President Barack Obama is a busy man. What with having to persuade the UN Security Council to pass the latest and toothless sanctions on Iran, excoriating oil companies for the Gulf oil spill, pushing a financial reform bill through Congress, and attacking the state of Arizona for enacting a law to stem the tide of illegal immigrants, something his administration refuses to do, you would think he has no time to take on the troubles of euroland.

But he found time to call Spain's president, Jose Luis Rodriguez Zapatero, to urge him to get his financial house in order. There is no indication Zapatero told the president to do the same - one doesn't bite the hand of someone about to feed him. Spain's president and his EU colleagues needed at least two favours from the American leader.

The first was for Obama to resist congressional demands that he prevent the International Monetary Fund from contributing US dollars to the EU bailout of Greece and other members of Club Med: a measure moving in that direction passed the Senate on a 94-0 vote. Obama has obliged - so far.

The second favour was to get Obama to go along with the Federal Reserve Board's decision to make dollars available to the European Central Bank for use by European banks. He did. The eurozone has one more request to make, but not just yet: that America intervene in currency markets to stabilise the euro.

Obama acquiesced because he fears the trouble on euroland's periphery will nip America's recovery in the bud or, in the now-common usage, that the contagion will spread across the Atlantic. Indeed, investors here are already showing signs of contracting the disease, to which no American firm or bank is thought to be immune. Roberto Pedone of Thestreet.com points out that even Apple has a 27.5% exposure to the eurozone. It may seem far-fetched to think that a few tiny eurozone countries can bring down the mighty American economy, but Obama has reason to worry.

David Fuller's view Europe could face a deflationary environment for several years as it struggles to rein in its runaway deficits. This fiscal consolidation is essential if countries within the European Union are to become more stable economically and if the euro to survive in its current format.

The USA is enjoying 'safe haven' status, at the moment, but it too has a runaway budget deficit and the stronger dollar is not a recipe for the export-led economic recovery that the Obama administration seeks.

In which direction should investors turn?

Towards emerging (progressing) Asia, I suggest, and this view will come as no surprise to veteran subscribers.

Presently, global stock markets are still in a corrective phase which has done considerably more technical damage to date than the previous correction which ended in early February. At Fullermoney, we cannot say when this setback will end or at what levels for individual indices. It could be relatively soon as short-term oversold conditions are developing, or it could persist for several months in what I suspect would eventually resemble a lengthy ranging environment for many stock markets. Under the latter conditions there would be some further retracement of last year's gains before support building commenced.

I expect developing Asia to lead the next recovery, possibly in tandem with the resources markets once again. Asia, ex-Japan, has the surpluses, savings and growth momentum. Recently, the region has seen some monetary tightening to curb inflationary pressures. That too is a headwind for stock markets but these measures will be less necessary as GDP growth slows in Europe and possibly the USA.

Relative strength from Asia's stock markets on the next upswing will require a considerably stronger performance by China, which we have not seen since last July. However, China's efforts to rein in its property sector are beginning to meet with success. The PRC will not want to slow GDP growth too much as that would cause higher unemployment.

The Shanghai Composite Index (weekly & daily) led at the 2007 top, led the recovery from 2008's lows and was first to run out of momentum last July. Its decline appears overextended and today's upward dynamic has broken the steep short-term downtrend. Let's keep an eye on China indices for signs of support building. Meanwhile, here are today's comparative PERs (historic) and Yields as reported by Bloomberg: Hang Seng China Enterprises Index (H-Shares) (HSCEI) 13.83 and 2.48%, Hang Seng Index (HSI) 14.15 and 3.33%, Standard & Poors 500 Index (SPX) 15.50 and 2%