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152 comments on DrumBeat: December 16, 2008

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VK on December 16, 2008 - 9:38am Permalink | Subthread | Comments top

From http://business.theage.com.au/business/chinese-flirt-with-recession-2008...

China flirts with recession!

CHINA'S industrial output has slumped to a new low, as leading economists say its previously irrepressible economy is probably shrinking this quarter and will contract again in the first quarter of next year.

Industrial production, one of the most closely watched economic indicators, grew just 5.4 per cent over the year to November - implying a sharp contraction since mid-year, when the annual rate was running at 17 per cent.

Electricity production was down by 9.6 per cent over the year, which analysts say is the sharpest slump in 30 years of economic reform.

The accelerating industrial downturn comes despite a partial rebound in steel output, as steel makers and downstream users appear to have finished the process of liquidating stocks.

Gross domestic product this quarter "must be contracting; everything is pretty bad," said Macquarie Bank's China economist, Paul Cavey. "And we're not at the worst point yet."

Mr Cavey said industrial production may have reached its nadir but he is most concerned about a precipitous fall in real estate construction, which has been a prime force in the economy. "Real estate construction is currently contracting by 20 per cent year-on-year and by early next year it will be 30 per cent."

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Leanan on December 16, 2008 - 9:43am Permalink | Subthread | Parent | Comments top

Canada flirts with depression:

PM's economic flip: 'I've never seen such uncertainty'

OTTAWA — Stephen Harper has delivered his bleakest forecast yet for the Canadian economy, warning yesterday the future is increasingly hard to read and conceding the possibility of a depression.

"The truth is, I've never seen such uncertainty in terms of looking forward to the future," the Prime Minister told CTV News in Halifax.

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VK on December 16, 2008 - 9:55am Permalink | Subthread | Parent | Comments top

Financial Uncertainty: My rational mind tells me how bad things are but I refuse to believe they are that bad.

Wishful thinking, optimism and hope will make the credit crunch disappear and than we can renovate the kitchen, 20 inch rims for my hot ride, big screen HDTV with surround sound, blackberry, all you can eat luxury cruises and that trip to Venice!

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writerman on December 16, 2008 - 3:52pm Permalink | Subthread | Parent | Comments top

It's not really a "credit crunch" this is too benign a phrase and doesn't really indicate the shear scale of the crisis we are experiencing. I think "global financial meltdown" is closer to the truth, follwed by a deep and profound economic depression lasting for years.

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TJ on December 16, 2008 - 10:54am Permalink | Subthread | Parent | Comments top

"Hard to read" = "Unwilling to accept"

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jografy on December 16, 2008 - 11:21am Permalink | Subthread | Parent | Comments top

As I mentioned previously, the PTB are preparing us for the real situation. This is why Harper called the election in October. He already knew. After a conversation with an old friend downtown I am bot reassured and even more concerned. While people seem to understand disaster is looming and there will be a need for collective action, more and more iI am convinced that collective action will be fascism with all its scapegoating and false promise. I expect harper to win a majority next time.

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sendoilplease on December 16, 2008 - 1:07pm Permalink | Subthread | Parent | Comments top

What do you think is the "real situation" that required calling the election in October? Harper "already knew" what ???

I'm not being sarcastic or anything, I just honestly don't know what you are talking about. I understand the creeping fascism part, but I mean specifics - is there some sort of event or something you are anticipating?

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jografy on December 16, 2008 - 4:07pm Permalink | Subthread | Parent | Comments top

I was commenting on Leanan's quoted piece on Harper where he is admitting the possibility of a depression. The government knew how bad the economic outlook was and called the election to make sure the vote preceeded any bad news about the economy. Note that in the campaign they were still talkin g budget surplus and lots of other good news stuff. The opposition wasnt any better. All parties shied away from saying anything meaningful about the economy during the campaign. I am afraid Canada is served no better by our political class than is the USA. Perhaps we are served worse in that we are a much more docile and pliable group than are the people of the USA and therefore bestow more implied responsibility upon our leaders. We are more likely to accept fascism I think. No I don't expect a one event catastrophe like hitting the ice berg but I think a gradual but rapid deterioration and with it an increase in fear in the population.

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advancednano on December 16, 2008 - 6:24pm Permalink | Subthread | Parent | Comments top

Conservatives keep big lead in the polls.
http://www.canada.com/topics/news/national/story.html?id=1072845

Canwest News Service and Global National poll said the Conservative party would garner 45 per cent of the vote and score a majority victory if an election were held today. (Dec 13) The poll showed 65% wanted Ignatieff (new liberal leader) to work out a compromise with Harper
http://www.ottawacitizen.com/Public+wants+compromise+coalition+poll+find...

Shaping up as either a likely Conservative majority or the coalition chickening out.

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jografy on December 16, 2008 - 9:01pm Permalink | Subthread | Parent | Comments top

Yes the polls are squarely for BAU. I think we will see either a strengthening of this poll trend or something really wild by the time parliament reconvenes. If January does turn out to be full of bad economic news and lay offs opinion will really be in flux. Harper might have been smarter to let the coalition be in charge for a few months of economic disaster and let them take the blame. The coalition parties havce not made any proposals that seem to be effective. It is likely that an automotive bail out will hold the balls in the air for a few extra months. But a few billion dollars will get burned up fast and then what? It isn't even guaranteed that "loan guarantees", the method that the Canadian gov't is proposing to use to help the companies will even work. Up to now the MSM have been saying that banks won't lend because they are afraid the borrowers wont pay it back. What if the real reason is that the banks need to hold the cash to pay off their own obligations near and mid term? They wont want to lend the cash even if repayment is guaranteed if they need the cash sooner. It will be interesting over the next few weeks.

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Leanan on December 16, 2008 - 12:31pm Permalink | Subthread | Parent | Comments top

Russia's industrial activity plunges

MOSCOW – Russia's industrial production plunged beyond expectations in November, fresh evidence that the economy may be entering a recession that will be deeper than previously feared.

Output fell a stunning 10.8 percent from October to November, an official from the Federal Statistics Service's press office said Tuesday. Production contracted 8.7 percent in November from the same month last year, marking the biggest falls since the 1998 financial crash.

Manufacturers have been strangled by choked credit markets and plunging demand for commodities, particularly metals.

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thirra on December 16, 2008 - 6:26pm Permalink | Subthread | Parent | Comments top

VK,your comment that China is flirting with recession is a masterful understatement.
IMO,China is on the edge of a precipice.Look at the basics,they are not new.

A massive overpopulation problem,environmental degradation on a huge scale which affects food production and public health,unsustainable use of coal for electricity generation,ethnic divisions which have already caused civil strife and so on ad nauseum.
The economic downturn will be the shove that sends the whole dirty shebang over the edge.
It is interesting that in Australia,we are not hearing the "China will save us"mantra anymore.Not even from Beijing's representative in Canberra,our somewhat less than esteemed Mr 5% PM.

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152 comments on DrumBeat: December 16, 2008

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