No wonder central banks around the world this week slashed rates by record or near record levels. We hacked by 1%, Sweden by a huge 1.75%, the European Central Bank by 0.75%, New Zealand by 1.5%, Denmark by 0.75% and Thailand by 1%. The Bank of England’s new rate of 2% is the country’s lowest since 1951.

Except for Thailand and Australia, the rest of those economies are all in recession, which overnight seemed to deepen, for the second time this week. Even in Australia, it’s now widely accepted that not even the huge improvement in oil trade account (thanks to those high iron ore and coal prices, plus some benefits from the 30% drop in the value of the Aussie dollar), will keep the economy from a small contraction in growth.

That’s despite a growing surge in new home loan applications for bank home loans that will start showing up next month and in February. At least that part of the $10.4 billion stimulus package is working. Not so in the UK, US, Europe and Japan where retail sales, factory orders, production and business investment are falling: Japan saw a 13% fall in business investment in the September quarter with car sales and exports down, more bad news can be expected.

Thousands of job cuts were announced in the US overnight (15,000 from three companies including AT&T). In Europe 5,300 were sacked from Swiss bank Credit Suisse, 11% of its worldwide staff. Around 1,000 jobs will be going at the London operations of Nomura of Japan, including the Lehman Brothers business it bought. Contrast those announced figures with the continuing secrecy at Macquarie Bank which won’t put a figure on this week’s job shedding. Some estimates are 10%, or nearly 1400 jobs worldwide.

It might be the unremittingly flow of poor business and economic news, but there’s a feeling that the plunge in the global and various domestic economies is accelerating:

  • Honda, the Japanese car giant, says it will sell its Formula 1 racing team and if it can’t it will be closed. The company has warned it may not make a profit in the six months to March next year: the saving over $A300 million a year. There’s talk a Middle eastern investor might buy in, but Dubai and Kuwait are being hurt by tumbling oil prices, out of control spending and a slumping property sector.
  • The French Government revealed a $A51 billion stimulus package, with several billion going to car groups Renault and Peugeot. The German parliament passed a $A63 billion package which seems on the light side given the much bigger size of the German economy than France’s.
  • Sweden’s rate cut came as one of its big businesses, the Scania truck and bus maker, revealed plans to shut its factories for up to a month over Christmas-New Year. Volvo and Saab are being damaged by the clouded futures of their owners, Ford and General Motors. Fifty per cent of Sweden’s economy depends on exports and most of that goes to the eurozone.
  • Mobile phone giant Nokia cut its sales forecasts for 2008 and 2009 for the second time in a month as the collapse in consumer demand around the world continues. It says it now expects mobile phone the market to decline by 5% or more next year — the first real decline in a market that has experienced exceptional growth for over 10 years.
  • Philips, the big electronics and consumer products group warned that the global economy was declining much “faster and deeper” than expected, and abandoned profit targets for 2010 and told the market it now expects a 4th quarter loss. It has already cut 1600 jobs, more will follow.
  • AT&T Inc, DuPont and Viacom revealed plans to chop more than 15,000 jobs as consumer spending and ad revenues fall and the recession cuts demand. That’s the Telco sector down; heavy industry in chemicals at DuPont sinking and the media at Viacom, which is also under pressure as Sumner Redstone, the major shareholder, is being pressed to raise cash by his banks.
  • Another sign of the way the slump is not leaving any part of the economy untouched is the damage done to the Canadian BlackBerry inventor, Research in Motion. The BlackBerry is the business toy of the cheap credit, easy money era. This week the company produced a surprise profit warning and the shares fell. And shares in Palm, a forerunner to RIM from the old tech boom days, plunged 36% this week after it said sales of its products (it produced some of the personal digital assistant type toys) had fallen 45% in the three months to November 28.
  • Two big oil and metals processors and producer, Nippon Oil and Nippon Mining, are planning a huge $US130 billion merger.

Meanwhile, sales at America’s major retail chains fell 2.7% last month on a same store basis, only Wal-Mart managed a significant bounce, with its sales up a strong 3.4%. The post-Thanksgiving sales weekend last weekend now looks like it bombed with sales up perhaps 0.8% at best.

The full retail sales figures are out next week, no one is confident. Big chains like JC Penny, Nordstrom, Gap and Limited Brands (which owns the Victoria’s Secret lingerie brand) saw sales fall 10%-12% on a same store basis.

Tonight we get November’s jobless figures from the US and some forecasters are now seeing 400,00 to 500,000 jobs going in the month and the unemployment rate hitting 7%.

That was after the first jobless claims figures remained above the half a million mark for the fifth week in a row last week in America. Even though there was a small dip in the number of first claim numbers, the number of people continuing to collect unemployment insurance for a week or longer rose to a 26-year high. The figure increased by 89,000 to 4.09 million for the week ended November 22. The last time the figure was this high was December 1982, when claims reached 4.38 million.