Where’s the sunshine?
	International Perspective – June 17, 2002
	Anne D. Picker, International Economist, Econoday

Last Weeks Highlights

Equities investors continue to fret about a host of issues. The lack of a specific date for the return of corporate profitability probably tops the list. But following closely are new terrorist worries; when will the United States return to a faster-paced-recovery worries; will the consumer continue to spend worries; corporate governance worries — and the list goes on. With little really positive news to hold onto, investors worldwide sold stocks. That is except in South Korea where the Kospi once again defied gravity and rose on the week. All other indexes followed here sank like lead balloons. While there are a host of worries, few investors see the positives that exist. For example, investors have turned a blind eye to the steady stream of modest improvements in U.S. indicators. No, the economy is not rebounding in 90’s style. Rather it is having an old fashioned recovery, putting one step in front of the other. For the go-go kids plain vanilla just doesn’t work. And they would be hard pressed to find such positives in either Europe or Japan! No need to recite the size of last week’s index declines, that information is readily apparent below.

The Bank of Japan kept monetary policy unchanged, leaving interest rates near zero as it continues its efforts to end almost four years of falling prices and help the economy emerge from recession. The Bank of Japan pared rates to close to zero 15 months ago and has made trillions of yen available to banks in an attempt to stem a five-year drop in lending. Finance Minister Masajuro Shiokawa told his Group-of-Seven colleagues that Japan is doing all it can to lift the economy and won't repeat the mistakes of two years ago, when a decision to raise rates was blamed for cutting short a nascent recovery. The G-7 (United States, Canada, Britain, Japan, Germany, France and Italy) met in Halifax, Nova Scotia on Friday and Saturday.