One of my favorite newspapers is the British rag - Financial Times. It tends to be unbiased and it will paint an interesting picture of what is happening around the world.
Here are some tidbits I picked up from a recent issue...

Italian industry has slashed its power consumption by 30% in the past 2 months as Italy has slipped into the grips of recession. Italy has issued a modest stimulus package but it hamstrung by its already large debt load. Over the next 2 years, 900,000 jobs could disappear in Italy.

Japan’s Central Bank has its key lending rate at 0.3% and really can’t lower it much more. To ensure banks remain solvent, the Central Bank will accept as collateral bonds rated BBB. Plans are to accept up to $32 billion of these bonds. Previous Bank policy was to accept only bonds rated A and better (how's that for a dramatic change of policy ?)

I am so mad I think my eyeballs are going to squirt blood and my hair catch on fire....

Canada, like so many other nations, is not immune to the global crisis unfolding right now. While other Governments are stepping up to the plate and taking action, what is Canada doing? Zero. Nadda. Nicht. Squat. Canada as of a few hours ago finds itself in a state of Constitutional crisis that is reminiscent of places like Bolivia and Mongolia and Russia.

Stephen Harper, the Canadian Prime Minister, on the surface appears to be a likeable sort. Well mannered, well dressed, educated....I think you get the image. But beneath it all lurks a neo-conservative student who is determined to steer Canada towards a right wing goal that really has not yet been made clear to Canadians. Canadians have been unsure of this man for some time now and that is why he has been unable to win a clear majority in an election.

The Cobalt Mining Race of the Century:

Supply Destruction vs. Demand Destruction

And they’re off! It’s a steep downhill race, and it looks like Demand Destruction has the early lead. Yes, yes, consumption is down in the US! What speed it has! He could be slowing as Europe looks strong…nope! Wrong on that count, Germany is in recession now…look at Demand Destruction go!

Supply is slow out of the gate today folks, but he always starts that way. 10 years ago, after Bre-X, Demand Destruction blew him away – but he did narrow the gap at the end.

Supply’s trainers, Lower Metal Prices and Rising Inventories, are yelling at him from the sidelines.

There’s a record crowd of Investors watching the race on TV screens around the world. But they don’t look happy. There was clearly some big betting on Supply Destruction.

If you are looking for some good, serious, hard-hitting advice I invite you to visit www.murenbeeld.com to read the most recent writings of Dr. Martin Murenbeeld.

I listened to a brief interview with him today and what he had to say was quite intriguing.

He was talking about the current situation and contrasting it to what we went through in the 1980's. He noted that in the late 1970's what we experienced was a demand driven round of inflation. Fed Chairman Paul Volcker was left with little choice but to ramp up interest rates to squelch this demand. He did it and successfully cooled off the economy and within 5 or so years, the economy was back in fighting form.

Whoa !!! what is happening here ??

6 weeks ago Canadians went to the polls and elected yet another minority Government. Nothing wrong with that I say....history shows that minority Governments can be quite functional indeed.

But this election has left the Opposition Liberal Party scrambling in that its leader Stephan Dione has now agreed to step down in light of his poor performace in the recent election.

Another good leading indicator is Coal. In January, President Obama is going to unveil a stimulus program. I have already written a previous blog on this subject where I voiced my opinion that he best not engage in a program of building schools and fixing potholes in roads. What is needed is projects to grapple with the gaping trade deficit.

One way to meet this trade deficit head on is to take steps to make America more energy self sufficient. With America sitting on a massive supply of Coal, one brilliant strategy for Mr. Obama would be to spend money building new coal fired generating plants and money on plants that can use existing technology ( originally developed in the 1920's !!) to convert coal into synthetic fuel.

One stock to keep a close eye on is KOL which is the Van Eck Global Market Vectors Coal ETF.

Right now RSI and DMI technical indicators are NOT giving a buy signal. I suspect it will take a move over the 50 day moving average to deliver this signal.

Have we seen the bottom? Is the worst over yet? If I were to stop 10 people on the street and pose that question, 5 would say yes, 5 would say no. I am not much for stopping people on the street, so I prefer to let the markets tell me what the status of things is.

One good leading indicator that is worthy of watching is the steel market. The demand for steel will tell us if the global economy is pulling itself out of its deflationary, de-leveraging slump.

One stock you should add to your screen is SLX which trades in the USA. SLX is the Market Vectors Steel Index, a basket of steel related stocks.

This past weekend I could not help but think about the price of Oil and its recent plunge from $147 all the way down to $50. True, global economic events have created some demand destruction which has been a negative for Oil, but what if there is another theme at work here?

In previous blogs I have made reference to Russia's Vladimir Putin and Venezuela's Hugo Chavez - both sources of agitation to the USA.

We all know that commodity futures markets can be manipulated. We have seen ample evidence of this in the Gold market. So if Gold can be manipulated, why can't Oil ?

Here's my wild and crazy theory. I invite feedback from readers on this idea.....

Oil is being artificially depressed through Futures manipulation.

This crimps revenues for places like Russia, Iran, Venezuela.

The media has been abuzz these past few days over statements made by Barrack Obama that he will soon unveil a plan that will result in the creation of 2.5 million jobs.

A recent article in my favourite of publications, The Economist, has given a nasty hint of what is to come.

Here in North America we don't really have a good feel for what is happening in the shipping world. My recent cruise on the HMS Queen Victoria terminated in the Greek port of Piraeus ( outside of Athens ). This is one of the world's biggest shipping ports and right now beneath the seemingly busy surroundings a crisis is unfolding. It turns out that Greece owns 1/5th (20%) of the global shipping fleet. The ongoing financial crisis has taken a serious bite out of the transport of commodity goods to Asia. Cargo vessels that several months ago demanded day rates of $50,000 are now fetching a paltry $7000 a day. In a classic case of misreading the markets, global shipping firms have a total of some 10,000 new ships in the final stages of building that will be ready to go into service in 2009. This should keep day rates under severe pressure as these new ships flood the markets with excess capacity.

As a former Investment Advisor, I was immediately drawn to an article in today's paper here in Paris that addressed the woes of the wealth management industry. Sadly, when I was in the "biz", the focus was all on the commission to be earned on a deal. All too often, the client came second and my monthly commission "run" came first. It looks like things in Europe were the same. As one member of firm Morgan Stanley recently noted, if the client expressed a desire to invest in apples, the wealth management industry would try to sell the client something that had apple flavor in it.

This approach obviously has now come crashing down around the ears of clients as global markets have imploded. A recent survey conducted by the Boston Consulting Group suggests that assets under management have grown 4% in 2008 versus 20% in 2006. Clearly investor confidence has been hit.

The media has been blathering on for months now about the banking and credit crisis, but seemingly has chosen to ignore trying to explain some of the underlying components.

At issue is an entity called the Bank for International Settlements ( or BIS). Think of BIS as the banker to the world's Central Bankers. In 2004 , after several years of wrangling, BIS unveiled Basel II, an accord designed to pave the way for state of the art risk management in the financial industry. Basel II was all about a new improved way of assessing loans, securities and other assets on a bank's balance sheet. The end result would be the calculation of a capital to assets ratio that would speak directly to the strength of a bank.

Over the past number of years, billions of dollars of Oil money has flowed into European banking institutions from Oil producing nations. European bankers leveraged this inflow ( as only the fractional reserve banking system would allow) and easy credit was the order of the day. Much of this easy credit found its way into real estate, which explains why today a 450 square foot apartment in Paris will run you $200,000 to $500,000 depending on what part of the city you are in. And not only did these European bankers lend to developed euro nations, they lent heavily to developing nations like Hungary, Romania, and the like. These lesser developed nations gorged themselves on this credit in unrestrained fashion.

As I flipped through the International Herald Tribune this morning in Paris, I was struck by an interesting article by Retired General Wesley Clark. His thesis is that America's strong industrial base over the past decades has given some positive spin-offs to the military. To now let Detroit ( the icon of the US industrial base) die, would be a serious blow to the US military and by extension a serious blow to US global strength in an otherwise unsettled world. He feels that the US Gov't should step up to save Detroit but he feels any bailout package should come with strings attached. Washington ( acting on behalf of taxpayers whose money will comprise any bailout package) should demand that Detroit deliver big, immediate strides forward in electric cars, fuel cells, hybrid cars and the like. Not only will this have positive implications for global warming and for domestic energy consumption, the military will realize serious benefits as well.

The other day, as we finished up our cruise in the Port of Piraeus (near Athens, Greece) we ate breakfast with a charming couple from Britain - Jim and Anne( last names withheld for privacy). Jim is a retired British banker who spent parts of his career working in various cities around the globe. Jim and I wasted little time in launching into a serious discussion about the global economy as we ate our omlettes and drank our tea. It turns out, things in the UK are quite bad. Banks were lending people 120% of the appraised value of a home and giving mortgages for up to 8X annual household income on the assumption that the UK economy would remain robust.

Right now I am sitting in a quaint Paris hotel along the River Seine about a 5 minute walk from the Eiffel Tower. The channels on my TV are all French, save for the European version of CNN.

This morning our cruise ship slipped deftly into its moorings in Port Said (Egypt) which is the entrance to the Suez Canal. Everywhere I look, I see ships laden with containers coming and going. Some headed into the Suez Canal for the shortcut trip to various Arabian ports, while others are headed to various Mediterranean ports in Italy, France and Greece.

As I craft this short blog of random musings, I am aboard the Queen Victoria sailing at 24 knots en-route to Alexandria, Egypt. We are currently just off the coast of Libya.

Yesterday we stopped briefly in the tiny island country of Malta with its population of 400,000 people. Our tour guide for our brief walking tour of the old part of Malta was a charming lady by the name of Mariame. No sooner had she introduced herself than she decided to wade into the political waters. In no uncertain terms she essentially said to our small tour group - “Thank God for the election of Barrack Obama and may God deliver change to America and the world”. I must say, I was stunned. Clearly Mr. Obama has deeply touched people in countries he has never been to. I dare say the Obama presidency is going to be a major turning point for the entire world.

As I write this blog, I have just spent a rather interesting day in the tiny Principality of Monaco located a short 20 minute train ride east of Nice, France. Multi-million dollar yachts all with fancy names registered in the Cayman Islands bob eloquently up and down in the marina as the gentle waves of the Mediterranean lap against their hulls. As I sat outside the historic Cafe de Paris sipping a very pricey Espresso I marveled at the steady parade of Lamborghinis, Rolls Royces and Bentley's that glided by on the street in front of me. Off in the distance the Monte Carlo Casino evoked images of James Bond (Agent 007) sitting at the gaming tables.