Hot spots

Former European Central Bank Vice President Lucas Papademos was named Greece's new prime minister, the socialist party announced Thursday.

This was one of several stunning headlines Thursday morning that painted the picture of a world economy that is going through enormous transitions -- changes that will test investors and politicians for years to come.

In the short term, the choice of Papademos is a signal that the European troika -- the European Commission, the European Central Bank and the International Monetary Fund -- can rely on the basic structure for the rescue of Greece, and, by extension, Ireland and Portugal.

Those rescues, however misguided the rescue for Greece appears, look to remain intact. Papademos, along with Greek opposition leader Antonis Samaras, have, according to reports, agreed to go along with the international bailout plan as designated by a letter they are expected to sign, pledging their support of the austerity measures Greece has agreed to implement.

The next headline that rears up says Italian bonds yields on Thursday morning dropped to less than 7 percent, giving investors a markedly better outlook on the day.

In an auction of one-year securities Thursday, Italy raised $6.8 billion, The New York Times reported. Yields on those bonds were at 6.09 percent, a huge jump from the 3.57 percent yield a similar auction produced in early October.

That doesn't mean much in the greater scheme of things: A sight reprieve, as the bottom line has not changed.

To sum that up: "Growth has stalled in Europe, and there is a risk of a new recession," said Olli Rehn, the European economic and monetary affairs commissioner.

"No real improvement is forecast in the unemployment situation in the European Union as a whole," he said.

More and more economists are placing their bets against the likelihood the troika will do more than just sniff and snort when it comes to helping Italy, which has the eighth-largest economy in the world and the third-largest in Europe.

Even if the European Central Bank has the firepower to purchase enough bonds to bring Italy's debt down to a manageable level, the political willpower is not there. German Chancellor Angela Merkel said recently the $1.4 trillion rescue plan already in motion would have difficulty raising the funds needed.

Back to Rehn's explanation: Growth has stalled. Everybody is pinched.

Lastly, a bit lower on the page, the headline reads imports in China rose sharply in October while export growth slowed.

That could be a trend in its infancy.

If the economies of Europe falter much farther, that cripples one of China's primary export markets. The U.S. economy, at the same time, can hardly provide China with the level of support that it has in the past.

China is flush with cash, but China is traditionally thrifty -- not luxury-minded. If export growth slows, the gains in imports may turn around, defining China's strategy of waiting out the crisis on the sidelines.

In international markets the Nikkei 225 index in Japan dropped 2.9 percent while the Shanghai composite index in China lost 1.8 percent. The Hang Seng index in Hong Kong tumbled 5.2 percent while the Sensex in India slid 1.1 percent.

In Australia, the S&P/ASX 200 gave up 2.3 percent.

In midday trading in Europe, stock rose. The FTSE 100 index in Britain added 0.3 percent while the DAX 30 in Germany added 1.7 percent. The CAC 40 in France added 0.9 percent while the Stoxx Europe 600 gained 0.7 percent.