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Germany sees company bankruptcies soar
- raverbashing 2y agoThe question is, are these companies the one that still work by fax and think the internet is a fad?
- throwbadubadu 2y agoYeah, at the same time: https://www.manager-magazin.de/unternehmen/volkswagen-chef-deutschland-ist-viel-besser-als-das-bild-das-aktuell-gezeichnet-wird-a-f9cb036d-396a-47f1-b582-57ef4d16c529 https://www.manager-magazin.de/unternehmen/volkswagen-chef-d... "Germany much better than the picture painted" https://www.deutschlandfunk.de/arbeitslosenquote-im-euroraum-auf-rekordtiefstand-102.html https://www.deutschlandfunk.de/arbeitslosenquote-im-euroraum... "Unemployed rate at its lowest in the EU" Similarly, in the US: https://www.theguardian.com/us-news/article/2024/may/22/poll-economy-recession-biden https://www.theguardian.com/us-news/article/2024/may/22/poll... "Majority of Americans wrongly believe US is in recession" We wouldn't be where we are with right-wing votes if we wouldn't have this much panic pessimistic breaking news everywhere I feel. There are definitely more perspectives. (And yes I know, unfair distribution plays also a huge part in very different perspectives..).
- redeeman 2y agoyou think people that "incorrectly believe the US is in recession" go by doomsday news? they look at their pocket when buying groceries, they looked at the glorious effects of bidenomics on their own life, and how it has been made that much harder, and form their opinions. When the talking heads on TV bask in how great the economy is, they speak from a position where their insider-trading fueled gains are so far away from the world of normal people that they barely could even point to a "normal person" if they were dumped in the middle of a crowd of them
- User23 2y agoIn the US the term recession has no specific definition. So whether or not we’re in one doesn’t mean much.
- lkramer 2y agoI am not American, and I don't know all the finer details, but weren't a lot of the inflation issues post covid a direct result of Trump's unrestrained borrowing even in a growth economy, all in the name of keeping the stock markets growing as your primary indicator of economic success a big factor? Certainly looking at the UK economy, I can trace back the source of our current problems well beyond the current election cycles even if the incompetence of the current government has not helped.
- User23 2y agoNo, this has nothing to do with Trump. The USA has been in “unrestrained borrowing” because it’s been funding itself with continuing resolutions rather than a budget since 2009. That means that the extra trillion dollars in 2009 “temporary” stimulus has been added to the debt every year since on top of the prior trajectory. This is easily seen if you look at the relevant graphs on FRED. That said, government borrowing or money creation doesn’t directly cause inflation either. Sad to say, the inflation we’re seeing appears to be as much on the production and importing side as it is on the demand side.
- hobs 2y ago> We estimate the ten-year cost of the legislation and executive actions President Trump signed into law was about $8.4 trillion, with interest. Yep, nothing to do with trump. https://www.crfb.org/blogs/how-much-did-president-trump-add-debt https://www.crfb.org/blogs/how-much-did-president-trump-add-...
- User23 2y agoYou’re providing a good example of how partisan bias makes you both snarky and stupid. For your own sake you may want to check that impulse. Otherwise, you are, despite your sarcasm, stating the truth. Nevertheless it might behoove you to learn more about how the US system operates. Like Biden after him and Obama before him, Trump had the choice to either sign the continuing resolutions that Congress sent him, or to refuse to fund the government altogether. This is something called Hobson’s choice and it’s not really a choice at all.
- ozim 2y agoOne company I worked for was always „in recession” especially when you asked about salary increases.
- rqtwteye 2y agoMine too! Stock is up, CEO pay is up, but the business environment is very difficult when you ask for a raise c
- snowpid 2y agois there any reason why this post is voted down?
- dailykoder 2y agobecause of the 'panic pessimistic breaking news everywhere', I guess. Somehow people want to believe that it's all really THAT bad and not that we are managing those hard times quite okay-ish
- itsoktocry 2y ago>Somehow people want to believe that it's all really THAT bad and not that we are managing those hard times quite okay-ish You: enlightened People voting against their governments across the world: no idea how good things are.
- portaouflop 2y agoIf you only knew how bad things really are
- snowpid 2y agoso how bad things in Germany really are?
- itsoktocry 2y ago>is there any reason why this post is voted down? Because it presumes the only reason people are voting "right-wing" is because they are reading "doomsday news". Versus, you know, disagreeing with the way the "left wing" have been running things. Not sure why the left are going with "You're not poor, look at these charts" as a political strategy, but unsurprisingly, people aren't buying it...the world over.
- lyu07282 2y agoDescribing liberals as left wing is really frustrating but it demonstrates exactly how liberal politics lead to right-wing authoritarianism and how ineffective liberals are at countering right-wing populism. If you think this way remember all the left-wing popular movements in recent times, like Occupy Wallstreet, Universal Healthcare, Climate Change, BLM or Palestine Solidarity. Now why do you think liberals in power did absolutely nothing for any of those causes? Why do left-wing protests do nothing if we are ruled by left-wing politicians?
- thg 2y agoThat's 80+% of the companies here, so I doubt it really is the relevant factor.
- LoganDark 2y agoI think it's only really 80% of the companies that deal with anything having to do with money.
- RamblingCTO 2y agoNah. I suspect that rising regulation and energy/manufacturing prices cause a big sweep. The real estate market is getting fucked pretty bad right now, as well as everything relying on lots of energy. Simply put: the runway ran out for a lot of folks and new regulations bite into their margins like a fire in a papermill
- Ekaros 2y agoNot to forget the rates. Euribor went from negative to positive in 2022... This alone had effect on some delay.
- oaiey 2y agoLawyers, Doctors and Buerocrats... oh no, they are fine.
- constantcrying 2y ago>The question is, are these companies the one that still work by fax and think the internet is a fad? No, only the government thinks like that.
- PinguTS 2y agoThe article focuses only on the near time statistics and is missing out the long term statistics as well as effects of the COVID19 pandemic. The effects of the COVID19 pandemic were that the bankruptcies law was temporarily changed, which had the effect that companies that were already on a way to bankruptcy could live longer. That is also the reason why in 2020 the numbers were at a low point for almost 20 years. Then in 2021 the numbers soared. So the the 2024 prediction will be still lower than the 2021 numbers. The long term view can be seen here: https://de.statista.com/statistik/daten/studie/4898/umfrage/anzahl-von-insolvenzen-in-deutschland/ https://de.statista.com/statistik/daten/studie/4898/umfrage/...
- k__ 2y agoI wonder how many of those companies already operated on the brink of insolvency before COVID.
- HPsquared 2y agoFinancial journalism that reports a single data point, out of context, without even a historical chart, are a pet peeve of mine. Even worse if they spin a complicated narrative based on this single data point that isn't supported by the broader context.
- jojobas 2y agoAnd then you realize that outside your peeve it's also bullshit all the way down. https://www.epsilontheory.com/gell-mann-amnesia/ https://www.epsilontheory.com/gell-mann-amnesia/
- Animatronio 2y agoNot only does the article mention that "They are also 11.2% more than in the first quarter of 2020 when 4,683 corporate insolvencies were filed before the COVID-19 pandemic had its full impact. The coronavirus pandemic period itself saw special, temporary regulations introduced and low insolvency rates." Your own statista link shows that the number of bankruptcies was steadily decreasing between 2010-2019, now it's going up again.
- TMWNN 2y agoI've heard that the Ukraine War, and consequent loss of Russian gas, was devastating for German chemical and manufacturing because of the increase in cost of not just energy but also feedstock.
- surfingdino 2y agoThey also lost Russia as a market to sell to. Ostpolitik bit them in the ass, because they did not diversify their energy supplies.
- petre 2y agoGermans keep complaining about the loss of Russian gas and refuse to see the war as an opportunity to scale up their military industrial complex, arm themselves to the teeth, sell weapons to Eastern and Southern Europe. Poland and Romania are buying tanks and howitzers from the US and South Korea, the French have their own industry.
- surfingdino 2y agoMaking heavy weapons requires lots of energy and they just lost access to it.
- echoangle 2y agoA leopard 2 costs about 30 million euros, how much of that is spent on energy you think? It’s just ridiculous to claim that energy is the bottleneck here.
- oytis 2y agoRheinmetall has been increasing production though. It's just a) getting into this business is hard, so it has limited effect on the rest of the economy b) arming oneself to teeth costs money, which is German budget is pretty low on at the monent
- andersa 2y agoOf course, we have an energy crisis and too much bureaucracy. Who in their right mind would want to run a company here?
- blueflow 2y agoMe, because the Situation is not really bad?
- trueismywork 2y agoA serious question: Is the situation better than other economies?
- blueflow 2y agoHow would i know? The company runs in Germany and is a local business.
- trueismywork 2y agoIt makes no sense to think about whether a situation is good or bad without comparing it to other economies in a globalized world. If all economies are suffering, then the problems are bigger than a single country. But if only one economy is suffering, the problems are definitely specific to that country. So, situation might not be that bad because theres no real loss, but may be the economy is suffering from opportunity loss. So your competitors are growing at 4% and your growing at 1% which means effectively you're shrinking at ~2%.
- tchalla 2y agoGDP wise Germany economy grew 0.3% in 2023. I think, it's one of the lowest in OECD if not the lowest.
- snowpid 2y agoThis is not good, but the doom is over exaggerated. Especially compared to another countries (cough US) Germany has a functioning policy system. Reforms are very possible, population is not polarised.
- submeta 2y agoHow does this fit with the observation of the German DAX going from 12,000 (during pandemic even below 9k shortly) to currently 18,000? Can anyone give a good explanation?
- lkdfjlkdfjlg 2y agoStonks
- jcfrei 2y agoDAX (as most other indices) just captures the top 40 public companies of an economy. It doesn't tell you much about the thousands of smaller businesses. And small to mid-size companies are a huge part of the German economy.
- mtmail 2y agoThe DAX is comprised of only 40 large companies.
- immibis 2y agoQuite easily: the stock market is not the economy. In many cases they have absolutely no relationship to each other.
- ivan_gammel 2y agoInflation and interest rates, both recent and future ones. Let’s say a company has revenue X and is valued as NX on the stock market. Let’s say they will be increasing prices to maintain profits in the next several years and will reach X+Y just because of that. If nothing else changes fundamentally, they should be valued at N(X+Y) at some point.
- wolframhempel 2y agoAs a German who lived abroad a long time, but moved to Berlin eight years ago, here’s my (completely personal) assessment of why Germany is going down the drain economically - and will continue to do so: 1) Mindset and Culture. The idea of entrepreneurship, hard work and reward for risk is becoming completely alien to Germans. New technologies and high growth sectors are almost exclusively perceived in terms of their risks and downsides. Security, reliance on the government for problem solving and tall poppy syndrome are paramount. 2) Overly complex civic systems. Germans always were famous for their bureaucracy. But government interference in the most minute details of running a business, endless red tape and micro regulations have made it largely impossible to be competitive on the international stage. 3) Poor Work Ethic. What? The Germans? Aren’t they known to be the hard working ones? Well - somehow, our trains are also known to be the punctual ones. These cliches might have been true during the “Wirtschaftswunder” - but today, Germans work the fewest hours of any OECD country. 4) Climate Focus. Germany’s government is focused on a largely ideologically driven understanding of climate change prevention. It’s not just that Russian gas is no longer available - in addition all nuclear power plants were shut off. Climate regulation and taxation also adds to rising energy prices and production costs. 5) Worker Rights: Germany has very high levels of worker protections, making it hard to scale workforces up and down and near impossible to dismiss employees for performance reasons. 6) High Taxes. Germany has some of the highest corporation and personal income taxes in the developed world. And while e.g. Scandinavian countries have even higher taxes, in Germany it doesn’t feel like you’re getting something of equal value back from the state. This is of course highly subjective. 7) Few Future Industries. Germany’s industry has focused on gas powered mobility and advanced machine building - and has become a world leader in many of these areas. It has, however, very few software, AI, or other companies that make up the bulk of e.g. the US economic growth. There’s probably many more - but this might paint a picture from the inside.
- selfmodruntime 2y agoI want to add to point 3) German's pay a lot of taxes. Living costs and rent are sky high in cities. In the past, I reduced my hours to 28 hours a week because the difference was negligible in taxes paid. I even got money from the government to pay rent because my wage was lower. There is a real problem where between salary band's, the money after taxes does not change significantly even if you're paid more. Working half a day only is incredibly popular for these reasons (among others). It's gone so far that politicans from all sides are publicly thinking about erasing the possibility for halftime work.