Two months ago we suggested that as part of the transition of austerity's center from Greece to Rome, we would soon see the launch of "The Piazza Navona Strike Cam." Close enough: as of this afternoon local time, Rome is literally burning, as expected yesterday when we covered the most recent events in Milan. From the Telegraph: "Demonstrators in Rome set fire to two cars and broke shop windows during a protest in the Italian capital, as activists organised a series of rallies in 82 countries. Inspired by the Occupy Wall St movement and Spain's "Indignants", demonstrators from Asia to Europe took to the streets. Riot police in Rome charged hundreds of protesters and fired water cannons, while a group of activists set alight a defence ministry annex nearby. Flames could be seen coming out of the roof and windows of the building on Via Labicana as firefighters struggled to tame the blaze. Dozens of masked protesters could be seen in the area, which had not been cordoned off. The violence was said to be caused by hooded militants known as "black blocks," who have infiltrated demonstrations in the past. There were no immediate reports of injuries. Television images showed one of the cars in flames and spewing thick black smoke over the route of the demonstration, which was otherwise peaceful." Whether due to a subversive group, or representative or broader pent up anger, increasingly more people are waking up to the fact that the current system does not work and needs a reset. Alas, for the "resistance movement" to be truly effective, things will have to deteriorate far more, and the welfare state structure will have to be truly on its last breath. As long as the status quo can dangle promises of (completely insolvent) pension benefits and retirmenet plans to the 99%, all of "this" is mostly for show.
Social Security to Bernanke – “You’re Killing Us!”
The most concise summary of bullish and bearish events in the past week and commentary
Jim Sinclair’s Commentary
The latest from John Williams at www.ShadowStats.com.
- The Great Downturn Deepens as Household Incomes Collapse
- September Retail Sales Gain Exaggerated by Poor-Quality Seasonal Adjustments
- Trade Deficit Still Suggests A Positive Contribution to Third-Quarter GDP
Jim Sinclair’s Commentary
You think this is limited to Euroland?
Eurozone inflation hits three-year high By Ralph Atkins in Frankfurt
Eurozone inflation has surged unexpectedly to a three-year high of 3 per cent, adding to the dilemma facing the European Central Bank as an escalating debt crisis pushes the region towards recession.
The acceleration weakened the case for an ECB interest rate reduction at its meeting next week, although the euro’s monetary guardian is expected to press ahead with measures to provide extra liquidity to eurozone banks. Eurozone unemployment, meanwhile, saw a surprise fall in August.
With next Thursday’s interest rate-setting meeting the last to be chaired by Jean-Claude Trichet, whose eight-year term as president ends on October 31, it will be harder for him “to bow out with a cut”, said Julian Callow, European economist at Barclays Capital. Eurozone inflation could rise further in October, he warned, before falling later. The ECB aims to keep inflation “below but close” to 2 per cent over the medium term.
September’s inflation rate – the highest since October 2008 – was driven up by clothing prices and energy costs. August’s inflation rate was 2.5 per cent.
However, the latest data did not close the door on an early interest rate cut. The ECB expects inflation to decelerate rapidly next year – the more relevant time horizon for its interest rate decisions.
The Difference Between Headline and Real Trends
Today’s positive headline retail sales numbers could be positioned as economic strength by the various media outlets. I caution against accepting this argument.
Retail sales priced in US dollars are a nonstationary time series. That is, currency devaluation (price inflation) causes the time series to creep higher regardless of economic conditions. This phenomenon referred to as base creep by statisticians makes historical comparisons and conclusions based on them useless.
Retail sales priced in gold, however, factors out inflation. This trend turned down in 2001 and sharply down in 2005. Today’s positive headline numbers did not alter these trends.
Gold-Adjusted Retail Sales (RSGLDR) and YOY Change
Headline: Retail Sales in U.S. Climbed More Than Forecast in September
Retail sales in the U.S. rose more than forecast in September, easing concern slumping confidence and scant hiring will derail the biggest part of the economy.
The 1.1 percent advance, the biggest since February, followed a 0.3 percent gain for August, a stronger performance than previously estimated, Commerce Department figures showed today in Washington. The median forecast of 85 economists surveyed by Bloomberg News called for a 0.7 percent rise in purchases last month.
Macy’s Inc. (M) and Kohl’s Corp. (KSS) are among retailers planning to boost hiring heading into the year-end holidays, even as gains in payrolls are too small to reduce unemployment. President Barack Obama, lawmakers and the Federal Reserve face pressure to spur the jobs needed to support household spending, which accounts for about 70 percent of the world’s largest economy.