U.S. Treasury Secretary Timothy F. Geithner and House Speaker John Boehner hardened their positions over the fiscal cliff, each blaming the other for a standoff that could lead to more than $600 billion in tax increases and spending cuts in January.
“There’s not going to be an agreement without rates going up,” Geithner said in a taped interview that aired today on CNN’s “State of the Union.” Republicans will “own the responsibility for the damage” if they “force higher rates on virtually all Americans because they’re unwilling to let tax rates go up on 2 percent of Americans.”
Republican Boehner said the White House is wasting time.
“I would say we’re nowhere, period,” Boehner said on the “Fox News Sunday” program. “We’ve put a serious offer on the table by putting revenues up there to try to get this question resolved. But the White House has responded with virtually nothing.”
There’s “clearly a chance” that there won’t be an agreement in time to avert the fiscal cliff, Boehner said on the Fox program. “Just the threat of the fiscal cliff is already hurting the economy.”
Geithner appeared on five talk shows today. In the interviews, taped Nov. 30, he challenged Republicans to make a counteroffer to the Obama administration’s framework plan.
Gene Sperling, Obama’s top economic adviser, challenged Republican congressional leaders to put an offer on the table.
“It’s for them now to come forward with their plan, with their details, so that we can start working quickly to getting an agreement,” said Sperling, director of the White House National Economic Council, on “Political Capital with Al Hunt,” airing this weekend.
“The ball really is with them now,” said Geithner, the administration’s lead negotiator on the fiscal cliff, on CNN. “They’re having a tough time trying to figure out what they can do, what they can get support from their members for.”
One good thing is happening in January. Tim Geithner is stepping down as US Treasury Secretary.
Chancellor George Osborne has admitted that curbing the UK's financial deficit is "taking longer" than planned.
But he told the BBC the government was "making progress" and that to "turn back now would be a complete disaster".
Mr Osborne, who delivers his Autumn Statement on Wednesday, said well-off people would "pay their fair share".
"The deficit is down by a quarter. There are a million more jobs in the private sector and to turn back now, to go back to the borrowing and the debt and the spending that Ed Balls represents would be a complete disaster for our country."
He added that some people were calling for more borrowing and others for more spending cuts, but the government had "got the right plan and we should stick to that plan".
As you can see, political bickering over needed budget cuts is rampant on both sides of the Atlantic.
It's important to maintain a global focus instead of looking at US problems in isolation. There is not a good fiat currency anywhere (and there cannot be by definition actually).
Sales fall for thirteenth month running in November
German sales remain flat while Italy records another severe fall
Rate of decline in France slows to weakest in five months
Summary of November findings
The Eurozone retail sector remained stuck in a sharp downturn during the penultimate month of 2012, according to Markit’s PMI® data. Sales fell for the thirteenth consecutive month, and remained well below the level seen one year earlier.
The PMI rose slightly in November to 45.8, from October’s 45.3. The latest figure signalled a sharp fall in retail sales compared with one month previously, and the average for the fourth quarter so far (45.5) is the second-lowest since Q1 2009. Moreover, the trend for 2012 so far (45.6) is the lowest annual average of any year since the survey started in 2004. The previous record low was in 2008 (46.1).
Retail sales across the single currency area fell on an annual basis for the eighteenth month running in November. The rate of decline was sharp, and stronger than the average over this sequence. Year-on-year sales rose in Germany, but fell at a near-record pace in Italy. The annual rate of decline in France slowed since October, but remained sharp overall.
Commenting on the retail PMI data, Trevor Balchin, senior economist at Markit and author of the Eurozone Retail PMI, said:
“November’s set of numbers portrayed the weak position the Eurozone’s retailers find themselves in going into the crucial festive season. Actual month-on-month sales continued to fall sharply, resulting in another marked drop compared with one year previously. The data are consistent with consumer spending having declined for five straight quarters come the end of the year.
Italian high street businesses recorded a further sharp decrease in sales in November, leading to more job losses in the sector. There was also a steep drop in purchasing activity as firms made efforts to reduce inventory levels. Meanwhile, average prices paid for goods for resale rose at a modest rate largely on the back of higher oil-related prices.
The seasonally adjusted Italian Retail Purchasing Managers’ Index® (PMI®) fell to a seven-month low of 35.5 in November, from October’s reading of 37.3, signalling a further sharp month-on-month decrease in total high street spending. The headline index has posted below the neutral mark of 50.0 continuously since March 2011, and remains below its average over that period.
In line with the sustained downturn in sales, November data showed that high street spending was down sharply compared with the situation one year previously. Furthermore, the annual rate of contraction was the steepest since May’s survey record. November saw actual sales again fall well short of planned levels, with the overall degree of underachievement the most pronounced for five months.
November data pointed to a further sharp decrease in retailers’ gross margins, which anecdotal evidence suggested was the result of discounted selling prices as well as a fall in sales. The rate of decline was little-changed since the previous survey period and faster than the historical trend. Also dampening profitability over the month was a rise in average purchase prices. Firms commonly linked the increase in their cost burdens to higher oil-related prices.
Margins squeezed amid sharp rise in wholesale prices
Actual sales underperformed initial targets in November
At 50.2 in November, the seasonally adjusted Germany Retail PMI was little-changed from 50.3 during October and, by remaining close to the 50.0 no-change value, signalled broadly stagnant month-on-month retail sales in Germany. This has been the general trend throughout the second half of 2012 to date. Anecdotal evidence from survey respondents largely suggested that subdued consumer confidence was the main factor weighing on retail sales during November.
French retailers report slower fall in sales during November
Gross margins fall at slower, albeit still marked, rate
Further reductions in purchasing and stocks
The contraction in French retail sales continued in November, but at a weaker rate. Both the monthly and annual measures showed less marked declines. Sales once again disappointed relative to previously set plans. Gross margins continued to be squeezed, although the rate of decline moderated.
The headline Retail PMI® posted 48.8 in November, up from 46.0 in October. The latest reading was indicative of a moderate pace of decline that was the weakest since June. Where a decline in sales was recorded, this was generally attributed by panellists to a difficult economic climate, reduced levels of customer footfall and strong competition.
European House of Cards
This entire European house of cards comes crashing down the moment either Germany or France takes a sharp turn to the downside.
Germany will follow (in a major way) the rest of Europe soon enough. It is simply impossible for the German export machine to keep humming with a massive slowdown in Asia, and an outright disaster happening in Greece, Italy, Portugal, and Spain.
Warning bells are flashing loudly, but few hear the call.
Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com