Aug. 14, 2014, 5:22 a.m. EDT
German GDP signals euro-zone recovery may be stalling ECB likely to come under pressure
By William Horobin and Todd Buell @ Marketwatch.com

Germany’s economy contracted while France’s stagnated in the second quarter, indicating the euro zone’s yearlong recovery may have stalled, and likely pressuring policy makers to come up with some new ideas for boosting growth.

The euro zone’s largest economy contracted 0.2% in the three months to June, Germany’s federal statistics office said, the first decline in output since the start of 2013. Compared with the second quarter of 2013, output was up 1.2%. Economists polled by The Wall Street Journal last week said they expected the economy to shrink 0.1% on the quarter and grow 1.4% in annual terms.

Destatis said that net trade was a drag on growth, as import growth outpaced export growth. Construction investment declined, but Destatis said this was due to projects being pushed forward because of the unusually mild winter. Both private and public consumption rose compared with the first quarter, the statistics office said.

Earlier on Thursday, figures from France’s statistics agency showed the euro zone’s second-largest economy failed to record any growth for the second successive quarter in the period April through June. Economists polled by the Journal had expected a 0.1% expansion in gross domestic product in the second quarter from the first. Compared with the same period of 2013, GDP was up just 0.1%.

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Figures published earlier this month showed Italy’s economy also contracted in the second quarter, by 0.2%. The data released Thursday mean that none of the euro zone’s three largest economies — which account for two thirds of the currency area’s output — expanded in the three months to June, making it unlikely that the euro zone as a whole managed to generate any growth.

The data weighed on European equity markets. Paris’s CAC-40 FRX1 +0.49%  lost 0.4% in early trade, while Frankfurt’s DAX DXAX +0.49%   waned 0.3% and has now fallen 6.75% since the start of July.

Indexes in Southern Europe felt the heat too, with Spain’s IBEX 35 XX:IBEX +0.02%   losing 0.4% and Italy’s MIB XX:FTSEMIB +0.41%   tumbling 0.6%.

The yield on the 10-year German government bond BX:TMBMKDE-10Y -1.19%    slipped to below 1% — its lowest level on record and well below the previous troughs hit in July 2012, when the euro-zone debt crisis threatened to spiral out of control. Yields fall as prices rise.

Weak recovery

The weak recovery leaves the currency bloc lagging other advanced economies such as the U.S. and the U.K. The sluggishness is keeping unemployment high and inflation low, increasing pressure on the European Central Bank to lower its outlook for economic growth and take more action to bring inflation closer to its 2% target from around 0.4% currently.

Even before the second-quarter figures were released, forecasters tasked by the European Central Bank downgraded their growth forecast for this year, but kept the outlook for next year and 2016 unchanged, according to a report issued Thursday by the ECB.

In its quarterly Survey of Professional Forecasters, the ECB projected GDP growth this year will be 1.0%, below the 1.1% rate forecast in May. The outlook for 2015 and 2016 remained unchanged at 1.5% and 1.7%, respectively.

“These expectations imply a gradual strengthening of economic activity in the years ahead,” wrote the ECB. Survey respondents indicated that “the downward revisions for 2014 were driven by a weaker-than-expected momentum in the second quarter, mainly reflecting lower-than-envisaged export and private consumption growth.”

Japan's Economy Contracts Sharply Households Cut Spending After Sales-Tax Increase in April
y ELEANOR WARNOCK  Updated Aug. 12, 2014 10:31 p.m. ET   Wall Street Journal

TOKYO—Japan's economy contracted sharply in the second quarter after a sales-tax increase in April sent household spending tumbling, which economists said could pressure the government to take additional stimulus measures.

Real gross domestic product, the total value of all goods and services produced in the economy, shrank 6.8% in the three months through June on an annualized basis from the prior quarter.

That was slightly less than a 7.1% contraction forecast by economists surveyed by The Wall Street Journal, but economists said a larger-than-expected drop in private consumption and a sharp increase in inventories raised concerns about the resilience of Japan's economic recovery.

A fallback in economic output was expected after the nation's sales tax rose to 8% from 5% on April 1. Prime Minister Shinzo Abe and other policy makers have said they expect the downturn to be short-lived.

If that forecast proves too rosy, the government might have to compile more economic-stimulus measures and reconsider plans to raise the sales tax further to 10% in October 2015, economists said.

Investors should watch out for a risk that the domestic economy stays sluggish for longer than expected, said Yasunari Ueno, chief market economist at Mizuho Securities.

"The next focal point is how much the economy will rebound in the July-September period. If the upward pressure is weak, it will likely increase the chance that Prime Minister Abe decides in December to delay the next sales-tax hike," Mr. Ueno said.

Even bad news coming in from China -- read the Wall Street Journal article:
Little Improvement Seen from China's Economic Stimulus Measures Data Suggest Recent Measures Haven't Revived Economy

Agree!! But we are already in a world wide recession.

Someone smarter than me, told us to buy a good safe and take our money out of ALL our accounts. Just put enough money in ckg acct to pay bills. They predict the seizing of our bank account also....somewhere in the near future.
just saying.

"The Sky Is Falling... The Sky Is Falling"...
Henny Penny

Quoted from bumblethru

Agree!! But we are already in a world wide recession.

Someone smarter than me, told us to buy a good safe and take our money out of ALL our accounts. Just put enough money in ckg acct to pay bills. They predict the seizing of our bank account also....somewhere in the near future.
just saying.

They should have recommended that you buy a good safe,  convert your money into gold, silver and other precious commodities and put them in the safe.  Paper money is not a good investment.

Quoted from DemocraticVoiceOfReason

They should have recommended that you buy a good safe,  convert your money into gold, silver and other precious commodities and put them in the safe.  Paper money is not a good investment.

that is EXACTLY what they recommended!!

Quoted from bumblethru

that is EXACTLY what they recommended!!

OK -- The way you posted it you said buy the safe and take your money out of the bank.  I presumed that they wanted you to put your money in a safe.

Of course, once they take your guns away then they could come back and take your safe and its contents, too.

Quoted from Box A Rox

"The Sky Is Falling... The Sky Is Falling"...
Henny Penny

Instead of going INTO the city and feeding the poor and maybe paint some houses for elderly or disabled homeowners who are getting cited with code violations, and instead of volunteering for filling up boxes and carrying boxes for the Concerned for the Hungry, he goes into his cushy Nisky office, with the upscale rich church, and spends free time copying and pasting.  

But never does he copy and paste the FACTS that prove the city/county/plex dems are ruining the city.

Eurozone crisis: The grim economic reality
Gavin Hewitt Europe editor
BBC 14 August 2014 Last updated at 06:58 ET

Over recent weeks, the French government has been saying it would "tell the French the truth" about the economy. A new reality is dawning.

French Finance Minister Michel Sapin has spoken of Europe's "economic malaise". After another quarter of zero growth in France, he has admitted that the government's previous forecast of 1% growth this year is impossible to reach.

It is not just France where uncomfortable truths have been unveiled. In the second quarter of the year, Germany suffered a 0.2% decline in GDP.

An important survey earlier this week concluded that economic growth will be weaker in 2014 than expected.

Italy is back in recession and the French economy stagnant. Other countries are hinting they will cut their growth forecasts.

And the risk of deflation is growing. French consumer prices fell 0.4% month on month. Portugal's price index slumped 0.7% in July. Spain saw the steepest slide in consumer prices in five years.

French Finance Minister Michel Sapin says there is "economic malaise" across Europe amid poor growth
Falling inflation and non-existent growth also puts countries like Italy in crisis. Matteo Renzi's young administration has been marked by great energy.

The Italian prime minister said that "not even dictators managed to get things done as fast as this."

But the dramatic far-reaching structural reforms to overhaul the labour market and the bureaucracy are not in place.

And here is the nub of the Italian crisis: it has debts of 2.1 trillion euros (£1.7 trillion). The debt-to-GDP ratio is currently edging towards 136% and rising.

That figure is likely to rise further and the fear is that at some stage the markets will ask how Italy will service its debt. To stabilise the debt, the country would have to run a very strong primary surplus, which is most unlikely.

Uncomfortable times
France is not only slashing its growth projections but signalling it will miss its target for reducing its public deficit as agreed with the European Commission. The deficit will end up above 4% of GDP, missing the 3.8% target.

The French, in a new spirit of candour, are saying they will cut the deficit "at an appropriate pace". It sounds like saying: "We will interpret the rules in our own way."

Mr Sapin said: "We must adapt the pace of deficit reduction to the exceptional situation... of growth that is too weak everywhere in Europe and the exceptional situation of inflation that is too weak across Europe."

It could make for an uncomfortable period.

There is a lot of frustration with France, particularly in Germany, for its failure to meet existing targets. There may well be resistance to further flexibility.

Italian PM Matteo Renzi administration is energetic but has been unable to introduce much needed reforms
In Italy, Mr Renzi said this week: "I have absolutely no interest in breaking the 3% ceiling."

But make no mistake - the arguments over the Growth and Stability Pact will be back in play this autumn. The French and the Italians will become even more vocal about relaxing rules.

However, there are some bright spots.

The Spanish economy has benefitted from a surge in exports. It may even revise up its growth forecasts. Unemployment has been falling too, but even so it remains at 24.5%.

Greece has a budget surplus but its economy is still shrinking. It may find some modest growth later in the year, but even so its projected growth remains too weak to significantly reduce its mountain of debt and, almost certainly, it will need further help.

Russian sanctions biting
The eurozone economy is also being buffeted by external crises, principally Ukraine.

It is hard to calculate the impact of sanctions against Russia, but at a moment when the European recovery is so fragile they are a further unknown. Some German manufacturers are hurting. German exports to Russia dropped 14% in the first four months of the year.

Greece could see some modest growth this year but its economy is still shrinking
Some European leaders, like French President Francois Hollande, are looking to the European Central Bank (ECB) to ride to the rescue.

"The ECB must take all necessary measures," Mr Hollande said, "to inject liquidity into the economy."

The ECB has already implemented six new long-term financing operations, in which banks are required to sign up to commitments to lend more. And banks which want to deposit reserves with the Central Bank have to pay negative interest rates.

The ECB says it stands ready to do more and is committed to using "unconventional instruments."

The pressure on the ECB is likely to grow but a much bigger question hangs over the European economy: why is growth so elusive and how will it bring down the high levels of youth unemployment and debt?

Quoted from DemocraticVoiceOfReason

OK -- The way you posted it you said buy the safe and take your money out of the bank.  I presumed that they wanted you to put your money in a safe.

Of course, once they take your guns away then they could come back and take your safe and its contents, too.

actually they said to diversify. cash, gold, silver, (metals)

can't put all your eggs in one basket.

Quoted from bumblethru

actually they said to diversify. cash, gold, silver, (metals)

can't put all your eggs in one basket.

Yes - always diversify - I would lean towards commodities like precious metals and semi-precious stones & gems. If you need a long-term (20-30 year investment) buy some tanzanite (one of the less expensive precious gems that is expected to soar in value over the next few decades).