8 Common Thinking Mistakes Our Brains Make Every Day and How to Prevent Them

8 Common Thinking Mistakes Our Brains Make Every Day and How to Prevent Them.
1. We surround ourselves with information that matches our beliefs
2. We believe in the “swimmer’s body” illusion
3. We worry about things we’ve already lost
4. We incorrectly predict odds
5. We rationalize purchases we don’t want
6. We make decisions based on the anchoring effect
7. We believe our memories more than facts
8. We pay more attention to stereotypes than we think

For the in depth look at these 8 mistakes visit 8 Common Thinking Mistakes Our Brains Make Every Day and How to Prevent Them – The Buffer Blog.

The Best Advice From A Single Guy

This is probably not something you see everyday on a Financial Services website but it struck a chord with me, especially after all the years that I have spent with couples and sometimes walked away thinking to myself that I was a relationship counselor and in fact it is often said that a Financial Planner will spend half his time as a relationship counselor.

Article starts here.

Nate Bagley says he was sick of hearing love stories that fell into one of two categories — scandal and divorce, and unrealistic fairytale.

So he started a Kickstarter and used his life savings to tour the country and interview couples in happy, long-term relationships.

He then took to Reddit’s /r/IAmA to share what he learned (just in time for Valentine’s Day), and to post podcasts of the couples’ journeys and advice.

via Here’s The Best Advice From A Single Guy Who Spent A Year Interviewing Couples | Business Insider.

Why Walmart Can Pull Off ‘Everyday Low Prices’ But Everyone Else Keeps Failing

Walmart, checkout

NEW YORK (AP) — Joelle Daddino is making it difficult for stores to make money.

Like many Americans who’ve grown accustomed to deep discounts, Daddino has become so obsessed with sales that she refuses to shop any place that isn’t having one.

“If I don’t have a coupon or it’s not on sale, I just won’t buy it,” says the Yaphank, N.Y., resident.

During the recession, retailers had more sales to lure cash-strapped Americans into stores. Now, that strategy has backfired. It has bred a group of deal junkies that won’t shop unless they see “70 percent” signs or yellow clearance stickers. They’re a thorn in the side of most retailers because the discounts it takes to get them into stores eats away at profits. In fact, retailers’ annual profit growth was cut in half between 2006 and last year, according to a survey of 122 merchants by Retail Metrics, a research firm.

So, big chains like J.C. Penney and Lowe’s are trying to wean sale-addicted customers off of sales in favor of everyday low pricing. It’s the biggest shift in pricing in decades, but retailers have a long way to go to convince shoppers that predictable pricing is better than the temporary promotions that they’ve grown to love. In fact, early this year, nearly three-quarters of 1,000 shoppers surveyed by consumer research firm America’s Research Group said it would take discounts of at least 50 percent to get them to buy a given item. That’s up from 52 percent in 2005.

Paco Underhill, whose company Envirosell studies consumer behavior, says retailers are to blame for the increase. He says their discounting during the downturn created shoppers who think everyday pricing “takes some fun out of” shopping. To help break the vicious cycle of discounting, Underhill says merchants have to think of ways to attract shoppers that can be just as intoxicating as two-hour sales or coupons. That could mean top-notch service or exclusive merchandise, for instance.

“Sales are just like heroin,” he says.

Now, retailers are trying to replicate the success of Wal-Mart Stores Inc., the world’s largest retailer that was founded 50 years ago on “everyday low” prices. Experts say Wal-Mart’s strategy has worked because it built its reputation on being able to offer customers the lowest prices every day.

In fact, the company’s revenue at stores opened at least a year in its U.S. namesake business fell for two years when it veered away from the strategy in favor of temporary price cuts. The company has since been able to turn around its business in part by renewing its commitment to everyday low prices.

Penney executives say they considered Wal-Mart’s model when they decided to change the retailer’s pricing strategy. It was part of an attempt to turn around the Plano, Tex-based chain, which has had annual sales declines in four of the past five years.

In February, J.C. Penney Co. eliminated coupons and the nearly 600 sales it used to have annually. It lowered prices in its stores permanently by 40 percent. The company’s three-tier price strategy also included monthly sales on select items and clearance sales every other Friday.

“Wal-Mart taught us all in the ’80s when you get a steady sales process, what happens? You can manage the business better,” Penney’s CEO and former Apple executive Ron Johnson says. “All good happened from a predictable sales pattern.”

But Penney, which has 1,000 stores, has learned that it’s not so easy to duplicate Wal-Mart’s magic. Customers have not embraced the new pricing: Penney recently reported its second consecutive quarter of big losses due to severe sales drops. And its stock has lost over 40 percent of its value since early February.

Now, Penney is changing its pricing — again — to add back more sales. Among other changes, the company began eliminating last month its monthlong sales and instead is increasing its clearance sales to every Friday. Johnson acknowledged that Penney made some mistakes, but he’s vowing to stick to the everyday pricing plan.

“Withdrawing from our promotional model to a more everyday model has been harder than we anticipated,” Johnson told investors in August. “But it doesn’t change our conviction that the promotional model had run its course, and we have a far better path forward.”

Wendy Ruud, a former Penney’s customer, isn’t waiting around to see if Penney executives are right. The Boca Raton, Fla. resident hasn’t been back to Penney since the new pricing plan was implemented earlier this year. Instead, she’s gone to Macy’s Inc. and Sears, Roebuck and Co. for clothing.

“When you have a sale, you really feel you are getting a better deal or a bargain,” Ruud, 49, said.

Penney isn’t the only retailer finding that everyday pricing is a tough sale to shoppers. Even merchants who are returning to their roots of offering permanently low prices are finding it tricky.

Like Wal-Mart, Lowe’s, the nation’s second largest home improvement chain, built its business around “everyday” low pricing. But then the company strayed away from that and started offering more sales when the housing market tanked in 2006. Shortly after, the company’s performance began to lag behind its bigger rival Home Depot, which never veered away from its everyday pricing strategy.

Since last summer, Lowe’s flip-flopped. It has been permanently cutting prices on a wide variety of items to better compete with Home Depot. But the strategy hasn’t worked. Lowe’s posted a 10-percent drop in net income amid a 0.4 percent decline in revenue at stores opened at least a year in the second quarter.

Lowe’s Cos. acknowledged that the pricing shift has been a problem. The company says it experienced light traffic over Memorial Day weekend in appliances, flooring, cabinets and countertops because of its reduced discount offerings. So executives say the retailer overcompensated by increasing promotions too much afterward, which hurt profit margins.

Lowe’s is still sticking to its everyday price plan, but it’s re-evaluating to find the right balance between everyday low prices and temporary promotions.

“We knew it was going to be difficult,” CEO Robert Niblock says. “But we may have been overly optimistic.”

Not every retailer is finding it hard to convince shoppers that everyday low pricing is better than fleeting sales. Clothing chain Stein Mart has had some bumps, but it’s starting to see positive results from its pricing shift.

At the end of last year, Stein Mart started cutting back on coupons, which it had relied on for two years. It’s now concentrating on what made the chain successful: offering permanent discounts of up to 60 percent on major brands such as Lucky and Nine West that department stores carry at full price. The company permanently cut prices up to 8 percent on select items, though it declined to offer details.

The 260-store chain, based in Jacksonville, Fla., says it changed its pricing after it found out that coupon purchases accounted for almost a third of sales in recent years, up from just around 5 percent from 2004 through 2006. Its goal is to cut coupon use by 50 percent this year.

Stein Mart says its pricing shift has been successful in part because it has simultaneously focused on boosting its offerings of trendy, brightly-colored merchandise in stores. It says that has helped to offset any backlash from it cutting back on coupons.

In the latest quarter, Stein Mart’s net income dropped 44 percent, dragged down by expenses related to software-related costs. But revenue at stores opened at least a year rose 1.6 percent. It’s a modest increase, but it’s significant because it reversed four straight quarters of sales declines.

“Our strategy is working very well for us,” the retailer’s interim CEO Jay Stein, the grandson of founder Sam Stein, told investors last month. “We’re getting back to our old self, a successful specialty-store environment at discount prices.”

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The Middle Class Are Blaming The Wrong People For Their Three Lost Decades

The Pew Research center ponders The Lost Decade of the Middle Class.

Since 2000, the middle class has shrunk in size, fallen backward in income and wealth, and shed some—but by no means all—of its characteristic faith in the future.

These stark assessments are based on findings from a new nationally representative Pew Research Center survey that includes 1,287 adults who describe themselves as middle class, supplemented by the Center’s analysis of data from the U.S. Census Bureau and Federal Reserve Board of Governors.

Median Income

chart

Median Net Worth

chart

Fully 85% of self-described middle-class adults say it is more difficult now than it was a decade ago for middle-class people to maintain their standard of living. Of those who feel this way, 62% say “a lot” of the blame lies with Congress, while 54% say the same about banks and financial institutions, 47% about large corporations, 44% about the Bush administration, 39% about foreign competition and 34% about the Obama administration. Just 8% blame the middle class itself a lot.

Who Is To Blame?

chart

Three Lost Decades! 

Median net worth is back to a level first seen in the 1980s. By that measure, the US has had three lost decades. Wow. 

62% Blame Politicians, Only 8% Blame Themselves

Note that 62% blame politicians and 54% blame financial institutions, but only 8% blame themselves.

Five Questions

Median net worth is back to a level first seen in the 1980s. By that measure, the US has had three lost decades. Wow. 

62% Blame Politicians, Only 8% Blame Themselves

Note that 62% blame politicians and 54% blame financial institutions, but only 8% blame themselves.

Five Questions

  1. Did banks force people to take out loans they could not pay back, or did people do so voluntarily?
  2. Who elects congress? 
  3. Do people make enough effort to understand interest rates, debt, the economic policies of politicians, exponential math and its implications, the untenable nature of public union pension plans and promises?
  4. Do a significant number of people (if not the majority) get their economic views (assuming they have any economic views) from The View, Oprah, The Talk, or CNBC?
  5. Why did PEW leave off the Fed and Fractional Reserve Lending from the list of answers?

Two Bonus Questions

  1. Would the majority of respondents know anything at all about the Fed and Fractional Reserve lending had the PEW listed those options?
  2. Who is really to blame for what is happening?


Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

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How Americans Really Feel About 25 Big Industries

stephen colbert goldman sachs

Gallup recently published its annual poll of Americans’ sentiment concerning the country’s main industries.

You’re unlikely to be surprised at who’s on the bottom — energy, government, banks.

But what’s important to note is which industries are rising in favor, and which are falling.  And which are going nowhere.

Gallup talked to 1,012 individuals to gauge whether they had a positive, negative, or neutral impression of the industry. The industries are ranked by the net positive score.  The sampling error is ±4 percentage points.

Computers — 63 % net positive

Percent positive: 73

Percent neutral: 14

Percent negative: 10

Change from last year: +1 ppt

Comment:  “America has remained the world’s dominant player in many aspects of the computer industry, with companies like Apple, Google, and Facebook standing as examples of entrepreneurial efforts that arose in short periods of time to offer products and services used the world over. It appears that Americans appreciate these success stories and hold these industry sectors in high esteem.” — Gallup

Source: Gallup




Restaurants — 49 % net positive

Percent positive: 59

Percent neutral: 29

Percent negative: 10

Change from last year: -2 ppt

Comment: Restaurants have historically averaged >50% positive.

Source: Gallup




Retail — 37 % net positive

Percent positive: 53

Percent neutral: 29

Percent negative: 16

Change from last year: +9 ppt

Comment:  The figure is just one point shy of the industry’s all-time high positive rating. 

Source: Gallup



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JIM ROGERS: India Can’t Overcome Its Growth Issues

Jim Rogers

Lately, India has stood out as being perhaps the most disappointing of the BRIC nations.  Ten years ago, Goldman Sachs economist Jim O’Neill declared these four emerging countries (Brazil, Russia, India, and China) as key growth markets.

To India, O’Neill asks, “What is the matter with you guys?”

Investment guru Jim Rogers is the latest to express concerns about country.

He spoke about it in an interview with The Economic Times:

ET Now: What about India because we are seeing the GDP growth slowing, inflation showing no signs of easing and the central bank refusing to cut rates till inflation eases? It is really like being stuck between a rock and a hard place. Can India overcome its sluggish growth issues?

Jim Rogers: I doubt it. India for some reasons gets better press in the reality. I still have not quite figured out the Indian press. The debt to GDP in India is now over 90%. Study shows that when you get that high debt ratio, it is very difficult to grow in a dynamic way. I am not a fan of India. In fact, I am short on India. So I do not think you are going to see a lot of good news coming out of India.

Rogers also talked about the Fed, China and the eurozone crisis.  Read more at The Economic Times.

SEE ALSO: 18 Brilliant Quotes From The Greatest Investor Of All Time >

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Why Billionaire Frank Giustra Is Making A Massive Bet On Inflation

We had the opportunity to sit down with Frank Giustra last week, the lion behind Lionsgate Films, and an early architect of countless resource companies—most notably Wheaton River Minerals (now known as the $33B Goldcorp, which spun out the $12B Silver Wheaton), Petro Rubiales (now the $7B Pacific Rubiales), and Urasia Energy.

By all accounts Giustra is brilliant, connected and wealthy. He made headlines in 2007 by pledging over $100 million and half of his future earnings to establish a charitable foundation with President Clinton. Outside of philanthropy however, Giustra has been reluctant to draw attention to himself, and rarely speaks publicly about investing.

In 2002 however, he moved heavily into gold and published, “A Tarnished Dollar Will Put the Shine on Gold”, when it was trading under $300 an ounce. Ten years later and with gold now priced over $1600/oz., it still occupies the largest percentage of his investment portfolio, and his views remain the same.

In discussing gold during the interview he said, “I believe it’s going a lot higher…it’s going to have a parabolic spike, caused by some event or some loss of confidence…a US dollar crisis would be a perfect example. That will cause gold to go through the roof, and then everybody will want to own it…I don’t think we’re even close to that yet…Gold will probably have a much greater run than some of the other hard assets–because it’s also a currency.” (19:16)

On the subject of inflation he remarked, “It’s easier to make money with inflation than with deflation. All you need to make money with inflation is money…Those that influence policy are usually the ones that have access to money, or can borrow it very cheaply… They have a conflict of interest… [Inflation is] where a lot of people are getting rich, and the public is being educated—quote “educated” to accept that type of [inflationary outcome].” (11:10)

When asked about the parallels between today’s Western societies and previous civilizations, he replied that a strong example would be, “Sixteenth century Spain. In just over 100 years, it went from an almost nothing nation, to a great empire, and back to a nothing nation. They became a consumption economy…They waged a number of wars with almost everybody on the planet…because they felt they were a superior nation…[and] that’s what’s happening in America today…There’s no way out except currency debasement.” (15:30)

With respect to the mining shares, he said, “The resource market is in the worst state I’ve ever seen it in…people usually connect irrational and stupid market behavior with peaks of markets, but it takes place at the bottom of markets too. And it’s just as bad [at bottoms]…fear is a much stronger emotion than greed…[There are] companies developing world-class assets trading at pennies on the dollar.” (21:50)

Additional topics discussed included agriculture, success, and mentorship (31:07).

Giustra’s predictions for the western world economies are sobering, but his view of the resource sector is optimistic, and his case for inflation is impossible to ignore. We feel this interview is required listening for all those who seek and desire wealth.

So without further comment, here is billionaire mining and entertainment mogul Frank Giustra in conversation at the Vancouver Club last week. Special thanks to Cambridge House and VC for putting us up, and to Frank for joining the program.

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Why Billionaire Frank Giustra Is Making A Massive Bet On Inflation

We had the opportunity to sit down with Frank Giustra last week, the lion behind Lionsgate Films, and an early architect of countless resource companies—most notably Wheaton River Minerals (now known as the $33B Goldcorp, which spun out the $12B Silver Wheaton), Petro Rubiales (now the $7B Pacific Rubiales), and Urasia Energy.

By all accounts Giustra is brilliant, connected and wealthy. He made headlines in 2007 by pledging over $100 million and half of his future earnings to establish a charitable foundation with President Clinton. Outside of philanthropy however, Giustra has been reluctant to draw attention to himself, and rarely speaks publicly about investing.

In 2002 however, he moved heavily into gold and published, “A Tarnished Dollar Will Put the Shine on Gold”, when it was trading under $300 an ounce. Ten years later and with gold now priced over $1600/oz., it still occupies the largest percentage of his investment portfolio, and his views remain the same.

In discussing gold during the interview he said, “I believe it’s going a lot higher…it’s going to have a parabolic spike, caused by some event or some loss of confidence…a US dollar crisis would be a perfect example. That will cause gold to go through the roof, and then everybody will want to own it…I don’t think we’re even close to that yet…Gold will probably have a much greater run than some of the other hard assets–because it’s also a currency.” (19:16)

On the subject of inflation he remarked, “It’s easier to make money with inflation than with deflation. All you need to make money with inflation is money…Those that influence policy are usually the ones that have access to money, or can borrow it very cheaply… They have a conflict of interest… [Inflation is] where a lot of people are getting rich, and the public is being educated—quote “educated” to accept that type of [inflationary outcome].” (11:10)

When asked about the parallels between today’s Western societies and previous civilizations, he replied that a strong example would be, “Sixteenth century Spain. In just over 100 years, it went from an almost nothing nation, to a great empire, and back to a nothing nation. They became a consumption economy…They waged a number of wars with almost everybody on the planet…because they felt they were a superior nation…[and] that’s what’s happening in America today…There’s no way out except currency debasement.” (15:30)

With respect to the mining shares, he said, “The resource market is in the worst state I’ve ever seen it in…people usually connect irrational and stupid market behavior with peaks of markets, but it takes place at the bottom of markets too. And it’s just as bad [at bottoms]…fear is a much stronger emotion than greed…[There are] companies developing world-class assets trading at pennies on the dollar.” (21:50)

Additional topics discussed included agriculture, success, and mentorship (31:07).

Giustra’s predictions for the western world economies are sobering, but his view of the resource sector is optimistic, and his case for inflation is impossible to ignore. We feel this interview is required listening for all those who seek and desire wealth.

So without further comment, here is billionaire mining and entertainment mogul Frank Giustra in conversation at the Vancouver Club last week. Special thanks to Cambridge House and VC for putting us up, and to Frank for joining the program.

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8 German Judges Hold The Fate Of The Euro In Their Hands

* German ruling on bailouts, budget rules on Sept 12

* Constitutional Court seen giving qualified “yes”

* May demand more consultation, limited liability

BERLIN, Sept 3 (Reuters) – Germany’s Constitutional Court holds the fate of the euro in its hands when it rules next week on whether a crucial euro zone financial rescue fund can go ahead.

A negative ruling, considered improbable by legal experts, would cast the 17-nation European single currency area into turmoil, spurring panic on bond markets by raising doubt over any more rescues of debt-laden southern states.

But if, as expected, the court gives a green light on Sept. 12 to the euro zone’s permanent bailout mechanism and a pact on stricter budget discipline, it may add conditions that constrain Berlin’s power to pursue further European integration.

The court based in Karlsruhe in western Germany, one of the country’s most trusted institutions, is unlikely to let Chancellor Angela Merkel completely off the hook.

Few experts expect the eight red-robed judges to reject the European Stability Mechanism (ESM)and fiscal pact outright, not least because of the devastating impact on financial markets.

“If they were to surprise us by striking down Germany’s participation, I would think it’d be an utter bloodbath in markets,” UniCredit global chief economist Erik Nielsen said.

But the sages may well demand more parliamentary consultation before Germany agrees to any further European integration, or signal that the process has gone as far as can be permitted without rewriting Germany’s Basic Law.

“I don’t think the court will block the ESM or the fiscal pact, so European integration of the euro will not come to an end on Sept. 12,” said Franz Mayer, a professor of European Union and constitutional law at Germany’s Bielefeld University.

“But it is unlikely there will just be one paragraph saying ‘no problem at all, just go ahead’. As in the past, it will be foggy, open to interpretation and all parties involved will say ‘We won’,” Mayer told Reuters.

The ESM was meant to succeed the existing temporary European Financial Stability Facility (EFSF) from July and erect a 700 billion-euro firewall to prevent the euro zone’s sovereign debt crisis from spreading further.

But Karlsruhe threw a spanner in the works by deciding in mid-July to take two months to look into complaints that the ESM and the fiscal pact that gives EU institutions intrusive powers to enforce the currency area’s budget rules violate the German constitution.

That left the fate of the new rescue fund in limbo. Without ratification by the biggest economy it cannot go into force.

On Sept. 12 the court’s Second Senate will rule on requests for an injunction from over 12,000 plaintiffs, who include eurosceptics from academia and Merkel’s own coalition as well as the hardline Left Party.

They essentially argue that these treaties undermine German lawmakers’ constitutional right to decide on the budget and expose Germany to potentially unlimited financial liability for the ESM risks.

Rulings on the EU’s Lisbon Treaty in 2009 and on the Greek loans and the EFSF in 2010 earned the court a reputation as a thorn in the side of the euro for insisting on the Bundestag’s (lower house of parliament) rights as a condition for approval.

“For Germans this is nothing new, every major decision on European integration is contested domestically so we are pretty much used to it and not overly worried,” said economist Klaus Deutsch of Deutsche Bank.

“Given the fact that they decided positively on the EFSF, I’d be surprised if they came out clearly against the constitutionality of the ESM,” he added.

SOFT AND HARD OPTIONS

Set up in 1951 to avoid a return to Nazi tyranny, the court has a history of testing the patience of chancellors such as founding father Konrad Adenauer, who called it “the dictator of Germany”.

The ruling comes amid frantic diplomacy over proposed action by euro zone governments and the European Central Bank (ECB) to cap Spanish and Italian borrowing costs, which is conditional on the ESM being deployed.

Merkel says it is “of the utmost importance” that the court approve the ESM. The worst-case scenario for euro zone leaders would be Karlsruhe rejecting it, leaving them in the short term with only 150 billion euros left in the EFSF.

German ECB board member Joerg Asmussen has said a ‘No’ from the court would just require “changes to the construction” of the ESM. But Morgan Stanley economists, rating the chances of a ‘No’ verdict as high as 40 percent, said one impact of this would be to permit “only cosmetic” ECB bond-buying via the EFSF.

“We believe that markets are not priced appropriately for the downside tail risk of a possible ‘no’ verdict,” the investment bank said in a note.

Still, the most likely scenario is that the court allows Germany to ratify the ESM and fiscal pact – but with qualifying comments that could range from mere formalities to fundamental observations about European integration that could reverberate for years to come.

The “soft” options include reiterating the need to consult lawmakers, splitting hairs about where the ESM treaty belongs in the constitution, or tinkering with details of the fiscal pact.

It could slow down the ESM by insisting that the upper house (Bundesrat), representing the federal states, also vote on new rescue requests or on new powers such as granting the ESM a banking license.

Constitutional experts have also speculated that the court could demand that a reservation be attached when President Joachim Gauck signs Germany’s ESM ratification.

This would address concerns about exposure to the ESM being open-ended – for example, if other euro zone states are unable to pay their share, or if there is an attempt to raise the maximum capital – by setting in stone the interpretation of “limited liability”.

The court could even force an unprecedented referendum on deeper EU integration by rejecting the treaties outright or by stating that no more sovereignty can be transferred to European authorities or courts under the current German constitution.

EURO GAME-CHANGER

“A change of the German constitution would be a big game-changer on the future of the euro,” wrote Morgan Stanley.

This would take Germany into uncharted territory. The constitution does not permit nationwide plebiscites, which got a bad name in the Weimar Republic and under the Nazis. Neither is there any guarantee that the public, let alone the increasingly eurosceptic media, would back deeper political and fiscal union.

“You can imagine that if there were an aggressive ruling, meaning at least a referendum and possibly much more, the result could be a huge economic depression unseen in Germany or Europe since World War Two,” said Humboldt University’s Matthias Kumm.

But the law professor believes the judges, especially 48-year-old court President Andreas Vosskuhle, are “finely-tuned” enough politically to avoid such a bombshell.

While Vosskuhle and court rapporteur Peter Huber, who drafts the ruling, are known to lean towards the idea of a referendum on Europe, as does Finance Minister Wolfgang Schaeuble, the judges will not want to sign away their powers or complicate the 2013 election, when Merkel will seek a third term in office.

But the referendum debate will not go away. Opinion polls suggest seven out of 10 Germans would like to have a direct say in how much more sovereign power – especially regarding how their taxes are spent – should be surrendered to Brussels.

Katinka Barysch at the Centre for European Reform said this debate “suits both the opposition and government”, giving the Social Democrats an easy platform and enabling Merkel to “put off hard decisions until after the 2013 election”.

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Germany’s Export Collapse

train germany yellow fast

The grimmest aspect of today’s German PMI report concerned exports:

Companies that reported a decrease in production levels in August generally linked this to lower
volumes of new business and fewer outstanding workloads at their plants. August data highlighted a
sharp fall in new order levels, although the rate of contraction eased slightly from July’s low. The slower pace of decline largely reflected a less marked drop in domestic demand, as new export work fell at the steepest rate since April 2009

Survey respondents commented on a general slowdown in global demand and particular weakness in new business inflows from Southern Europe. Investment and intermediate goods producers recorded the steepest reductions in new export orders. Meanwhile, August data signalled a rapid fall in outstanding business at manufacturing firms, which extended the current period of contraction to 12 months. 

For more details of the week report, see here >

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