German investor confidence rose – a sign of stronger Euro zone economy or a sense of over optimism typical before a major recession?
Kirsten McLauren
Mar. 11, 2008

Investor confidence in Germany unexpectedly rose for a second month in March. The US dollar tanked and Euro appreciated to all time new high on the news.

However, the news can be deceptive. It is not the consumer confidence. It is the investor confidence. Investors typically become over optimistic at the end of a bull market just before the start of major recession.

European Central Bank (ECB) showed the first signs of worry yesterday. Their internal measures say while germany may be able to cope up withy the appreciating Euro, other Euro zones especially Spain and other countries can plunge into a deep recession if not a depression.

US consumer is key to Euro zone economic growth. The oil price although stable in Euro terms, is still rising. The exports to US is hurting heavily.

The Euro zone overall economy is in trouble. It may be the right time to short Euro against US Dollar from a contrarian stand.

German investor confidence rose – a sign of stronger Euro zone economy or a sense of over optimism typical before a major recession?
Kirsten McLauren
However, the news can be deceptive. It is not the consumer confidence. It is the investor confidence. Investors typically become over optimistic at the end of a bull market just before the start of major recession.
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