Friday, December 26, 2008

For Those of You Who Like Charts

Well, one good turn deserves another. So if, like Paul Krugman (and me, I think, though I hadn't gotton as far as thinking through all the implications of what was happening when I posted) you take the view the Ukraine industrial output chart I put up yesterday is the smoking gun (or starter's pistol, or line judge flag, or whichever metaphor works for you) that tells us that the second great depression has now begun, then here are some more of those tell tale charts to put in you pipe and smoke (or if , like Huck Finn that is your preference, to chew on),

Japan industrial output isn't exactly falling at the same dramatic pace as Ukraine, but a 16.2% year on year fall isn't to be sniffed at either.

And exports, which drive the Japanese economy, were down by 26.7% in the same month. Even more to the point, deflation is baaack, or almost back, since "core" core prices hit zero (or 0.1% below current overnight BoJ interest rates) in November, and outright deflation surely isn't far behind.

You can find more detail on all today's Japan data over at the Japan Economy Watch Blog, and for those of you who want some more deflation background on Japan, well, Krugman has the goods here (extermely wonkish)

Moving nearer to home we have Germany. Here is the latest (flash) December manufacturing PMI for Germany, which is just about as point of the spear as you can get in terms of just in time data.

The slope of that line looks pretty telling doesn't it, especially if you are in to depression economics. Then we have the November new orders chart, another shocker, and indicator of much worse to come, I think.

Now going back to this point:

“There is a burgeoning economic crisis in the European periphery,” Krugman said on the ABC network Dec. 14. “The money has dried up. That’s the new center, the center of this crisis has moved from the U.S. housing market to the European periphery.”

I think this is largely true, if we mean by the periphery the UK, Ireland, Eastern and Southern Europe, but the periphery in a very literal sense always ends up biting the hand that feeds it, since German industry depends on exports to that periphery perhaps more than to anywhere else, so it is not surprising that once the periphery folds, the shock wave moves on in towards the centre. I don't know if the blast that which is about to hit Germany next year will count as a depression, but if it doesn't, it is going to be a damn close call.

Moving now towards the periphery, we have Spain, where the money certainly has dried up, and with it demand for Spain's manufactured products. The November PMI was contacting at an all time series maximum for any country.

Central Europe

The whole of central European manufacturing is now contracting rapidly. First off, the Czech Republic

Then Poland

And Hungary

Then There Is Russia

Moving on now to Russia, industrial output was down by 8.9% year on year in November, so it hasn't yet reached Ukraine levels, but at the rate of contraction they are experiencing I wouldn't be too confident that that state of affairs will last too long.

And Finally China

Where the November PMI also showed quite a strong contraction:

So Where does that leave us?

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