Eurostat released declining GDP growth figures for both the Eurozone and the EU27, stemming from higher consumer expenditures but decrasing business investment. Compared with the second quarter of 2006, seasonally adjusted GDP rose by 2.5% in the euro area and by 2.8% in the EU27, after +3.2% and +3.3% respectively for the previous quarter.
Q3 started on a negative note datawise. Eurozone producer prices advanced 0.3% MOM in July after a gain of 0.1% in June. The July YOY figure stands at 1.8%, helped by a decline in energy prices.
ECB Pours Markets One More
The European Central Bank poured one more for banks suffering from a backlog in clogged deals now believed to hover around the $500 billion mark.
It allocated 256 billion Euros in its regular tender, 46 billion more than last week.
While it is a bit difficult, to say the least, to navigate the ECB website, the latest weekly financial statement shows that the monetary expansion has slowed and the ECB has tempoarily drained 65 billion Euros and shrunk the balance sheet a cool 60 billion Euros to a total of 1.16 trillion Euros. Gold sales have come to a virtual halt in the last week of August.
UK MP's to Grill BoE about Credit Crunch
The Independent informs us that british parlamentarians will grill Bank of England officials about the current credit crunch that forced Barclays Bank to borrow 1.9 billion Pounds at the emergency credit facility.
Likely subjects for questions will include the Bank of England's emergency credit facility, the role of the credit rating agencies, and the stability of the financial system.Textbook Economic Decline In the USA
"We will ask how the emergency facility is being used, what the Bank's view of liquidity is, how we got into this position, and what reassurances the Bank can provide as to the stability of the entire system," Michael Fallon, the senior Conservative member on the committee, said.
The outlook in the USA is not better. Plunging car sales come as the second milestone on the path of bursting bubbles after housing. Next will be credit cards. The Boston Globe runs a story that says credit card offers aimed at subprime debtors jumped 41% in the first half of 2007. Offers to those in the best credit grade fell 13%, paradoxically. Debtors paying their mortgage with their credit card. And you still want to own bank shares?
In order not to forget inflation at the gate of 100 million firearm owners here a snip from a story on rising ammunition prices from KHQA Online.
Russ Merkel is the Co-Owner of Merkels in Quincy and Manager of the store's hunting and fishing department. He said of the ammunition increase, "I can say in 37 years I've been involved in this business, I can't remember any other period of time we've had this much inflation, this much of a cost increase in ammo."Negative Millionaires
Merkel noticed ammo prices started going up last year....and by the end of 2006, they had gone up 60 percent. Most gun owners didn't notice last year because retailers had stocked up on ammo before the increase went into effect.
But this year is a different story.
Here's an example of the increase. This is a 40 pack of 223 Winchesters. Last year this box sold for around $8.50. This year the same box costs $15.95.
It will get worse. American-made ammo companies just announced they'll increase prices by 15 percent on September 1st and add yet another increase at the first of the year.
The coming recession will create a new consumer class. The "negative millionaire" who not only has nothing but a million of debt on top of it.