Good inflation, nice inflation, rising inflation. Normally rising inflation is bad, a cause for much hand-wringing and rises in interest rates and bond yields. But after its recent terrifying brush with deflation and negative interest rates (which still linger across parts of Europe), you could read the joy in the headlines on Tuesday night in the wake of a larger-than-expected rise in eurozone inflation in May. “It’s back” was one banner on a blogs for a while. Others pointed to deflation being vanquished, vanishing, gone. Inflation rose 0.3% in May across the eurozone on a headline basis, with core prices up 0.9% from 0.7% in April. Both readings were higher than forecast and came as the impact of lower oil and energy prices has started fading (hint: for Australian inflation as well).
The great evil of deflation has gone, so will the European Central Bank now turn off the taps of its quantitative easing campaign of 60 billion euros a month of bond purchases? Nope, not till Greece is sorted out. And on Greece, the country’s creditors have agreed to send the country a letter detailing what they want the country to do, and Greece seems to have sent its own letter, telling its creditors what it is prepared to do. The upshot is the creditors — International Monetary Fund, European Union and eurozone — want a lot, the Greeks are prepared to give back very little. More high-wire stuff to enrage the rest of Europe, generate trading opportunities for investors, and worry everyone else. But before the celebrations linger a bit longer than they should, a reminder from the reality of the eurozone’s economic problems — unemployment remains high at 11.3%. — Glenn Dyer
Now this is what I call a sharemarket. Much is talked about how big the American sharemarket is, a great heaving mass of investors (mostly big ones), going long, short, making money, losing money, cheating and rorting and generally being the centre of the universe for the rest of the globe’s bourses. But consider the latest figures from China. They should terrify you. The number of new stock trading accounts opened in China’s A-share market last week reached 4.4 million, the seventh week in a row the number topped the 2-million mark. In fact, last week’s total was up 1.8 million from the previous week. Chinese Securities Regulatory Commission figures showed that 2.43 million new stock accounts were opened last week in the Shanghai A-share market, 1.97 million were opened in the mores speculative Shenzhen A-share market.
The total number of accounts on the two bourses came to 216 million as of last week. To put that figure in some perspective, that’s 67% of the entire United States population, let alone sharemarket investors. Total turnover on the two Chinese markets yesterday was US$322 billion. No wonder smart market observers are very, very scared of what might happen if the shit hits the fan and China’s markets slide and millions of of 216 million investors try to head for the exit all at once — as it seemed was happening last Thursday. — Glenn Dyer
Searchers flop. Travellers to the US will know that American immigration and Homeland Security/Transportation Security Administration (TSA) officials are among the least welcoming on Earth. If it weren’t for the warm welcome foreigners mostly receive from other Americans, the place would not be worth visiting, even The Big Apple, where the treatment of aliens at JFK is pretty miserable. America’s ABC news says the TSA just ran an amazing sting operation to check on how well its agents do their jobs when carrying out searches of travellers. The conclusion: just useless.
ABC news reported the searches failed to find mock explosives and weapons in 95% of tests carried out by undercover agents. The trials were conducted at the busiest American airports, and agents were repeatedly able to smuggle weapons through checkpoints. TSA agents failed 67 out of 70 tests, the ABC report said. And this morning the head of Homeland Security announced that the head of the TSA was being “reassigned”, pending the finalisation of a new appointment from President Barack Obama. — Glenn Dyer
On the other hand, security is first rate at Paris airport. They managed to find an almost empty tube of toothpaste in my carry on luggage. It’s the size of the container they look for, not how much is actually present. And tooth paste is such a dangerous explosive, it’s no wonder they confiscated it.