Peak of Erudition

The US economy is driven by consumer spending and hence the government is hell bent on improving the consumer confidence in their future and also their perception about the future of the economy. But the high rate of unemployment coupled with weak housing market conditions seem to be badly hurting the consumer confidence.

The February 2010 reading of the US consumer confidence index has hit a 10 month low due to the above factors.
The US government might have to work very hard to pull back the confidence to healthy levels in the coming months. Any further deterioration in the consumer confidence index would be very harmful for the economy as a whole.

The Chinese government is worried at the massive rise in property prices across all major cities. China has seen a massive 50% plus rise in property prices over the last one year due to increasing demand from millions of middle class consumers.
Now the Chinese government wants to avoid another bubble burst, and hence has decided to raise the interest rates by 50 basis points. The Chinese government has already asked the three main banks of the country to cut down on new loan issues in the coming months. All these are expected to result in further drop in demand for products and services inside China.

The US private sector comprises of hundreds of global multinational companies and thousands of supporting small / medium sized companies. All these companies have been able to exploit the global recession to their advantage in the last two years, by cutting down the work force. These companies have also ensured higher output from the retained work force.
But all those are going to turn the other way round in the coming months, because talents will be in demand across categories due to rising demand. That could force many companies to hire people in a hurry over the coming months and also start giving more comforts for existing work force. So expect the US unemployment rate to drop below 8% by the end of 2010.

The Indian economy is running fast and has recorded a spectacular 7.9% GDP growth in the last quarter. The industrial output and also the service sector output have gone up substantially. The exports have gone down due to poor global economic scenario.
The Indian economy is riding high only on the back of a healthy domestic demand which is continuing to grow. The current quarter GDP is also expected to be around the same level, in spite of agriculture sector failing due to weak monsoon.

The US retail sales have bounced by a healthy 1.4% in the month of October 2009, and that has been enough to push the Dow Jones and Nasdaq indices to year high today. The Dow Jones crossed the 10400 mark while the Nasdaq climbed to 2200 level.
Analysts are expecting the US stock markets to remain range bound for the next one or two months, till major trends of the global economy appear.

The US congress is working on a revolutionary amendment to the US regulations which would effectively cut the power of US FED in making the decision on interest rate changes. The politicians have always been against the upward changes in the interest rates being done by US FED and have been seeking to gain control over it.
Now the Obama administration seems to be working on legalizing this through this legislation. If it comes through, then there could more economic upheavals in US in the near future.

The US unemployment rate has hit the double digit mark in October 2009, with the official figure jumping to 10.2%. There has been more job losses in the month of October 2009, due to weak economic conditions. This is the highest level of unemployment in US in the last 26 years which is haunting the Obama administration.
The US government is likely to face tougher times in the months to come because soaring unemployment base could pose serious threats.

The Berkshire company, headed by Warren Buffett, has signed up a deal to buy Burlington Rail road company for 44 billion US dollars. The deal is expected to give 77% equity control to Berkshire and it would make or break Berkshire over the next few years.
The deal also would be sending a strong signal to millions of investors across the world, that US is on a strong recovery mode. But as per latest trend of unemployment and housing data, the US is going to face tough times in the near future.

The Indian stock market reached 52 week high just two weeks back and was remaining very firm on the back of heavy foreign fund flows. But in the last one week, the market has corrected by a whopping 10%, only due to massive profit booking by few of the major foreign funds, apart from increasing fear of tighter liquidity in the near term.
The Indian central bank had increased the statutory liquidity ratio by a massive 100 basis points just last week which started the downfall.

The Asian stock markets have corrected by 3% to 6% in the last few days, due to weak consumer confidence data from US and also negative GDP data from UK. The global markets are likely to remain subdued for the next few days unless there are strong positive economic indicators coming out of US and Europe.
There is also a rising danger of commodity prices which in turn is fueling inflation. That in turn will be forcing most of the central banks to raise the interest rates, which can pull down the economic recovery.