In the days before the May 6th elections in France, key German States, and Greece, the cat fight between [Merkel Sends Stern Warning] Merkel and the likely new French President Hollande escalates. Talk about the rats abandoning ship, but hey it’s all good. The charts demonstrates in spades the nature of the conflict, as France’s ‘conomy in particular is being routed.
The choices are resolving insolvent entities especially banks (a storm, but the more credible approach), or deflationary derailment: national priorities dominate, each country for it’s own, fail to distinguish between illiquidity and insolvency (the non-credible complete disaster). The later is by far the likely path underway, the former would require brave leadership. Printing money and bailouts to buy insolvent securities simply accelerates France, Germany, Italy and Spain’s ultimate cost.
Keeping a close on Germany and France, at last the hopium is wearing off in those countries as consumer PMI plunges. Obviously things are worse in France thus the feuding. I have a strong hunch the hopium in the US rolled over as well in April.
France: much worse