During the financial crisis, Germany’s export orders fell off a cliff. GDP plunged 2.1% in the 4th quarter of 2008 and a horrid 3.8% in the 1st quarter of 2009. The worst quarters in the history of the Federal Republic. But the recovery was enormous. So it’s natural that the German media would gloat over the “German success recipe.” But now the first shadows have appeared.
Greece’s Extortion Racket Maxed Out
by Wolf Richter • • Comments Off on Greece’s Extortion Racket Maxed Out
Just how bad is the real economy in Greece after five years of recession, countless strikes, and 17.7% unemployment? Registrations of vehicles plunged 30% in 2011, after having plunged 37% in 2010. They’re now at the lowest level in over 20 years. Troika inspectors are on their way … to demand yet more cuts. And the Prime Minister puts the nuclear option on the table.
California’s High-Speed Rail To Nowhere
by Wolf Richter • • Comments Off on California’s High-Speed Rail To Nowhere
For medium distances, high-speed rail is faster than flying. It’s hassle-free and comfortable. And it benefits the economy. But not the way California is doing it. The hullabaloo about funding the skyrocketing costs of linking LA and the Bay Area ignores a huge economic problem: once again, taxpayers are asked to create jobs overseas. Contenders: Germany, Japan, France, and China.
Construction Spending And The Housing Quagmire
by Wolf Richter • • 4 Comments
Among the “good” economic news today was private residential construction, up 2%, confirming trends in building permits and housing starts. Construction creates lots of jobs and contributes significantly to GDP. Everyone, from the President down to local politicians, wants it to grow. It gets them reelected. But for homeowners, banks, and tax payers, these trends are costly.
Tell-Tale Signs Of Official Exasperation
by Wolf Richter • • Comments Off on Tell-Tale Signs Of Official Exasperation
Vibrating with irrational post-flight euphoria, I place my feet on size 24 yellow footprints painted on the floor at immigration and wait. Travel lore has it that Tokyo Narita is a congested and problematic airport. But at 8:25 a.m. I see no congestion and no problems—until an immigration officer waves me over. He studies my ticket, doesn’t like it.
Missing: 13.3 Billion Deutschmarks
by Wolf Richter • • Comments Off on Missing: 13.3 Billion Deutschmarks
In late 2001, German banks sold Euro Starter Kits—sealed pouches with €10.23 in coins. One of many steps in the arduous process of weaning Germans from their D-Mark. I bought one and still have it. It’s in the back of a drawer, next to a D-Mark coin. And that coin is part of a vast phenomenon: 13.3 billion in missing Deutschmarks. But now people see a reason to hang on to them.
French CEO About Ratings Agencies: ‘We Have To Shoot All These Guys’
by Wolf Richter • • Comments Off on French CEO About Ratings Agencies: ‘We Have To Shoot All These Guys’
“We’re experiencing the beginning of the repercussions of the financial crisis,” said Michel-Edouard Leclerc, CEO of the second largest retailer in France. He has never seen so much “rational behavior among consumers” and so much “fear of getting screwed.” Until now, the crisis has touched mostly the financial world, but in 2012, it will hit the real economy. “It’s always the people who end up paying,” he said.
The US Auto Industry Drifts Off To China
by Wolf Richter • • Comments Off on The US Auto Industry Drifts Off To China
Practically every car or truck sold in the US today contains Chinese-made components, though Chinese-designed vehicles haven’t made it yet. Chinese automakers scramble to move from nice-looking but shoddy copy-and-paste models to reliable products that would be competitive in the US. It’s a government priority. And they’re getting there through the back door.
The Endgame: Japan Makes Another Move
by Wolf Richter • • Comments Off on The Endgame: Japan Makes Another Move
The cabinet approved a doozie of a budget with a horrid deficit. Yet it relies on accounting shenanigans. In reality, the government will borrow a disastrous 56.2% of every yen it spends. The vaunted trade surplus has become a trade deficit, the working population is declining, the savings rate plummets…. But the government has a solution: a miracle.
by Wolf Richter • • Comments Off on Culture Shock
Bali, 1996: The taxi driver honks his way from the airport through Denpasar’s polluted, dusty chaos and drops me off at a walled compound in Kuta by the beach. From the gate, I see a tropical garden, a pavilion with a pointy ceramic-tile roof, a swimming pool, and two-story guest buildings. A girl in red flowery sarong and sheer blouse….