Is the glass still half full or already half empty?

Deutsche Bank boss Christian Sewing declined to commit himself in a public appearance this week: "I would say that with the announcements by the central banks that they will raise interest rates quite significantly, it is difficult to give a percentage, but the probability of a global recession and also in Europe is 50 percent.”

Archibald Preuschat

Editor in Business

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The recession, nothing occupies investors at the moment - and the mood is highly nervous, how nervous, can be read day in, day out on the German stock barometer Dax.

It goes a little up, then a good bit down - but in total the losses are there.

The Dax lost more than one percent over the course of the week.

But is the recession coming now?

Well, some say so, others say so.

The lower raw material prices speak for a significant slowdown in economic activity: For example, the price of copper fell by more than 6 percent over the course of the week and is only slightly higher than a year ago.

signs of a recession

Other industrial metals show a similar trend.

And even the oil price, which some market observers recently saw at $150 a barrel, lost a good 5 percent over the course of the week.

On the other hand, Klaus Wohlrabe from Munich's Ifo Institute does not yet see any signs of a recession.

However, the economist adds: "The impending gas shortage has significantly increased the uncertainty among companies."

That is exactly the crucial point: What will happen if German factories say: All wheels stand still because Vladimir Putin wants it?

And what do consumers do when they hold the final bill for electricity and especially natural gas in their hands and realize that they have already burned the money that they actually saved for a vacation or other leisure activities?

This will hit sectors like tourism and gastronomy, which have just recovered from the economic consequences of the corona pandemic, badly.

Back to Christian Sewing: If his glass was still half full, he spilled a good portion on Thursday.

Deutsche Bank's paper fell by a whopping 12 percent, and Commerzbank did the same.

If the recession comes, then the institutes have to reckon with high loan defaults, the reasoning was given.

If you believe that the markets are right, that is an alarm signal.