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ECB Warns Germany's First Quarter Growth May Be Negative

Tyler Durden's picture


The most probable replacement to Trichet, Axel Weber who is a member of ECB's governing council said earlier on Bloomberg TV that extend and pretend is now shifting to Europe warning that Germany's Q1 growth could be negative, of course qualifying the statement that everything past this quarter will be stronger. Weber said that "a very weak first quarter means that the second and third quarters will be stronger." Even so he said there was still no reason to revise the expectation of German growth in 2010 to just over 1.5%.

We fail to see how with austerity measures sweeping across traditional German import partners, particularly within the PIIGS, there is any hope that the German economy will regain an upward trajectory, although by Q2 and Q3 when various additional stimulus measures will have to be announced globally, and the ECB will likely finally commit to QE, he may very well be right. As more and more of the world is becoming like China in goalseeked GDP growth virtually all economic indicators are starting to lose any predictive value, especially on an adjusted "stimulus-free" basis.

We will be watching to see if economists revise their German growth expectations following this statement, and whether Bund levels, trading well inside of their US equivalents, push wider on the news.



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Tue, 03/09/2010 - 10:40 | Link to Comment THE DORK OF CORK
THE DORK OF CORK's picture

I hate to say I told you so but to all those Teutonic Lovers out there - Germany's Industrial Base is geared towards supplying the unsustainable consumption of the PIGS and others and their savings rate will crash as a result of the rest of us not buying their Goodies

Irish savings rates have risen dramatically to 12% and  Hibernia is just the first deficit country within the EU to become a surplus country in a necessary re balancing of trade.

Be careful what you wish for Germany , it might just come true

Tue, 03/09/2010 - 11:07 | Link to Comment Anonymous
Tue, 03/09/2010 - 11:22 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

Just as the DAX is a cleaner market indicator, so is German GDP.  They may be willing to dive-bomb your town square during a hostile take over, but the Germans like their numbers pristine, mostly. 

Tue, 03/09/2010 - 11:38 | Link to Comment THE DORK OF CORK
THE DORK OF CORK's picture

Germanys Industrial Policy is flawed - Import cheap gas from Russia and lick ass - build BMWs to sell to the rest of us - Have nice fat Euro balances in their bank accounts.

They should have spent their surplus on going nuclear and win a measure of independence , but they are just a victim of the mandarins in Brussels as are the other European countries , they just don't know it yet.

Lets face it it is just a vassal state not unlike Japan - they just look different

Tue, 03/09/2010 - 13:53 | Link to Comment carbonmutant
carbonmutant's picture

Instead or going nuclear they bet on solar. They have become the largest solar panel producer in the world.

If Gazprom is willing to build the pipe they'll buy the gas.

Tue, 03/09/2010 - 14:26 | Link to Comment THE DORK OF CORK
THE DORK OF CORK's picture

I like to know how much energy they produced from solar this winter - solar is a sick joke in temperate countries - in the season of maximum demand it produces nothing - that is what you get when your energy policey is driven by deluded hippies

Tue, 03/09/2010 - 13:00 | Link to Comment curbyourrisk
curbyourrisk's picture

The "Deflation Contagion" take hold!

Tue, 03/09/2010 - 13:43 | Link to Comment Anonymous
Tue, 03/09/2010 - 13:48 | Link to Comment markytom
markytom's picture

All is not well Sweden either as they have entered recession again in their fourth quarter.

Thu, 04/15/2010 - 10:22 | Link to Comment mark456
mark456's picture

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