Around the Globe 08.30.2013

America’s Widening Confidence Gap, In a Little Chart – The Market Now.

Consumer Confidence by Income Group


A constant them in this blog is the unreliability of economic indicators due to their being skewed by the top of the income distribution.  Earlier in the week, I compared and contrasted the confidence levels among different consumer income groups, and you can read that here:

Around the Globe 08.27.2013

That chart basically compares the top half of the U.S. income distribution to the bottom half segmented into four groups.  I would like to the top half divided in a similar fashion in order to learn exactly how much of this “confidence” is being reported by the upper echelons.


U.S. July Consumer Spending Up 0.1%, Income Rises 0.1% –

Consumer Spending in U.S. Rises Below Forecast on Incomes – Bloomberg.

Weak spending, inflation data underscore soft U.S. economy | Reuters.

I wonder why consumer spending and the economy are still weak.  Could it have anything to do with this chart?

US Real Wage Performance Since 2000


Euro-Zone Unemployment Falls –

Eurozone Total Unemployed Workers 08.2013

Today’s award for the most misleading headline of the day goes to the Wall Street Journal.  Eurozone unemployment did fall slightly; about 24,000 less people were unemployed in July than in June.  The reason why the headline is not accurate is because a shift in 24,000 in a population of close to 20 million should not be considered as a change either way, because the number is too small to be significant.  Basically, a decrease of one-tenth of one percent is probably within the error range for the survey.

Moreover, the real story of the Eurozone’s employment picture is right here:

Eurozone Employed Workforce 08.2013

the number of people working declined 668,000 or about 0.5%.  This was the steepest monthly drop in the workforce since the beginning of the Eurozone recession.  Perhaps the GDP recession is over in the Eurozone, but the labor recession wears on.

Greek Cash Shortfall Spells Problems for Euro Zone –

Greek Government Budget Deficit

Deadheads were a cult that followed folk rock group the Grateful Dead around on tour living a hand-to-mouth existence relying on the kindness of others.  When the tour ended, Deadheads tended to just stay wherever they were until the next touring season began.  This leads to the old joke from the 80’s:

Q. How can you tell that a Deadhead crashed on your couch?

A. He’s still there.

So, how can the Germans tell that they once bailed out Greece? Because they are still bailing out Greece.

Greece has devolved into a permanent ward of the Eurozone.  The Greeks need to attain economic growth rate of 5% for several years in a row in order to end their nightmare, but this growth will never come.  While the Germans are loathe to admit it, they are now the guardians of Greece and will be paying a few billion euro a year for years to maintain the integrity of the eurozone.  These payments will continue until either the Germans get tired of handing over the cash or the Greeks grow weary of what will be increasingly draconian conditions attached to the aid.


One thought on “Around the Globe 08.30.2013

  1. ” While the Germans are loathe to admit it, they are now the guardians of Greece and will be paying a few billion euro a year for years to maintain the integrity of the eurozone. ”

    Exactly. And what I have been saying for years.

    EVEN IF you forgave Every Penny Greece borrowed or was loaned, AND
    paid off all of their debt. RIGHT NOW

    A few years from now they would need another bail out.

    To Make matters worse, IMF is forcing Greece to sell off State assets and land.

    To Make matters even more horrible, you have near 68 % unemployment
    for 18 – 25 year olds.

    After 5 years being unemployed, what makes anyone think anyone will want
    to hire them 5 years from now, no experience, and technology learned in
    college will have far exceeded their knowledge.

    . You cannot change a culture or a way of life by loaning money

    that permits the culture and way of life to continue.

    . The US and all others have to learn this too.

    The hard way it seems.

    . Once bankrupt, cold and wet and hungry,
    they will learn.
    Unfortunate but true.

    . Human nature seems to be that absolute misery and suffering is needed
    before any real change in behavior is made.


    Must hit rock bottom or die like a drug addict.

    To change.

    This appears to be the same world wide, not just Greece.


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