8 Reasons Why Bill Blain Is Suddenly Very Worried About Germany

Blain’s Morning Porridge EXTRA: ‘WHAT ABOUT THE GERMANS’
It’s unusual for me to write a follow up to the Morning Porridge – but following some conversations and reading about the end of ‘Peak Merkel’, I fear I’ve considerably underestimated the risks raised by the inconclusive German Election.
We are now facing a period of intense political bargaining, weak government and even the potential of a second German vote.
As a result, the prospects for more volatile European peripheral markets, particularly Greece and Italy, are likely to be exacerbated, and we might well see some of the currency and European stock market froth blow away in coming days as the scale of the ‘German Problem’ becomes clearer.
My worst case Germany scenario is a second election early next year, political uncertainty as Mutti Merkel finds herself squeezed out, and a scramble to build a new coalition government in her aftermath. The best case scenario isn’t much better: that Merkel manages to forge a new coalition, but it will be a long drawn out affair and the resulting administration will be vulnerable, weak and fraxious.

This post was published at Zero Hedge on Sep 25, 2017.