Central Perk: 7 aug. 2012

marți, 7 august 2012

Mish's Global Economic Trend Analysis

Birth-Death Model in Spain: 391,000 companies closed, 334,500 New Businesses Launched; Spain Lost 57,000 Companies in 2011

Posted: 07 Aug 2012 11:25 AM PDT

Inquiring minds are looking at the birth-death model of Spanish businesses.

Statistics show Spain Lost 57,000 Companies in 2011

The number of active enterprises decreased 1.6% in 2011 and stood at 3,199,616. This is the fourth consecutive year of decline according to the latest update of the Central Companies Directory (CCD) released by the National Institute of Statistics (INE).

During 2011 more companies ceased their activities (391,270) than were launched (334,516). The net effect is a loss of 56,754 businesses.

By size, measured in number of employees, Spanish firms are characterized by their small size. 55.2% of companies (1,764,987) did not employ any workers in 2011. In addition, 867,550 companies (27.1%) had one or two employees, while those hired 20 or more workers accounted for only 4.7% of businesses.

The fewest casualties were in education (2682), the utilities (1,478), recreation and entertainment (859), and sector programming and computer consulting (828).

By contrast, construction of buildings had 13,206 net company closures, followed by specialized construction (10,170) and architectural and engineering (7343).

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Italy Industrial Production Plunges 8.2% YoY, GDP Declines 2.5% Annualized; Italy to Pay Civil Servants 80% of Their Salary to Do Nothing

Posted: 07 Aug 2012 07:35 AM PDT

News in the eurozone's third largest economy is once again on the dismal side. Italian Industrial Production Plunged more than expected as did GDP.

Italian industrial production declined more than forecast in June, signaling the euro region's third-biggest economy probably contracted for a fourth quarter. Economists forecast a decline of 1 percent, according to the median of 16 estimates in a Bloomberg News survey. Production fell 8.2 percent from a year ago on a workday-adjusted basis.

Italian business confidence declined last month more than economists forecast as executives became more concerned that the country's economic recession will deepen in coming months.

Fiat SpA (F) temporarily stopped new investments in Italy as the European debt crisis caused sales in the region to plunge. Italian car sales have plummeted 20 percent through July, with deliveries this year on track to slip to the lowest level since 1979.

Italy to Pay Civil Servants 80% of Their Salary to Do Nothing

To plug the rising deficit gap, Prime Minister Mario Monti approved Deep Cuts in National Spending (a needed measure but not how they went about it), and also hike the VAT by 2% (economic insanity in a deepening recession).

Italy's government has agreed to cut spending by 26bn euros (£21bn, $32bn) over the next three years to plug the gap between spending and income.

Staffing levels will be assessed by October. Some workers will be sent home for two years on 80% of their salary before losing their jobs or being retired.

The package means the country will not now need to bring in an unpopular increase of 2% in value added tax (VAT) and will be able to funnel 2bn euros to the Emilia Romagna region, which was hit by two earthquakes in May.

The cost of servicing Italy's debt increased by 16% to 18.7bn euros, up from 16.2bn euros in the first quarter of 2011.

Italy Recession Lingers for Year

The official estimate for decline in GDP this year was -1.2% (revised lower from about half that). Prepare for another downward revision as Italy's Recession Pain Deepens.

Italy shrank further into recession in the second quarter for a 2.5 percent yearly decline, data showed on Tuesday, threatening attempts by Mario Monti's technocrat government to control a debt crisis that is undermining the whole euro zone.

A 0.7 percent fall in gross domestic product, only slightly better than the first quarter's 0.8 percent decline, means the Group of Seven economy has now been contracting for at least a year, according to figures from government agency ISTAT.

This will weaken tax revenues and hit jobs and consumer spending, a vicious circle which makes it harder for Monti, who is aiming to cut the budget deficit to 0.1 percent of GDP in 2014, to meet his public finance goals.

A Reuters survey of analysts last month forecast that the budget deficit this year would be 2.3 percent of GDP, compared with Monti's 1.7 percent target, and 1.3 percent in 2013, when the government forecasts a 0.5 percent shortfall.

ISTAT gave no numerical breakdown of GDP components with its preliminary estimate, saying only that activity contracted in agriculture, industry and services.

ISTAT said so-called "acquired growth" at the end of the first quarter stood at -1.9 percent.

This means that if GDP posts flat quarterly readings in the final two quarters of 2012, over the whole year it will be down 1.9 percent from the previous year.

Expect Debt-to-GDP to Rise

Italy's debt-to-GDP ratio is 123%. Given rising borrowing costs and shrinking GDP, that number is going to go up, perhaps substantially.

Eurosceptic Government in 2013

What Italy needs is work rule reform, pension reform, a dramatically smaller government, and lower taxes. As with Spain, work rule and pension reform is very slow in coming but tax hikes have been plentiful, exactly the wrong approach.

A eurosceptic government may be on the way next year as Mario Monti will step down in April.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Damn Cool Pics

Bulldog vs. Porcupine
Marilyn Monroe Aging Timeline
Great White Shark Cage Diving Hotspots of the World [Infographic]
E.T. The Walrus Practices His Vocalizations. [VIDEO]
Behind The Scenes of Pink Floyd: The Wall
Miley Cyrus Shows Off Her Toned Figure
Madonna Aging Timeline

Bulldog vs. Porcupine

Posted: 07 Aug 2012 05:03 PM PDT

Bella Mae the bulldog tried to approach a porcupine that came to drink some water from the pond at the backyard of her owners' house. The doctors had to remove about 500 quills from the dog's face, feet and mouth.

Marilyn Monroe Aging Timeline

Posted: 07 Aug 2012 04:14 PM PDT

Great White Shark Cage Diving Hotspots of the World [Infographic]

Posted: 07 Aug 2012 04:05 PM PDT

Discover where in the world you can come face to face with a great white shark, that is if you are brave enough. The infographic below from Marine Dynamics Shark Tours compares the few places in the world offering shark cage diving with great whites, and will help you decide where you would like to experience this life changing experience.

Click on Image to Enlarge.

E.T. The Walrus Practices His Vocalizations. [VIDEO]

Posted: 06 Aug 2012 09:55 PM PDT

E.T. is a 30-year-old Pacific walrus at Point Defiance Zoo & Aquarium in Tacoma, Washington.

He weighs about 3,400 lbs and is one of only 17 walruses in U.S. zoos and aquariums. E.T. came to the Zoo as an orphan from Prudhoe Bay, Alaska.

E.T. is named for his wrinkled resemblance to alien in the popular 1982 movie "E.T. The Extra-Terrestrial."

Behind The Scenes of Pink Floyd: The Wall

Posted: 06 Aug 2012 09:28 PM PDT

It's been 30 years since the big-screen version of Pink Floyd's classic album The Wall hit cinemas. The images are the work of David Appleby, the unit photographer on the 1982 film which sees a rock star (played by Bob Geldof) descend into madness.

Miley Cyrus Shows Off Her Toned Figure

Posted: 06 Aug 2012 08:58 PM PDT

These pictures show how considerably the 19-year-old star's body has changed over just a year. She has been going to Pilates classes religiously for months.

That's what she looked like in 2011...