European economy in serious trouble
Spain Plans to Merge All Nationalized Banks Into Gigantic Bad Bank; Merging Small Cesspools Creates Bigger, Deeper, Smellier Cesspools
“Bear in mind that Bankia, one of the banks in this cesspool merger was formed on December 3, 2010 as a result of the union of seven failed Spanish financial institutions.
In 2012, Bankia was the third largest lender in Spain and the largest holder of real estate assets at 38 billion euros. Bankia is once again in trouble, along with Caixa Catalunya and Novacaixagalicia.
Allegedly the merger of three cesspools into a bigger, deeper cesspool will make the water drinkable. I have news for Luis de Guindos: It won’t.”
Containment Theory Blows Sky High: German Manufacturing PMI Plunges to 45; French Manufacturing PMI Plunges to 44.4, Sharpest Contraction in 3 Years
“May data highlighted divergent employment trends across the manufacturing and service sectors. Net job hiring returned to the service economy, but manufacturers signalled the greatest degree of workforce reduction since February 2010.
German private sector input cost inflation was robust and slightly faster than in April, while output charges increased at the sharpest pace since July 2011. The indices measuring inflationary pressures also showed a divergence between manufacturing and services during May.
Manufacturers reported the lowest level of input price inflation for four months, but service providers signalled a much sharper rise in their cost burdens over the month. Moreover, output price inflation in the service economy hit a 14-month high, while factory gate price inflation across the manufacturing sector was the weakest since November 2011.”
Eurozone PMI Disaster – Worst Downturn Since Mid-2009, Manufacturing and Composite at 35-Month Low; Expect Numerous GDP Downgrades, Missed Budget Targets
“All GDP estimates from the Eurozone to-date have been pure bunk. Expect numerous downgrades after this disastrous report. If countries are to meet debt-to-GDP targets still more austerity measures will be forthcoming which will mean more layoffs, higher unemployment, and lower revenues.
In short, Spain, France, Italy will find it impossible to meet budget targets as the recession picks up steam.”