(Update 1 of 3)
INTRODUCTION:
Last week's markets and 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: Retail Sales up on cars, gasoline! FED’s Beige Book found US recession may be moderating!; US recession may be ending by september: Nobel winner krugman said! US Treasury let 10 financials repay $68 b received under TARP (JPMorgan Chase, Goldman, Morgan Stanley and AMEX, but warned the banking industry crisis was not over yet. Citigroup was to convert $58 b of preferred stock to common equity. México: ¡Economy; The Worst is over, a domestic and respectable private institution (IMEF) said! EUROPE:United Kingdom: Lloyds repaid $3.8 b to Treasury. Recession shows signs of "bottoming out", a Bank of England said! Housing also showed some signs of "stabilizing"! Industrial production up 0.3% in April, 1st monthly increase in 14 months. Italy: Industrial Production up 1.1%. ASIA:Japan: “Unshakable” Trust in US treasuries, a Bank of Japan official said!; China: New lending doubled, Industrial Production Up; Fixed-asset investment surges 32.9%, countering a dramatic esports fall; South Korea kept rate at record-low of 2% on a stabilizing economy! GLOBAL ECONOMY, GEO-POLITICS, MARKETS AND NATURAL DISASTERS: GlobalEconomy: Bloomberg’s Global Confidence Survey up for 3th month on signs worst is over; BIS also said global slump may be easing! After a US court decision Fiat consolidated its Chrysler purchase. Commodities: Baltic Index on commodity shipping costs was the highest since September, meaning the world economic activity has picked-up, mostly on China's demand for iron ore, coal and grains.
BAD NEWS:
Some other respectful opinions (World Renown Economists and multilateral Institutions) 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! What Do you Think?
AMÉRICAS: United States: Unemployment Rate up from 8.9% to 9.4% in May, though it was the smallest jobs reduction in 8 months. If it were to get to 10% it would considerably depress consumer spending and seriously undermine a mid-term solid recovery; US Budget Deficit was again a subject of great concern!; futures traders wrong on fed's rate cut bets? Obama said that recovery will take longer than previously estimated; Brazil: Lowered rate to 9.25%, more than expected on recession; GDP fell by 0.8% in 1st quarter leaving it 1.8% lower than a year earlier.EUROPE: European Union: Record low voters turnout: 43%. The “Left” did badly. Eurosceptics did well. Merkel, Sarkozy triumphed. European Comission President Barroso asked for another 5-year term. European Union Ministers rebuffed U.S. call to publish stress tests on the region’s banks; United Kingdom: Gordon Brown brushed aside critics and may survive until the next general election, before june 2010. Sweden: The European Central Bank lent it $4.2 b to avoid a meltdown in the Baltic Region by Latvia’s potential devaluation. Sweden’s industrial production fell by 2.1%; Euro-Zone: Member’s strained budget situation continued to cause heated polemic! Germany: Former East-Germany is resisting better the economic crisis than its western and richer counterpart. Germany’s April exports declined more than forecast and Industrial Production fell by 1.9%. France: Plan for a new 30-year bond as borrowing need rise! Industrial Production fell by 1.4%; Ireland: Its credit rating has been cut by S&P's for the 2nd time this year... ASIA: Japan: Economy shrank at record 14.2% on exports; machinery orders fell to a 22-year-low; China: Exports fell by record after global demand slumped; Consumer prices declined 1.4% in the year to May (deflation jitters);GLOBAL ECONOMY, GEO-POLITICS, MARKETS AND NATURAL DISASTERS:Global Economy; world GDP to fall to -2.5% in 2009, from around 4.5% in 2005, 2006, 2007 and 3% in 2008 (52 countries = 90 % of GDP); Arcandor, Germany’s retailing and tourism group, filed for insolvency after its goverment refused a bail-out. Airline Industry losses this year doubled to $9 b. KLM, asked its pilots to handle bags (luggage), to help it through the bad times with better client services. Commodities: Oil reached above $70 a barrel 1st time this year. Markets: The dollar hegemony was attacked from all sides! Amber light for global shares and risk markets after Markets rise this year (over-optimistic?); S&P's warned Asia their sovereign-debt ratings were at risk. It cut india and taiwan from “stable” to “negative” on heavy stimulus spending. Also lowered it for Ireland, again. The World Bank Lowered its Global Growth Estimate; BRIC countries want to get in big leagues through dollar selling strategy! The world economic outlook "looks bad"! Geo-Politics: The UN Security Council prepared tougher sanctions on North Korea after nuclear testing and several missiles launched. IAEA found uranium traces in Syria, which denies nuclear programme. Iran’s uranium production expanded. Natural Disasters: Swine Flu finally declared a "pandemic"!
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!---
Sorry but last week's extremely negative news continued to overwhelm the very few positive ones.----
J CNN
