ITALY UNDER another so called “SPECULATION” ATTACK

WHAT IF iRAGLIA HAD TO DEFAULT?

TOO BIG TO BE BAILED OUT … OR: A GREEK SALAD?

ENGLISH ABSTRACT As Spain eventually recovers, the chances of an Italian crisis become bigger and bigger. In case of an Italian default, here are some speculative ways out:

a) annexion of Northern Italy to Germany is the 1st best, provided the chances of pursuing EU as a “fantastic object” (G Soros, after David Tuckett) are negligible; problem is persauding the German people.

b) 2nd best is an international protectorate or – de facto –  an IMF temporary dictatorship, as in any other undeveloped country.

c) I can’t  figure out realistic intermediate solutions, since the Monti gov. experiment has definitely shown that the Italian corporate society, and even more its out of law Southern regions, do not want to cure the cancer. Nonetheless, Fabrizio Goria reports today (June 13) that a LAST CALL internatonal network for a controlled default of  Italy might take place, namely from next January the 1st.

d) We are left with Tango bonds, Italy’s default and sorting out of the €: a dead end. And no solution at all, since until 1′ before the exit, Italy might still engender a domino, worsening furtherly the ongoing #GOD (#GreatOECDepression).

More: if you can read Italian, just give a look to the international plans on the “almost impossible” bailout of Italy’s €2 trillions sovereign debt, through a forced rescheduling in 2013, as anticipated by the quoted Goria’s paper:

http://www.linkiesta.it/ristrutturazione-debito-italia-tesoro

Picture: an outstanding view of the European side of Italy; Val di FUNES, SANTA MADDALENA and the AMAZING Puez Odle in the background (got via Luigi Zoppoli).

Mercoledi 13 giugno

1 ora fa il bravo Fabrizio Goria esce sul sito de Linkiesta.it con le anticipazioni – chiave sul vertice di ieri sera di FullMonti con ABC.
Ne escono 2 scenari, a seconda se il costo sovrano salga quest’estate oltre il 6% o >10%.
Nel secondo caso, si va ad una soluzione greca di FALLIMENTO CONTROLLATO PER ALLUNGAMENTO E CONSOLIDAMENTI FORZOSO DEL DEBITO SOVRANO: giuridicamente assai più facile  in Italia grazie al furbastro e  “lungimirante” dpr 2003/398 che all’art. 3 consente qualsiasi ristrutturazione per DM.
Quanto al fronte di tutte le istituzioni europee e globali, verrebbero in soccorso all’iRaglia  con una capacità potenziale > €1 tri (0,7 tri i firewalls europei, 0,3 IMF e la BCE a varcare il taboo di comprare bot). Di più:  http://www.linkiesta.it/ristrutturazione-debito-italia-tesoro

Martedi 12 giugno

Man mano che la Spagna leva – se le leva – le castagne dal fuoco, passa oltre il 50% (ad es. da un 40 verso un 60%) la Prob attesa di un default dell’iRaglia. Questo tuttavia ha ben poche possibilità di essere bailed out in modo ordinato e caritatevole, senza una soluzione fallimentare alla tango-bond. Nessuno infatti ha i fondi per salvare l’iRaglia e le sue 2 banche duopoliste decotte, che insieme fanno più del PIL nazionale  (UniDebit poi, ridotta ad un autentico buco nero da Profumo, con la sua sciocca avventura nell’Est Europeo). Solo IMF, pur non avendo i fondi, potrebbe bluffare ed essere credibile.
Le soluzioni di governance possibili in caso di default: 1. l’annessione alla Germania (almeno del Nord Italia) è senz’altro quella OTTIMALE TRA QUELLE POSSIBILI, ossia con Prob significativamente positiva (vedi punto 3 sotto); però non passerebbe MAI ad un referendum in Germania (in iRaglia non lo faranno proprio: siete Sudditi, no?).
  • 2. Golpe ed instaurazione  – come in qualsiasi altro paese post-coloniale, quello iRagliano sarebbe un caso di caduta da finto, artificiale Centro a naturale Periferia – di una dittatura IMF in iRaglia, con sospensione di Costituzione e tutti i suoi organi di qui a 2-3 anni, sino al riordino interno e la ripresa mondiale. Una soluzione sub-ottimale rispetto ad 1, ma sempre efficace e del tutto praticabile. Ordine pubblico? Appaltarlo al KGB che sta facendo faville a Mosca (APPLAUSI! BRAVI! Ed anche così CARINI: senza torcere 1 capello).
3 – … – n-1. Tutte le soluzioni intermedie, 3rd, 4th, …,  (n-1) best:  sono BLOCCATE dalla natura balkanizzata a caste, corporativa e\o mafiosa di tutta la società civile e delle strutture sociali iRagliane, dall’Alpe all’Africa. Il governo FullMonti, pur ed anzi proprio con tutti i suoi difetti e limiti, è stato l’ultimo e DEFINITIVO esperimento in quest’àmbito. Siete IRRIFORMABILI. Vie normali chiuse, in una società ultra-bloccata, malata e degenere nell’anima come nei suoi corpi, individuali ed intermedi.
D’altro canto, esiste sì una Prob €psilon prossima a 0 che la catastrofe continentale ridia vigore ad una €uropa proprio in zona Cesarini (il senso del discorso di George Soros cui ho assistito al Teatro Sociale di Trento il 2 giugno: avete 3 mesi di tempo), addirittura – idealmente – come Stato IperFecoming_soon_financial_turmoil_in_europe_and_the_united_states_essaysderale, Flessibile e (ossimoro, fascino, contraddizione) Liberale. Lo psicanalitico “oggetto meraviglioso” di Soros. Ma non vedo gambe nemmeno per le Utopie contraddittorie, di questi tempi. Ossia questa 1st best ipotetica si moltiplica per una Prob nulla, e fuoriesce dal choice set, nel mio range di scenari.
E’ un caso-limite fuori range: sempre un benchmark, tuttavia. Dal quale valutare l’ottimalità di una DIVISIONE DELL’UNITA’ NAZIONALE FORZOSA, in caso di DEFAULT – FALLIMENTO dell’I-RAGLIA.
Esattamente come, alla scala continentale, Soros opina (ed argomenta nel libro, in tutti i suoi articoli recenti ed a Trento) che, se cedesse l’€, verrebbe giù tutta la costruzione europea sino ai mercati unificati e Schengen (essendo, dice, una “bolla politica” che non stava in piedi se non camminando). Non so se una disgregazione simile valga come previsione per lo Stato-Nazione iRaglia, ma la propongo come obiettivo e forzatura.
Da notare che la Lagarde, direttrice IMF, si è allineata alla sostanza dell’analisi e PREVISIONE di Soros (che già a Trento aveva raccolto consenso tra i premi Nobel presenti). 3 mesi di vita dell’€ senza una svolta radicale.
  • N come AFRICA, appunto. N COME NON-SOLUZIONE. Sentiero naturale\neutrale, il  PUNTO DI ATTRAZIONE SENZA CHOC ESOGENI è la devastante via afro-argentina che cancella almeno per decenni l’Italia dal novero dei paesi avanzati; e rischia (senza firewalls formidabili) di ingrippare persino l’economia mondiale già in Grande Depressione, rigettandola in deflazione e recessione aperta come nel 2008-9. L’iRaglia esce dai mercati finanziari e non ci rientra più, per la gioia dei populisti; fuori dall’€, la £ si avviterebbe tendendo decisamente a 0, uccidendo per anni ed anni tutto ciò che si muove in una economia geograficamente importatrice di energia e risorse primarie. Sulla rinascita, ne riparleremo dopo molti anni e cadaveri, se e solo se l’Europa soravvvivesse.
In tale ultimo caso, i vari Mussolini in panchina, come Grullo e Travaglio, anziché essere ridicolizzati come sub-1, annientati o assassinati sub-2, o rompere sempre i coglioni sub-3,  scatenerebbero una GUERRA CIVILE tra loro, al fine di assumere il titolo di Bokassa d’iRaglia a vita; o a dinastia. Sono gli eredi legittimi del A) Duce etiopico e B) Cavaliere libico, ma di serie C.

€ break-up scenarios

Here’s a 50 pp document by Nomura (various authors), I got from the Long Room area of alphaville – ft. In an interesting Section: financial weapons of mass destruction:-)

nomura-breakup-collection

“Currency Risk in the Eurozone:

Accounting for break-up and redomination risk”

Published in: on January 6, 2012 at 6:50 pm  Leave a Comment  
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Monty might save Germany

A paradox? A possible, reasonable forecast of a complex system derail?

ONLY MONTY CAN SAVE GERMANY!

THE € IS DEAD. Point is whether the likely Italy’s default would leave the € alive for how many days, well in advance of this competitive domino (Italy > France), Feldstein is talking about in the paper I refer to here. And, without the €-zone, a decline of Germany down from being the 2nd world economic power would start, as Oscar Giannino was arguing tonight at tg3 night, and eventually carry on (unless countervailing forces emerge, e.g. re-uniting Germany and Europe), until sorting out form the top 10 (Germany will rank after Turkey: with reverse migration?).
Italy might become a stronger industrial power than Germany: the revenge!

Therefore I’d re-phrase Feldstein on the ft: Only Monty can save Germany.

Martin Feldstein: Only Italy can save the euro
The euro currency may soon collapse even though there is no fundamental reason for it to fail. Everything depends on Italy, because financial markets now fear that it may be insolvent.

If the Italian government has to continue paying a seven or even eight per cent interest rate to finance its debt, the country’s total debt will grow faster than its annual output and therefore faster than its ability to service that debt.

If investors expect that to persist, they will stop lending to Italy. At that point, it will be forced to leave the euro. And if it does, the value of the “new lira” will reduce the price of Italian goods in general and Italian exports in particular. The resulting competitive pressure could then force France to leave the euro as well, bringing the monetary union to an end.

The euro currency may soon collapse even though there is no fundamental reason for …
Published in: on November 30, 2011 at 10:43 am  Leave a Comment  
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GreenspanTremonti generated Great Depression

Finally a highly likely answer to the initial faq in this de(e)p-re(ce)ssion blog, since when it started 3 and 1\2 years ago: hard recession or long depression? The latter.

 

3 years after Lehman Bros. today

How it happened that we were thrown into the 2010s Great OECD Depression?

#GreatOECDepression

Chance and serendipity in history. Here is, in an Italian version, a brief about how the 3rd GD in the History of Capitalsms (the plural is MANDATORY!) was produced by a clever, furbo Alan Greenspan and such a beast as Giulio “Voltremont” 3monti.

From my yesterday’s  twitter hashtag, we’ll label the 2010s  as #GreatOECDepression, in order to focus upon its main novelty, the peculiar global duality.

DAL SUBPRIME AL CROLLO EST-EUROPEO ED AL DEBITO SOVRANO ATLANTICO. LE VIE DEL SIGNORE ALLA OECD GREAT DEPRESSION.

Il SUBCOMANDANTE subcrime mette sotto stress estremo, e talora  stravolge e rimette  in discussione DALLE LORO FONDAMENTA,  i Capitalismi post-Fordisti tarocchi di matrice Reagan – Greenspaniana (di striscio Clintoniana, se lui contava q.cosa).

Nonostante i sapienti trucchi di quest’ultimo, e la decisiva complementarietà col sotto-consumo BRICS,  sistemi insostenibili basicamente per erosione della figura e della esistenza bio-politica stessa de  ceti medi circa la maggioranza della popolazione, il borghese-massa (Mario TRONTI), e la sua capacità autonoma di C e S senza indebitarsi in modo perverso e\o progressivo.

Ciò avviene nella civilizzazione Nord Atlantica, diciamo per contesto sottoposta anche (ma assai più blandamente) ad una del tutto normale,  ENTROPICA e fisiologica erosione sociale secolare, dopo le onde di sviluppo lungo un 1\2 millennio, che trassero spunto anche dai rimescolamenti dell’ecologico Columbus Exchange (dal pomodoro alla Pizza Margherita)

Ma venamo a  noi ora:

Meccanismi di generaz. della #GreatOECDepression: 

1 0nda 1, subcrime 2007-10 (US UK Ic\reland Spain): da blocco inter-bancario luglio 2007 x demoltiplicatori-acc. e varie crisi simultanee, sino alla recessione globale differenziata 2009 e ripresa borse 2010 nell’aspettativa di un ciclo standard.

2 0nda est-europea 2, 2009-11  (CEE, Central East Eu.: crisi monet. e fin.) si riprende dopo decisivo IMF-bailout (altrimenti saltavano subito le esposte Austria, Italia ed Unicredit, Svezia con impatti successivi) e Hayekiane cure da cavallo (drastici tagli redditi, svalutazioni e strette fiscali).

3 0nda SovDebt 3, 2010-15? (contagio da PIIGS a €; il “compagno spread”) precipita riforma rimbalza. € al panettone, ma + difficile colomba 2012. 3 anni dopo l’0nda 1, funziona un po’ come 1931 su 1929: è Grande Depressione, ma stavolta NON GLOBALE. 0ECD.

4  #GreatOECDepression 2007 – 2020? Il riarmo tra i blocchi populisti contrapposti iniziò nel … (speriamo che ce la caviamo).


Q€: e la nave va, ma NON a gonfie vele

Bilancio del primo giorno UFFICIALE di caccia alle farfalle da parte delle Vispe Terese di Francoforte.

Per LEX il Quantitative €asing (Q€) è già un primo mattone di una qualche maggiore coesione se non fusione fiscale:

“As it is an interest-rate subsidy, it is also a cross-border transfer of wealth, the ECB’s equivalent of the EU’s regional development fund (set up in 1975). Hence this is a further small step towards a single fiscal eurozone.

There could be a bigger step yet to come. The ECB might have to issue its own bonds to sterilise the money it is printing to buy sovereign debt. Such bonds, true “euro-bonds”, might face legal obstacles. Politicians and voters could well object.”

E per Phastidio senza yield targeting (tipo: sopra il 5% compro tutto sul mercato) non si fa paura a nessuno; pertanto date le dimensioni in gioco,  per esser credibili occorrono gli eurobond proprio come dice Lex (qui le 2 analisi collimano):

“è inimmaginabile pensare che l’Eurotower compri titoli italiani nelle quantità necessarie a mantenere il rendimento compresso su livelli di sostenibilità (yield targeting), come vi avevamo già detto. E a dire il vero non lo ha fatto neppure per Grecia, Portogallo ed Irlanda, eppure era più semplice, visti i volumi in gioco. L’impressione è che la Bce abbia concordato con i governi francese e tedesco e con la Commissione europea una soluzione-ponte più pirotecnica che sostanziale, in attesa che l’EFSF venga dotato di risorse per l’autunno. Ma anche 1000 miliardi non servirebbero.”

Infatti, Roubini parlava oggi su La Repubblica di 2-3 volte gli attuali 0,4 trilioni in dotazione al nascituro EMF, oggi embrione efsf. Stavolta Nouriel è ottimista, come accade più spesso dello stereotipo: non 1 ma 2 trilioni sembrano una cifra minima più adeguata, sempre sull’ipotesi che intanto si arresti il domino sulla Francia, sennò potrebbe non bastare NESSUNA CIFRA.

Con 1 g. di ritardo leggo  via Sole 24 ore una stima NYT vicinissima alla mia: US$ 1.4 trilioni per il bailout italico ed altri 0.7 per l’iberico. Io ho detto la stessa cifra per l’aumento di dotazione. Infatti aggiungere alla dotazione efsf €1.6 tn. = US$ 2.28 tn.

Citazioni da:
1. LEX
http://www.ft.com/intl/cms/s/3/72ad8a62-c1ae-11e0-acb3-00144feabdc0.html#axzz1URmx51dk
2. PHASTIDIO.net
http://networkedblogs.com/lp0Ek
Che a sua volta cita: http://phastidio.net/2011/08/05/lora-dei-dilettanti/

G20: invented late 2008, dead 2 y. later?

Chronicles of a currency war

G20 was the hurried up way to fully incorporate BRICs into financial regulation and fiscal policy coordination and global decision making (as for monetary policies, they are are alreadly informally coordinated, inasmuch as possible and sound, by the CBs “club”). We discussed at length its first moves in this blog (see December 2008 posts).

At the first real crisis, 2 years after it doesn’t work AT ALL. To make things simple, Obama has no more a proper leadership (max, just agenda-setting powers), and Chindia is not yet nor soon the new Empire (and such an empire will substantially depend upon the path eventually leading to it).

The sharp division created on the one hand by “helicopter” Bernanke’s $0.6 trillions QE2, and on the other by yuan’s under-valuation by an est. 19% (source:  Peterson Inst. of Int.l Econ.), would have been quite easy and straightforward to deal with and solve, had a proper bargaining environment been there. It wasn’t.

The near future will tell us if it is just the G20 who’s dead, or the willingness to bargain, or both.

Inspired by the noisefromamerika blog style, and specifically by a quite similar table (same structure) at page B14 in  Folha de S.Paulo today, here is its last outcome.

EXPLAINING THE G20 FINAL DOC

IT SAYS\IT MEANS

1. exchange

To evolve towards exchange systems more market determined: by stressing the exchanges’ flex in order to reflect the underlying fundamentals, and avoiding competitive devaluations.

This point is FULLY anti-Chinese, because this is the country whose exchange control is more striking, and particularly US-annoying (the US leaders being so stupid, that they do not want to change their economic base, even after such a momentum crisis; if they had a proper Industrial Plan, they wouldn’t care much about the yuan). Message: China must undervalue, but under-valuation in general must not be used as a weapon, a pro-X (eXport) policy (a basic lesson from the 1930s katastrophe’).

2. Flow of capitals

The advanced economies, incl. those issuing reserve-currencies, will vigilate against disordered changes in the exchange rates. Their actions will help to prevent an excess volatility in the ST capital influx towards some emerging countries.

This is the compensating anti-US point. The yankees must stop to print money in order to buy credit. In Brazil as in China and elsewhere, Helicopter Bernanke’s $ create speculative K inflows, hence potentially Greenspan-style bubbles in commodities or housing. No, thanks. $ go home!

3. Disequilibria

The IMF might play a role here, by developing further the MAP (Mutual Assessment Process). The final target is ambitious: to match external stability together with fiscal, monetary, financial and exchange consistency.

Obama’s +\- 4% GNP  threshold (for S-I = X-M surpluses) has been thrown to the garbage. Now the IMF “arbiter” must deal with the hot potato, and is called to some persuasion hard job. But the Empire-like (centre-periphery)  divergence between over-saving BRICs and under-saving North Atlantic old powers is always there, and no one knows how to deal with it. Empires’ history tells how to do (read Marcello de Cecco, e.g.).

4. Safety nets

Make stronger the global financial safety nets, in such a way as to help the countries to cope with financial volatility.

If one country is financially sound (not Greece), but is hit by a financial exogenous choc, it will have title to receive credit and emergency help.

5. IMF reform

The leaders approve their Ministers’ decision to widen the participation of dynamic emerging countries to IMF shares.

BRICs and NICs will put more money in the IMF, hence get more power. The IMF’s architecture will (in part) close the gap with the economic geography of the real world.

6. Financial system reforms

The financial system regulation must become stronger, with tighter capital and liquidity requirements.

Here was the G20 good start, with the Commission coordinated by Draghi, which has been working meanwhile. Vikram Pandit, the Citi’s CEO sent a mafioso message to the G2o on the Financial Times: to impose higher capital and liquidity standards might have a significant negative impact upon banking systems, consumers and economies. Here the G20 returns compact once, in order to face the Financial Criminals that did  not respond anywhere of their sub-crimes. But the banks have already won the game. The proof is that Mr Pandit, after blackmailing all the past and future superpowers and their intelligences, is still alive.

7. Fiscal policies

Advanced countries must adopt such fiscal re-adjustment plans as to be “clear”, and “pro-growth”. Paying atn that they risk to deteriorate the economic recovery.

Leaders come over one year of impasse (US versus EU, lead by “Empire of austerity” Germany) between applied “keynesism” (keep State budget deficits high) and avoiding Sovereign debt collapses (reduce State deficits). The inner ambiguity of the issue is recognized.

8. Doha Round

A strong commitment to a success of the commercial liberalisation.

They keep saying it, but they don’t really mean it.

The reality of the 2007-2011+ crisis is of course against free trade (at least temporarily). Doha Round never took off since from its start in 2001. Now it’s unofficially dead.

At the opening of the G20, two closest allies such as the US and SK could not announce a bilateral free trade agreement. That was the sign that the atmosphere was really, really bad.

Va a cagare sulle ortiche, Ministro trepppalle

Cronache di COZZA ITALIA

Mi cito da facebook:

Voltremont, ringalluzzito dal monazza del Pd, ha tranquillizzato (SI FA PER DIRE: lo temono come l’aids addizionato di peste bubbonica) i mercati:

“anche se si va ad elezioni,

i conti pubblici sono a posto”.

Grazie al CAZZO, ha aumentato di 45 miliardi le tasse (ndr 1: vedi tabella 1 sotto). POVCAPUTTANAVACCA!!! E poi a posto na minchia, con dei conti così da MACELLERIA SOCIALE E PIEDI IN TASCA al TAXPAYER; e l’incertezza politica a 360° per mesi e mesi, parte una speculazione di sicuro, anzo più di una. Alla 99 posse: RIPETUTAMENTE RIPETUTAMENTE… 𝄞𝄫♫♪♪  ☭☮☯   仝

ndr 2 – 仝 Ombrellone, luogo PARADIGMATICO delle crisi politiche e finanziarie più CROLLISTICHE E MAYA mai viste.

A) Tutto cominciò nel luglio 2007.  Freudianamente, non se lo ricordano i mona, inclusi metà economisti,  che datano la crisi da quando se ne sono accorti loro, sti koglionazzi col cervello migrato via: il loro ACCORGERSI, è una distribuzione gaussiana alta da 1 a 2 anni dopo. Oggi ad es., nel discutere la siccità russa e canadese, un KOGLIONAZZO di loro (non so chi, una cosa sentita a radio3)  ha detto che la ag-flazione dell’estate 2008 aveva … “PRECEDUTO LA CRISI”: MA VA IN MONA, ciò!!! QUALCUNO DI QUESTI BISOGNA COMINCIARE A BUTTARLO DA RUPI TARPEE. Il XXI secolo Malthusiano della lunga bolla speculativa demografica, sia l’occasione per un pò di “mano invisibile lombrosiana”.

B) Nell’Italia della guerra fredda, invece, sotto l’ombrellone si riparavano malaticci, pallidi governicchi balneari mentre, consultando più il  Cencelli che l’Artusi, nelle cantine del Palazzo si cucinava a fuoco leee…eeentissimo, la ribollita  – prima una bollitura morotea per insaporire, poi una dorotea per stemperare – del governicchio per svernare. La politica al ritmo degli avvoltoi migratori dei Pirenei.

Basti per ora questa tabella, da me ricavata dall’analisi ed intervento parlamentare di Mario Baldassari, pubblicato il 15 luglio.

Tabella 1. BALDASSARRI  AL SENATO SVELA I CONTI DELLE 3CARTE DI 3MONTI

se, come me, non vedete la tabella, cliccate sul suo simbolino ed apparirà AHIME’ in una nuova schermata (a wordprè!)


sad labour market for a few years

As economic analysis, and experience teach, the labour market follows che monetary, then the production cycle with a variable lag of a few months. Most rich countries are well advanced in the labour market crisis, lead by the US where the downward fall is just catastrophic.

Look at the alarming statistics prepared on Feb.6 by the nancy Pelosi office, in order to set the ground for the discussion of the stimulus:

090206jobsrecessionsThe management section of the ft surveys today the grim European labour markets:

http://blogs.ft.com/management/2009/04/07/why-a-good-job-is-hard-to-find/


Why a good job is hard to find

April 7, 2009 1:25am

For those looking for work in these troubled times, there is good and bad news. On the positive side, there are at last “British jobs for British workers” as migrant labour heads home. The bad news? The vacancies include meat packing, sorting potatoes, grating carrots, cleaning, and – the least bad options – working as a retail assistant or in a fast-food restaurant. In Spain, strawberries are being harvested by Spaniards for the first time in years. “Picking strawberries is the last resort, but it’s all there is,” said Jose Maria Gomez, a 29-year-old former construction worker, in The New York Times last month.

As one employment agency manager told this newspaper recently, a new type of job-seeker has emerged. “It’s what I’d call older, middle-aged people who have been in work for 10, 15, 20 years in one place,” she explained, “and now with the climate as it is, they are made redundant and are willing to take on anything. It is heartbreaking.” It is sad seeing highly skilled people being forced to take on semi or unskilled jobs. But while such work may be back-breaking, is it really “heartbreaking” as well? Having a good job – that is, interesting work in civilised conditions – is clearly preferable to having a bad one. But better a miserable job than no job at all.

So with unemployment rising just about everywhere, it might seem an odd time to start a debate on “good work”: what it is and to how create more of it. That is what the Smith Institute, a London think-tank, has done, launching a pamphlet* on the subject at a seminar last week.

The remainder of the article can be read here.


Published in: on April 9, 2009 at 6:24 am  Leave a Comment  
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Job losses in the US

Today from the office of the speaker, Nancy Pelosi: an alarming comparison of  job losses in the US recessions 1990-1, 2001-3 and 2008-10.

090206jobsrecessions

Published in: on February 7, 2009 at 4:35 pm  Leave a Comment  
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doctor doom’s 2009

Nouriel Roubini has now a weekly column on Forbes, where some synthesis is made of the much richer rge material (unique, very deep and informative news “clusters”; regular blogs or interventions by some of the best macroeconomists). This is an invitation to read regularly, as an amateur, both “Doctor Doom” Forbes column, and the free sections of rge-monitor.com (while a professional economist is obliged to subscribe to rge):

Doctor Doom

A Global Breakdown Of The Recession In 2009

Nouriel Roubini, 01.15.09, 12:01 AM EST

Forecasting pain, from the U.S. to Australia.

pic

With the industrial world already in outright recession and the emerging world navigating toward a hard landing (growth well below potential), I expect global growth to be flat (around -0.5%) in 2009.

This will be the worst global recession in decades as the fallout of the most severe financial crisis since the Great Depression took a toll first on the U.S. and then–via a variety of channels–on the rest of the global economy.

Here is a global breakdown of my forecast.

The United States economy is only halfway through a recession that started in December 2007 and will be the longest and most severe in the post-war period. U.S. gross domestic product will continue to contract throughout all of 2009 for a cumulative output loss of 5%.

One last look at 2008 will reveal a very weak fourth quarter with GDP growth contracting about -6% in the wake of a sharp fall in personal consumption and private domestic investment.

I see the real GDP growth contraction playing out through the year as follows: first quarter 2009: -5%; second quarter 2009: -4%; third quarter 2009: -2.5%; fourth quarter 2009: -1%–adding up to a yearly real GDP growth of -3.4% for the U.S. in 2009.

This forecast is much worse than the current consensus forecast seeing a growth recovery in the second half of 2009; I also predict significantly weak growth recovery–well below potential–in 2010. (…)

The latest cyclical upswing in the Eurozone was largely driven by a temporary but powerful boost to domestic investment from disappearing risk premia in the aftermath of the adoption of the single currency and by external demand from a buoyant world economy.

Both demand sources fizzled out by the second half of 2008, leaving the Eurozone as a whole and its largest members exposed to diverging deleveraging patterns in the face of suboptimal EMU-wide automatic fiscal stabilizer mechanisms.

The latest record-low readings of leading and sentiment indicators point to a severe recession ahead in 2009 that shapes up to be worse than the 1992-93 crisis. For the Eurozone, I expect a below-consensus contraction in real GDP of around -2.5% (…)

We believe China will experience a hard landing in 2009, with growth unlikely to exceed 5%, a sharp slowdown from the 10% average of the last five years. The reversal of capital flows and high credit cost will pull down India‘s growth significantly, to around 5% in 2009 from an estimated 6% in 2008.

END  OF NOURIEL’S QUOTATION

This graph, now in the front page of the Greenberg geo-eco think thank of the CFR (where we always read two of our favourite blogs: Follow the money by the International Economics “Sherlock Holmes” Brad Setser (*); and the delightful political incorrectness of  Amity Shlaes’ Forgotten man: healthy antidotes to FDR or BO’s santifications), is quite informative.

RAQ (Rarely Asked Q.) Did u know, before having looked at it, that the 2nd NewEconomy bubbbbbble (2003-07)  was much more  pervasive cross-country, than the so much advertised 1st one (1994-2001)?

2growths_oneline_cfr

(*) We are much more than friends, in brotherhood from decades with Otaviano Canuto, himself an rge blogger, Catou and all their beautiful family. Nonetheless, our esteem of Otaviano as an economist made a big jump upward a few weeks ago, when we discovered, in an exchange of comments on a recent post, he had … something to teach to Brad. Before, we believed anything alike impossible, i.e. beyond human limits.