Death Star Economics



Chinese inflation down, Goldman Sachs bad at German

Chinese inflation eased to 1.8% in July, more than the 1.7% expected by some, but less than the 2.2% in June and much much less than the 6.5% in July 2011. The most immediate reaction, paired with data showing the slowdown of industrial production and retail sales, is hypothesizing over the urgency, likelihood and effects of more quantitative easing by the Chinese government. Here’s the back and forth as according to Alphaville vs SocGen

The banking scandal du jour concerns UBS: discs indicating tax fraud of “big clients” showed up in Germany, while the bank is shifting to the center of libor manipulation claims in the US.

Otherwise, Greek unemployment rose to 23.1% in May, which is an increase of 0.5% from April. On the upside, industrial output has risen 0.3% after previously slumping by 2.9%. Yay. Fitch downgraded Slovenia, while warning Japan to get a grip on its debt measures to avoid a downgrade themselves. Further, the ECB has cut its 2013 GDP forecast from 1% to 0.6%, following a growth forecast cut of the Bank of England just yesterday. The FT argues that BoE is running out of things to do, while the pound is said to be headed for a slump.

After inventing the term BRICs for the emerging markets of Brazil, Russia, India and China, which later got extended for South Africa and also kind of included Indonesia at some point, Jim O’Neill, father of economic acronyms and chairman of Goldman Sachs Asset Management, got a new one in stock: MIST. And the MIST-countries are outperforming the BRIC-countries by a mile, according Goldman. Even the anti-anglo-saxon Germans appreciate the new promising investment turfs. Somewhat amusing, because loosely translated the acronym for Mexico, Indonesia, South Korea and Turkey means ‘shit’ in German.

So long.


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