1) Oil is up sharply despite an increase in inventories. I think the short term movement is down for reasons articulated recently. But, there is a mention in the WSJ today that 78% of China's electricity is coal fired and they are now importing coal. Not likely to ease the Chinese seemingly insatiable demand for oil.
2) No way are foreign economies decoupled from the fortunes of the U.S. The U.S. consumer spent $9.5 trillion last year, six times more than the consumers of China and India combined.. The world exports to the U.S., and if we falter, so do they. 65% of Japans GDP is export and 23% of Mexicos GDP is derived from exports to the U.S. alone (Wall Street Journal.) Emerging economies,however, which are 30% of world GDP and 85% of the world's population, are better equipped today to weather a downturn. Brazil, for example, has a $185 billion foreign reserve, Russia $160 billion, and emerging economies in total have $4.1 trillion. Not so long ago many of these countries were faced with bankruptcy.
In fact, it costs $155,000 to insure $10,000,000 of Latvian debt via a credit default swap (see several prior notes on swaps), and $164,000 to insure the same amount of Merrill Lynch debt. Ouch!!! Latvia is (in one sense) a better credit than Merrill !