Germany Enters Recession — Europe Expected To Follow
Germany is now reporting the worst recession they’ve faced in at least 12 years has begun:
The German economy, Europe’s largest, contracted more than economists expected in the third quarter, pushing the nation into the worst recession in at least 12 years.
Gross domestic product dropped a seasonally adjusted 0.5 percent from the second quarter, when it fell 0.4 percent, the Federal Statistics Office in Wiesbaden said today. Economists expected a 0.2 percent decline, the median of 40 forecasts in a Bloomberg News survey showed. The economy last contracted this much over two consecutive quarters — the technical definition of a recession — in 1996.
And this is not likely to be contained in Germany:
The International Monetary Fund predicts advanced economies including the U.S. and euro area will contract simultaneously next year for the first time since World War II. Federal Reserve Chairman Ben S. Bernanke, Bank of England Governor Mervyn King and European Central Bank President Jean-Claude Trichet have all signaled they’re ready to cut interest rates further to stem the deepening economic slump.
The European Commission said on Nov. 3 that the 15-nation euro region is probably already in a recession. Just over 40 percent of German exports go to other euro-area nations.
Several other European nations are expected to be reporting GDP numbers over the next day. The news is not expected to be positive, with at least Italy and Spain looking weak, with some troubles in France as well.
All this bad news will lead right into the G20 summit, and is likely to lead to some very interesting talks. You’ve already seen my thoughts on that. Sadly, I think Bush’s comments today may only throw fuel on the socialistic fire, since his words carry negative weight these days.
It’s tough for me even to pay attention to this stuff. Each day, I work to educate myself more and more about what’s actually going on. Each day, I try to get a better and better handle on the truth. The truth is making me less pessimistic about the market, and unfortunately is making me far more fatalistic. I’m really thinking Great Depression II is on the way. I just hope this doesn’t come true.