German investor confidence continues to slide, now that the end of government stimulus programs enacted during the crisis is on the short-term horizon.
Bloomberg: The ZEW centre for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict developments six months ahead, dropped to 51.1 from 56 in October. The median forecast in a Bloomberg News survey of 39 economists was for a decline to 55.
The obvious comparison can be made with the U.S.. Investor confidence could be set to drop as the amount of U.S. government stimulus declines (though it’s doubtful it will be fully withdrawn any time soon).
The odd thing is that Germany’s removal of stimulus programs actually makes us more confident in the country’s prospects. Short term investors may clamor for stimulus in order to pump the market, but longer-term ones should be more interested in what’s best for the long-term prospects of the economy–an end to government support for the market, even for the U.S..