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On The German Triple-C Issue: Culture, Clausewitz And Clausius
Submitted by Brandywine Global Investment Management,
“It does seem to be true that the Germans, more readily than other peoples, can withdraw themselves from the exigencies and contingencies of life into a region of Innerlichkeit.” -John Dewey, Columbia University Professor of Philosophy
The issue of Germany and its approach to ameliorating the overleveraged balance sheets of its southern neighbors will dictate the direction of sovereign spreads in 2012. The direction of sovereign spreads will also determine the direction of risk premium spreads in the leveraged finance markets— both bonds and loans. Defaults in the leveraged finance market will and should be an afterthought to the systemic risk factors inherent in sovereign and next-of-kin bank credit spreads. Therefore, forecasting default rates should take a backseat to a better understanding of German Kultur and thought that will shape the euro-zone sovereign finance structure in 2012 and beyond.
[ZH - this is why we are so loathsome to take any notice of the rear-view mirror defaults as well as forecast default expectations as liquidity is much more critical than any macro or micro data]
John Dewey assessed German culture and thought in a 1915 book titled German Philosophy and Politics. His essential point was that “the chief mark of distinctively German culture is its selfconscious idealism with unsurpassed technical efficiency and organization.”
While these words were published nearly 100 years ago, they still ring true. In fact, they are very relevant to better understanding the German psyche and their approach to restructuring the debt of their most troubled southern neighbors, Greece and Portugal.
[ZH - short-term pain but medium-term gain on devaluations]
The most recent European Union summit highlighted that we are left with some of the same issues that confronted the great empires prior to World War I—the battle between “English liberalism with its emphasis on individual freedom and self-determination and Prussian socialism with its emphasis on order and authority.”
Events in 2012 will establish the path we will pursue. With this uncertain backdrop, investors should assess credit risk premiums with caution, but remain opportunistic to any changes in the macro background.
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January 2nd, 2012
By David Goldman
Today’s Bloomberg headline sums it up: “German government bonds drop as China, India manufacturing boosts optimism. Germany’s manufacturing purchasing managers’ report also surprised on the upside.
Germany has been decoupling from Italy for the better part of a decade.
The concept of Europe as an economic entity is increasingly less important for high value added manufactures. As I keep saying: it’s not the end of the world.
It’s just the end of Italy (and Greece, and maybe Spain). Stop worrying. Look forward to another mediocre year of equity market returns.
http://blog.atimes.net/?p=1993
The Big News may be not that Germany leaves the euro, but that Germany leads the way to a new EU partnership with Russia, and, as we should, jettison the US and Nato (and the Brits too).
Re debt and the banks we will simply have a great re-set and wipe a lot of it out. Europe's debt is mostly owed to itself. With Russia providing energy, Europe is complete, self-sufficient including food, we have no trade deficit ...
From America we now get nothing except fraud, lies, theft, and attempts to control the internet and media with propaganda.
But as typical Europeans, we are not going to be the cold initiator of the divorce from the USA. That will happen after America starts W W III and perhaps even drops a nuke bomb on somebody, when it is undeniably clear that the USA are the new fascist Nazis.
Here in Europe, Germany leading, and Russia included, we will remain the best place to live in the world.
Going on past form, Germany may try to forge a partnership with Russia at the same time as a partnership with Western Europe. That's when it ends...
What is Stalingrad's name, currently?
It's sure is interesting to see how some people view the world as being filled with nothing but collectives. You've just painted a picture of how the world works/will work, yet not a single one of your actors actually exist. Each and every one of them is but a belief system of how a given group of people will respond to other groups, yet only a handful of actual people will be in a position to provide input.
This distortion of reality grows all the more clearer once the idea that "we owe ourselves" is actually ciphered out amongst the individual winners and losers. Then it becomes obvious that one class of individuals has stolen the wealth of another, and the idea of any 'balance' is ludicrous upon its face.
With your logic, I shouldn't care that Corzine stole billions, because, after all, he is one of "us."
The US wishes you the best. All redistributionists / collectivists should make your plane reservations to join our Prussian Russian/German friends.
Everybody is a redistributionist as long as we have centralized Monetary Systems. Socialism vs libertarism is just theater to keep the pub entertained.
We in the USA would love to divorce Europe more than you know . . . . PLEASE take your bloated social welfare state, and fund your own military (actually you won't need it against your monopoly gas supplier Gazprom . . . . or will you?). You'll be in good company with close allies such as Iran and Venezuela. As for us, if we have any luck we may un-learn all the Keynesian socialist stupidity we picked up from Euro-land over the last 70 years.
Enjoy your forced Koran readings.
I was actually surprised how much the US social welfare state already mirrors the German one. And good luck (for us all) trying to get rid of it again, to some sensible level.
I sincerily regret all the "Keynesian socialist stupidity (you) picked up from Euro-land over the last 70 years"
I particularly regret the way we forced you to to pick up this socialist stupidity, at gunpoint
it was shameless of us
Dude, you are tragicly stupid. Please stop talking. You are embarassing Europe. Don't you know people outside of Europe are reading this and thinking "What comic books has this man been reading?!"
It has always been the European dream of self sufficiency through the conquest of their neighbors, or alliances as some say. It seems the Russian/Germany thing was tried before to attain world domination...er..self sufficiency. The EU is in the shape it is today because they refuse to cooperate. I can't see how its going to get better with Russia in the mix. Each looking for the prime moment to pick each others pocket.
That is absurd. Germans are the most closely aligned with the American People of all the EZ, the profilgate US government notwithstanding.
Edit: Yes, we have some housecleaning to do on this side of the pond, but do it we will.
Is that all? I'm a big fan of the theory that the CIA will gain control of Israel's nukes and "hit the send button" towards Iran in short order. Don't worry...by my estimates the Iranians should only send three to five your way in retaliation! In the meantime "da Mericans" will be shocked and enraged at the interruption in the latest episode of "Who's got Talent!"
Christ, Banker Guy, we ain't been married. We've just be drinkin' and screwin ...unless I signed something when I was drunk. Show me the paper! We like Russia just fine. Have lots of operations there from oil and gas, aluminum and leather, to ...McDonalds. I agree with your idea if you mean that Belgium, Nederlands, Germany, Austria should build upon Russian resources and talent, dropping the periphery to stay competitive. Just be careful who your new-found partners are. As for your accusations about the US, we here in the USA notice that almost all the worst fraud and reg-arbitrage is happening in The City because it isn't legal here. Belgium...a country that just kind of happened to give an idle prince a country to run, no? But the Flemings, fine. Letzeburgisch fine too.
Like Germany is a lot better than the U.S., right? Just recently, the President of the republic, Christian Wulff, stooped so low as to to make personal phone calls to the editor of the Bild-Zeitung threatening him with legal action if a certain story were to be published. And what was that aristocratic defense minister Bozo's name who got thrown out of office for plagiarism? (had to google it: Karl-Theodor zu Guttenberg) ... Actually, there were several ministers from various German political parties who recently lost their jobs through proven plagiarism on their doctoral theses.
German politicians are a bunch of idiots just like the U.S. politicians.
And Germany also suffers under a high level of debt. The "reset" you mention will happen, but it won't be "simply", I'm afraid.
Speaking of Germany, I think we're looking at a potential black cygnet. Merkel's government could fall sooner than one might imagine due to "rot" caused by her ministers & presidents losing their jobs. The coalition partner FDP isn't looking well right now, either. That could through chaos into the bailout talks just as certain critical countries are looking for refinancing ..
That is right.
They are all US citizens.
The national label does not matter.
What matters first is the doctrine they espouse.
"They are all US citizens."
But in denial...
or as the pop song goes : "chasing the American Dream,
chasing everything we`ve seen,
up on the TV screen!"
In that sense we, the West ,are just all of the same bunch .
And who would provide leadership to your Eurotopia ?
Germany footing the bill for Russia`s energy and the rest
teaching those eastern bears a thing or two about good
cuisine ...dream on, someone will have to lead your sect
A US centric view of a global problem. Have no doubt the Europeans view the US as massive hypocrites, but envy the so called freedom of the Fed simultaneously. See you in hell Geithner and Uncle Ben...
I ... who am neither ... DO KNOW .. both GERMANS and ANGLOSAXONS .... INTIMATELY ... linguistically ..culturally and historically ..and i STRONGLY DISAGREE '
And if one is allowed to generalize ... which one is :
The Anglosaxons are NO LONGER characterized by :
liberalism with its emphasis on individual freedom and self-determination and Prussian socialism with its emphasis on order and authority
On the contrary ..it is GERMANS and SWISS ..and AUSTRIANS ..and .... FRENCH ... well more or less ALL EUROPEANS ... who have INDIVIDUAL LEGALLY ENSHRINED FREEDOM ... and ANGLOSAXONS who are DEMORALIZED and UN-EDUCATED SLAVES of their ruthless and greedy RULERS
One of the reasons for this is... that it is in the culture of North and Central European People .. NOT TO PRETEND and NOT TO CHEAT ... as well as attempt to do HONEST and METICULOUS WORK .... if not for anything else ..then out of professional pride .... no FAKE SMILES THERE !
The reason is, that you can't make thru cold winter by pretending, cheating and smiling.
Very smart comment. I suppose you know about the coming Ice Age.
Germanic tribes and their Anglo-Saxon descendants will just deprive you off your winter hoard without pretending and cheating , but they do tend to smile after they conquer.
and to BANK GUY in BRUSSELS .... RIGHT ON SPOT !
Germany's situation now is like where Japan was in 1989: having made money off exports to the US, money was placed in real estate and it seemed like there would be no end to the boom. THere was speculation that Japan would soon produce Half The New Patents In The World of the 1990s. Their technological know how and marketing savy combined with the insatiable US market (propped up by credit) made it seem like Japan was unbeatable: cars, nearly all consumer electronics, the 'new' PC market, scientific equipment, heavy industry, inroads in banking, global real estate...on and on. Twenty deflationary years later we all "know better", but we sure didn't in 1989 when dire predictions about the fate of the US vs Japan were being made as the Japanese bought up Rockefeller Center, Pebble Beach Golf COurse and other US icons.
Germany has benefited from high-end exports to the US, which have held up. But the yuppie boom is coming to an end. All the wannabes and now downwardly mobile puppies won't hold the market up. It has an aging population with massive guaranteed entitlements that would make Americans green with envy. Much more than Japan had. Including 8 weeks paid vacation per year. Free healthcare and education. Full pensions. And like Japan, no need to expend for military protection. There is a big and growing wealth disparity with a shrinking middle. And the still-impoverished East has massive real estate loans
Real estate has not been a problem in Germany and won't be any time soon. You're right about the aging issue. And that's why Germany is eager to get foreign people to work here (if they're qualified enough and are willing to work hard and to earn little (which is totally stupid but...)). And it seems to work for now as more and more people from Spain and Greece are willing to go to Germany to get work.
About our exports to the United States:
Sure, the US are and always will be an important trade partner. But they are not as important anymore as they were in the 90s or 80s. You make it sound as if we would depend entirely on the US. That is not true. Other countries gained importance - like China.
About Russia:
Yes it is true that since the end of the cold war, we actually tried to improve our relationship to the country. The relationship is very special. Not because of the GDR (and there are a lot of East Germans that are able to speak Russian). It was a brutal, mercyless and fierce fight between Stalinist Russia and Hitler Germany. There are still old people in cities like Berlin that fear the Russians, but there is also a large and growing Russian community there.
It is true that our political class and our business elite turn a blind eye on the problems in Russia. But ask yourself: Is America that different? I mean look at your relationship to the Saudis - you don't want to tell me that there is democracy, freedom of rights, rights for women and all that stuff.We depend on Russia and the resources from there. And we export quite a lot to Russia (which includes also Weapons) And if you talk to anyone here, most people would love to see an improvement in their society. But it is not up to us to decide this.
Germany is not the WWII Germany. The mindset is totally different. Not to say that Germans don't make any mistakes or wrongdoings. Plenty. Like in every other nation on this planet. Today everyone believes that Germans are organized and hard working people. Go back to the 15th century and the Spanish people would've told you the opposite. Unorganized, chaotic, lazy, ineffective to summarize the beliefs of the time.
Brandywine = Legg Mason
We are getting like a week worth of rallies, quick fix and panic buy up, with crap fundamentals to boot. The Dow on close was a good example, quick sells forced through at the close. Point? We are f*cked. Europe is so F*cked it's beyond being f*cked. Did the John Dewey also mention that the Germans HATE a high oil price? It has screwed them more times than anything else, now with stagflation via crap EZ PMI, slowing economy etc
JUST GIVE ME A RULER AND I'LL DRAW YOU FUNDAMENTALS ON ANY GIVEN CHART!
His name is Petraeus. His title is Director but in fact he is now known as "God"...that would be yours, mine, their's...pretty much everybody's till after the election over here. Fer some reason everyone get's mad at me when I say how relieved I am at this fact. I just wanna be left alone...and he's my only hope as I see it.
Just respect the tape and make the money. You sound like you are caught short. All economic data is suprising, you are brave if you are shorting the market under these circumstances.
Yo Stax I agree, I would 100% run with the bulls, no probs. But you saw the close of the Dow, what it strips 30points on the closing bell! And I would go long? This is NOT a bull market. We had fudged/or inflation based PMI send the market into a 2012 meltup.
I went short end of 2011 when the santa rally fizzed. Caught now, but I dunno, I don't think I want to go long with the above example. we should have the first stages of 2012 volatility in a week or so.
Just saw a news report on the Italians going mental on the oil prices. Most of Europe will wake up very quickly to the oil price. That and the momos panic buy start year. No I aint a bull yet...
Also Asia starts intervention on the weak USD, usually but not always, is a good bear signal for a stock reversal.
Germans are pessimists and British are depressives - these are national responses to the way they are governed. The Germans hope for something better, ideologically purer, and more coherent; and the British are simply beaten down by being ruled by Overlords who think they are descended from the Normans.
German politics is rocky. Merkel undermined Horst Koehler as President - a man whose expertise in issues around Euro and IMF were far better than her chosen successor Wulff, who is now on the skids. Germany, like Britain is headed for political crisis as its government collapses
Everyone should study Weimar German history, not so much the economic aspect, but the sociological one. The problem is German history/innovation/success it peaks pretty hard. Then a decline. In other words the Germans get ahead of themselves. Then reality kicks in. Same today, they actually still think they can carry Europe. Particularly the lazy southern Europeans. Yes, it is arrogance, but once the German economy goes into reverse...then it all goes to sh*t. The best part is that aspects of hyper inflation has already hit Europe (food/fuel), but the stats/government are feeding this crack up boom denial madness.
So i 100% agree both UK and Germany in 2012 will face collapsed governments.
European 'payback' is coming, the can kicking craziness ends in Jan
.. but, but the new president was so much more modern and
liberal! He is a true peoples president as apparently he has
no money of his own ( he keeps getting "loans" from all over
the place) to fund his pitiful lifestyle. And even more liberal and down to earth is the fact that he left his family and married a prostitute right off a brothel .
(Whore mongers or not prosecuted in Germany; so don`t call him a criminal)
All for his country ! How more fittingly of the state of a non-nation and her pseudo-elites can such a first lady be ??
But lest I'll get myself into trouble on overseas trips,
let's not comment on his highly treasonous utterances of
"Islam is part of Germany". Just the usual NWO globalist
new-speak of some selected head-of-state...
Surely reading a book On War by a German would be tantamount to sticking your head into a fire?
Germany's culture? What about V? Vergangenheit, Verloren & Varus (a Roman general).. And what if one agrees with one of Niall Ferguson's conclusions in "The Pity of War", that Germany acted from a position of weakness? Isn't that all one needs to know? They pay employees in the car-industry twice as much (vs. the US) and produce twice as many cars, and yet Germany thought it necessary to implement Hartz reforms. A feeling of weakness?
I'll leave M-, F- or K-combinations to someone else...
"..the battle between “English liberalism with its emphasis on individual freedom and self-determination.."
Er, have you been to Britain or met the Govt in the past 20 years??
Authoritarian, spy-camera, totalitarian Statist creeps who (tried to) beat the US to locking up people without trial by 5-6 years
Britain is sinking in 80 years of socialism, the "Liberals" are closet-Marxists and even the right are died-in-the-wool State socialists.. there hasn't been a "liberal" in that toilet, Westminster, for all of 20 years
Freedom doesn't get a look-in when the State and its EU Marxists machinegun the people with 2,000 new laws a decade on micro-managing every facet of social and economic behaviour (Stalin and Mao were beginners compared to these creeps)
We all have so much to learn from how the State sector (mis)manages things and shows us how it's done... see the bankrupt shambles of State education, State healthcare, State transport and roads and State socialised property
Most countries get destroyed by socialists or bwankers... Britain has managed BOTH on this occasion, another fuking great achievement from the whore (Mother of Parliaments) on the Thames
Hear, hear.
As an aside, fellow Anglo-Saxon, 2,000 new laws in a decade is a refreshing breeze of freedom, compared to the 40,000 news which were imposed upon this shackled populace in America, throughout the Fifty States...effective just this January First past. This nation would be unrecognizable to Washington, Paine, Warren, Madison, Samuel Adams...indeed, even to a hardened Federalist as Hamilton. "Alien and Sedition Act ?" Libertarian boilerplate, when set in comparison to the "Patriot Act" so-called.
"One nation, under arrest..."
Blame the First World War & the governments' attempts to pretend it didn't bankrupt them. You should never stop & pay your respect on the 11th hour of the 11th day of the 11th month.
hey if socialism = evil, liberalism = good then you're right. everything wrong is socialism, the creative finance is socialism, banks are socialist, the huge CEO salaries are socialism, me stumbling and banging my head against the wall is socialism. also Thatcher was socialist. who could ever thought? thank you for your simple explanation of how things are in the land of the commie smurfs!
it's unbelievable how many people unreasonably obsessed with socialism populate ZH.
Since this thread is nominally about German business and political culture some of you may enjoy reading an admittedly idiosyncratic eBook on the subject "Cultural Dimensions of Expatriate Life In Germany" written by someone who has lived and worked in Germany at several different times in his life - that would be me. The book is available for the Kindle and can be purchased for the lordly sum of $2.99 or borrowed for free. I'm perhaps too ambitious when I suggest that it may offer some useful insights. http://www.amazon.com/Cultural-Dimensions-Expatriate-Germany-ebook/dp/B002KE45RS/ref=sr_1_1?ie=UTF8&m=AG56TWVU5XWC2&s=books&qid=1271882495&sr=1-1
ooops, you forgot Kris Kringle aka Santa Claus, aka Uncle Sam aka Uncle Bernark
crank up the wagner.
A yes, John Dewey. The man responsible for the deliberate dumbing down of the American Primary education and secondary education system.
Dewey's philosophy had evolved from Hegelian idealism to socialist materialism, and the purpose of the school was to show how education could be changed to produce little socialists and collectivists instead of little capitalists and individualists.
Have a look for an eye opener.
http://www.ordination.org/dumbing_down.htm
"English liberalism with its emphasis on individual freedom and self-determination and Prussian socialism with its emphasis on order and authority"
Im not sure how liberalism got confused the British or with subsidizing the city of london,or that socialism is now a prussian trate.... oh wait -a Investment Broker wrote this. Dont forget there LIMITED LIABILITY ;)
How? Quyite easily, US citizenism and cheap propaganda.
Russia, model of stability run by kleptocratic Siloviki - Bank Guy in Brussels obviously sees himself as Walter Ulbricht making CMEA work. German living standards would collapse in raising Russia's. Pre-1914 Siemens was dominant in Russia helping industrialise an existential threat to Germany as Schlieffen and his staff were contemplating striking before RUssia became too strong...and in those days Russia and Germany shared a common border through Poland just as in September 1939
More and more, US citizens make me think of Melniboné, the Dreaming City.
US citizens are trapped in their propaganda, fantaisical world and are unable to address reality straightly while being aware of it.
US citizens are the alpha and omega of the current state of the world but will want to see weaklings to be so.
Self determination in US citizenism?
Every time I read this kind of cheap propaganda, I cant help laughing thinking at the poor bloke somewhere around the world who is forced to pay the price of reality so that one US citizen can be allowed in its revelling of propaganda.
US citizens are trapped within the walls of their own propaganda. They know they are not fooling anyone with it, they know everyone knows it is propaganda but they have no choice but to surrender to the comforting arms of their propaganda.
Not real event is big enough to wake them from their dreams.
Such is the nature of US citizenism.