THE WEEKLY GLOBAL INVESTOR: 01/02/2009

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

SUMMARY (update 1):

------The "Euro" warning signs are multiplying. Last week they came from two respectable sources, one was the International Monetary Fund and the other from Mr. Soros (who in foreign exchange has an extraordinary reputation, if sometimes a very controversial one. This week another one, that of Mr. Sarkozy (French President) is added to this anxious chorus. Let's keep ourselves alert to monitor the unfolding of events regarding this currency, which being world's 2nd most important, the risk implication (do we need more?) to global financial stability is notorious.-- ( And you may wish to read the respective articles posted on this same "blog", thank you. J CNN) --

Spain jobless rate rose to 14.4% and Ireland to 9.2%, highest for over a decade.
Ruble under attack -30% since August. Russia says there won't be budget deficit?
Britain hit by strikes over foreign workers.
Brazil vs crisis to increase spending on infrastructure this year by 28%. Help poor with martgages.
N. Korea scrapping agreements with S. Korea to prevent hostilities. test its longest-range missile?
Iran's satellite into orbit on 30th year of Islamic revolution. US viewed it with “great concern”.
Elections in 14 of Iraq’s 18 provinces. Relatively peaceful. Turnout was low.
UK reduced rates 1/2 % point, to 1%.
Japan's Jobless: Panasonic -15,000 employees, NEC -20,000, Hitachi -7,000 to go. On spending & yen.
Motorola global mobile market 6.5%, from 23% some years ago.
US Jan car sales worst in decades. GM-49% Jan 2008, Ford -40%, Chrysler -55%. Toyota -32%.
US car-parts suppliers asked for $25.5 b in aid.
US GDP - 3.8% annual in 4th q, 2008, largest since 1982 but for inventories rise, over 5%. Better this quarter? Pending Home sales, Manufacturing and services barely picked up.
Euro area inflation fell from 1.6% to 1.1% in January, Manufacturing and services edged up in Jan from a record low. Spain jobless rose to 3.3m, + than 1 m higher than in 2008. Ireland, 8.3% to 9.2%.
Australia cut rate 1% p. 3.25%, lowest 45 y. Norway 1/2%p to 2.5%. Indonesia 1/2% to 8.25%.

LAST WEEK'S SUMMARY:

US House approved Obama’s $819 b stimulus package. No Republicans voted for it. Now the Senate’s turn.
Iran’s Ahmadinejad, responded to Mr Obama extending hand by angrily calling for an apology.
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.
Iceland’s government became the first to fall as a result of the financial crash. Early election in May.
Russia won’t deploy any missiles in Kaliningrad! Hopes Obama to delay missiles in Poland, Czech Rep.
Bolivia backed a new (President Morales’) polemic constitution but the majority in 4 rich “autonomous” departments rejected it. Political conflict will continue!
The International Labor Organization 2009 forecast considered the unemployed higher by 18m than in 2007, “worst-case scenario” 50m more.
IMF-2009 world growth forecast says it will be the worst since 1945. GDP 0.5%, from 2.2% last Nov. US -1.6%, Euro -2%, Japan -2.6%.UK-2.8%.
Banking System troubles continued: Bank of America to ask for more government aid. Nomura’s quarterly loss of $3.7 b is the biggest since 2001 on absorbing Lehman's Europe, Asia operations, Iceland banking crisis and Madoff's scheme. Santander to recompense with $1.8 b. First to offer on Maddoff. ING’s CEO resigned on quarterly loss gov aid.
FED kept rates at 0-0.25%. Will buy long-term government bonds if necessary.
US Bad economic news continued: 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?).
Britain’s Growth fell by 1.5% 4th quarter of 2008, preliminary estimate. It was 1.8% lower than a year earlier.
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.

PREVIOUS WEEKS:

USA 44th President swore in!
Israel, Hamas ceasefire held up!
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!
Spain, Portugal ratings were downgraded by S&P’s as previously was Greece’s.
Brazil, Canada and Hungary were the latest to join the club of interest rate cutting nations to fight their economic slowdowns.
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.
The Dow Jones Industrial Average closed below the 8,000 point for the first time since last November.
US Consumer Inflation -0.7% Dec, -1.7% Nov. Annual +0.1%. Core was still +1.8%.
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.
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.

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The information contained herein is derived from sources believed to be reliable, but not independently verified. The Weekly Global Investor assumes no responsibility for errors, inaccuracies or omissions in these materials, nor shall it be liable for damages arising out of any person’s reliance upon this information. The Weekly Global Investor does not warrant the accuracy or completeness of the information, text, graphics, links or other items contained within these materials. The Weekly Global Investor shall not be liable for any special, indirect, incidental, or consequential damages, including without limitation losses, lost revenues, or lost profits that may result from these materials. Opinions and estimates constitute general judgments and are subject to change without notice. Past performance is not indicative of future results.

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