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Germany's ZEW Economic Sentiment Indicator increases by 16.9 points to 22.3 for March, marking...

Germany's ZEW Economic Sentiment Indicator increases by 16.9 points to 22.3 for March, marking the highest reading since June 2010 and the 4th consecutive month the sentiment indicator has trended higher.
Comments (5)
  • schatzl
    , contributor
    Comments (391) | Send Message
     
    And is reflected in the stock exchange. DAX about to crack the 7000. Don't trust it one bit as Germany's export markets in Europe are failing badly. Who will be buying their products?
    13 Mar 2012, 07:38 AM Reply Like
  • WMARKW
    , contributor
    Comments (10234) | Send Message
     
    Greece? Oops....wrong answer. The answer is Germany cannot keep its status as a major exporter in the EU. Something has to give to change the status quo to allow the Mediterranean states to become competitive. It a combination of things that have to change, but you can rest assured that Germany has no interesting in helping that situation....other than lending Euros - which won't do anything.
    13 Mar 2012, 09:27 AM Reply Like
  • kcr357
    , contributor
    Comments (557) | Send Message
     
    Would you say Germany had a distinct advantage when the euro was implemented due to a large manufacturing base compared to other countries, as well as those other countries now having a currency on par with Germany to allow them to consume a lot of German made goods? Kind of like if central america were to adopt the dollar(just trying to get a good understanding of what's going on overseas)
    13 Mar 2012, 01:21 PM Reply Like
  • schatzl
    , contributor
    Comments (391) | Send Message
     
    The € per se has not been to the benefit of Germany as many like to believe. I've lived and worked in Germany pre - and post € and what has happened in general, was that Germany maintained their large export surplus - that admittedly grew even larger, but at the expense of lesser direct investments. That money ended up and Spain and Ireland and was one of the main contributors to the property bubbles. For Germany, the ECB interest rate was too high, for places like Ireland it was too low. The common currency and common interest rate created giant imbalances that have simply grown and were never addressed. The ECB is patching up the cracks with our European version of QE, but it can't hide the fact that this whole project is a disaster.

     

    What has made Germany so competitive beyond what is was already, was the incredible wage restraint by unions and labour, coupled with labour reforms that liberalised the labour markets. Germany experienced no real wage growth in the last 10 years, compared to the rest of the €-zone where real wages grew between 20 and 30%. The competitive gap is so large now, that no amount of liquidity can prevent the inevitable collapse. When that happens will be decided either by the ECB or the voters.
    13 Mar 2012, 02:48 PM Reply Like
  • WMARKW
    , contributor
    Comments (10234) | Send Message
     
    Excellent post Schatzl. Es war sehr gut !
    13 Mar 2012, 06:19 PM Reply Like
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