News from the editorial

  • Yvonne Döbler

Avoiding insolvency - a guide for business managers in a crisis.

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iStock Inso1004929340Short-time working allowance, tax liquidity support, financial assistance - the federal government or the EU not only provides money for entrepreneurs in need. An overall concept should prevent that actually healthy companies have to file for insolvency. Five points are particularly important here!

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  • Klaus Meitinger

ifo Institute: Corona will cost Germany hundreds of billions of euros

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The Munich ifo Institute has now added to this. The coronavirus will cause hundreds of billions of euros in production losses for Germany's economy, cause short-time work and unemployment to skyrocket, and put a considerable strain on the national budget. "The costs will probably exceed everything known from economic crises or natural disasters in Germany in recent decades," said Ifo President Clemens Fuest. "Depending on the scenario, the economy will shrink by 7.2 to 20.6 percentage points. This corresponds to costs of 255 to 729 billion euros."

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  • Klaus Meitinger

How deep will the recession get?

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BörsenindikatorAfter economists have only revised their growth forecasts downwards in small steps in recent weeks, the Munich-based ifo Institute has now driven a stake that roughly shows what is in store for the German economy in the coming weeks (https://www.ifo.de/node/53925).

The ifo Institute is currently presenting two alternative forecasts. A "very, very favourable" scenario with minor production restrictions would result in a 1.5 percent decline in real national product. However, this does not take into account production shutdowns, which have already occurred. Larger production cuts, on the other hand, would already lead to a 6 percent contraction in 2020. This decline would then be one percentage point worse than in the financial crisis of 2009.

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  • Klaus Meitinger

Capital market seismograph reduces equity exposure.

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Kapitalmarkt Seismograf 2Dear readers,

The dramatic development of the last few days and the massive increase in volatility had massively increased the probability of negative turbulence in the capital market seismograph. "This has resulted in a change in positioning on the stock market," Oliver Schlick informs.

As you know, the capital market seismograph distinguishes between three phases: "green" (calm market = buy), "yellow" (turbulent market with positive expectation = invest, but with hedging) and "red" (turbulent market with negative expectation = do not invest).

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  • Klaus Meitinger

The next domino.

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iStock 863883990While the stock market is in panic mode, the losses in corporate bonds are comparatively small. This could change.

We still remember an analysis by Pictet in October 2018, when the Swiss took a close look at the corporate bond market and wrote: "Beware oft the fallen angels.

The chain of argumentation went like this: Many large investors are only allowed to buy so-called investment grade bonds - i.e. securities with good or very good credit ratings. Their rating must be at least BBB (from the Standard & Poors agency) or Baa (from Moodys).

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