A wave of government bailouts around the world and a sharp deterioration in existing infrastructure could lead to as much as $35 trillion in public works spending over the next 20 years, according to a new study by CIBC World Markets.

The study, released last week, says that many of the countries that balanced their budgets over the past 10 years did so by skimping on the construction costs for new public assets and the maintenance of existing buildings and roads, CBC reported.

“The global economy is running a major infrastructure deficit as the cost of decades of under-investment is now surfacing,” said Benjamin Tal, the analyst who authored the study.

Canada, for example, has eliminated an enormous budget deficit left over from the 1980s, but built up an infrastructure deficit of $120 billion in the process.

Governments have come to realize that …

China stock market and Baltic Dry Index are in current disagreement.

China manufactures things and ships them around the world.  Much of that transport is done by sea.  The Baltic Dry Index is an assessment of the price of moving major raw materials by sea.

As global trade increases, the Baltic Dry Index tends to increase.  As global trade decreases, the index tends to decrease. The number of cargo ships can and does fluctuate to moderate swings in the index, but not rapidly.  That makes the Baltic Dry Index a useful tool to view global trade (and to a great extent the Chinese export economy) in a single indicator.

The following Baltic Dry Index chart shows the index collapsing in the last 6 months.  However, FXI (the China ETF) did not fall nearly as much, resulting in the rising relative performance shown in the middle panel of the chart.  Both FXI and the

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China’s massive stimulus package could be just the trigger commodities needed to resume a bull run, says Frank Hemsley. He says more G20 nations will likely follow China’s lead after the coming global summit. And when all these projects get underway in the next year, demand for metals and grains will recover strongly. This from Fleet Street Newsletter: Since this whole credit crunch began, investors pretty much everywhere have been hit. It doesn’t matter what sector a company is in, its share price is less now than what it was in July. But there are a couple of sectors that have really outperformed the rest of the market. And I mean “outperformed to the downside”. In other words, they’ve fallen further and faster than other sectors.

The first is no surprise. It’s the banks and other financials. It’s no surprise, because

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China announced on Sunday that is was going to put a stimulus package worth approximately $585 billion dollars into effect over the next two years.

A Marketwatch article entitled “China unveils stimulus package as growth slows,” describes the use of the funds as mostly infrastructure-related:

“Funds from the stimulus package will be spent in ten major areas that include low-income housing, rural infrastructure, water, electricity, transportation and improvements in the environment.”

World markets rallied sharply with the news, posting 3-5% throughout Asia. The US soared in early Monday trading as well – gaining 3-4% in just a few hours.

According to the Emerginvest Asian Heat Map, almost the entire continent had solid gains. China, India, and Russia all soared 5-7%.

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Monday November 10, 2008 Navivest

Troubled by the downturn in the global economy and a slowing of its own economy, from an 11.4% annual growth rate last year to an estimated 10.5% this year, China on Sunday, announced an economic stimulus plan that will have the country spend $586 billion over two years.

The government which just last year was still talking about trying to slow down bank lending to certain sectors of the economy such as real estate so as to avoid over heating, is now planning on removing the credit ceilings of commercial banks so as to stimulate more lending.

The government is still somewhat cautious about over lending, and at the meeting where the removal of the credit ceilings was determined, it was decided that credit expansion must be “rational” and “target spheres that would promote and consolidate the expansion of consumer credit.”

China is planning on spending the

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