Expect "DramaticSlowdown" inGermany: Saxo BankAnalysis
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Saxo Bank chief economist Steen Jakobsen had some interesting comments on Germany and German exports given a slowdown in China and a rising Euro.

To help put things in perspective, here is a chart on the Euro.

Technical analysts will point out this is a bearish break of the trendline, thus the euro may be headed lower.

Fundamentally, the chart reflects an unexpected rate cut by ECB president Mario Draghi as well as statements by various ECB members regarding the possibility of negative interest rates.

Let’s continue the fundamental view as presented by Steen Jakobsen.

ExpectDramaticGermanySlowdown

Via email, Steen writes …

The German economy is heavily exposed to global growth which we see dramatically slowing down – the strong EURO will impact export 5-7 month from now which creates dramatic slow-down where we even could see the German economy going below 1% growth and come close to recession.

Our Economy-Physics models sees slow-down for the next three to six-month then small rebound before dramatic slow-down in tail-end of 2014 – overall the German GDP will be challenged.

German industry and its consumer is increasingly becoming uncompetitive through one of the worst energy policies in Europe. Right now German companies (Read: BMW and Daimler) are either already moving or about to move jobs to mainly the US due to steep rises in energy cost.

The new coalition furthermore wants to pursue less flexible labor market model to "reset" inequality. Nice top line effort wrong method.

Finally, the European economy is almost perfect symmetrical in its peaks and valleys: (Source: Bloomberg LLP & Citigroup CESI Index)

EurozoneSymmetry

I agree with the viewpoint stated by Steen.

For further discussion and analysis, please see …

China’s 3rd Plenum Means Slower Growth; Australia’s "One Trick Pony" is Biggest Loser; What About Canada? Eurozone Flash PMI Shows Slight Growth, France Back in Contraction

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

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