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).


A Pulitzer for an inquiry into Wall St. Subcrimes

THE FIRST PULITZER EVER, 4 SOMETHNG THAT NEVER WENT INTO PAPER, PRINT.

 @ProPublica
1st time a group of stories not published in print won a #PulitzerPrize for journalism: http://propub.ca/hoGfXx @niemanlab

While Denmark’s Doma wins 1st word restaurant title by the British Restaurant Mag, @ProPublica it’s champagen for the 2nd consecutive Pulitzer entering the house. This year (and for the first time ever a pure digital media affair) the winners are @Jake_Bernstein & @eisingerj > http://twitpic.com/4miz63. Due to:

http://www.propublica.org/series/the-wall-street-money-machine

 As the housing market started to fade, bankers and hedge funds scrambled for ways to maintain the lavish bonuses and profits they had become so accustomed to, repackaging mortgages in complex securities called collateralized debt obligations. The booming CDO market masked how weak the housing market was, and exacerbated its collapse.

Namely focusing upon this HF, Magnetar:

The Magnetar Trade: How One Hedge Fund Helped Keep the Bubble Going

by Jesse Eisinger and Jake Bernstein, ProPublica – April 9

@ProPublica

 Senate report on the origins of the financial crisis cites our investigations: http://propub.ca/eIu8Oo

Their results strongly support a strict and strong regulation, by showing how Austrian or neoclassical, neoliberal self-regulation JUST DOES NOT EXST.

Banks’ Self-Dealing Super-Charged Financial Crisis

by Jake Bernstein and Jesse Eisinger
ProPublica, Aug. 26, 2010, 10:09 p.m.

As investors left the market in the run-up to the meltdown, Wall Street created fake demand, increasing their bonuses — and ultimately making the crisis worse.

All the best to ProPublica, a new kind of professional digital media, and the two laureates.

Published in: on April 19, 2011 at 1:04 pm  Leave a Comment  
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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.

Grecia e non solo: il rimbalzo del subcrime sovrano

i segnali di una svolta deflattiva nei mercati covavano da mesi, ne abbiamo discusso qui e lo sapevamo.
Si è sovrapposta negli ultimi mesi la precipitazione della crisi del debito sovrano, per i ruoli degli Stati di ultimi creditori nell’ammortizzare il “buco nero” della Grande Finanza. E le crepe aperte tra le diverse velocità e strutture compresenti nella regione poco ottimale €.
Ma ora i 2 fenomeni (crisi privata e  pubblica) potrebbero anche carburarsi a vicenda, con una bella auto-catalisi da far tremare i polsi. Corvaccio Roubini dice che non è esclusa un’implosione dell’€. E come dargli torto? Non è esclusa affatto, la si gioca nella evoluzione ed autogenesi della crisi.
E smettiamola con posizioni partigiane e superficiali sulla conduzione della crisi di Atene: chapeau al sangue freddo sia di Angela che di Papageorgiou Jr! Basta anche con l’anti-politica:  Antipolitici da 1 a  5 stelle, AVETE ROTTO I  C O G  L I O N I! Questi politici qui (alcuni) hanno le palle e se le giocano pure (voi no). Sono condizioni strutturali E della economia E degli assetti politici di Bruxelles che non hanno retto allo stress. Meno male, così ora qualcosa, in peggio o meglio cambierà.
LA NOVITA’ è che oggi (giovedi 6 maggio) la crisi si ri-privatizza – cedono, si crepano le obbligazioni corporate. Dalla inc**ata  selvaggia e senza vaselina ai cittadini taxpayers, il cerino ripassa anche nelle ricche casseforti dei capitalisti?
DAL TWITTER E BLOG di  @zerohedge oggi giovedi 6 maggio segnaliamo questi 3 “telegrammi”:
1) European Corporate CDS Blowing Out Wider, Xover At 505, HiVol At 152 bps, Public Funding Crisis Becoming Private Again http://bit.ly/daxt0x
2) (ore 13) rumor of Italy downgrade by S&P >> COMMENTO – di qui una polemica furibonda oggi, con Moody che  vede nero e non risparmia l’ Italia e le sue Bancone (too big to fail). Toccata sull’orgoglio, Banca d’Italia ragiona bene a difesa del sistema (ma continua a non dire cosa non va nelle banche). Tremonti se la cava con “Italia vaccinata” non può andare in crisi ?!? (le sue solite imbecillità: lui è anti-proverbiale; razzola  così così, ma predica che è uno schifo; come dimostra il bel libro di Noise From America)
3) New post: Moody’s Sees Contagion Risk For European Banking System http://tinyurl.com/3y52e6h
Poi oggi Piazza Affari ha avuto un grosso scossone al RIBASSO, m ogni medaglia ha il suo rovescio:
wsj
European stock markets have slumped in recent weeks amid fears of contagion from the euro zone sovereign debt crisis. But that may be creating buying opportunities among some European blue chip stocks

http://online.wsj.com/article/SB10001424052748704370704575228150078387286.html?mod=djemheard_t


Per l’Italia, si rimanda per l’essenziale (non c’è proprio pericolo AD OGGI, ma pure nulla di stabile) all’editoriale di Alesina su Il Sole di martedi: RIFORME SUBITO / Farà bene all’Italia un esame di greco. Diciamo  che Tremonti si rivaluta in questa contingenza rispetto a certe critiche al suo operato (non le nostre), ma la sua proverbiale prudenza potrebbe presto non bastare, nello scenario delineato sopra.
In caso di precipitazione, data l’instabilità politica STRUTTURALE dell’Italia (inettitudine assoluta del Ducetto di Arcore, e sua mancanza di maggioranza senza Fini) il cocktail non sarebbe Molotov ma Nucleare. Con rischio di default paese assieme ad elezioni anticipate svolte in condizioni pazzesche e “greche” (anzi peggiori: lì chi governa ha il polso fermo ed il sostegno popolare). Il tutto aggravato dalla nota imbecillità storica della Sinistra Italiana: una sinistra evoluta, moderata e non ideologica avrebbe ucciso il Berlusconismo nella culla, e non saremmo qui ma altrove. Con un debito inferiore al pil, ed un pil assai più vasto. A fare club con la Germania.
Published in: on May 6, 2010 at 3:35 pm  Leave a Comment  
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Who was the Forrest Gump of the crisis? Bob, of course

Robert Rubin, Goldman Sachs arbitrageur and chairman, US treasury secretary, and Citigroup grandee, was the Forrest Gump of this crisis

The outstanding accusation by the Reuters’ Felix Salmon blog, on March 3:

Robert Rubin, Goldman Sachs arbitrageur and chairman, US treasury secretary, and Citigroup grandee, was the Forrest Gump of this crisis, turning up in all the key places at all the key times. The fact that he’s still trying to deflect blame off himself and onto the hapless George W Bush is simply pathetic. There’s more than enough bad stuff to pin on Bush that he really shouldn’t blame the crisis on him as well. Especially not when he’s so personally culpable for the crisis. Indeed, there’s probably no one individual, with the possible exception of Alan Greenspan, who deserves more blame for this crisis than Rubin does.

A bit superficial, but VERY GOOD – the attack and the label for Rubin!!! Well deserved, indeed.

But deeply, I don’t agree and I am not alone: how can we not focus also upon the Clintonians (although with a  lot of difference amongst them), most of which are now the economic gurus of poor Obama guy (who nonetheless chose them freely, under reasonable cultural, socio-environmental and financial constraints – contradicting the little he had kept saying during a Campaign that he finally won only in September, under AIG and Lehman collapses).

Published in: on March 7, 2010 at 4:33 am  Leave a Comment  
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we r de best

After so many humiliations: as in Brazil 1988 (the fake Plano Cruzad0 that made disasters, although for politicians’ fault – but NOBODY knew), 20 years later economists have been banned WORLDWIDE  from élite clubs, from the Culture where they had not yet entered.

BUT: there’s a compensation. At least in a restricted, less cultivated biznezz and operative area, economists have won an audience they didn’t in Campus.
Read the wsj today

The New Stars of the Blogosphere 

By KELLY EVANS

Americans trying to understand the nail-biting financial trauma of the past several months are flocking by the millions to a surprisingly lively source of enlightenment: blogs written by economists.

Such blogs are thriving in this recession, driven by intense interest from policymakers, investors, academics and people like Zina Poletz, a Minneapolis public-relations executive who says she had little interest in economics before the financial crisis intensified last fall. “I never thought I’d be sitting up late at night reading what [Federal Reserve chairman] Ben Bernanke thinks, but now I do,” she says. (..)

“My [economics] professors were always saying, ‘This is the most relevant class you could ever be in,’” says Christa Avampato, a product developer in New York City with an M.B.A. from the University of Virginia’s Darden School of Business. “But I think until the last 18 months I never really believed them.”

The result is a watershed moment for economics bloggers, ranging from academics to armchair economists, who are all too happy to help readers fill in the blanks—or find a place to vent their frustrations. Traffic to the top sites, such as Marginal Revolution, Freakonomics and the blogs from academics such as Paul Krugman, Greg Mankiw and Brad DeLong, surged anywhere from 80% to 250% from July to September 2008 as the financial crisis intensified, according to Compete.com, a Web site that measures Internet traffic. The most popular blogs can attract as many as 50,000 to 100,000 page views a day. (..)

Selling Books

Blogging, in return, helps academics raise their profile and connects them to a wider audience. “I make no money from my blog, but I do make money selling books,” says Mr. Mankiw, a Harvard University economics professor who served as chairman of President Bush’s Council of Economic Advisers earlier this decade. Mr. Mankiw is also the author of several textbooks on economics. His eponymous blog has received some 10.9 million visits since he started it as an extension of his academic work in March 2006. (..)

The financial crisis has helped crystallize the ideological split between the liberal economists who favor government action and intervention in the economy and the conservatives who prefer a more hands-off approach. The result often pits Mr. Mankiw and other conservatives—such as Arnold Kling, an economist and scholar with the Cato Institute who writes for EconLog, or Megan McArdle, a self-described libertarian who blogs for the Atlantic—against Mr. Krugman or Mr. DeLong in fast-paced, high-profile arguments over health care, budget deficits and stimulus packages. MORE

MUCH DEEPER ON THE CRISIS; THEORIES; POLITICS in our school blog:

http://industrialeinternazionale.ilcannocchiale.it

and its 110 pages .pdf basic document, on how the worst ever crisis of Capitalisms is interpreted from a variety of points of view, only in part related to ideologies: much more to alternative scientific paradigms in Political Economy.  

https://enzofabioarcangeli.files.wordpress.com/2009/07/mappaseminario_090630_03.pdf

 

 

 



1 programma di governo: x il centro-sinistra? Per chi ci sta

ANNUNCIO, LANCIO SU TWITTER (testo eguale a qui): http://is.gd/WPZx

Testo integrale del nostro inedito programma di politica economica in Italia, per un’uscita della crisi che consenta di inserirsi (con una finanza pubblica finalmente risanata) in un  nuovo modello di crescita mondiale sostenibile: http://grapesofwrath.ilcannocchiale.it/

Pubblichiamo stamane su http://grapesofwrath.ilcannocchiale.it/ la parte economica di un programma di governo, che di per sè è del tutto “centrista” anzi – ad evitare, a scanso  equinozi – del tutto ORTOGONALE al vecchio frame politico da 2° Millennio, che ancora domina la scena dei mercati politici europei (gli USA si sono invece lanciati a capofitto nel 3°, grazie alle procedure odd, strane ma efficaci delle loro Presidenziali).

BASI ANALITICHE: le ricerche svolte a Vicenza, con il corso di Economia Industriale Internazionale di questo secondo semestre e nel seminario congiunto col corso Analisi Fondamentale dei Mercati. Si veda, in v. provvisoria, il doc-sintesi del Seminario SubCrime: mappaseminario_090530

In breve, per un .. governo Arcangeli- Brunetta, o Arcangeli- Bersani, comunque AB:

1 mega stimolo fiscale del 4% del PIL in finanziaria 2010, ma da anticipare già ora: finanziato con un taglio drastico delle spese inutili o dannose (via le Province, difese dalla Lega);
2 ri-penalizzazione di elusione ed evasione: effetto annuncio che porterebbe ad un surplus di bilancio nel 2010 (non sprecare tale tesoretto come fecero i prodi Padoa Schioppa e Sartor);
3 abolire CIG: reddito sociale garantito di €500 e fermare l’immigrazione con lo sviluppo.
4 ripartono le politiche industriali, dell’innovazione; valorizzare le business ecologies ed i social media.
5 Complementari riforme concorrenziali e di struttura: governo stabile 5 anni senza togliere prerogative ad un Parlamento dimezzato e differenziato tra le 2 Camere (non “Senato delle Regioni”, già ipertrofiche e da ridimensionare, ma delle comunità locali, dei comprensori e distretti; cancellare per sempre le Province, sostituite dai comprensori gravitazionali dei servizi rari e località centrali:  ben più ampi, ed a geografia diversa dai micro-bacini di lavoro locali).

MORE: post di oggi su http://grapes-of-wrath.ilcannocchiale.it/

Emma, don Gianni, Giulio and Silvio

Mr Profumo’s  high risk profile is still there (un delirio di onnipotenza da manager-dinosauri del millennio passato: speriamo che la crisi ne spazzi via un bel po’ – a questo serve!).

Although, meanwhile, the Bretton Woods  institutions have spent some hundred billion $ to stop the  CEE domino & save Center – East CBs, the private ones and their Western owners (like  Unicredit). The tragi-comic is that, while they stick to XX Century ultra-neolib (bullshit, or Great Narration if u like it),  the ex-Socialist countries  have been saved only by …

Internationalist Financial Socialism: the 6th  Socialist International, more or less.

AHAHAH! I.e., the XXI Century form of a Communist “spectre of Marx” (Derrida).

They didn’t deserve all that, with our money, stability pursuing and hard work, the bastards: should have tasted the mud of what is pure capitalism at grapes-of-wrath times. Such idiots, still thought-prisoners of their slave socialist past (better IMF to pay shrinks to all of them: value for money), paranoic  ultra-“lib” (sorry to use such a nice name & HIGH thought tradition, Einaudi – Hayek etc.,  for their ideological credos denying even the existence\nature of a global REAL crisis,  and of course not begging pardon for a crazy management of their unsustainable fast growth):

CEE leaders  didn’t deserve a penny, for their thoughts.

But so goes globalisation – what make a difference from begga’ yo’ neibo’ (Keynes’ bestia nera) in the former GreatDep, is that there  is little room for it now, at GreatDep 2 times.

IMF comes to save  East Europe to save Mr Profumo, Italy’s  monster public debt and the € zone stability. By the way, LEX (below)  is right: private debt/GDP ratio is somehow half in Italy compared to the US. What he doesn’t say is that Italy’s sickness has a name: Tremontite.  Only  Italy spends 0 for fiscal stimuli (as if we were …Austrians, no Risorgimento!): Giulio had the courage and determination (I believe he likely ended his fast power career here, because of that) to choose to re-equilibrate what matters most to Berlin, Bruxelles, Frankfurt and London markets, i.e. the public debt/GDP ratio, at a very low GDP level, instead of pushing the GDP earlier, in 2007-2008, in order to allow now for more fiscal manoeuvre (less taxes  and\or  more infrastructures, what China, the US etc. are doing, to match the powerful monetary policies that have succesfully controlled, “un-powered” the stagdeflation cumulative spiral until now).

Yesterday Emma Marcegaglia, speaking in the name of all  the Italian entrepreneurs, expressed all their frank, growth-professional dissent from Tremontite  Malthusanism, but too much A BASSA VOCE to have any impact whatsoever: no blackmail, no electoral boycott (like: we’ll all vote Casini). There is another illness at work here, Berlusconite; Emma has not yet a full power on her  syndicated patrons, even if the Cavaliere consensus  has never been  so low among the Italian bourgeoisie & industrialists  – now beginning to call for a true right and centre-left, out of this stallmate depriving Italy of a guide at harsh times,  while FIAT goes to its worldwar and can manage with  its own  Foreign Affairs, but the small businessmen  ecologies? They are just lost & abandoned to themseleves – i.e. the  ones who were  the Cav. fans until now – but not any more: for elementary,  Darwin-Schumpeterian survival reasons. It’s a POLITCAL divide, from the unmanaged crisis about to decimate the SMEs.

There is an empty space, at the centre  of Italy’s political arena, for a new political force representative of the middle classes, the high bourgeoisie and repressed  high tech animal spirits!!! La DC? A new entry (Montezemolo)?

You measure here ALL the tragic,  historical failure of Berlusconi who WAS really, as he knew  (was told, by  don Gianni) and told,  l’Unto del Signore called for this middle cass re-assembling Mission. But  he miserably failed it: 100%, for a number of reasons. His era already belongs to the past; a mere cohincidence: the death of the great political teologist and teological political scientist, don Gianni (a sublime figure for his teaching and thought, widely appreciated by a transversal audience; and a nitzschean Superman indeed, in his  indomable adventurist impetus:  from “anti-Pope” Card. Siri, to Craxi and the Cavaliere). Unforgettable don  Gianni Baget Bozzo! Riposa in Pace.

LEX
Italy’s economy

Published: May 14 2009 09:17 | Last updated: May 14 2009 20:49

Italy is still sick. Its economy has suffered a series of recessions over the past decade. Yet its labour market remains inflexible and deeply uncompetitive; since 2000, Italian labour costs have risen by 45 per cent. Productivity has also stagnated, while rising annually on average by 1 per cent in the eurozone. As a result, Italian exports – from capital goods to shoes – have suffered particularly badly in this slump. Yet Italy also lacks many features of the credit boom that have ravaged other countries. While government debt is scarily high, at more than 100 per cent of output, household and corporate debt is low. Nor has there been much of a housing boom.

This halfway happy result is reflected in the relative good health of Italy’s two biggest banks, UniCredit and Intesa Sanpaolo. Neither has yet taken government money. Both are funded by large deposit bases. Both are among Europe’s most efficient lenders. And both are still reporting healthy profits. That, though, is where the similarities end. Almost 90 per cent of Intesa’s business is in Italy. UniCredit, by contrast, has sought to escape domestic economic stasis by taking more than half its business abroad. This aggressive foreign expansion, especially into central Europe, has lately taken Unicredit’s share price on a wild ride. (…)

And, from May 11 ft on Poland postponing euro entry –http://www.ft.com/cms/s/0/e4bf38a8-3e52-11de-9a6c-00144feabdc0.html – Marchionne / Profumo 6-0, 6-0, 6-0.

In one example of mixed signals, Fiat’s factory in southern Poland is churning out small cars for the west European market, and is not planning production cuts.

Subcrime-2 is paneuropean. Attila returns!

http://grapes-of-wrath.ilcannocchiale.it/post/2189528.html

We have this blogpost IN ITALIAN, where we reifly argue why and how a  Paneuropean Subcrime-2 is already on the move, and no one else can stop it, TOO LATE. A number of quite interesting consequences, in a von Hayek Angel sense:

an Angel comes to make you pay your wrongdoings, and also those of the Prime and Finance Ministers, or CEO that came before and believed in so called “neo-liberal” (where liberty has no room) bullshits and irresponsibility,  or “bonanzas” and bubbles.

Austria and Sweden, in the West, will be killed by the Eastern Tsunami; they earned mountains of extra-profits, “bonanza” from the transition to capitalism in their neighbour countries. Now they’ll lose everything, and much more than that.

UniCredit is already a re-nationalised Bank (a Guinness: its Credito Italiano component, will have been rescued in both Great Depressions: 1934 and 2009). Aready,  in the market expectations,  otherwise its Friday closure would not have been  but epsilon.

– Let us bet, on InTrade and elsewere, about the parity  € = $ before … (I wan’t tell you my bet date, but I already gave you here A LOT of info, and based ON FUNDAMENTALS; better: ON DYNAMIC ATTRACTORS; as for the date, monitor InTrade, ’cause I move some small capitals on those future markets, and I might make critical mass…).

INCIPIT of the last grapes-of-wrath post:

Svelato il Mistero di Scilla e Cariddi: perché non si fa il Ponte, e  non è solo colpa di Profumo.

ARIDATECE LA CASSA DI RISPARMIO DI VR-VI-BL-AN !!!!

1- TEMA.

Erano partiti, i Grandi Banchieri Oligopolisti di Austria, Italia e Svezia in testa, alla conquista dei confini est dell’Impero Europeo. Si sono fatti concorrenza oligopolistica della peggior specie  a botte di credito facile: E  FU SUBCRIME-2, quello tutto pan-europeo. Effetto Frontiera Far East Europe.
Noi lo sapevamo da anni come andava a finire, sia all’Est che nelle Banche Vetero-Fordiste e Ribollite dell’Ovest (quelle che hanno legato a quel sasso che rotola  il loro Destino), e:
1) l’incoscienza di Mr. Profumo ci ha sempre fatto tanta tenerezza (una volta ho provato  anche a dirglielo, eravamo in Assindustria a Vicenza, ma lui non mi ha capito ed ha tirato dritto);
2) l’allegria con cui TUTTA l’Europa sta precipitando nel burrone, insieme sapendolo e senza  saperlo, è molto Pirandelliana. La Merkel sta per essere sbalzata di sella solo perché c’è la crisi (il VERO motivo per cui Mc Cain non ha fermato Obama) e si comporta di conseguenza (decidendo le cose  pro domo sua). Non c’è un solo uomo politico in tutta Europa, che pensi all’Europa. NON UNO SOLO: se ora affonda, ed era comunque inevitabile date le premesse, se lo merita.
Come facevamo a saperlo?  Elementare, Engels. Da una traccia d’indagine nei racconti ironici  e divertiti di Marx, specie nelle corrispondenze con Engels sul Tribune (più vive dei suoi Ricardismi teorici, che spesso sbagliano premesse e conclusioni): di  volta in volta, Frontiere  alimentano i cicli espansivi.

Ed il sistema  più instabile che fu mai creato, funambolizza così la sua lunga durata.

2B optimistic: this is the beginning of the end

BREAKING NEWS

March 2, 2009

wsj
The Dow Jones Industrial Average dropped by 300 points to end below the 6800 mark for the first time in nearly 12 years, as a broad-based selloff seized the markets, sending shares lower in every sector. The S&P 500 briefly dropped below 700 for the first time since October 1996 before ending just at that level amid across-the-board declines, including drops of more than 6% in basic materials, energy, financial and industrial sectors. The Nasdaq Composite Index fell 4%.

For more information, see: http://online.wsj.com/article/SB123599406229708501.html?mod=djemalertMARKET

I REVEAL THE TRUTH:

ANGELA IS THE ANGEL

Yesterday, sent by the Aparecida no one is keen to listen to anymore,  the Angelo della Vendetta started  cutting some heads and share values, but it was only the beginnig of  the end. The necessary “Visible Foot” freeing markets from lame ducks (the von Hayek – and  – Schumpeter, neo Austrian Foot) has just started kicking off, and will have a couple of years of hard work ahead. The ecomomic “curtain wall” has not yet come down: then the neoAustrain Angel will have no pity, not even for her country of origin (Austria); it will be CEE (Central East Europe) Tsunami soon, and little will stay alive in Western Europe, after her mission.

On the other coast of the Atlantic, there is no reason for DJIA, now that 7000 is over, to land asymptotically or not towards 6000: still, the Western Actives would B by far over-valued, at 6000 (down from top 11,000).

a) DJIA passed yesterday, in a quantum jump below 6800 (My God!) the 7000 PSYCHOLOGICAL threshold of “depression”, i.e.  Wall Street finally cut the Gordian Node (FAQ: is this a deep recession or a depression? The latter. Now we know:

the answer, my friend,

is blowing in the East European wind.

For no apparent reason, in Wall Street: just ordinary administration – adjusting the e’s in the p/e ratios, to what one can reasonably guess for next Autumn, when all things that might have gone wrong, will have (Murphy’s Law, a secularised divulgation version of Greek Tragedy’s Destiny).

b) European, namely Italian banks are just disappearing, day after day from markets. This is no violation, as most people say (banks capitalisation below book value?), on the contrary: A STRICT APPLICATION OF THE FUNDAMENTALS. Such;

giant, monopolistic, hyper-speculative, anti-social, caparbiously authoritarian and highly inefficient with their personnel, vandalised by ignorant managers, enemies of the Territory where they just steal surplus value (no help to innovation, to anything) banks

should have never been born, as they did UNDER THE CRAZY, ANTI- ECONOMIC, MONOPOLISITIC CONCENTRATION WAVE of the New Economy, version 1 and 2, in the last two ABEs, Artificial Bubble Economies, 1993-2007.

Mr Profumo (legally and apparently the UniCredit CEO, still) is already at the job office to look for another place: but

FAQ – Who will hire such a crazy man, that ruined  in just one only stupid Ego trip three  healthy  banks full of Tradition (Cassa di Risparmio di Verona- Vicenza – Belluno- Ancona, Credito Italiano, and Banca di Roma)???

ANSWER: We want them back, our 3 banks, and we’ll get them before Summer. The Angel is working for Justice to triumph, on this Earth.

I knew in advance, but I did not want to disseminate pessimism: last week rally on Italian Banks was artificial, home made and effimero. A literal Tsunami is charging its batteries very speedy, then it will lead to the “SUBCRIME no.2 – The European version” Vendetta dell’Angelo Sterminatore (who appears to have occupied the soul of Angela Merkel, dictating her what she must do, in such a way as Destiny requires):

– 1. a default of the majority of the 10 CEE States unprotected by the Eurozone;

– 2. a national economy collapse, and consequent quasi-default or default of  the Austrian State (only by the immediate, direct consequences of CEE toxic credits, by applying a multiplier 2 to Dansk Bank scenario 3: Austria will lose 22% of its neutral GNP, this year; as we say below, with a multipler 3 it makes -33%; then self-reinforcing dynamics will carry on further the Visible Foot job);

-3.  the forthcoming closure, and “week-end X nationalisation” of the majority of large Continental European Banks (British Island ones are already kaputt: RBS is a Gordon Brown’s property, Barclays is 90% down in capitalization. from £90 to 8; Switzerland is  in search of diversifying out of Credit, which after all, ex post was not its natural Vocation; after weekend “X”, there will be an ephemeral rally on Swiss Banks, the  only private ones left, but it will not last long). More in:

– Dansk Bank Research last report, and continuous, daily information flow in their precious site, an Observatory on  € subcrime: http://www-2.danskebank.com/danskeresearch

– and the interactive graphic ft representation of Dansk Bank’s € subcrime scenarios.

REFERENCES: go to last week’s euro_exposure_to_cee_230209 Dansk Bank Research impact study, put into a graph by the Financial Times. Please note:

a) Dansk Bank worst scenario (alike the Asian crisis 1997) will B the best one soon;

b) this report just estimates Banks’ sofferenze, i.e. the 1st round of money-real transmission mechanisms, and repeated positive feedback interactions (ping-pong like). The full impact is, as usual, larger by an order of magnitude, so that the Austrian GDP, e.g., (-11% according to the Report) might approximately and optimistically (multiply x 3) lose no less than 1/3 this year, as a CEE Subcrime full impact consequence. Being so close to Austrian borders as we are, is no health.