The Germans in the pension trap – Morning Briefing

It’s the weekend, late summer and without thinking about the gas bill, and I don’t want to spoil your mood with the latest shelling situation in the Ukraine, including Crimea. Not even with the discussion about who Johannes Kahrs was actually very close to Olaf Scholz in the Hanseatic SPD, even if the long-time money collector seems to have the status of an annoying fly for the chancellor today. And the request of the US Attorney General to the courts to please publish the search warrant for Donald Trump’s Florida Disneyland “Mar-a-lago”, which he personally approved, should not be analyzed further.

Let’s get practical for a change and turn to the phenomenon of overthinking. What is meant is being caught in a merry-go-round of thoughts, because all the problems in the world (climate, Putin, prices) plus personal decisions press on the hypothalamus and synapses. We asked business leaders how they deal with “overthinking” and received insightful answers:

  • There is the faction of the “mentals”, who, like Personio founder Hanno Renner, rely on meditation. Jürgen Dawo, founder of the prefabricated house company Town & Country, breathes consciously for a few minutes on the office couch and listens to the birdsong in the national park once a week.
  • There are the communicative ones like Katy Roewer, Head of Human Resources at the Otto Group, who just talk, talk, talk – with colleagues, friends and family.
  • There are the structured ones, who, like the agency founder and current Edding manager Fränzi Kühne, rely on rituals – be it the daily viewing of “Gute Zeiten, Schlechte Zeiten” (RTL) for 20 years.
  • And finally, there are movement artists such as VW digital force Anja Hendel, who appreciates “walking calls” (telephone calls while walking) or, of course, the well-chosen running route.

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Incidentally, one could also agree with Kurt Tucholsky: “Give people more sleep – and they will be more awake when they are awake.”

Germany’s population is aging twice over: on the one hand, birth rates have fallen sharply, on the other hand, life expectancy of individuals continues to rise.

Handelsblatt economist Bert Rürup carries out a ruthless, splendid reckoning with the pension policy of the incumbent traffic light coalition. As is well known, the huge problem of aging, which begins in 2024 when the “baby boomers” retire, did not make it into the coalition agreement. However, there was a promise to permanently limit the minimum pension level to 48 percent and the contribution rate to a maximum of 20 percent during this legislative period.

If Olaf Scholz meant it seriously – and there can be no doubt about it for tactical reasons of calming down the voters – the contribution rate for the pension would have to rise from today’s 18.6 percent to 29 percent by 2070, ceteris paribus. Rürup: “These costs cannot be explained away, they can only be redistributed through reforms.”

The man they call “pension pope” advises succinctly to risk more “Münte”. Minister of Social Affairs Franz Müntefering (SPD) gradually introduced “pension at 67” in 2007. This social democrat of the old school had explained on questions of pension provision that you don’t have to be a mathematician, but that it was enough “Sauerland elementary school” to know: “We have to do something”.

What the Germans do best with their money and how they protect it from falling in value (inflation!) is what we will be covering in our big weekend report. War in Ukraine, supply chain ruptures, protectionism and energy shock are forcing a reorientation – a “polycrisis” according to Harvard economist Kenneth Rogoff.

With all caution, the answer per portfolio includes resilient individual stocks such as Coca-Cola, Linde, Allianz or Apple, but also more bonds and of course a stronger cash position. When stock markets fall again soon, cash will be “king” for purchasing discounted securities.

Real estate, like gold, should also be included in any financial investment consideration. Last but not least, many people whisper about “concrete gold” as if it were the famous “Nibelungen hoard”. Unfortunately, due to the skyrocketing prices for energy and building materials, the market is currently “in tatters”, as our English friends say – it is dismantling, tearing itself apart.

In the second quarter, prices for residential, office and commercial buildings increased by 17.6 to 19.4 percent compared to the previous year. And it is precisely this industry inflation that will continue, which is why incoming orders in the construction industry recently fell by 7.5 percent. The construction boom of recent years has come to an abrupt end and the scaffolding is being dismantled.

Last Monday I had to do four hours of hard work with a small team at the Handelsblatt headquarters on Toulouser Allee in Düsseldorf in the afternoon. The aim was to select exactly ten books from the 70 submitted by the publishers for the German Business Book Prize 2022 – this year’s shortlist.

The top ten include Massimo Bognanni’s Cum-Ex-Report, Sebastian Dettmer’s analysis of the great “unemployment”, Katja Diehl’s “Autocorrection”, the answers of the behavioral economist Armin Falk, ten visions of the future by Kai-Fu Lee, Alexander Hagelüken’s “Wirtschaft für Kids ‘, Katrine Marcal’s treatises on the woman factor in inventions, Thomas Mayer and his ‘inflation specter’, Thomas Piketty’s ‘Short History of Equality’ and Monika Rößinger’s ‘Hydrogen Transition’.

In the next Friday morning briefings we will publish a short review of one book. At the end, they should vote with the other readers on the best work – for an undoped audience award.

Louise Bourgeois “Spider”: The sculpture, over six meters high, is composed of steel, tapestry, wood, glass, fabric, rubber, silver, gold and bone.

(Photo: The Easton Foundation/VG Bild-Kunst, Bonn 2022, Photo: Erika Ede)

My cultural tip for the weekend: the exhibition “The Woven Child” by Louise Bourgeois (1911 to 2010) in Berlin’s Gropiusbau, which runs until October 23. The focus is on textile works from the late creative phase of the French artist, which show the eroticism and charisma of the female body. The exhibits illustrate her struggle with trauma and life experiences. The arguments with the parents, who had a gallery for old tapestries in Paris, also play a role here. Bourgeois introduced into her oeuvre the “Spider” that she made famous as an ode to the mother, as well as “Cells”, which enclose fetishes of life.

And then there’s billionaire Klaus-Michael Kühne, 85, with his wallet and tax account in Switzerland and his heart in his hometown of Hamburg. And there in particular with the second division soccer team HSV, a currently faded myth. The senior now offers the clammy club (70 million euros in debt) 120 million euros. Some of it is intended for the naming rights of the venue, which is to be called “Uwe-Seeler-Stadion”.

But the banknote wedler from the Alpine region is not a patron, but a tough businessman. Kühne wants to increase his stake in Fußball AG from 15 to almost 40 percent and expedite two people he trusts to the supervisory board. The HSV members are unlikely to think much of the coup. And medical entrepreneur Thomas Wüstefeld even wants to sue Kühne Holding because it did not fully inform him about the financial drama when he sold 5.11 percent of HSV shares. Part of the chaos in the “Uns-Uwe” association is that there is again a motion to vote out the recalcitrant Wuestefeld board of directors in the supervisory board.

In this situation, we inevitably remember the recently deceased HSV hero Uwe Seeler: “Our backs are no longer against the wall, but in the wall.”

I wish you a relaxing, restful weekend.

It greets you cordially
Hans Jürgen Jakobs
Senior editor

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