| By

Off the keyboard of John Ward

Follow us on Twitter @doomstead666

Friend us on Facebook

Published on The Slog on August 29, 2014

Discuss this article at the Economics Table inside the Diner

THIS WAY TO THE CRASH

Despite a consensus expecting US disposable income to grow by 0.2% in July, it fell by 0.1% – for the first time in six months. Having endured the jobless recovery, it looks like Americans might now be in for the cashless recovery.

In Russia, the economy is rapidly weakening: inflation is high, the ruble is weak, interest rates are climbing, and disposable incomes have dropped.

Eurozone inflation fell to its lowest level since November 2009 this August, as analysts warned that price growth in the currency bloc is “worryingly low”. “This is yet another bad indicator of the health of the eurozone economy”, said Luke Bartholomew, of Aberdeen Asset Management. Give that man a kupee doll.

Meanwhile, Italy – the country long targeted by The Slog as the real European basket case – saw its consumer prices drop by the most since records began. It’s the eurozone’s third-largest economy…and so firmly entrenched in recession, prices fell at twice the expected rate.

In the UK, retail behemoth Tesco has issued another profit warning, and its intention to slash the dividend by 75%. That’s a very big number indeed, and the company’s bland statement blaming “challenging” trading conditions cannot hide the reality: Tesco is losing out bigtime to the bottom-rung discounters, particularly Lidl. Every Lidl helps, as they say….but this sort of share loss and growth doesn’t happen during an economic recovery.

Neither does a stalled housing market. It is quickly becoming clear that, despite British Chancellor George Osborne’s Help to Buy scam, UK house prices have stagnated: more than normal numbers of sales are falling through due to nervous buyers in the residential property market. UK values edged up by just 0.1% from July to August for the second month in a row. Vendors in England and Wales got around 96% of their asking price in August – a third fall: if that level drops to 94%, sector analysts say price drops will accelerate.

Global manufacturing output continues to engage reverse gear, as a result of which mining giants are staring at a $US30bn slump in revenue during the next 12 months. The price of iron ore has collapsed some 36% during 2014.

Even those famous O’Neill Brics are somewhat out of true. The Brazilian economy was this afternoon declared officially to be in recession – something of a bummer for Dilma Rousseff’s re-election bid.

Before these latest developments, dear Reader, you heard that German gdp shrank by 0.2%, the French economy flatlined for the second quarter running, in China an spectrum of indicators suggested faltering growth, and falling energy demand was beginning to make the Russian economy look not so much sick as poorly.

And how, pray, have the markets, bourses and other misleading outcomes reacted?

The Dow Jones was flat. The FTSE was up 0.2%. The French CAC 40 edged 0.34% higher. The Australian S&P/ASX 200 index gained 0.08% to 5,629. The European Euro Stoxx 50 added 0.42%. The German DAX rose 0.22%

They’re coming to take us away haha/ They’re coming to take us away/To the funny farm/Where life is beautiful all the time

Great stuff, Ward: 6.30 pm BST on a Friday is the perfect aperture for this kind of bad news. Ed

Earlier at The Slog: All aboard for the Trojan Horse to BUPA