“We want our money back,” thundered Obama last week, even as he acknowledged that risky bets are continuing unabated. Obviously, the US isn’t about to strike at the root of the problem, excessive speculation, though there are some murmurs about a possible clamp down on speculation in oil and gas. The proposed 0.15% tax is on liabilities of top financial companies, not on speculative transactions.

What the state of the US economy is and where it is going remains as uncertain as it was when Lehman went under. Imports plunged about 25% in 2009 and in volume terms, oil imports in Nov were the lowest in ten years. Hopes are now pinned on the govt hiring 1.2 mn temps for census work in H1.

Google must have taken the White House into confidence before threatening to quit China, and that may be the beginning of cyber wars, or trade wars (protectionism), or clashes of cultures at an unimaginable scale. Keep fingers crossed, though things at so macro a level take time to get translated into micro effects.

China continues to lend its businesses and subsidize consumer purchases, blissfully ignoring the 16% drop in exports and 27% increase in money supply as retail sales still account for only about 40% of GDP. Forex reserves climbed $453 bn last year also! Retail sales rose by $400 bn to 2.25 tn last year and domestic brands have started mushrooming. Production of mobile phones reached 600 mn, including 145 mn unbranded, while demand for diamonds and gold scaled new heights.

Europe’s trade surplus declined significantly last year but it still has some surplus. Germany’s GDP fell 5% last year and Moody’s said Portugal and Greece economies face slow death, giving rise to wild speculation about Greece quitting or being expelled from the Euro zone. Italy’s amnesty scheme is estimated to have resulted in assets worth $17 bn having been withdrawn from UBS, Credit Suisse and Julius Baer.

Russia’s parallel economy is now estimated at about 20% of GDP or $70 bn, salaries in Japan have declined for 18 consecutive months, and Dubai housing prices were down 50% while population plunged 8% last year. Korea posted a record trade surplus of $41 bn last year. South Africa is trying to figure out whether it would be worth hiking power tariff for boosting investment in generation.

Twitter says share of US in its worldwide users is declining while growth abroad continues to be satisfactory, AOL is closing its German operations, and Verizon and AT&T are cutting tariffs in the post-iPhone era. Apple has filed a patent-infringement complaint against Nokia and Deutsche Post is to launch a hybrid mail service that would combine email with snail mail (whatever it means).

The financial services industry seems to be back to normal; both public investments in PE funds and investments by PE funds in public companies are growing healthily. BC Partners (PE firm) is to raise $8.4 bn for leveraged buyouts. Goldman Sachs has admitted it takes positions before giving sell or buy advice to clients.

J&J has admitted it paid bribes to push a drug for the elderly. Wal-Mart is to close ten Sam’s Club stores but says this has nothing to do with the overall outlook. Airbus and Boeing delivered 498 and 481 airplanes, respectively, in 2009; newer versions are simply too fuel efficient to be ignored. Shiseido, Japanese cosmetics firm, is buying Bare Escentuals for $1.7 bn in cash.

George Soros is trying to spell out the economics of curbs on carbon emissions and a German city has even started offering free parking to environment-friendly cars, but the whole thing is apparently cooling down as it is increasingly being realized that paying Euro 0.40-0.50 a unit isn’t a sustainable way of promoting solar.

News of millions having been paid by investment houses for getting control over billions of pension and retirement funds came in last week. The big wigs of the financial industry deposed before US authorities but admittance of guilt by faceless corporations had no effective impact on the official stance, though the SEC did propose a ban on unsupervised trading by investors on alternative trading systems. In China, over 106,000 officials were punished last year for abuse of stimulus money. The malaise isn’t limited to the financial sector. Germany raided almost every large retailer of food and drugs because of suspected price fixation last week, and Italy has had to cancel order for 24 mn doses of swine flue vaccines it had placed with Sanofi.

Heartrending pictures of devastation in Haiti moved the world last week, though race related events in Italy and Australia and reluctance of elderly air passengers to let security personnel see their diapers continued to make headlines. In Asia, the ratio of men to women continues to fall; China will be short of 24 mn females of marriageable age by 2020. Poland has decided to slap a tax of $820,000 on five years income of a prostitute. Notwithstanding lissom lasses posing nude to support ban on fur, the fur trade says its doing fine. A survey says growth in obesity in US has declined. The Japanese say they are offended more by foreigners talking loudly when travelling by trains than by drunks and a Chinese student donated a staggering $8,888,888 to Yale last week, making his Chinese alma mater squirm.

As far as Obama is concerned, “America is moving forward again,” and that means the world should look forward to singing “happy days are here again” again. May be there is no land left to build a house but one can always buy a floating house – Utopia Residence of Beverly Hills has placed an order for a billion dollar ship with Samsung and would be offering two bedroom units for $3.7 mn each by 2013. Don’t have that kind of money? Put all your savings with Merrill Lynch or Morgan Stanley, so it grows adequately by then.

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