Events do develop rapidly in the midst of uncertainty. So I thought it best today to update readers on what’s going on in the world. My recent essays in The Star covered a wide variety of subjects, ranging from what G-20 leaders did in Vladivostok to the serious malpractice of manipulating the London Interbank Offered Rate (LIBOR); from the snoozing global economy to efforts by the European Central Bank (ECB) and Fed to stimulate economic activity with more quantitative easing; from recession in the eurozone to Europeans struggling to save the euro and bring down unemployment. For sure, the course of global growth has gone worse. So what else is new?
Global Economy Snores
The world economy is now at its most fragile since the 2008 financial crisis, according to the Organisation for Economic Co-operation and Development (OECD),2 the Paris-based 34-member rich world’s think tank. Last week, the World Trade Organization (WTO)3 forecast that world trade will grow by a mere 2.5 percent this year, based on data showing global trade volume rose by just 0.3 percent in the second quarter of 2012 (2.1 percent in the first quarter of 2012). Growth is dragged down mainly by Europe to less than half of the previous 20-year average. Its forecasts are based on a consensus 2.1 percent world growth in 2012 and 2.3 percent in 2013.
Still, many risks remain on the downside. OECD puts the blame squarely on the eurozone. So, too, is the row between China and Japan ...