Whether white America is really being racist or Obama is playing the racist card isn’t clear but the race of the world’s most powerful man moved closer to being a burning issue last week when an entertainer actually interrupted his address to investment bankers in NY. Whether the fictional drama in Irving Wallace’s celebrated novel The Man is due to be enacted in real life, only time would tell but Osama says Obama is ‘powerless’ to stop the war in Afghanistan.

As it became clear that 9/15 is now more important a date than 9/11, Joseph Stiglitz thundered in Paris last week that big banks have become bigger since the crisis – share of Citi, Chase, BofA and Fargo in deposits has risen from 32% to 39% ($3.8 tn) between end 2007 and 30 June 2009. Support for Stiglitz came from none other than France’s Sarkozy, who said the practice of measuring growth by GDP alone was what triggered the crisis.

Credit card defaults are growing almost all over the world, excessive adjustments of adjustable mortgages (Option-ARMs) are rising, the euro zone says it lost 1.9 mn jobs in Jan-Apr, and OECD countries expect to lose 25 mn jobs by the end of 2010.

Yet, hemlines have risen high enough; “I have never seen so much of leg,” said a designer at the NY Fashion Week. The Dow is almost there at the five figures, yet gold and oil are above 1000 and 70 respectively, and the euro and the yen seem to be beating the dollar mercilessly.

Global equities are almost back at pre-Lehman levels and it is all champagne and caviar at the City and the St. How can one not earn profit if it is possible to take deposits at 1%, buy treasuries that yield 4%, and then borrow at 1% against govt paper to invest in markets where profits are for keeps while losses are to be reimbursed by the people. A system of the people, by the people, for the people.

Ignoring the fact that Hong Kong’s market capitalisation is already six times its GDP, nearly 100 Chinese firms are preparing for IPOs. Korea’s services exports are $16.7 bn lower than exports. Japan’s new PM plans to push domestic consumption, hike minimum wages and ban manufacturers from employing temps. US is enacting the age old drama of pretending to protect its manufacturers (tire producers this time).

One important development is Japan’s new philosophy that says a strong yen will be good for its economy. There is no possibility of any drastic change in the Chinese stance but if Japan actually lets the dollar slip below 90 yen, it can change the entire scenario, with flows towards Tokyo upsetting equities, currencies, commodities and governments in one go. Needless to say, after that, the Japanese would start nibbling at distressed assets in America and Europe again.

After Belgian dairy farmers sprayed three million litres of milk to protest against unremunerative prices, EU has started talking of a futures market for milk. In 5-10 years, probably convenience stores would be offering consumers bread, butter, corn and wheat on forward delivery basis. Singapore, however, is taking steps to contain volatility in real estate prices, while California is rationing water and penalising energy guzzling TVs.

De Beers has slashed production drastically, cut its workforce by 2,700 and is seeking funds from shareholders, including Anglo American PlC, Louis Vuitton North America has doubled its digital advertising budget and Faberge, bought by Pallinghurst Resources from Unilever in 2007, wants to sell $7 mn brooches on the Web to cut retailing costs.

Microsoft would let its shareholders vote on executive pay every three years, Oracle new software licenses sales are down by about a sixth, though it is working to get European clearance for its $7.4 bn purchase of Sun Microsystems, Adobe is to buy Omniture (Photoshop) for $1.8 bn and Facebook says it now has 300 mn users and a positive cashflow.

Cellphone handset manufacturing units of Casio and Hitachi are being merged with that of NEC, to remain competitive in a market (Japan only) expected to shrink 20% this year. Chevron, with partners ExxonMobil and Royal Dutch Shell is preparing to start work on a $37 bn LNG development in Australia.

Nissan is working furiously to create some noise in its electric cars so pedestrians aren’t taken unaware, and Renault’s US partner Better Place has been awarded contracts by Israel and Denmark to set up networks for battery swaps and recharges.
ILFS, the world’s largest buyer of passenger airliners (owns 955) is sought to be bought back by CEO Steven Udvar-Hazy (Hungarian), who had sold it to AIG in 1990. Novacem of London is struggling to raise funds for producing cement that can absorb carbon dioxide.

StanChart has agreed to be the sponsor of Liverpool Football Club, with some cash that it hopes to recoup by selling Liverpool shirts and merchandise at its branches, while Barclays is selling $12 bn of toxic debt to a fund set up by one of its former employees. Meanwhile, BofA continues to answer probing questions about what it knew before it took over Merrill Lynch.

Japan’s Kama Chien, 114, has become the world’s oldest person after a black woman who voted only for John Kennedy and Obama in her lifetime died last week at 115, a 224 story skyscraper has been mooted by a US architect (of course in UAE), British men have started getting eyebrows done, and the super rich have started chartering flights to avoid risk of swine flu while 3M and Kimberly-Clark are hawking special, thicker masks that supposedly are the only ones that can effectively reduce risk of flu.

Is the world due for another shock? If yes, where is it likely to come from? Silly question. How can a shock ever come from any place other than God’s own country! When? Silly again. When God wants it for His people, i.e. when stimulus works no more.

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