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STORIES:
Spain’s Pain Seen Intensifying as Slump Deepens Plight - (www.bloomberg.com) Spanish data this week will
reveal the extent of damage wrought on the euro-area’s fourth-biggest economy
as the government fights to cap a swelling deficit that is propelling the
country toward requiring international aid. Retail sales fell 11 percent in
September from a year ago, the National Statistics Institute said today.
Figures on public finances,
consumer prices, and gross domestic product tomorrow may confirm a
deteriorating economy and
debt profile amid the toughest austerity in its democratic history. The Bank of Spain estimated
last week that GDP fell for a fifth quarter. The Spanish statistics
onslaught will extend scrutiny by investors on the country after unemployment
data last week showed a record with one in four workers jobless. The prospect
of a worsening growth profile threatens to defy the government’s forecast for
an easing in a slump that has now extended for five years, adding pressure on
the country to apply for help.
Greece says EU/IMF lenders refuse to concede on reforms - (www.reuters.com) Greece's foreign lenders have refused to
make any further concessions on changes to labour laws contested by a junior
coalition partner, the country's finance minister said on Sunday, prolonging an
impasse on a crucial austerity package. Athens has been locked in talks with
its European Union and International Monetary Fund lenders on the austerity package for
months, but a final agreement has been held up by the small Democratic Left
party's refusal to back the new wage laws. The party, which says the changes
undermine labour rights, has said it will vote against the measures when they
are put to a parliamentary vote next week.
Spain retail sales decimated by VAT hike - (www.reuters.com) Spanish retail sales fell at
their fastest pace on record in September as already battered consumer
confidence took another hit from a hike in value added tax, driving many
shoppers to trade down to cheaper products. Sales fell 10.9 percent year on
year, Monday's National Statistics Institute data showed, reflecting an economy
struggling through its second recession in three years and plagued by
chronically high unemployment. The drop was the biggest in calendar-adjusted
terms since current records began in January 2004, and marked the 27th monthly
decline in a row. Spain has
been in recession since the first quarter of the year and is not likely to grow
again until late in 2013, according to official estimates that many economists
consider optimistic.
Deflation
Forces Rear Ugly Head, Market Crash Danger - (www.kitco.com)
Then we can consider the US
fiscal cliff, a huge rise in taxes and cuts in US budgets items like Defense.
So by December, is it not true that there is a very large amount of selling
pressure building, particularly given the fact that the US stocks are or were
nearing their all-time highs again? And then there is no doubt that markets are
closely watching and waiting for the outcome of the US election which for
example would determine if Obama care goes into full effect and thus causing
employers to cut workers since they have to provide more health care which is
already squeezing them. So there is this wait and see mode, but also deflationary
numbers are accumulating, and there have been lots of large multi thousand
layoff notices by large US companies. Tension is building. One wonders if the
US stock market is finally going to correct since there are many reasons for it
to start now, and the recent market topping, and 500 point Dow breakdown, could
indicate we are on the cusp of the beginning of a large widespread world stock
crash.
Tax
break on forgiven debt to end - (www.dispatch.com)
Distressed homeowners who get
rid of their homes via short sale or foreclosure for less than they owe on
their mortgage could find themselves even more distressed: They could face a
tax bill later because the part of the loan they didn’t repay will be
considered as income, thanks to the expected expiration of a tax break. “It’s
like kicking a man when he’s down,” said Ted Johnson, a partner with local
accounting firm Parms & Co. Dave Krebs, of CPA Advisory Group in
Westerville, said it comes as a shock to most consumers when they find out
about the potential tax liability of selling a home for less than what is owed
on the mortgage. “ ‘Why would they tax me? I’m already broke,’ ” many tell
him.
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