Dramatic food inflation in India. Prices are up double digits.

An Indian economist reports:

“While headline food inflation may have come down to single digits last week, prices on the streets do not seem to be cooling off proportionally. Adding to the woes are unseasonal rains in India’s western region and floods in the southern part. Shivram—a wholesale vegetable dealer in Chennai—says that the recent floods have devastated standing crops, including vegetables, and are sending prices up. Dealer checks in Nagpur too confirm similar trends: prices of most vegetables have increased by more than 40% in the last fortnight, with the commonly-used onion leading the charge with a ~100% increase in Mumbai and Chennai.
The recent surge in oil prices—of >10% over the last month—has lead to expectations of inflation spiraling up again and amplified concerns over government finances due to the higher oil subsidy bill. “

This is bound to be extremely disruptive in a country where the poor spend most of their income on food.

Southern countries in Euroland uncompetitive due to strong currency

From the NYT today:

"The World Economic Forum has issued competitiveness ratings for 20 years based on increasingly sophisticated measures, including government, law, ethics, infrastructure, technology, debt and education, said its lead economist, Jennifer Blanke. Germany ranks fifth in the world of 139 countries, just after the United States. The Netherlands is 8th, France 15th, Austria 18th, Belgium 19th. But the southern economies of the euro zone are a different story. Ireland comes in at 29, Spain at 42, Portugal at 46, Italy at 48 and Greece at 83."

In the same article, Roubini says Spain, Portugal, Italy and Greece will have to reduce wages by 30% to regain competitiveness.

And the winner is? GERMANY!

http://www.nytimes.com/2010/12/03/world/europe/03divide.html
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Chinese workers flee expensive coastal regions for the interior.

The Pearl River Delta may be 900,000 short of workers, and the other coastal regions are similar. Increasing prices and stagnant wages are making it increasingly difficult for workers to remain on the coast and many are returning to the interior.

Significance: 1. Bottlenecks are developing in China’s state-controlled industrial sector. 2. Worker discontent is growing.

http://www.nytimes.com/2010/11/30/world/asia/30china.html

Industrial production growing rapidly across the globe

YOY in September 2010:

China: China: 13%, Japan 11%, Eurozone 9%, Brazil and Russia 6%, United States 5%. With the weak dollar, why is the US lagging? The answer may be anti-business government policies.

Factoid: The Mall of America has no vacant retail space for the first time in 18 years

Is this a retail recovery or the devil finding work for idle hands?

3rd quarter US corporate profits the highest ever (over 60 years)

Now at 11.2% of GDP. At a $1.7 trillion annual rate, corporate profits are ahead of 2007’s $1.5 trillion. The recession is over for the corporate sector.
http://www.nytimes.com/2010/11/24/business/economy/24econ.html

India's underground economy continues to thrive

India's underground economy has maintained a steady 50% size of the reported one for three decades and now totals $640 billion at the current exchange rate. (3x that at purchasing power parity.)

Source: LiveMint of India