WORLD CRISIS: --WEEKLY WRAP-UP--

MY SNAPSHOT,  PLAIN-LANGUAGE ASSESSMENT OF LAST WEEK’S OUTSTANDING ECONOMIC EVENTS SHAPING OUR WORLD:

SUMMARY:

1. US House approved Obama’s $819 b stimulus package. No Republicans voted for it. Now the Senate’s turn.  
   
2. Iran’s Ahmadinejad, responded to Mr Obama extending hand by angrily calling for an apology.  
3. World Economic Forum began in Davos Switzerland in a, Depressing global crisis environment. Russia and China attacked the West, particularly the US for all the trouble.
   
4. Iceland’s government became the first to fallas a result of the financial crash. Early election in May. 
   
5. Russia won’t deploy any missiles in Kaliningrad? Hopes Obama to delay missiles in Poland, Czech Rep.
   
6. Bolivia backed a new (President Morales’) polemic constitution but the majority in 4 rich “autonomous” departments rejected it. Political conflict will continue!    
7. The International Labor Organization  2009 forecast considered the unemployed higher by 18m than in 2007, “worst-case scenario” 50m more. 
   
8. IMF-09 world worst 1945. GDP 0.5%, from 2.2% last Nov.US -1.6%, Euro -2%, Japan -2.6%.UK-2.8%.
   
9. Banking System troubles continued:BOFA gov. aid. Nomura’s qly loss $3.7 b biggest since 2001 on Lehman Europe, Asia, Iceland,Madoff. Santander to recompense $1.8 b. 1º on Maddoff. ING’s CEO resigned.qly loss gov aid.
10. FED kept rates at 0-0.25%. Will buy long-term government bonds if necessary.
    
11. US Bad economic news continued: January January Consumer Confidence fell to 37.7, new low since 1967. House Prices also fell -18.2% year-to-Nov, Existing Home Sales+6.5% Dec. (Good News?). 
    
12. Britain’s Growth fell by 1.5% 4th quarter of 2008, preliminary estimate. It was 1.8% lower than a year earlier. 
13. United States Growth fell and Japan’s Industrial Production slumped.

To know more about these subjects please refer to the corresponding articles posted on this “blog”

The purpose of this basic report is simply to reassert the relevance of  what you have already witnessed during the last 5 days and to inform you of anything that you could have missed. Of course, I’ll be always grateful for letting me know of those crisis-related happenings I  failed to notice myself.

Last Week:

1. USA 44th President swore in!
2. Israel, Hamas ceasefire held up!
3. China growth rate fell to 6.8% in the year to the 4th  quarter,after attaining 9%  in the 3th q.  It was the slowest GDP growth in 7 years.  It grew 9% 2008 and 13% in 2007 when it became the 3th largest world economy. Some say China is already in recession. Big risk of workers protests getting out of control!
4. Spain, Portugal ratings were downgraded by S&P’s as previously was Greece’s.
   
5. Brazil, Canada and Hungary were the latest to join the club of  interest rate cutting nations to fight their economic slowdowns.
   
6. Banking troubles continued,  with Bank of America (1st quarterly loss in 17 years), Citigroup (4th quarter net loss of 8.3 b), UK Banking System to get more aid from Government. RBS falling 67% on losses. Denmark and Irish Banks problems continued.
   
7. The Dow Jones Industrial Average closed below the 8,000 point for the first time since last November.
8. US Consumer Inflation -0.7% Dec, -1.7% Nov. Annual +0.1%.  Core was still +1.8%.
   
9. The European Commission 2009 Economic forecasts: Euro Zone; -1.9%.  Germany -2.3%, France -1.8%, Spain & Italy -2%. Ireland. -5%. Euro Budget Deficit to be  4% of GDP. Unemployment Rate to get to 10% in 2010.
   
10. United Kingdom Unemployment Rate was 6.1% in the 3 mths to Nov,  the previous 3 months  5.7%. Unemployment benefit claims were the highest since 1991. Consumer Inflation slowed  down  from 4.1% to 3.1% in December.

CONCLUSSION: 

It was an awful week which continued to reflect the severity of this Global Crisis. China’s depressing GDP economic data (worse than expected) may mean It is already in a recession (please read this blog’s corresponding article). In our globalised world, we can expect a very negative economic feedback to many, many countries as a side-effect of this nation’s slowdown. Last but not least, the sad welcome to Barack Obama from the financial markets (the inauguration day) does not show any approaching general confidence. The US stocks slumped dramatically that session and the DJIA closed below the 8,000 points for the 1st time since late november.