We woke up this morning to reports that German BIP “unexpectedly dropped by .2%” in the second quarter of 2014. Die Zeit already sought and found that the “troubles” of the German economy are self made (premature finger pointing) and the rest of the press tuned into the big oncoming economic train wreck (Focus, Tagesspeigel, Die Welt, etc). Die Welt, for example, sees a surprising and significant drop in this .2%! Besides the fact that a .2% change in the first vintage of these numbers is neither significant nor trustworthy today’s economic reporting highlights a .2% drop compared to 2014Q1 while suppressing a .8% increase compared to 2013Q2. These numbers will be revised later and may in fact be wrong. A change of .2% ought to be well within the revision error so that such a number should not be any more worth of a headline than the ink needed to print it.
Based on the Toll Index (April, May, June) I was saying that 2014Q2 will be an 8 year high. The veracity of my statements follows from the graph below. The very last downwards peck is what caused today’s storm in a teacup.