MERCATO LIBERO

A giugno la capacità produttiva fa segnare NUOVI MINIMI.

Industrial production decreased 0.4 percent in June after having fallen 1.2 percent in May. For the second quarter as a whole, output fell at an annual rate of 11.6 percent, a more moderate contraction than in the first quarter, when output fell 19.1 percent. Manufacturing output moved down 0.6 percent in June, with declines at both durable and nondurable goods producers. ... The rate of capacity utilization for total industry declined in June to 68.0 percent, a level 12.9 percentage points below its average for 1972-2008. Prior to the current recession, the low over the history of this series, which begins in 1967, was 70.9 percent in December 1982.

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MA I MERCATI FESTEGGIANO E PENSANO A QUANTO SOSTENUTO DA MERRILL LYNCH : LA FINE DELLA RECESSIONE.



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MA ROSEMBERG (E NON E' UNO STUPIDO) CI RICORDA ALCUNE COSE MOLTO IMPORTANTI....SULLO STATO DELLA RECESSIONE


Today's Signal-To-Noise Reduction From Rosenberg

Posted by Tyler Durden at 11:34 AM
Always helpful to hear Rosie's perspective as he ferrets out the important data from the noise. The highlighted section may be a worthwhile read to all who have claimed the recession is now over.

U.S. consumer stuck in reverse

What was key in the June retail sales data for the U.S. was the 0.1% MoM dip in what is called the "core" figure, which excludes gas, autos and building materials. With the downward revisions, this was the fourth decline in a row, and while spending is nowhere near as weak as it was at the start of the year when Armageddon fears were setting in, it is troubling that the consumer is still fractionally in reverse in the face of the massive tax stimulus that the Obama team offered the household sector over the last quarter. And, while there may well be some lagged impacts, by and large, the fiscal stimulus, at least directly on the income side, has basically run its course. There is more than just a remote prospect of a consumer relapse as summer moves to autumn because organic wage-based income has declined in three of the last four months and without more financial help from Uncle Sam, we would look for more negative retail sales data in coming months.

Nominal GDP still deflating

We also received business sales data for May — this is a proxy for nominal GDP, and it declined 0.1% during the month, and is falling at an 18% YoY trend, which is without precedent. The economy is clearly still in a recession. Excluding auto, the sequential decline was 0.3% and the YoY slide was 17.3% — a record as well. So the quick answer is "no" — this is not just an automotive story, it's rather broad-based. The inventory-to-sales ratio has come off its cycle highs, but at 1.42x, it is hardly low enough to spark the re-stocking that seems to be part of the mainstream economists' macro forecast (go to Signs of Upturn in Inventories Remain Elusive on page A2 of the WSJ). It will likely have to edge down towards 1.35x before we expect a renewed positive inventory cycle to take hold. Most likely a 2011 story (in fact, the bulk of the inventory improvement has been in the motor vehicle sector — excluding autos, the I/S ratio, at 1.35x, has barely budged from its seven-year peak). What is fascinating is to hear forecasts of the recession ending when so far, three of the four major ingredients — real sales, industrial production and employment — have yet to hit bottom (and real organic income, the fourth variable, is struggling to carve one out).

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E ROUBINI CI RICORDA GLI INSORMONTABILI PROBLEMI CHE CREERA' LA DISOCCUPAZIONE

Mounting Job Losses Will Hurt Consumption, Housing, Banks’ Balance Sheets, Public Finances and Lead to Protectionist Pressures
Nouriel Roubini | Jul 14, 2009

Recent data suggest that job market conditions are not improving in the United States and other advanced economies. In the U.S., the unemployment rate, currently at 9.5%, is poised to rise above 10% by the fall. It should peak at 11% some time in 2010 and remain well above 10% for a long time. The unemployment rate will peak above 10% in most other advanced economies (especially Europe and Japan), too, where social safety nets are broader and thus leading to less short term job losses and pain, but where the effects of the crisis on growth have been even more severe than the U.S.

But these raw figures on job losses, bad as they are, actually understate the weakness in world labor markets. If you include partially employed workers and discouraged workers who left the U.S. labor force, for example, the unemployment rate is already 16.5%; even temporary employment is sharply down. Monetary and fiscal stimulus in most countries has done little to slow down the rate of job losses as economies suffer from problems of insolvency, not just illiquidity, and as the fiscal stimulus programs are too small and not labor intensive enough. As a result, total labor income – the product of jobs times hours worked times average hourly wages – has fallen dramatically.

Moreover, many employers, seeking to “share the pain” of the recession and slow down the rate of layoffs, are now asking workers to accept cuts in both hours and hourly wages. Thus, the total effect of the recession on labor income of jobs, hours and wage reductions is much larger.

Other indicators are suggesting a protracted period of job losses and a persistently high unemployment rate even after the recession is over. The average duration of unemployment is not at an all time high in the U.S. Many manufacturing sectors are on a secular decline (autos, etc.) and employers are shedding jobs on a permanent basis; employment in the previously bubbly sectors (housing and related housing/real estate services, banking and financial services) is falling sharply and will not recover for a long time. The process of offshore outsourcing of both blue collar and white collar jobs is still in full swing. A lot of the job losses in the U.S. and in other advanced economies are structural rather than cyclical; many jobs will never come back.

A sharp contraction in jobs and labor income has many negative consequences on both the economy and financial markets. There are at least five important ones that we will discuss next:

First, falling labor income implies falling consumption for shopped-out, saving-less and debt-burdened households, which have already been hard hit by a massive loss of wealth (as the value of equities and homes has sharply fallen) and a very large rise in their debt ratios and debt servicing ratios. With consumption accounting for 70% of GDP in the U.S. and also a high share of aggregate demand in other advanced economies, this implies that the recession will last longer, and that economic recovery next year will be anemic (less than 1% growth in the U.S. and possibly even lower growth rates in Europe and Japan).

Second, job losses will lead to a more protracted and severe housing recession, as joblessness and falling income are key factors in determining delinquencies on mortgages and foreclosure; by the end of this year about 8.4 million U.S. individuals with mortgages will be unemployed, unable to service their mortgages and likely to default. Also, with falling incomes, uncertainty about future employment and weak consumer confidence the number of households who are willing to buy a new home or can qualify for a mortgage is smaller. Home prices have already fallen about 27% from their peak; they are still falling – year over year – by 18%. So, the cumulative fall in home price is likely to end up being 40% to 45% from the peak. Large job losses also lead to less demand for commercial real estate (office space and factory floors) and thus likely to worsen the accelerating slump in this sector.

Third, if you plug an unemployment rate of 10% to 11% into any model of loan default rates and losses given default, you get ugly figures not just for residential mortgages (both prime and subprime), but also for commercial real estate, credit cards, student loans, auto loans, etc. The U.S. stress tests assumed that the U.S. unemployment rate will average – in the most adverse scenario – 10.3% in 2010. But at the current rate of job losses the unemployment rate will be above 10.3% already at some point this fall. Thus, banks losses on their toxic assets and their capital needs will be much larger than recently estimated, which will worsen the credit crunch and the ability of households and firms to borrow to finance consumer durable spending, residential home purchases and capital spending by the corporate sector.

Fourth, rising job losses lead to greater demands for protectionist measures, as governments are pressured to save domestic jobs. The sharp fall in global exports and imports has already been severe even without a massive surge – so far – in protectionist actions. But, as job losses mount and a glut of global manufacturing capacity needs to be worked out, these pressures will escalate. While the G20 committed in the fall to avoid protectionist actions, by early 2009 already 17 out of the 20 countries in this group had undertaken over 50 policy measures that are protectionist. This rise in protectionism threatens to aggravate the damaging contraction of global trade.

Fifth, the higher the unemployment rate goes, the wider budget deficits will become, as automatic stabilizers reduce revenue as labor income falls and increase spending (for example, on unemployment benefits). Thus, an already unsustainable U.S. fiscal path, with budget deficits above 12% of GDP this year and public debt expected to double as a share of GDP from 40% in 2008 to 80% by 2014, becomes even worse.

This leads to a very difficult policy dilemma. On the one hand, rising unemployment rates are forcing politicians in the U.S. and other countries to consider additional fiscal stimulus programs to boost sagging demand and falling employment. For example, in the U.S. the drumbeat about the need for another fiscal stimulus is becoming louder by the day: state and local government have a $250 billion fiscal hole that the Federal government will have to help fill; expiring unemployment benefits will have to be extended as the number of continuing claims – signaling very difficult prospects for currently unemployed workers – are surging to all time highs; a new round of employment-intensive jobs programs and infrastructure spending will be necessary.

On the other hand, despite persistent deflationary pressures that will continue through all of 2010 (as the slack in goods and labor markets is still sharply rising), rising budget deficits, high financial-sector bailout costs, continued monetization of deficits, and eventually unsustainable levels of public debt will ultimately lead to higher expected inflation – and thus to higher interest rates, which would stifle the recovery of private demand. Deflationary pressures will be dominant through 2010, but by 2011-2012 the effect of large and monetized fiscal deficit will put significant upward pressures on long term government bond yields, especially as the U.S. creditors are becoming wary by the day of the risk that the U.S. will inflate or devalue away the real value of their trillions of U.S. dollar assets.

So, increasingly, while further fiscal stimulus seems necessary to avoid a more protracted recession, governments around the world can ill afford it: they are damned if they do and damned if they don’t. Indeed if, like Japan in the late 1990’s and the U.S. in 1937, they take the threat of large deficits seriously and raise taxes and cut spending too much too soon, their economies could fall back into recession. But recession could also be the result if deficits are allowed to fester, or are increased with additional stimulus to boost jobs and growth, because bond-market vigilantes might push borrowing costs higher. Indeed, in the U.S. most of the 2001-2003 tax cuts are expiring at the end of 2010 – cuts on income taxes, capital gains, dividends and estates taxes – and if these cuts are not reversed – to prevent a massive fiscal drag in 2011 – the fiscal deficit will remain extremely large even in 2011-2012, thus increasing the concerns about deficits and debt sustainability. And if the tax cuts are partially or fully allowed to expire to allow the reductions of unsustainable fiscal deficits, a weak economy with an anemic recovery could be pushed into another recession. Indeed, damn if you do and damn if you don’t!

Thus, even as mounting job losses are undermining labor income and consumption, pushing further down home prices, increasing the banks’ losses, weakening the support for free trade, and further worsening public finances, the room for further policy stimulus is becoming narrower. Indeed, not only are governments running out of fiscal bullets as debt surges, but monetary policy is having little short-run traction in economies suffering insolvency – not just liquidity – problems and monetary easing has so far been like pushing on a string. Worse still, in the medium turn the monetary overhang may lead to significant inflationary risks as a period of sharp deflation may be followed – from 2011 on - by a period of rising expected inflation and disorderly weakening of the U.S. dollar.

Little wonder, then, that we are now witnessing a significant correction in equity, credit, and commodities markets. The irrational exuberance that drove a three-month bear-market rally in the spring is now giving way to a more sober realization among investors that the global recession will not be over until year end, that the recovery will be weak and well below trend, and that the risks of a double-dip W-shaped recession are rising. The alleged green shoots turned to be yellow weeds and – unless policy makers figure out a sensible medium term exit strategy for monetary and fiscal policy – they may turn into brown manure.

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E POI C'E' LA FED....PENSATE CHE HANNO CAMBIATO IDEA SULLA DISOCCUPAZIONE E SUL PIL...
DISOCCUPAZIONE PEGGIORE DEL PREVISTO....PIL MIGLIORE DI QUANTO PENSASSERO...

Siamo preoccupati sui dati FED...Il Pil come fa a salire (rispetto alle precedenti previsioni, se la disoccupazione peggiora?...e questo come si concilia con le argomentazione qui sopra riportate da Roubini?...qualcuno sta prendendo una cantonata grande grande....e io penso che sia la FED)

FRA RECESSIONE E NUOVA ECONOMIA