The continued rise in number of jobless continued to be ignored by policy makers sanguine about the stable dollar, Dow, Nasdaq and … Iraq, North Korea, Afghanistan and Pakistan! Scam accused Allen Stanford’s complaint about his jail cell not being air-conditioned didn’t surprise.

Economic indicators for US and EU have all been declared satisfactory, sound and reassuring but concerns about Asian economies are becoming louder. Equities in Asia have indeed risen 40-50% in last six months and the possibility of ‘irrational exuberance’ having arrived cannot be ignored.

Chinese banks have lent $1 tn in loans in H1, outstanding loans are 120% of GDP, and M2 is set to exceed that of the US, though market cap is still only a third of GDP. Markets are marked by very high turnovers, as well as PE ratios. While the US is now silent on Chinese monetary policies, China continues to admonish the US for its ballooning budget-deficit.

Bankers on the St have started ordering $4000 vintage wine bottles again but the number of failed banks in US has risen to 69, daily turnover on LSE declined 41% in H1, distressed sales continue to account for about a third of home sales in US, retail sales in Japan have been falling for ten months now, Euro zone unemployment is close to 10%, and profits of even Shell and Exxon have plunged two third or more in the latest quarter. HSBC alone has set aside $15 bn for sour consumer loans in the US and De Beers has cut 4,700 jobs as its sales have plunged to the lowest since 1974.

US and EU continue to dilly-dally on financial regulation, harping more on bankers’ bonuses than on size of individual banks and the liberty they enjoy to speculate with depositors money. While Milan city is suing the likes of UBS, Deutsche and JP Morgan for illicit profits earned from its bonds, fund managers in Britain are threatening to migrate if personal income tax is not rolled back from 50 to 40%, corporate insiders are selling their shares at a steady pace and the hedge fund industry has started showing distinct signs of revival, despite hundreds of billions having been withdrawn by investors. EU wants hedge funds to report their strategies and the US SEC has extended the ban on naked short sales but the problem is that too few are managing too much money.

Interest rates and inflation are being discussed in elegant conference rooms and economist John Taylor’s formula (1.5 times inflation plus 1%) for benchmark interest rate is at least being debated. To mitigate risks, some are talking about caps on corporate debt but perhaps what is needed is a minimum amount of debt secured by personal guarantees so the risk-averse common man can feel comfortable about his savings.

Shanghai, with 3 mn or 22% of permanent residents having crossed the age of 60, is asking couples to have more kids, and Taiwan is planning curbs on commercial firms arranging foreign brides, of whom it already has 400,000. Swine flu appears to be shifting to back pages of newspapers, but demand for vaccines and masks is expected to exceed at least $5 bn.

Fuel oil is priced almost at par with crude now, implying Exxon and Reliance enjoy no advantage of superior technology. Focus on hydro, solar and wind energy is getting sharper by the day, one example being the city of New Jersey putting solar collectors on 200,000 electric poles and roofs of buildings, despite effective capital cost of solar power still being nearly ten times conventional. China expects to expand wind energy to 10,000 MW this year and may touch 30K by 2020, though China, being China, just may hit the target of 100,000 MW.

A Japanese economist says rise of one degree in temperature in office cuts productivity by 1.9% but that hasn’t deterred companies like Dai-ichi from setting air-conditioning controls at 28 degrees and providing handheld fans to their employees. Sooner or later, the US and China, currently stricken by the auto-bug, would see what an efficient public transport system can do – in Japan, a car has become 17th priority of the young and girls actually feel embarrassed when boyfriend arrives in a car.

US media has ignored those who said Obama wasn’t born in the US, Kenya says its economy is doing fine, Japan is looking to provide ultra advanced medical services to the world, such as gene diagnosis and regenerative therapies, Nigeria wants to develop itself as a tourist destination and its neighbor S Africa says 11% of its population (over five million) is living with AIDS, despite Bill and Melinda Gates not having shifted gaze to swine flue. The agreement Microsoft has signed with Yahoo is absolutely indecipherable, like a hedge contract.

China’s online gaming industry is worth almost $4 bn, has at least 130 R&D companies, and is growing at over 30% a year, notwithstanding govt ban on ‘mafia’ games inspired by The Godfather. The industry has an estimated 200 mn customers and there is no room for global players because of language problems.

Drugs prices in Afghanistan have declined to 20 cents a shot for opium and 60 cents for heroin. Obviously, productivity has reached historic highs, supply has exceeded demand, and the unemployed in US and EU can afford their supplies even out of dole receipts.

The man on the street has been paying for profligacy of the rich and powerful and that isn’t about to come to an end. Role of speculators in pushing oil prices up is facing scrutiny from several quarters but UK is still sulking because electricity is sold (before it is consumed) only 2.7 times in UK while the figure for Germany is 8. Bernard Madoff wondered aloud last week why his ponzi wasn’t discovered sooner but with riskless bank deposits yielding less than 2% in most major economies, perhaps potential for ponzis is still limited only by the skills of the organiser.

xxxxx