Obama was present when 18 caskets carrying bodies of US soldiers who died in Afghanistan arrived in Delaware last Thursday, probably saying he has no intention of having another Vietnam on his hands. The point is the arms industry of the US has become too miniscule a part of the juggernaut now.

The no-holds-barred war between America’s far right against Obama’s left-of-centre attitude is getting uglier by the day. Ideology is a secondary consideration on both sides of the fence.

The US officially declared last week that it was out of the woods as GDP grew 3.5% in Q3. After a euphoric surge on the St Thursday, chips were down on Friday when reports of weak consumer spending came in. Number of failed banks this year has risen to 115 and Capmark, the largest commercial real estate finance co in the US, owned by Goldman Sachs and KKR, has filed for bankruptcy.

US, Europe is convinced the time to withdraw stimulus hasn’t arrived as consumer prices are falling and unemployment is rising. France is planning to provide a ‘grand loan’ of $52 bn for funding infrastructure. Over 10% of Germans have lost their jobs since the crisis began – 3.258 mn have been laid off. Across Europe, companies are cutting working hours and wages in tandem. China too doesn’t believe the time to exit stimulus has come.

George Soros says another recession is due in 2010 or 2011.

Forex reserves of China and Russia are growing a billion a day each and Brazil’s real is rising relentlessly. How long can the developing world keep its own citizens wanting for sustaining lifestyles of ageing populations in Europe and still reckless spending of Americans.

One sane voice last week was Venezuela’s Chavez, who asked citizens to stop singing in the shower and complete their baths within three minutes, to help conserve water. Also, S Korea, Singapore and Hong Kong are moving to contain real estate prices by tightening lending norms to wipe off oddities like a one bedroom apartment in Hong Kong’s Kowloon district selling for US$3.2 mn. That real estate contributes significantly to economic uncertainty is apparently being realised in EU and US also, though it is still a mere blip on the horizon. Morgan Stanley is calling it a new era when central banks would consider asset prices also when deciding monetary policies.

On the wind and solar energy front also, govts seem to be moving from lip service to long term thinking, as is evident by China’s intense exercises to fix the contentious pricing issue. Worldwide, over 10 mn have been displaced because of climate related factors. However, for the time being, currency traders in NY and London continue to determine whether the Irish should drink beer in their own pubs or travel to Northern Ireland.

Microsoft says it lost $6.6 bn in China alone because of piracy while Facebook has been awarded $711 mn for damages caused by an Internet marketing company. Sony’s sales were down 19.8% to $18.5 bn, the biggest losers being Bravia TV and Cybershot cameras. Nintendo isn’t doing too well, as iPhone is replacing handheld game consoles too. South Africa’s MTN suffered a shrinkage in its subscriber base at home in Q3 as unemployment rate rose to over 24%.

Honda has tripled its profit forecasts on the back of rising motorcycle sales and success in small cars (says its competition is only Hyundai now), US Steel revenue dropped to $2.2 bn in Q3, when sales of Whirlpool were down 8% and Honeywell’s sales plunged 17%, Ingersoll reported a revenue decline of 19%, and Schlumberger revenue slumped 25% to $5.43 bn. Heineken is buying out its Mexican partner and Gianni Versace is cutting workforce by a quarter. Boeing and Airbus orders have hit a 15 year low.

Oil giants like Exxon Mobil, Royal Dutch Shell and Eni are in a limbo not only because of sluggish demand for energy but also the burden of managing varying taxes, exchange rates, and rampant speculation. BP is pushing oil output in low tax regions like the Gulf of Mexico, but an oil company cannot sell the oil in its pipelines even if it knows price is going to halve tomorrow.

Kellogg increased its profit 6% in Q3 as more people are eating breakfast at home and many of them are still reluctant to cook.

AIG continues to sell assets in Asia, and pay up obligations against CDOs it wrote for anybody and everybody; it has paid Societe General $16.5 bn, Deutsche Bank $8.5 bn and Merrill Lynch $6.2 bn. So you know it would honour its commitment toward your life policy also. Deutsche Bank, meanwhile, is buying wealth manager Sal. Oppenheim for $1.5 bn, in an effort to cut reliance on investment banking. The difference between the two, perhaps, is that business per client is higher in the former. Meanwhile, Galleon boss Rajaratnam’s case has become even more hopeless as he is now being charged of having paid $250 mn in bribes to banks for market info.

A province in Indonesia, which already has a law allowing adulterers to be stoned to death, is planning to ban women from wearing tight trousers. Japan wants swimming stars not to dye hair, wear earrings or have brightly painted fingernails, insisting that US and Australia too are setting these criterion. A 112 year old Somali has married a 17 year old and intends to have more children. Divorce rate in US is dropping because couples can’t afford the costs. British kids 11 year or older would soon be receiving career counselling under an official program through YouTube. A Northwest aircraft overflew its destination by 150 miles and the administration says the country’s students lag far behind at K-12 level in math and science courses.

Policy makers are returning to sanity, but at a pace that may turn out to be too slow to prevent hyper-inflation and social riots in most unlikely of places.

xxxxx