An economist at MIT said last week both financial gain and cocaine breed risk tolerance and complacency; sudden inflows of money keep a man on a sort of high that isn’t very different from what cocaine does. Obviously, it is imperative for the US to keep its financial industry ticking since drugs obviously cannot be the preferred route to peace and happiness.

After firing 5000 at Microsoft, Bill Gates joined Barack and Bernanke in verbally shooing away the meltdown. Gates said technology will pull US out of recession and help financial markets work better and even Warren Buffett nodded in agreement! God, do all causes have the power to cure? By the way, derivatives worth around $450 trillion are floating around the globe and nobody knows who would get burns when, of what degree. If a central clearing system is indeed put in place, possibility of the City and the Street suffering vertigo, falling off the cliff, cannot be ruled out.

Consumer prices across the world are largely flat, falls and rises being nominal and isolated in most cases. Though the world appeared to be less frightened by fears of recession than the week before, the 54.2% tumble US housing starts took in April must have dampened spirits of some. Between Oct 2008 and Mar 2009, property prices plunged about 50% in UAE.

Americans are beginning to recycle used clothing, instead of exporting it to far away places in Africa and Asia and have even started learning the art of haggling for better prices at stores selling groceries, clothing and even beautycare services. Incredible it may sound but recession-hit strip clubs in Texas aren’t collecting the mandatory $5 entrance fee from patrons.

China has started building massive stockpiles of commodities like copper, aluminium and zinc and has started parking its reserves in short-term, instead of long-term US treasuries. For the uninitiated, a kilo of aluminium in inventory means energy consumption at some point of time in the future can be cut by 15 units.

Long-term oil supply arrangements with Russia and Brazil against hefty down payments disguised as loans represent an innovative policy being followed by China. Its program for direct subsidies to consumers for purchases of automobiles and durables is also very different from the US policy of funding banks and then asking them to fund the consumer. Not surprisingly, while US GDP shrank 6% in Q1, China managed to grow 6% in the same period.

Nevertheless, nobody has a grip on the situation. Until yesterday China was the big boy in US treasuries market but this year gross issues are estimated at $ 8 trillion, which would make Chinese purchases ‘a drop in the ocean.’ Even as global financial players were celebrating a new and more stable government in India, the Italian born de facto head of government Sonia Gandhi quietly nudged the economy leftward, without anybody noticing. Japan's economy shrank a record 4.0 percent in Q1, despite the $160 billion stimulus plan, while Australia appeared to be chugging along normally.

The UN sought $ 543 mn for helping displaced Pakistanis last week, somebody said Iran, which test-fired an advanced missile Wednesday, could build a nuclear weapon in one to three years, and Sri Lanka said it had successfully crushed the Tamil tigers, albeit after losing 6200 soldiers and wounding 30,000. Even as ASEAN expressed concern over Myanmar situation, China said things have to be decided by the people of Myanmar. Elsewhere, it told EU to focus more on the $ 400 bn bilateral trade than Dalai Lama. Incidentally, Obama has started thinking of what Guantanamo detainees may do, if released, and Israel said all of Jerusalem would remain under Israeli sovereignty.

Whether it has something to do with the economic meltdown isn’t known but gays and lesbians seem to be growing all over. They are planning rallies in such unlikely places as Russia and Singapore. What can turn Stanford educated women aspiring to be US supreme court judges to lesbianism is something researchers need to work on. But then hasn’t the Pope acknowledged the power of Facebook to impact the pontiff’s acceptance? Of course there are contradictions here also – number of those opposed to abortions is growing steadily.

Parliamentarians in Britain are hiding their faces for having milched the taxpayer for personal conveniences and a former S Korean President accused of bribery allegedly jumped off a cliff, though the US appears to have forgotten all those who sliced away its citizens’ long-term savings for personal gains. A Pulitzer Prize-winning columnist was accused last week of having stolen words from, of all places, a blog!

Though fears of swine flu aren’t as omnipresent now, its coverage seems to have spread. US has asked three drugmakers for 20 mn vaccines.

While the US remains obsessed with banks and buicks, several parts of the world seem to have taken a leap into the world of renewable energy. In US itself a utility is talking of beaming energy from space to earth, Australia is moving to build the world’s largest solar energy plant and work on a solar powered town in Dubai that would house 50,000+ seems to be making steady progress. Meanwhile, China has embarked on an ambitious 100,000 mw wind energy project.

Barring some weakening of the dollar, currencies, equities and commodities remained largely steady last week, though oil did flex its muscles, crossing the $ 60 mark. OPEC says 75 will be reasonable but where the markets will go is anybody’s guess. One thing good about oil clawing its way above 60 is that it is keeping the energy scene live and kicking. Though still stubborn on Kyoto, the US has decided to ‘cap and trade’ auction emission rights internally.

Artificial or real, calm has apparently arrived. How long will it last? No matter what the boys at the Street say, you can’t hedge against the kind of turmoil that began last year.

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