Roundingup Some News From Here And There

Consumer confidence improved a bit, the trade deficit narrowed, some striking workers in France released a hostage and China is worried about the safety of their Treasury hoard. Just a few things from around the world.

Consumer confidence as measured by the Michigan Survey of Consumers edged up from 56.3 to 56.6. The percentage of people who thought that Washington was doing a better job managing the crisis rose to 23% from 14% but the consumers assessment of current conditions fell from 65.5 to 62.3. All of these numbers by the way are awful from an historical perspective but at least two of the three showed some improvement. The rate of decline in the third was also less than it had been previously. Remember, right now we’re pinning all of our hopes on those second derivative observations. Link here.

The trade deficit fell 9.7% to $36.1 billion. Exports were down 5.7% and imports tumbled 6.7%. Interestingly the drop in imports was not fueled by a fall in the price of petroleum. Import prices slipped only 0.2%. Who knows what happens to these numbers if a) a recovery starts or b) oil prices start to take off. Link here.

I had missed this one yesterday. Workers at Sony France took the chief executive of the company hostage to protest what they considered an unfair severance package. They released him this morning — sort of. He was bundled into a bus and driven straight to a nearby town for negotiations. No word at this time if they accomplished anything to better their packages. Link here.

China’s prime minister Wen Jiabao expressed concern about the security of his country’s large holdings of U.S. debt.

Speaking ahead of a meeting of finance ministers and bankers this weekend in London to lay the groundwork for next month’s G20 summit, Mr. Wen said he was “worried” about China’s holdings of United States Treasury bonds and other debt, and that China was watching economic developments in the United States closely.

“President Obama and his new government have adopted a series of measures to deal with the financial crisis. We have expectations as to the effects of these measures,” Mr. Wen said. “We have lent a huge amount of money to the U.S. Of course we are concerned about the safety of our assets. To be honest, I am definitely a little worried.”

He called on the United States to “maintain its good credit, to honor its promises and to guarantee the safety of China’s assets.”

But he stopped short of any threat to reduce purchases of American bonds, much less sell any of them. Still, it is rare for any world leader to raise questions about the safety of United States treasuries.

Mr. Wen seems to have forgotten that the reason he had dollars to “lend” to the U.S. was that its consumers spent a great deal of money buying things from his country, thus enabling the incredible economic progress China has enjoyed. In as much as his exports dropped 25.7% in January and U.S. imports for the first two months of this year from China are down 17.4% he might be better advised to worry that Americans are learning to live with fewer cheap imports from everywhere.

The war of words that Tim Geithner started with his manipulation crack at his confirmation hearings has been winding down. Mr. Wen does himself no favors by ratcheting things up at this time. The reality is that both countries have the equivalent of economic nuclear bombs targeted at each other and neither is going to use them for fear of reprisal. I hope! Irresponsible comments have, however, led to irresponsible actions on more than one occasion. Link here.

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