Europe
Europe continues to dominate world news as well as the markets. On the 9th of December, the European Union assured us that the decisions taken at their summit, would ensure that the debt crisis would stop the insecurity over the Euro. The insecurity however, continues and the effect on the global markets continues.
All the European Union states (other than Britain) agreed at the summit in Brussels, to give the EU greater control over their national budgets.
Investors were disappointed however, as they had expected a commitment by the European Central bank (ECB) to buy more government bonds, hopes which were dashed by ECB president Mario Draghi.
The ECB has for some time intervened in equity markets buying government bonds from countries like Italy and Spain at favorable rates to these countries. Investors have been hesitant to buy these bonds and have been demanding high interest rates, which has meant that Italy and Spain had to pay such high interest rats that it became difficult for them to pay off their debts.
They still however run very close to the wind, with 10 year Italian bonds running at 6.5% and the affordability barrier assumed to be around the 7% mark.
The ECB will continue to by bonds in these countries at a rate of about 20 billion euro's per week.
The European Stability Mechanism (ESM), The EU's permanent rescue fund, has been increased to 500 million Euro's, which is still a drop in the ocean compared to the 1.9 trillion Euro's Italian debt, not including the other debt ridden European countries.
The EU member states will also have to fork out another 200 billion Euro's to the International Monetary Fund, to enable The IMF to be able to render assistance to embattled Euro zone countries.
Stricter fiscal controls were also agreed on, which limited the amount of debt a country can hold and they could subject themselves to large fines. If a country, cannot afford to meet its financial responsibilities, and takes further loans, how is a fine helping the issue?
Ernst & Young is predicting a "bleak" winter for Europe, with economic growth of just 0.1% predicted for the whole of 2012. Greece, Europe's most indebted country has announced that the countries economic contraction will be more that the 5.5% predicted. This follows the economic contraction of 4.5% in 2010.
Britain
Deputy Prime Minister, Nick Clegg of the Liberal Democrats, broke ranks and criticised his coalition partner Conservative Prime Minister David Cameron over the decision to withdraw, saying that Britain would become marginalised and isolated within the European Union.
China
In the face of the "grim" outlook for the global economy for 2012, China has pledged to guarantee growth with a series of commitments aimed at ensuring economic stability.
Beijing has promised to keep monetary policy prudent, fiscal policy pro-active and consumer prices stable. With the recession in Europe, the very slow economic recovery in the USA, analysts are expecting growth in China to slip below 9% for the first time in years.
Africa
Plamen Monovski, chief investment officer of Renaissance Asset Managers has advised investors to forget China and to invest their money in sub-Saharan Africa, if the wish to benefit from growth in the emerging market economies.
Africa, once shunned by investors, is beginning to attract interest from the world's biggest banks and corporates. The World Bank released figures in September announcing that 7 of the 10 fastest growing economies in the world were in Africa.
The appeal of Africa is in the rise of a consumer society. Africa has the population and consumer spend as big as that of India. South Africa is well placed to drive this expansion in Africa with companies such as Walmart and MTN already well on their way with expansion plans.
The International Monetary Fund (IMF) announce in October, that it was positive about the outlook for Africa, because of the growth in areas such as mining.
The region is expected to post nearly 6% growth for 2012, up from just above 5% growth this year.
COP17
A damper was placed on the process, with Canada announcing that it would withdraw from the Kyoto protocol on climate change.
Prime Minister, Stephen Harper, which has close ties to the energy sector, said that Canada would be subject to penalties of $13.6 billion under the terms of the treaty for not cutting the required amount of emissions by 2012. Sounds a bit like withdrawing from an examination because you have not studied to me.
Person of the Year
Time magazine announced the winner of their very popular Person of the Year competition and the winner was "The Protester"?
He walked straight to the provincial government building to complain and when he got no response, dowsed himself with paint thinner and set himself alight.
This act incited protests that would topple governments and dictators and start a global wave of dissent.
A ridiculously fraudulent election in 2010 started protests in Egypt which led to the downfall of the government.
In the US, widespread financial recklessness and a gigantic public debt, along with ongoing revelations of double dealing by banks, and the refusal of Congress to even consider ever slightly higher taxes on the very highest taxes sparked the Occupy movement.
This protest has now spread from the cities in the Middle East to Madrid, Athens and London, Tel Aviv and numerous cities in the US including New York. Not excluded were cities across Russia, Mexico, India and Chile.
The protests resound across the world with the only difference being in one country you may risk being pepper gassed while in another it may cost you your life
