The ECB cut rates for the second time, as expected, though amidst a strong bond/bund market rally that has now completely un-inverted that yield curve. This comes at a time when major businesses like Volkswagen are thinking about closing down factories due to how much idle capacity they have. What links all of these together, what explains all the facts, is that there was never a global recovery, only a transitory price illusion. 

Eurodollar University's Money & Macro Analysis

Bloomberg Half-Empty Car Plants in Europe Spell Trouble for Workers
https://www.bloomberg.com/news/articles/2024-09-11/vw-s-german-factory-closures-highlight-wider-problems-for-europe-s-carmakers?srnd=phx-economics-v2

Volkswagen 2023 Annual Report Income Statement
https://annualreport2023.volkswagen-group.com/consolidated-financial-statements/income-statement.html

Volkswagen 2019 Annual Report
https://annualreport2019.volkswagenag.com/

ECB Press Conference Statement
https://www.ecb.europa.eu/press/press_conference/monetary-policy-statement/2024/html/ecb.is240912~4f7b17040c.en.html

Bloomberg ECB’s Economic Hopes at Risk as Consumers Put Spending on Ice
https://www.bloomberg.com/news/articles/2024-09-09/ecb-s-economic-hopes-at-risk-as-consumers-put-spending-on-ice

Statista Half of OECD Countries Earn Less Now Than Pre-Pandemic
https://www.statista.com/chart/32831/real-wage-growth-in-the-oecd/

OECD Employment Outlook 2024
https://www.oecd.org/en/publications/oecd-employment-outlook-2024_ac8b3538-en.html

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