Obama's Malaise, Europe's Economy, Oil Bust

Many people have pointed out the similarities between former president Jimmy Carter, and current president Barak Obama. In fact, the economic devastation the US is in for now may in many ways be just a belated Carter second presidential term.

Obama goes far beyond Carter in the corruption department, however. There is no financial pie that Obama will not thrust his fingers into, as long as there is loot to hand out to friends and supporters.

And you know US government debt is becoming disastrous when Obama himself warns about its size and long-term consequences. The only problem is that Obama's words mean absolutely nothing. It is only Obama's actions that signify.

Europe's economy in the first 2009 quarter was nothing to write home about. Down, down, down.

Germany, Europe's biggest economy, contracted by 3.8% in the first quarter, equivalent to an annualized rate of -14.4%, in the country's worst quarterly performance since official records started in 1970. Sharply falling exports and business investment were behind the slump, the government said, whereas consumer spending grew slightly, thanks in no small part to Germany's cash-for-clunkers incentives, which led to higher new-car sales.

....Italian GDP fell 2.4% in the first quarter, or by 9.4% at an annualized rate, as the downturn in European and global trade hit the country's industries.

France's economy, which depends less on exports than Germany's or Italy's, shrank by 1.2% in the first quarter, or an annualized 4.7%. The French government also revised down GDP for the third quarter of last year to -0.2% from a previously positive +0.1%, meaning that French GDP has now contracted in the last four quarters, like the euro-zone economy overall.

Spain already published figures on Thursday showing that its economy shrank by 1.8% last quarter, or by 7% at an annualized rate. Spain is suffering both from falling exports and from the implosion of the country's decade-long construction boom. _WSJ

Some recent numbers suggest Europe's economies may start to recover by the end of 2009, but those rosy predictions ignore the other shoes yet to drop on Europe's banks and financial sectors.

And while the Baltic Dry Index (BDI)has risen, oil demand appears to be falling at the sharpest rate since 1981.

In its closely watched monthly survey, the Paris-based agency said it now expects global oil demand to fall 3 percent to 83.2 million barrels a day this year, or 2.6 million barrels a day less than in 2008.

That is the ninth consecutive monthly cut the IEA has made to its oil demand forecast since last August, when the IEA had forecast oil demand would reach 87.8 million barrels a day in 2009.

Since then, the IEA has steadily lowered its forecasts as the financial crisis plunged the world into the deepest global recession since the Great Depression. _Chronicle

It also appears that China has been inflating the BDI via orders from steel and construction materials plants that have failed to adjust targets downward in recognition of the global recession. The Chinese government has ordered banks to begin refusing loans to these "big spenders in denial."

H/T News Alert and Instapundit

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