LIVE: Thousands Of Companies Are Telling Us The State Of The Global Economy
SCORECARD (All Times EST)
- Japan: Markit/JMMA Manufacturing — 46.5, down from 46.9 in October
- China: NBS Official PMI — 50.6, up from 50.2 in October
- South Korea: HSBC Manufacturing PMI — 48.2, up from 47.4 in October
- Netherlands: NEVI Manufacturing PMI — 48.2, down from 48.9 in October
- China: HSBC Manufacturing PMI — 50.5, up from 49.5 in October
- Taiwan: HSBC Manufacturing PMI — 47.4, down from 47.8 in October
- Vietnam: HSBC Manufacturing PMI — 50.5, up from 48.7 in October
- Indonesia: HSBC Manufacturing PMI — 51.5, down from 51.9 in October
- India: HSBC Manufacturing PMI —53.7, up from 52.9 in October
- Russia: HSBC Manufacturing PMI — 52.3, down from 52.9 in October
- Saudi Arabia: SABB HSBC Manufacturing PMI —57.0, down from 59.8 in October
- Ireland: NCB Manufacturing PMI — 52.4, up from 52.1 in October
- 3:00 AM Turkey: HSBC Manufacturing PMI — 52.5 in October
- 3:15 AM Spain: Markit Manufacturing PMI — 45.3, up from 43.5 in October
- 3:45 AM Italy: Markit/ADACI Manufacturing PMI — 45.1, down from 45.3 in October
- 3:50 AM France: Markit Manufacturing PMI — 44.5, up from 43.7 in October
- 3:55 AM Germany: Markit/BME Manufacturing PMI — 46.8, up from 46.0 in October
- 4:00 AM Eurozone Manufacturing PMI — 46.8, up from 45.7 in October
- 4:00 AM Greece: Markit Manufacturing PMI — 41.8, up from 41.0 in October
- 4:30 AM UK: Markit / CIPS Manufacturing PMI — 49.1, up from 47.5 in October
- 5:00 AM Australia: AiG Manufacturing PMI — 45.2 in October
- 7:00 AM Brazil: HSBC Manufacturing PMI — 50.2 in October
- 9:00 AM US: Markit Manufacturing PMI — 51.0 in October
- 9:30 AM Canada: RBC Manufacturing PMI — 51.4 in October
- 10:30 AM Mexico: HSBC Manufacturing PMI — 55.5 in October
Europe: A 30-50% Collapse In Wages In Spain, Italy And… France
Said otherwise, most European countries (including France) face a desperate need for external devaluation, which is impossible under a monetary union, leaving only internal devaluation as an option. This is where the much maligned concept of austerity comes in: from a macroeconomic perspective, austerity is not so much an exercise at moderating the pace of debt increase (as neither Spain nor Italy have reduced their rate of debt issuance), but of gradually becoming more price competitive with Germany: a key outcome that will be needed for the Eurozone to have any chance of survival, i.e., lowering sticky unemployment rates from levels that virtually assure social “disturbances” in the months and years ahead.
And herein lies the rub: because while protests against “austerity” (which as we observed recently has still not been truly implemented in Europe, and certainly not in Portugal or Spain) are a daily event in most PIIGS nations, “you ain’t seen nothing yet.“ The reason: to achieve the unavoidable macroeconomic rebalancing, and to collapse the spread between soaring labor costs in the periphery and those of Germany (see chart below), the bulk of European countries will need to see wages collapse by anywhere between 30% and 50% to compensate for the lack of state-level currency devaluation optionality. And yes, this includes France.
The following are 11 facts that show that Europe is heading into an economic depression…
1. The economies of 17 out of the 27 countries in the EU have contracted for at least two consecutive quarters.
2. Unemployment in the eurozone has hit a brand new all-time record high of 11.7 percent.
3. The unemployment rate in Portugal is now up to 16.3 percent. A year ago it was just 13.7 percent.
4. The unemployment rate in Greece is now up to 25.4 percent. A year ago it was just 18.4 percent.
5. The unemployment rate in Spain has hit a brand new all-time record high of 26.2 percent. How much higher can it possibly go? This is already higher than the unemployment rate in the United States ever reached during the Great Depression of the 1930s.
6. Youth unemployment levels in both Greece and Spain are rapidly approaching the 60 percent level.
7. Earlier this month, Moody’s stripped France of its AAA credit rating, and wealthy individuals are leaving France in droves as the socialists implement plans to raise taxes to very high levels on the rich.
8. Industrial production is collapsing all over Europe. Just check out these numbers…
You don’t have to be an economic genius to understand that the perpetual uncertainty over the Eurozone’s future has led to a widespread freeze on industrial investment and development. Industrial production is collapsing at an accelerating rate, falling 7% year-on-year in Spain and Greece, 4.8% in Italy, and 2.1% in France.
9. There are even trouble signs in the “stable” economies in Europe. In Germany, factory orders in September were down 3.3 percent from the month before, and retail sales in October declined 2.8 percent from the previous month.
10. The debt of the Greek government is now projected to hit 189 percent of GDP by the end of this year.
11. The Greek economy has shrunk by more than 7 percent this year, and it is being projected that the Greek economy will contract by another 4.5 percent in 2013.
World Economy Teeters, Even Without Fiscal Cliff
from Money News:
The global economy is on edge – and that’s without the U.S. fiscal cliff.
Among rich nations, the U.S. outlook remains the least troublesome. But given a recession in the eurozone and a recent contraction in Japan, that’s not saying a lot.
At the same time, many emerging markets are hurting. India is likely to log its weakest growth in a decade this year and Brazil’s economy is also sputtering. Luckily, growth in China appears to be firming.
U.S. manufacturing data this week is also likely to suggest a fourth-quarter slowdown is at hand.
Indeed, some worry the fourth quarter, which has been affected by the impact of superstorm Sandy, will bring the world’s largest economy remarkably close to stall speed.
“The risk of seeing a negative sign in front of fourth-quarter GDP is nontrivial, to say the least,” said Tom Porcelli, economist at RBC Capital Markets….
“The improving numbers are mostly because of government investment,” said Dong Xian’an, an economist with Peking First Advisory. “From the second quarter, the government has unleashed a lot of projects, and that has started to be felt in the economy, but it’s not a very healthy recovery yet.”