{"id":178,"date":"2011-07-14T10:17:03","date_gmt":"2011-07-14T14:17:03","guid":{"rendered":"http:\/\/www.sdaconseil.com\/blog\/?p=178"},"modified":"2011-08-11T23:08:10","modified_gmt":"2011-08-12T03:08:10","slug":"cfo-%e2%80%93-2nd-quarter-higher-stakes-to-watch-during-your-summer-vacations","status":"publish","type":"post","link":"https:\/\/sdaconseil.com\/?p=178","title":{"rendered":"CFO \u2013 2ND QTR: HIGHER STAKES TO WATCH, DURING YOUR SUMMER VACATIONS"},"content":{"rendered":"

\"\"<\/a><\/p>\n

(14 July 2011)<\/em> The end of QE II has lifted the fog over the financial markets.\u00a0 We are now discovering the stakes have grown higher in 4 areas.\u00a0 The third quarter will remain eventful, just as CFOs will take their vacation weeks.<\/p>\n

USA<\/strong><\/p>\n

The economic growth engine in the USA is sputtering:\u00a0 Unemployment and real estate remain a serious drag.\u00a0\u00a0 The debt ceiling issue has become the playground of harsh partisanship politics.\u00a0 Increasingly the ghosts of the Japanese lost decade are coming back to haunt the Americans:\u00a0 sluggish growth, high debt, and a slow transformation.\u00a0 Not quite as bad as in Europe, but sufficiently serious to prompt the Fed to think about a QE III.\u00a0\u00a0 This was just the pattern witnessed in Japan.\u00a0 It is hard to tell which of the US$ or the Euro is more vulnerable.<\/p>\n

EUROPE<\/strong><\/p>\n

Austerity programs, pushed in the throats of peripheral countries like Greece, are not quite buying the time hoped for by politicians, and the French and German banks.\u00a0 Financial markets are not convinced by a plan to create more supranational debt, while austerity dims the economic growth prospects of Southern Europe.\u00a0 Contagion theories are back.\u00a0 Speculators are eyeing Italy, and are testing everyone\u2019s nerves.\u00a0 Italy has come to control its budget deficit, but debt\/GDP is standing at 120%, and growth averaged less than 1% for the last 10 years.\u00a0\u00a0 Not quite a standing duck, but the margin of error is rather slim for Italy.\u00a0 The Euro has in the meantime stood its ground in the currency market.\u00a0\u00a0 We suspect the hand of China is protecting its economic interest.\u00a0Slowly but surely, we are moving towards a resolution of the 3 factors:\u00a0 Debt restructuring, loss distribution, structural reforms.\u00a0 The longer it takes, the more painful deleveraging will be.\u00a0<\/p>\n

CHINA<\/strong><\/p>\n

Perhaps the greatest level of rumours was found in China.\u00a0 Growth for the 2nd<\/sup> quarter was just reported at 9.5%, calming some stretched nerves.\u00a0 Yet we seem to go from quarter to quarter about China growth, uneasy about a potential reversal.\u00a0 The authorities are working hard to contain inflation, which notched up to 6.4% (and food inflation at 11.7%).\u00a0\u00a0 They even let the Yuan slightly appreciate against the US$.\u00a0\u00a0 There has been a string of reports about the true level of debt in China, and bad loans.\u00a0 There are surely a few holes in the balance sheets, but we will have to wait and see to get the real picture.\u00a0 There is room for a few surprises in China on that account.\u00a0 But the real thing to watch is how China will manage a transition from a growth rate of near 10% per annum, to a more sustainable level of 6-8%.\u00a0 When and how this takes place is a crucial piece for the rest of the world.<\/p>\n

REST OF THE WORLD<\/strong><\/p>\n

As America and Europe remain fragile to external shocks, the rest of the world does count.\u00a0 The Arab spring is inching forwards.\u00a0 Egypt is not making much noise, but it is a large country and its\u00a0political path remains uncertain.\u00a0 In the 4 BRIC countries, inflation ranges from 6.4% in China to 9.6% in Russia.\u00a0 There is some story to watch in those numbers.<\/p>\n

World economic growth forecasts are still standing clearly above 4%, steady and safe\u00a0for commodity countries like Canada and Australia.\u00a0\u00a0 But the 3rd<\/sup> quarter might move those forecasts.\u00a0 The game is tight.<\/span><\/p>\n

\u00a0<\/span><\/p>\n

Andr\u00e9 Du Sault.<\/span><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

(14 July 2011) The end of QE II has lifted the fog over the financial markets.\u00a0 We are now discovering the stakes have grown higher in 4 areas.\u00a0 The third quarter will remain eventful, just as CFOs will take their vacation weeks. USA The economic growth engine in the USA is sputtering:\u00a0 Unemployment and real […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1,8],"tags":[37,47,16,65,64,34,95],"_links":{"self":[{"href":"https:\/\/sdaconseil.com\/index.php?rest_route=\/wp\/v2\/posts\/178"}],"collection":[{"href":"https:\/\/sdaconseil.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sdaconseil.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sdaconseil.com\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/sdaconseil.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=178"}],"version-history":[{"count":6,"href":"https:\/\/sdaconseil.com\/index.php?rest_route=\/wp\/v2\/posts\/178\/revisions"}],"predecessor-version":[{"id":194,"href":"https:\/\/sdaconseil.com\/index.php?rest_route=\/wp\/v2\/posts\/178\/revisions\/194"}],"wp:attachment":[{"href":"https:\/\/sdaconseil.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=178"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sdaconseil.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=178"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sdaconseil.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=178"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}