Global| Jan 27 2009German Biz Confidence In a Small Rebound: What's All the Fuss?
Summary
The German IFO index made a small rebound in January and that has caused some excited stirring in markets. Still the IFO Business climate index is very weak and the EMU sentiment index for Germany (Dec) is even lower than it was in [...]
The German IFO index made a small rebound in January and that
has caused some excited stirring in markets. Still the IFO Business
climate index is very weak and the EMU sentiment index for Germany
(Dec) is even lower than it was in 2001 at the bottom. There should be
little excitement is such low persisting readings and on such a weak
rebound.
The table above shows that the Biz Climate, Current Situation
and Biz Expectations indices all are down about 20% Yr/Yr. Taken as a
percent of their respective ranges since early 1991 the business
climate index is in at the bottom one-percentile of its range, the
current situation is in the bottom 12% of its range and business
expectations are in the bottom nine percent of their range. These are
all weak global range positions and year over year standings.
That markets want to put a positive spin on such a poor
showing tells us of the poor state of market psychology right now.
Clearly the chart (above) shows little to cheer about. In any event we
would expect a much more substantial rebound in expectations even
before the current situation improves. Nothing like that is in train.
The optimism registered today, is just that based on nothing in
particular.
| IFO Survey: Germany | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Percent: Yr/Yr | Index Numbers | ||||||||
| Jan 09 |
Dec 08 |
Nov 08 |
Oct 08 |
Sep 08 |
Current | Dec 08 |
Curr/ Avg |
Percentile | |
| Biz Climate | -19.8% | -20.0% | -17.8% | -13.4% | -11.0% | 83.0 | 82.7 | 86.3% | 1.1% |
| Current Situation | -19.8% | -18.1% | -14.2% | -8.9% | -9.4% | 86.8 | 88.8 | 90.3% | 11.9% |
| Biz Expectations | -19.8% | -21.9% | -21.3% | -17.6% | -12.6% | 79.4 | 76.9 | 82.4% | 8.7% |
| average & range since Apr-91 | |||||||||
Robert Brusca
AuthorMore in Author Profile »Robert A. Brusca is Chief Economist of Fact and Opinion Economics, a consulting firm he founded in Manhattan. He has been an economist on Wall Street for over 25 years. He has visited central banking and large institutional clients in over 30 countries in his career as an economist. Mr. Brusca was a Divisional Research Chief at the Federal Reserve Bank of NY (Chief of the International Financial markets Division), a Fed Watcher at Irving Trust and Chief Economist at Nikko Securities International. He is widely quoted and appears in various media. Mr. Brusca holds an MA and Ph.D. in economics from Michigan State University and a BA in Economics from the University of Michigan. His research pursues his strong interests in non aligned policy economics as well as international economics. FAO Economics’ research targets investors to assist them in making better investment decisions in stocks, bonds and in a variety of international assets. The company does not manage money and has no conflicts in giving economic advice.
More Economy in Brief
