Europe

Submitted by $hane Obata

USD: Return Of The King

Falling oil prices, China growth fears, submerging markets, Brexit and Italian banks. All of those risks have one thing in common: They have not derailed the US economy. Despite concerns about a recession, it continues to grow at a steady pace. According to the Atlanta Fed, real GDP is expected to grow by 0.7% in Q1’16. That is not a great number; however, the series is extremely volatile.

sources: Bloomberg, @Not_Jim_Cramer

As we predicted last week when Wikileaks released an IMF transcript which suggested trubulent times may be ahead for Greece, Reuters today writes that "the leaking of a conference call of International Monetary Fund officials on Greece's latest bailout review has further undermined mutual trust in fraught debt talks, embarrassed the European Commission and infuriated the IMF and Germany."

By Mises.org, Originally printed in Newsweek on October 14th, 1946 as "Inflation, Deflation, Confusion." Available in Business Tides: The Newsweek Era of Henry Hazlitt

Hazlitt, 1946: Inflation, Deflation, Confusion

Just over a year ago, a black swan landed in the middle of Europe, when in what was then dubbed a "Spectacular Development" In Austria, the "bad bank" of failed Hypo Alpe Adria - the Heta Asset Resolution AG - itself went from good to bad, with its creditors forced into an involuntary "bail-in" following the "discovery" of a $8.5 billion capital hole in its balance sheet primarily related to ongoing deterioration in central and eastern European economies.

After four consecutive quarters of declining EPS for the S&P (including the estimated 9% plunge in Q1 earnings) is it time to declare victory over the global earnings recession? Here is the answer according to Morgan Stanley's Jonathan Garner.

Has the Global Earnings Recession Finished?

We think it's too soon to declare that the global earnings recession has finished and remain neutral equities in our asset allocation framework.