Crumbling Eastern Europe

Hard to find an economist that doesn't believer the "R" fits the world now. Global Recession is with us, but how the world faring on a relative basis? Surprisingly, despite being singled out by some as the core culprit, the US is actually leading the world in terms of performance. Eastern Europe seems to be taking it on the chin worse than anyone else. Currencies have taken a nose-dive, and unlike the US and other more developed countries, borrowing money isn't really an option. Printing money to deal with loans doesn't quite work in these environments, so drying credit is taking the wind out of the sails for who knows how long. Mortgages denominated in foreign currency are dealing with the consequences of local devaluation.

Major Australian telecommunications firm Telstra dropped on forecast warnings. Down 2% in afternoon trading, Telstra's CEO will be leaving the company in June. Some believe this will be a positive step for the company. Union difficulties and refusal to comply with the government's push to provide better services to small and medium sized businesses were reported to be part of the problem.

Tata Motors (TAMO.BO) of India announced that it would begin selling the Nano, the world's smallest car in late March. The car is expected to be priced in the $2,000 range. interesting approach to impending anticipated gas pressures. Wonder how the Nano does in a fender bender, much less a full impact crunch. Save gas money but don't live to tell about it?

Brazilian shares weakened after the holiday break. But Shares oil giant Petrobras (PBR)
gained 3.2%, tracking a 6% jump in crude-oil prices to $42.50 a barrel on the New York Mercantile Exchange. Crude for April delivery surged following a report that weekly U.S. gasoline inventories fell by more than expected.

Shares of Latin America's largest bottler dropped over 75% in the last quarter due to demand drops and exchange losses. Mexico based FEMSA (FMSAUBD.MX) (FMX.N) suffered from exposure to currencies that largely decreased against the dollar with contribution from losses in derivatives.

Dramatic drop in export demand is continuing to anchor the world's second largest economy. Japan is experiencing the worst trade deficit in history. And now in addition to a plummet in US demand, it is contending with a precipitous drop in Chinese demand. Even Just In Time production perfected in Japan has not been adequate to prevent the build of manufacturing inventories. Shipments of automobile and electronic parts throughout Asia have come to a halt. Signs of a shrinking economy will continue to test an already battered business environment. Ironically, the thriftiness of Japanese consumers isn't helping matters. Unlike the leverage laden US consumers, Japanese consumers are saving and not spending which is having an additional drag on internal demand.