WORLD CRISIS WEEKLY WRAP-UP (June 15 - - June 18, 2009)

(Update 1 of 3)

INTRODUCTION:

Last week's markets had a small set back but many analysts continued to be upbeat. Does the following data background correspond to this perception?

GOOD NEWS:

Economic Statistics are not as awful as they were only a few weeks ago. They are now only very, very bad. Is this reason enough to rejoice?---- Can we see the light at the end of the tunnel!

Américas: -----United States: FED weighs using FOMC statement to damp rate-rise speculations----- FED’s Fisher says no plan to raise rates soon----- AMEX, Goldman Sachs, JPMorgan Chase and Morgan Stanley repaid TARP----- Current-account deficit narrowed from $155 b to $101.5 b 1^st q. Deficit is now at 2.9% of GDP, the lowest for a decade on decline in oil imports, industrial supplies and Raw materials----New housing starts were +17.2% in May-------Permits to build new private homes up too------ Leading index and factory data also showed good news! -----México: Sovereign risk up moderately----Lowered rate to 4.75% to support shrinking economy; Europe: -----Norway cut rate by 0.25% p to a record low of 1.25%------Germany near bottom, recovery like a "bathtub" (slower than a V shaped one, I think); Switzerland kept rate, plans "firm action" on franc speculation-------- United Kingdom: Finance Minister Darling signals limited overhaul of bank rules; Asia: ----Australia: Reserve Bank of Australia minutes suggested another rate cut from 3% if economy deteriorated more; Japan: Bank of Japan voted unanimously to keep rate at 0.1%, there since December; Government, Bank of Japan agreed worst of recession over----China: World bank raised china 2009 growth forecast to 7.4%;------- South Korea: ; Global Economy, Geo-Politics, Markets and Natural Disasters: -----Global Economy: -----BlackRock to buy Barclays Global Investors for $13.5 b to become world’s biggest money-manager, with $2.8 trillion in assets under management------- G-8 Finance Ministers moderately optimistic on World Economy, start planning stimulus exit strategies on recovery-------Commodities: ; Commodities: ; -------Markets: Dollar has no rival as world currency!-------- Dow industrial average erases 2009 decline on economic recovery------- Geo-Politics:; Natural Disasters: ;

BAD NEWS:

Some other respectful opinions (World Renown Economists and multilateral Institutions, the IMF and the World Bank included) and the next data were not that positive though and infer this crisis’ worst effects on people are just beginning to be felt with the corresponding social risks growing by the minute!

Américas: United States: Factory output sinks; Obama sees jobless at 10%, recovery soon, financial plan gets wary reception from bank---- Fed opposes Government stripping central bank of consumer-loans responsibility------ Fed gets no requests for 1st round of TALF loans-----Obama’s changes to US financial regulatory system biggest in decades, it includes greater authority for the FED in systemically important financial firms; government will be able to seize, dismantle large distressed companies; tougher rules on derivatives, securitisation; hedge funds to register and finally a consumers’ rights agency------Industrial production -1.1% in May, following -0.7% in April-----Annual inflation falls most in 60 years, -1.3% year to May, after -0.7% to April; ------Bank failures rise to 40 this year-----Investor Allen Stanford indicted on fraud charges!------Jobless rate of 10% spreads to half of states, risking recovery------- México: Finance Ministry recognizes fiscal pressures for 2010------- Brazil: ; Europe: Russia has to structurally reform the economy, despit a recent rise in oil prices------ Latvia devaluation would cause "swift contagion"--------Inflation is also receding in emerging markets-------- Poland’s inflation fell from 4% to 3.6%------European Union: Accord on European finance regulation------- European leaders say banking system "remains risky”... United Kingdom: Finance minister signals rift with Brown over fiscal deficit---------Banks may need more capital to finance recovery-------Uk has guarantee on a European Union bank regulator------BOE King, and Darling, the chancellor, differed on banking regulation. King wants more power. ------------Inflation dropped less than expected. +2.2% to May, slightly below the rate in April----------Unemployment +7.2% 3 months to April from 6.5% previous quarter. Jobless Claims doubled in 12 months to May to 1.54m, highest since 1997------- Sweden: Ready to act "forcefully" on Latvia debt and currency crisis------Euro-Zone: -----Germany's Steinbrueck signals concern on European Credit Ratings-------Payrolls contract by record as recession bites------- ECB shouldn't raise rates: Nowotny! ------Inflation falls to zero to May after +0.6% to April! -----ECB: Banks’ losses will reach $283 b by 2010---Increased risks because they ar undercapitalised or overexposed to instability in Eastern Europe. ; Germany: Steinbrueck signals concern on European Credit Ratings ; France: Le déficit public de la France dépassera probablement 7% du PIB------- Ireland: ; Asia:------India wholesale prices fall for 1st time since 1970s------Japan: Recovery may not be sustained, Shirakawa says----kept rate at 0.1%, recession easing! ; China: "bubble of belief" in china economy seen bursting!... China: foreign direct investment tumbles on crisis; Global Economy, Geo-Politics, Markets and Natural Disasters: ----Global Economy: Japan Sumitomo MFG launched share issue to bring $9.6 b, biggest in years------ Germany's Steinbrueck signals concern on European credit ratings--------FedEx showed a large quarterly loss. This is a Gloomy forecast for the World Economy the rest of the year------British Airways asked staff to volunteer to work for nothing in “fight for survival”------ Air India, deferred payments to employees 2 weeks because of a cash crunch-------MySpace fired 30% of US employees on competition vs Facebook-------Six Flags filed for Chapter 11. To restructure around $2 b of debt. Revenue plunged (it owns 20 amusement parks)-------BRICS (Brazil, Russia, China, India) call for "greater voice" in global financial institutions-------The International Monetary fund (Strauss Khan) declared that the worst of this crisis is still to come------------European leaders say banking system "remains challenging”...Commodities: ; Markets: -----Analysts are concerned over dollar and deficits--------BRIC dollar bonds beat ruble, reais, yuan debt as "bubble of belief" in china economy seen bursting!... Sweden is ready to act "forcefully" on latvia crisis. Devaluation would cause "swift contagion" in Central and Eastern European Countries-----World Central Banks must respond according to their capabilities, Government Officials said----------- International demand for US assets slowed in april--------China’s foreign direct investment tumbles on world crisis effects-------United States bank failures rise to 40 this year! --------Moral hazard for banks threatens next cycle!------European Leaders achieve an accord on financial system regulation------; Geo-Politics: Israel’s PM,Netanyahu, accepted Palestinians should have a state though its conditions (no army for example) didn’t cheer up its neighbours------ Iran protesters dispersed by water cannons!------- Iran's security council warned mousavi against more protests------1m people came out to the streets of Tehran, Iran’s capital, vs a possible rigged election by M. Ahmadinejad, the incumbent president, vs Mousavi. Police cracked down. Iran: khamenei-Rafsanjani split limits Iran's power elite------N. Korea threatened a “thousandfold” retaliation if attacked, after UN Security Council voted unanimously to toughen sanctions.------Russia vetoed observers’ in Abkhazia and South Ossetia whose independence recognised after last August’s war with Georgia------Hawaii to get missile interceptors vs north korea ...Natural Disasters: ;

CONCLUSION:

It does not help to the world economic stability a threatening attitude of “nuclear weapons-state-to-become-and-missiles-launching-crazy” North Korea. Also the“swine flu” pandemic menace touching national health systems, global trade and tourism at a time of generalized bloated budgets. Global Industries (cars, airlines, etc) are in for a tough ride, too!----Iran adds a touch of dramatism to middle-east geo-politics.

Last week's extremely negative news continued to overwhelm the very few positive ones.----

J CNN