From the barter desk of Bob Meyer…05/13/2008

What’s The Message Here?

Only three countries in the world do not use the metric system…Liberia, Myanmar and the United States. For America to maintain it’s role in the world, it may be a good idea to think about joining it.


National Federation Of Independent Business (NFIB) Reveals. . .

“Recession fears are spreading and the economy is showing definite signs of slowing, even on Main Street,” confirms NFIB chief economist William Dunkelberg. The NFIB Index of Small Business Optimism rose 1.9 points in April to 91.5 (1986=100). Half of the gain was due to an improved outlook for business conditions 6 months out, and a quarter was from improved earnings trends. At the same time, rising prices are becoming a matter of serious concern.

The National Federation of Independent Business (NFIB) is the nation’s largest small-business advocacy group, established in 1943.

Financial Markets Worry Former World Bank President

Former World Bank president James Wolfensohn, now an advisor to Citigroup, is pessimistic on the outlook for financial markets. He believes that global bank losses from the credit market crisis could reach $1 trillion.

So far, financial institutions have reported $310 billion in losses resulting from the credit market crisis that began with subprime mortgages in the U.S. According to Wolfensohn there may be $1 trillion worth of losses.

His loss estimate is close to the International Monetary Fund forecast of $945 billion, and he notes that $1 trillion now represents a “consensus estimate” for the losses. The IMF predicts global growth will reach 3.7% this year, the slowest rate since 2003 and down from 4.95% last year.

The European Commission estimates that Europe’s economic growth will slow to 1.5% next year, thanks to the continuation of the credit crisis. That forecast constitutes a 29% decrease from the commission’s previous prediction of 2.1% growth.

Wolfensohn says the damage suffered by financial institutions surpasses any other episode he has witnessed in his 40-year career, largely because of the extent of the overhangs in financial markets. (Challenges to the major institutions are in terms of write-downs and impact on market capitalization.)

Torrid growth in emerging markets such as China and India will cushion the damage for the world economy. The IMF forecasts growth of 9.3% in China this year and 7.9% in India. Emerging markets have enormous internal growth and are expanding in other markets, such as Africa.

The column “From the Desk of Bob Meyer” is the first section of the weekly Tuesday Barter Report. To read the entire issue of the Tuesday Barter Report, see:
TUE

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