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German Economy Back In Trouble As Stimulus Wears Off

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http://www.telegraph.co.uk/finance/comment...unch-looms.html

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.

By Ambrose Evans-Pritchard

Published: 7:15PM BST 26 Aug 2009

German Chancellor Angela Merkel gives a statement to the media at the chancellery in Berlin on May 30, 2009

Tough action for tough times: the German government will be proactive in heading off another credit crisis Photo: Reuters

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.

And why are the banks refusing to lend money nilly willy? Because they are basically insolvent given the trillions spent and the billions available. This crunch is about to come back with double the level of vengeance now that the Brown stimulus has been absorbed and reality beckons once again.

As for house prices "rising" in the UK: far fewer transactions of higher priced homes are skewing the averages. Unemployment and inflating asset prices do nt mix well.

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http://www.telegraph.co.uk/finance/comment...unch-looms.html

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.

By Ambrose Evans-Pritchard

Published: 7:15PM BST 26 Aug 2009

German Chancellor Angela Merkel gives a statement to the media at the chancellery in Berlin on May 30, 2009

Tough action for tough times: the German government will be proactive in heading off another credit crisis Photo: Reuters

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.

And why are the banks refusing to lend money nilly willy? Because they are basically insolvent given the trillions spent and the billions available. This crunch is about to come back with double the level of vengeance now that the Brown stimulus has been absorbed and reality beckons once again.

As for house prices "rising" in the UK: far fewer transactions of higher priced homes are skewing the averages. Unemployment and inflating asset prices do nt mix well.

One thread not enough for you?

Or did you climax too soon?

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