Central Perk: 25 nov. 2012

duminică, 25 noiembrie 2012

Mish's Global Economic Trend Analysis

Constitutional Crisis in Spain; Pro-Referendum Parties Win 87 of 135 Seats

Posted: 25 Nov 2012 07:30 PM PST

Spain takes a giant step towards a full-blown constitutional crisis as Catalans overwhelmingly elect candidates promising a break-up vote.

Catalonia has delivered a sweeping mandate to political parties pledging to hold a referendum on independence in elections that place the northern Spanish region on a collision course with Madrid.

In a vote billed as "the most decisive elections in the history of Catalonia" by Artur Mas, the region's president, pro-referendum parties won 87 of the Catalan parliament's 135 seats.

Following weeks of intense debate about Catalonia's future relationship with Spain, turnout was 69.5 per cent, the highest for a Catalan regional election in nearly 30 years.

The vote comes amid pressure from various regions around Europe for more independence, including proposals for a referendum on the issue in Scotland in 2014.

Spain's central government has said any move to push ahead with a referendum on independence for Catalonia, which has an economy the size of Portugal's and makes up about a fifth of Spanish output, would be illegal and against the Spanish constitution.

Catalonia has built up a debt pile of €42bn, the largest of all of Spain's 17 regions, and is currently locked out of international capital markets. Earlier this year the region was forced to request an emergency €5bn credit line from Spain's central government to avoid defaulting on payments.

Messy Politics

The ruling (Center-Right) Convergència i Unió party which favors a referenced actually lost 12 seats in the election, from 62 to 50. However, it lost those seats to more radical pro-independence groups.

Artur Mas, leader of Convergència promised a referendum but will have to align with even more radical groups to produce one according to CNN.

Artur Mas, president of the region's parliament, promised a referendum on independence for one of Spain's most important regions if he won re-election.

But after the election, Mas has a more difficult task because his center-right Convergence and Union coalition lost 12 of its 62 seats, a strong setback for a party that was hoping to gain a simple majority in the 135-seat legislative body.

The Catalan Republican Left party was the big winner in the elections, winning 21 seats, according to the Catalonia elections web site, which reported 98% of the votes had been counted.

The Catalan Republican Left party also backs independence, and the two parties could form a majority in parliament on the independence issue.

They, however, differ on most other issues, especially economic policy.

Voters in Catalonia, the most powerful economically of Spain's 17 regions, heeded the call that these would be historic elections, even if independence wasn't on the ballot Sunday. They voted during a deep economic crisis in the eurozone countries, especially in Spain and in Catalonia. Voter turnout was the highest in 24 years for Catalan elections, officials said.

The Spanish government in Madrid vows to block any self-determination referendum, arguing that the constitution does not permit a region alone to decide its independence.

Last September 11, an estimated 1.5 million people -- 20% of Catalonia's population -- filled the streets of Barcelona, the Catalan capital and Spain's second-largest city, demanding independence.

A survey earlier this month by the Catalan government's polling center showed 57% of Catalans would vote for independence, a 6% increase from last June and a 14% increase from a year and a half ago.

Judging from the election, I suspect the percentage who would vote for independence is much higher.

A showdown with Madrid looms.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

450,000 Businesses Shut Down in Italy; Non-Performing Loans Jump 15.3%, Write-Downs 21.6%

Posted: 25 Nov 2012 11:47 AM PST

Here are a couple of interesting economic links from Italy courtesy of reader Andrea. The translations from Italian are a bit choppy, but the gist of the articles is easily understandable.

Non-Performing Loans Jump 15.3%, Write-Downs 21.6%

From Thompson Financial News: Non-Performing Loans Jump 15.3%

Non-performing loans amounted to approximately 117.6 billion, 1.8 billion more 'than in August and 15.6 billion in more' than in September 2011, marking an annual increase of 15.3%.

With regard to loans net of write-downs at the end of September totaled 67.2 billion, about 1.5 billion more 'than a month before and almost 12 billion more' than in September 2011, with an annual increase of 21.6%.

450,000 Businesses Shut Down in Italy in Three Years

La Stampa reports 450,000 Businesses Shut Down in Italy in Three Years.

In just three years, from 2010 to 2012, about 450,000 companies closed with a loss of over 300,000 jobs, while the Italians caught up in terms of wear [usurious loans] increased to 600,000.

These are the data provided by Sos enterprise-Confesercenti usury-day. In particular, wear Italian capital Rome and Naples are confirmed.

It is "wear submerged, chameleon, now violent now` hit and run 'which marks a difference between the demands of incredible help and legal reality." [Bankruptcy looms]

The President of Confesercenti Marco Venturi pointed out that "the rest of the bank lending to businesses fell by 6%, rising instead both protests, particularly in the South, both failures, especially in Lombardy and the north-east. Do not forget that over the years has formed an army of 5 million people who for various reasons - bad payers, protested - is effectively excluded from the banking system and therefore must satisfy all its needs for cash."

The fact that more businesses shut down than jobs lost in those businesses says that many of the businesses are shell corporations. However, the implied stress is very real.

For more from Andrea regarding Italian bankruptcies, please see Reader Comments on Italy's Insane Labor Rules

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Seth's Blog : Persuade vs. convince

Persuade vs. convince

An anonymous copyeditor working on my new book unilaterally changed each usage of "persuade" to "convince."

I had to change them all back.

Marketers don't convince. Engineers convince. Marketers persuade. Persuasion appeals to the emotions and to fear and to the imagination. Convincing requires a spreadsheet or some other rational device.

It's much easier to persuade someone if they're already convinced, if they already know the facts. But it's impossible to change someone's mind merely by convincing them of your point.

If you're spending a lot of your time trying to convince people, it's no wonder it's not working.

More here.