usiness morale has fallen significantly in industry and retail
Expectations are getting more pessimistic
But there are no signs of a recession at the moment
Threat of gas shortages has increased uncertainty
It will be a bit naive to completely rule out a recession at this stage. The combination of higher and more persistent inflation as well as the gas supply shortage will present major economic headwinds to Germany in the months ahead. If the former doesn’t ease significantly, I doubt things on the ground will see a turn for the better.
Bridgewater earlier this month disclosed a range of short bets in excess of €1.5bn … it now holds close to €9bn in short positions including Bayer, Allianz, Santander and BASF.
“Given the deterioration in fundamentals and high inflation I am not surprised that they feel that this may be the beginning rather than the end of the correction,” said Patrick Ghali, co-founder of London hedge-fund advisory firm Sussex Partners.