At last, it's the real economy
The credit crunch is pretty real, of course, if you're trying to get a mortgage or a loan. But stock markets seem to have called the bottom of the credit crunch. Now they're waiting to see if big companies are still making money and, more crucially, what they say about prospects.
This week is the big first quarter earnings week in the US, with a range of big companies including Boeing, Kimberly-Clark, McDonald's and Merck all reporting.
The tech sector will be the most keenly-observed; Google lifted the markets last week with strong numbers and this week we have Yahoo! on Tuesday, Apple on Wednesday and Microsoft on Thursday.
It's certainly D-Day for Yahoo!. Unless it produces more rabbits out of the hat (like its ad deal with Google), it will surely be forced to surrender to Microsoft's $44bn bid.
Microsoft is expected to provide further strong earnings as it's profiting massively in export markets from the weak dollar.
So it can easily afford to sweeten the bid for Yahoo!. That's if CEO Steve Ballmer is feeling merciful.
Bank of England to bail out RBS
Later today, the Bank of England will announce that it's going to swap government bonds for £50bn of mortgages and credit card loans sitting uncomfortably on the big banks' balance sheets, with the aim of freeing up the credit markets.
Among other things, this might just save the job of Royal Bank of Scotland CEO Fred Goodwin.
Fred is in the spotlight because RBS is going to announce on Tuesday that it needs to raise around £10bn (the UK's biggest rights issue) from shareholders to (take your choice) repair its balance sheet/raise its equity to loans ratio in line with new Bank guidelines.
It will also write off a few more billions against mortgage-backed investments.
If RBS was acting in isolation, Fred might pay the penalty for his decision to spend £56bn (in alliance with Santander and Fortis) on Dutch bank ABN Amro.
But now he can say that he's actually doing what the Bank wants, and setting a good example to his peers.
This will be taken with a lorry load of salt by shareholders, who know that he overpaid for ABN just as the credit crunch was getting underway.
But they'll grin and bear it and hope the newly fortified RBS can wring big profits out of ABN, with Fred using his "shredding" abilities (ie skill at cost-cutting) to bring home the bacon.
As for the Bank of England, it's doing now (under fierce political pressure) what it declined to do last summer when the Northern Rock crisis broke.
A result for Gordon Brown and Alistair Darling. If it works, of course.
Producers declare war on speculators
Saudi Arabia, the world's biggest oil producer, made it clear in no uncertain terms over the weekend that it had no plans to increase production.
This is despite oil trading at $114 a barrel (it's more than doubled in a year) and pleas for more from the US.
A similar, and even more serious crisis is bubbling up in food commodities, with staples like rice and wheat soaring in price.
This is even being felt in the UK, so you can see the devastation it's causing in Asia and Africa.
The producers are blaming hedge funds for driving up prices as they switch money from equities to what they see as a one-way bet (a richer world means more competition for just about every commodity).
The price of most commodities is determined by the cost of futures (ie, bets on where the price will go). So a hedge fund can affect the price of millions of tons of rice or barrels of oil by agreeing to buy a relatively small amount.
With the producers playing hardball, the hedgies will be the next group targeted by the legislators (and a proper nightmare that will be).
Stephen Foster is a former news editor of ±±¾©Èü³µpk10, former editor of Marketing Week and Evening Standard ad columnist. He is a partner in Editorial Partnership and writes the blog and Politics of the Media for Brand Republic.
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