Under the radar: Some trends are obvious enough and visible to all investors. Others are more-subtle, but are just as potent, and these often slip 'under the radar.'Case in point: German manufacturing orders, which jumped the most in almost two years in May -- rising 4.4%, Bloomberg News reported Tuesday. That's the indicator's largest increase since June 2007, and nine times the Bloomberg News consensus estimate.
The significance? Germany is Europe's largest economy, with a 2008 GDP of $2.86 trillion, or as they say in the Europe, 'As Germany's economy goes, so goes the euro-zone.'
Hence, the May manufacturing stat represents a 'euro-green shoot' -- another sign that Europe's largest contraction since World War II is ending.
Further, one of the structural imbalances of the previous global expansion (and there were many) concerned global growth that was disproportionately driven by U.S. GDP growth. And, as many investors are now aware, much of that growth was unsustainable and driven by home equity loan and mortgage debt-fueled consumption. The United States has since entered the 'frugal consumer' era. Translation: consumption has to increase in the world's other, major economic regions -- particularly in Europe -- and a growing, healthy German economy is intrinsic to that more-balanced global GDP growth.
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Reader Comments (Page 1 of 1)
7-07-2009 @ 6:56PM
rob said...
anyone want to bless kids in europe and brazil & down under?