In the first article, we are told that Greece is awakening from its coma. Meanwhile, in the second, PM Samaras is busily denying that the need for additional budget cuts even though its privatization plan is failing. Greece will need to come up with about €1.5bn or so if it is unable to close deals on state assets in 2013. Moreover, revenues are running behind projections again. Greece will require more money soon whether it be debt forgiveness or the ELA money printing program.
Greece resides in the realm of surreality. Employment and GDP have been falling for years, yet business confidence has risen markedly in the last year. Maybe Greek businessmen have bought into the mainstream media’s Greek recover meme.
In the meantime, will Angie be able to keep the lid on Greece until after Bundestag elections?
Europe has unveiled an action plan to deal with its steel industry. The good news about the EU’s steel industry is that it ran its highest trade surplus in a decade. The bad news is that a precipitous drop in imports is what enabled it to run such a large surplus. Falling imports are indicative of Europe’s economic malaise.
Fortunately for European steel producers, the action plan contains very little action making it similar to other European endeavors, like a banking union. The plan is a political document created so that politicians can score points for attempting to save jobs. The steel producers are actually in favor of reducing state intervention in the steel market.
When ZeroHedge points out the divergence between the economy and the stock market, it is just another day in the Blogosphere. When mainstream media outlet Bloomberg uses the same chart and makes the same point a day later, it is a sign that a correction is fast approaching Uncle Ben’s Magic Money Land.
BTW, I prefer ZeroHedge’s chart and analysis. Compare the chart and articles yourself and see what you think.
Over the weekend, I read the latest John Mauldin piece about Japan. He is so convinced that the yen is on the verge of collapse that he financed his new home purchase with a yen based loan. That is the ultimate contrarian indicator for the current yen narrative. At the present juncture, it is safe to say that the yen is done depreciating.
Something changed on May 2. I can’t tell you what happened, but the evidence is all over every chart I use for my posts. For some reason, the dollar began appreciating rapidly on this date. I am not sure if this caused the slide in emerging markets or if the slide in emerging markets pushed the dollar higher as speculators cashed out and converted.