CONSUMER SPENDING, anecdotal evidence: I just received word that my gas bill is to rise by 11%, while my electrical bill is going to rise by 18%! Meanwhile, the price of a pint of beer here in London is firmly at £4 ($6.50!). (Unless you go to one of the Samuel Smith's pubs, where a fresh and tasty bitter still costs only £2+).So what does this say about consumer spending?
CHINA HEADED FOR A CRASH?: A new book, entitled 'The American Phoenix' (Profile Books) by Charles Dumas and Diana Choyleva (Made known to me by Anthony Hilton of the Evening Standard.) posits that the Chinese growth rate is likely to halve because their export-led growth model is unsustainable.
This analysis dovetails into what Soc-Gen economist Albert Edwards said, as reported in the Guardian on 03Jan11 (yeah, that far back). Here's a few quotes: "... housing and credit bubble goes out of control..." "The Chinese situation is the one that could come out of nowhere because people are not considering it as a serious possibility." "...it's a bit like investing in Nasdaq stocks in 2000..."
We've heard this story before, from Japan in the 90's. We all know how it ended. This time, however, the leverage is far greater.
NFP: Told us what we already knew: the economy is in the doldrums at best. All eyes now look toward the Fed meeting on 20-21 Sep. so what can they do? print more money? Buy puts on equities indexes as we rally. I'll have more to say about his during the week.
STAY TUNED
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