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Reality Strikes As Italy Slashes Economic Growth, Hikes Deficit Forecast
For all those who thought the smooth-talking, avuncular Goldman operative Mario Monti would never lie when he said "Italy is fine", we have some bad news. He did:
- *ITALY REVISES 2012 GDP TO -2.4% FROM -1.2%
- *ITALY REVISES 2013 GDP TO -0.2% FROM GROWTH OF 0.5%
- *ITALY RAISES 2012 DEFICIT TARGET TO 2.6% FROM 1.7%
- *ITALY REVISES 2013 DEFICT TO 1.6% OF GDP FROM 0.5%
- *ITALY SEES 2012 DEBT AT 126.4% OF GDP, 2013 DEBT AT 127.1%
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Ooooops!
Hope that "unlimited" OMT has enough capacity to bail out Italy, Spain, Greece, Portugal, and eventually France, Germany, etc.
The ECB should've done a stealth bailout of Italy by moving their HQ to Italy and paying Italians to build their new facility. With how much Italian companies are forced to overcharge due to regulations, they probably would've managed to balance the budget for this year.
Dood, wake up. Mario Draghi HAS NOT BOUGHT A SINGLE BOND from his plan.
It's all jawboning. NOTHING HAS BEEN ACTUALLY DONE, probably because the Germans made a deal:
"You can claim you're going to do all these things, and we'll say supportive things, but under NO CIRCUMSTANCES are you allowed to actually do any of them."
That got Spanish yields under 6%. When someone calls his bluff and he can't buy any bonds, it will all disintegrate.
"I lied."
http://www.youtube.com/watch?v=_wk-jT9rn-8
Time for the inflation magic fairy to show up.
Real deficit = Nominal deficit - (inflation rate x total deficit)
Then Mario calls in reinforcements from TBTF, who lean on Uncle Ben to prop up the ponzi a little longer.
Hey, but look at the upside. Our deficit will only be 6.8% of the GDP in the coming FY.
Actually its 8.5% in 2012.
http://www.whitehouse.gov/omb/budget/Historicals
Hey, but look at the upside. Our deficit will only be 6.8% of the GDP in the coming FY.
Monti is a good German - he has done his Job of keeping the German economic oil tank full - this waste is then expressed in German GDP growth....
GDP is a truly terrible economic metric.
It is the waste needed to pay interest on Sov debt without costly political tension
omrpublic.iea.org/demand/ge_dl_ov.pdf He is also very popular in France......omrpublic.iea.org/demand/fr_dl_ov.pdf
You're a very thoughtful person. And you think about political realities. I look forward to your posts. Monti is a good german; yeah, that brings a smile to my face. After WW11, a lot of "good Germans" were simply liars. But then, that's no dis-qualification, is it.
costly political tension;" Yeah; well, it's sure cheaper than using Poland for a Chessboard to play with Tanks.
Hey, let's stop joking around! Nobody could have ever seen this coming!
/sarc
A report came out that the Canadians spent $11M in hotel rents while helping the Lybians.
Now, the Canadians are gone things are going to get worst.
Bullish!!!
Surprise!
Need. More. Inflation.
Solid investment grade, lol
"We don't need any bailout from the ECB to buy our bonds....D'OOHHHH!!!!"
Fortunately, Mario Draghi is Italian.
He also worked for Goldman Sachs.
Yes, an explosive mixture.
Benvenuto Italia!
Don Carleone: "and tell Luca Brazi i said come here....."
Argentina is about to be kicked out of the IMF for lying about their economic statistics.
I suppose we all do realize about half of Europe should be kicked out, too?
Has anyone noticed that no one has a plan to fix these numbers? Celebrations are convened when there is announcement that they will borrow more money, or more specifically, that someone is willing to lend them more money and deepen their hole. But a plan to fix it? Nada.
They are all stuck in the Old Normal of thinking that they can grow their way out. They cannot envision the reality that they are past the tipping point and growing will never get them out.
Instead, the goal is keep the juggled balls in the air, wait for a natural disaster to occur, and then they can blame all the evaporation of people on the disaster rather than themselves.
People love it and cant have enough.
Argentina a lot of other things that the EU did'nt ;)
This thing is all living on hope, and there is still plenty to be sold, although peak hope could be near now. But expect a tsunami of hope in the coming 45 days with the Obummer campaining on big nothings. This guy is better at selling hope than the Mexican lords are at selling coke.
Au contraire my friend... Obamacare has a gubermint plan in the works to facilitate the 'Private Medicinal Marijuana Program' into a facsimile ?GSE? [eg. private prison systems, etc.,]... where medicare will pick up the tab for your bong'spuff !
sayin it ain't so...
I'm just waiting for the bond vigilantes to ring the bell for "last call".
For a time that seemed likely and possible both.
But then it became clear that HFT is almost the majority of bond trading volume.
The vigilante reality was far too obvious. The governments will not allow ANYTHING to stop their juggling of balls in the air. If a vigilante shows up with size sufficient to undo HFT, he'll be killed.
We'll never hear about it.
Argentina is about to be kicked out of the IMF for lying about their economic statistics.
Congratulations you are now free!
<< Argentina is about to be kicked out of the IMF for lying about their economic statistics. >>
If they kick out all countries that 'lie' about their stats (i.e., apply that policy equally), no country would be left, would they?
Well, if it works for Argentina, then it will certainly work for the U.S. So that's the plan, is it Ben?
The IEA diesel consumption in Italy pointed in this direction for some time now - its not a surprise.
(diesel is the oil stuff which does the work)
PS also the Italian private car market is turning Greek.
The Drop in Greek car regs just gets bigger & bigger. (ACEA)
Jan – Aug 07 : 208,921
Jan -Aug 11 : 72,513
Jan – Aug 12 est : 42,072
One fifth of credit boom sales now.
Astounding either with or without a devaluation but those guys must have no tokens for domestic commerce.
The very big market of Italy could obviously become the next Greece with huge consequences for zee Germans.(what are the Current Volks ,Merc ,BMW sales in Italy , or is it all Polish Fiat 500s ?)
Jan -Aug 07 : 1,741,322
Jan -Aug 11 : 1,224,096
Jan – Aug 12est : 981,030….. a bit over half of credit bubble peak
Spain is a bit further along this path
Jan -Aug 07 : 1,119,050
Jan – Aug 11 : 568,349
Jan – Aug 12est : 520,216……just under half of credit bubble peak. (flat lining ?)
Spain would probally benefit most from a return to a domestic currency given its previous massive internal rail investments with for example 3 million+ people still using the Barcelona to Madrid plane shuttle in 2010 despite the presence of a high speed rail connection since 2008.
There is still a few Gems remaining in Spain (although not many)
A Christmas spent in Seville looks nice.
http://www.youtube.com/watch?v=QOCgVbDIpt8
Its Germany that is in trouble – In Germany YOU NEED Gas / oil central heating(currently 400KBD) ,Seville not so much although the culture of Siesta needs to be brought back for the summer months as air conditioning will be prohibitively expensive under the Spanish Peseta with only the rich affording airconditioning courtesy of
en.wikipedia.org/wiki/PS20_solar_power_plant
Cannot really understand why the Spainish & Italian do not default…..they are dead ducks withen the Euro.
Same political culture as Ireland I suspect , the guys on top have too much to lose.
Hey D of C, i've been following your posts for a while. What country in the Eurozone is even close to viable according to your energy consumption/import model ?
Well - they will never become energy secure but they can become semi viable only when they leave the Eurozone and become nations again rather then the post 1987 Europe of Extreme Market states.
The money / energy construct then works over shorter distances using surplus energy to feed domestic demand and investment rather then sustaining ultra long distance commerce and international banking energy / labour arbitrage operations.
The more countries go along the national road the less energy leakages.......for example despite the depression in Ireland aviation burns 3 times as much Kerosene as it did in 1990 despite slightly better engines.......this extracts from domestic demand.....
The domestic demand & fixed capital investment figures were published today in Ireland and they are quite horrible.......GDP is fine though.....
Total Irish domestic demand (current)
Y2007 Q1 : 43,003 Million
Y2007 Q2 : 42,115 Milllion
Y2012 Q1 : 30 ,915 million
Y2012 Q2 : 29,947 million
Don't be fooled by the banking spin in Ireland..(we are their best pupil)
Google
Economic Adjustment Programme for Ireland — Summer 2012 ...
In the above report they at least openly stated that they must take money from people so as to make private banks profitable. (think about that for a second ...... if so what is the function of private banks ?)
This is the extreme rentier dynamics that Micheal Hudson talks about.
There is no role for credit banks in a energy starved world - they can only function as parasites which is their natural gift.
FIAT FIAT FIAT and I am not talking about the Fiat 500 which is Polish made now.
The non national Euro experiment means we must export to countries where malinvestment is currently occuring so as to pay off previously malinvested debt...eventually when Germany is destroyed via migration following footlose capital & subsequent malinvestmet the capital will move back into previously broken countries ... and the cycle repeats......downwards into a entropy pit.
Its a entropy cycle - bank credit money only lives to run down existing social energy systems.
A global cul de sac.
Given that domestic customers are so much closer then external markets the energy lost from these pointless exports is huge.
This could otherwise be used to sustain domestic demand and rational investment.
Countries need to renationalise their money systems.
The last time total quarterly domestic demand was in the 29,000s was in the Year 2003
Back then stuff was a bit cheaper I gather and the population of the Irish state was far lower at 3.979 million rather then 4.484 million of 2011.
PS
Italian Diesel consumption
omrpublic.iea.org/demand/it_dl_ov.pdfWhat do you do for a living? If I was running a hedge fund in Europe I'd definetely want to interview you as a portfolio manager. Reality is a bitch; but it's all we got. The Aircraft Fuel usuage is symptomatic of the inflationary period we just lived through; Now, in the new normal, it looks in-correct to do so much long range shipping; then, it was "okay".
@Sat
I work for Chet Raymo ..... I am a character in one of his books so I find it impossible to leave the two-dimensional world of the page.............
Have you read the book, "The Tradgedy of the Euro"; the subject matter includes it's birth and how and why it was created. It's actually available on line to read for free; I believe it's in the library at www. Mises.com. The purpose of the Euro was to prevent the periodic de-valuations of the French Franc vis a vis the German Mark; to avoid embarrassment for the French Socialists and attacks by the market; it was forced on Germany by blackmail; their Chancellor at the time had to faithfully promise to go along with the joke in order to secure permission from France, UK, USA, to re-unite and become one country again; being Germans they actually did their duty and kept their promise. Most of the German population is completely mystified as to why their "leaders" ever got into this in the first place. The financial machinery behind the Euro looks like an alarm clock built by an eight year old; it's missing a couple of gears.
@Sat
The purpose of the euro was to replace the concept of the nation state (also a product of banking) with the lowest level of hell - the market state.
Read
The Shield of Achilles: War, Peace and the Course of History(2002) Philip Bobbitt
History is repeating itself - the Venetian banking system wishes to destroy.
www.youtube.com/watch?v=ryozM8twDUI
I think we can safely say there is a dis-connect between the "leaders" and the population. As long they can manage with "spin"; they will; civil wars are so messy.
Economic growth? Italy? Really? And then there's Spain. Really? Oh, and then there's the US. No shit - really? And, pardon me - China. Really?
We're barrelling down a tunnel we should have exited LONG ago. Instead of slowing down, we've accelerated, into the void, hoping for daylight, and everyone is along for the 'ride'.
"To Ludicrous Speed!!!"
How was your vacation good? Glad to hear it.
Global collapse....
Yep soon as someone offers money; wouldn't you know it; they need twice as much. Banksters what loathsome creatures.
So the Italian hockey stick was finally crushed by reality. Time to re-apply that hockey stick starting 2014. I expect them to expect at least a 2.0 percent GDP growth in 2014. After all in 2010 Greece was expected to grow by 2.1 percent this year.
The Titanic is also fine.
Well, you could say that; yes. It's certainly in no danger of sinking.
WHERE'S PAULSON, RUBIN, CORZINE, BLANKFEIN, DIMON, AND GEITHNER WHEN YOU NEED 'EM!?!?!?
Quick! Send Goldman's crack team of can-kicker profiteers!!!!! There's still a few American tax-payers ready to take it to save the global financial system, otherwise, just CHARGE IT!
Bunga Bunga time
Very nice. Rating: AWESOME.
I look forward to a riot-ly Euro Christmas.
Can't they help a guy out in need ; a trillion at 0% for eternity should do it.
What is this "reality" you speak of?
AAPL over $700/share and "deficits don't matter" are playing on the monkey grinder.
Here are Ben and Timmy and the amazing QE organ: http://upload.wikimedia.org/wikipedia/commons/8/89/Organ_grinder_with_monkey.jpg
A little music, some cotton candy, and the kids will be so happy (in the moment).
I thought the Concordia was the only thing that sunk.
Optimistic
Burn baby burn! Come on. Lets have this collapse all of a sudden. I'm sick of this stupid monopoly money, and would like the return on the DMARK. The world needs a first would nation that can manage its money properly post collapse.
This is getting ridicuous. I wish something would blow up, either an Iranian Nuke Plant, or 10,000 Chinease fishing boats, or something to get the ball rolling.
Be careful what you wish for.
But much better than Uganda.
Everyone should know better by now.
Just BTFDYFI.
Noi ora seamo tutti come Schettino!
Am I the only one who looked at these numbers and said, "dang these are pretty good when compared to the US".
so are we going to have to wait YEARS for the Italy shit show? Bring. it. on.
BULLISH! More QE!
Jeff Grundlach was interviewed today or yesterday as saying that the US Ten Year could increase 100 basis points in interest by December. This corresponds to a lower price for the Note; which trades in the aftermarket, (after issued); it's enormously significant; I'm having a lot of trouble getting to the actual interview, apparently it was on a segment of CNBC. I'm thinking seriously of going short the Ten Year in the Futures market. Grundlach is actually as smart as I am; and he has a lot of recent experience in upper layers of "Bond World". So, soon, we could be talking about the bond vigilantes attacking our debt; not Spains. Of course this is inevitable; but he's talking about right now, basically. If anyone can get the video interview to play, would they please post it on Zero Hedge; it certainly belongs here. Cheers.
Those numbers seem way to optomistic