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Realistbear

Euro Zone July Unemployment Hits 9.5 Pct

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http://uk.biz.yahoo.com/01092009/325/insta...ts-9-5-pct.html

(Reuters) - Euro zone unemployment rose as expected in July to 9.5 percent, its highest since May 1999, underlining the lag with which the jobless rate reacts to nascent economic recovery......./

"Nevertheless, euro zone unemployment still seems likely to rise markedly higher, thereby posing a serious threat to growth prospects over both the near and medium term.

http://uk.biz.yahoo.com/01092009/323/germa...rge-feared.html

Tuesday September 1, 10:06 AM

German unemployment edges up, surge feared

FRANKFURT (AFP) - The German unemployment rate rose slightly to 8.3 percent in August, official data showed on Tuesday and experts said it might soon surge when job subsidies run out.

As the artificial stimulus wears of the trend will pick up where it left off. Jobs are the prime mover for house prices--the fundamentals are far from sound in the EZ and here.

Green shoots? Not for 5 years, at least.

Edited by Realistbear

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Is this what the jobless recovery is all about?

What are the shadow stats like for European unemployment?

Then you have some severe distortions with Irish unemployment far worse than german.

The EU is going to be stressed like never before.

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Spain: The hole in Europe's balance sheet: http://www.safehaven.com/article-14360.htm

Spain: The Hole In Europe's Balance Sheet

By Variant Perception

Dives sum, si non reddo eis quibus debeo.

I am a rich man as long as I don't pay my creditors.

Titus Maccius Plautus (c. 254-184 BCE), "Curculio"

Themes

Spain = Japan 2.0? - We argue that 1) the real estate crash in Spain is worse than is widely believed, 2) Spanish banks are hiding their losses, and 3) investors are smoking crack if they believe that Spanish banks are among the strongest in Europe, (see Forbes latest Spanish Banks In Top Form). If all these are true, Spain will soon have zombie banks like Japan.

Banks are hiding losses - We believe that Spanish banks are not marking their real estate loans to market and are extending credit to zombie construction companies. They do this by 1) Getting a boost from accounting changes, 2) Not marking loans to market, 3) Continued lending to zombie companies, 4) Extending 40 year and 100% loan-to-value loans, and other bubble-like lending practices. We look at each of these in turn.

Spain is in deflation - In a deflationary environment, servicing debt becomes even harder. Even when rates go to zero the real burden of debt goes up. That is why deflation is such a terrible thing. Eastern Europe, Spain and Ireland are now all experiencing the beginning of deflation. We believe that we will see much more deflation to come, which will have broad ramifications across the European banking sector.

Who's holding the bag? - The periphery countries are net debtors, and the rest of Europe is the net creditor. When a debtor can't pay, the creditor suffers. Germany, France and others will need to cope with recapitalizing the periphery and Spain.

Plenty more at the link....

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