Opinion That Matters
The following clip from the June Sprott Asset Mgmt monthly newsletter.

If you want to know what's really going on, listen to the executives of companies that actually produce and sell things. On May 24, Tiffany & Co cut its fiscal-year sales and profit forecasts blaming "slowing growth in key markets like China and weakness in the United States as shoppers think twice about spending on high-end jewelry."¹⁸ On June 8th, McDonald's surprised the market with lower than expected same-store sales growth in May, following a lacklustre April sales report that the company stated was "largely due to underperformance in the United States, where consumers continue to seek out very low-priced food."¹⁹, ²⁰ On June 13th, Nucor Corp., the largest U.S. steelmaker by market value warned that its second-quarter profit will miss its previous guidance after a "surge" in imports undermined prices and "political and economic uncertainty affect buyers' confidence".²¹ On June 20th, Proctor and Gamble lowered its fourth quarter guidance and profit forecast for 2012. Factors that drove the company's challenges included "slow-to-no GDP growth in developed markets", high unemployment levels, significant commodity cost increases and "highly volatile foreign exchange rates".²² Other companies that have recently lowered guidance include Danone, Nestle, Unilever, Cisco Systems, Dell, Lowe's, and Fedex. It's ugly out there, and many companies are politely warning the market about the type of environment they foresee ahead in both the US and abroad.
To give you a hint of how bad it is in Europe today, the most recent retail sales out of Netherlands showed a decline of 8.7% year-over-year in April.²³ In Spain, retail sales fell 9.8% year-on-year in April, which was 6% greater than the revised drop of 3.8% in March.²⁴ Declines of this magnitude are not normal occurrences and signal a significant shift in spending within those countries. We fear this is a sign of things to come within the broader Eurozone, which will only serve to complicate an already dire situation that much more.