Australian house prices continued to slide in July, according to the latest RP Data-Rismark house price index.On a seasonally adjusted basis prices fell 0.6% in July while the 0.2% June decline was revised lower to show a fall of 0.4%
via Housing falls accelerate – macrobusiness.com.au | macrobusiness.com.au.
Many ask whether high-income countries are at risk of a “double dip” recession. My answer is: no, because the first one did not end. The question is, rather, how much deeper and longer this recession or “contraction” might become.
…… the dire consequences of soaring risk aversion, against the background of such economic fragility. In the long journey to becoming ever more like Japan, the yields on 10-year US and German government bonds are now down to where Japan’s had fallen in October 1997, at close to 2 per cent. Does deflation lie ahead in these countries, too? One big recession could surely bring about just that. That seems to me to be a more plausible danger than the hyperinflation that those fixated on fiscal deficits and central bank balance sheet find so terrifying.
via Martin Wolf|Struggling with a great contraction – FT.com.
With only one week to go before President Obama details his plan to revitalize the stalling economy, Labor Secretary Hilda Solis vigorously defended the administration’s efforts to crank up hiring during a speech on Tuesday at the National Press Club. She stressed that Obama’s plan will include a payroll tax cut extension, an unemployment benefits extension, and the creation of a national infrastructure bank to rebuild roads and railroads with a mix of private and public funds.
Economic Cycle Research Institute co-founder Lakshman Achuthan: “There’s nothing they’re going to be able to do about that near-term direction in the unemployment rate, especially if we slip into a recession because every time you have a recession by definition the unemployment rate will be spiking.”
… Achuthan says the time to act was in the spring when the economic indicators started to weaken. “We were above 200,000 [monthly payrolls] and we’re not going back there anytime soon,” he says. “We’re going to continue to weaken at least through the end of this year,” which is (more) grim news for the millions of Americans in need of work.
via It’s Too Late For Obama To Create Jobs, Says ECRI’s Achuthan.
Let’s be blunt here, the only thing that will cause QE 3 to come out will be:
- Another market Crash (S&P 500 sub-100); or
- A major bank collapsing.
That’s it. QE 3 is not going to be some “let’s push stocks higher” move. It’s going to be a “desperately trying to hold the system together” move.
via QE 3 Ain’t Coming Unless One of These Two Items Happen | ZeroHedge.
It’s hard for a president to win reelection with a high unemployment rate. It looks like there is no way in the world, between now and the election, that unemployment will drop substantially. That does not bode well for Obama’s reelection.
via Walter Williams On The 2012 Election And Sound Money | ZeroHedge.
European Council President Herman Van Rompuy: “We can’t make…the same mistake that some have made with the launching of the single currency. We launched a common currency but we forgot about having a common economic policy. Now we will launch euro bonds without having a much stricter and much more unified fiscal policy. We can’t make the same mistake.”
But officials are clear that EU Economics Commissioner Olli Rehn won’t be dropping the idea. Mr. Rehn’s view is the exact opposite of Mr. Van Rompuy’s. Rather like the supporters of the euro in the 1990s, he believes that by launching the euro-bond project first, politicians will then ensure that fiscal convergence eventually follows.
The assets held in mutual funds fell $219.2 billion in July – before the announcement that Standard & Poor’s had cut its rating of U.S. debt for the first time ever.
What is just as important is that ….. the YoY change in real GDP, which is now at 1.5%, is a slam dunk indicator of recession: “Since 1948, every time the four-quarter change has fallen below 2 percent, the economy has entered a recession. It’s hard to argue against an indicator with such a long history of accuracy.”
While overall personal income rose during the month, inflation-adjusted personal income after taxes fell 0.1%. It was the first drop since last September.
