Thursday, 27 August 2009
Dont Speak too Soon
Remember these little news stories on the 13 August.
Basically the Germans and the French stated publically that they were coming out of recession after showing 2 quarters of growth.
Then we see this headline coming out of Germany earlier today.
German state to lend directly as second credit crunch looms
Germany could directly intervene in the credit insurance and lending markets as soon as September to head off a looming credit crunch, as it fears the economic recovery may soon falter as banks refuse to roll over loans.
The finance minister, Peer Steinbrück, said broad sectors of the German economy are in trouble even if the country has avoided a full-blown lending crisis so far.
"Conditions have become much tougher for some industries – electrical engineering, machine tools, suppliers, chemicals and shipbuilding. We have clear evidence from both small and large companies that lending is jammed.
"The banks are not stepping up to their responsibility to provide credit," he told the German paper Handelsblatt.
"Some indicators that have performed better, but... it is too early to say we have shaken off this crisis. There is still lots of risk and uncertainty, and no grounds for complacency. The fact that GDP proved better in the second quarter with 0.3pc growth is somewhat reassuring, but let's not forget the economy has shrunk 7pc from a year before."
So basically German banks still refuse to lend. The small amount of money that appeared in circulation is now locked down and some one shot their mouth off a little too early to state all was well with German economy.
I do not realise that Gordon Brown and Badger Darling were involved with the Germans as well.