Soft Landings or Hard Knocks?
When the light at the end of the tunnel begins to look more and more like a freight train
Random Walk keeps flipping over cards and seeing doom, but at least we’re not alone—Europe is going to show us how it’s done! Let’s hope the soft-landers carry the day, but it would be nice if they explained their plan to the rest of us. In the meantime, a sneak peak at who will pain and who will gain.
Things we think
LNG uber alles
Germany appears to be in trouble. Manufacturing is what Germany does best—better than anyone else in the Eurozone—but at this moment, it’s not going very well. PMI is roughly a measure of output, where above 50 means growth and below 50 means contraction:
While August was not as bad as expected, the trend has been negative for months now. For the world’s fourth-largest economy, with a trillion$+ of manufactured exports, that means trouble. And trouble for Germany means trouble for the Eurozone.
Why is this happening? Well, stop me if you’ve heard this before, but the simplest version is that it turns out Germany needs energy to manufacture (and ship) things,
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