The Indian city of Pune, near Mumbai city, was hit by terrorist bombing few days back. At least ten people have been killed of which two are said to be foreigners. Also nearly 50 people have been injured in the blast, which occurred out of a bag consisting of RDX bombs. The terrorists seem to have planted the bomb just an hour before schedule and conducted the blast with the target of foreigners.
The investigations are on, and the Indian authorities are even checking out the speeches of fundamental leaders inside Pakistan for further clues.
Argentina’s central bank chief Martin Redrado has resigned following a bitter public row with President Cristina Fernandez de Kirchner.
Mr Redrado said he could do no more to protect the independent institution of the bank from the president’s efforts to control its dollar reserves.
He had blocked the president’s attempt to use $6.6bn (£4bn) in the bank reserves to service Argentina’s debt.
The president says the country will benefit from her proposed move.
Mrs Fernandez de Kirchner says it will bolster Argentina’s standing in international markets.
Argentina has $13bn of international debt that matures this year, and a hole in its budget of between $2bn and $7bn.
The banking trouble for the US economy is only getting complicated with every passing month. In the last one year alone, the US FDIC has closed down over 125 banks which were not meeting the capital adequacy requirements, but even after that the number of problem banks is not coming down.\
On the contrary, the number of problem banks has gone up to 552 banks with over 345 billion dollars of assets at stake, as of September 2009. The US FDIC has also seen the entire reserve money vanish due to the costly closure of over 120 banks in the last 11 months. The rising unemployment is only expected to add more bad debts to the banking system for few more quarters, as per experts.
The third quarter of 2009 has turned out to be better for the Malaysian economy with the GDP going down only by 1.2% versus 3.9% in the second quarter. The Malaysian government has been spending billions of dollars in infrastructure and tax breaks in the last three quarters to reverse the negative effects of the global slowdown on the Malaysian economy.
Japan has a very large aged population that is not revenue generating and has been a big drain on the economy for the last decade. And the global economic crisis in the last two years has only aggravated the situation and Japan has been forced to keep the interest rates at record low levels. In fact the abnormally low funding by Japan has lead to an asset bubble across the globe in the last five years, that lead to the global economic crisis.
Now Deflation is once again haunting the Japanese economy, which will force the government to continue with the costly stimulus measures for some more time. By the next two or three months, many countries across the globe might pull back the stimulus measures, and may even start increasing the interest rates.
But Japan might continue with the liberal bank funding which may delay the economic recovery of the country.
The unemployment in US is rising to record high levels when it hit 10.2% in the month of October 2009. That is having a direct impact on the bad debt and doubtful debt level of banks and mortgage firms. Yes the percentage of delinquent mortgage loans has reached a record high of 9.64% as of third quarter end, up from the 9.24% recorded in the second quarter.
This is in spite of special efforts by the Obama government to reverse the fortunes of millions of jobless Americans and also the efforts in pushing up the ailing housing sector.
The US government has done the first decisive step to give the full power to regulatory authorities to break the so called “Too big to fall” companies. A US house panel has voted in favor of the bill and now it will be taken up by the US senate and the house of representatives.
They are also expected to vote in favor of the bill, which might be used as a strong tool by the government to break too big sized companies well before they become dangerous. The financial meltdown has been caused by the collapse of the top five firms in US and the Obama administration does not want to allow a repeat of the episode again.
The year 2009 started on a very bad note for Singapore, but the export dependent country is seeing a massive surge in real estate prices due to carry trade US dollars flooding the market. There are more takers for real estate properties in Singapore, and in spite of massive increase in new property supplies, the prices have surged by nearly 25% in the first 10 months of 2009.
The government is now putting additional controls on bank funding for real estate projects to avoid a bubble burst.
The top line US retail sales reads at a healthy 1.4% for the month of October 2009. But if you take out the automobile sales from that which has rebounded from a pathetic September sales, the retail sales is up only by 0.2% against the consensus estimate of 0.4%.
This is likely to continue in a narrow band since the unemployment rate is at a record high of 10.2% as of October 2009 end.
All these countries are already facing a crashing exports to US in the last one and a half years, and have been forced to spend billions of dollars of their reserves to shore up the domestic demand. But all these have only helped them in slowing the pace of recession, and at last all these countries are seeing some recovery in their GDP.
But the US dollar is posing a far bigger problem for these countries in the last few months, as their currencies have appreciated by anything between 10% to 20%.
That has been making their exports not viable at current exchange rate, which in turn is stopping any export market recovery. And all the central banks of these countries have already spend a substantial portion of their capacity and purchased huge quantity of US dollars, but for which the US dollar depreciation would have been much sharper.
Once these countries start tightening their interest rates, then there could be further flow of US dollars into these countries from investment funds, which can further depreciate the US dollar value.
