Italy's Temporary "Glass Half Full" Insanity

Tyler Durden's picture

Yesterday it was the French, with record high unemployment and record low bond yields. Today, it is the turn of the Italians as the unemployment rate rose to 13.2% - the highest since records began - as bond yields continue to plumb new "lower rates will spur lending which will spur economic growth which will create jobs" lows...

As Bloomberg reports,

Renzi said today’s increase in the unemployment rate is partly due to more people starting to look actively for a job. The so-called “discouraged” workers who are not looking for work are not counted in the Istat jobless data.


“Unemployment data are worrying,” said Renzi, whose comments on the sidelines of an event in Catania were broadcast by SkyTG24. “We cannot deny the problems out there, still we shouldn’t see the glass half empty either.”

Is this worrying?


As we asked - entirely rhetorically - before - just what is it that ECB sovereign QE supposed to achieve?

*  *  *

As Reuters reports, deflation looms...

Italy is stuck in a rut of diminishing expectations. Numbed by years of wage freezes, and skeptical the government can improve their economic fortunes, Italians are hoarding what money they have and cutting back on basic purchases, from detergent to windows.




"I see an enormous danger that we will still be in this situation in six months' time, and the longer it lasts the harder it is to get out," says Gustavo Piga, an economics professor at Rome's Tor Vergata University.




"I always tell myself that if we can get through this period we will come out very strong, but I'm honestly not optimistic about the future."

But it is considerably more worrisome than that...

Fully 70% of new jobs in Italy in the third quarter of this year were filled by temporary contracts, according to labour ministry statistics released Friday that highlighted the precariousness of the employment picture.

*  *  *

All Europe needs is bond-buying-backed lower rates and it will reach escape velocity... right?

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max2205's picture

Bond yields are supposed to go down in a depression....

staaaawks , not so much

Arius's picture

by looking ar the rest ... Obama has done really well and has cleared the way, next elections are a lock for the dems ... just sayin'

hobopants's picture

"Nothing a good war won't fix right up" - Every banker who ever lived.

Sudden Debt's picture

Americans should watch France more closely.

France is the number onesocialist country in the world, followed by America as the second most socialist country in the world.

But the reason for high unemployment in France is that it cost the employer AT LEAST 72.000 euro's to fire a employee. So... Nobody dares to hire or fire anybody anymore over there.
And why should America watch France?
Because Obama will also adapt that tactic pretty soon in a effort to halt unemployment.

And as a note, when Americans call Europe socialist pigs... :)
They forget that they are runner ups as number 2 in the world
America just does it at such a costly way with a enormous high bureaucracy that it's even more terrifying than anything in the world.

tarabel's picture



No doubt. But we plan on fixing that while Europe plans on expanding it.

directaction's picture

I was in Rome for a week back in '86. Then again a few months ago. There've been a few changes.

The biggest change I saw was that back in the 80s there were actual Italians living there.  

hobopants's picture

You mean those weren't Italians I saw chanting allahu akbar and waving scimitars about? Boy, our tour guide was full of shit.

Sudden Debt's picture

We often do citytrips to Rome because it's pretty cheap to go but to live there... A small appartment costs over 600.000 euro's.
It's as expensive as Paris!

hobopants's picture

You're a lucky bum to have all that history nearby, wish I could see it again but I keep wasting my money on precious metals.

AdvancingTime's picture

It is ironic and only fitting that Italy is shaped like a boot. In many ways Italy could be viewed as the Achilles heel of Europe. Italy is loved and often the travel destination by many Americans and for good reason, it is downright charming, but that does not mean it is a good place to put your money.

Italy is also the third largest economy in the Euro-zone after Germany and France and yet it holds the largest public debt totaling over 2 trillion euro. Almost everyone agrees that Italy’s public debt is unsustainable and needs an orderly restructuring to avert a default, but as usual in the Euro-zone no action is happening. More on why Italy may bring down the euro in the article below.

Tom Green Swedish's picture

Italy is totally trashed no recovery ever.

escapeefromOZ's picture

I am in Italy . Recently I discussed the unemployment rate with other citizens . They do not believe the statistics published by the government . They think that the unemployment rate is much higher than 13.2 % . The ISTAT engages in the same type of manipulation of statistical data the USA government does .

StopBeingParanoid's picture

Well, for sure statistics don't include all the people who are actually working ("in nero") AND getting unemployment benefits. Italy has some €200bn shadow economy, so if anything Italians should be more optimistic about what ISTAT says...

Tinky's picture

I recently spent some time in Italy, and concur with others who suggest that the stated rate is very low. I also met more than a few small business people who were disgusted with the ridiculous Government policies and capital controls, and as a result have simply re-incorporated in Singapore, Malta, etc. So, as one would expect, the more desperate the Government's actions become, the less effective they will prove to be.

I also received a wire transfer (originating from Amex) at an Italian bank. Note first that there is a limit of €1000 on transfers into Italy! After the usual security questions, the clerk asked me what my profession was, and how much I made last year. I nearly flew off the handle, but it wasn't her fault – she was simply reading the prompts on her screen. She claimed that it was the intermediary (i.e. Western Union) that had posed the questions, but I didn't (and don't) believe it. So I told her that I was a Lion Tamer, and that I made $4,000 last year. She typed it in and I got my money.

Capital controls at their finest.

tarabel's picture



Good man. You win a cookie.