The world is not enough

The world is in a recession.The G20 gathering in Washington on Nov.18 came out with basic principles about having "college of supervisors" to examine books of investment companies operating globally.It reminds me of an example given by one of my university professors during the good years of the 60s and 70s.He said a lubricating company had a complaint of a leak with their cans.What would they need to do?Some students would say came out with a new design.The professor said, "Yeah, in the meantime the cans continue leaking!"This is exactly what happens with the G20 leaders. They came out with a 11-page communique in terms of what the future should be but not what they need to do to plug the leak now.Global stock markets are down or in such wild swings that one doesn't know what will happen next.Britain, Germany, Japan and of course US are already in a recession.Citicorp had to be rescued by the US Government and so was AIG, sponsors for the Manchester United.Growth figures in China is in a 19-year low, 7.5%.Back home the growth for next year projected to be 3.5%.Just yesterday Bank Negara lowered the interest rate to 3.25% and the statutory reserve rate to 3.5%.While it is acknowledged generally our financial institutions are not caught with the sub-prime mortgage problems or the derivatives linked to them, the world economy is slowing down and being an export oriented economy our exports are going to be lower.Already income from petroleum and commodities are much lower. Crude is trading around US$55 per barrel, more than half of the peak of US$147 in mid-July this year.Palm oil is a quarter of its peak and so is rubber.While the good news is petrol is at RM2 per litre but prices of goods still remains high.Red chilli for example has gone beserk as high as RM18 per kilo!The Government cannot do much with non-controllable items.So less chilli for your cooking.