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Car sales were a major source of growth in 2012 and are expected to finish the year +13 per cent compared with 2011. But the momentum can’t last and will pretty much evaporate in 2013, Calculated Risk’s Bill McBride says, citing new forecasts from Edmunds. Here’s the chart:
Photo: Bill McBride/Calculated Risk
Prepare For A Lost Decade In Europe (Hans-Werner Sinn)
It would take 10 years for Spain and France, with annual inflation 2% lower than that of their competitors, to regain their competitiveness, Sinn writes. But there’s hope: 10 years ago, Germany “was like France is today – the sick man of Europe.” Finally succumbing to economic realities, Gerhard Schroeder decided in 2003 to cut second-tier unemployment insurance, “thus paving the way for the creation of a low-wage sector, in turn reducing the rate of inflation.”
American Consumer Goods Are ageing — And That’s Bullish (Barry Ritholz)
Barry Ritholz pulled the following chart from a BloombergBusinessweek story showing the age of different consumer goods:
“All of this stuff eventually has to get replaced,” Ritholz writes. “The question is how much of this economic activity falls to the US economy; I’d guess well over 50%.”
Japan’s Planned Easing Will Prove Merely A Stopgap (Stephen Roach)
If the muted U.S. recovery is any lesson, the Bank of Japan’s plans to vastly increase asset purchases will not address that country’s root problems. “The last thing that the Japanese economy needs at this point is backsliding on structural reforms,” he writes. “Yet, by forcing the BOJ to follow in the misdirected footsteps of the Fed and the ECB, that is precisely the risk that Abe and Japan are facing.”
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