Cyber attacks on key South Korean and US websites and Google’s new operating system Chrome created waves last week and oil went hurtling below 60 but the real big news went unnoticed - Chinese President Hu Jintao sort of explained his country’s success when he left the G8 summit before it started, to handle ethnic clashes back home. Every country needs leaders who worry more about their citizens than photo ops at high profile summits.

Pascal Lamy says the finance industry may end up deglobalizing the world, somebody has suggested financial products be offered only after being certified safe (like medicines), the US is reportedly considering clamps on oil speculators and Geithner is urging Congress to regulate the $592 trillion derivatives market. While a quick flash of common sense on part of Americans cannot be ruled out, it would be futile to expect any serious change; while the US budgetary deficit (mostly for funding losses of speculators) is projected at 13.6% for fiscal 2009, several hundred new hedge funds have been set up this year too.

Sensing shortage of parking space for liquid money, over 250 global non-finance giants like Colgate, IBM, Safeway, Microsoft and others raised over $700 bn in H1. Even News Corp. is sitting over more than $6 bn in cash. This phenomenon needs to be noted and considered by all watchful eyes. Too much is changing too fast for too many companies. In 2008 Shell and Exxonmobil overtook Wal-Mart in sales but both may be behind the retailer in 2009 and in 2010, well, who knows? Too many bizarre things are happening. When prices of oil and other major commodities (i.e. inputs for major consumer products) decline, stocks plunge!

Several important realities were recognized last week. Obama himself wrote G8’s obituary, admitting it was no longer competent to take decisions for the world. China and Japan continue to flip-flop on their call for a new world currency but it’s clear that they aren’t being over ambitious; China has started yuan settlements in a limited way but is keeping RMB on a leash and Japan is recoiling by the growing weight of the yen. Also, Obama has almost ruled out a second stimulus package, which perhaps implies he sees the first as an exercise in futility.

Poland and S Korea are selling bonds at 300 and 400 points (respectively) above US treasuries and Hungary has started funding mortgages in euros much ahead of its joining the mighty new currency. Saudi Arabia wants its own Street; it has asked Dow Jones to create Saudi indices.

US retailers continue to report declines in sales, so much so that Wal-Mart has stopped reporting monthly sales. Some say the definition of luxury is changing, super brands offering more hedonistic than real value are going for a toss and firms like Samsung are performing well, though Ikea is indeed going for its 10th store in China (about 50,000 sq mtrs). Nokia has started losing money and Hutchison (Li Ka-shing) is planning to sell a part of its stake in its Israeli unit. NTT is troubled because customers paying a fixed $66 a month are downloading almost all pornography provided by over a thousand producers on their cell phones.

Daimler launched a hybrid (gasoline-electric) car last month, a decade after Toyota and Honda, both of whom have already started registering respectable volumes. VW hopes to join the league by 2013. Yet, Suzuki and Mitsubishi are being advised to forget America like a dream that went bad. BAIC (China) bid for Opel has invited some derision (“you can’t chew and digest technology like bread”) despite China already having become the world’s largest market for automobiles.

Coke is building more plants in China, Pepsi is to invest $1 billion in Russia, Korea Electric will build a $2.5 bn power plant for Saudi Electric and Mesa Power of T. Boone Pickens has shelved plans for a large wind farm in Texas because money isn’t available, sending wind turbine producer GE into a tizzy, even as Sekisui, Daiwa and Sumitomo Forestry of Japan have already sold tens of thousands of small houses powered by solar energy.

Economies dependent on remittances, such as Bangladesh, the Philippines, Tajikistan, Moldova, Lesotho and others are going into a tailspin as developed world unemployment inches towards the 10% mark. In Spain, it is 18%. More than a sixth of Russia’s population is expected to slip below poverty line ($185 a month) by end 2009 as unemployment is projected at 13%. Not surprisingly, Vatican radio has started airing commercials, though it is unlikely to accept ads from …. everyone.

German food producers are being accused of using fake ingredients in their products, Australia is believed to be losing over a thousand jobs a day, bankers in Amsterdam are looking at the flesh trade as a growth area that needs banking, and the US continues to be the largest importer of, besides human beings, wildlife animals also – a recent report says it imported 1.5bn of them between 2000 and 2006. Notwithstanding the lost decade and all, the Japanese continue to be the quietest, cleanest, most polite and almost totally uncomplaining tourists in the world; at least hoteliers say so.

For the enterprising, there are opportunities galore. Madoff and his ilk notwithstanding, con artists are booming in areas like debt repairs and job hunting.
Wall St high fliers who made an average of $385,000 in 2007 aren’t taking Switzerland’s determination to maintain secrecy seriously and are open to alternate proposals. If the feeling of unease about the future persists, securitize your earnings from the job you expect to get in 2010 and get it rated from Moody’s. Chances are somebody at the St would give you some cash because no matter where you deposit it, it would go back to the St and in any case your securitized asset would offer opportunities for repackaging. And if that too doesn’t work, fly Air New Zealand and watch cabin crew dressed only in body paint.

xxxxx