Deutschland uber alles?

So congratulations, then, to the Germans, who were worthy winners of the World Cup yesterday.  Macro Man was surprised to find himself hoping they would win; although they played by far the more attractive brand of football of the two finalists, he's never really forgiven them for the appalling (uncalled) handball in the 2002 quarterfinals that ensured the USA's departure. (2:10 of this clip.)

The country will no doubt be rapt with ecstasy today and throughout the week; before long, however, the glow of even the most brilliant of sporting triumphs begins to ebb and you're back facing the quotidian burdens of life.

To be sure, Germany sits atop the European economic sphere as well as the global footballing one, but these days that's not exactly a lofty throne.  Indeed, while it's all well and good for Angela Merkel to plant a sweaty kiss upon the cheek of Mario Goetze and to warn about the perils caused by those damned Portugeezers, the trend in the German data isn't exactly screaming "Deutschland uber alles."

The Markit PMI, for example, peaked in Janaury and has fallen every month but one since:

The decline has been mirrored by a deceleration in industrial production, which is now threatening to decline one  a y/y basis:

In fairness, that decline has not been mirrored in manufacturing orders, where growth is still comfortably positive.   It will be interesting to see how that gap gets filled:

Frau Merkel had better hope, meanwhile, that die Mannschaft's triumph inspires an orgy of replica shirt purchases, as the trend in the (admittedly flaky) retail sales figure does not look particularly encouraging, either:

As discussed in the comments section to Macro Man's previous post, it's not like the Germans have a lot of moral standing when it comes to the banking sector, either.  It had been awhile since your author had looked at a chart of Deutsche Bank: it certainly looks like the market is voting with its feet.  (By way of disclosure, Macro Man has a good professional relationship with DB and a number of its front office personnel.   They have also been very generous in supporting a charitable endeavour of his, so they certainly deserve a karmic tip of the cap for that.)

While it is true that both employment and net exports have held up very well thus far, it is probably legitimate to question how sustainable that might be with the rest of the eurozone looking even worse than the Germans, as the economic surprise index below would indicate:

Still, things could be worse.   Germany has after all won the World Cup- just imagine how those Brazilians must be feeling after getting another thumping.  That Dilma Rousseff was booed lustily during the post-match awards ceremony would not appear to augur well for her electoral chances.

Still, one should always look on the bright side of life.  Brazil hosted quite possibly the greatest World Cup of them all, even if the local side conceded more goals in the tournament than anyone since Belgium in 1986.  Moreover, they can now concentrate on fielding a side full of 11 humans now that the nation's least favourite donkey has retired from international football.
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Click here for comments
July 14, 2014 at 11:13 AM ×

speaking of which, I remember the wave of national pride post our 1982 victory...

Toto Cutugno rules!


abee crombie
July 14, 2014 at 2:01 PM ×

IBEX on the 100day MA. Looking for a bounce?

Was that a turn in the CAD and GBP

First Nickel, then Copper (bounce) now Zinc. Though it seems precious metals getting spanked

Mr. T
July 14, 2014 at 4:58 PM ×

Isn't this just more data supporting ever larger rounds of Draghi bazooka ammunition? I nibbled on some DB today - not because I have visibility into their assets or loan portfolio, but because its apparent to me that whatever friction the ECB had to reinvent its mandate was only from Germany's success - with their economy weakening and their banks on the ropes it seems like full speed ahead.

July 24, 2014 at 5:36 PM ×

Yes, the Germans seem to be winning at everything these days. World Cup Soccer, German F1 Grand Prix, and their economy is the envy of the world. I'm sure US policy makers can learn something from then too.