It is amusing to see how other writers portray a story vs. what I would say about the same data.
For example, Bloomberg columnist Rainer Buergin reports German Factory Orders Declined Most in Almost Three Years.
Please consider Buergin’s interpretation of the story vs. mine. Both follow.
Bloomberg: German factory orders dropped the most in almost three years in November as the euro region economy edged toward a recession and global demand weakened.
Mish: German factory orders dropped the most in almost three years in November as the European recession deepened.
Bloomberg: Orders, adjusted for seasonal swings and inflation, slipped 4.8 percent from October, when they surged a revised 5 percent, the Economy Ministry in Berlin said in a statement today. That’s the biggest drop since January 2009. Economists forecast a decline of 1.8 percent, according to the median of 25 estimates in a Bloomberg News survey.
Comment: That paragraph is fine.
Bloomberg: While the euro region’s sovereign debt crisis has clouded the outlook and cooling global growth is hurting export orders, Europe’s biggest economy may still avert a recession.
Mish: The euro region’s sovereign debt crisis, coupled with austerity measures and rising taxes in Greece, Spain, Italy, France has clarified the outlook, and it’s not pretty. The European recession will be extremely harsh and Germany will not escape.
Bloomberg: Unemployment at a two-decade low is helping to bolster consumer sentiment, service industries expanded in December and business confidence unexpectedly rose for a second month.
Mish: German unemployment at a two-decade low has temporarily helped boost consumer sentiment. In addition, service industries expanded in December and business confidence unexpectedly rose for a second month. However, do not expect those conditions to last. Any notion that Germany will escape a brutal European recession is complete silliness. Indeed, Germany and the entire Eurozone is already in a recession. Conditions will worsen as tax hikes and austerity measures take an enormous toll. Fundamentally, hiking taxes in the midst of a recession is the worst possible thing to do, yet various officials, including Nicolas Sarkozy, the president of France are clamoring for still more tax hikes.
Escalating trade wars between France and Spain are icing on the recession cake. For details please see …
“Social VAT” Trade Wars Heat Up Between Spain and France
Brussels Recommends Sucking Spain Dry with Increased VAT; France to Raise Sales Tax to Protect Jobs; Is There Any Point or Reason for the Eurozone?
Mike “Mish” Shedlock
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