Written by by TYLER DURDEN at zerohedge.com
Things are not great in Germany.
A confluence of economic stagnation, higher energy prices (due to anti-nuclear idiocy), and the highest corporate distress rates in Europe suggest Deutschland is in for a sharp contraction – a sentiment shared among fund managers, credit traders and crestfallen German executives moping around Davos last month, according to Bloomberg.
The bad news is continuing to pile up. After the economy shrank in the final quarter of last year, downbeat early surveys for 2024 signal there’s little respite ahead.
Demand from borrowers for investment in the likes of machinery, factories and technology has fallen, creating a risk that domestic growth is impeded in the longer term as companies focus on getting through the current struggle. And now there’s growing concern about some lenders’ exposure to the shaky US corporate real estate market. -Bloomberg“
Germany is really in trouble,” according to Barings fund manager Brian Mangwiro. “All the big manufacturing economies are slowing but, in Germany, this is compounded by higher energy costs. There are also challenges in the auto sector with competition coming from China.”