News round-up: 14 Aug 2008
The key story today is pretty downbeat. It shows a global recession taking form. In the global recession section below are a number of stories from different newspapers I get in my RSS feeds from around the world. All of them are pointing to recession. In fact, I originally posted this earlier today and have had to update the stories to include the negative GDP numbers from Germany and France. The Eurozone is expected to be reported as negative at 11:30 CET.
We have not seen a global slowdown layered with a financial crisis that is this broad since the Great Depression.
Over the past two months, I have written about economic or housing slowdowns in the US, Canada, the UK, Ireland, Spain, the Baltics, Germany, Denmark, Japan, South Africa, and Australia (and now France and China) . As much as the upswing over the past few years has been broad, the downturn now is equally so. The $64,000 question is hat happens in emerging markets, especially the BRICs (Brazil, China, Russia and India). My feeling is they will not decouple and so will be dragged down with the rest. Industrial output in China has already slowed. Let’s see what happens after the Olympics.
Since this is a pretty dour assessment, see ‘Odds & Ends’ if you want a laugh. The video in the story ‘You want fries with that?’ is pretty funny.
Around the World, Pessimism About the Economy – NY Times
U.S. retail sales drop for first time in five months – Sydney Morning Herald
German Economy Contracts for First Time in Four Years – Bloomberg
French Economic Growth Contracts for First Time in Five Years -Bloomberg
South Africa: ‘Consumers won’t recover soon’ – Fin24
Chinese industrial output slows – BBC News
Korea: Economists Warn Of Potential Post-Olympic China Downturn – Korea Herald
Japanese economy posts Q2 contraction – Sydney Morning Herald
Japan consumer confidence hits all time lows – again – in July – Japan Economy & News Blog
UK: Bank of England slashes UK growth forecasts – Telegraph (Forget about rate hikes; ain’t gonna happen)
Bank of England: Britain is heading for recession – Independent
Estonia: Estland andra EU-landet i recession – Dagens Nyheter (in Swedish: Estonia in recesion)
Netherlands: Europa op de rand van een recessie – Financieele Dagblad (in Dutch: European and Dutch growth near zero)
France: La production industrielle chute en France – Figaro (in French: industrial production down in France)
Spain: El crecimiento económico español se estanca y sólo sube una décima en el segundo trimestre – ABC (In Spanish: Growth of 0.1% in Q2)
Spain: Las empresas americanas en España, el 7% del PIB, empiezan a sufrir el deterioro económico – ABC (In Spanish: American companies are cutting back in Spain)
Europe: Wirtschaftsklima in Euro-Zone auf 15-Jahres-Tief – Handelsblatt (In German: Business Climate in Europe at a 15-year low)
At Countrywide, Option ARM Woes Mount – Housing Wire (BOA are a bunch of knuckleheads for taking this risk on; someone should be fired)
Rising Mortgage Rates Drive Down Home Prices: Study – Housing Wire (The Fed has no control of the long end of the curve; easy money is not alleviating the problem)
A Building Hangover for Spanish Economy – NY Times
El precio de la vivienda sufre su quinta caída consecutiva con un 3,9% en julio – ABC (in Spanish: housing prices down for fifth month in a row)
The crudest of models for Fannie Mae cumulative losses – (Fannie Mae Part III) – Bronte Capital
Odds & Ends
You want fries with that? – Guardian (Hilarious)
Porn Star, Ex-Nun Find Love in Unhinged Novel: Beach Reading – Bloomberg
Facebook soars to No. 1 spot globally – MSN Money
Kudlow to English Translation Dictionary – Infectious Greed