Thursday, January 5, 2012
September's industrial new orders number for the Eurozone was very bearish indeed but it looks like in October things improved slightly from there. I continue to think that this is the beginning of a new European recession but the jury is still out on its depth and length. The critical thing there will be whether the European authorities manage to avoid a disorderly failure of any large governments or financial institutions. If they continue to muddle through, as they have been, with neither a clear and convincing resolution of the crisis but nor with allowing critical institutions to fail, then I expect a longish but not incredibly deep recession. On the other hand, if they allow some kind of "Lehmann-type" event to occur then the crisis could turn very abrupt and the recession get much deeper in a hurry.
In other news - December inflation is estimated at 2.8% - still not particularly low.