The global economic recovery is on the ropes, battered by political conflicts within and across countries, lack of decisive policy actions, and governments’ inability to tackle deep-seated problems such as unsustainable public finances that are stifling growth. Growth in global trade has weakened and the spectre of currency wars, with countries looking to maintain export competitiveness by keeping their currencies weak, has returned to the fore.

The Brookings-FT Tiger index shows growth momentum has dissipated in nearly all major advanced and emerging market economies. Central banks of the major advanced economies have responded with a range of conventional and unconventional policy monetary policy actions. These measures have put a floor on short-term financial market risks but have been unable to reverse declining growth momentum. As a result, financial markets continue to go through short-term cycles of angst and euphoria even as indicators of real economic activity remain mired in weakness.

Read the rest here.

Scary.

Via Instapundit, this is the chart to keep in mind when it comes to deficits and campaign promises.  It’s pretty self-explanatory, but pay close attention to the huge jump in deficit spending between FY2008 and FY2009 — and the very large gap between White House and even CBO estimates and reality (in gray) in FY2010-12:

Read the rest here.

The French economy will fail to grow in the second half, extending stagnation to five quarters, national statistics office Insee predicted yesterday.

“Gross domestic product will be unchanged in the third and fourth quarters, with corporate investment, household spending and foreign trade all broadly flat, Insee said in a report. Government spending is preventing the nation from falling into recession.

The report, entitled “At a Standstill,” underlines the challenge to President Francois Hollande as he struggles both to contain the budget deficit and improve competitiveness in Europe’s second-largest economy. After two more quarters in which GDP has stalled, France will have posted five with no growth following two with expansions of 0.2 percent or less.”

Full article

“Shoppers from China’s mainland curbed spending at Hong Kong luxury stores during the Golden Week holiday, reflecting growing pressure on the city’s economy from faltering tourist demand.

Purchase of luxury goods by mainland visitors in Hong Kong is set to fall at least 10 percent from a year ago during this week’s holiday, said Joseph Tung, executive director of the Travel Industry Council. The decline comes even as the number of tourists coming from China increases.”

Full article

Total N. American rail traffic came in at 717k card last week. The adjusted total of ~735k cars sets a new 4 year record for a single week in the series handily beating the 721k set during the same week last year.

Read the rest of the analysis and see the chart, here.

EVERY four years, we poll the top American economists to get their views on the presidential election. This week’s print edition explains many of the results from our 2012 survey, which was conducted between September 18 and September 28. One particularly interesting set of results was generated when we asked economists why they thought the recovery had been so slow. This chart shows how various subpopulations rated the importance of six factors we chose:

Read the rest here.

“LONDON (Reuters) – Dwindling new orders and faster layoffs marked a worsening decline for euro zone companies last month, according to business surveys that dent hopes the economy will return to growth before 2013.

Wednesday’s purchasing managers indexes (PMIs) suggested it was almost inevitable the euro zone returned to recession in the third quarter.

A good gauge of economic growth, Markit’s Eurozone Composite PMI fell to 46.1 in September from 46.3 in August.”

Full article

Germany, Europe’s largest economy, had a return to spending helping out the overall retail sales data in the euro zone. Retail sales climbed a whopping 0.01%.

Full article 

Are central banks setting investors up for a big fall ? Global PMIs suggest a serious slowdown, but due to central bank activity the markets are not signaling such an event. Buyer beware.

Full article 

“A compounding lack of confidence in the future has kept American companies from investing in their businesses and is leading the country back into recession, real estate mogul Sam Zell told CNBC.”

Full interview

“South Korea’s inflation accelerated the most in three months in September after typhoons damaged crops and a holiday boosted demand for food, according to a report nine days before the central bank decides interest rates.

Consumer prices increased 2 percent from a year earlier after a 1.2 percent gain in August, Statistics Korea said today in Gwacheon, south of Seoul. The median estimate in a Bloomberg News survey of 12 economists was for a 1.8 percent gain. Prices rose 0.7 percent from August.”

Full article

NEW YORK (CNNMoney) — Economists think Republican presidential candidate Mitt Romney would be better for the economy than President Obama. But they’re not very enthusiastic about either of them.

Nine of 17 top economists surveyed by CNNMoney picked Romney when asked who’s election would help the economy grow more. Only three picked Obama.

Read the rest here.

Spending outpaced income in the latest data points released this morning. Spending rose due to higher gasoline prices.

Full article

“Japanese and South Korean industrial production fell more than economists estimated last month as slowdowns in China and Europe weighed on exports, building the case for more monetary easing.

Japan’s output fell 1.3 percent from July, the biggest decline in three months, a Trade Ministry report showed in Tokyo today. South Korean production slid 0.7 percent, partly on a strike at Hyundai Motor Co.”

Full article

“The unprecedented belt-tightening known as the fiscal cliff that looms over the United States could at the very least cut world growth in half in 2013, Fitch Ratings said on Thursday.

The fiscal cliff — a double whammy of tax increases and spending cuts totaling about $600 billion — could tip the United States and possibly the world into recession, Fitch said.

“The U.S. fiscal cliff represents the single biggest near-term threat to a global economic recovery,” the ratings agency said a research note released in London.”

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More evidence the latest QE will probably not help the U.S. economy…

Full article

Here is an interesting article on PMI data vs GDP data. I only ask how low will PMI and GDP go given the horrendous chart chomping formation.

Full article

09/26/2012 The global financial system remains “overly complex” as reforms bog down in the post-recession economic slump, the IMF warned in a report Tuesday.

Subprime Crisis Diagram. Courtesy of Farcaster/CC-BY-SA-3.0

And central banks’ record-low interest rates may be creating future problems by encouraging excessive risk taking, the very behavior that reforms are trying to curb, the International Monetary Fund said in its latest Global Financial Stability Report.

The IMF said that financial systems were little changed five years after the start of the US subprime mortgage crisis that plunged the global economy into recession.

“The data suggest that financial systems are still overly complex… and the too-important-to-fail issues are unresolved,” the IMF report said.”

Full report

“ROME (Reuters) – Italian retail sales fell for the fourth month running in July, data showed on Wednesday, highlighting how austerity measures and unemployment are discouraging shoppers and deepening a year-long recession.

Sales dropped 3.2 percent in July compared to the same month last year, National statistics office ISTAT said, for their steepest fall since a 6.8 percent drop in April, the largest decline since the current data series began in January 2001.”

Full article

Big beat.

Consumer confidence surged from 61.3 last month to 70.3 this month.

That’s well ahead of estimates of 63.1.

Needless to say this has all kinds of ramifications, if it holds up.

The significance is both political and economic if the consumer is feeling better.

Here’s the full announcement from the Conference Board…