Factories slash output and jobs around world

[Joanne98]

By Jason Subler

BEIJING (Reuters) - Factories in China and India joined much of Europe in slashing output and jobs at a record pace in December, another sign the biggest emerging markets were wilting under the recession gripping industrialized nations.

Factory activity surveys in the United States were also expected to show a steeper contraction in December, as demand collapses in the Western countries that developing nations rely on as export markets.

Economists and policymakers had seen China, Russia, India and Brazil, with their vast markets and rising wealth, as the engines of growth that could save the world from recession. Those hopes are fading fast and forecasts are getting gloomier.

From job losses at Chinese factories to the biggest drop in South Korean house prices in five years, there were signs the export slowdown was rippling through domestic economies in emerging markets.

"What is worrying is that the weakness has spread rapidly from the externally-oriented sectors to domestically oriented sectors too," analysts at OCBC Bank in Singapore said in a note after the country announced gross domestic product data.

In contrast to the rapidly darkening economic outlook, the mood in markets has brightened slightly. Having squirreled cash into safe havens for much of the past quarter, investors are eyeing assets pummeled in the financial turmoil of 2008.

http://www.reuters.com/article/topNews/idUSTRE4B70ME20090102

[xchrom]

1. recommend

[lib2DaBone]

2. K&R Financial turmoil of 2008.....

.. they ain't seen nothin' yet....

[GliderGuider]

3. Recommended. However,

I strongly suspect the touted "brightening mood of the markets" is just another bear market rally, aka a dead cat bounce. Caveat emptor.

I've read ilargi's speculation over at TAE that Chinese society will begin to disintegrate if GDP growth drops below 5%. It looks like that's already started to happen. Reports in this article from Russia, Europe, Africa and the rest of Asia drive home the point that this is a global shitstorm still in its early days.