Below is the report on the increase in the German Economy released today. Also included are the comments by Warren Mosler, who has pretty much been the best we have seen out of all for many years at understanding and discussing the Eurozone issues as well as the right side of the Euro trade to be on.
Whats relevant to us is all the negatives being discussed around about the Eurozone, and how this can possibly affect our markets here. So many are using the Eurozone as a potential reason for the US Markets to decline, so when we see good news on Germany, and then Warren Mosler thinking the Euro can possibly get stronger ( which it did today after his email below), then to us thats a positive for us in the markets over here. A stronger Euro is good for earnings and also the markets. We think this is reflected somewhat today in the financials, as one of our positions, CITIGROUP, is trading up 9 cents to $5.03 after this report. Also probably more important is JP Morgan CEO, Jamie Dimon, yesterday on CNBC was positve on the outlook for the banks yesterday and talked about banks starting and also raising dividends again.
FROM: Warren Mosler
It’s been a long two decades, and 3.6% growth coming out of a 4.7% slump, slowing to 2% this year, isn’t anything to brag about.
And with the German dependency on exporting to the rest of Europe they’ll likely support continued ECB funding assistance.
The austerity measures, which make euro ‘harder to get’, combined with ECB funding assistance, which addresses default risk, also continue to fundamentally support a stronger euro.
And higher crude prices, which make dollars ‘easier to get’ off shore, work to both weaken the dollar and weaken US domestic demand.
German Economy Grew at Fastest Pace in Two Decades
Jan. 12 (Bloomberg) — Germany enjoyed its fastest economic expansion in two decades last year as booming exports spurred hiring and consumer spending.
Gross domestic product jumped 3.6 percent, the most since data for a reunified Germany began in 1992, after slumping 4.7 percent in 2009, the Federal Statistics Office in Wiesbaden said today. The figure was in line with the median forecast in a Bloomberg News survey of 28 economists. GDP probably rose 0.5 percent in the fourth quarter from the third, the statistics office said. The official fourth-quarter report is due on Feb.
The Bundesbank expects Europeâ€™s largest economy to expand 2 percent this year and 1.5 percent in 2012 as the sovereign debt crisis damps demand in the euro area, its main export market.
Germanyâ€™s Continental AG, the second-biggest tire maker in Europe, yesterday reported sales and earnings that beat its 2010 goals.
â€œThe growth momentum continued into the first quarter and current forecasts might turn out to be too pessimistic,â€ said Klaus Baader, co-chief euro-area economist at Societe Generale in London. â€œThe German economy will likely have returned to its pre-crisis level in the third quarter.â€
The euro traded at $1.3032 at 10:13 a.m. in Frankfurt, up from $1.3005 before the GDP report.
‘The 7 Deadly Innocent Frauds’
“The most important book ever written”- Elizabeth O’Tool, Jan 8, 2011
The 1997-2001 budget surplus was the longest surplus since the 1927-1930 surplus. Coincidence?
The financial sector is a lot more trouble than it’s worth.
Valance Company, Inc.