Bielmeiers Blog

DZ BANK

Stefan Bielmeier, DZ BANK’s Chief Economist and Head of Research, comments on economic developments in Europe, the USA and the Emerging Markets, assesses international financial market trends and gives his opinion on politics and economic policy – concisely, succinctly and to the point.

The economics and financial market experts of DZ BANK’s Research division support Stefan Bielmeier in his blog.

Find out more in Bielmeier‘s Blog about DZ BANK Research’s current topics, the experts’ focal areas, and their general viewpoints on the latest developments.
E-mobility triggers copper fantasy

The International Motor Show (Internationale Automobil Ausstellung – IAA) in Frankfurt opened its doors to the general public on Saturday. The automotive sector in Germany, which has been beleaguered by the diesel emissions scandal and speculation about unlawful collusion, is focusing at the IAA on electric mobility in particular. There is no doubt that the German automotive industry will launch an e-campaign with new models in the coming years. The pronounced future trend towards e-mobility will significantly drive the demand for industrial metals over the next decades. In addition to metals such as lithium, cobalt and nickel, which are used to manufacture accumulators, copper in particular should benefit in the long-term. For example, up to 140 kilos of copper are built into an electric car, depending on the range. In contrast, a car with an internal combustion engine requires an average of only 23 kg of copper. Copper is also…

Fear of crashes and bubbles puts off investors – but wrongly so

If you ask experienced investors what occurs to them spontaneously regarding the equity market in the eighties they would presumably say “the October crash of 1987.” Bond investors harking back to the nineties often mention the bond market crash of 1994. Is it worth investing in the emerging markets? – A currency crisis like that in 1997 could be looming. Tech stocks around the turn of the millennium? Wild dreams about the possibilities of the internet that were followed by a crash. The financial crisis and the Lehman bankruptcy in 2008? Bankers carrying cardboard boxes out of skyscrapers, and even a stock market crash. Even those investors who were not directly involved in these events (e.g. the millennials) are constantly reminded of them. Television images and newspaper reports of anniversaries or interviews have burnt these memories permanently into the brain-synapses of many an investor and non-investor. In fact, the DAX…

British public gradually feeling the effects of the Brexit burdens

  Inflation in the UK is once again heading for the 3-percent mark and is even expected to exceed this in the coming months. While price pressure in other industrialised countries is just starting to ease up again, the British pound weakened by the uncertainty over Brexit is causing British consumer prices to spiral steadily upwards. Bearing the brunt of this are the consumers who are now clearly restricting their purchases – private consumption, one of the cornerstones of the economy in the United Kingdom has more or less ground to a halt in the second quarter and visibly decelerated economic growth. The weakness of the pound as well as the uncertainty over the approaching EU exit are also having an adverse impact on immigration. The British economy can expect to experience considerable employment bottlenecks as a result of this. The UK is feeling the deceleration effects from Brexit more…

US tropical storms: possible economic impact

It is not yet possible to get a full picture of the devastation caused in the US by the two tropical storms “Harvey” and “Irma”. While it is therefore still too early to provide an exact analysis of the economic impact of the storms, a few conclusions may even be drawn at this point. Overall, experience shows that the impact of natural disasters (hurricane “Katrina” in 2005 and “Sandy” in 2012) on economic growth is only short-lived and the slumps following immediately in the aftermath of a storm are generally made up again by the subsequent reconstruction measures. However, short-term negative economic fallout is to be expected, especially given how close together “Harvey” and “Irma” occurred, as well as the fact that two important regions, namely Texas and Florida, were affected at the same time. With hurricane “Harvey” hitting Houston, the fourth-largest city in the US, many oil refineries have…

Showdown in Catalonia is rapidly approaching

Today’s national holiday in Catalonia marks the showdown in the ongoing struggle for “Independéncia”. While it is anticipated that hundreds of thousands of Catalans will take to the streets to demonstrate for more autonomy, the Spanish central government and the Catalan executive oppose each other as entrenched fronts. While the president of the regional government, Puigdemont, continues to print ballot papers in breach of the Constitution, Prime Minister Rajoy is making use of the full power of the judiciary. This has not been entirely without success just recently, for the threatened prosecution of civil servants who support the referendum has caused the first cracks to appear in the so far unwavering front formed by Catalan politicians. The mayors of some Catalan cities, including Barcelona, will be refusing to make any premises available for the vote unless the integrity of their local civil servants is guaranteed. Three weeks before its planned…

Globalisation cannot be just – but creates more prosperity

Globalisation – no other topic has been discussed as fiercely and emotionally. The debate tends to hinge on two questions: Can globalisation be just? And: Does globalisation improve our prosperity? The honest answer to the first question is: No. And the answer to the second question is: Yes. So why is that the case? The gap in prosperity between the emerging markets and the industrialised countries has significantly closed in a relatively short period of time. This trend has been driven by well above-average growth in the emerging markets. Growth was, in turn, triggered by strong wage differences and a corresponding relocation of labour-intensive processes from the industrial countries into the emerging markets, with the emerging markets’ business model being strongly export-driven and less dependent on the domestic economy. While the emerging markets got such a boost from the shift of certain work processes from the industrialised nations, this had…