German Politics and Policies: Izabella Kaminska On the German Election, Economy, and Markets

I was thinking about what the Polish-born German Communist revolutionary Rosa Luxemburg would have thought of self-proclaimed socialist Alexandria Ocasio-Cortez having a servant carry the hem of her dress as she walked the carpet to her waiting SUV and concluded that Luxemburg would have slapped AOC silly.

The servant wore a corona mask, as did all the servants at the Met Gala, while the attendees gamboled without facial coverings.

Because I was thinking about Luxemburg my mind was already primed for a move to the left in German politics. In fact I was thinking pretty far to the left. In the 1920's Berlin was the second "Reddest" capital in Europe, second only to Moscow, and though the German civil war of 1919 had ended with the formation of a republic things were very much in flux. The formation of the communist/socialist/whatevs paramilitary street thug organization, the Roter Frontkämpferbund in 1924 was an indication of how close Berlin was to emulating Moscow.

So with all this running through my head, the first thing I saw regarding German politics on Monday was that the referendum to expropriate and socialize Berlin apartments from Germany's largest landlord had passed. Although the referendum is not binding on the Berlin government the result 57% ja/39% nein is one heck of an indication of the political zeitgeist.

And with that background here is the editor of the Financial Times' Alphaville property: 

 

What do the German election results mean for markets?

Whatever the coalition talks muster, a revolutionary spirit is in the making in Germany. 

The German elections have corroborated what much of the European establishment already suspected: that the country’s political compass had splintered greatly in the last few years. For those not abreast of the latest, Merkel’s CDU/CSU — now fronted by Armin Laschet — narrowly lost out to the Social Democrats over the weekend. But the biggest takeaway of the vote has been the diminishing size of the collective centrist vote, with results that looked like this:

*****

It is only now that the hard work of forging a three-party coalition begins. But while the fragmentation is unlikely to be news for eagle-eyed politics watchers, Helen Thomas, founder and CEO of analysis firm Blonde Money, has been warning for months that markets have been failing to account for the possibility of a greener and more-left leaning German political establishment from October onwards....

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