Global Recession Gathers Pace as Euro zone Manufacturing Contracts

By: Mike_Shedlock

The global recession is picking up steam. The US is in contraction, U.K. Manufacturing Is In Contraction , and now Euro zone manufacturing activity is in contraction .

The euro zone's purchasing managers' index (PMI) for the manufacturing sector, compiled by data and research group Markit, slid to 49.2 points in June, from 50.6 in May, up slightly from an initial estimate of 49.1.

Analysts said that the weakness in manufacturing activity in June was widespread across the euro zone. German activity slowed to its second-lowest level since September 2005, although it remained well in expansion territory.

However, the PMI pointed to contracting activity in Ireland, France, Italy, Spain and Austria. Activity was particularly weak in Spain and Ireland, adding to the deepening gloom on these economies, they added.

Reasons To Be Cautious

Contraction in the U.S., U.K., Ireland, France, Italy, Spain and Austria should be enough to make anyone cautious.

But in case you need still more reasons, Professor Bennet Sedacca offers an additional 25 Reasons To Remain Cautious . It's a good set of reasons and tough to condense. Inquiring minds will want to take a look.

1.  Stocks are firmly in a downtrend.
The S&P 500 is down roughly 20% from the market peak on October 11, 2007.

2.  Corporate spreads are rapidly widening.
Investment grade bonds yielded as little as 0.30% more than U.S. Treasuries did back in 2003 - but are now as much as 2.30% above U.S. Treasury rates.

3.  Everyone I know is saying “All is well, buy America.”
The crowd is usually wrong at extremes.

4. .......

By Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

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Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management . Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

Visit Sitka Pacific's Account Management Page to learn more about wealth management and capital preservation strategies of Sitka Pacific.

I do weekly podcasts every Thursday on HoweStreet and a brief 7 minute segment on Saturday on CKNW AM 980 in Vancouver.

When not writing about stocks or the economy I spends a great deal of time on photography and in the garden. I have over 80 magazine and book cover credits. Some of my Wisconsin and gardening images can be seen at MichaelShedlock.com .

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