bizzXceleration: Performance, Value and Profit

International Economic Situation

World Bank Cuts 2009 Global Growth Forecast The World Bank has cut its 2009 global growth forecast, saying the world economy will shrink by 2.9 percent and warning that a drop in investment in developing countries will increase poverty. Global trade is expected to plunge by 9.7 percent this year, while total gross domestic product for high-income countries contracts by 4.2 percent, the bank said. It said economic growth in developing countries should slow to 1.2 percent -- but excluding relatively strong China and India, developing economies will contract by 1.6 percent. The bank's latest forecast is a sharp reduction from its March prediction of a 1.7 percent global contraction, which it said then would be the worst on record. Economic damage to developing countries "has been much deeper and broader than previous crises," warned the report, issued Sunday in Washington. The global economy should start to grow again in late 2009, but "the expected recovery is projected to be much less vigorous than normal," the report said. It said banks' ability to finance investment and consumer spending would be hampered by the overhang of unpaid loans and devalued assets. Eastern Europe and Central Asia have been hit hardest and the region's gross domestic product is expected to plunge by 4.7 percent this year, the bank said. It said growth should recover next year to 1.6 percent. GDP in Latin America and the Caribbean should shrink by 2.3 percent this year before rebounding to expand by 2 percent in 2010, the report said. In the Middle East and North Africa, growth is expected to fall by half this year to 3.1 percent, while that of sub-Saharan Africa will drop to 1 percent from an annual average of 5.7 percent over the past three years, the bank said. East Asia should post a 5 percent expansion, supported in part by China's stimulus-fueled growth, the bank said.

• World Bank Cuts Forecast for Developed Economies
• Worldwide Warning [06-22-09] BNN talks to Andrew Burns, economist, World Bank.

The Financial Crisis: Charting a Global Recovery New World Bank analysis of the global economy paints an unprecedented picture: global output falling by 2.9 percent and world trade by nearly 10 percent; accompanied by plummeting private capital flows, likely to decline from $707 billion in 2008 to an anticipated $363 billion in 2009. As the world enters what appears to be an era of markedly slower economic growth, the World Bank’s annual Global Development Finance (GDF) report, released today, updates the outlook for the global economy, and explores the broad approach that will be necessary to chart a worldwide recovery. “Extraordinary measures by governments around the world have helped save the global financial system from complete collapse, but the economic recession in the real sectors persists,” said the World Bank’s Justin Lin, Chief Economist and Senior Vice President, Development Economics. “To break the cycle, we need bold policy measures, including restoration of domestic lending and global capital flows.”

Weak recovery in sight but damage from crisis likely to be long-lasting, says OECD The slowdown in OECD economies is reaching the bottom following the deepest decline for more than 60 years, says the OECD’s latest Economic Outlook. But recovery is likely to be weak and fragile, and the economic and social damage caused by the crisis will be long-lasting. The latest edition of the Economic Outlook is the first in two years to see previous projections for economic growth revised upwards – most clearly for the large emerging economies and the United States – rather than downwards. But the prospects for the euro area this year have worsened and Japan’s have changed little since the OECD’s previous projections were published in March. US economic activity this year is expected to fall 2.8%, against the 4.0% decline projected in March. Growth in 2010 is now forecast at 0.9% compared with 0% previously. The trough in US activity is expected during the second half of this year but the Outlook warns that as the impact of the stimulus measures fades, increased savings by corporations and consumers to reduce their indebtedness will continue to hold back growth. The recovery will not be strong enough to stop unemployment rising to around 10% over the next two years.

• Complete OECD Report (PDF)

BEYOND THE CRISIS: MEDIUM-TERM CHALLENGES (pdf) The economic crisis will cast a long shadow. The projections described in Chapters 1 and 2 imply that by the end of 2010, even though a recovery is under way, most OECD countries will still face severe macroeconomic imbalances including large output gaps, high unemployment, very low inflation or even deflation and wide fiscal deficits. This chapter considers how such macroeconomic imbalances might begin to be resolved over the medium term, as well as the main associated risks and uncertainties. Based on existing empirical studies it is likely that potential output will be significantly reduced as a result of the crisis. Estimates described in this chapter imply a downward revision to the level of OECD potential output in the wake of the current crisis of about 2% by the end of 2010. However, for some countries the revisions are much larger. In the medium term, the level of OECD potential output has been revised down by 2¾ percentage points compared to pre-crisis projections, although the long-term potential growth rate is unaffected. Two-thirds of the projected fall in near-term potential growth in the OECD revisions comes from the collapse in investment and the associated slower growth of capital input to production

Krugman Says Global Economy Isn't Showing Any Sign of `V-Shaped' Recovery  Nobel Prize-winning economist Paul Krugman said the world’s economy is showing “not a hint” of a “V-shaped” recovery marked by a swift decline and revival. The economy is “stabilizing, not recovering,” Krugman, an economics professor at Princeton University in New Jersey, said today at a conference in Dublin. “Things are getting worse more slowly.”  Data this month showed that the contraction in Europe’s manufacturing and service industries is easing and confidence in the economic outlook is rising. The U.S. lost fewer jobs in May than forecast, a report today showed. The International Monetary Fund says its forecast for global growth of 1.9 percent next year is based on the premise of a healthy financial system. “We have made the transition from sheer panic to chronic anxiety,” Krugman said, adding he’s has a “hard time” seeing what might drive a “full” economic recovery. U.S. payrolls fell by 345,000 in May, the smallest decrease in eight months, after a revised 504,000 loss in April, the Labor Department said today in Washington. The U.S. policy response to the economic crisis has been “extraordinarily aggressive,” Krugman said. “Unfortunately, it hasn’t been enough.” The country will need “some form of new taxes” to bring down its deficit, he added. Service industries in the U.S. shrank at a slower pace in May while job losses mounted, indicating that any economic recovery will be slow to develop. “The euro zone, like the United States, I fear, could be facing kind of a lost decade,” Krugman said.

• The 21st Century Economy: A Beginner's Guide Mr. Eppping presents a how-to guide on surviving in today's global marketplace and downturn. The event is held with Steven Greenhouse, author of "The Big Squeeze" and was taped at the Carnegie Council in New York.

German central bank: economy to stagnate in 2010 Germany's economy will shrink by 6.2 percent this year and stagnate in 2010, the country's central bank said Friday, delivering a forecast more pessimistic than the government's. The Bundesbank said in its June monthly report that the new projection is "a reflection of the massive economic downturn" late last year and early this year. Gross domestic product shrank by 2.2 percent in last year's final quarter and by a massive 3.8 percent in this year's first quarter. "Downward pressure on the German economy is likely to ease during the course of 2009, although it does not look like there will be a significant upturn in the near future," the Bundesbank said in a summary of its monthly report. "With the gradual easing of tensions in the international financial markets, improved expectations, and with the support of extensive monetary and fiscal stimuli, the German economy could regain some ground in the third quarter," it added. The government forecast in late April that the country's economy, Europe's biggest, would contract by a post-World War II record of 6 percent this year but would return to growth -- albeit feeble -- of 0.5 percent next year. However, the Bundesbank, the national central bank, said it expects zero growth in 2010. "As things stand, economic activity is expected to remain at a subdued level in 2010, despite picking up slightly in the course of the year," the bank's report said. Germany's economy grew 1.3 percent in 2008, about half as much as the previous year. The country went into recession in last year's third quarter.

Structural Changes and Strategic Challenges

Stephen King: Good luck, not good providence, was at the core of happier times  We stand at a momentous point in macroeconomic policy thinking. A couple of years ago, it was possible to argue that monetary arrangements were good enough to avoid, or at least temper, nasty economic developments. We understood enough, apparently, to avoid the mistakes of the 1970s. We were living through the Great Moderation, the Great Stability or, as Mervyn King, the Governor of the Bank of England, once put it, the NICE (non-inflationary continuous expansion) decade. Two years later, after the onset of the biggest financial meltdown in living memory and the deepest, most synchronised, global downswing since the 1930s, it is no longer obvious that the Great Moderation amounted to much. Policymakers may have avoided a repeat of the 1970s, with its noxious mixture of high inflation and stagnant growth, but it is now difficult to talk with a straight face of Moderation, Stability or NICE-ness. The Great Moderation was a story about the reduced volatility of output and inflation and "no more boom and bust", which Gordon Brown probably wishes he had never uttered. There is no doubt that, for a while, economic developments were favourable. From the mid-1980s in the US and the mid-1990s in the UK, it appeared that economic life had become more stable. The question all along was whether this stemmed from structural changes in economic behaviour, from the impact of new, and improved, policy frameworks, or just good luck. James Stock and Mark Watson of the US National Bureau of Economic Research asked, "Has the business cycle changed and why?" Their conclusions were not as encouraging as those of Messrs Bernanke and King. Having examined all sorts of possible explanations for the Moderation – a shift from a manufacturing to a services-based economy, improved inventory management, a calmer housing market and smaller policy and price "shocks" – they concluded that "better" monetary policy could account for no more than 20 to 30 per cent of the reduction in economic volatility since the mid-1980s. Much more of the reduction was down to good luck. "We are left with the unsettling conclusion that the quiescence of the past 15 years could well be a hiatus before a return to more turbulent economic times."

Competitiveness: The U.S. and Europe Are Tops The global financial crisis seemingly shifted economic power away from hard-hit Western countries such as the U.S. and Britain to cash-rich emerging economies such as India and China. But while the West is limping along today, economic power may shift back when growth resumes. Why? Among the nations of the world, developed countries still enjoy considerable advantages in fundamental economic competitiveness—whether based on the quality of their infrastructure and educational systems or the sophistication of their business laws and bureaucracy. That's the conclusion of the 2009 World Competitiveness Yearbook, an annual report published by IMD business school in Lausanne, Switzerland. Based on a detailed analysis of economic output, government and business efficiency, skills, and infrastructure, the researchers ranked 57 of the world's economies to determine which are best placed to succeed in the 21st century economic race. Topping the list for the 16th consecutive year, unchanged from its No. 1 ranking in the 2008 report, was the U.S.—despite a tough economic situation and rising unemployment. With its world-class higher-education system, enormous and diverse economy, and powerful infrastructure, the U.S. continues to be the world's biggest economic engine and top destination for foreign direct investment. The U.S. shared top billing with plenty of other developed and competitive countries whose economies also are shaky these days. Among the top 20 on the list, only oil-rich Qatar, ranked 14, and China, ranked 20, can be considered emerging economies. What makes countries like Denmark and Japan more competitive than the likes of Slovakia and Brazil? Some of the credit goes to efficient domestic policies, ranging from the level of taxation to the time required to start a business. Though many top-ranked countries have labor market protections, relatively high taxes, and sizable bureaucracies, they are nevertheless more flexible and adaptable to the rapidly evolving global economy than many emerging countries. They also usually benefit from less corruption, more stable public finances, and generally better and more widely available education. Take Sweden. The Scandinavian country jumped from No. 14 in 2005 to No. 6 in this year's rankings. What gives this small state, with a population of just 9.2 million, an edge over India and its population of 1.1 billion? According to IMD's Garelli, Sweden's widespread social programs, combined with a strong education system and vibrant entrepreneurial scene, mean Sweden ranks among the top 10 countries in the world on more than half of IMD's competitiveness categories. In contrast, India, which is ranked No. 30 this year, scores high marks only for the size of its domestic economy and its low labor costs.

• World's Most Competitive Countries 2009: Who's Tops in the Global Game?

Surging American Savings Rate Reduces Dependence on China as Growth Slows  In the recession following a borrowing binge that sent consumer debt to the highest level ever, Americans are shutting their wallets and building their nest eggs at the fastest pace in 15 years. While the trend will put the country’s finances in better balance and reduce its dependence on Chinese investment, it may also restrain economic growth in 2010 and beyond, said Lyle Gramley, a senior economic adviser with New York-based Soleil Securities Corp. and a former Federal Reserve governor. “There’s been a fundamental change in people’s behavior,” he said. “It will affect the economy for years.”  Government data today showed that the household savings rate rose to 6.9 percent in May, the highest since December 1993, as personal spending increased less than incomes. The rate in April 2008 was zero. Most of the rise in income in May was due to one-time government stimulus payments to seniors, said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts. Nouriel Roubini, an economics professor at New York University and chairman of RGE Monitor, forecasts that the savings rate will ultimately reach 10 percent to 11 percent. What’s critical, he said in a Bloomberg Television interview on June 24, is how quickly it increases. A rapid rise in the next year because of a collapse in consumption would push the economy, already in its deepest contraction in 50 years, further into recession, he said. If it occurs over a few years, the economy may grow. The bigger cash reserves will lessen U.S. dependence on investment by China and other foreign countries to finance economic growth, Gramley said. The current-account deficit, which includes trade in goods, services and income transfers, narrowed in the first quarter to its lowest since 2001 as Americans saved more and brought fewer imports. Edmund Phelps, winner of the Nobel Prize in economics in 2006 and a professor at Columbia University in New York, said it may take as long as 15 years for households to rebuild what they lost in the recession. “The only way we’re going to get a healthy, full recovery is over a long period of time, involving households rebuilding their balance sheets,” Phelps said in an interview on June 22 with Bloomberg TV. “There’s no silver bullet that’s going to get us into good shape quickly.”

China’s savings problem and the consumption constraint For the past decade until the onset of the 2007-08 crisis, the US has been growing quite rapidly. Powering this growth has been an even more rapid surge in consumption. When US consumption grows faster than GDP, two things must happen. 1. The US savings rate by definition declines 2. If the country is running a trade deficit, and consumption is growing faster than production (assuming that investment isn’t falling, or is at least not falling by more than the difference), then the country must run a growing trade deficit. If US consumption growth exceeds US growth in production (I am ignoring changes in investment because they are a relatively small part of this), then in China production must exceed consumption. This is just another way of saying that as the US savings rate declines and powers a surge in the trade deficit, the Chinese savings rate must rise and power an increase in the trade surplus. In fact this is what happened. What does this mean for China? Obviously the US trade deficit is contracting quickly. This means that China’s trade surplus must also be contracting quickly.  In fact China’s trade surplus has been growing, and this is where my simplification (the world consists of the US and China) runs into a problem. Although all trade surpluses are contracting, the fact that China’s trade surplus is rising indicates that other surplus countries are bearing more than 100% of their share of the global contraction. I don’t think this is sustainable and ultimately, perhaps even already, China’s trade surplus will decline. By the way the fact that China has been able to force at least part of its own adjustment onto trade competitors will likely lead to increasing anger with China, as it already seems to be doing especially on the part of Asian competitors, and will power a further rise in international trade tensions. So what does that mean for future Chinese growth? When China was growing at 11-13% a year, Chinese consumption was growing by 9% a year. The rapid reversal in the earlier decline in US savings might cause Chinese GDP growth to grow by at least 1-2% below consumption.  So if we assume that Chinese consumption continues growing at 9%, this initially suggests GDP growth rates of 7-8%. But hold on. If GDP growth rates of 11-13% translate into 9% consumption growth rates, is it reasonable to assume that GDP growth rates of 7-8% will still result in 9% growth rates in consumption? I doubt it. My guess is that the growth in Chinese consumption will also slow.  This suggests that while the US is adjusting, China’s annual growth rate must be significantly below 7-8%, perhaps 5-6%, or even lower. The key is the rate of Chinese and US fiscal expansion, in the former case to permit the rise in Chinese savings rates not to constrain domestic growth, and in the latter case to slow down the contraction of the US trade deficit.

• Debt is up, trade is down, and we still don’t know which way to list
• Stimulus – at what cost?

So Much for the Cheap 'China Price' A growing number of companies are moving beyond the usual considerations of labor and raw material costs in deciding where to produce goods to calculate the "total cost of ownership." That means tallying expenses associated with things such as storage and delays. By this light, the so-called China price, which always seemed to be at least 40% below U.S. costs on everything from bedroom furniture to telecom gear, isn't so low. In fact, China's once-formidable edge in manufacturing has all but disappeared in some industries, according to a new study by Southfield (Mich.) firm AlixPartners, which researches and consults on outsourcing. AlixPartners studied five categories of machined products, ranging from large engine parts requiring significant labor to small plastic components that need little. The cost shift has been dramatic. In 2005, AlixPartners found that by the time the items had arrived at a U.S. port, Chinese-made parts were 22% cheaper on average than those produced in the U.S. By the end of 2008, however, the average price gap had dropped to 5.5%, which often isn't large enough to merit the hassle of manufacturing halfway around the world. Even more surprising is the cost comparison with Mexico. While the total cost of making goods in China was about 5% cheaper than in Mexico three years ago, manufacturing in China now is about 20% more expensive. Compared with the U.S., the savings in Mexico have widened to 25%, from 16%. "A couple of years ago outsourcing to China was a no-brainer," says Stephen T. Maurer, AlixPartners' managing director. No longer, he says. The biggest factors behind the sharp shift are currency fluctuations and labor costs. The yuan has appreciated by around 11% against the dollar since late 2005, and wages have risen 7% to 8% a year. To rein in polluting industries, furthermore, Beijing has stripped away tax breaks for exporters of some heavy industrial products.

• China Losing Luster with U.S. Manufacturers Two years of disastrous quality-control breakdowns, from foul fish and lead-tainted toys to poisoned drugs and dairy products, are taking their toll on China's allure…
• Poorly made Why so many Chinese products are born to be bad…
• The China Price: The True Cost of Chinese Competitive Advantage  Alexandra Harney takes a critical look at China's success in attracting foreign investment.  She spoke at an event hosted by the East-West Center in Washington, DC.

• Watching Your Step in China Success in China requires an eye for opportunity and the need to do your homework.

Asia Challenges the U.S. for Green Tech Supremacy America was caught off guard in the 1950s when the Soviet Union suddenly launched its first Sputnik satellite. It looks like history may repeat itself, but this time the arena is more down to earth. In August, the leaders of Japan, China and Korea will hold a trilateral summit to discuss how they can pool their resources and expertise to develop and commercialize emerging green technologies. Who knows what world-beating products and processes will result from a successful collaboration? As it is, Japan has already sped ahead of the U.S. in hybrid car technology. China is emerging as a leader in electric cars, solar power and wind power. Korea is not yet known for anything environmentally friendly, but that is about to change. The Korean government is spending $31 billion to fund research into 27 green technologies, including non-silicon based solar cells, biomass fuels, and carbon collection, storage and processing. This unusual international collaboration is not solely aimed at reducing carbon emissions and husbanding the planet's resources, although hammering out a united front among Asia's top industrialized nations for the Copenhagen Climate Conference in December is one of the professed goals. It's really a hard-headed, shrewd initiative to marry Japanese and Korean high technology with China's manufacturing prowess, massive domestic market and bulging foreign currency reserves — thus creating a formidable player in a post-crisis, low-carbon world. What is becoming clear is that the fossil-fuel-fed industrial era is ending, and that the leading power of that age, the U.S., might not be able to maintain its economic dominance. New Energy Finance, a provider of information and analysis on low-carbon technologies, estimates that investment in clean energy in Europe last year reached nearly $50 billion. The figure for North America is a much lower $30 billion.

Red square blues NOT long ago, Russia proudly counted itself as one of the BRICs—with Brazil, India and China, the four emerging-market giants that were outgrowing the rich world. Yet it now makes more sense to talk of the BICs. With GDP shrinking by almost 10% in the year to the first quarter, Russia is in deep recession. This is upsetting and worrying for the country’s political masters in the Kremlin. Upsetting because, as late as last autumn, they dismissed the economic crisis as a Western problem that would leave Russia unscathed. But the collapse in the oil markets has shown just how much Russia still depends on getting a good price for its natural resources. Neither President Vladimir Putin in 2000-08 nor (since last May) President Dmitry Medvedev has done anything like enough to diversify the economy—indeed, it depends more on oil and gas now than it did. The government has utterly failed to create a legal and political infrastructure to support business and enterprise. The Kremlin may not care much about either of these shortcomings, especially now that oil once again costs $70 a barrel. Yet even at this price it must worry, for it can no longer honour its side of Mr Putin’s original bargain: that, in return for a guaranteed rise in living standards, ordinary Russians would accept curbs on the media, rigged elections and a slide into autocracy. The Russians are now lumbered with the second part of this deal without gaining the benefits of the first. Not since Mr Putin came to power have high inflation and shrinking GDP caused such a fall in real incomes (see article). Why has this not led to more protests? Partly because the Kremlin is firmly in charge and partly because many Russians built up savings in the boom years and have yet to feel the full impact of recession. Besides, faith in the “good tsar” and low expectations of government mean that few blame Mr Putin, now Mr Medvedev’s prime minister.

Oil at $250 Is Pipe Dream Without Chinese Boom: William Pesek  Green shoots could be great news for black gold. That is how some traders are reading signs that global growth is returning. They are bidding up the prices of oil and other key commodities, and there are two primary reasons: U.S. stimulus efforts and China. Optimists may be wrong on both accounts, particularly the latter. Expectations of a quick U.S. rebound cooled in the last 10 days. U.S. stocks slumped this week after Standard & Poor’s downgraded the credit ratings of 18 banks. Optimism is still coursing down Wall Street, though, that the worst is over. The more obvious area of misplaced cheer is Asia’s second- biggest economy. China bulls argue government largess will not only boost Chinese growth, but global demand, too. In this scenario, recent gains in commodity prices will be sustained over the next few years. Things may be more complex than that. “The reality is not so rosy,” says Jamie Dannhauser, an economist at Lombard Street Research in London. “Exports show no sign of life and the increase in domestic spending reflects a massive state-led program of raw material stockpiling -- hardly the foundations for sustained gains in domestic final demand in an export-dependent economy.” China’s ability to drive global growth is more limited than many investors realize. In a June 16 report, Albert Edwards, a London-based strategist at Societe Generale SA, argued that a “bubble of belief” in China’s outlook is likely to burst and end rallies in commodity prices and mining-company shocks. Without a snapback, especially in the U.S., China will be hard-pressed to grow at 6 percent or faster on a consistent basis. If it can, is that expansion rate in a $3.2 trillion economy enough to fill the global void? It’s simply not. And a U.S. recovery may be farther away than economists say. Policy makers won’t be spending much time in the short run retooling China’s lopsided economy. Without national safety nets for the unemployed, the household savings rate will remain absurdly high. The impediments to developing a stronger domestic economy are structural and formidable. China’s 4 trillion yuan ($585 billion) stimulus plan certainly helps, yet it’s not a long-term growth strategy. If global growth doesn’t return soon, today’s public spending may morph into tomorrow’s bad loans. A deflationary cycle may even hit China. It’s possible all that liquidity sloshing around the world will boost commodity prices. Those betting a Chinese boom will get us to $250 oil should get used to disappointment.

Unboxed: Can Governments Till the Fields of Innovation? INNOVATION — the tricky, many-step process by which ideas become products and services — has typically been seen, studied and celebrated at the micro level, as a pursuit for entrepreneurs and clever companies. But governments are increasingly wading into the innovation game, declaring innovation agendas and appointing senior innovation officials. The impetus comes from two fronts: daunting challenges in fields like energy, the environment and health care that require collaboration between the public and private sectors; and shortcomings of traditional economic development and industrial policies. Innovation policy, to be sure, is an emerging discipline. It lacks crisp definitions or metrics. The most explicit embrace of it has been outside the United States, though the Obama administration is taking some initial steps. The rising worldwide interest in innovation policy represents the search to answer an important question: What is the appropriate government role in creating industries and jobs in today’s high-technology, global economy? That central issue animated much of the discussion at an unusual gathering earlier this month at a lodge north of San Francisco. This invitation-only affair was organized and moderated by John Kao, a former professor at Harvard Business School and founder of the Large Scale Innovation. A few speakers covered big-think issues like climate-altering geoengineering and water-management technologies. But the main participants were innovation-policy practitioners from nine countries: Australia, Brazil, Britain, Chile, Colombia, Finland, India, Norway and Singapore. The meeting offered a window onto the state of innovation policy — how it is being defined, and what countries are doing. Above all, innovation policy is an attempt to bring some coordination to often disparate government initiatives in scientific research, education, business incentives, immigration and even intellectual property. In India, the government and industry have financed research into products and services that reverse the traditional pattern of innovation flowing gradually from wealthy nations to the rest of the world, said R. A. Mashelkar, chairman of the country’s National Innovation Foundation. Early evidence of the trend, he said, includes the $2,000 Nano automobile, and low-cost drugs for tuberculosis and psoriasis.

Market Situation

Stoned wallabies make crop circles The mystery of crop circles in poppy fields in Australia's southern island state of Tasmania has been solved -- stoned wallabies are eating the poppy heads and hopping around in circles. "We have a problem with wallabies entering poppy fields, getting as high as a kite and going around in circles," the state's top lawmaker Lara Giddings told local media on Thursday. "Then they crash. We see crop circles in the poppy industry from wallabies that are high," she said. Many people believe crop circles that mysteriously appear in fields around the world are created by aliens. Poppy producer Tasmanian Alkaloids said livestock which ate the poppies were known to "act weird" -- including deer and sheep in the state's highlands. "There have been many stories about sheep that have eaten some of the poppies after harvesting and they all walk around in circles," said field operations manager Rick Rockliff. Australia produces about 50 percent of the world's raw material for morphine and related opiates.

World Bank Report is Old News [06-23-09] BNN talks to Richard Kelly, international economist, TD Economics.

• Strategy Session [06-24-09] Protecting your gains in this market can be difficult. BNN discuss strategies to take advantage of the current market conditions with Danielle Park, portfolio manager and president, Venable Park Investment Counsel.
• Look Beyond the U.S. [06-26-09] The U.S. is undergoing a sea-change and U.S. equities will bump along the bottom for some time. Investors are better off looking to emerging markets for a decent return. BNN talks to T.J. Marta, chief market strategist, Marta on the Markets.
• China's Recovery [06-22-09] China has just had its GDP forecast increased by the World Bank, the stock market is up 60% and the market is getting ready for the first IPO in nine months. BNN discusses China's recovery with Erik Nilsson, senior international economist, Scotiabank.

Brazil [06-22-09] Some unique features of Brazil's economy will leave it well-positioned when the world's economy turns around. Oscar Sanchez, senior Latin American economist, Scotiabank, explains.

• Brazilian Equities [06-22-09] A look at Brazilian big-and-medium-cap equities with William Landers, managing director, BlackRock. Mining Brazil [06-26-09] BNN talks to Tara Hassan, mining analyst, M Partners.

• Investing In Latin America [06-26-09] Amid talk Mexico could lose its investment grade rating, DBRS issues its latest report on the country. VP Fergus McCormick, who recently raised Colombia to investment grade, talks about his ratings for the region.

Russian Economy [06-23-09] Deleveraging is hitting Russia with a vengeance and the Russian government will burn through most of the cash it built up through the commodities bull run to support the economy. A look at the state of the economy with Paul Biszko, senior emerging markets strategist, RBC Capital Markets.

• Investing in Russia [06-23-09] BNN talks to John Connor, portfolio manager, Third Millennium Russia Fund.

Indian Economy [06-24-09] A look at the Indian economy and strength of the consumer with Deepak Bhattasali, lead economist, South Asia, The World Bank.

• Indian Equities [06-24-09] Indian equities continue to be among the best performers of the BRIC nations. Levi Folk, emerging market economist, Excel Funds, provides insight on where to find those growth opportunities.

Chinese Economy [06-25-09] The government is a huge player in the Chinese economy and the main reason growth, albeit at a slower pace, continues. Nick Consonery, associate, Eurasia Group, explains.

• Chinese Equities [06-25-09] BNN talks to Tim Mulholland, managing partner, China America Capital Company

BRIC and EM ETFs [06-26-09] A look at the composition and performance of popular emerging market ETFs with Bradley Kay, ETF analyst, Morningstar.

UPDATES:

Corporate Bond Market

• Corporate Bonds: So Yesterday? [06-29-09] BNN speaks to Michael Santoli, associate editor, Barron's.
• Corporate Bonds [06-29-09] BNN speaks to Robert Follis, managing director, corporate bond research, Scotia Capital.

Oil and Commodities

Iraq Begins Major Oil and Gas Auction After a year in preparation, a much-heralded auction of licenses to develop Iraq’s huge oil reserves began Tuesday but seemed to run into difficulties when oil and gas companies demanded far more remuneration than the authorities were ready to pay. Symbolically, the sale, broadcast on television, coincided with the formal handover by American forces of security arrangements in urban areas to Iraqi forces — an economic counterpoint to the striving for political military independence underpinning the Iraqi takeover of patrolling Iraq’s restive cities. At the auction, each contender offered a sealed bid containing details of how much oil the developing company would produce and how much it expected to be paid for each barrel of oil produced.The auction has been billed as one of huge economic importance to Iraq, whose oil fields have been closed to foreigners for decades since they were nationalized. Iraq is seeking to increase its oil production after six years of war.

As Iraq Stabilizes, China Bids on Its Oil Fields

• Scotia's Commodity Price Index [06-29-] BNN talks to Patricia Mohr, VP economics, Scotiabank.
• Top Story : [06-29-09] Niall McGee reports on IEA cutting crude oil forecasts.
• Big Oil in Iraq: Part 1 [06-29-09] BNN talks to Greg Priddy, analyst, global oil, Eurasia Group.
• Big Oil in Iraq: Part 2 [06-29-09] BNN talks to Greg Priddy, analyst, global oil, Eurasia Group
• Canadian Companies in Kurdistan [06-29-09] BNN talks to Ahmed Said, CEO, Vast Exploration.
• Sovereign Wealth Fund Resource Rush [06-29-09] The recent acquisition of Addax Petroleum by Sniopec underscores the trend of sovereign wealth funds getting away from dollar-based assets and into resources. BNN interviews Jan Randolph, head of international sovereign risk, Global Insight.