Germany: It Ain’t Your Father’s Locomotive
This Great Graphic comes from Markit’s Chris Williamson. It illustrates that the German good producing sector has fallen on hard times again. The economy contracted by 0.2% in Q2. Another decline in Q3 cannot be entirely ruled out, though it may just escape with something just above stagnation. The main cause that most politicians and economists will focus on ... Read more
Germans Happily Pay More For Renewable Energy, But Would Others?
By Chris Dalby: While Germany is breaking world records for the amount of sustainable energy it uses every year, German energy customers are breaking European records for the amount they pay in monthly bills. Surprisingly, they don’t seem to mind. In the first half of 2014, Germany drew 28 percent of its power generation from renewable energy ... Read more
Bundesbank Says Nein and Ja on Further ECB Accommodation
Germany appears to have capitulated. The Bundesbank has dropped its opposition to extraordinary measures, like ending the sterilization of the SMP bond purchases, and has even dropped its visceral opposition to QE, if it can be structured properly to keep within the ECB’s mandate. As Jurgen Stark’s recent op-ed piece in the Financial Times makes clear, this ... Read more
Don’t Hold Out for a Lasting German Economic Rebound
German industry is plugging away. Ending in August, the 3-month average of the seasonally- and calendar-day adjusted volume of industrial production (excluding construction) maintained a quick 8.3% annualized pace. Even if this core measure of industrial activity falls another 1% in September, the Q3 quarterly annualized pace would be 10.5% – a robust acceleration from Q2 (6.3%). ... Read more
This ‘Competitiveness’ Thing Is a Scam
What is ‘competitiveness’? It’s an important part of the euro area leaders’ negotiated terms in the July 21st Summit announcement by the European Heads of State. The first paragraph, #4, and #11 of the announcement all refer to this issue of ‘competitiveness’: We also reaffirm our determination to reinforce convergence, competitiveness and governance in the ... Read more