European Economic Scene Worsens Yet Again; Inflation Uptick Good News for Japan; Three Retailers Chasing the White Whale and Losing

Eagle Eye Opener

European Economic Scene Worsens Yet Again (Bloomberg)

Investors looking for signs that the European Union (EU) is battling back from its economic pit can keep looking. The EU’s statistics office said the jobless rate rose from 12.1 percent to 12.2 percent in March. In addition, inflation grew as well to 1.4 percent. Both of these pieces of bad news certainly increase the pressure on the European Central Bank to do something (print money) to give economic growth a kick in the pants. All of these issues will be on the table at the EU’s next summit meeting in Brussels in June. But really, does it take a meeting for them to decide to use the only strategy they have at hand, crank up the printing press a la the United States and Japan?

Inflation Uptick Good News for Japan (CNBC)

In keeping with the inflation theme today, prices rose for the first time in almost three years in Japan. And surprisingly, one product is leading the way to the land of rising prices: televisions. Prices for televisions jumped 14.5 percent month over month. RBS’s chief Japan economist, Junko Nishioka commented, “… TV prices have been declining by 20-30 percent on an annual basis. But we are seeing some bottoming out — this is a good sign.” Overall, Tokyo’s consumer price index (CPI) rose .1 percent in May, on a month-over-month basis.  This is one of the first signs in years that Japanese household consumption is rising. Will this be a case where government stimulus worked out exactly as intended? We’ll see.

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Three Retailers Chasing the White Whale and Losing… (YahooFinance)

Just as Captain Ahab’s obsession with a certain white sea-mammal kept pushing him until the end, so goes the retailers’ pursuit of the most elusive of all consumer dollars: teen apparel money. As the year’s second-largest buying spree gets ready to cycle up (back-to-school purchases), retailers are in a tooth-and-nail battle to remain relevant in their target’s eyes. Fully 21% percent of teenagers’ expenditures go to clothing, in their own struggle to remain atop the cool clothing class in school. Judging by first quarter results, three previously popular clothiers are now getting failing grades: Abercrombie & Fitch, Aeropostale and American Eagle all posted disappointing earnings. Abercrombie & Fitch’s Hollister brand owns the top slot in brands losing popularity with buyers. While some analysts blame the weather, these three big-name brands are flunking out, The real cause is an even more fickle force — teenager choice. And as long as retailers and investors target teen trends, they both will face struggles as monumental as living through your teenage years.

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“The solution to our problems is found in business, outside of government.” -- Tony Blair, Milken conference 2013 SPECIAL ANNOUNCEMENT: At 9 p.m. EDT tonight, I appear on John Stossel’s Fox Business (check local listings) show “Stossel” to discuss the growing debate “Austerity vs. Stimulus: Which is the Best Way Out of the Great Recession?”

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