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Corona-Depression: Southern Europe Will Never Recover

Corona-Depression: Southern Europe Will Never Recover



Corona-Depression: Southern Europe Will Never Recover Tyler Durden Sun, 06/28/2020 - 08:10

Authored by Guillaume Durocher via The Unz Review,

Bad news for southern Europe. It looks like coronavirus will further entrench the European Union’s long-standing disparities between north and south.

According to the European Commission’s estimates, the economies of Italy, Spain, and Greece will all shrink over 9%. By comparison, the EU average is 7.4%. France will shrink 8.2%, while most Nordic/Germanic countries will shrink less than 6.5% (that’s Germany, the Sweden, Denmark, Austria, Finland).

EU unemployment expected to rise from 6.7% to to 9% this year. Unemployment will rise to 9.7% in Portugal, 10.1% in France, 11.8% in Italy, 18.9% in Spain, and 19.9% in Greece. Germany will have 4%.

Deficits are going through the roof, from 0.6% of GDP in 2019 to 8.3% this year. Debt will rise to over102% of GDP, with huge disparities: over 115% for Spain and France, and almost 160% for Italy and 200% for Greece. By contrast, Germany’s debt will rise to 75% of GDP and Great Britain’s to 102%.

In terms of jobs and debt reduction, all of the hard-won gains of the past five years or so have been annihilated.

Nominal GDP per capita (in euros) in selected European countries (source: Eurostat). Italy and Greece never recovered the standards of living of the early 2000s. Note France and Germany decoupling since 2010.

Unemployment (%) in selected European countries (source: Eurostat). Southern European countries never recovered from the 2010 eurozone crisis. Notice that France’s performance has been noticeably worse than Germany’s and Britain’s since then as well.

Macroeconomically, France is now effectively part of southern Europe. From around 1965 to 2000, France was, uncharacteristically, significantly richer than Britain. In the 90s, France was about as rich as Germany, which was then hobbled by the annexation of formerly communist eastern Germany. Today, not having its own currency (unlike Britain) and having an enormous welfare and overregulated labor market (relative to Germany), there is no denying that France is falling behind.

Even before the COVID recession, southern Europe was barely on track for slowly growing out of debt. Now these hopes are completely dashed.

The economic disparities between northern and southern Europe – which have been manifest at least since the late nineteenth century and particularly since the Second World War – are going to become deeply entrenched.

This is part of the reason that I am skeptical of short or even medium term race war scenarios in Western Europe. The fact is that the most diverse and, most often, zealously diversitarian parts of the Western world – Germany, the Netherlands, the Nordic countries, Great Britain, the United States, and the former White Dominions, mostly of north-west European and Germanic background – continue to be more economically dynamic.

Northern Europe and its colonial offshoots continue to be better at creating economic wealth – despite being hobbled by African, Islamic, and Hispanic minority populations which represent an economic drag relative to the natives – than comparatively homogeneous southern European nations and their colonial offshoots (namely the Whitish nations of Argentina and Chile, which have a fair amount of Amerindian blood).

In the 90s and early 2000s, the European Union could still confidently hope that, despite considerable inequalities, its nations would gradually converge to the same standard of living and level of development.

These hopes were encouraged by peculiarly Boomer assumptions: that wealth grows on trees and everyone is equal. When the euro common currency was created in 1999-2002, the European Central Bank declared that the public debt of southern European countries was just as credit-worthy as that of Germany and investments in them were effectively be subsidized. German and, especially, French banks jumped at the opportunity make massive investments in southern Europe, leading in particular to a hypertrophied public sector in Greece and a huge property bubble in Spain. The bubble burst circa 2010.

All this has great political ramifications. The scale of the economic disaster in southern Europe is presumably why German Chancellor Angela Merkel agreed to a remarkable doubling of the EU budget by €500 billion over the next three years, raising EU loans to fund transfers to countries hit by coronavirus, particularly southern Europe.

This improvized quasi-federal scheme is quite unprecedented, in terms of speed and scale, in EU history. As Jean Quatremer observes, given that the new budget would be financed by relatively painless loans, European leaders may have strong incentives to resort again to such plans in order to find the concluding fudge during their interminable summit negotiations.

Significantly, it appears that the German establishment – not counting the German Constitutional Court – has basically accepted the ECB’s adoption of Anglo-style mass lending to shore up the economy. If continued indefinitely, this will presumably prevent a 2010-11-style financial panic in southern Europe, but this has controversial redistributionary and inflationary implications in the medium term.

Today, even not accounting for highly-fertile immigrants, northern Europe’s fertility seems to be somewhat higher than that of southern and eastern Europe, I suspect because (potential) parents enjoy superior childcare/welfare services and higher/more secure incomes in northern Europe.

If southern Europe does not recover economically, we can expect continued depopulation as their fertility rates remain depressed and their more enterprising youth, particularly the educated, head north. These nations’ financial and political dependence on the north will grow. North-European economies will of course benefit from the inflow of southern European immigrants, partly counteracting the effects of Afro-Islamic immigration.

Politically, we have fertile ground for instability. The Macron régime is already barely able to keep the more uppity elements of the (neo-)French population – whether white gilets-jaunes or Afro-Islamic BLM marchers – at bay.

Italy looks to be on the verge of explosion. Both the political establishment and the people at large are becoming anti-EU. The inchoate populist-leftoid Five-Sar Movement has collapsed. Matteo Salvini’s nationalist Lega is being outflanked . . . by the even more nationalist Brothers of Italy.

Imagine that the euro-globalist establishment in these countries will now have to manage these pressures with additional grinding years of mass unemployment and belt-tightening. Italy has strong prospects for decisively flipping to a national-populist regime in the coming years and joining the ranks of Visegrád. (I am less optimistic for France.)

In the long run, I am talking 30-40 years, we can expect that northern Europe will become so dysfunctional that people prefer living in southern or eastern Europe. Non-Whites currently make up around 20% of the north-west European population. When this rises to 40 or 50%, we can expect the situation to get very unstable indeed.

Hopefully, by then , the southern and eastern Europeans will have taken note of their brethren’s mistakes and start taking the necessary measures. I mean the adoption of enlightened biopolitics: the preservation their ethno-national identities (accepting only assimilable immigrants, including fellow Europeans) and systematic policies to ensure their nations reproduce and, more than that, do so with a view to improving genetic and phenotypic quality. European nations will be so marginal in the world by then that we will really have no room for yet more excuses, delusions, and half-measures.

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DAX – PMIs paint a bleak picture for manufacturing but China offers hope

Manufacturing remains in trouble China seeing some growth but unconvincing Bearish confirmation for DE30 index Manufacturing PMIs released throughout the…



  • Manufacturing remains in trouble
  • China seeing some growth but unconvincing
  • Bearish confirmation for DE30 index

Manufacturing PMIs released throughout the day have made for pretty miserable reading and even those in China barely registered any growth after a lengthy period of contraction.

The Chinese data did offer some cause for hope at least, despite ultimately barely sitting in growth territory. The trajectory is positive and boosted by targeted stimulus measures that are seemingly working. External demand remains a problem but a bump in domestic demand is promising.

The sector in Europe is looking particularly grim with demand remaining extremely weak, backlogs falling and layoffs expected to accelerate over the months ahead. That’s unless we can see a rebound in activity which is looking very unlikely at this stage with the global economy struggling for any positive momentum against the backdrop of high interest rates.

The PMIs from the US were a little better, particularly the ISM reading which significantly beat expectations but even here, it remains below 50 and therefore in contraction territory. With interest rates set to remain “higher for longer”, things aren’t likely to dramatically improve for the sector.

A very bearish signal for the DAX

The DE30 turned lower again today after staging a mild recovery in recent sessions and the move could reinforce bearish views on the index.

DE30 Daily

Source – OANDA on Trading View

The reason is that the move lower came after a retest of the 200/233-day simple moving average band, following the breakout last week. The rotation lower now could be viewed as confirmation of the breakout and therefore a bearish signal.

The next potential area of support could be seen around 15,000 where prior support and resistance falls around the bottom of the descending channel.

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Can An ‘Independent’ Kennedy Destroy “The Whole Left-Right Demon-Driven Pyschodrama”

Can An ‘Independent’ Kennedy Destroy "The Whole Left-Right Demon-Driven Pyschodrama"

Authored by James Howard Kunstler via,





Can An 'Independent' Kennedy Destroy "The Whole Left-Right Demon-Driven Pyschodrama"

Authored by James Howard Kunstler via,


“Intents have been overtaken by events.”

- Jacob Dreizin

You have to wonder what took Bobby Kennedy, Jr. so long to recognize that the Democratic Party was a home that he had long ago been turned out of, like a dog that has peed on the carpet too many times.

At the end of last week, Mr. Kennedy intimated that he might run for president on an independent line.

If he manages to get that line on the state ballots - and you can easily imagine New York and California trying to thwart him - it will change all the current calculations about the 2024 election.

As of right now, the Party of Chaos is living up to its name. They continue to present an obviously false and ridiculous consensus among themselves that “Joe Biden” is running for reelection. In fact, “the Big Guy” is about to get run through a wringer of the most abject public disgrace as his already-well-known crimes of bribery and treason get conscientiously laid out for all to see with cold and implacable decorum. Even the mind-fucked spawn of the Ivy League, toiling away on their CIA-owned newspapers and cable news networks, might find themselves forced to spin their narrative in a new direction.

“Joe Biden” is now a monumental embarrassment and a liability to our country, let alone to the degenerate party that owns him. Sub rosa efforts must be in motion to persuade him to resign before the impeachment inquiry spotlights all those telltale bank records, but they will fail to overcome his demented pride. He’ll ride this thing out to the bitter end, when he can use the last tool at his disposal to officially pardon everyone involved in his family’s racketeering operation. The longer the party pretends to support him, the closer the party itself skates toward self-destruction. Also consider: if allowed to play out, the impeachment inquiry will implicate the DOJ and the FBI in obstruction of justice — exposing many Deep State blob players to danger of prosecution.

Gov Gavin Newsom dangles himself above the fray as the deus ex machina who can touch down in DC and make all the Democrat’s problems go away. Such an attractive fellow! Great teeth and hair! Tall as a sequoia! And such a smooth talker! The woked-up suburban ladies who comprise the party’s main voting bloc grow moist in anticipation of Gov. Newsom landing on-stage like a demigod out of a Mozart opera.

But how do you think he’ll make out in an election when the airwaves are filled with oppo ads showing his toothy and hairy visage inset against scenes of homeless junkies and looting flash mobs? Try blaming that on climate change.

What else does he stand for? Censorship? Forced vaccinations? Child sex mutilations? Open borders? News-flash: these are increasingly unpopular, except among an easily-identified depraved elite.

Indeed, the whole Left-Right demon-driven psychodrama is proving impossible to live in as it throbs and pulsates toward something like civil war. And it has obscured the truly potent idea that the nation might actually be capable of solving its problems by facing up to them and changing how we act. That potent idea might be what voters will see in Bobby Kennedy if he can get their attention. Mr. Kennedy would dismantle the heinous partnerships between private corporations and the US government that loosed the Covid-19 op on the world and asset-strips the middle-class. He favors closing the border and a reevalution of immigration policy. He aims to negotiate an end to the ignoble Ukraine war project. He’s determined to disassemble the security state apparatus that’s destroying the US Constitution and citizens natural rights with it.

Mr. Kennedy says he can bring divided Americans together on these dire matters. It’s conceivable that his message might go over with enough rancor-weary voters to pull off a tour-de-force plurality in a three-way race, where nobody wins enough electoral votes to settle the contest, which then moves to the House, like in the old days of Jefferson and Burr. The rest is election mechanics, some of it very sinister when you consider all the election-rigging booby-traps already in-place such as mass mail-in ballot harvesting, no voter ID requirements, and the still-mysterious hookups of vote-counting machines to the Internet. But, at least, Mr. Kennedy running on an independent line will be a hard whap upside the Democratic Party’s thick skull, maybe even a death-blow to the party. They made a big mistake trying to un-person him. He’s on a hero’s journey at a moment in history when America dearly needs a hero.

*  *  *

Support his blog by visiting Jim’s Patreon Page

Tyler Durden Mon, 10/02/2023 - 16:20

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Small Business Bankruptcies Surge In 2023, Five Reasons Why

Small Business Bankruptcies Surge In 2023, Five Reasons Why

Authored by Mike Shedlock via,

Small business bankruptcies are at…



Small Business Bankruptcies Surge In 2023, Five Reasons Why

Authored by Mike Shedlock via,

Small business bankruptcies are at a much higher pace than any year since the Covid pandemic...

Small business bankruptcies from the American Bankruptcy Institute via the Wall Street Journal

The Wall Street Journal reports There’s No Soft Landing for These Businesses

Nearly 1,500 small businesses filed for Subchapter V bankruptcy this year through Sept. 28, nearly as many as in all of 2022, according to the American Bankruptcy Institute.

Bankruptcy petitions are just one sign of financial stress. Small-business loan delinquencies and defaults have edged upward since June 2022 and are now above prepandemic averages, according to Equifax.

An index tracking small-business owners’ confidence ticked down slightly in September, driven by heightened concerns about the economy, according to a survey of more than 750 small businesses. Fifty-two percent of respondents believed that the country is approaching or in a recession, said the survey by Vistage Worldwide, a business-coaching and peer-advisory firm.

Robert Gonzales, a bankruptcy attorney in Nashville, said he’s now getting four times as many calls as he did a year ago from small businesses considering a bankruptcy filing.

“We are just at the front end of the impact of these dramatically higher interest rates,” Gonzales said. “There are going to be plenty of small businesses that are overleveraged.”

Five Reasons for Surge in Bankruptcies

  • Rising Interest Rates

  • Surging Wages

  • Tighter Bank Credit

  • Overleverage

  • Work-at-Home Curtailing Demand

Fed Rate Interest Rate Hike Expectations Are Still Higher for Even Longer

The Fed has hiked interest rates to 5.25% to 5.50%. It’s the highest in 22 years.

And Fed Rate Interest Rate Hike Expectations Are Still Higher for Even Longer

Surge in Wages

Minimum wages have surged. Unions are piling on. Small businesses have to offer prevailing wages or they cannot get workers.

In California, Minimum Wage for Fast Food Workers Jumps 30% to $20 Per Hour. Governor Gavib Newsom called it a “big deal”, I responded:

A Big Deal Indeed, Expect More Inflation

Yes, governor, this is very big deal. It will increase the cost of eating out everywhere.

The bill Newsom signed only applies to restaurants that have at least 60 locations nationwide — with an exception for restaurants that make and sell their own bread, like Panera Bread (what’s that exception all about?)

Nonetheless, the bill will force many small restaurants out of business or they will pony up too.

30 Percent Raise Coming Up!

If McDonalds pays $20, why take $15.50 elsewhere?

The $4.50 hike from $15.50 to $20 is a massive 30 percent jump.

Expect prices at all restaurant to rise. Then think ahead. This extra money is certain to increase demands for all goods and services, so guess what.

Other states will follow California.

Biden Newsome Tag Team

Biden’s energy policies have made the US less secure on oil, more dependent on China for materials needed to make batteries, fueled a surge in inflation, and ironically did not do a damn thing for the environment, arguably making matters worse.

See  The Shocking Truth About Biden’s Proposed Energy Fuel Standards for discussion of the administration’s admitted impacts of Biden’s mileage mandates.

Newsom is doing everything he can to make things even worse.

The tag team of Biden and Newsom is an inflationary sight to behold.

Bank Credit and Over-Leverage

In the wake of the failure of Silicon Valley Bank, across the board small regional banks are curtailing credit.

The regional banks over-leveraged on interest rate bets. And businesses overleveraged too, getting caught up in work-from-home environments that curtailed demand for some goods and services.

The bankruptcies will fall hard on the regional banks.

Add it all up and things rate to get worse.

Tyler Durden Mon, 10/02/2023 - 15:40

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