Italy in Recession, Industrial Production Plunges 4.8% GDP Likely Already Negative
Economics / Euro-Zone Nov 11, 2011 - 06:29 AM GMTBy: Mike_Shedlock
Here is a note I received by email from Barclays Capital regarding Italian GDP and Industrial Production ...
Italy: September IP declined 4.8% m/m (BarCap: -4.0%, consensus: -3.0%)
Italian IP declined 4.8% m/m in September, weaker than our below-consensus expectation of -4.0% m/m (market: -3.0% m/m), from an increase of 3.9% m/m in August, downwardly revised from 4.3% m/m previously.
As we had highlighted when the previous report was released, the sharp increase in August IP would prove temporary and correct in September. Italian industrial output tends to be historically quite volatile in August for technical reasons such as the process of seasonal adjustment undertaken by the ISTAT statistics office (for more on this please read: Italy: IP surged in August but past experiences suggest there is little to get excited about).
Accounting for the revision to the index, Italian IP is reported to have contracted -0.1% q/q in Q3, below our initial expectations, suggesting a small downside risk to our expectation that Italian GDP had declined 0.2% q/q in Q3. As our GDP indicator shows, Italian GDP might have declined as much as 0.3% q/q. On this specific point, the Italian statistics office ISTAT will not release the preliminary GDP growth for Q3, but it plans to release the final Q3 figure on 21 December.
Italian Economy is Toast
The Italian economy is toast and that is before the "Rise of the Technocrat Borgs" who will make matters much worse. Please see Beware the Technocrati; The Next Delusion is Technical Government; Borg Cannot Save Europe.
Expect Krugmanites to Howl at Moon
Italy desperately needs structural reforms especially the ability for corporations to fire people much easier than they can now. Long-term, reforms will make Italy more competitive. Short-term, reforms coupled with austerity measures will add so much pain (not that it takes that much) that the vast army of Krugmanites will howl at the moon.
Also bear in mind there have been no reforms that have started yet, only promises to make reforms. Things in Italy are about to get much worse, and Italy is already in recession
By Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List
Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management . Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.
Visit Sitka Pacific's Account Management Page to learn more about wealth management and capital preservation strategies of Sitka Pacific.
I do weekly podcasts every Thursday on HoweStreet and a brief 7 minute segment on Saturday on CKNW AM 980 in Vancouver.
When not writing about stocks or the economy I spends a great deal of time on photography and in the garden. I have over 80 magazine and book cover credits. Some of my Wisconsin and gardening images can be seen at MichaelShedlock.com .
© 2011 Mike Shedlock, All Rights Reserved.
© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.
