By Edward Hugh: Barcelonabr /br /Well here's the first BIG news from yesterday's global manufacting PMI reports - Spain's manufacturing contraction accelerated in September. Of course, how could it be otherwise. But I do wish all those people who are still in denial on what is now an all too evident reality would finally come out of the woodwork and do something. If Spain really goes down, it will drag the rest of the Eurozone with it, like Moby Dick, taking Ahab Trichet and his crew careering down to the murky bottom with him. Brussels, Frankfurt, you need to react. Zapatero has to go, and he has to go now. Spain needs a set of rational policies to deal with the crisis, before things really get out of hand.br /br /br /strongSpain's September PMI/strongbr /br /Key points:br /- The Rate of output contraction accelerated.br /- First reduction of new orders ...

by Edward Hugh: Barcelonabr /br /Spain's current account deficit fell to 2.064 billion euros in July from 7.752 billion euros a year earlier as imports tumbled, according to the latest Bank of Spain data. This is a very sharp and dramatic fall, and my guess is that at this rate the gap will close in six months or so, which will be a very strong correction, and potentially very painful for Spanish living standards.br /br /a href="http://2.bp.blogspot.com/_ngczZkrw340/SsWsqARyfVI/AAAAAAAAPUQ/FmtoUHFiVT0/s1600-h/current+account+balance.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 244px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5387902366847761746" border="0" alt="" src="http://2.bp.blogspot.com/_ngczZkrw340/SsWsqARyfVI/AAAAAAAAPUQ/FmtoUHFiVT0/s400/current+account+balance.png" //abr /br /br /In fact the Spanish current account deficit ballooned in the "good years" - from around 3% of GDP at the turn of the century, to around 10% in 2008 on the back of large external borrowing to acquire housing units and land, and the inevitable imports which were sucked in to fuel ...

div class="body" pBy Claus Vistesen: Copenhagenbr //ppI should immediately reassure my readers that I am not going to re-account or even continue a href="http://macro-man.blogspot.com/2007/11/curious-case-of-vanishing-bid_23.html"Macro Man's story of 2007/a a href="http://macro-man.blogspot.com/2007/11/curious-case-of-vanishing-bid-part-2.html"in which Sherlock Holmes was looking/a for a vanishing bid in risky assets. Also, I am not sure that we are actually looking at a bid which will vanish but one which will perhaps taper off gradually or so at least is the estimated scenario policy makers would like markets to believe in. Of course, a href="http://clausvistesen.squarespace.com/alphasources-blog/2009/9/18/a-cautious-boj-stands-pat.html"recent messages from the BOJ/a suggested a very cautious stance towards the economic outlook and although the ECB's chairman Trichet has ardently argued that an exit strategy from extraordinary financing provisions, the statement that, emnow is not the time to exit/em, still echoes most of the official messages coming from the ECB./p pBut perhaps more important than when ...

by Edward Hugh: Barcelonabr /br /Russia’s central bank this week lowered its main interest rates for the seventh time since April 24 - lowering the refinancing rate a further quarter percentage point. The decision came hard on the heels of the announcement that the Russian economy suffered a record economic contraction in the second three months of the year and refelect the growing recognition that the country now faces a painfully slow recovery. Just how painful things might become will form the subject matter of this report.br /br /You can also download the full text in PDF if you prefer to print and read - a href="http://sites.google.com/site/globaleconomicperspectives/macro-economic-reports/RussiaBriefingSeptember2009-Edward.pdf?attredirects=0"Bank Rossii Eases Further As Russia's Economy Contracts At A Record Rate/a.br /br /strongRisks Rising On All Fronts/strongbr /br /Bank Rossii cut the refinancing rate to 10.5 percent from 10.75 percent (following a quarter point reduction on August 10), and lowered the repurchase rate ...

a href="http://1.bp.blogspot.com/_ngczZkrw340/SqeIfEhvvOI/AAAAAAAAPG0/gIej76YsWCU/s1600-h/Latvia+exports.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 260px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5379418347289951458" border="0" alt="" src="http://1.bp.blogspot.com/_ngczZkrw340/SqeIfEhvvOI/AAAAAAAAPG0/gIej76YsWCU/s400/Latvia+exports.png" //abr /br /br /a href="http://1.bp.blogspot.com/_ngczZkrw340/Sqduz5AQyYI/AAAAAAAAPGc/VPWJ-B5zMVI/s1600-h/quarterly+constant+price+imports+and+exports.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 257px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5379390117671651714" border="0" alt="" src="http://1.bp.blogspot.com/_ngczZkrw340/Sqduz5AQyYI/AAAAAAAAPGc/VPWJ-B5zMVI/s400/quarterly+constant+price+imports+and+exports.png" //abr /br /by Edward Hugh: Barcelonabr /br /br /Latvia’s economy shrank a revised 18.7 percent in the second quarter of 2009 over a year earlier in what was the second-steepest drop in the entire European Union (worsted only by Lithuania) according to detailed data released by the statistics office yesterday. The contraction, which is now the largest since quarterly records began in 1995, was revised down from a preliminary estimate of a 19.6 percent annual drop. And Latvia's problem can easily be seen in the above charts which show the most recent movement in exports, and quarterly data for constant price imports and exports. The Latvian ...

by Edward Hugh: Barcelonabr /br /blockquote'As far as I am concerned, this is ... the most complex crisis we've ever seen due to the number of factors in play'br /Spanish Economy Minister Pedro Solbes speaking to the Spanish radio station Punto Radio September 2008br /br /“‘The global imbalances have to add up to zero and so, if the US is going to be less the consumer importer of last resort, then other countries are going to need to be in different positions as well."br /Director of the US president’s National Economic Council Larry Summers, speaking over lunch with the FT’s Chrystia Freeland./blockquotebr /br /Basically what we now have before us - as Pedro Solbes pointed out before being uncerimoniously defenestrated from the inner circle of the Spanish government - is an extremely complex situation and problem set. The background has evidentally been an unprecedented global financial and economic crisis, but ...

by Manuel Alvarez-Rivera, Puerto Ricobr /br /Fifty-four years of almost uninterrupted Liberal Democratic Party (LDP) dominance in Japanese politics came to an abrupt end on Sunday, August 30, 2009, when the conservative, business-oriented party was swept out of power in an election to the Shugiin or House of Representatives, the lower yet more powerful chamber of the Asian's country bicameral Parliament, the National Diet.br /br /With all votes tallied, the main opposition Democratic Party of Japan (DPJ) captured 308 of the 480 House of Representatives seats, while LDP only managed to secure 119, in a near-reversal of the previous 2005 general election outcome, when the Liberal Democrats scored a huge victory with 296 seats, while DPJ won only 113 seats.br /br /Three-hundred of the 480 seats in the House of Representatives are filled in single-member constituencies by the first-past-the-post (FPTP) method used in legislative elections in the U.S., the U.K., ...

by Edward Hugh: Barcelona,br /br /Global factory business activity expanded in August for the first time since May 2008 in a broad-based revival, witnessed especially in the United States and Japan, according to the global PMI index, produced by JP Morgan. The index rose to a 26-month high of 53.1 in August.br /br /br /pa href="http://4.bp.blogspot.com/_ngczZkrw340/Sp4ziTICMQI/AAAAAAAAPAE/-kStkWkNu3Q/s1600-h/JPMorgan+Global.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 227px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5376791669469491458" border="0" alt="" src="http://4.bp.blogspot.com/_ngczZkrw340/Sp4ziTICMQI/AAAAAAAAPAE/-kStkWkNu3Q/s400/JPMorgan+Global.png" //abr /br /The general picture is positive, and manufacturing output generally held up better again in August, although only a few countries managed to actually show an expansionary headline reading. To be clear, when reading the individual countries it is important to understand that the headline index is made up of a series of sub indexes - like current output, sales, future orders and employment, and so the indicator is not equivalent to the actual industrial ...

by Edward Hugh: Barcelonabr /br /Sovenian GDP fell by 9.3 percent in the second quarter of this year when compared to the second quarter of 2008. This was the third quarter in a row which has seen a fall in Slovene GDP, and the was the deepest annual drop so far in the current economic crisis. In the first half of 2009, GDP decreased by 8.8 percent compared to the same period of 2008. On the other hand, seasonally and working day adjusted GDP increased by 0.7 percent compared to the first quarter of 2009 technically making a break in the recession.br /br /But before we get too excited about this fact, we need to consider that this escape from recession was simply a technical detail, and due to movement in the trade impact. Both exports and imports fell sharply - exports of goods and services by an annual 21.3 ...

by Edward Hugh: Barcelonabr /br /In this post I would just like to ask a very simple question. What is the real rate of growth of unemployment in Spain? Are things improving, getting worse, or simply staying the same? Now, before you jump to too many conclusions on this it is important to remember that in the world of economic analysis there are lies, damn lies, and then there are press releases.br /br /So if you read in the headlines in your paper recently that the number of jobless in Spain fell by 20,794 in July after a 55,250 decline in June (cutting the total number of unemployment benefit claimants to 3.54 million), you might like - bearing in mind what I have just said - to ask yourself what else could lie behind such statistics?br /br /a href="http://1.bp.blogspot.com/_ngczZkrw340/SpLYRWjfjVI/AAAAAAAAO80/93ki_DqUF1o/s1600-h/unemployment+one.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: ...