However there are minimum standards that make the industry more effective in the work that it does. The easy methods are not always the best or effective ways of making money from gold. What might appear to be a short cut might end up the longest journey of your life. Gold prices have recently been reaching record levels so it has been an optimal time to invest in gold. Many people with unwanted gold items such as gold scrap are selling these items to buyers interested in purchasing certain amounts of gold.

The markets that are involved in the gold investment sector will have regular management information about the movements in the product. However they will not seek you out to give you this information. You have to be proactive enough to check out the trends for yourself when you decide to join the gold investment program. The media outlets perform a similar job but once again they require to actively searching for the information that is relevant to your business.

There is a debate to be had as to whether it is absolutely necessary to have the services of a financial adviser when it comes to delivering the best gold investment. Some people believe that they are able to make the investment decision on their own with the help of the information that they have on the internet.

Moreover these people might have prior experience of the industry such that it is relatively easy for them to manage their portfolio without outside interference. This contrasts with the other elements that may be struggling with the need to deal with the different aspects of the gold investment market. These people will need the support of a financial adviser.

What is important is that if you decide to use the services of a financial adviser you pick the right sorts of people that will be able to help you with your investment. It is not just a case of walking into a cake shop and making do with what is available. You have to do the research on the type of adviser that you want. It might also be a good idea to have someone that is attached to a gold investment company so that they can give you up to date information about the industry.

The fact that the investment takes a long time to mature means that sometimes the people that are working within industry fail to update their intelligence on the gold market. They simply buy the bullion and wait for the materialization of the profit. However there are many dynamic variables in the gold market that have to be observed in order to be successful. You have to continue to watch the value of your investment even if you are not intending to sell. This is because the price changes may become suddenly favorable to you.

The duties levied on the companies had also been relaxed between these countries. This program was called as ‘The Border Industrialization Program’. With the implementation of NAFTA called as North American Free Trade Agreement, Mexico manufacturing has tripled.

Earlier, Mexico attracted manufacturers who perform only simple assembling. But, later with the development in this industry many big shots with complex products started flowing in to Mexico. China attracted many inexpensive commodity manufacturing in world level. At this time, US were looking for a similar place like china which could produce low cost products. Mexico manufacturing proved as the exact solution for a situation like this. Many foreign firms started setting up their operations and manufacturing in Mexico.

Methods of implementation :
Mexico manufacturing companies used five common methods:

• Contract or sub-contract manufacturing – This method is a form of outsourcing where Mexico manufacturers manufacture products for another company. This method will be used for companies who like to drive down the production cost involved in setting up infrastructure.
• Joint venture – Two or more firms invest for a single manufacturing.
• Full-owned – As its name suggests, the whole capital and profit belongs to a single company.
• Shelter – In this method, a firm can operate manufacturing and assembly in Mexico without even having knowledge of the subsidiary.
• Outsourcing – This is almost same as contract or sub-contract, except that this method outsources people rather than products.

Advantages :
The price of the land marked as one of unique Mexico manufacturing companies’ advantage for its development. Unlike other developing countries, the land cost remain cheap in Mexico which attracted many manufacturing in Mexico. Many firms which require large engineering content preferred Mexico than to other countries. Its proximity to US also helped the manufacturing companies for coordinating activities. Products got manufactured soon as the raw materials were readily available nearby and the products got delivered in time because the markets were nearby.

In practice, the term “exchange” refers primarily to the building, then to the time (Exchange continues from twelve to three), and finally, to a special kind of market. Exclusively with the latter definition, we will deal in the future.

First, one might argue that any stock exchange trade is a trade of replaceable values, and that in exchange hall there are no goods or money. However, markets are not limited to the valuables; there are exchanges, which make their operation in freight (such as the ship-exchange in Ruhrort). In addition, there is also a question related to whether the sale of samples, very often occurring at all stock exchanges, is related to the trade of replaceable values. Secondly, speculation can be described as a characteristic feature of Exchange. However, there is also speculation outside the Exchange. Then we can say that the Exchange is committed to facilitating the trade of goods and securities. This is certainly true, but railroads and many other institutions also serve these purposes, but are not stock exchanges. It is necessary to find other characteristic features of exchanges, distinguishing their traits in comparison with markets.

When people talk about a market, developed before exchange, first and foremost a regular meeting of parties with the purpose of transacting business, happening in a certain place and at certain times, is meant. Place and time – are constant, the parties and operations may vary. Anywhere, where there are no such meetings in a certain place and at a certain time, there can be no question of exchange. The difference between the exchange and the market is mainly in the following three points:

1. In the convertibility of listed on the stock exchange, but absent items

2. The existence of organization in the exchange, in contrast to the free market

3. The existence of formal fixed rates and quotations in the exchange.

Everywhere, where one of these features is missing, it is not an exchange in the stated sense, but rather a market or intermediate levels. Let us analyze in detail the three distinctive traits.

The essence of the Exchange is that it is a special kind of market where trade replaceable values is carried out, while these values and charges for them are not present. What is a replaceable value? This quality is due to the nature of the goods comprising the subject of trade. For example, in the market you buy a particular horse, some flowers, a piece of meat. A hostess buys products of certain quality and class. All these things are there, to examine them in detail. No one buys a pig in a poke. This is followed by the payment and transfer. The characteristic feature of the market is, therefore, in the presence of buyers and sellers, money and goods. At the stock exchange others are often presented, mostly traders. Initially, there were producers and consumers, but they were gradually superseded by merchants. Trading on the stock exchange is not on a physically presented particular product i.e. on the kind of a product, when a bag of rye can be replaced by another of equal quality. Hence the conclusion, that all the goods on the market can be substituted or replaced. The convertibility of goods traded on the exchange leads to one very important consequence: the securities or commodities circulating, i.e., sold or bought on the market may be missing. This fact creates a huge advantage for trade and exchange. The presence of the goods would bring the exchange back into a state of market and the transactions would have been brought up to its size.

Of the convertibility of goods and values, derives the second investigation. Securities or commodities should not be there at the time of purchase, they should not even be available to the owner. These operations form the basis of a stock market speculation. It is based on the fact that each purchase can be compensated with the sale and every sale with a purchase. Or, for example, on the sugar market, the transactions may be concluded for the delivery of sugar supply, when the beets, from which this sugar would be received, were still sown.

The second distinguishing feature of Exchange is the organization. The Exchange is an organized market, i.e. there are bodies for certain functions related to the management, maintenance of order, bringing the exchange transactions to norms, etc. Market does not know such a device. The only body that has the market is the maintenance of order. Sellers and buyers in the market represent a great unorganized mass. But wherever the market rises to the level of exchanges, there appear bodies. However, these bodies are not always the same. Each market has its own organizational structure, but all have at least the stock exchange committee – the chief and the supreme body of the Exchange.

Apart from a clear organizational structure each market also uses the principle of self-regulation, i.e. has inner-Exchange regulations, which are the basis of exchange activity of a specific exchange. These include the Memorandum, Articles of Association and Rules of the trading process.

In the Memorandum are listed the founders of the Exchange, the purpose of its creation and the means of achieving the stated objectives is determined; it is responsible for the obligations of the founders of the Exchange, the initial size of the  statutory fund, its division into shares and how they distributed between the founders, the rights and responsibilities of the founders, the allocation of profits and the establishment of contingency fund, sets out the terms of the termination of the Exchange, indicating the location and details of the Exchange.

As a rule, the Charter of the Exchange includes the following sections:

1. general provisions;

2. creating exchanges;

3. activities of stock exchanges;

4. size, order of formation and change of the authorized capital, funds and profit exchanges;

5. rights and duties of members of the Exchange;

6. management of exchange;

7. accounting and reporting exchanges;

8. termination of the Exchange.

The Rules of the auction reflect the issues such as the participants of exchange trading, and their order, exchange of goods, the order of their setting out and withdrawal from trades; stock transactions, their types, the order of registration, legalization, dissolution, and the recognition of their invalidity; settlement of disputes and sanctions for the violation of the rules of exchange trade.

Stock exchange is an organization with the aim not only to trade in replaceable values, but also the pricing. Pricing on the exchange takes place regularly, and under common control, i.e. behind the authority of the whole assembly or the executive committee. Where there is no such official quotation of prices, there is no exchange.

Now we can define the notion of stock exchange. Stock exchange is an organized market to trade in convertible values on which the process of pricing runs under public control. The objectives of the Exchange are not to supply the economy with raw materials, capital, currency, but the organization, regulation, standardization of commodity, capital and currency markets.

It is not necessary to write about when it was formed, its turnover. More importantly, we need learn how to earn on Forex market.

To get started, you need to get to the Forex market. This is done very simply. There are many companies providing access to trade on the Forex market. Terms and reliability of these companies are different. Many questions arise such as: how to choose a company in which to open an account?

The answer can be how it is done generally. The first step is to go to the website and to read under “about us”. Then choose companies that are not new, as it is a guarantee that the company is stabile and will not disappear with your money. Next, look, whether a license is granted; many major companies that provide access to the Forex market provide on the site as much information as possible about themselves. After that, see the conditions for access to the Forex market. If the company provides too favorable conditions, then you can start having doubts about it. If the company takes great commissions, night, spread, etc., I am hardly going to work with it. Next, you should go to the “news”, and read the pace of its development and its state at the moment. After that, study the software, because through it you will work daily on the Forex market. As you visit the company forum, read the reviews about the company. If you are satisfied with everything, go to the “opening of the account,” read the contract, and if you feel that you like it, open the account and start trading on the Forex market.

With time, as you will earn on Forex market, be sure to open another 2-3 accounts and play on them in turn. This will be a guarantee that if the company closes, you will not be left in the idiots, because you will already be able to return all the money invested and take more from the company. It is done like this: Suppose you invested 3000 rubles on the Forex market, won 3100 on top of it and lifted them to your bank account. Now, you’re already a winner, even if the company closes, you will get all your money back and even take some amount from it as well.

When you select a company and come to the Forex market, it is high time to start earning. The Forex market differs from the stock market and bonds. Its major difference is its technology and its availability. The Forex market is easily accessible. It is more complicated to get on the stock market.

There are two ways of profiting on the Forex market:

To place bets on the event. Thus, currency EUR/USD at 10:00 will be higher than 11:00. There are companies that are doing it.

Have profit from each item of traffic. That is, if the opening bid EUR/USD was at around 1.1200, and after an hour would be at around 1.1220, then for every point of traffic, you lose or win money. If the contract was purchased on the increase, then you’ve earned 20 points (spread not included), but if you opened up for a fall, then you have lost 20 points. The amount of one item is chosen by you. The more money invested in the Forex, the more expensive the point.

On the stock market the scheme is a little different, but it will not be discussed here. The main task here is to learn how to earn on Forex market.

Forex is only a schedule that reflects the expectations of millions of people. Some are involved in the trade, showing their expectations, while others sit and wait for the right moment, also showing their expectations. Forex Market is people’s market. If not for the traders (all who carry out transactions on the Forex market), graphics would stop.

Forex market does not wish anyone evil or good, it is indifferent, it does not know anything about you. If you have lost and it is useless to get mad at the Forex market. Better accept it, find the cause of the loss, and do not to repeat it anymore.

Every trader of the Forex market wants to win money, and he does not think of taking it away from you; his winning is paid by the company.

Many articles and books are written on the Forex market so there are just three important points to be mentioned here:

The choice of a mediator between you and the Forex market
Ways to profit on the Forex market
The structure of Forex market.

Banque PSA Finance SA, registered in June 2008 as the financial branch of French auto concern PSA Peugeot Citroen, is going to buy the above mentioned bank. German Deutsche Bank will be the financial consultant from the part of AIG, whereas the Russian unit of CMS will consult the French side.

Other terms of the transaction have not yet been disclosed.

It should be recalled that the net loss of AIG for the Ist quarter of 2009 decreased by 44 per cent and amounted to 4.35 billion dollars, while a year earlier the company recorded a net loss of  7.8 billion U.S. dollars. In doing so, the losses in terms of one share in the I quarter of 2009 amounted to 1.98 dollars while a year ago they were recorded at U.S. 3.09 dollars per share.

The company AIG has been one of the biggest victims of the world financial crisis. In autumn of the last year it was on the brink of bankruptcy, and the government had to actually buy back the entire company, spending tens of billions of dollars. Since then, AIG has begun to restructure, gradually getting rid of its units and moving to a less bulky structure of the company.

In April of this year AIG agreed to the sale of its insurance business named 21st Century Insurance Group to Swiss insurer Zurich Financial Services Group. Under the deal, one of the “daughters” of Zurich Financial will pay 1,9 billion dollars to AIG, of which U.S. $ 1.5 billion will be paid in cash and another 400 million dollars – in the form of debt securities guaranteed by Zurich Insurance Company, the principal operating unit of Zurich Financial.

Brazil is not against dedollarization of the global financial system and trade, but this process should take place gradually, through a “safe action”, said Minister of Foreign Affairs of Brazil Celso Amorim.
“I do not know whether the world is ready to say “let’s replace the dollar with special drawing rights (SDR) or something similar”, but why should not we go in the direction of this?” – S. Amorim told reporters at the UN headquarters.
According to the Brazilian minister, the rapid abandonment of the dollar as the world main reserve currency would be terribly wrong as the leading developing countries keep their international reserves in dollars, transmits Reuters.
Earlier, China and Russia advocated the development of a new, more equitable and balanced international monetary system, in which national reserve currencies could take the place of the dollar.
However, economists note that in the foreseeable future, the dollar is unlikely to be removed from its dominant position in international finance.

The U.S. GDP in the I quarter of 2009 decreased by 5.5 per cent according to the final data. The data was presented on Thursday, June 25, by the U.S. Department of Commerce. Analysts expected that the decline in GDP would be about 5.7 per cent. That was the number that previously was reported.
The fall in U.S. GDP was 6.3 per cent in the IV quarter of 2008 .
Growth of GDP deflator was confirmed at 2.8 per cent, and turnover rates were revised downward: in the final data, export fell by 30.6 per cent (previous data was by 28.7 per cent) and import went down by 36,4 per cent (previously a decline of 34.1 per cent was reported). The decline of export was the biggest one since 1969. And the decline of imports – since 1937.
The base price index PCE (not taking into account the costs for energy and food) rose by 1.6 per cent according to the final data. Data on the growth of consumer spending slightly adjusted downward in the I quarter of this year – to 1.4 per cent instead of the previously announced 1.5 per cent.
Business investment declined by 37.3 per cent, investment in real estate went down by 38.8 per cent.

Economics of the EU can not cope with the sharp increase of government expenses directed at combating the crisis and maintaining the growing number of unemployed, said the latest report of the European Commission. The Commission calls on EU countries to sharply tighten financial discipline so that the economic growth does not stall when the economic recession comes to the end.

In 2009-2010 the total anticrisis package of the EU countries made 600 billion euro (5 per cent of EU GDP). However, according to the recent European Commission report, this amount may become very small compared to the one when the European banking sector enters, which, according to authors of the study will range from 2.75 per cent to 16.5 per cent of the GDP of the EU. The outcome depends on many factors, but the study of 49 financial crises that have occurred in the world since 1970, says that on average the figure will be about 13 per cent of GDP of the EU.

In addition, the heavy burden of keeping a growing number of unemployed people has also fallen on the state budget : according to studies unemployment in the EU will reach 11 per cent in 2010. Its contribution has also made the demographic situation: Europe is becoming «old», and the burden of pensions has also been put on the shoulders of the treasury. As a result, the average debt of the EU could rise to 80 per cent of GDP next year, compared with 60 per cent in 2007. «The latest statistics says that the EU economy is still very fragile and vulnerable», – said economist of the National Bank of Australia David Tinsli. In June PMI business activity index rose much less than were the expectations of experts – by 0,4 per cent to 44,4 per cent. And while it remains no more than 50 per cent, it indicates a continuing decline.

However, until now there is nothing to please them with. At the beginning of the week the World Bank (WB) published another negative forecast that the world economy will decline to 2.9 per cent this year. This projection finally frustrated investors and caused a sharp decline in world stock and commodity markets.

Meanwhile, just a few weeks ago, the investors and market participants were almost full of happiness. The American market had grown by about 40 per cent for the past few months, as investors had believed in the ending of the crisis and the imminent recovery of the global economy. However, the forecast WB deprived the investors of their dreams for happiness, and earlier this week the U.S. stock market closed with the biggest loss over the past two months, and the index S & P 500 dropped below the levels at which it concluded the last year.

The U.S. dollar managed to win back its losses slightly against the backdrop of heightened optimism; and the U.S. currency quotes grow each time the world market shares fall. “At the moment, all allegations of an early restoration of the world economy seem to be at least debatable. The market feels uncomfortable and this discomfort is reflected in the value of the shares”, – said Citigroup analyst Shiyam Devani.

In her turn, Tullett Prebon economist Lena Komileva believes that the recent rally in commodity and stock markets was due not just because of the positive economic statistics. According to her, after the gradual stabilization of the global economy, investors finally freely sighed and began to buy up shares of companies and commodity assets this spring . “But we should not forget that the stabilization and recovery are not synonymous. Until the financial markets get out of the crisis, it is not worth waiting for the restoration of the world economy ,” – adds the expert.

This assertion is difficult to be disagreed with. All the actions taken by the world’s Central Bank to exit the crisis has not yet yielded virtually any results. Moreover, as the head of Johnson-Illington Advisors, Hugh Johnson pointed correctly, consumers sell all that they can and reduce their spendings instead of increasing it. “It is hard to imagine the economic recovery in such circumstances”, – added the analyst. He estimated that the growth in the American economy could only begin by this year’s end, and that it would be extremely weak. “I think the world’s equity markets will adjust even at least by 5-15 per cent”,- he said.

It seems that this point of view is shared by the leading specialist for Harris Private Bank Investment Jack Ablin. According to him, the recent stock market rally was just another correction, and now “everything has returned to its own place.” Indeed, the investors are not too pleased with the statistics: unemployment in the United States is at the level of 26-year peak, while European banks, according to ECB estimates, will write off at least 283 billion U.S. dollars this year.

Strategists the French bank BNP Paribas believe that in order to return the confidence of the investors of the FED, which carries out the functions of the Central Bank of the United States, it should be understood that discount rates will remain unchanged in the nearest future. However, it should be noted that the lower refinancing rate will not have the best impact on the U.S. currency and may even eventually trigger a sharp rise in inflation. “In any case, the U.S. legislators will have to decide what is more important – economic growth or astable dollar,” – concluded the leading market analyst of FX Solutions Jozeph Trevizani.

Russia and Venezuela signed an agreement establishing a joint bank with an authorized capital of up to 4 billion U.S. dollars some days ago. The document was signed by the outcome of the negotiations that were conducted between the Prime Minister of the Russian Federation Vladimir Putin and the Venezuelan Vice President Ramón Alonso Karrisalesa, when the latter visited the capital of the Russian Federation Moscow the day before the negotiations.
As Deputy Finance Minister Dmitry Pankin explained to reporters the bank will be established on the basis of Eurofinance-Mosnarbanka. Its current shareholders have agreed to assign part of their shares in favor of Venezuela.

It is highly expected that the Venezuelan side of the bank’s new shareholders will include the State Treasury and the Bank of the Venezuelan oil corporation. The founder of the Bank from the Venezuelan side could become the Venezuelan Petroleum Corporation or the state development fund.
It is anticipated that the bank will be created in the course of this year. The share of Russia will most likely be 51% and it will be controlled by the bank VTB and Gazprombank.
According to D. Pankin, the bank will participate in the financing and implementation of many joint programs and projects between Russia and Venezuela. The headquarters of the new bank will be located in the capital of the Russian Federation – Moscow.

“I think that in the long run, this problem may actually become relevant. However, it can affect the shares of Visa and MasterCard even now” – said the expert Citigroup Donald Fandetti. Concerns about this law have already made their contribution in a 10 per cent decline in the shares of Visa and a 5 per cent decline in the securities of MasterCard for the last month. Their shares are very likely to fall in price further, analysts believe. “The Bill will pull down the stocks at least as long as we do not have any clarity,” – considers the representative of Cowen & Co company Moshe Katri.
It is also worth noting that the bills on the service charge that are now under discussion may be a supplement to the recent law, which approves limiting fees and interest rates on credit cards. The new bill will give wholesalers and retailers the opportunity to discuss service charges with banks. This bill came as a result of longstanding complaints from the owners of shops that banks operate in a conspiracy, set the fee structure, and do not allow the sellers to negotiate with Visa and MasterCard.

Service charges have increased by 14 per cent to about 48 billion U.S. dollars, accounting for approximately 1.75 per cent of the total amount of purchases just on the basis of the last year. In their turn, Visa and MasterCard have said that merchants have an opportunity to discuss the reduction of charges with them. In doing so, companies that issue credit cards add that they will not be affected by the new law because they are not engaged in levying service charges.

“It is very unlikely that the Congress will regulate the service fees by law or will set prices”, – says the president of Visa of North America, William Shidi. In his turn, the President of MasterCard in the U.S. market Makvilton Chris wonders whether the American government is planning to enter the game in order to control the price in the free market. “In the end, this is a price control, and it is not very good”, – adds K. Makvilton.

It should be recalled that in late May, U.S. President Barack Obama signed a law protecting the rights of holders of credit cards. The new law restricted the right of the card issuers to increase interest rates and commissions, and ordered them to inform clients about changes in the terms of the contract in advance. The official name of the document is The act of accountability, responsibility and information disclosure in the industry of credit cards.

Venezuelan President Hugo Chavez hopes that the oil prices will increaseto $ 100 per barrel. Thus he has asked for help from Russia. The Venezuelan president wrote a letter to Russian President Dmitry Medvedev, which calls for “the unity of major oil-producing countries”, transmits Associated Press.
According to U. Chavez, the Vice-President of Venezuela Ramon Karrisalesthe, arriving in Moscow on 22 June will take the message from the Russian head of state.
The export of crude oil makes 93% of the export structure of Venezuela. The drop in oil prices from their peak of $ 147 per barrel in the last year was a painful hit to the revenues of Venezuela, and also led the Russian government to redraw the budget seriously.
At the last trading session in New York crude oil futures prices for Light Sweet closed at around 69.55 U.S. $ / bbl.

Pharmaceutical Industry of the United States is prepared to spend 80 billion dollars over 10 years for the reform of American health care, which is being developed by the administration of U.S. President Barack Obama.
Democrat Senator Max Bokus has managed to negotiate with pharmaceutical associations on the bill on the reform to transfer part of program costs on the shoulders of businesses, passes Associated Press.
The agreement between the White House, lawmakers and the pharmaceutical industry should facilitate access to prescription drugs for millions of older Americans and reduce costs of the federal government.
B. Obama welcomed the agreement that was reached by the senator and pharmaceutical companies, describing it as a “turning point” in improving the national health system.
The current U.S. public health system, by the general view of American politicians, is imperfect and is in need of immediate reform. Approximately 46 million people in the country are not covered by a health insurance program, the budgetary costs of Medicaid and Medicare programs are growing at a daunting pace and the budget already has a huge deficit.
Congressmen, working on the reform bill, hope that the cost of the plan will not exceed 1 trillion U.S.

The U.S. government implemented payments through TARP program after the bankrupt of Lehman Brothers shocked the financial markets last fall. 125 billion U.S. dollars were allocated in order to help major banks, which had to be sufficient during the current economic crisis.

Despite the fact that the banks’ return of their previous emergency government financial help demonstrates their strength, it is too early to talk about full recovery of American, as well as European banks: stock rating agency Standard & Poor’s (S & P) downgraded the rating of 18 U.S. banks.

«Prospects for the industry are very dark», – commented S & P analyst Rodrigo Kvintanilla on the event. This action affected, in particular, the fourth-largest U.S. bank Wells Fargo, which credit ability was evaluated to level AA- by S & P.

S & P is painting a gray picture also for the banks in Europe. «We expect the volume of reserves to grow significantly in order to cover potential risks in the loan business», – said analyst Scott Boogie,” which predicts that the delays in repayments in many European countries will double this year compared with the ones of the last year. According to the calculations of S & P, the 50 largest banks in Europe consolidated 128 billion euro as a reserve to cover potential risks in the loan business last year.

Experts of S & P believe that the banking sector in Europe and the U.S. will face some serious changes. «Industry is on the verge of aggressive changes, and in all likelihood, we will witness some dramatic shifts», – emphasized Mr. Kvintanilla.

Of course, large-scale crisis plans of the authorities had their effect, and investors are gradually beginning to return their confidence. But some experts warn that the crisis is not yet finished, and soon many banks will have to write off their assets. This is particularly true of European banks, underscore the market participants.

According to estimates of some analysts, European banks will have to cancel orders of about $ 280 billion of bad assets over the next year and a half, and a lot will depend on their ability to attract new capital. “Banks should be able to earn money and solve their problems. Investors’ attitudes to them depend largely on these skills, – said bank analyst of Hugh baths Shtinis Morgan Stanley. – Of course, investors are asking how many banks will need time to recover from the crisis”. In early March shares of European banks fell to their lowest level over the past 17 years. Then they were able to somewhat balance their decline and the growth of bank securities in Europe grew by about 20% during the period of this year. However, we should not forget that in the event of a panic among investors the quotes of companies of the banking sector may once again collapse; even though the threat of collapse of the European banking system is left behind. Meanwhile, rating agency S & P warned earlier this week that the financial environment still leaves much to be desired, and that not all European financial groups will survive the current crisis. “Earlier this week, another rating agency Moody’s downgraded the ratings of 25 European banks. Among the “low” rated banks were Spanish bank BBVA, German Deutsche Bank, French BNP Paribas and a huge number of smaller banks. In turn, UBS analyst John-Paul Kratchli notes that the European banking sector still “lacks capital.”

The most interesting thing is that U.S. banks have managed to attract new capital much better than the European ones have done. For example, during the period of this year European banks have attracted about 42 billion dollars of new capital. Last year the figure was 126 billion dollars. For comparison: the U.S. banks attracted 68 billion U.S. dollars only during this quarter. And there is every reason to assume that the European banks will have to try to find the money as soon as possible.

In May, the number of permits issued for construction of new homes rose by 4% – up to 518 thousand units compared to April. The number of permits for the construction of new homes declined by 47% in May 2009 compared to May last year.

According to the report of API, oil reserves of energy in the United States were characterized by the following week changes as of June 12:
- Crude oil: reserves fell by 1.262 million barrels and amounted to 356.634 million barrels;
- Gasoline: stocks rose by 2.140 million barrels, and amounted to 207.694 million barrels;
- Heavy distillates (fuel oil and diesel fuel): stocks rose by 881 thousand barrels and amounted to 151.545 million barrels.

Import of crude oil rose by 832 thousand barrels per day – up to 9.350 million barrels per day.

Even before the opening of the trading session, the U.S. Department of Commerce (US Department of Commerce) reported a sudden increase in construction of new homes. According to the data, this index increased by 17.2% – up to 532 thousand units in May compared with that of the previous month. This is significantly better than the expectations of analysts, which forecasted a growth of up to 500 thousand units, and it allowed bidders to forget about the recession for some time. Simultaneously, the Ministry of Labor of the States (US Department of Labor) reported that industrial prices (index PPI) of the United States increased by 0.2% in May 2009 compared to the previous month, while analysts had expected growth rate by 0.7%.

Positive news from the housing market was somewhat balanced by a greater-than-expected decline in industrial production in the United States in May. The indicator has decreased by 1.1% in monthly terms, while experts predicted a decline of 0.9-1%.

At the end of the trading day Dow Jones index fell by 107.46 points (-1.25 per cent) – up to 8504.67 point, NASDAQ – by 20.20 points (-1.11 per cent) – up to 1796.18 point, S & P – by 11.45 points (-1.27 per cent) – up to 911.97 points.

The volume of retail sales in the United States grew by 0.5% in May 2009 compared with that of April and amounted to 339.99 billion dollars. Such data was released on Thursday, June 11, by the US Department of Commerce. Analysts had expected that this figure would increase by 0.6%.

In annual terms, retail sales in the United States decreased by 9.6% in May 2009.

According to revised data, the volume of retail sales decreased by 0.2% in April of this year.

The trade balance was positive in the amount of $ 31.3 billion, which is $ 38.8 billion less than that in January-April 2008. In the trade with foreign countries the balance was equal to $ 24.7 billion (down 34 billion dollars), and with the CIS countries – 6.6 billion dollars (a decrease of 4.8 billion dollars). Export of the Russian Federation in January-April 2009 amounted to $ 77.8 billion as against that of January-April 2008 – a decrease by 47.7%, including export to foreign countries – $ 65.5 billion (down by 48, 1%), and the CIS countries – $ 12.3 billion (down by 45.4%).

“Reduction of the value of Russia’s exports in January-April 2009 was due to a fall in average prices of exported goods and because of the physical volumes of export supplies”, – said FCS. The basis of Russia’s exports in January-April 2009 to foreign countries amounted to fuel and energy goods, the share of which in the commodity composition of exports to these countries amounted to 67.4% (in January-April 2008 – 72.8%).

Imports of Russia in January-April 2009 amounted to $ 46.5 billion, which decreased by 40.9% compared with that of January-April 2008, including from foreign countries – to $ 40.8 billion (down by 39.5%), and from CIS countries – 5.7 billion dollars (a decrease of 48.9%). “Reducing the cost of Russia’s imports in January-April 2009 is due to a decline in average prices of imported goods, and the collapse of their volume”, – said FCS. In commodity composition of imports from foreign countries the share of machinery and equipment accounted for 45.5% in January-April 2009 (in January-April 2008 – 55.5%).

The main trade partners of Russia in January-April 2009 among the foreign countries were: China, trade with which amounted to 10.7 billion dollars, Germany – 10 billion dollars, Netherlands – 9.5 billion dollars, Italy – 8.5 billion dollars, Turkey – 5.7 billion dollars, United States – 4.9 billion dollars, Japan – 4.5 billion dollars, France – 4.5 billion dollars, Finland – 4.1 billion dollars, Poland – 4 billion dollars.

Meanwhile, the positive trade balance of Russia on the methodology of the balance of payments in April 2009 decreased by 1.7% over March 2009 and reached 6 billion 688 million dollars, said the report published today by the Bank of Russia. In general, for January-April of this year the surplus was 26.442 billion dollars, which is 2.4 times lower than that of the same period of last year.

At the same time, as compared to April 2008, the trade surplus decreased 2.2 times (from 14 billion 835 million dollars).

Exports of goods from Russia in April 2009 compared with that of March 2009 increased by 0.5% and amounted to 21 billion 279 million dollars. Imports to Russia in April 2009 increased by 1.55% – up to 14 billion 591 million dollars. Export from the Russian Federation decreased by 47.1%, import – by 42.6% Compared with those of April 2008.

Thus, foreign trade turnover on the methodology of the balance of payments in April 2009 amounted to 35 billion 870 dollars, which is 0.9% higher than that in March 2009.

Russian GDP may decline to 6-7% and inflation may become below 10% while maintaining the trend of stabilization in the economy in 2009, predicts Oleg Vyugin, the president of the board of directors of MDM-Bank, ex-head of Federal Financial Markets Service. “If Russia’s economy is going towards stabilization, we can get a reduction of GDP at the level of 6-7% the following years, taking into account the effect of the fourth quarter of 2008. Inflation under such scenario may be less than 10%”, – said Vyugin.

The new work of the RF Ministry of Economic Development forecasts a fall in GDP in Russia by 6-8% this year, a number of officials and experts do not rule out a deeper downturn in the economy. The official forecast for inflation this year is 13%. “I would describe the present situation in the Russian economy as stabilizing. I think later (in the short term) we will flounder somewhere at the current level, which is now reached”, – said Vyugin.

In his view, the projections for the longer term can be built no earlier than autumn of this year. “This is due to the fact that consumers’ and producers’ views on the trends of development of economy and the strategy of their behavior results from the signals that they receive from the economy during a few months. I think that by the fall of this year final opinion on the further development of the Russian Federation can be formed on the model of the letter L, not W, as some think now, “- said Vyugin.

“The economic recession, which is expected in the current year, for the most part, is a consequence of massive disruption in the global economy and the consequent drastic reduction in our exports,” – quotes a leading paper from the speech of Minister of Economics and Technology of Germany Karl-Theodor zu Gutenberg at the meeting of the Cabinet of Ministers.

According to him, the two existing government programs to improve conditions allow Germany in a national scale “to survive better” compared with other countries. In this regard, zu Gutenberg sees no benefit in taking the third market program, as called for by some politicians and experts.

“Anyone who believes that we must “add” a third program will get just the opposite effect: undermining the confidence of investors, consumers and taxpayers. Waiting and frustration – this is the last thing our country needs “, – stressed the Minister.

He said that the further stabilization of the banking and financial sector was the main problem in the process of solving the issue of returning the German economy on a course of stable growth.

“So I think that the primary purpose of developing a rapid and effective solution is the isolation of “toxic securities” on bank balance sheets” – said the head of the Ministry of Economy of Germany.

He also expects further decline of exports this year, but also predicts, that the global economy recovery will stabilize in this sector in 2010.

Almost the same predictions, according to experts in the ministry, can be attributed to the construction investment. “The government market program has a direct supporting influence on it,” – it is said in the press release.

Less encouraging forecast is given in the paper for the field of employment: “In the current year, unemployment will increase by an average of 450 thousand and will reach the level of 3.7 million people, and next year it will increase approximately by 900 thousand and will be 4.6 million people.”

The Minister called personal consumption an important stabilizing factor, which in this period will be exposed to only a very slight decline due to short-term program of government (in particular, reduction of tax on incomes of citizens, reduction of the size of mandatory contributions to health insurance, payment of benefits to children and increase of pensions).

Wide economic benchmarks of the spring forecast, as noted in a press release, will be the basis for the planned evaluation of tax revenues, as well as for meetings in the Council of financial planning, in regard with federal budget, land, communities, and contributions to social insurance.

Not so long ago the figure was about 60%. As “RBC daily” writes, the first time since the beginning of the industrial revolution in the XIX Old and New Light will yield the palm to developing countries led by China.

CEBR previously predicted that the economic hegemony of the West would soon end, because even in 2007 China was the third in world economies, but the turning point was named in 2015. After the financial crisis made its adjustments, the process of redistribution of forces in the global economy only increased.

“The Center of the financial crisis is in developed countries, so a recession in the economy of the West is expected. As a result, developing countries, especially China, will increase their share in global GDP this year. This will accelerate the existing trend of moving the economic power from the Group of Seven major Developing States to developing countries”, – said Oxford University economist Linda Yue.

Thus, CEBR expects that China will become world’s second economy this year, thus getting ahead of Japan. The forecast is very realistic, since when the crisis began the Land of the Rising Sun has been experiencing a huge drop in demand for its products.

Analysts point out that all countries are facing the economic recession, but in developing countries it takes place in a mild form. And the recovery process there will be more successful. This can be seen even now. Over the past three months the stock market in Latin America showed an increase of 78%, East Asia (excluding Japan) – rose by 66%. For comparison: American index S & P 500 rose by only 35%.

Bill Gross, the head of one of the world’s largest asset management company Pacific Investment Management Company (PIMCO), also talked on the precariousness of the economic prospects of the absolute leadership of the U.S. last week. He pointed out that the growing budget deficit and uncertain prospects for further economic growth pose a threat to the highest credit rating (AAA) of the United States, which they currently have.

The Minister of Finance of the United States arrived in China. Economies of the two countries are so tightly linked to each other that any wrong movement can lead to the collapse. Head of Finance of the U.S. came to persuade Chinese colleagues not to do sudden movements.

“A successful transition to a more balanced world economy will require significant advances in the world. But the most important changes must occur in China and the United States. The welfare of the rest of the world will depend on our success. And the effectiveness of U.S. policy in part will depend on China,” – said Gaytner.

But the questions of the effectiveness of this policy make China nervous. All the recent years, the country has bought U.S. treasury bonds – sort of IOU of America. They have always been considered very reliable: after all American economy is backing them. As a result, almost 70% of China’s reserves are located in dollar-denominated assets; their reliability is under big questions now.

And if China suddenly decides to start getting rid of dollar reserves, it is clear that it will be followed by a collapse, which will affect both the United States and China. Because of that the tone of statements is similar to that of ultimatum. “It is in the interest of China that the U.S. economy once again begins to show growth. We will rise or fall together. We are in the same boat, and it is good that we paddle in one direction,” – U.S. Secretary of State declares Hillary Clinton.

But the concern of China in recent years is only growing. The United States are trying to solve all the problems solely by printing new dollars and releasing more and more debt bonds. The last example is the bankruptcy of General Motors. At first glance everything seems to be done by the rules of the market economy: debt restructuring, sale of assets, if it was not for one significant “but” – this is again done with the money of the government. And it is not taken from taxpayers, but is simply done by re-printing and producing U.S. IOU.

A special board in New York shows the astronomical amounts of debt – the United States owes globally more than 11 trillion dollars – to 94 thousand dollars per household. To rescue its economy the United States is going to issue debt receipts for another 3 trillion dollars this year. However, the more they are produced, the more doubts are heard about their reliability. So suddenly oil prices got higher once again – almost of pre-crisis rates; and stock markets are also rising.

This means that it is very difficult to build long-term projections, including budget and schedule of entire countries. Over the past 3 months almost all of the world indices have increased – the Russian stock exchange has risen by 80%, German – by 40%, and the Chinese – by 25%. But one can not exactly say whether that means improvements in the real economy or not.

The cost of housing in the United States in March fell by 2.2% compared with that in February 2009. In the 1st quarter of 2009, prices fell by 19.1% compared to those of the same period in 2008, which makes it the maximum decrease from the beginning of tracking such data in 2001.

Meanwhile, sales in the secondary housing market in the United States increased in April on annual cost accounting by 2% and reached 4.66 million homes. Such forecast was issued by Bloomberg News after survey of several experts. In March 4.57 million homes were sold.

Currently, the quota for the extraction for 11 countries in the organization (Iraq is not subject to the quota) is set at 24.845 million barrels of oil per day, and most analysts did not expect any changes at the May meeting, reminded the “Interfax”.
As the Saudi Arabian Oil Minister Ali al-Nuaimi said, OPEC has maintained quotas in anticipation of recovery in demand for oil by the end of this year. Thus, the organization does not change the quota for the second meeting this year.

Meanwhile, the cost of oil since the last OPEC meeting in March has risen by 36%. Recently, crude oil has traded above $ 60 mark per barrel. Before the OPEC meeting the President and Minister of Petroleum of Angola, José Maria de Vasconcelos Botel said that OPEC member countries needed to complete the reduction of oil production in order to achieve full compliance with the quotas, because the cost of oil had not yet reached the desired level of 70-75 dollars per barrel.

Member countries of the Organization have decided to reduce oil production from 1 January 2009 to 4.2 million barrels per day (bpd) compared with the actual level of production in September, which amounted to 29.045 million bpd. However, the April production was 25.81 million bpd, an increase of approximately 225 thousand b/d compared to that of March. This was the first increase in nine months. Thus, the announced reduction of production conducted only at 77%.

OPEC, which accounts for about 40% of the world’s oil supply, is composed of 12 countries: Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, UAE and Venezuela.

This was stated by EU Trade Commissioner Catherine Ashton following a meeting with Russian Minister of Economic Development Elvira Nabiullina on the sidelines of the St. Petersburg Economic Forum.

Nabiullina also commented with enthusiasm on the prospects of joining the WTO.

“Indeed, there is a feeling that we are coming to an agreement with the EU. We hope that we will complete major negotiations by the end of the year. We have built a schedule that must be completed by that date” – brings the words of the Minister agency RIA Novosti. She stipulated that an unresolved issue remains in the negotiations with the EU; that is the issue of export duty on Russian forests, which is not beneficial for such European countries as Finland.

Deputy of Nabiullina Maxim Medvedkov, who has headed the Russian delegation in negotiations on the WTO for a long time, pointed out that several months will pass between the completion of negotiations and the actual entry of Russia into the WTO. “We have actually agreed with the EU on the understanding that negotiations would be completed before the end of the year. But between the completion of negotiations and acceptance at least six months will pass” – said Deputy Minister.

Catherine Ashton and the U.S. representative for trade negotiations Ron Kirk are the highest ranked foreign guests of the Forum, where many Russian leaders will have speeches, including President Dmitry Medvedev.

Russia has been negotiating with the WTO member countries more than 10 years. The organization includes 153 countries; all of them must give their consent to the entry of Russia in this organization.

Russia remains the world’s largest economy outside the WTO.

Previously the obstacles for Moscow to become a member of WTO were its strained relations with neighboring countries, such as the introduction of the ban on the importation of wines from Georgia in 2006.

As BNP Paribas Bank President Philippe Delpal told the Russian service of BBC, the main theme of the forum should be the investment climate in Russia. “I would like to know how we should restructure our strategy to conduct business in Russia. How we, foreign investors, can invest more in the country, and how we can create a safer place for investments in Russia”,- explained Delpal.

Organizers have invited over 2 thousand participants to the forum, including representatives of the political elite and leaders of major corporations such as Exxon Mobile, Gazprom, TNK-BP, and ONEKSIM. But shortly before the forum it has been revealed that not all of the invited people will attend the program. “The crisis is not the best time to overspend” felt heads of international corporations, and stayed home.

But even those who come are unlikely to listen to the recommendations of the forum on the crisis. The program, offered by the organizers, at first glance, is large: there is a session to discuss the causes of the crisis, its impact on different sectors of business, even the history of previous crises, and there are also planned roundtables for the companies in banking sector, oil, transport, and even film.

The forum members give particular attention to the subject of reserve currency. Opinions about the fact that dollar, as such, needs to have an alternative appear increasingly in recent times. A few weeks ago, representatives of China and Brazil discussed the possibility of using national currencies instead of dollar in trade transactions.

In general, however, from the 13th Economic Forum in St. Petersburg experts and analysts are not waiting for anything good. Members who attend the forum will most probably leave without a prescription from anti-crisis, and without hope for the new rules of doing business in Russia. And even the planned concert of the group Duran Duran on Palace Square is threatened to be spoiled by rainy weather.

However, it is clear that innovation comes along with money, or after it. So, it was necessary to take steps that would allow investors to feel comfortable on the Chinese soil. And Chinese took into account that fact – only 30 years of reform China has attracted $ 860 billion in foreign direct investments to its economy. During this same time, 650 000 enterprises with foreign participation were created, which not only eliminated the dependence of a number of industries from imports, but also became the leading suppliers to the world market. As a result, China went to the first position in the field of high-tech engineering products, ensuring 500 per cent increase in exports of manufactured goods from the level of 2002.

Today, the number of researchers in China is approaching to the one of the United States. The number of graduates in information technology each year grows to 200 000 people, which is five times faster than in the West. The big advantage of China is linked with the age structure of scientists – most have not so long ago graduated.

In order to establish a national innovation system, China will have a long and difficult path. In any case, building technology inside the country, China will not abandon the “purchase” innovation. On this occasion, the Middle Kingdom continues to buy. And the case given is relatively easy – crisis, when many are ready to sell, just to survive. It is no coincidence that at the end of April during the meeting of Chinese Premier Wen Jiabao with his Finnish counterpart Matti Vanhanenom a question was raised about the establishment of a Helsinki district of China Innovation Center. And yet the Chinese Prime Minister praised Finland’s credit-worthiness, and expressed his hope that Finland would allow its citizens to buy bonds of Suomi. To this end, Beijing is going to send a purchasing and innovation delegation to Finland. For this purpose Celestial is ready for feats. And Chinese people have achieved their goals more than once before.

Shmatko, who did not go to Brussels, said that the situation was serious – gas «reality show» could happen again. He lamented that the EU is not enough active in this matter. «We have informed the management that, in our opinion, EU countries do not have a proactive position regarding this matter», – emphasized the minister.

In his turn, Vice Premier, Finance Minister Alexei Kudrin, reported on June 1 that the head of the Russian government Vladimir Putin had sent a letter to the International Monetary Fund (IMF), where he drew attention to the importance of financial support to Ukraine so that it does not disrupt deliveries of Russian gas to Europe.

Kudrin added that a similar letter was sent to the EU which, given the criticality of the situation simply must respond. «We believe that the EU should also be concerned to avoid failure. Ukraine is on the line where it is not able to fully provide payments for gas », – Kudrin emphasized.

Meanwhile, Ukraine ceased pumping predetermined volumes of gas into storages and, accordingly, ceased to pay for the lost fuel. The fact that she had almost nothing to pay for gas, Ukrainian Prime Minister Yulia Tymoshenko acknowledged at the meeting with Vladimir Putin, in Kazakhstan, May 22. She asked Russia to provide payment for gas transit for five years in advance, because that was the only way to solve the problem. But – she was refused.

The official representative of «Gazprom» Sergei Kupriyanov indicated that the shortage of fuel complicated Ukraine gas transit to Europe. «We are concerned about this situation and try to convey this concern to our colleagues in Europe. If now, in summer, underground storage facilities in Ukraine are not adequately filled, it will be very difficult for the Ukrainian colleagues to comply with their obligations to transport gas “, – he said.

Surprisingly there is no reaction from the EU yet. In March of this year it signed a treaty with Ukraine behind Russia’s back that it would modernize the Ukrainian gas transmission system. But Brussels is not in a hurry to invest in the salvation of the Ukrainian economy. And also the meeting of the European Commissioner for Energy and the head of the Minernego of Russia foiled. It is clear for everyone: if the gas crisis happens again, the sufferers will be European consumers.

Analysts of JPMorgan Chase & Co. also increased recommendations on the shares of one of the leading manufacturers of LCD-monitors, Nippon Electric Glass Co. to “above market”, and as a result the quotes the company soon grew to 8.2 per cent.

At the end of the session the quotes of some chemical companies also rose because of rumors that deals to merge some members of the sector could increase its profitability. As a result, shares of the company Tosoh Corp., specializing in the production of caustic soda, and those of the chemical concern Mitsubishi Chemicals Holdings Inc. added to the price of 0,96 per cent and 0,9 per cent respectively.

In the sector of electronics manufacturers market leaders became TDK Corp. (+1,36 per cent), Toshiba Corp. (1.36 per cent) and Olympus Corp. (1.89 per cent). Among automakers the following companies’ quotes rose – Honda Motor Co. (+1,95 per cent), Toyota Motor Corp. (+1.3 per cent) and Mazda Motor (+0,39 per cent).

At the same time in the red zone the session was closed for the financial sector, which happened after the decline of quotations of American financial companies on the stock market in the United States with a statement of some of them of their intention to raise funds through additional issue of ordinary shares in order to recover state money received under the program TARP. Against this background, quotes of the largest bank in Japan, Mitsubishi UFJ Financial Group dropped 1.13 per cent, while shares of smaller ones – Mizuho Financial and Sumitomo Mitsui lost 1.26 per cent and 0.27 per cent respectively in value.

As a result of trades on 3 June 2009 Nikkei index rose 37.36 points (0.38 per cent) – up to 9741.67 points. Dollar rate against the Japanese yen decreased by 0.68 yen over the previous trading day, and as a result became 95.62 yen per dollar.

Every year in June, the newspaper The Financial Times publishes top FT 500, which is the rating of the largest capitalized companies in the world. A month before the publication of the rating, it became apparent that despite the crisis and the fall in oil prices, the fight for the championship will be the oil industry: the Chinese governmental PetroChina and American private company Exxon Mobil.

On May 25, the world’s news agencies reported that the capitalization of PetroChina on the Shanghai Stock Exchange rose by three per cent and reached the mark of the 336 billion dollars. At first glance in this mediocre news there was only one thing interesting: namely, the three per cent was the lacking number for the Chinese company in order to become the most expensive company in the world.

The point is that the main competitor of the Chinese company – Exxon Mobil – cost 335.9 billion dollars as a result of trades on Friday, May 22. On May 25, they were not able to beat the record of PetroChina: the tender in the United States on that day did not take place because of the national holiday – the Day of Remembrance.

On May 26, shares of PetroChina in Shanghai went down by 0.08 percent. Thus, the investors of the American company had only to slightly increase the value of Exxon Mobil in order to regain its title of the largest in the world. And so it happened: on May 26, Exxon Mobil shares went up by 1.42 per cent, while the capitalization became 340.65 billion dollars.

Who will be put on the first place of FT 500 is already known, as the classification is drawn up by market capitalization by March 31. If this time no surprises happen and reporting date will not be changed, then ExxonMobil will be the first.

Since the results of bidding for major world markets are published in real time, we have an opportunity to see how the capitalization of the largest companies has changed in the world during the past year. Thus, despite the fall in oil prices, their places among the largest companies retain not only Exxon Mobil and PetroChina, but also another oil and gas corporation – Royal Dutch Shell.

Another candidate for the considerable drop in the ranking became “the bronze prize-winner” of last year – General Electric. During not the whole year the capitalization of company decreased from 370 to 139 billion dollars. So this time, General Electric will almost certainly not be in the first three. True, although the almost all American manufacturer in the world (from light bulbs to aircraft engines) should not worry: in 2009 it headed one of the most prestigious rankings – Global 2000, which is compiled on the basis of market capitalization, revenues, assets and profits.

The Congressional Budget Office had originally projected the $700 billion Troubled Asset Relief Program would cost taxpayers $189 billion.

The additional cost, which applies to TARP spending for fiscal years 2009 and 2010, was included in the CBO’s March projection of a $1.8 trillion deficit for fiscal 2009, which ends September 30.

The TARP cost projection was raised due to changes in financial market conditions, new transactions and a shift in expected timing of payments, the CBO said.

The Treasury Department announced plans to use some of the money to help avoid home foreclosures and made new deals with Bank of America and American International Group. Those programs involved higher subsidy rates than previously estimated, the report said.

Congress passed the Wall Street bailout program in October with the goal of stabilizing banks and reassuring jittery markets.

The price of US light crude fell by $1.95, or 3.6%, to $52.39 a barrel. London Brent oil fell $1.57 to $51.89.

On Thursday, prices hit their highest level of the year as economic optimism led to hope of increased demand.

But bad economic data from Japan and the US sent Wall Street lower and helped put an end to the recent rally.

‘Depressing data’

Recent price hikes have led some analysts to call the start of a bull run in oil prices.

But “depressing economic data have put a halt to the recent rally”, said Christopher Bellew at Bache Commodities.

“People are getting way ahead of the game,” added Michael Lynch at Strategic Energy & Economic Research.

Data showed that retail sales in Japan saw their biggest fall in seven years in February, while growth in US consumer spending in the month slowed compared with January.

South Korea and Vietnam also reported weak economic data, providing more evidence that the global slowdown is hitting Asia’s economies.