Euro
is a 'knife in the ribs' of the French says Le Pen - (www.reuters.com) French
presidential candidate Marine Le Pen told a political rally on Sunday that the
euro currency which she wants France to ditch was like a knife in the ribs of
the French people. The leader of the eurosceptic and anti-immigrant National
Front (FN) also told the rally in the city of Bordeaux that the forthcoming
election for president could herald a "change in civilization". Encouraged
by the unexpected election of Donald Trump in the United States and by
Britain's vote to leave the European Union, Le Pen hopes to profit from a
similar populist momentum in France, though opinion polls suggest she will lose
the May 7 run-off. "We are at the mercy of a currency adapted to Germany
and not to our economy. The euro is mostly a knife stuck in our ribs to make us
go where others want us to go," Le Pen said to loud cheers and applause. Reiterating
her anti-globalisation and anti-immigration views, she declared: "We do
not want France to be open to all commercial and human flows, without
protection and borders."
Denmark:
Debt Bomb, Waiting for an Inflationary Spark - (www.wolfstreet.com) From
the outside looking in, the Danish economy appears as blissful as the country
itself, which usually tops “The Happiness Index.” The unemployment rate ticked down to 4.2% in
the most recent release from 4.3% in 2016. Denmark, ranked 20th in economic complexity in 2015, has a mostly even trade balance,
and $50K GDP per capita in 2016, making it among one of the richest nations in
the world…. Nevertheless, the recent prosperity comes with a cost; one that must
be paid by future generations. While the party was fueled by artificially
low-interest rates (those below the rate of inflation), a debt bomb has been
building, waiting for an inflationary spark to set off a crisis. The Danes
out-borrow everyone, including the Americans. This chart from the OECD
(National Accounts at a Glance) shows total household debt as percent of net
disposable income in 2015. The top five: Denmark, Netherlands, Norway,
Australia, and Switzerland: This debt culture, prevalent in the richer nations
(because they can), is driven by an artificial sense of confidence that the
government will take care of them if the bottom falls out. However, it may turn
out that the borrowers will just be refinanced into a longer-term loan,
reducing the monthly burden but doing nothing about the debt itself.
The
Auto Industry Is About To Drive Off A Cliff, Again - (www.zerohedge.com) We knew cheap money would be too much
for auto executives to refuse and oversupply was a sure bet! So will
be the industry's return to the Washington "substance abuse center".
Expect the industry to be back at the government feeding trough asking
for help. In the fall of 2015 we released a video study
entitled: "The Coming Global Auto Abyss - Too Much Supply, Too Many
Brands; Combine with Too Much Credit!". We
concluded that low interest rate monetary policy for the auto industry was
like handing crack cocaine to a drug addict. The auto industry would rapidly
and irresponsibly abuse it, to such an extent that it would once again
'spin out' and careen back to what can only be termed
the Washington 'substance abuse center'. Whether mis-management or clever
strategy we are unfortunately being proven right and are now witnessing the
reality. FORD
INADVERTENTLY SIGNALS THE REALITY: During Ford Motor company's latest earnings call, while
defensively attempting to justify a massive 50% shortfall in earnings (falling
to $0.30-0.35 from $0.68 in Q1 2016 and versus expectations of $0.48), they
disclosed that sales volumes are now expected to fall off this year and
next with used car prices dropping for several years! How could this be with US
industry sales at historic levels approaching 18M units per year and no one
anywhere with any credibility, even remotely suggesting that a US
recession was imminent? The answer is that 'hole' we referred to above
has arrived but it is a much worse chasm because of the industry financing
options that have been foisted on the unsuspecting, tapped out US buyers
since the "cash-for-clunkers" sleight-of-hand.
Latin
American Markets Feel the Pressure From Political Turmoil - (www.bloomberg.com) It’s
been a tumultuous few days in Latin America, with anti-government protests in
Venezuela and Paraguay, an attack on the opposition presidential candidate in
Ecuador and recurring unrest in Brazil, where the president’s popularity is
tumbling amid attempts to reform the pension system. All are reigniting concern
about political stability in some of this year’s best-performing emerging
markets and key U.S. trading partners. Below are some of the continent’s market
pressure points. Venezuela: The
country’s sovereign bonds due 2027 slumped to the lowest level since August
after the Constitutional Court said on March 29 it would take over the
duties of the opposition-controlled National Assembly. The decision was reversed Saturday,
signaling a possible rebound in prices.
Ford,
Chrysler Sales Disappoint as Cars Plunge Despite Discounts - (www.bloomberg.com) U.S.
auto sales trailed estimates, with Ford Motor Co. and Fiat Chrysler Automobiles NVreporting the biggest declines, as heavy
incentive spending failed to keep struggling sedan and compact models from
plunging. Carmakers’ shares fell. Total deliveries slumped 7.2 percent at Ford
and 4.6 percent at Fiat Chrysler last month. General Motors Co. sales climbed 1.6 percent, a smaller gain
than analysts projected, while Honda Motor Co. reported a surprise drop. The
results cast doubt on expectations that industrywide U.S. auto sales would
bounce back following declines in the first two months of the year. Carmakers
are using heavy discounts to try to trim inventory that’s swelled to the
highest level in more than a decade. GM has dialed back output of cars like the
Chevrolet Cruze, while Fiat Chrysler is eliminating models including the Dodge
Dart compact.
OPEC's
Barkindo Sees Progress in Oil Cuts as Stockpiles Fall - (www.bloomberg.com)
Fading Trade-Crackdown Fears Power Overseas Rebound - (www.wsj.com)
Fading Trade-Crackdown Fears Power Overseas Rebound - (www.wsj.com)
Coming up this week in business: Where the jobs are, market fears, and a Trump-China fight - (www.cnbc.com)
Trump trade still set to fixate investors in busy April - (www.ft.com)
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