With monetary authorities around the world preparing for their exit, there are fears in some circles that a new Armageddon is in sight. Volatility could shoot up, it is argued, as investors try to figure out the impact of a synchronous global tightening on their respective asset classes—let alone the difference between, say, the effective fed funds rate and the interest on excess reserves!

After the financial and banking crisis of 2007/2008, the year of 2010 will certainly be dominated by the following global macroeconomic themes:

a) the growing importance in the world economy of Brazil, Russia, India and China – the so-called BRIC countries – with excellent perspectives, as far as their impact on world economic growth is concerned;

b) the dangerous fiscal and/or balance-of-payments situation of Portugal, Ireland, Italy, Greece and Spain – the so-called PIIGS countries – bringing serious risks for the world economy, including a renewed credit crunch;

c) the contradictory economic policies of the G-5 “big” economies ( US, UK, Germany, Japan and France).

The elections in Iraq on March 7, 2010, are likely to serve as an important indicator of the prospects for a resolution of the long-running dispute over the administration of the ethnically mixed and resource-rich province of Kirkuk in the north of the country.

Finally, some good news. We recently surveyed CFOs of 620 companies in the U.S. and nearly 800 in Europe and Asia and found some encouraging signs. U.S. finance chiefs are finally loosening the purse strings: capital spending is expected to rise 9 percent, and tech spending, R&D, and advertising should all increase by about 4 percent. These are the largest expected increases in several years and indicate that the business sector has bottomed out and is improving. As further evidence, public U.S. companies expect earnings to increase by 14 percent.

With Yemen’s oil revenues plunging, the government’s push into the gas market seemed like an economic saving grace for a state wracked by poverty and terrorism, but analysts warn more thought should be given to carving out the country's post-petroleum era.

Recent revelations that Greece used derivatives to disguise its true level of borrowing have surprised markets. The reaction is reminiscent of Captain Renault (played by Claude Rains) in Casablanca: "I am shocked, shocked to find that gambling is going on in here."

Global manufacturing activity continued to expand in February, albeit at a slightly weaker pace than in January. At 55.2, down slightly from 56.1 in January, the JPMorgan Global Manufacturing PMI posted its second highest reading in almost four years. The average reading so far in Q1 2010 (55.7) is above that for Q4 of last year (54.2). The headline Manufacturing PMI has now remained above the no-change mark of 50.0 for eight successive months.

Crude oil broke through the $80 a barrel ceiling repeatedly during the week but kept falling back as hedge funds placed big bets on the Euro’s decline.

The fiscal drama in Greece held global markets hostage much of the week as worries about the impact of the Greek crisis on the euro outweighed comments from Federal Reserve chairman Ben Bernanke about continued low interest rates in the U.S., pushing the euro down against the dollar and damping crude prices.

This is expansionary monetary policy...

Today, North America saw the Q4 2009 GDP figures for Malaysia and Germany. In my view, the two releases accurately depict the developed vs. developing picture of economic recoveries: one is causing the other.