plethora of data releases and central bank decisions to keep markets occupied. Another important Eurogroup meeting for Greece rounds out a full schedule.
    The FOMC meeting will be the main event of the week, where the Fed will deliver a 25 bps rate hike, in line with market expectations. While very weak retail sales or CPI could dissuade the Fed, this remains a very unlikely scenario absent a collapse in Wednesday’s CPI print. BofA expects lower inflation and growth forecasts, while the dots will show 3 hikes in 2018 and 3.25 hikes in 2019. The press conference will likely be focused on balance sheet normalization and implementation timing.
    No change from BoJ, BOE or SNB

    This post was published at Zero Hedge on Jun 12, 2017.


  • JPM: More “Tech Wreck” Pain Coming As “A Lot Of Lazy Money Was Chasing Momentum”

    Over the weekend, Goldman – whose “FAAMG” report was one of the catalysts to the Friday “tech wreck” rotation out of tech/growth/momentum and into value/energy – warned that the pain may not be over, simply because the outperformance of strong balance sheet companies – usually tech-linked names that have little or no debt and substantial cash flow – in a 10%+ equity market rally is rare; occurring in only 5% of six-month stretches in the last 30 years, and warning that “the last such notable episode was in 2000, at the Tech Bubble peak.”
    This morning it was JPM’s turn to opine on Friday’s events, only not on the cause of the mauling, but why we got to where we are. As JPM’s macro strategist Adam Crisafuli writes, “tech will remain under pressure – the space has become overcrowded w/a lot of lazy/complacent money chasing momentum and these weak hands can be quick to exit – that departure process usually takes longer than just a few days.”
    Here is his full note.
    What’s happening this morning? Stocks fell pretty much throughout Asia and prices are weak in Europe too. The US futures are down ~6 points. US TSY yields are flattish while 10yr yields are down in France and Italy following weekend political developments (the UK political situation remains very fluid although this really isn’t impacting anything beyond the shores of that country). Crude has a small bid following some encouraging news out of Qatar (Qatar remains committed to the production agreement and Kuwait is hopeful on a resolution to the current regional friction).

    This post was published at Zero Hedge on Jun 12, 2017.


  • Bill Blain: “It’s A FUBAR Moment Of Monumental Proportions”

    In his characteristically unique style, this morning Mint’s Bill Blain has set his sights, and commentary, on the recent elections in the UK and France, the former of which he summarizes as a “FUBAR moment of monumental proportions” while the latter is – well, who knows, but “at least Macron has a plan.”
    His latest “Blain’s Morning Porridge” note below:
    France or the UK – A Tale of Two Cities… but mainly who is going to clear up?

    ‘You have sat too long for any good you have been doing lately. Depart, I say, and let us have done with you. In the name of God, go!’ Markets are a function of politics and confidence. Politics boils down to a very simple equation: do people like you? Confidence boils down to the likelihood politicians will successfully make it better. Markets bet on the outcomes.

    This post was published at Zero Hedge on Jun 12, 2017.


  • British Election Backfires on May – Exit Polls Show Hung Parliament

    It’s looking like a hung Parliament and the polls got it wrong again in Britain. The Conservatives appear to be 12 seats short of the 326 to rule with a majority vote after a 20 point lead back in April. Theresa May is facing a serious backlash over her shocking election campaign gamble following an exit poll suggested that her snap election roll of the dice has completely failed to pay off. Where before the BREXIT vote was purely conservative, Corbyn had to embrace that position but then he turned to the youth and got a massive turnout in some areas at 75%. London itself is filled with a lot of students. Corbyn appealed to them promising healthcare and tuition deals and thus was tapping into a reservoir of people who would not normally vote.
    This election illustrated the entire problem I have been warning about. We are facing a generational battle. Ironically, the youth do not quite realize that voting Labour was a vote for the very neo-Marxist policies that have created the crisis we have in pensions going forward. It has been this type of promising manna from heaven with assurances to make the rich pay for it. This is exactly the same policies of Hollande in France, which proved so disastrous. Yet the old saying; Ah to be young again, but know what I know now comes to mind. What the youth have done looks very well like fulfilling what our computer has been projecting – the fall of the British pound long-term.

    This post was published at Armstrong Economics on Jun 9, 2017.


  • Macron – False Hope for Europe

    Those who think that the election of Emmanuel Macron to the Presidency of France is the savior of the Euro probably believe that politicians are really there for the people rather than themselves. Macron’s idea of federalizing Europe some call the ‘transfer-union’ is politically never going to happen. The EU is being torn apart at the seams for centralized government dictating to an economy and regulating everything just does not work. Ask Russia and China.
    Socialism is the same as Communism, with the minor distinction that you formally own your property, but are regulated and taxed so you are still not ‘free’ to do as you like. To a large degree socialism is worse for you have to fill out forms and pretend that your vote will actually change something – when they do not listen anyway.

    This post was published at Armstrong Economics on Jun 4, 2017.


  • Macron Invites All Americans Disappointed With Trump To Flee To France

    French President Macron invited American citizens – especially those with a higher education – who are disappointed with Trump’s decision to pull out of the Paris accord, to help ‘make our planet great again’ by moving to that bastion of liberal global values, France , where they will find “a second homeland.”
    In a short address to Americans following Trump’s announcement to withdraw from the Paris climate accord, the French leader said that while he respects President Donald Trump’s decision, he believes it was a “mistake” and invited all Americans (ideally those with a college education) to come join him in France “to work together on concrete solutions, for our climate, our environment.”

    This post was published at Zero Hedge on Jun 3, 2017.


  • Eurasian Economic Transformation Goes Forward — F. William Engdahl

    At this juncture it’s clear that the attempt of the Trump Administration and related circles in the U.S. military industrial complex have failed in their prime objective, that of driving a permanent wedge between Russia and China, the two great Eurasian powers capable of peacefully ending the Sole Superpower hegemony of the United States. Some recent examples of seemingly small steps with enormous future economic and geopolitical potential between Russia and China underscore this fact. The Project of the Century, as we can now call the China One Belt One Road infrastructure development – the economic integration on a consensual basis by the nations of Eurasia, outside the domination of NATO countries of the USA and E.U. – is proceeding at an interesting pace in unexpected areas.
    1971: America’s Twilight Begins
    It’s very essential in my view to appreciate where the post-1944 development of America’s role in the world went seriously wrong. The grandiose project dubbed by Henry Luce in 1941 as the American Century, if I were to pick a date, began its twilight on August 15, 1971.
    That was the point in time a 44-year-old Under-Secretary of the Treasury for International Monetary Affairs named Paul Volcker convinced a clueless President Richard Milhous Nixon that the treaty obligations of the 1944 Bretton Woods Treaty on a postwar Gold Exchange Standard should be simply ignored. Volcker rejected the express mandate of the Bretton Woods Treaty which would have seen a devaluation of the dollar in order to rebalance world major currencies. By 1971 the economies of war-ravaged countries such as Japan, Germany and France had rebuilt at a significantly higher level of efficiency than the U.S.
    A devaluation of the dollar would have given a major boost to U.S. industrial exports and eased the export of dollar inflation in the world arising from Lyndon Johnson’s huge Vietnam War budget deficits. The de-industrialization of the USA could have thereby been avoided. Wall Street would hear none of that. Their mantra in effect was, ‘Nothin’ personal, just bizness…’ The banks began the destruction of the American industrial base in favor of cheap labor and ultra-high-profit manufacture abroad.
    Instead of correcting that at a point it could have had an enormously positive economic effect, Volcker advised Nixon to in effect spit on America’s international treaty obligations and to brazenly dare the world to do something about it. On Volcker’s advice, Nixon simply ripped the treaty in shreds and ended Federal Reserve redemption of dollars held by foreign central banks for U.S. gold reserves. The U.S. dollar overnight was no longer ‘as good as gold.’

    This post was published at New Eastern Outlook


  • S&P Futs Near All Time High On Strong Euro Data; Oil Drops On Trump’s SPR Sale Plans

    S&P futures rose alongside European stocks as Asian shares posted modest declines. The euro set a new six-month high and European bourses rose as PMI data from Germany and France signaled that the ECB will have to tighten soon as Europe’s recovery remains on track, with the German Ifo business confidence printing at the highest level on record, and hinting at a GDP print in the 5% range. Oil declined after the Trump budget proposal suggested selling half the crude held in the US strategic petroleum reserve.
    Strong economic survey data across the Eurozone supported EU bourses, despite a cautious start to trade after last night’s deadly terror attack in the UK. Alongside strong headline numbers, one of the most eye-catching details in the data was the biggest manufacturing sector job growth reading in the survey’s 20-year-history and overall employment gains were the second best in a decade.
    “It’s a very good result and it’s broad based. We’ve got a good pace of growth here. The fact we have maintained this high level in May is great news for second quarter GDP,” said Chris Williamson, chief business economist at IHS Markit.”

    This post was published at Zero Hedge on May 23, 2017.


  • Hedge Fund Managers Pour SALT on U.S. Stocks, Look to Europe

    By Frank Holmes
    Europe is back on the map. That was one of the main takeaways last week from the SkyBridge Alternatives (SALT) hedge fund conference in Las Vegas, where $3 trillion in assets was represented. Speaker after speaker touted European equities for their attractive valuations and as a means to diversify away from the volatile American market in light of rising U. S. geopolitical risk. France’s election of centrist Emmanuel Macron over far-right nationalist Marine Le Pen this month has especially eased investors’ fears that antiestablishment forces would challenge the integrity of the European Union (EU).
    Economic growth is finally picking up in Europe – ‘solid and broad,’ as European Central Bank (ECB) president Mario Draghi recently put it – and many countries’ purchasing managers’ indexes (PMIs) are at five- and six-year highs. Export orders and hiring have accelerated. Labor participation is improving. European commodity sectors, including energy and metals, look cheap and oversold, meaning it might be time to start accumulating.
    Trading at around 17 times earnings, European companies are priced to move compared to American firms, which are trading at 22 times earnings.

    This post was published at GoldSeek on Tuesday, 23 May 2017.


  • Gold Somewhat Ignores Dollar Weakness

    The precious metals complex rebounded as expected after becoming very oversold just a few weeks ago. The rebound has been aided by weakness in the US Dollar, which plunged roughly 2% over several days. However, upon further inspection Gold’s rebound has been entirely dollar-centric. Gold has remained weak in real terms and strength in the gold stocks and Silver has been rather muted. In short, the lack of much stronger performance in the face of US Dollar weakness bodes for increasing downside risk over the near term.
    Gold’s recent strength has been driven entirely by Euro strength and not due to falling real interest rates, its primary fundamental driver. Macron’s win in France coupled with recent strength in European markets has supported what was an oversold and depressed Euro. This has supported Gold in US Dollar terms but only in those terms. As the chart below shows, Gold has been weak when measured against foreign currencies and equities.

    This post was published at GoldSeek on Sunday, 21 May 2017.


  • “Bond Bears Have Had A Difficult 2017” Goldman Mocks Its Clients After Cutting Its Treasury Yield Target

    It has been a day of capitulation for Goldman. Just hours after the bank that controls the White House cut its forecast for Trump tax hikes by nearly 50% from $1.7 trillion to $1.0 trillion, moments ago Goldman, which starts off every single year predicting that 10Y yields will rise to 3.00% (or higher) over the next 12 months – much to our recurring mocking every single year – just cut its 10Y Treasury yield forecast for the end of the year. To be fair (to those who lost money listening to its reco) it did so kicking and screaming, with chief GS Intl strategist Francesco Garzarelli adding saying that “in relation to expectations around nominal activity growth and credit expansion, 10-year bonds now screen as expensive across the board.”
    Well, maybe relative to Goldman’s expectations for nominal activity. Others, which as of today also include Fed’s Bullard, however are watching the chart below and have realized that any hopes for an economic rebound in the remaining 7 months of the year are now long gone.

    This post was published at Zero Hedge on May 19, 2017.


  • ECB Tapering May Trigger ‘Disorderly Restructuring’ of Italian Debt, Return to National Currency

    The only other option: ‘Orderly restructuring.’ Here’s the staggering scale of the Italian government’s dependence on the ECB’s bond purchases, according to a new report by Astellon Capital: Since 2008, 88% of government debt net issuance has been acquired by the ECB and Italian Banks. At current government debt net issuance rates and announced QE levels, the ECB will have been responsible for financing 100% of Italy’s deficits from 2014 to 2019.
    But now there’s a snag.
    Last month, the size of the balance sheet of the ECB surpassed that of any other central bank: At 4.17 trillion, the ECB’s assets have soared to 38.8% of Eurozone GDP. The ECB has already reduced the rate of purchases to 60 billion a month. And it plans to further withdraw from the super-expansionary monetary policy. To do this, according to Der Spiegel, it wants to spread more optimistic messages about the economic situation and gradually reduce borrowing.
    Frantically sowing the seeds of optimism on Wednesday was Bruegel’s Francesco Papadia, formerly director general for market operations at the ECB. ‘On the economic front, things are moving in the right direction,’ he told Bloomberg. The ECB will begin sending clear messages in the Fall that it will soon begin tapering QE, Papadia forecast. By the halfway point of 2018 the ECB would have completed tapering and it would then use the second half of the year to move away from negative interest rates.

    This post was published at Wolf Street on May 18, 2017.


  • French 30-Year Bond Sale Over 4 Times Oversubscribed

    In its first bond sale since the presidential election and the first big test of investor sentiment after Emmanuel Macron won the presidency, France received more than 31 billion in demand for a 30-year bond offering, once again demonstarting the unprecedented demand for duration on the yield-starved continent where the ECB is happily gobbling up every interest-yielding instrument. With some 7 billion in ultra-long duration paper sold via a syndicate of banks, pricing at 30Y FRTR +12, tighter than the +14 price talk, the issue was more than 4 times oversubscribed.
    Investor appetite for the bond, which some said helped by a cheapening of French debt in past weeks, also sparked an outperformance of 30-year French bond yields, which fell 3 basis points in late trade. When France opened books on the deal around 0830 GMT on Tuesday, interest was already in excess of 18 billion even before it started taking orders, according to Retuers IFR. It nearly doubled over the course of the day.
    “The 30-year area has been relatively cheap so it is no surprise to see strong demand for this bond today,” said Patrick Jacq, rate strategist at BNP.
    It goes without saying that a main driver for the investor interest is that while the bond matures in May 2048, three years later than the current 30-year benchmark, it is still eligible for ECB purchases in June,

    This post was published at Zero Hedge on May 16, 2017.


  • Key Events In The Coming Quiet Week: US Industrial Production In Focus

    It is a relatively quiet week for economic news in the and Eurozone with focus turning to UK data, Japan 1Q GDP, inflation in Canada & Australia’s employment report. Norway GDP should show continued improvement and the Riksbank proposal on a new policy target will also draw interest. In EM there are monetary policy meetings in Chile, Indonesia, Mexico and Poland.
    The start to the week is even more quiet today with no significant data to highlight, while in the US the May empire manufacturing reading is due along with the NAHB housing market index for May.
    On Tuesday, with little of note in Asia it’ll be straight to Europe where the final April CPI revisions are due in France along with the April CPI/RPI/PPI data docket in the UK. Euro area Q1 GDP and March trade data follows, while the May ZEW survey is also due in Germany. In the US tomorrow we’re due to receive April housing starts, building permits and industrial production data.
    We’re kicking off Wednesday in Japan where the March industrial production print is due. In the UK we’ll get March and April employment data, while April CPI for the Euro area is also due.
    There is no data of note in the US on Wednesday.
    Thursday kicks off in Japan again with the Q1 preliminary GDP report, while in China we’re also due to get April property prices data. In France on Thursday we’ll get Q1 employment data while in the UK we’ll get April retail sales. In the US on Thursday the data includes initial jobless claims, Philly Fed business outlook for May and Conference Board’s leading index for April.
    It’s a quiet end to the week on Friday. In Germany we get April PPI while in the afternoon session we get the flash consumer confidence reading for the Euro area in May. There is no data in the US on Friday.

    This post was published at Zero Hedge on May 15, 2017.