October 4, 2009
Economic Outlook: A new order
Asian markets opened flat Monday following a week of mixed economic news -- a week in which even some good news looked less than encouraging.
For example, consumer spending rose 1.3 percent in August, the largest month-over-month spike in nearly eight years. But a spike by definition goes up fast and comes down hard. So it follows that September auto sales fell back to into the same rut they were in before the federal CARS rebate program came and went in late July and early August. In hindsight, the spike looked ominously more like a glitch than a part of a recovery.
Manufacturers in Japan look over many miles of ocean to find their tried and true customer base -- that would be the United States -- only to find in September that customer base lost 263,000 jobs, with the U.S. unemployment rate climbing one tick from 9.7 percent to 9.8 percent. None other then former Federal Reserve Chairman Alan Greenspan said Sunday on ABC's
This Week he suspects
we're going to penetrate the 10 percent barrier and stay there for a while before we start down.
In Japan, the Nikkei 225 rose 0.05 percent. The Hang Seng index in Hong Kong fell 0.15 percent. The Singapore Straits Times fell 0.63 percent, while the S&P/ASX rose 0.08. In China, the Shanghai composite index rose 0.9 percent.
In Istanbul, Turkey, Group of Seven financial leaders met in part to unwind the G7 lock on global economic policy making.
A more representative, responsive and accountable governance structure is essential to strengthening the IMF's legitimacy, U.S. Treasury Secretary Timothy Geithner said, one of several acknowledgments that emerging economies -- China, Brazil, India and Russia, to name a few -- were ready for more voting power at the International Monetary Fund.
The IMF said it a statement it was ready to welcome the new order.
We recognize that the distribution of quota shares should reflect the relative weights of the fund's members in the world economy, which have changed substantially in view of the strong growth in dynamic emerging market and developing countries, the IMF said Sunday.