As oil jumped from 63 to 68, Dow shot past 9000, Nasdaq came close to 2000 and value of the euro exceeded 1.42 dollars, volatility remained the only constant last week also. Euro had seen $1.6 last year and yen has been at 90. Who knows where the duo, or daddy dollar, would be next month. Somebody should research where oil would have gone, had manufacturing not migrated to coal-centric China in the last decade.

Harvard, Yale and Stanford are facing financial difficulties they had never imagined; Harvard actually borrowed $2.5 bn last Dec. Notwithstanding Obama’s resolve to bolster education, the bailout doesn’t include educational institutions. Funding by the unique VC industry of US slipped 50% in Q2 to $3.67 bn. Two largest pension funds of California have lost 100 bn.

Earnings reports are undoubtedly satisfactory but the tens of millions of job cuts had to produce profits. The problem is demand. Pricey shopping districts like Madison Av in New York and the High Street in London are looking at 15% or more vacant space. Apartments in Manhattan have lost over 20% value and further falls aren’t being ruled out. “Retrenchments by consumers” is how the job cuts are being described. “… never seen a pull back like this,” said a Goldman economist.

China is doing fine but it is focused on China. Besides, the bolstered demand may not last very long as growth is believed to be largely investment driven. It has already spent enough on infrastructure and perhaps that is the reason why newly issued loans are lubricating equities and commodities markets, more than demand for real goods and services. China now has the second largest market cap in the world - $3.21 tn against Japan’s 3.20 tn and volumes have surged 200% since last year. PE ratios are at dizzying levels of 33-35 but they have been above 45 before. Passenger and cargo volumes at Hong Kong were down 18% and 13% respectively in June.

It is becoming increasingly clear that the US economy is rapidly losing its ability to move the world, either way. Americans are reportedly drinking more tap water than ever before; Q2 Coke volumes fell 1% in North America but were up 33% in India and 14% in China. McDonald’s too did better outside the US. Russia’s Grazpom has issued euro bonds at 7.6% yield while for dollars it had to pay 7.9% (yield).

Even as Obama is trying to ask those selling exotic financial products to put adequate money aside for covering potential losses and plans to bar ratings agencies from providing consulting services, reports of Wall St brokers using some high speed technology to put millions of small deals through for manipulating markets have come in.

Obama wants greater state role in healthcare to cut costs but an industry that is used to charging the consumer the same price for generics and branded drugs says the US will go bankrupt if the President’s “like-a-broken-record” rumblings don’t stop. At another plane, the swine flu scare is being blasted beyond bigotry, forcing govts across the globe to spend billions on vaccines. 300 have died of swine flu in US so far while the normal flu kills 36,000 a year.

Argentina farmers are demanding lower taxes and restraints on exports of corn and soya, Chile is sitting pretty on $42 bn it saved because of high copper prices in recent years, tiny Paraguay is pressing Brazil to let it sell its share of electricity from a joint project to private Brazilian utilities, a move which can get it an additional $630 mn. Mobile operators in Africa have smelled success in money transfer and have started breathing down the necks of banks and credit card companies. UN says Arab nations growth has been stunted by excessive dependence on oil and the health of the Arab world isn’t very encouraging.

Credit ratings of Mexico, Russia and India continue to be questioned, suggesting impending financial crises that could move hundreds of billions of wealth but anything resembling the Asean 1997 can be more or less ruled out, given the willingness of India and Russia to impose controls when necessary. Even countries like Switzerland have started intervening in currency markets.

Corruption in Venezuela is being held responsible for the growing drug menace in US. Perhaps drugs-centric economies should press for free trade in marijuana and cocaine also; if GM food can be debated at Doha, why not heroin?

Hillary Clinton was in India last week, selling nuclear equipment of US arms of Toshiba and Hitachi, though fighter jets of Lockheed and Boeing were also on the agenda. Elsewhere, she called North Koreans ‘unruly children’ and they described her as a ‘schoolgirl.’

Bill Gates says he is enjoying the game with Google, Amazon is buying shoes and apparel online retailer Zappos for $928 mn, workers of an autoparts maker in France are threatening to blow up the plant, demand for iPhones continues to exceed Apple’s ability to produce, Deutsche Bank is being accused of spying on two of its board members, Levi Strauss lost money in Q2, Barnes & Noble has relaunched e-books, Haier of China is pushing its PCs abroad vigorously, and Wal-Mart has started indexing environmental impact of products it sells.

Beijing Auto has withdrawn from Opel, Volkswagen, owned 51% by Porsche, is set to swallow the later, and GM, after having come out of bankruptcy, is hungrily looking at the “Cash for Clunkers” scheme that is expected to boost sales over the next few weeks.

Boom or doom or status quo? Take your pick. Italy’s Berlusconi says he isn’t a saint and his people like him as he is. His popularity has dipped below 50% but unlike American presidential hopefuls, he isn’t apprehensive about the new generation drones that would be able to snoop inside homes. In the US, for winning his second term, all Obama has to do is to ensure a few of the new drones are available to the US media.

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