The triple A rating the US has enjoyed uninterrupted since 1917 is beginning to be questioned in a scenario characterized by falling wages and the likes of Krugman warning the US may face its own lost decade if it doesn’t handle the situation efficiently. In year to 9 Oct 2008 investments of the famous 401K plans had lost $4 trillion in value. Freddie Mac needs another $6.1 bn in aid and rumors of an impending crisis in the credit card industry persist, though Obama is already asking banks to be more reasonable with cardholders.

President Obama has asked the healthcare industry to cut costs ten percent but that is easier said than done. And even if it is achieved, what succour will it provide to a nation that spends 15% of its GDP on healthcare? The stark reality is that nearly one half of America is obese and perhaps Massachusetts new law requiring fast-food chains to disclose calories would have a greater impact on healthcare expenditure.

China appears to be inching closer to assuming economic leadership of the world and some do expect it to rescue the world. Retail sales are rising. Auto sales in Jan-Apr topped 3.83mn units. One ad is actually advising Chinese women to scream at their husbands publicly if they refuse to buy cars for them! Consumer prices declined for the third consecutive month in April but that may have been caused by lower oil and commodities prices. China proudly demonstrated its achievements in having tackled the aftermath of the Siachun quake on 12 May 2008. Sitting pretty on over two trillion dollars of reserves, China is coolly watching the world describe its currency as The Almighty Renminbi. However, China is focused on its domestic economy, trying to ensure basic necessities for those rendered unemployed because of plunging exports.

Things aren’t hunky dory in a large number of economies. IMF says Middle East and Central Asia economies would slow from 6 to 2.5 percent this year and Mexico’s ratings are already under pressure yet again.

Giant corporations are coming croppers like never before. Toyota reported its first loss in 60 years, Toshiba in 30 years and Sony in 15 years. Fiat is eyeing Chrysler, as well as European operations of GM. Nike, like many others of its ilk, has slashed 5 percent jobs worldwide. India’s Tata group has candidly admitted its purchase of Corus and Jaguar-Land-Rover was a ‘me too’ action. EU imposed a fine of $1.4 bn on Intel for violation of anti-trust laws.

Stimulus, more stimulus and then more stimulus seems to be the mantra that helps obviate the need for some hard thinking. Resentment of the man on the street is growing as he is asked to pay for profligacy of those whom he has to park his money with. Policy-makers are apparently determined to maintain the pace of financial innovation and auto sales, which can perhaps only exacerbate the situation in not-too-distant a future. US is investigating officials for having awarded contracts for management of pension funds to a favored few but China and India are refusing to recognize the perils of handing over people’s hard earned money to the smart operators.

One sensible step the US has considered lately is the proposal to subject derivatives to normal tax. Other than that, it continues to attribute most of its woes to the Chinese who believe, unlike the Americans, in working hard and saving for a rainy day, instead of borrowing against future earnings in advance for funding fancy holidays this season.

The Pope was in Nazareth last week, trying to make amends for having used some tough words for the Islamic world in the past and Obama made preparations for his forthcoming trip to Egypt when he probably intends to unveil an ambitious plan for lasting peace in the Middle East. Dreams die hard.

Meanwhile, Pakistani commandos continued to attack Taliban, Suu Kyi of Myanmar was in news again, the US was trying to figure out where it could place 241 detainees at Guantanamo after closing it, and the tiny Sri Lanka threw out journos reporting on abuse of human rights by its marauding soldiers even as thousands of Tamils sailed across the strait to safer pastures in India. Iran freed a US journalist but N Korea is trying two.

Russia’s plans for floating nuclear power stations in the arctic to exploit oil and gas reserves, and its resolve to protect its interests in the arctic by force, if necessary, are sending shivers down the spines of many, even as Russia is trying to improve its relations with China and Japan at the same time. The world’s largest democracy, India, managed to get itself a stable government after several weeks of uncertainty.

The Swine Flu scare at least didn’t escalate further; Mexican children began returning to schools and the subject slipped to back pages of newspapers.

Hackers wanting to hawk fake goods to Facebook members are phishing successfully for user data. Adolf Hitler probably squirmed in his grave as somebody was fined 900 euros for knocking the head off his wax statue at Madame Tussauds. A report said the Israelis recycle 70% of water they consume and Obama is contemplating cancellation of a fleet of new helicopters for the White House.

Equities firmed up further last week with Dow up by about 200 points and Nasdaq up 50 points. Nikkei also rose 200 points. Crude touched $60, though it retreated marginally toward the end of the week. Gold inched up a little but most commodities, as well as currencies, remained largely stable.

Things are getting curious. When oil goes up, markets actually rejoice and incredible it sounds but golf ‘industry’ executives too are looking for aid from Obama.

The world shed a small part of fear of the unknown last week but, as always, perceptions vary from person to person and nation to nation. The future remains as uncertain as ever but then life has to go on.

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