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The stock markets have been very bullish the last three months. The argument that this is only a shortlived rally cannot hold much longer. Yet, the economic forecasts look more dire than before. An overview of news reports from around the globe.
 The Telegraph interviewed the European Central Bank: The European Central Bank is paying close attention to mounting difficulties at 25 banks deemed crucial to the health of the eurozone financial system, fearing another wave of bank turmoil next year if the recession drags on.
Reuters looked at the troubled Californian State: California's government risks a financial "meltdown" within 50 days in light of its weakening May revenues unless Governor Arnold Schwarzenegger and lawmakers quickly plug a $24.3 billion budget gap, the state's controller said on Wednesday.
The Daily Reckoning gives a perspective on the economic bail-outs and bull markets: The smart money is betting that they fail to stop deleveraging. But the very smart money is betting that they create a new, worse problem – inflation, maybe hyper-inflation. Inflation reduces the real value of debt…but in a perverse and unpredictable way. Debtors don’t pay their bills; savers pay them. Inflation – like bailouts – rewards the least responsible players…those who have gotten themselves heavily in debt…and punishes those who have done the ‘right’ thing. As Germany saw in the ’20s, it de-stabilizes the whole society…leading to extremely unwelcome outcomes. According to PressTV, not much recovery is to be expected this year: US businesses fear the world's largest economy will remain flat through the rest of the year, a Federal Reserve report says. In its latest Beige Book, which surveys business expectations across the country, the US Central Bank said all regions reported that the economy "remained weak or deteriorated further" since mid-April.
Jim Rogers was interviewed about the economic recession (first 5 minutes) on Wall Street Journal TV: A remarkable story broadcasted by Japan Today regarding two Japanese men detained in Italy carrying $134 billion worth of U.S. bonds: Two Japanese nationals were detained by Italian financial police last week after trying to enter Switzerland with $134 billion worth of undeclared U.S. bonds, mostly Treasury bonds, an Italian daily said Wednesday. The Japanese consulate general in Milan confirmed that the detention had taken place and said it was trying to confirm with Italian authorities whether the two were indeed Japanese nationals and their identities.
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