I guess that when the United States sneezes, the world catches a cold. Consumer sentiment was announced to be circling the drain in the United States and the world economy dropped for the first time in four months.

The Bloomberg Professional Global Confidence Index fell to 39.13 this month – from 43.57 last month. Your benchmark: anything below 50 means that there are more pessimists than optimists. In the United States, index fell from 36.7 to 29.5, suggesting that we're more pessimistic than the rest of the world.

Some trends are obvious enough and visible to all investors. Others are more subtle, but just as potent, and these often slip "under the radar."

The World Bank's recent "downgrade" -- the magnifying of its 2009 forecast for the global recession to a 2.9% contraction from the previously released 1.7% pull-back grabbed headlines, and it sparked a whole new round of selling on Wall Street.

Further, sentiment appears to be building that the much-anticipated Q3/Q4 global economic recovery may not arrive on time.

Oil moved up above $70 early in the session, but was unable to hold that momentum through the day. After its strong start to the day, prices dropped $2.19 to $67.83.

A major reason for the drop in prices can be attributed to the World Bank. The World Bank slashed its forecast for this year's global economic growth, and reported that the current recession is deepening.

Just look at these numbers. The World Bank expects private capital flows to developing countries to fall almost three quarters to $363 billion dollars from $1,200 billion in 2007. It logically follows that if developing countries do have the capital they need, they cannot stimulate their own economies.

Some countries like Russia and China can draw on their foreign exchange reserves. Countries which do not have reserves will have to rely on private capital. The world Bank estimates that developing countries will be short up to $635 billion dollars.

MAJOR PAPERS:

• The Wall Street Journal reported that President Bush picked former advisor Robert Zoellick to take over the World Bank from Paul Wolfowitz; Mr. Zoellick, now a vice chairman at Goldman Sachs Group Inc (NYSE: GS), was a trade representative and deputy secretary of state.
• The Institutional Shareholder Service has advised shareholders of medical device maker Biomet Inc (NASDAQ: BMET) to turn down a $10.9B private equity deal for the company, according to the Wall Street Journal.
• The Financial Times reported that the IntercontinentalExchange Inc (NYSE: ICE) has signed an exclusive deal with the CBOT Holdings Inc (NYSE: BOT), a move that could advance ICE's unsolicited bid for the Chicago Board of Trade.
• Rather than focus on potential take-out targets, Barron's Online's "Weekday Trader" said that the smart bet for investors is to focus on companies with rising profits, cash flows and dividends, such as Loews Corp-Carolina Group (NYSE: CG) and Imperial Tobacco Group plc (NYSE: ITY), which boast free cash and dividends.

OTHER PAPERS:

• Best Buy Co Inc (NYSE: BBY) is in talks with Vivek for a "foray" into India, the Economic Times reported.
  
• The Washington Post reported that Nigeria filed criminal charges against Pfizer Inc (NYSE: PFE) over child deaths.

It's looking like World Bank president Paul Wolfowitz will use a Nixonian formulation for his departure.

Richard Nixon decided soon after his re-election in 1972, to leave Vietnam after years of failure there -- using the formulation "Peace with Honor." Nixon's declaration came just a few months prior to the emergence of the Watergate affair which led him to resign rather than face impeachment. Nixon couldn't just get out of Vietnam and admit it was a failure -- he had to put some lipstick on the pig.

Similarly, according to The Times Online, Paul Wolfowitz is hinting that he'll quit after characterizing the charges against him as a smear campaign. Wolfowitz can't resign and admit that the special arrangements he made for his "girlfriend" were an example of the very corruption he declared himself against when he took over the World Bank job.

So he'll rail against the unfairness of it all and then resign. Whatever. Just get him out of there. And soon.

Peter Cohan is President of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter.

World Bank head Paul Wolfowitz -- (enjoy this The Office parody from YouTube) -- has gotten the world to spill many different kinds of fluids, including:

• The blood of thousands of people -- including U.S. soldiers and Iraqi civilians -- who died because Wolfowitz thought it would be great to start a democracy in Iraq;
• The hundreds of billions of dollars that the U.S. has spent in the wake of Wolfowitz's false promise that Iraqi oil could cover the war costs; and
• The tons of ink that has been spilled arguing in print over Wolfowitz's tenure in government -- both at the Defense Department and now at the World Bank.

Now there's the matter of his girlfriend Shaha Riza, formerly of the World Bank, for whom the New York Times reports that Wolfowitz arranged a job at the State Department paying $193,590 -- more than the Secretary of State.

The bank's 7,000 employee staff association wants Wolfowitz to resign, saying his actions have tarnished the bank's reputation. But the U.S. is the bank's largest shareholder, and according to White House spokeswoman Dana Perino, its president "has confidence in Paul Wolfowitz.''

I think Wolfowitz has spilled enough precious fluids for one lifetime. With government "servants" like him, who needs enemies?

Peter Cohan is President of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter.