Depression or double-dip? One of them’s in the eurozone, UBS says | FT Alphaville

Depression or double-dip? One of them’s in the eurozone, UBS says

A handy table from Paul Donovan.

The UBS economist notes that recent global growth data has somewhat disappointed investors — prompting concern about a possible double-dip or even depression. To help illustrate the differences from the current economic situation — which Donovan labels an “entirely predictable” soft patch — he compares 2011 to the 1930s, and also the double-dip recession of the early 1980s.

Anyway, here’s Donovan:

It is clear that the global economy today lacks many of the problems that prevailed in these earlier crises. However, the similarities between the current slowdown in the Euro area periphery and the earlier crises (particularly the 1930s) are a great deal more marked. Globally what we have is a soft patch for growth – predictable, and as long as credit continues to be positive no more serious than that. There are no clear parallels to the 1930s or the 1980s. As our US team have highlighted several times, the credit environment today is significantly different from previous double dip episodes. However the Euro periphery is less positively positioned. Trapped in a monetary union that does not work, and forced by circumstances to repeat some of the policy errors of the 1930s, for the Euro periphery the current situation exhibits some disturbing depression-like characteristics.

That’s d-d-d-depressing.