Thursday , February 27 2020
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Tag Archives: Germany

If Some Economists Are No Longer Buying It

Germany’s Finance Minister Olaf Scholz ignited and invited controversy today when he signaled that the federal government is looking at a possible suspension to constitutional budget measures. With a nasty political fight certain to follow, even temporarily adjourning the country’s so-called debt brake would not be easy. With Chancellor Angela Merkel’s party already in a precarious position, one might wonder, why now? The mere hint of a softening to the prevailing budget position picked up an...

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Curved Again

Earlier today, Mexico’s Instituto Nacional de Estadística y Geografía (INEGI) confirmed the country’s economy is in recession. Updating its estimate for Q4 GDP, year-over-year output declined by 0.5% rather than -0.3% as first thought. On a quarterly basis, GDP was down for the second consecutive quarter which mainstream convention treats as a technical recession. On a yearly basis, it was actually the third straight. Nothing seems to have changed as 2019 drew to a close. Mexico’s struggle...

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Capital Markets Remain Fragile after Yesterday’s Bloodletting

Overview:  Yesterday's bloodletting in global equities has calmed, but investors remain on edge. Despite all the concerns that the markets were under-appreciating the implications of the new coronavirus, there is a sense that yesterday's moves were in excess. Japanese markets, which were closed on Monday, played catch-up today, and the Nikkei shed 3.3%. Australia's market fell another 1.6% today after a 2.2% slide yesterday, but many of the other regional markets stabilized, including...

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Schaetze To That

When Mario Draghi sat down for his scheduled press conference on April 4, 2012, it was a key moment and he knew it. The ECB had finished up the second of its “massive” LTRO auctions only weeks before. Draghi was still relatively new to the job, having taken over for Jean-Claude Trichet the prior November amidst substantial turmoil. The non-standard “flood of liquidity” was an about-face from his predecessor (who had been raising rates in 2011 before the wheels fell off), an early test of his...

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Sources of Imbalance and the Pushback Against New Divergence

The US dollar's surge alongside gold has eclipsed the equity market rally as the key development in the capital markets.   Even the traditional seemingly safe-haven yen was no match for the greenback.  The dollar appeared to have been rolling over in Q4 19, as the sentiment surveys in Europe improved, Japanese officials seemingly thought the economy could withstand a sales tax increase, and data suggested the Chinese economy was gaining some traction.   However, 2020 has begun...

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Number Four Gets Back To Looking Nasty

Shocking, perhaps, but in no way unexpected. IHS Markit didn’t just throw a wrench into all that talk about a global rebound, the organization solidly hammered a substantial nail in its coffin. According the flash estimates for February 2020, the US economy hit a skid. The manufacturing version dropped back to 50.8 from 51.9 in January. The rebound on this side, if you could even call it that, appears to have run its course. It’s now three months in a row for Markit’s index to the downside,...

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Apple’s Warning Weighs on Sentiment

Overview: Apple's warning that it will miss Q1 revenue due to the knock-on effects of the coronavirus seemed to be a modest wake-up call to investors, who, judging from the equity market, were looking beyond. Equities have fallen, and bonds have rallied. Japan, Hong Kong, and South Korean stocks fell by more than 1%, and only China and Indonesia were able to post gains. The MSCI Asia Pacific Index fell for the fourth consecutive session. Led by information technology, materials, and...

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European Data: Much More In Store For Number Four

It’s just Germany. It’s just industry. The excuses pile up as long as the downturn. Over across the Atlantic the situation has only now become truly serious. The European part of this globally synchronized downturn is already two years long and just recently is it becoming too much for the catcalls to ignore. Central bankers are trying their best to, obviously, but the numbers just aren’t stacking up their way. We’ve seen all this before, repeatedly. Part of the denial is about the nature of...

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As the Data Comes In, 2019 Really Did End Badly

The coronavirus began during December, but in its early stages no one knew a thing about it. It wasn’t until January 1 that health authorities in China closed the Huanan Seafood Wholesale Market after initially determining some wild animals sold there might have been the source of a pneumonia-like outbreak. On January 5, the Wuhan Municipal Health Commission issued a statement saying it wasn’t SARS or MERS, and that the spreading disease would be probed. In other words, you can’t blame...

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Low-Cost Universal Health Care With A Record Budget Surplus?

How can it be?      See the full DW article here The following video on the German health care system is a must view, folks. Take the 10 minutes and watch. If not, study the charts. The German system is completely private consisting of two plans: 1) SHI — Statutory Health Insurance — for those making under $60k per year, is made up of a highly regulated sector of competing not-for-profit private companies, and 2)  PHI – Private Health Insurance. Upshot Better healthcare at a lower...

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