Germany will lead the global downturn

[marmar]

By Matthew Lynn


LONDON (MarketWatch) — There has been no shortage of shocks for the market in the past few weeks. The U.S. has lost its triple-A rating. Italy is struggling to stay in the euro. The French banks are running into trouble because of the loans they have made to the continent’s peripheral countries.

But in fact none of those should have surprised anyone much. The U.S. had been running up too much debt for a couple of decades and the dollar was already on the way out as a reserve currency. The Italians struggled to stay in the lira — no one expected them to survive in the euro without a few problems. And it would hardly qualify as a financial crisis if the French banks weren’t losing money. Each of those events was about as unexpected as Andy Murray getting knocked out of Wimbledon in the semi-finals.

In truth, the really worrying news is coming out of Germany.

The signs right now are that the motor of the European economy is starting to slow down significantly. That was confirmed with the release of second-quarter figures that showed gross domestic product growth of a mere 0.1% at a quarterly rate in the second quarter of the year, significantly lower than the 0.5% most economists had been predicting. ...........(more)

The complete piece is at: http://www.marketwatch.com/story/germany-will-lead-the-global-downturn-2011-08-16?dist=afterbell

[truebrit71]

1. Bloody Germans!!!!

:evilgrin:

[rfranklin]

2. It is the patriotic duty of Americans to buy MBs and BMWs...

Help save the world economy!

[nadinbrzezinski]

3. I am afraid this is all I can afford, MAYBE

[xchrom]

4. Recommend

[femrap]

5. I wish I could

find another Braun coffeemaker....I guess China has put its foot down and told the US that if it wants to buy a coffeemaker, it's going to come from China.:puke:

[Dreamer Tatum]

6. Wasn't but just a couple weeks ago that Germany was held up as a model economy.

Guess it isn't.

[pampango]

7. It's still a much more "model economy" than ours.

"By one government measure, 706,000 more Germans were employed in May of this year than the year before, of which 415,000 were full-time positions and 289,000 part time. In terms of relative size, that would be roughly comparable in the United States to nearly 2.7 million more people with jobs in 2011 versus 2010.

With strong unions and legal protections for workers, Germany’s labor market for years was compared unfavorably with the more flexible American one. Even after embarking on painful reforms, it suffered from high structural unemployment. In July, German unemployment was 7 percent, compared with 9.1 percent in the United States.

As for the young, the unemployment rate is the third lowest in Europe, behind only the Netherlands and Austria. Only 9.1 percent of people between the ages of 15 and 24 are unemployed here, less than half the 20.5 percent average in Europe."

"A recent report in the daily newspaper Bild said that government experts expect the job boom to continue for another four years. In a survey of 1,800 Germans prepared for the business magazine WirtschaftsWoche by the Allensbach Institute for Public Opinion Research, a majority spoke of an era of increased insecurity, but a full 53 percent said they were optimistic about the next 12 months. Only 12 percent were pessimistic.

“They hear it on the news but for most Germans what they experience in their lives is completely different. The crisis is virtual,” said Renate Köcher, the institute’s director. “What’s decisive for most people is their own situation and for many people that has improved noticeably in the past three or four years.”"

http://www.nytimes.com/2011/08/17/world/europe/17germany.html

Plus Germany has one of the most equitable distributions of income in the developed world.

[marmar]

8. Indeed.

nt