U.S. President Barack Obama is expected to urge world leaders to increase emergency government spending to jumpstart the global economy. At an April summit to be held in London, the U.S. will call for the ramp-up in government spending as economic data continues to show the current economic downturn is going from bad to worse. A senior White House official said the domestic $797 billion fiscal stimulus package showed the U.S. was “doing its part.” A coordinated action to address the current crisis was the “first and most important” goal of the summit, he added.

It’s not just the States that has plans for a global stimulus package. European Union finance ministers are set to back plans from the International Monetary Fund to double the body’s funds to $500 billion to fight the financial crisis. The announcement also is expected to unveiled when politicians convene in London next month.

Source: Wall Street Journal, Reuters

States Squabble over Stimulus Funds

U.S. states and federal agencies are squabbling over whether the $797 billion stimulus package is being used in ways that violate the letter or spirit of the legislation. The battles raise new questions surrounding the intent of the legislation and threaten to delay the injection of funds into the stumbling economy. The key question is whether the money is meant solely to boost the economy or represents the first step in longer-term reforms.

Source: Washington Post

Japan Records Largest Ever Current Account Deficit

Japan — the world’s second largest economy — suffered its largest ever current account deficit in January in a sign that plunging global demand is taking its toll on the country’s export-dependent economy. Japan’s current account fell into deficit for the first time since 1996 to $1.75 billion.

Source: Financial Times

Strong Dollar Worsening Global Crisis

American investors are bailing out of foreign ventures and bringing their dollars home, entrusting them to the supposed safety of United States government bonds. This is lifting the value of the dollar, but also is exacerbating the economic crisis across the world.

Source: New York Times

Global Assets Fall $50,000 Billion

Falls in the value of financial assets worldwide now could have reached more than $50,000 billion — equivalent to a year’s global economic output — according to the Asian Development Bank. The bank estimates capital losses last year in Asia, excluding Japan, at $9,625 billion, or 109% of the region’s gross domestic product.

Source: Financial Times

Geithner Under Pressure

Since taking over as U.S. Treasury secretary, Timothy Geithner and a skeleton crew of unofficial senior advisers have been racing to make decisions that will shape the future of the banking, insurance, housing, and car industries. Now, however, there are signs that this frantic agenda is getting ahead of him.

Source: New York Times

Congress Criticizes Stimulus Money Spending

U.S. Congressional investigators are criticizing the Obama administration for failing to police deals in which banks participating in the federal bailout lent billions of dollars overseas. The deals include $8 billion of financing for Dubai by Citigroup (recipient of at least $45 billion in bailout funds); $1 billion in investment in India by J.P. Morgan (which got $25 billion from the government rescue); and $7 billion in investment in China by Bank of America (which got $45 billion from the bailout).

Source: Washington Post

Switzerland Rejects U.S. Demands for UBS Data

Switzerland has rejected U.S. demands for UBS, the country’s largest bank, to hand over the data of 52,000 U.S. clients, Swiss newspaper Berner Zeitung quoted the Swiss justice minister as saying. “These are UBS’ client data,” Justice Minister Eveline Widmer-Schlumpf said. “They are requested without substantiated suspicion. This is against our legal norms and it is against the agreements we have with the United States.”

Source: Reuters

IPO Market ‘Dead as a Doornail’

The market for initial public offerings (IPOs) is a “dead as a doornail.” The market is valuing new companies so cheaply that private investors — whether private equity firms or venture capitalists — don’t think IPOs are worth it. Worse still, the dead IPO market hurts the economy by shutting off a key way companies raise money for expansion.

Source: BusinessWeek

Latvia Could Go Bankrupt in June

Baltic country Latvia faces bankruptcy in three months if it fails to deliver budget cuts required by the International Monetary Fund and if the next installment of its financial bailout is delayed, according to Premier-designate Valdis Dombrovskis. “If we do not continue to receive this international loan, then we go bankrupt in June,” Dombrovskis said.

Source: Bloomberg

Mulally Credited for Ford’s Improvement

Despite being an industry outsider, Ford Chief Executive Officer Alan Mulally is credited for shaking up the automaker. Under his leadership, decision-making is more transparent, once-fractious divisions are working together, and cars of better quality are moving faster from design studio to showroom.

Source: BusinessWeek

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