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Is Europe's Recession Really Over?
jones_supa writes "Bloomberg, the WSJ and the NYT cheered to report that the Euro Zone's economy has showed signs of recovery after two years of decline. They're all based on the news that Eurostat, the keeper of economic statistics for the European Union, says GDP grew 0.3 percent within the EU's borders from the end of March through June. As Olli Rehn, Eurostat's vice president, writes on his blog: 'I hope there will be no premature, self-congratulatory statements suggesting "the crisis is over."' He calls the GDP report only another sign of 'a potential turning point in the EU economy.' The quick conclusion by some economists and some in the news media that a slight rise in one quarter's GDP means a recession is over ignores how experts figure out when an economy is either in a significant downturn (a recession) or enjoying steady growth (an expansion)."
No.
nope.
A recession is defined as two consecutive quarters of negative growth. Thus, the recession is technically over.
Which doesn't mean it can't come back later.
... cannot recover. That's what debt is - a promise to work harder later than you work now. In the case of large public debt, it's a promise to force your children to work harder than you do.
See, this is why the dolphins think we're morons.
I'm inclined to agree.
An enigma, wrapped in a riddle, shrouded in bacon and cheese
Notice how economic indicators never come with measures of uncertainty. It's always "we added 100,000 jobs this month". You'll never hear "we added 100,000 +/- 50,000 jobs". Yet another reason why economics is not a real science.
Give me Classic Slashdot or give me death!
The EU is getting more integrated, but is still nowhere near one economy that moves in unison. So the answer to the headline question is: yes in some places, no in others. Germany's GDP is growing; Spain's is shrinking.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
and throwing the Economist's bone's, killing a chicken, and skaking the Magic Eight Ball:
Question: what will the European economy do?
"My sources say no"
Which is much more informative than Alan Greenspan EVER was.
Specifically, German manufacturing...
That sector benefited over the years between the start of European Monetary Union and the start of the Mediterranean death-spiral from being locked into a favourable exchange rate with a relatively cash-rich (albeit debt-fuelled) set of customer states. Most of those states are economically dead or dying at the moment.
If the German manufacturing sector has managed to diversify its markets enough over the last couple of years that it can weather the delayed shock of this when it finally hits, then Europe will probably muddle through. Once the worst of the crisis has past, the states that should never have been in EMU to begin with can be eased out of it without too much risk of contagion and most of Europe will be ok (though I suspect living standards in Greece etc will take decades to make up lost ground, if indeed they ever do).
If German manufacturing does start to suffer in a big way over the next year or two, then we've only seen the start of the problem, as if the economic engine of much of the continent splutters, then the death spiral will just widen. In that case, expect to see the UK and some of Eastern European states split away in self preservation and some really unpleasant social disorder sweep most of the rest of the continent.
All of which is absolutely nothing compared to what will happen when China's generation of largely-single angry-young-men-used-to-ever-rising-living-standards (the inevitable result of a one-child-policy that turns a blind eye to a bit of back-door gender selection) experiences its first serious recession.
Terrorist. Grab the dolphin lover.
Humans are the only sub-sapient species on this planet. The proof is all around us.
Nihil in publicum sputa.
People can weather bad times for a while, many have nest eggs, live off ramen noodles and stay with their parents longer, don't start a family, take more education instead and whatnot to live a subsistence life but those options tend to run out and eventually what they desperately need is a job and an income so they can get on with their lives. That the economy isn't tanking even more is great, but unless there's real growth and people getting back into the labor force it's still going to be a train wreck in progress. The same is happening in the US, before the financial crisis the employment-population ratio was about 63% now it's hovering between 58% and 59%, despite what the unemployment rate says. The US would need another 10 million jobs to return to 2008 levels.
So far I must say that despite everything it has been very calm so far, when you're looking at 27.6% unemployment and 64.9% youth unemployment like Greece does right now many countries would be at "fuck it, communism can't get any worse" conditions. And fat fucking luck if you're going to get a job after years of unemployment, most places will see you as damaged goods and rather hire someone straight out of school. The economy is one thing, it will survive somehow but the people are getting royally screwed. It's a generation almost certain to have it much worse than their parents, despite all the technological advances. And somehow I have the feeling it's just one bad domino away from becoming something much worse, so many look ready to fall.
Live today, because you never know what tomorrow brings
Sure, the recession is technically over. Thus begins the extended economic depression during which unemployment remains extraordinarily high - over 60% for young people in periphery countries - and the economy significantly underperforms its potential.
This is all the result of a political economy which requires permanent public deficits for private sector growth in the absence of private credit expansion, combined with a private debt overhang prohibiting such an expansion.
.: Semper Absurda
Nothing new in this submission. It's well known that real-time economic data is noisy. This holds particularly true for real GDP as well some other statistics from the national income accounts (but less so for labor-market statistics). Revisions between the first and final data release of GDP average somewhere around 1 percentage point (that's in the US data, but it's probably relatively similar in the EU).
The European welfare state is unsustainable. It's unsustainable in the short run for the PIIGS, but also, with declining birth rates and rising debts, unsustainable even for Germany and other Northern European countries. Even the smallest nods towards austerity are greeted with riots. The only question is how much pain, economic collapse and hyperinflation happen on the way down.
... or where is the angle for nerds and geeks in this?
I for one would really appreciate to read news in here (/.), that I don't read everywhere else.
Sorry.
A recession is defined as two consecutive quarters of negative growth. Thus, the recession is technically over.
Which doesn't mean it can't come back later.
It seems to me that if you need two consecutive quarters of negative growth to call it recession, you should also need two consecutive quarters of positive growth to call it an expansion or recovery
One quarter of weak growth doesn't really tell you anything.
is the GDP report even valid? Given the multi-decade manipulation of the way the deflator (inflation) is calculated it is quite possilbe that not only Europe, but the US as well, has been in recession since the early 2000's. Shadowstats is an outfit that provides US figures using the most recent prior methodology - I think it is circa 1992. And remember, the government(s) have a very vested interest in keeping the "official" inflation figure low - it lowers any payment tied that rate (social security, procurment contracts) while also making the GDP figure look better.
9-5? What kind of pussy country is that? Here in Spain most jobs are like 12-6 or worse. And we are getting salary cuts and lower minimum wages. And that's only for the ones lucky enough to have a job. (since at some point you will be the only remaining employee of your company, guess who takes the workload of the ones that got fired?)
Oh and our politicians don't print, they steal. It's even proven but there they are staying.
Um .... I'm pretty sure 9 to 5 (8 hours) is longer than 12 to 6 (6 hours) ... unless you mean noon until 6am the next day (or midnight until 6pm, both of which seem ridiculous). Am I missing something obvious here?
Can't be done in Europe, which is one of the reasons they're worse off than America or Britain.
Is China(and emerging countries, etc)'s rise and worldwide longh awaited economical balancing really over ? Hint : I doubt it. Therefore; No.
12-6, so a six hour day? Sweet.
He was probably thinking 5 hours to 9 hours.
Oh, thought he meant 9 hours for 5 days a week. I was trying to say 12 hours, 6 days a week.
Communism can get A LOT worse ! when the reds inevitabily begin "collectivizing" (nationalization) the owners oh the house/farm/factory/whatever is a kulak/burgeois/intellectual/enemy-of-the-people. And they are slowly killed or are excluded from society at best. I know more about this than you do, kid.
Someone didn't study their history. It's because banks keep printing money that we get economic crises.
America is sitting on tons of debt and Britain isn't doing all that hot either. Europe isn't worse off at all.
"Your father's Leukemia was very bad, he had fever of 104 (F). He's much better now - in fact he's down to room temperature."
Speculation be damned, European Union has its own problems. Let them settle their problems because we have our own right now in our own country. The stock market should never tie the European markets to ours mainly because we have to deal with their shit...
Yep, it's you. Governments printing money often is the way out of economic crises.
...if this wasn't 201x but 197x. Politicians do not understand the impact of the Globalization concept they had introduced.
Governments printing money to get out of a crisis is a large gamble.
The four worst economic crises in history have been caused by governments printing money to get out of a small crisis.
GDP grew by 0.3%. If I remember GDP figures correctly they usually have a error margin of +/- 0.5.
try to make ends meet, you're a slave to money, then you die
It is not the way out of the crisis, but a way of postponing solving its causes (while causing new ones).
Great, now all the staff that work for companies that aren't contracting and are still making nice big profits thank you very much, now they can give them a proper pay rise that makes up for when they shafted them with 0% pay rises because of the 'recession'.
If you accepted a 0% pay rise then you're a mug and the directors who gave themselves another 10% are laughing at you.
Waterfox - a Firefox fork with legacy extension support, security updates and better privacy by default.
EU is complete for the moment. Don't allow any country to joing. Especially any of the eastern europe countries. ...
Possibly cut off Romania
Cut off some of the corrupt southern countries who lied anyway in the first place joining EU. Cut off Greece and possibly Italy and Spain.
When something is falling steadily for a sufficiently long period of time random fluctuations will eventually cause one quarter to go positive.
Recently I was involved in research that showed big polarization in EU from North to South. There is big need to change mentality but this is not a fast process ... More details in this link http://www.nature.com/srep/2012/120920/srep00678/full/srep00678.html
Uh, Britain is in Europe you moron.
And Britain is not doing any better than France, and considerably worse than Germany.
Watch this Heartland Institute video
That was a fascinating read (some statistics required). Is the butchers vs neurosurgeons example a commonly used model? It reminds me of an old joke I vaguely remember from when the EU was smaller:
The Europe we want is where the cooks are French, the police are British, the mechanics are German, the lovers are Italian, and the bankers are Swiss.
The Europe we have is where the cooks are British, the police are German, the mechanics are French, the lovers are Swiss, and the bankers are Italian (well the latter is true currently).
To be, or not to be: isn't that quite logical, Slashdot Beta?
Those died in 1975 or so, and there will hopefully never be another boom in the West like the one between 1945 and 1975. The reason is simple: everything was destroyed in 1945, hundreds of millions had died, and everything was there to be rebuilt. This is fortunately no longer the case.
However this is not a normal situation. In peace, we should all expect a small, steady growth, more or less proportional to the population increase, but not much more, e.g. in the West anywhere between 0.5 to 2% a year. Anything more means someone is losing out somewhere. It is not quite a zero sum game, but almost.
The thing we should be doing is invest in the long term future, but our political, economic and sociologic systems are not geared up to it. Everybody wants to become rich quick. Like the internet boom of the 2000, or the investment products craziness of 2008 or so, this is a game were only a very few win, and many lose. We should concentrate on avoiding investment bubbles and painful downturns. This will have to wait until the machines rise and make it happen for us (in the best possible outcome).
Our parental overlords and their pressure groups and lizard people are going to permit our cookie jar to magically refill itself.
Not.
They don't want it. They say that since we ate all the cookies, there are no more cookies. LIES! It's all their fault! You know who I mean.. them! The only reason for the lack of cookies is that they prevent the magical refilling process.
In other words: you're ascribing intent to what is a natural process of reacting to diminishing resources and societal collapse. Because, if it's somebody's fault, then at least in theory (after that somebody has been scapegoated) it can be corrected.
But people who try to live in reality see that people (e.g. their parents) grow older and feeble and will at one point die, and so it is with larger sociological constructs like corporations and societies and cultures. Like the apoptosis shortening your telomeres with every division, there are inevitable problems for our societies that cannot be solved with the political tools in place within our societies: "predicaments". So, they will fail to respond to certain classes of problems that are easy to see for outsiders but impossible / taboo to discuss within the organization: think "anathema".
Conserving energy, doing with less, adapting your consumption pattern to the production levels, is anathema in the USA, I think (I could be wrong because I've never visited the USA and never will). It is only this which makes an energy crisis into a deadly societal problem; other cultures just grin and bear it, put their pants belts a few teeth smaller, move in with their parents, plant expensive vegetables themselves, hope their children (if they can afford children) will have it a little better.
As long as there's a state of law and a sense of solidarity, many things are tolerable. The USSR collapsed and most people survived although it must have been a horrible time (read Dmitry Orlov or Jared Diamond, or "The Long Descent" by John Michael Greer, if you dare).
To be, or not to be: isn't that quite logical, Slashdot Beta?
Recent figures suggesting (very) modest growth in the UK have been greeted with enthusiasm, but I still think as a country we're in trouble, and a big part of that I think is that wages have not in any way been keeping up with the huge rises in house prices over the last 20-30 years.
The government is encouraging banks to lend to house buyers by guaranteeing a portion of the mortgages, but it seems to me to just be encouraging another bubble.
The average full-time, permanent employee salary in the UK is around £24,500; the average house price is around £230,000 and rising; it'll be more in the South and less in the North, but even so, the average house price is nine times the average salary. It's just not sustainable.
I just adore the use of the GDP to tell when an economy's in recession, depression, or not. The one in the US, for example, being declared over years ago...
Tell that to everyone out of work, esp. those out of work for *years*.
GDP is the mean, not the median. The "financial services" industry, incl. the market, are getting richer and richer, and so our GDP is going up, right?
Horse hockey.
A science has predictive power. An art has descriptive power. "Economics" has neither; rather, it has the track record of the writers of supermarket horoscopes. Yet they get paid good salaries, and are listened to... because it makes the new nobility, er, the 1%ers, very happy....
mark
Wish I had the mod points.
GDP growth is merely one metric.
Ah ok I see.
Hmm yeah, I suppose the "9-5" idiom doesn't make sense in Europe anyway considering they generally use 24h time there. 0900-1700 doesn't quite have the same ring to it.
it's just the crises inherent and immanent in the current economic system ruling the world. this system's goal is accelerating the process of makeing the rich richer and the poor poorer. this process can never be stopped or reversed - and all the factors softening the effects of this process in "Old Europe" are currently being smashed under the pretext of "fighting" this "crisis."
Even in "economically strong" Germany the poor get poorer because the rich get richer (and vice-versa) (eg huge funds of taypayers' money have transferred to banks to "save" them thus securing this process).
This is all part of the ruling economic system and will steady accelrate even more - it cannot be really changed from within this system (remember how and why Fordism cratered.)