May 2, 2014
How can this be possible? Bond yields are at record lows and stock prices near record highs across Europe and even the ever-increasing debt-to-GDP characteristics of the perennially weak periphery are able to issue bonds willy-nilly as if nothing had ever happened. So how come 18.9 million people across Europe were unemployed in the euro area in March? Spain – actually trading at its cheapest cost of funding of all time (below 3%) – accounts for 6 million of those. As Bloomberg’s Niraj Shah notes, Greece and Spain have the highest jobless rates in Europe at 26.7% and 25.3%, respectively. That contrasts with 4.9% in Austria. The overall unemployment rate was unchanged at 11.8% in March from February after the previous month’s read as youth unemployment continues to rise.
Welcome to the totally manipulated “markets” where indicators have no signal quality anymore except to perpetuate an entirely false hope that the status quo is attainable once again and sustainable going forward.
For a brief month or two, Spain’s unemployment data fell – rekindling belief in the miracle (thanks to participation rate shenanigans) but now as yields push below 3% for the first time, it is re-accelerating….