Friday, June 26, 2009
Glimmers of hope are starting to emerge in the hard data. Exports in Asia are forming a more decided bottom; but since the trough is -20% to -30% off over the year, the recovery may be a long haul (or it may not). By some measures, home values in the UK and the US are showing signs of stabilization, as the annual pace of decline slows. German business sentiment continues its ascent, moving past its 1993 low! In contrast, inflation maintains its steady descent; Japan is hard hit.
Overall, the global economy is finding its footing on the path toward stabilization.
Exports in Asia: looking a little better, but still WAY down over the year!
UK and US home values: signs of hope? Yes and no.
The US measure, the Federal Housing Finance Agency (used to be OFHEO) includes only conforming mortgage homes; and therefore, it doesn't capture the full market (there are other measures of home values, i.e., the S&P Case Shiller indices, that do not signal such a decided stabilization in home values). This is a weak market; and with foreclosures persisting and inventories high, prices are likely to fall a bit further.
According to the Ifo Institute for Economic Research, German business sentiment saw its fourth monthly gain! Here is an excerpt from the release:
The brightening was solely the result of the firms’ expectations – the pessimism of the survey participants with regard to the six-month business outlook has again weakened. Their dissatisfaction with the current business situation is just as strong as it was in May. The survey results confirm that the German economy is gradually stabilising.
Inflation remains in (or is nearing) the red for Singapore, Hong Kong, and poor Japan.
The global economy this week: looks a little brighter but still bad.