We’ve been commenting lately (in fact, ad nauseam) on the undeniable signs of slowdown in Germany. The euro area’s economic powerhouse has so far been able to resist economic deterioration across Europe, and has been seen as a safe haven as countries like Portugal, Ireland, Italy, Greece, and Spain flounder. Regardless of Germany’s capability to survive and generate growth in the long term, today we received confirmation that Germany has been pulled into the European death spiral:
European markets all took a plunge on Draghi’s comments. US markets have fallen too. It’s unclear to what extent these fears are generated by Barack Obama’s election victory, which reawakens businesses’ concerns about the “fiscal cliff” and stricter financial regulation, and to what extent Europe is leading the charge. But it’s clear that US markets have more than just their own domestic issues to watch out for.