Japan elected a new govt last week that promised to shift focus from companies to people and stop being subservient to the US, though it is too early to say whether the new PM Hatoyama, a pedigreed politician, would wilt like Obama has. Otherwise, the world was largely calm, with equities, currencies and commodities more or less steady, though gold did cross the thousand dollar mark and the soothing ‘slower deterioration’ mantra was replaced by ‘slower recovery.’

Global sales of semiconductors are down about 25% this year and the transport industry, shipping and air, continues to face falling rates; daily rentals for certain categories of ships have plunged over 50% in the last few months. A recent survey says one in four young US workers is unable to pay bills but retailers have started cutting prices of essentials also.

Canada GDP shrank 3.4 percent in Apr-June, S&P says Mexico must look for ways of raising revenue if it wants to avoid a lower rating, Brazil’s industrial output has risen for seven consecutive months, Jamaica’s inward remittances are down by a sixth and South Africa is running a budget deficit in excess of 10% of GDP, though trade deficit is shrinking and currency is appreciating.

Syria has started opening up a little as it cannot even buy spare parts for 8 of its 16 passenger airplanes. Chinese legislators are communicating with the people online. Japan is trying to involve its elderly in community service, in order to contain their shoplifting activities! In Germany, people have hoarded light bulbs because bulbs above 75 watts have been banned through out the EU.

China's trade surplus with EU was down 36% in H1 and its gold output rose 13.4% in Jan-July to 172 tons but banks are beginning to exercise caution in lending. In Hong Kong, investments in real estate have tripled in the last two years. HSBC says more and more rich foreigners are shifting base from the UK to Switzerland, as income above a quarter million dollars is set to attract a tax of over 50%.

Reasonably steady bond yields and interest rates suggest that global money supply is still at reasonable levels, which means major economies are unlikely to have any problems in continuing their stimulus plans at least until mid-2010. One reason could be the steady, though yet not very visible, rise in savings. Booming equities markets and re-energized players in the $600 trillion derivatives markets are guzzling money saved by the man on the street while policy-makers are unable to determine the extent to which Ivy League bankers in $3,000 suits should be barred from promising the moon on earth to gullible investors. Meanwhile, private equity firms have started becoming vulture entrepreneurs, taking over troubled firms, sometimes for asset stripping.

Walt Disney is buying Marvel Entertainment (Spiderman fame) for about $4 bn and Ralph Lauren says it will open 15 stores every year in Hong Kong and China, where GM’s vehicle sales leaped 112% in August. Baker Hughes (oilfield services) is buying BJ Services for $5.5 bn, BP has apparently discovered one billion barrels of recoverable oil in Gulf of Mexico, and Khosla Ventures has raised $1.1 bn for investing in renewable energy and clean technologies.

While the Chinese are prowling around for companies owning natural resources, Japanese pharma majors are swallowing rivals all over the world, having spent over $12 bn for pharma businesses in the US alone. The latest is purchase of Sepracor of US by Dainippon Sumitomo Pharma for $2.6 billion. Meanwhile, Pfizer has agreed to pay $2.3 bn for having illegally promoted three drugs. However, capital spending cuts by Japanese businesses has continued for nine quarters.

Moody’s and Standard & Poor have been indicted for having issued deceptive ratings for mortgage backed securities, in exchange for thrice the normal fees, leaving one wondering why no new player is ready to take the global trio head on. Bank of America is trying to figure out a way of building a new identity that can reflect its ownership of Merrill Lynch, though some believe it should divest Merrill and boost its own books and image.

Facebook is selling friends at about $0.10 each, YouTube (Google) is starting a new movie rental online service, Sony’s latest digital music player outsold iPod in Japan last week and Playboy has agreed to pay $850,000 to Lindsay Lohan for baring all. God has probably offered similar assets to a million others but only a few like Lohan are able to securitize and market their assets.

Though the US is expecting a favorable ruling from WTO in respect of European subsidies to Airbus, its airlines appear to have gone bonkers. After having started charging for checked in baggage, they are now asking consumers to pay extra for credit card charges, the naïve assumption being that the consumer looks only at ticket rates. Meanwhile, the WTO has allowed Brazil to impose punitive taxes on US goods as compensation for US subsidies to its cotton producers.

While Russia president Medvedev has unleashed a war against alcohol by imposing curbs on advertisements and hiking penalties for drunken driving since half of all deaths between ages of 15 and 54 are due to diseases related to alcohol, Hong Kong has decided to overtake Singapore as the wine hub of Asia. Consumption in China and Japan continues to rise at a fast pace as more are learning the art of toasting. Meanwhile, a survey says those who prefer sweet wines tend to be more impulsive while fans of dry varieties are more open.

The world seems to be at peace with itself. The trillion (millions and billions are passé) dollar question is whether it is 2004 all over again. Take the plunge or play it cautious? If you don’t have money, the question is irrelevant. If you have, then also it is irrelevant because eventually temptation is going to get the better of you. Try yoga.

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