The latest numbers are in, and they’re bad. They’re so bad that Brazil is telling other Latin American countries to reorient their economies away from Europe — and Denmark’s doing the same thing. China’s thinking similar thoughts, and Japan’s economy is stalling as well. And the Slovenian economy is suffering and nearing bailout territory.
New warnings about the new More Europe banking regulatory scheme are sounded and the notion is threatening to create new divisions, Deutsche Bank sees dark, chaotic times ahead, the IMF is set to cut forecasts again, the new eurobank headquarters is way over budget, Spain’s divisions are growing deeper, and the Portuguese are angry. Italy’s in contraction, and Monti’s begging unit help to save Fiat jobs — though he won’t yet ask for a bailout.
The Irish economy’s stagnant, Germany’s leading carmarker won’t make its projections, Merkel’s calling on an old ally to sell Germans on her scheme, and French Apple Store workers hacve called a strike for the day of the new iPhone debut.
Eurozone scores worst numbers in three years
Despite all that austerity and all those bailouts, the common curfrency zone’s economic numbers are bad and rapidly getting worse.
From Moran Zhang of International Business Times:
Euro zone private sector economic activity contracted at the fastest rate since June 2009, defying hopes that the aggressive new policy from the European Central Bank would help reignite growth in the single currency bloc.
Europe’s troubles continued to hit exporters around the world. Thursday’s purchasing managers indexes, which survey thousands of companies worldwide every month, showed Chinese factory activity shrank for an 11th month in September, while Japan’s exports tumbled for a third month in a row in August. Things aren’t looking any better for the U.S., where factory activities suffered its weakest quarter in three years.
“The overall message is that things haven’t changed much from last month. Our forecast that the euro zone recession will only deepen from here and that growth in China will slow further suggests that the outlook for U.S. manufacturers isn’t very rosy,” Paul Dales, senior U.S. economist at Capital Economics, said in a note.
Read the rest.
More from Deutsche Welle:
Markit expects a 0.6-percent contraction in Gross Domestic Product (GDP), meaning a return to recession marked by two consecutive quarters of shrinking economic output.
The British researchers said they had hoped a recent announcement by the European Central Bank (ECB) to start buying the debt of struggling eurozone members might have lifted business confidence.
However, business sentiment had taken a “turn for the worse,” adding to the “most gloomy” outlook since early 2009.
According to the PMI index, French business activity has suffered a particularly sharp downturn in September, with Europe’s second biggest economy likely to shrink by as much as 0.6 percent after zero growth in the first two quarters of 2012.
By contrast, the German PMI reading showed the country’s manufacturing sector climbing to a six-month high, with the service sector breaching the 50-point mark, which separates economic growth from contraction.
Read the rest.
And this from Agence France-Presse:
Eurozone private sector business activity declined for an eighth straight month in September, hitting its gloomiest patch in three years as French activity plunged, a survey showed Thursday.
The closely-watched Purchasing Managers Index (PMI), a survey of 5,000 eurozone businesses compiled by Markit research firm and a key forward-looking indicator, came in at 45.9 points, down from 46.3 in July.
Any reading below 50 indicates contraction in activity.
Taken together with previous months the data suggested “the worst quarter for three years,” Chris Williamson, Markit chief economist said in a statement.
He tipped a 0.6 percent contraction in gross domestic product for the quarter, which would confirm a return to recession.
Read the rest.
European crash adds to China’s worries
No surprise here. When your biggest customers are hard up for cash and worried about the future, they’re not that interested in buying more stuff.
From Andy Bruce of Reuters:
The huge economic uncertainty in Europe has had a pronounced impact on export-reliant economies like China, where manufacturing contracted again in September.
European Union and Chinese leaders are meeting in Brussels on Thursday leaders to try to bridge growing differences over trade and find common ground on tackling Europe’s debt crisis.
The China manufacturing PMI inched up in September to 47.8 from August’s nine-month low of 47.6, suggesting the world’s second-largest economy remains on track for a seventh quarter of slowing annual growth.
“In order to convert hopes into reality and avoid an outright hard landing, the Chinese authorities have to step up again their accommodative efforts on both the fiscal and the monetary side,” said Nikolaus Keis, economist at UniCredit.
Read the rest.
And it’s not just China, as Ben McLannahan of Financial Times reports [via MISH’S Global Economic Trend Analysis]:
Japan recorded another steep fall in exports in August, highlighting the vulnerability of the nation’s finances amid persistently high imports of fuel.
Thursday’s government data showed that shipments slipped almost 6 per cent from a year earlier to Y5tn ($64bn), the third monthly fall in a row, while imports were 5.4 per cent lower at Y5.8tn. The resulting trade deficit of Y754bn was among the widest since last March, when the Fukushima crisis led to the staggered closure of the country’s nuclear reactors.
Adjusted for seasonal variations, Japan has recorded trade deficits in each of the 18 months since the earthquake and tsunami, after decades of more or less uninterrupted surpluses.
Read the rest.
Another European economy on bailout’s brink
A report on Slovenia’s accelerating economic crisis from Deutsche Welle:
Banking regulatory scheme poses dangers
A major plank in German Chancellor Angela Merkel’s More Europe agenda, the transfer of banking oversight in the eurozone from individual nations to the European Central bank in Frankfurt could further divide the European Union.
That’s the opinion of the man who’s currently the EU’s top banking regulator.
From John O’Donnell of Reuters:
Plans to create a European banking union risks a supervisory split between countries in the euro zone and those outside, Europe’s top bank regulator said on Wednesday, warning of his concerns about the latest plan to tackle the financial crisis.
Last week, the European Commission unveiled plans for the European Central Bank to supervise all euro zone banks as an initial step towards a banking union, a proposal that has divided opinion within the euro zone and worried neighbouring states who fear their banks will be indirectly affected.
Speaking to lawmakers in the European Parliament, Andrea Enria, the chairman of the European Banking Authority, warned that the Continue reading