The French government is trying to reign in its deficit by jacking up taxes, including the capital gains tax—an old philosophical pillar of the French left. But an explosive essay published last Friday hit a nerve with entrepreneurs, venture capital investors, artisans, and mom-and-pop business owners. And their anger, which spread across the social media, the papers, and finally TV news, turned into an open revolt.
US National Debt: In A Year, I’ll Add Another Ugly Data Point
by Wolf Richter • • Comments Off on US National Debt: In A Year, I’ll Add Another Ugly Data Point
The final amount that the US government owes at the end of fiscal 2012 (September 30) is, drumroll, $16,159,487,013,300. It owes it, in no particular order, to the Saudis, US citizens, the Social Security Trust Fund, the Chinese, the Japanese, the Russians…. It amounts to about 103% of GDP. An earsplitting hangover from a debt binge that robbed the future. But there are winners.
California’s Ballyhooed Recovery? Oh Dude!
by Wolf Richter • • Comments Off on California’s Ballyhooed Recovery? Oh Dude!
Worse Than The Infamous Lehman September: France’s Private Sector Gets Kicked Off A Cliff
by Wolf Richter • • 3 Comments
The Paris auto show should have been exciting. Over 100 new models from econo-boxes to exotic prototypes. Chicks next to some of them. Nausea-inducing colors, downsized motors. Something for everyone. But it had been preceded by supplier events loaded with the dire verbiage of an industry on a death march. Particularly in France, whose private sector is veering into economic fiasco. And on Monday, it became official.
Greece, Tell Brussels “To Take A Hike” And Let The Troika Bail Out The ECB Instead
by Wolf Richter • • 3 Comments
Awful as Greece’s GDP has been, it doesn’t do justice to the economic fiasco. Take new vehicle registrations: in August, they plunged 46.7% from prior year. Only 3,886 new vehicles were sold. A collapse of 80% from August 2008 at the cusp of the crisis. For the first eight months of 2012, sales were down 42% from prior year, and 65% from 2008. People have stopped buying new cars. And not just cars.
The Miraculous Decoupling Of Reality, For Now
by Wolf Richter • • 1 Comment
CEOs believe the next six months are going to be tough; and they’re reacting to it by slashing capital expenditures and jobs. These ugly trends “reflect global demand flattening out, particularly in Europe and China,” said Boeing CEO Jim McNerney. The numbers are evoking the dark days of 2009 and double-digit unemployment. It’s been a steep and bumpy slide.
Japanese Ministry of Finance To Bondholders: You’re Screwed!
by Wolf Richter • • 4 Comments
This has got to be the icing on the Japanese cake. The website of the Japanese Ministry of Finance, more specifically the FAQ page on government bonds, has been catapulted to stardom on Facebook and Twitter. Not in a good way. It asks the question: “In case Japan becomes insolvent, what will happen to government bonds?” And then, incredibly, it answers with a terse action plan for when the Big S hits the fan.
Catalonia Cries for Independence, Spain Might Break Apart, And Its Military Threatens To “Crush” The “Vultures”
by Wolf Richter • • 9 Comments
Spain has enough problems: a debt crisis, a hangover from a housing bubble, unemployment of over 25%, youth unemployment of over 50%, massive demonstrations against “structural reforms” that the government is trying to implement in its desperate effort to keep its chin above water…. And now it has a new one: the possible breakup of the country. The military has already chosen sides.
“Forceful And Timely Action” To Nowhere
by Wolf Richter • • 2 Comments
“Japan’s experience is a sobering real-world reminder of why forceful and timely action is appropriate,” said the Fed’s Eric Rosengren in his desperation to rationalize QE3. It would be a flood of money, not the “muted” response from Japan to two decades of stagnation. “Appropriate fiscal policies”—even larger deficits—should be used to battle Japanese-style stagnation. Alas, no developed country has done that for longer and to a greater extent than … Japan. And no developed country is in deeper trouble.
Monetary Schizophrenia in Germany
by Wolf Richter • • 2 Comments
A pact with the devil—that’s now the official metaphor for the European Central Bank’s “unlimited” bond purchases that are supposed to save the Eurozone. Bundesbank President Jens Weidmann himself referred to it when he discussed the “dangerous correlation of paper money creation, state financing, and inflation.” But it’s too late. Germany has cracked in two. And part of it has embraced that pact with the devil.