Spain is shifting from recession to depression

[Nova78]

» 12 Signs That Spain Is Shifting Gears From Recession To Depression Alex Jones' Infowars: There's a war on for your mind!

Where have we seen this before? Bond yields soar above the 7 percent danger level. Check. The stock market crashes to new lows. Check. Industrial activity plummets like a rock and the economy contracts. Check. The unemployment rate skyrockets to more than 20 percent. Check. The bursting of a massive real estate bubble pushes the banking system to the brink of implosion. Check. Broke local governments beg the broke national government for bailouts. Check. The international community pressures the national government to implement deep austerity measures which will slow down the economy even more and hordes of violent protesters take to the streets. Check. All of this happened in Greece, it is happening right now in Spain, and mark my words it will eventually happen in the United States. Every debt bubble eventually bursts, and right now Spain is experiencing a level of economic pain that very, very few people saw coming.

The recession in Spain is rapidly becoming a full-blown economic depression, and at this point there is no hope and no light at the end of the tunnel.

 

[Plight]

We've also been noticing slow downs in the asian markets, and when and all these foreign investors stop buying our bonds, massive loads of inflation will be on the way..something to look forward to :|

 

[EdwardBaiamonte]

We've also been noticing slow downs in the asian markets, and when and all these foreign investors stop buying our bonds, massive loads of inflation will be on the way..something to look forward to :|

well, Germany is urging Spain to live very conservatively within its means. When the world listens to Germany most economic problems will be gone.

 

[waltky]

1 of 4 are unemployed in Spain...

Spain jobless rate hits new high in third quarter
26 October 2012 - The unemployment rate in Spain is the highest in the eurozone

About a quarter of working-age people in recession-hit Spain are unemployed, new figures have shown. The unemployment rate rose to 25% in the third quarter, from 24.6% in the previous three months, Spain's National Statistic Institute said. Among workers aged 16-24, the jobless rate was flat at about 52%.

The figures confirm those by the EU statistics agency, which has said that unemployment in the eurozone is at a high of 18.2 million. "In the space of just five years, unemployment in Spain has risen from 8% to now just over 25%," said the BBC's Tom Burridge in Madrid. "In parts of southern Spain, one in three of those looking for a job can't find one." "An increase in the number of people out of work means less money circulating in a recession-hit Spanish economy. It also makes it harder for the Spanish government to balance its finances, as it pays more out in unemployment benefits, and takes less revenue in."

Spain is trying to restore confidence among international investors in Madrid's ability to repay its debts, which have been made harder by the fact that Spain is currently in a deepening recession.

More BBC News - Spain jobless rate hits new high in third quarter

 

[Sinjorri]

does anyone know how long it will take spain to hit depression at its current rate?

 

[EdwardBaiamonte]

Spain is rapidly becoming a full-blown economic depression, and at this point there is no hope and no light at the end of the tunnel.

why be so gloomy?? There is always hope. Depressions are easily stopped dead with capitalist measures!! Capitalism stops depressions that liberals have started and prevents new ones from occuring.

 

[waltky]

Granny says dat creakin' sound ya hear is the world `bout to fall into dat double-dip recession...

Eurozone unemployment rate hits new high in October
30 November 2012 - Unemployment is highest in Spain, partly due to the collapse in the property market

The eurozone's unemployment rate hit a new record high in October, while consumer price rises slowed sharply. The jobless rate in the recessionary euro area rose to 11.7%. Inflation fell from 2.5% to 2.2% in November. The data came as European Central Bank president Mario Draghi warned the euro would not emerge from its crisis until the second half of next year. Government spending cuts would continue to hurt growth in the short-term, Mr Draghi said.

'Two-speed Europe'

The unemployment rate continued its steady rise, reaching 11.7% in October, up from 11.6% the month before and 10.4% a year ago. A further 173,000 were out of work across the single currency area, bringing the total to 18.7 million. The respective fortunes of northern and southern Europe diverged further. In Spain, the jobless rate rose to 26.2% from 25.8% the previous month, and in Italy it rose to 11.1% from 10.8%.

In contrast, unemployment in Germany held steady at 5.4% of the labour force, while in Austria it fell from 4.4% to just 4.3%. "The real problem is that we have a two-speed Europe," economist Alberto Gallo of Royal Bank of Scotland told the BBC. "The biggest increase in unemployment is being driven by Italy and Spain. "It is the same as you are seeing in financial markets," he explained. "The periphery [Spain and Italy] is the area where the banks are the least capitalised and need the most help, and the loan rates are the highest."

Spending hit

See also:

Economic growth slows in India, Brazil and Canada
30 November 2012 - Canada's slowdown was in part due to weakening activity in its oil and gas sector

A string of major economies have reported disappointing data. Economic growth slowed in India in the third quarter, while in Canada and Brazil it dropped surprisingly sharply. Meanwhile in the eurozone, unemployment hit a new high of 11.7% in October, as German retail sales fell unexpectedly and French consumer spending dropped. And in the US, citizens saw their incomes stagnate in October, while spending fell slightly, in large part due to disruption from Storm Sandy. US personal incomes rose less than 0.1% from a month earlier, according to the Commerce Department, while spending fell 0.2%.

The department's Bureau for Economic Analysis, which compiled the report, said that much of the underlying data was not yet available, and the drop in spending largely reflected its own estimates of the likely loss of business due to Storm Sandy, which made landfall near New York City on 29 October. Other recent data from the US has pointed to a strong rebound in the world's biggest economy, including a surprise upward revision of the country's third quarter annualised growth rate from 2% to 2.7%.

Losing momentum

North of the border by contrast, Canada's economy fared far worse over the summer. A sudden drop in the country's exports and weakening activity in its oil and gas sector pulled its annualised growth rate in the third quarter down to 0.6%, short of the 0.9% growth rate expected on average by economists. This was the same growth rate that Brazil manage to eke out during the same period - but a lowly 0.6% growth rate came as a much bigger shock for a country that was growing at a rapid 7.5% clip in 2010. The markets had expected the growth rate to be twice as fast.

The poor showing puts further pressure on President Dilma Rousseff's government to do something. It has already announced up to $50bn (£32bn) of stimulus measures, as the economy has steadily lost momentum over the last two years. India's government faces a similar headache. The country's growth rate came in at 5.3% during the third quarter, compared with a year earlier - in line with economists' expectations, but nonetheless disappointing for a country that aspires to a Chinese-style 8% growth rate. Like Brazil, India has hit a soft patch in the last 18 months, and has averaged less than 5.5% growth this year.

Markets took heart from the data, with shares in Bombay rallying on hopes that the economic slowdown would give the government the political impetus it needs to push through economic reforms, including a long-delayed plan to open up the country's retail sector to international competition and investment. Of the major developing economies, only China appears to have recovered from what has looked to be a worrying slowdown before the summer, with a string of positive economic data announced just ahead of the country's decennial leadership transition earlier this month.

Euro woes

 

[EdwardBaiamonte]

We've also been noticing slow downs in the asian markets, and when and all these foreign investors stop buying our bonds, massive loads of inflation will be on the way..something to look forward to :|

no reason to think they will stop buying since as liberal and depressed as our economy is, much of the world is worse.

 

[waltky]

Europe's debt mountain remains a source of anxiety...

Eurozone crisis: Troubling year ahead
20 December 2012 - Italy's debt mountain remains a source of anxiety

Europe's leaders, at the start of the year, would have settled for how 2012 is ending. The worst of the predictions did not come true. The eurozone has survived intact, but it is still a currency in intensive care. Recently I asked the German Finance Minister, Wolfgang Schaeuble, how far we were through the crisis and he thought somewhere between 50 and 60%.

Positive signs

Firstly - for those who see the glass half-full. Europe's leaders demonstrated their absolute commitment to defend the euro and the markets have started to believe them. The President of the European Central Bank (ECB), Mario Draghi, was the star of the year. By promising to do whatever it takes to defend the currency he brought down the borrowing costs of countries like Spain and Italy. His promise remains untested, but the markets are wary of betting against the bank. To the often-asked question of what stands behind the euro - the answer is now the ECB. One of the ratings agencies said "the future of the euro will be decided at the gates of Rome". Under Prime Minister Mario Monti's stewardship, Italy's borrowing costs shrank and reforms are being pushed through.

Europe has committed itself to a banking union - and a European supervisor of the eurozone's big banks. It will involve a large transfer of national authority to a European institution - the ECB. Considering the banks have been at the heart of the crisis, this is a hugely significant step. Once the banking supervisor is in place, troubled banks will be able to apply for help directly from the permanent bailout fund, the European Stability Mechanism (ESM). It should mark the end of banking problems ending up on government books and forcing up their debts.

Greece did not leave the euro - something many German MPs and officials had suggested as recently as July. The word "Grexit" is no longer heard in the land. Greek Prime Minister Antonis Samaras is judged "serious" and "reliable". Frau Europe - Angela Merkel - is almost certain to be re-elected as German chancellor in September, although it may make her even more cautious in the short term.

And now the bad news...

 

[EdwardBaiamonte]

Europe's debt mountain remains a source of anxiety...

but America's is worse because we are just printing money to cover our debt while Europe is learning to live within its means.

They may well emerge much stronger than we are. And lets not forget they have lower corporate taxes and their personal taxes are less progressive.

 

[JimmieD]

but America's is worse because we are just printing money to cover our debt

No. We are neither "printing money" nor doing things for the reason of covering debt. The Fed attempts to manage inflation expectations by changing the shape of bond yield curves - mostly the Treasury curve and mortgage curve. From it's most recent meeting the Fed is trying to manage inflation expectations by signaling it's unemployment rate target.

The Fed isn't some evil genius organization trying to secretly fund the government. The Fed uses various DSGE models to try to forecast the variables they are interest in so they can form the appropriate policy. The thing is these models often prove to not reflect the real world, as was the case in the late 60's and early 70's when Keynesian models broke down (though for some reason some politicians still think they're valid). The real case is that the Fed is bunch of nerdy academics who simiply aren't really fortune tellers; so they fumble around in the dark sometimes and make errors trying to get the results they want. It's a perfect example of Hayek's "pretense of knowledge."

while Europe is learning to live within its means.

It's doing no such thing. The ECB is as interventionist as the Fed and is the only reason why Greece, Spain, and Italy have not left the Euro and subsequently been enveloped into an inflationary mushroom cloud.

 

[EdwardBaiamonte]

but America is worse off than Greece because we are just printing money to cover our debt

No. We are neither "printing money" nor doing things for the reason of covering debt.

wrong wrong wrong The Fed bought 70% of all the debt issued by the Treasury in the last 12 months. They do this so Barry can keep spending without raising taxes. It is an anti-austerity measure.


while Europe is learning to live within its means.

It's doing no such thing. The ECB is as interventionist as the Fed and is the only reason why Greece, Spain, and Italy have not left the Euro and subsequently been enveloped into an inflationary mushroom cloud.

wrong wrong wrong. The ECB is forcing Greece, for example, to live within its means. Why do you think they are rioting in the streets?????
If the Fed were not printing money the riots in the streets would be greater here than in Greece as we too were forced to learn how to live with in our means.

 

[JimmieD]

They do this so Barry can keep spending without raising taxes. It is an anti-austerity measure.

No they don't. I refer back to my post about inflation expectations.

wrong wrong wrong. The ECB is forcing Greece, for example, to live within its means.

By accepting their bonds as collateral and through their various ELA programs? So when the ECB does the same sorts of operations the Fed does you think there is something materially different going on?

 

[EdwardBaiamonte]

So when the ECB does the same sorts of operations the Fed does you think there is something materially different going on?

As long as Greece can't print money the ECB can put a lot of pressure on them to learn to live within their means. If Greece could simply print money to hand to the liberal government like our Fed does here their situation would be very different.

In sum, Greece is learning to be responsible while our Fed is preventing that here!!

Its true the ECB is getting sloppy and may in the end, cave, but at this point they are far ahead of our Fed. That's why they are rioting in Greece and not here!!

 

[jillian]

1 of 4 are unemployed in Spain...

Spain jobless rate hits new high in third quarter
26 October 2012 - The unemployment rate in Spain is the highest in the eurozone

About a quarter of working-age people in recession-hit Spain are unemployed, new figures have shown. The unemployment rate rose to 25% in the third quarter, from 24.6% in the previous three months, Spain's National Statistic Institute said. Among workers aged 16-24, the jobless rate was flat at about 52%.

The figures confirm those by the EU statistics agency, which has said that unemployment in the eurozone is at a high of 18.2 million. "In the space of just five years, unemployment in Spain has risen from 8% to now just over 25%," said the BBC's Tom Burridge in Madrid. "In parts of southern Spain, one in three of those looking for a job can't find one." "An increase in the number of people out of work means less money circulating in a recession-hit Spanish economy. It also makes it harder for the Spanish government to balance its finances, as it pays more out in unemployment benefits, and takes less revenue in."

Spain is trying to restore confidence among international investors in Madrid's ability to repay its debts, which have been made harder by the fact that Spain is currently in a deepening recession.

More BBC News - Spain jobless rate hits new high in third quarter

that's what happens with austerity.

it's not rocket science.

 

[EdwardBaiamonte]

that's what happens with austerity.

it's not rocket science.

so tell us what they should do and why it would work or admit as a liberal you lack the IQ to do so?? We'll hold our breaths.