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Is Europe's Recession Really Over?

Soulskill posted about 8 months ago | from the mission-accomplished dept.

EU 159

jones_supa writes "Bloomberg, the WSJ and the NYT cheered to report that the Euro Zone's economy has showed signs of recovery after two years of decline. They're all based on the news that Eurostat, the keeper of economic statistics for the European Union, says GDP grew 0.3 percent within the EU's borders from the end of March through June. As Olli Rehn, Eurostat's vice president, writes on his blog: 'I hope there will be no premature, self-congratulatory statements suggesting "the crisis is over."' He calls the GDP report only another sign of 'a potential turning point in the EU economy.' The quick conclusion by some economists and some in the news media that a slight rise in one quarter's GDP means a recession is over ignores how experts figure out when an economy is either in a significant downturn (a recession) or enjoying steady growth (an expansion)."

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159 comments

Betteridge's law of headlines (5, Funny)

gwjgwj (727408) | about 8 months ago | (#44568111)

No.

AC's law of watching the data ... (1)

Anonymous Coward | about 8 months ago | (#44568219)

and throwing the Economist's bone's, killing a chicken, and skaking the Magic Eight Ball: [purdue.edu]

Question: what will the European economy do?

"My sources say no"

Which is much more informative than Alan Greenspan EVER was.

Re:Betteridge's law of headlines (1)

intermodal (534361) | about 8 months ago | (#44568233)

You beat me to it. But basically, you're right. The sad thing is, in this case, a simple statement of negation would have sufficed for a headline.

Re:Betteridge's law of headlines (5, Informative)

ShanghaiBill (739463) | about 8 months ago | (#44568587)

No.

Actually, yes, in this case. People tend to think that "recession" has a fuzzy definition, and means bad economic times, or high numbers of jobless. It doesn't. Recession means two or more consecutive quarters of economic contraction. Period. A recession is not "over" when you get back to the previous levels of income and employment. It is over when you hit bottom and start to recover.

Re:Betteridge's law of headlines (2)

icebraining (1313345) | about 8 months ago | (#44568851)

Problem is, a single growing quarter doesn't mean we've hit rock bottom. So, yes, technically this recession may be over, but that doesn't mean we won't have a new one half a year from now.

Re:Betteridge's law of headlines (2)

lightknight (213164) | about 8 months ago | (#44569637)

http://www.merriam-webster.com/dictionary/recession

Depends which dictionary you are consulting.

Definition #3 is, perhaps, what the general public is running with:
3: a period of reduced economic activity

Re:Betteridge's law of headlines (2)

Prof.Phreak (584152) | about 8 months ago | (#44571359)

Doesn't mean they won't revise the number 6 months from now. I'll go with the pesimistic ``NONE of the problems have been resolved... so... why the optimism?''

Re:Betteridge's law of headlines (4, Informative)

Windwraith (932426) | about 8 months ago | (#44568695)

Being from Spain, this guy is right. The answer is a simple "no". I am giving zero craps about the wellbeing of the EU as a thing, but I can't take any more tax raises and salary cuts as we are. A new tax raise AND salary cut for all is coming soon. So yeah, the recession is here to stay.

Re:Betteridge's law of headlines (1)

Dogtanian (588974) | about 8 months ago | (#44569001)

No.

There's a slight complication here, in that *if* this is a case of Betteridge rather than a legitimate question, then the answer the headline is implying is already "no". It's not "Is Europe's recession over?", it's "Is Europe's recession *really* over?" (as in, other people have already said that and *this* is the note of doubt implying a "no").

In this case, then, *if* one assumes this is a case where Betteridge is relevant, then, the "correct" answer should be "yes"!

Of course, Betteridge only applies in cases where the would-be assertion in a headline has been obviously rephrased as a fake "question" (*) purely because the story (and evidence) would be too flimsy- or nonexistent- to support it otherwise. It's not clear that this is the case here.

(*) It does not, as too many Slashdotters have assumed in the past, automatically apply to any headline in the form of a question

Re:Betteridge's law of headlines (2)

classiclantern (2737961) | about 8 months ago | (#44570451)

Not if they cooked-the-books the same way the Obama administration did here in USA. This quarter they included art, music, and poetry for the first time. I'm going to cook me up a big meal of contemporary sculpture for dinner.

Is Europe's Recession Really Over? (1)

geek (5680) | about 8 months ago | (#44568123)

nope.

Re: Is Europe's Recession Really Over? (-1)

Anonymous Coward | about 8 months ago | (#44568625)

There are no recessions with liberals in charge, only growth in the opposite direction.

Re: Is Europe's Recession Really Over? (0)

Anonymous Coward | about 8 months ago | (#44569095)

Q: How can you tell if 8% unemployment is good or bad?

A: If liberals are in charge then it's awesome! If not then it's horrible!

Big Mistake (-1)

Anonymous Coward | about 8 months ago | (#44568153)

It's not over if you use wrong tools to fight recession.
FED showed us how it's done. Just print the money and flood the Wall Street with it.
And print, and print and print and print and print print, and print and print and print and print print, and print and print and print and print print, and print and print and print and print and print and print and print print, and print and print and print and print print, and print and print and print

and rest of the losers, go to your daily 9-5
and work and work and work and work and work and work and work and work and work and work and work and work and work and work and work and work and work and work and work and work and work and work and work and work and work and work and work and work and work and work and work and work

Re:Big Mistake (0)

Anonymous Coward | about 8 months ago | (#44568751)

9-5? What kind of pussy country is that? Here in Spain most jobs are like 12-6 or worse. And we are getting salary cuts and lower minimum wages. And that's only for the ones lucky enough to have a job. (since at some point you will be the only remaining employee of your company, guess who takes the workload of the ones that got fired?)
Oh and our politicians don't print, they steal. It's even proven but there they are staying.

Re:Big Mistake (1)

Cimexus (1355033) | about 8 months ago | (#44568931)

Um .... I'm pretty sure 9 to 5 (8 hours) is longer than 12 to 6 (6 hours) ... unless you mean noon until 6am the next day (or midnight until 6pm, both of which seem ridiculous). Am I missing something obvious here?

Re: Big Mistake (0)

Anonymous Coward | about 8 months ago | (#44569017)

He was probably thinking 5 hours to 9 hours.

Re:Big Mistake (1)

Anonymous Coward | about 8 months ago | (#44569031)

Oh, thought he meant 9 hours for 5 days a week. I was trying to say 12 hours, 6 days a week.

Re:Big Mistake (0)

Anonymous Coward | about 8 months ago | (#44568975)

12-6, so a six hour day? Sweet.

Re:Big Mistake (0)

Anonymous Coward | about 8 months ago | (#44568939)

Can't be done in Europe, which is one of the reasons they're worse off than America or Britain.

Re:Big Mistake (1)

BenoitRen (998927) | about 8 months ago | (#44569409)

America is sitting on tons of debt and Britain isn't doing all that hot either. Europe isn't worse off at all.

Re:Big Mistake (1)

BenoitRen (998927) | about 8 months ago | (#44569343)

Someone didn't study their history. It's because banks keep printing money that we get economic crises.

Re:Big Mistake (0)

Anonymous Coward | about 8 months ago | (#44569633)

Yep, it's you. Governments printing money often is the way out of economic crises.

Betteridge is actually wrong this time (4, Informative)

Anonymous Coward | about 8 months ago | (#44568165)

A recession is defined as two consecutive quarters of negative growth. Thus, the recession is technically over.
 
Which doesn't mean it can't come back later.

Re:Betteridge is actually wrong this time (3, Insightful)

bill_mcgonigle (4333) | about 8 months ago | (#44568213)

Thus, the recession is technically over.

Technically, the growth needs to be measured in concert with actual monetary inflation. I don't know what the status is in the EU, but in the US, they *never* do that on state-controlled media.

More important is what the unemployment levels are like vs. historical norms. For instance, in the US, we'd need 3.5% growth for ten consecutive years to reach pre-2000 levels of employment. That level of growth was never achieved in the 20th century.

As I understand it, Spain, for example, is in much worse shape than the US in terms of employment.

Official numbers rarely reflect the condition of the common man.

Re:Betteridge is actually wrong this time (0)

Anonymous Coward | about 8 months ago | (#44568425)

" For instance, in the US, we'd need 3.5% growth for ten consecutive years to reach pre-2000 levels of employment. That level of growth was never achieved in the 20th century."

What the Fuck? With the exception of the mid-late 90s, we are at pre-2000 levels of employment now, dumbass. We have better employment now than in the 80s, 70s, 60s.

Re:Betteridge is actually wrong this time (0)

Anonymous Coward | about 8 months ago | (#44568469)

Spain overall unemployment @ 28%, the real teller is for males under 30 it's closer to 50%. Let that sink in a bit,, 50%! No wonder in the UK we are flooded by well educated young Spanish, willing to take waiter/waitress jobs, anything to earn some money.

Re:Betteridge is actually wrong this time (3, Informative)

ShanghaiBill (739463) | about 8 months ago | (#44568613)

Spain overall unemployment @ 28%

Spain also has a huge underground economy. Lots of people work "off the books" and are not counted in the official employment numbers.

Re: Betteridge is actually wrong this time (1)

dnadoc (3013299) | about 8 months ago | (#44568713)

I think the report is of real GDP, not nominal GDP. But in common parlance, a recession just means "the economy is not satisfactory" because of unemployment or inflation. It's like the word "Frankenstein". Meaning just ends up being usage, as Wittgenstein might say.

Re:Betteridge is actually wrong this time (3, Funny)

tlambert (566799) | about 8 months ago | (#44568371)

A recession is defined as two consecutive quarters of negative growth. Thus, the recession is technically over.

Which doesn't mean it can't come back later.

"A recession is when your neighbor loses his job. A depression is when you lose yours. And recovery is when Jimmy Carter loses his."
-- Ronald Wilson Reagan

Re:Betteridge is actually wrong this time (0, Flamebait)

Sponge Bath (413667) | about 8 months ago | (#44568529)

Ronald Wilson Reagan

Quoting Republican scripture I see. Everyone join in:

And Saint Reagan raised trickle down up on high, saying, 'O Lord, bless this thy economic voodoo that with it thou mayest blow thine enemies to tiny bits, in thy mercy.' And the Lord did grin, and the people did feast upon the lambs and sloths and carp and anchovies and orangutans and breakfast cereals and fruit bats and large chu...

Re:Betteridge is actually wrong this time (3, Interesting)

SolitaryMan (538416) | about 8 months ago | (#44568861)

Especially funny since Reagan and Thatcher basically created bubble-based economy.

Re:Betteridge is actually wrong this time (1, Informative)

Mashiki (184564) | about 8 months ago | (#44569959)

Really? I didn't know they were responsible for the implementation of Keynesian economic policy during the age of the great depression in the 1930's, and were fundamental in it's acceptance in the 1920's. Useful tip: Keynesian economics is what creates bubble economies.

Re:Betteridge is actually wrong this time (2)

Andtalath (1074376) | about 8 months ago | (#44571397)

That was the beginning of bubble economics, yes.
However, the eighties was when focus shifted from producing goods to just earning money.

That is the true bubble problem, no real valie behind the percieved value.

Re:Betteridge is actually wrong this time (0)

Anonymous Coward | about 8 months ago | (#44569081)

And then came the Great Obama, who had a stimilus of $900 Billion, a tax increase on the rich, a new medical plan, and everything else he ever wanted. But alas, the ONLY reason the economy is running at all is because the Fed is printing $80 Billion a month and buying 70% of all US Treasuries because no one else will.

All that and after 5 years unemployment has only JUST gotten to where it was when he started. Don't bring up the fact that 13 million unemployed people are no longer counted in those numbers now, because that will only show that is still much worse and it is a sin to besmearch the Obama.

Really, grow up. After Reagan we had what, 20 years of constant growth? And you blame HIM for the current economy, and failed to mention the current guy in charge who got EVERYTHING he ever asked for?

People on /. really are dumb now.

Re:Betteridge is actually wrong this time (1)

operagost (62405) | about 8 months ago | (#44568561)

Of course, when you're out of the recession but aren't recovering, it doesn't mean much.

Too early to call (2)

erice (13380) | about 8 months ago | (#44568591)

A recession is defined as two consecutive quarters of negative growth. Thus, the recession is technically over.

Which doesn't mean it can't come back later.

It seems to me that if you need two consecutive quarters of negative growth to call it recession, you should also need two consecutive quarters of positive growth to call it an expansion or recovery

One quarter of weak growth doesn't really tell you anything.

Re:Betteridge is actually wrong this time (3, Interesting)

ObsessiveMathsFreak (773371) | about 8 months ago | (#44569597)

A recession is defined as two consecutive quarters of negative growth. Thus, the recession is technically over.

This definition is fundamentally flawed. Under this, it is technically possible for an economy to decline indefinitely which never actually entering a recession. GDP change from quarter to quarter could progress like so

-2.0%, +0.1%, -2.0%, +0.1%, -2.0%, +0.1%, -2.0%, +0.1%, .....

Which works out at a -3.7% decline every year, but still technically no recession. This is what we refer to in the mathematical business as "absurd".

Unfortunately, this appears to be exactly how the political class across the Eurozone appears to doing. The continent is slowly imploding, but event one 0.1% quarter of growth is taken as proof that "The recession is over". The way the modern world is going, I'm really beginning to understand exactly how the Soviet Union operated on a political level.

Re:Betteridge is actually wrong this time (1)

Pretzalzz (577309) | about 8 months ago | (#44570419)

Unless the Europeans are a hell of a lot better at determining these numbers then we are, they are sure to be revised. More than once. There is no guarantee that 5 years from now 2nd quarter 2013 EU GDP will still be positive. For instance US fourth quarter 2012 GDP was initially -0.1%, revised to +0.1%, revised to +0.4%.

Debt-backed economies.... (1, Insightful)

Anonymous Coward | about 8 months ago | (#44568189)

... cannot recover. That's what debt is - a promise to work harder later than you work now. In the case of large public debt, it's a promise to force your children to work harder than you do.

Re:Debt-backed economies.... (0)

Anonymous Coward | about 8 months ago | (#44568295)

That is not what debt is. A debt is a promise to repay the principle amount of a loan and interest, if any. It has nothing to do with work. For example, I can work harder right now (hard as I can, hard as anyone can) but I can't afford a house right now.

You are right about passing debt to our children; it becomes their burden. If I was 20 or younger I'd be rising up and taking over.

Re:Debt-backed economies.... (4, Interesting)

reve_etrange (2377702) | about 8 months ago | (#44568343)

You are right about passing debt to our children

Wrong. Whatever is produced at a given point in time is available for consumption at that time. We will never send real resources backwards in time in order to "repay" public debts.

The real theft your generation has perpetrated on mine is all of this lost output which can never be regained. Public debt needs to increase so the output gap can be closed.

Lost Output Clock [lostoutputclock.com]

Re:Debt-backed economies.... (2)

tukang (1209392) | about 8 months ago | (#44568541)

We will never send real resources backwards in time in order to "repay" public debts.

Who said anything about sending resources back in time? We'll send our resources to our creditors and as the debt and interest increase future generations will have to send more of it to our creditors than we do now. You seem to think that increased spending leads to increased output but that's debatable and even if you do get an increase in output you can't guarantee that it will be domestic output.

Re:Debt-backed economies.... (1)

ShanghaiBill (739463) | about 8 months ago | (#44568743)

We'll send our resources to our creditors and as the debt and interest increase future generations will have to send more of it to our creditors than we do now.

Perhaps that will happen, but that is rarely how government debt has been repaid in the past. Much more often the debt has been monetized, and simply inflated away. When Japan started to run big trade deficits with America, and buying lots of bonds, there were 800 yen to the dollar. Today there are about 100 yen to the dollar. So the Japanese are getting back 12 cents on the dollar.

Re:Debt-backed economies.... (1)

alexander_686 (957440) | about 8 months ago | (#44568893)

I am so confused. In 1972 (that is as far back that I can easily go) it was 300 Yen to the dollar, before any large currency flows out of Japan. In 1980 is was 200. Today 125. Where is 800 coming from?

Also, the difference in real interest rates and purchasing parity explains most the change – not monetary policy.

Re:Debt-backed economies.... (1)

tukang (1209392) | about 8 months ago | (#44569415)

It already is happening. The amount of interest we pay as a % of total tax revenue collected has been steadily rising and is at a a 10 year high [worldbank.org] even though the interest rate on treasury bonds is at relatively low levels [treasury.gov]. In other words the money we're borrowing is really cheap, yet we're borrowing so much of it that we're still paying more in interest relative to total revenues collected than we have in the past decade and there's no reason to believe that we will be able to continue to borrow money cheaply especially if we increase our public debt too much.

Re:Debt-backed economies.... (2)

reve_etrange (2377702) | about 8 months ago | (#44570293)

You still aren't getting it. We do not conduct public borrowing in order to obtain money to spend. We first spend money, which we exchange for real resources, then "borrow" that same money back when our trading partners transfer their financial assets into "securities accounts" which pay a somewhat higher interest than do reserves themselves (current rates are ~3% for "long-term" securities, which are actually highly liquid, and 0.25% for reserves). Indeed, it cannot be otherwise as a matter of logic, because the only source of US dollars is the US federal government itself.

Of course our public debt is increasing; it must increase given that the real terms of trade are in our favor. In other words, we are exchanging pieces of paper with only a notional value for real resources. Once consumed, our trading partners have forever lost whatever those resources could provide, while their US financial assets only have value within a context of voluntary exchange.

Re:Debt-backed economies.... (1)

reve_etrange (2377702) | about 8 months ago | (#44570259)

Even if the debt were "repaid" via increased tax levies, that would not imply transfer of real resources. Since the de novo source of US dollars can (by definition) only be the US government, the government must first transfer money into the private sector for said money to be later taxed.

No matter what happens vis-a-vis the government's debt positions, the only way for us to lose access to our real resources is by voluntarily exchanging them for financial assets.

Re:Debt-backed economies.... (2)

reve_etrange (2377702) | about 8 months ago | (#44570247)

We'll send our resources to our creditors and as the debt and interest increase future generations will have to send more of it to our creditors than we do now.

We don't "repay" public debts with real resources. We "repay" them when a securities account (yes, that's what they call them) at the Fed is debited and a reserve account is credited. We also don't "borrow" (sell securities) in order to fund expenditures. Indeed, it is impossible for someone to exchange US dollars for US securities without having first obtained the dollars. This is in direct contradiction to the normal state of affairs during "borrowing." The only way for future generations to lose real resources is by voluntarily exchanging them for US dollars.

The proper way to understand public debt, in the form of US Treasury Securities, is to see reserves as "checking account" and securities as "savings accounts." Just as your bank does not sacrifice any real resources when you transfer money from savings to checking (indeed, they may be better off due to reductions in interest payments), the USA does not lose real resources when the Fed conducts a "reserve add" AKA debt repayment.

Re:Debt-backed economies.... (2)

alexander_686 (957440) | about 8 months ago | (#44568563)

Let me point out 2 examples of where you are wrong.

First, you are assuming that the products are being generated inside the economy. If you are borrowing money from China to buy Chinese goods this is no longer true.

Second, you need to learn a little about pension accounting. If I am working today but I am going to retire in a few years you have a huge liability to pay form my pension and medical costs. While no formal bond has been issued governments, it carries a similar or higher obligation. In this case you really are sending money back in time. (In the past, when countries have been faced with paying foreign creditors or defaulting on pension obligations they tend to shaft the foreigners.) Now, I don’t know how Europe includes this in the “official national debt” but the numbers are out there. (The US does not, which makes me sad.)

Re:Debt-backed economies.... (2)

reve_etrange (2377702) | about 8 months ago | (#44570385)

First, you are assuming that the products are being generated inside the economy. If you are borrowing money from China to buy Chinese goods this is no longer true.

You have this backwards. The only de novo source of US dollars is the US federal government itself. We must first purchase goods from the Chinese in order for them to gain US dollars. Once they have gained dollars via this voluntary exchange of their real resources for our paper, they may spend those dollars themselves. However, generally they wish to hold those dollars. Since those dollars collect 0.25% interest, they choose to use those dollars to purchase US securities, currently bearing ~3% interest. They might invest them otherwise to gain higher rates than that, but they would have to accept some risk were they to do so. In other words, federal expenditures fund bond purchases and tax payments and not vice-versa, both in fact and as a matter of logic as explained above.

In this case you really are sending money back in time.

First of all, I said we can't send real resources back in time. Second, we don't send money back in time, either (quite the opposite).

Today, those of us who are working produce a certain amount of real resources. We agree to transfer a portion of those resources to persons who are not currently working. At any point in time, those currently living get to consume all that they produce. The transfer of resources between workers and retirees is mediated via either transfer programs such as Social Security (which is running a surplus now, and a huge surplus at full employment) or via investments. In the case of investments, the worker agreed to reduce his past consumption (by purchasing interest-bearing financial assets rather than real resources) in favor of future consumption.

Mismanagement of pension funds not withstanding, it is up to us as a society to determine how the real resources with exist today are divided among the people currently living. And while we might reduce present consumption in favor of future consumption, in the absence of a time machine it is not possible for us to adjust past consumption in any way.

Re:Debt-backed economies.... (0, Troll)

operagost (62405) | about 8 months ago | (#44568597)

Yes, let's fire up the printing presses and make some magical fairy money. Don't mind the fact that the few of us who have continued to work hard, be fiscally responsible and fight to build assets instead of relying on government services will have our wealth wiped out by your hyperinflation.

Re:Debt-backed economies.... (-1)

Anonymous Coward | about 8 months ago | (#44568663)

Public debt needs to increase so the output gap can be closed.

Borrow our way to prosperity. Paul Krugman is doing a lot of damage arming you numpties with his magical thinking.

They can't borrow trillions more. They're already printing the equivalent of the entire discretionary budget. If they place trillions of new demand on treasuries, interest rates will climb and put a Pentagon size hole in the budget. They can print it, but if they drive inflation up any more bank capital ratios go sideways when all these ~4% fixed rate mortgages become liabilities.

We've used debt to paint ourselves into an economic coffin corner and the gears are going to strip no matter what we do. By all means, borrow another few trillion and spread it among your constituencies; I'd rather the bottom fall out sooner than later, when I'm even older.

Eventually reality asserts itself. Cyprus, Greece, Detroit, Portugal, San Bernardino... It's just too bad we must inflict so much damage before we stop listening to the Krugmans of the world.

Re:Debt-backed economies.... (1)

reve_etrange (2377702) | about 8 months ago | (#44568367)

This AC is completely wrong. All public debts are matched by an equal private asset. "Paying off" public debt consists of asset swaps between reserve accounts and securities accounts held at the Federal Reserve. There will never be a need to levy higher taxes to conduct such swaps, let alone a need for private individuals to "work harder."

Re:Debt-backed economies.... (0)

Anonymous Coward | about 8 months ago | (#44568449)

This AC is completely wrong. All public debts are matched by an equal private asset.

Not true. Not since Ronald Reagan.

Re:Debt-backed economies.... (1)

CrimsonAvenger (580665) | about 8 months ago | (#44568905)

This AC is completely wrong. All public debts are matched by an equal private asset. "Paying off" public debt consists of asset swaps between reserve accounts and securities accounts held at the Federal Reserve. There will never be a need to levy higher taxes to conduct such swaps, let alone a need for private individuals to "work harder."

If this were true, there'd be no real problem with the Federal Reserve buying up all the Public Debt in the USA, and then doing so again whenever more money is needed (next month, and every month after, basically).

Hell, they could abolish income taxes and corporate taxes too, while they're at it.

And using the miracle of accounting, we'd all get something for nothing, right?

Re:Debt-backed economies.... (1)

reve_etrange (2377702) | about 8 months ago | (#44570211)

If this were true, there'd be no real problem with the Federal Reserve buying up all the Public Debt in the USA, and then doing so again whenever more money is needed (next month, and every month after, basically).

Reserves and Securities are both highly liquid, interest-bearing public debts. The point is that if you trade one for another the only difference is the interest rate (currently ~3% for securities and 0.25% for reserves). If the Fed literally bought all of securities, the private sector would have less money in the long run due to a lower average interest rate.

Hell, they could abolish income taxes and corporate taxes too, while they're at it.

It is absolutely a fact that taxes (and bond sales) do not operationally fund the federal government's expenditures. In that sense they could be abolished. However, it's clear that inflation would result as private sector wealth - in the form of bank deposits - would not be drained to counter the increase from federal spending. This is in contrast to the accumulation of reserve balances at the Fed, which only function to settle payments and can't be lent "out" into the economy-at-large.

And using the miracle of accounting, we'd all get something for nothing, right?

Again, you aren't getting the point. The only constraint on output is the availability of real (physical and human) resources. We are simply doing less than we might given the available real resources, because of a mistaken belief that the net amount of public liabilities represents something other than the net amount of private assets.

Think of it this way; as a matter of logic it is impossible for China to have used US dollars to purchase US securities without the US having first supplied China with US dollars via market exchange (or gifts, I guess).

Measures of uncertainty (2)

Hatta (162192) | about 8 months ago | (#44568209)

Notice how economic indicators never come with measures of uncertainty. It's always "we added 100,000 jobs this month". You'll never hear "we added 100,000 +/- 50,000 jobs". Yet another reason why economics is not a real science.

Re:Measures of uncertainty (4, Informative)

blueg3 (192743) | about 8 months ago | (#44568361)

That's the quality of reporting for you. Most original reports include confidence intervals. The Census, for example, provides access to economic indicator data with its confidence intervals.

it's not really an integrated economy yet (5, Informative)

Trepidity (597) | about 8 months ago | (#44568215)

The EU is getting more integrated, but is still nowhere near one economy that moves in unison. So the answer to the headline question is: yes in some places, no in others. Germany's GDP is growing; Spain's is shrinking.

Re:it's not really an integrated economy yet (2)

intermodal (534361) | about 8 months ago | (#44568255)

And as a German-born American, I certainly hope the EU never moves economically in unison, since the only way to get that to happen is to basically destroy every shred of autonomy for the member nations.

Re:it's not really an integrated economy yet (1)

Trepidity (597) | about 8 months ago | (#44568283)

It would be better if there were at least more labor-market mobility. Countries could still run their own domestic economies, but someone who didn't like the economic policies of country A could just move to country B and choose theirs instead.

That is legally possible today but in practice done much less than e.g. state-to-state movement in the U.S., for many reasons. Some of them are legal barriers to recognizing credentials, although those are slowly being harmonized (e.g. medical licenses are now harmonized). Language barriers are one major one, though very asymmetric: an engineer who speaks English can easily get a job in Copenhagen, even if they speak no Danish, but an engineer who speaks no French will have a harder time being hired in Paris.

Re:it's not really an integrated economy yet (0)

Anonymous Coward | about 8 months ago | (#44568379)

Autonomy isn't necessarily the most important thing in the world... bigger is that it would obliterate smaller economies which would go into whiplash when you try to restructure them to look like Germany.

Re:it's not really an integrated economy yet (1)

manu0601 (2221348) | about 8 months ago | (#44570527)

I think the sentence makes more sense if you substitute "autonomy" with "democracy", or "people sovereignty". The European Union objective for a few decades has been to destroy that. And now that unelected leader are obviously incompetent at running the continent, it may explain why a majority of EU citizen reject [pewglobal.org] the EU project. It does not work and citizen cannot fix it, therefore our best option left is to get rid of it.

Re:it's not really an integrated economy yet (1)

Teun (17872) | about 8 months ago | (#44568485)

I care little (non-zero!) about the autonomy of my city, province or country providing it is replaced by the autonomy of a larger entity like a democratic Europe.
Both professionally and privately I travel a lot and I see the European project as a great chance for it's people, a much better chance for peace and prosperity than the individual nations can ever give.

The economic problems in many of the EU countries are not a lack of funds but individuals, companies and banks refusing to spend it.
There is plenty of money available to kick-start our economy, all we need is a more positive outlook.

Re:it's not really an integrated economy yet (1)

operagost (62405) | about 8 months ago | (#44568609)

If you hold little value in the autonomy of your city or your country, what do you think your own autonomy is worth in a "democratic Europe"?

Re:it's not really an integrated economy yet (2)

Carewolf (581105) | about 8 months ago | (#44569071)

Some economies where never shrinking much in the first place. So if you are talking about EU recession you are talking EU numbers.

Re:it's not really an integrated economy yet (1)

Patch86 (1465427) | about 8 months ago | (#44571421)

Not many economies are integrated in the way you're thinking. Try looking at the economic data for London versus Yorkshire and see how often the two have moved in unison for any sustained period of time.

In most economies it is accepted fact that some areas will boom while others don't, and that the two will cross-subsidise and even each other out. The EU's problem isn't that the nations aren't in synch, it's that there isn't that level of acceptance of cross subsidisation yet. We still have a situation where a German man in the street might resent his taxes being spent in Spain; a hang over to old nationalism. Try asking Londoners if they resent their money being spent in Leeds; most wouldn't even have considered the question before.

Watch Germany (4, Insightful)

RogueyWon (735973) | about 8 months ago | (#44568227)

Specifically, German manufacturing...

That sector benefited over the years between the start of European Monetary Union and the start of the Mediterranean death-spiral from being locked into a favourable exchange rate with a relatively cash-rich (albeit debt-fuelled) set of customer states. Most of those states are economically dead or dying at the moment.

If the German manufacturing sector has managed to diversify its markets enough over the last couple of years that it can weather the delayed shock of this when it finally hits, then Europe will probably muddle through. Once the worst of the crisis has past, the states that should never have been in EMU to begin with can be eased out of it without too much risk of contagion and most of Europe will be ok (though I suspect living standards in Greece etc will take decades to make up lost ground, if indeed they ever do).

If German manufacturing does start to suffer in a big way over the next year or two, then we've only seen the start of the problem, as if the economic engine of much of the continent splutters, then the death spiral will just widen. In that case, expect to see the UK and some of Eastern European states split away in self preservation and some really unpleasant social disorder sweep most of the rest of the continent.

All of which is absolutely nothing compared to what will happen when China's generation of largely-single angry-young-men-used-to-ever-rising-living-standards (the inevitable result of a one-child-policy that turns a blind eye to a bit of back-door gender selection) experiences its first serious recession.

Re:Watch Germany (1)

Anonymous Coward | about 8 months ago | (#44568387)

The UK isn't in what you're calling the European Monetary Union, so it can hardly "split away", and UK funds cannot legally be used directly and immediately to fund Eurozone bailouts. UK funds *can* be used in supporting loans and in direct aid to EU members (and hence Eurozone members) so it's not that the UK won't be supporting struggling Eurozone economies, but it is not directly tied to it beyond the fact that the collapse of the UK's largest trading market would be ruinous for the UK economy.

Re:Watch Germany (2)

the eric conspiracy (20178) | about 8 months ago | (#44568583)

The German economy is a ticking time bomb due to sub replacement birth rates and a unaccommodating immigration policy coupled with negative attitudes towards Muslim immigrants.

It's also well-known that Germany's long term care system is unsustainable due to the demographic problem.

A recent census shocked German politicians when it showed a population 1.5 millions smaller than expected.

http://www.nytimes.com/2013/06/01/world/europe/census-shows-new-drop-in-germanys-population.html?_r=0 [nytimes.com]

SUB-TITLE: HAS GERMANY SAVED EUROPA ?? (-1)

Anonymous Coward | about 8 months ago | (#44568323)

Well has it !! Not so long as Spain, Italy, Greece, France, and all the fucking commie-countries, are allowed to remain, NO IT CANNOT !! Let those dole-o-mites start their own union, oh, the Pee-on Union !! And kick all those fucking foreigners out while you still can, DE !! Soon enough there will be more minarets than churches, and a din of arab-speakers so overwhelming you cannot hear the next stop !! I was to write, "wait and see", but you do not have to wait !!

It is just starting... (-1)

Anonymous Coward | about 8 months ago | (#44568363)

We in the US learned the hard way of what happens when entitlements are handed out like candy with a shrinking workforce.

It is only a matter of time before Europe ends up in the same trap. Too many handouts, too little labor. So far, the EU has been lucky by living off the back of Germany but this will not last either.

Steady bad isn't exactly good (4, Interesting)

Kjella (173770) | about 8 months ago | (#44568373)

People can weather bad times for a while, many have nest eggs, live off ramen noodles and stay with their parents longer, don't start a family, take more education instead and whatnot to live a subsistence life but those options tend to run out and eventually what they desperately need is a job and an income so they can get on with their lives. That the economy isn't tanking even more is great, but unless there's real growth and people getting back into the labor force it's still going to be a train wreck in progress. The same is happening in the US, before the financial crisis the employment-population ratio was about 63% now it's hovering between 58% and 59%, despite what the unemployment rate says. The US would need another 10 million jobs to return to 2008 levels.

So far I must say that despite everything it has been very calm so far, when you're looking at 27.6% unemployment and 64.9% youth unemployment like Greece does right now many countries would be at "fuck it, communism can't get any worse" conditions. And fat fucking luck if you're going to get a job after years of unemployment, most places will see you as damaged goods and rather hire someone straight out of school. The economy is one thing, it will survive somehow but the people are getting royally screwed. It's a generation almost certain to have it much worse than their parents, despite all the technological advances. And somehow I have the feeling it's just one bad domino away from becoming something much worse, so many look ready to fall.

Re:Steady bad isn't exactly good (0)

Anonymous Coward | about 8 months ago | (#44568549)

On the bright side, maybe if the number of people who are out of work long term outweigh the number of steady work people. When an economy does recover. Those out of work people will have more chance for success in positions that otherwise would be un-available to them.

But I don't see the economy getting better for at least 1-2 decades minimum. It may not get "much worse" but better? I dunno. It feels a long way off.

-posted AC so this opinion doesn't flood to the top cause of good karma.

Re:Steady bad isn't exactly good (1)

Anonymous Coward | about 8 months ago | (#44568687)

The same is happening in the US, before the financial crisis the employment-population ratio was about 63% now it's hovering between 58% and 59%, despite what the unemployment rate says.

Far be it from me to paint rosy pictures in these economic times ... BUT ... to be fair, the majority of that change you note is due to demographic changes, e.g. the leading edge of the Boomers retiring ... which will continue to cause the ratio you mention to decline for some time.

Data. [calculatedriskblog.com]

There are parts of the US economy that are actually doing quite well ... not as good as those currently in office would have you believe, but also not as bad as those not currently in office would have you believe.

Re:Steady bad isn't exactly good (1)

Kjella (173770) | about 8 months ago | (#44571465)

Far be it from me to paint rosy pictures in these economic times ... BUT ... to be fair, the majority of that change you note is due to demographic changes, e.g. the leading edge of the Boomers retiring ... which will continue to cause the ratio you mention to decline for some time.

Data.

Your own data contradict your claims.

"...over the 2008-2011 period...only one-quarter of the...decline of actual LFPR...can be attributed to demographic factors."

This conclusion - that three-quarters of the decline in the LFPR since the beginning of the Great Recession can be attributed to cyclical factors - is supported by other research.

Yes, the demographics are one factor but it dropped like a rock over the span of a little over a year, so drastically the composition of the population doesn't change.

Re:Steady bad isn't exactly good (-1)

Anonymous Coward | about 8 months ago | (#44568761)

return to 2008 levels

The liberal gentry and their pressure groups are going to permit the land use, water use, emissions, power generation, development and everything else to really recover.

Not.

They don't want it. Move in with your parents. Downsize yourself. Walk or stay home. That is the intended outcome.

Communism can get A LOT worse, buddy (0)

Anonymous Coward | about 8 months ago | (#44569131)

Communism can get A LOT worse ! when the reds inevitabily begin "collectivizing" (nationalization) the owners oh the house/farm/factory/whatever is a kulak/burgeois/intellectual/enemy-of-the-people. And they are slowly killed or are excluded from society at best. I know more about this than you do, kid.

Recession over, depression underway (2)

reve_etrange (2377702) | about 8 months ago | (#44568417)

Sure, the recession is technically over. Thus begins the extended economic depression during which unemployment remains extraordinarily high - over 60% for young people in periphery countries - and the economy significantly underperforms its potential.

This is all the result of a political economy which requires permanent public deficits for private sector growth in the absence of private credit expansion, combined with a private debt overhang prohibiting such an expansion.

Re:Recession over, depression underway (1)

Anonymous Coward | about 8 months ago | (#44570297)

If you have an economy that is based on private credit expansion, it's already broken. No need to mention public deficits or overhang as part of that.

Not newsworthy (2, Informative)

Anonymous Coward | about 8 months ago | (#44568431)

Nothing new in this submission. It's well known that real-time economic data is noisy. This holds particularly true for real GDP as well some other statistics from the national income accounts (but less so for labor-market statistics). Revisions between the first and final data release of GDP average somewhere around 1 percentage point (that's in the US data, but it's probably relatively similar in the EU).

Re:Not newsworthy (0)

Anonymous Coward | about 8 months ago | (#44568447)

I should've added that various papers on this subject have been published over the last ten, fifteen years by economists such as Athanasios Orphanides.

Nominal vs Real growth (1, Insightful)

roman_mir (125474) | about 8 months ago | (#44568433)

Isn't it hilarious how the government officials and fake mainstream 'economists' use absolute numbers to imply that their preferred narrative actually has any real meaning behind it?

Here is an example of what I am talking about:

A person makes 3000 dollars a month and can afford X amount of goods after paying the rent, food, energy and transportation costs and saves 10% every month. Next year prices go up by 5%, the same person on the same salary has to pay more for rent, food, energy and transportation and has at least 5% less left over for other spending. His savings rate falls and GDP seems to grow.

The question to all these politicians and mainstream economists: is that person better off, now that he can no longer afford to save even his miserly 10% (in countries like China, people routinely save up to 50% of their monthly income)?

The mainstream economists will point out the nominal GDP growth and say: this is a good thing.

Of-course he doesn't tell you that the reason prices went up and reduced the savings rate was government printing (figuratively) a huge wad of money, which is inflation and moves through the market players, from central banks, to commercial banks and various financial organisations, to money, stock, commodity, housing markets, etc. Eventually this translates into consumer goods and the nominal GDP grows while the savings rate falls, purchasing power falls and people are in fact left poorer off now then they were before.

In the Long Run, All of Europe is Fucked (1, Insightful)

Anonymous Coward | about 8 months ago | (#44568539)

The European welfare state is unsustainable. [washingtontimes.com] It's unsustainable in the short run for the PIIGS, but also, with declining birth rates and rising debts, unsustainable even for Germany and other Northern European countries. Even the smallest nods towards austerity are greeted with riots. The only question is how much pain, economic collapse and hyperinflation happen on the way down.

Re:In the Long Run, All of Europe is Fucked (1)

purpledinoz (573045) | about 8 months ago | (#44568855)

Things aren't allowed to collapse until the German election is over. Expect to see things to move after this September.

And does it run Linux? (1)

udippel (562132) | about 8 months ago | (#44568581)

... or where is the angle for nerds and geeks in this?
I for one would really appreciate to read news in here (/.), that I don't read everywhere else.
Sorry.

Re:And does it run Linux? (0)

Anonymous Coward | about 8 months ago | (#44568799)

Debian is working on a crisis-eu port, but they are having issues with the reliability of the platform.

Re:And does it run Linux? (0)

Anonymous Coward | about 8 months ago | (#44568853)

Are "nerd stories" being missed because of the additional current event stories. The angle for nerds is having a place for nerds to discuss current events. Why are you in the comments adding noise if you are not interested?

Perhaps better to start with (4, Insightful)

Lawrence_Bird (67278) | about 8 months ago | (#44568723)

is the GDP report even valid? Given the multi-decade manipulation of the way the deflator (inflation) is calculated it is quite possilbe that not only Europe, but the US as well, has been in recession since the early 2000's. Shadowstats is an outfit that provides US figures using the most recent prior methodology - I think it is circa 1992. And remember, the government(s) have a very vested interest in keeping the "official" inflation figure low - it lowers any payment tied that rate (social security, procurment contracts) while also making the GDP figure look better.

The real question (1)

solkanar (946999) | about 8 months ago | (#44568947)

Is China(and emerging countries, etc)'s rise and worldwide longh awaited economical balancing really over ? Hint : I doubt it. Therefore; No.

If economists were Physicians (1)

Anonymous Coward | about 8 months ago | (#44569535)

"Your father's Leukemia was very bad, he had fever of 104 (F). He's much better now - in fact he's down to room temperature."

Nope. (1)

Travis Repine (2861521) | about 8 months ago | (#44569581)

Speculation be damned, European Union has its own problems. Let them settle their problems because we have our own right now in our own country. The stock market should never tie the European markets to ours mainly because we have to deal with their shit...

It would probably be... (0)

Anonymous Coward | about 8 months ago | (#44571207)

...if this wasn't 201x but 197x. Politicians do not understand the impact of the Globalization concept they had introduced.

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