WORLD CRISIS WEEKLY WRAP-UP!...(April 13--17, 2009)

WORLD CRISIS WEEKLY WRAP-UP! (April 13 – 17, 2009)

 

Introduction:

 

OK, We have now entered the 2^nd month of a stock-market rally. Optimism is rising everywhere but reality strikes anyway. World economy is still falling. Many companies are still failing and many more will with the inexorably consequences on unemployment and spending confirming the bear market and recession will continue to rule. 

 

Bad News:

 

North Korea quits nuclear disarmament talks. North Korea is a risky subject to the world and particularly to Asia (Japan and South Korea). World deflation looms even though many Governments are still in a fight vs inflation. China’s foreign direct investment fell for 6^th  month in a row. Its GDP of 6.1% was less than half that of last year..

 

Good News:

 

The IMF expanded credit lines are already a functioning policy tool. México and Poland are the first countries to accept them (no strings attached, remember?). Some of the big banks profit reports were much better than expected and the US FED Beige Book survey was not as bad one as last.  

 

Conclusion:

 

Outstanding this week is the fact that the FED’s Beige Book result was somewhat less pessimistic that last month’s survey. US economic “decline is slowing”. Really?-----Is it possible that the worst of this crisis be over? Financial Markets have been mostly positive for the past 4 weeks, with the lower volatility index underlining all the optimism (see the story below please). I think however that the damage is done and a recovery is still very far from our global regulators  reach, notwithstanding the fiscal and monetary expansionary steps they have taken! -----What is your conclusion from last week's selected news (below)?

 

• Hungary New Gordon Bajnai. Technocrat P. Oszko, Finance Ministry. FMI $25 b 2008 rescue.
• Poland 2nd after Mexico to seek a credit line from IMF got $20.5 b.
• After UN criticised rocket launch, N. Korea quits 6-nation talks vs its nuc-weapons programme.
• Thailand protests forced ASEAN summit cancellation. Ask for resignation PM, Abhisit Vejjajiva.2 died! 
• Indonesia’s general election suggested big victory for Democ. Party of President, Yudhoyono. 
• India’s general election over four weeks, got under way.
• Goldman net profit of $1.8 b, 20%. To raise $5 b, 9% of its value, to repay  $10 b it got from gov. bail-out.

• JP Morgan Chase net profit $2.14 b. 
• Wells Fargo expected a $3 b qly profit, record on Wachovia preformance. 
• UBS forecast qly net loss of $1.8 b. To cut 8,700 jobs, 11% of global workforce.
• Intel’s qly net profit -55% y-y, to $647m, revenue -26%, better than expected. PC Market bottomed Out¿
• SEC called for “intense review” of credit-rating agencies for not downgrading.. Conflict of interests on pay..
• US Retail sales fell unexpectedly in March. Inflation -0.4% in the year to March, 1^{st annual}  fall since 1955.
• US Ind. Production fell again; industrial capacity dropped to 69.3%, lowest since 1967.
• A record 800,000 plus homes received a foreclosure filing in the first quarter. 
• General Growth Properties, more than 200 malls, entered bankruptcy protection 27 b of debt.
• FED’s Bernanke: “tentative (positive) signs” home sales, homebuilding, consumer spending sharp decline in economic activity slowing”. 
• Obama: “glimmers of hope”, but more pain before the year is out.
• China’s growth fell to 6.1% y-1^st q , less than half of what it was in mid-2007. Still possible 8% GDP this year. 
• China not currency manipulator policy stance contradicted Geithner himself. Yuan undervalued, but steps to  flexibility”.  
• US Inflation -0.1% in March, after +0.4% in Feb.

• US FED’s Beige Book said 5 of its 12 district banks reported moderation in pace of ec decline.
• China’s growth in ind. production, retail sales, investment led the gov to claim that its stimulus plan working.
• Germany Wholesale prices were 8% lower in March than a year earlier, -0.9% since February.
• South Africa Retail Sales were 4.5% lower in real terms in February than a year earlier.
• Singapore contracted by a record 11.5% year-to-1^{st q}. GDP to shrink 9% in 2009, Asia’s worst.
• Poland inflation 3.6% in March on weak zloty raised fuel , but strengthened on  FMI credit line of $20.5 b.
• México Obtiene Línea De Crédito Por Casi $50,000 Millones de dólares...
• Credit-Crisis Damage To Be Long-Lasting!
• Euro-Trichet Faces Biggest Split As ECB President!...
• Euro-Area Signals More Rate Cuts!...Really?
• Lehman Fall A Mistake?....Yes!
• US Foreclosure Filings Climbed To Record!
• Bloomberg Global Confidence Rose To 11-Month High...
• China's Foreign Direct Investment Falls For 6th Month in a row...
• US Producer Prices Fall 1.2%, Retail Sales Down!.....
• Thailand's Political Instability Hurting Economy!
• Yen, Dollar Up On Global Recession Worries!
• China's Property Prices Fall As Construction Tumbles!...
• Japan Producer Prices Fall!...Return To Deflation?...
• Dollar Gains Most In 2 Months On Us Optimism!
• China's Reserves Rise Least In 8-Years!...How Come...