REORDERING OF WORLD ECONOMY COULD BE ON THE WAY - World stock markets have seen massive falls this week. These losses were accelerated yesterday, after comments following a meeting between the IMF and the World Bank. The head of the IMF, Christine Lagarde, said that the economic situation was entering a "dangerous place". Robert Zoellick, the World Bank President, said separately that he thought the world was in a "danger zone". It is not just Europe causing the trouble - there are now fears about China as well, and how a slowdown there would have knock-on effects on the rest of the world.
Justin Urquhart-Stewart, of Seven Investment Management in London, says the current events on world markets are ''astonishing'' with a key change in the economic standings in the world. He says there is a lack of political credibility and says that the steep losses on the world markets are a call to the politicians to take action in key areas which need to be urgently adjusted - these areas include the euro zone debt crisis and the US deficit.
The analyst says the warnings from the World Bank and the IMF should be taken very seriously and adds that the banking crisis that broke out in 2008 has never really been fully resolved. He says the banks' debts need to be shored up and managed properly. He also says the statement from the BRIC countries - Brazil, India, Russia and China - which suggested that they could lend money to the IMF was ''fascinating''. He says the strong nations which established the World Bank and IMF after World War 2 are now the indebted nations and the developing countries have all the money. He says the BRIC move could be the first phase of the reordering of the global economic structure, but says that the reordering will take several years.
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MORNING BRIEFS - DCC says it will buying some of Total's oil distribution assets in Britain, the Isle of Man and the Channel Islands.
*** On the currency markets the euro has recovered from an eight month low, and is trading at $1.3479 cents and 87.64 pence sterling.
