The MSM has this as a leading headline today... Recession Stalks Germany as Breakeven Rates Drop: Euro Credit
The falling cost of protecting against inflation in the German bond market portends a deeper slowdown in Europe's largest economy, signalling the effects of the continent's debt crisis are edging closer to the core.
The two-year breakeven rate, a gauge of inflation expectations, dropped to minus 0.45 percentage point for Germany from 1.04 percentage point a year ago, and has remained negative since the end of May. The rate reflects investors selling index- linked bonds in favor of regular securities because they reckon consumer prices will start declining.
"Germany is most probably heading for a recession," said Humayun Shahryar, chief executive officer of Auvest Capital Management Ltd., a fund company in Nicosia, Cyprus, overseeing $100 million. "We are going through a debt crisis inEurope, and massive global economic slowdown. I'm not sure how Germany will be able to escape that."
As the biggest contributor to bailouts for indebted euro partners, the risk is that economic travails at home make it even harder to convince German voters to loosen their purse strings just as yields on Spanish bonds suggest the country will be next in line for a rescue.
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Original Page: http://www.zerohedge.com/contributed/2012-07-30/when-not-if-germany-slows-whole-house-cards-collapses
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