I have been saying that I expect German data to disappoint and come in on the softer side. Why? German Ifo numbers suggest improving business confidence even though German data has been relatively weak.
For example, German retail sales for February were weak as were the German PMI numbers. Germany printed 48.4 which is below the expansion divide. Just today, we got further confirmation of the weakness in the data with German manufacturing shrinking at the largest pace since 2009. Either the German businessmen know something that we don’t or their confidence is completely misguided. I am betting it is more the latter than the former. And so while I think German numbers will hold up well compared to the rest of the euro zone, they will come in below expectations.
After all, I did say in January that Germany is in recession already with the rest of the euro zone, meaning that Q1 2012 will be a negative GDP print. I think this is an outlier perspective but we will see the numbers in due course and I think they will be weak, probably negative.
Bottom line: The Germans will do relatively well but they will not decouple. If the eurozone slides down, Germany will undoubtedly slide with it.
That’s it. Here are the links.
- CISPA is the New SOPA – Ron Paul
- The Burgeoning Student Debt Problem « naked capitalism
- German manufacturing shrinks at fastest pace since 2009 – PMI | Reuters
- Eurozone crisis set to get worse before it gets better | Business | The Guardian
- The Trust Deficit « naked capitalism
- The Irish Economy » Eurostat debt figures released, Irish debt/GDP at 108.2%
- DOT: Monthly Miles Driven
- How Pete Peterson is driving the fiscal consensus | Felix Salmon
- Peak Oil | Un Cafelito a las Once – 1C11
- Controverse sur les estimations des réserves pétrolières – Devises & Matières Premières – Le Figaro Bourse
- Raiffeisen Zentralbank plant Kapitalerhöhung – Raiffeisen – derStandard.at › Wirtschaft
- RIGZONE – Argentina Seeks Partner for YPF to Invest $10B
- India hits record trade deficit | beyondbrics | News and views on emerging markets from the Financial Times – FT.com
- Andrew Haldane on the Arms Race in Banking « naked capitalism
- FT Alphaville » Peak oil goes mainstream (again)
- Immobilien: Halbes Land im Kaufrausch – Wirtschaft – KURIER.at
- Rajoy en 2008: "Entregar el petróleo a extranjeros es de un país de quinta" – lanacion.com
- Colombia: we are not Argentina | beyondbrics | News and views on emerging markets from the Financial Times – FT.com
- Philly Fed drops for first time in 5 months | Economy | News | Financial Post
- EconoMonitor : Great Leap Forward » DOES CHAIRMAN BERNANKE KNOW SQUAT ABOUT MONEY?