Showing posts with label recession. Show all posts
Showing posts with label recession. Show all posts
Dubai money woes augur a new phase in the economic crisis?
As if to remind the world of the fragile economy, Dubai, the Middle East country with an ambitious agenda to grow financially was spooked by its inability to meet debt obligations.
Dubai’s debt at $80 billion (£48 billion) is enough to worry the market in spite of assurances given to investors by several banks. Dubai World, the state-owned corporation asked a halt on its interest payments, a moratorium of 6 months, because it cannot meet its payments. Affected by the recession, the millionaire’s paradise has suffered a slump in real estate after its extravagant spending on fancy skyscrapers.
“Fears of a dangerous new phase in the economic crisis swept around the globe yesterday as traders responded to the shock announcement that a debt-laden Dubai state corporation was unable to meet its interest bill.
Shares plunged, weak currencies were battered and more than £14 billion was wiped from the value of British banks on fears that they would be left nursing new losses.”---TimesOnline (11/26/09, Hosking, P; Robertson, D.)
The desert kingdom's money problems mirror the economic meltdown still pestering the United States and the rest of the world. Optimistic investors trumpet the tanking of the economy is over, but a double dip recession in 2010 is a real possibility in the interconnected business world.
There is high uncertainty in the market. In spite of instruments available (i.e. Dubai help from the United Arab Emirates,) confidence in the economy is low, leading many to speculate on how many more vulnerable countries will be mired in the crisis. As much as the lesson USA now faces, no country in the planet can rationally buy its way to properity. By borrowing or printing paper money and spending beyond one's capacity people will end up poor in the long haul. (Photo Credit; MailOnline) =0=
==============================================================
Dr. Doom thinks the worse is yet to come
In an article written for the Daily News, Nouriel Roubini, better known as Dr. Doom predicted that unemployment would be worse next year. From the official jobless rate of 10.2% the NYU economics professor who foresaw the economic meltdown spoke grimly of greater loss of work ---probably now hovering at 17.5% if those who stopped looking for jobs or remained underemployed were included.
“The long-term picture for workers and families is even worse than current job loss numbers alone would suggest. Now as a way of sharing the pain, many firms are telling their workers to cut hours, take furloughs and accept lower wages. Specifically, that fall in hours worked is equivalent to another 3 million full time jobs lost on top of the 7.5 million jobs formally lost.
This is very bad news but we must face facts. Many of the lost jobs are gone forever, including construction jobs, finance jobs and manufacturing jobs. Recent studies suggest that a quarter of U.S. jobs are fully out-sourceable over time to other countries.”----Daily News (11/15/09, Roubini, N.)
Roubini suggested that in the coming year the unemployment rate will hover high at about 11%, but it will be far worse in the following two years. Because of a weak labor market, he says the economic growth and recovery will be slow.
The budget deficits will rise accompanied by slowing in the real estate market. Delinquencies on mortgage payments, larger budget deficits and a fall of real estate prices are expected. If these scenarios occur, banks and lending institutions will bear much of the pain.
Roubini’s prescription is for the government to embark on another stimulus---creation of jobs by investing on infrastructure. Giving away unemployment checks is not enough. Those without work must find a way to have one and be productive.
Judging from the falling popularity of Obama, there is doubt if the US president can steer the country to better economic times. As he rounds up his visit to Beijing, China, Obama speaks of a double-dip recession if debt and spending are not controlled. =0=
=============================================================
Shoplifting rises globally as recession persists
The Retail Research in United Kingdom in its Global Retail Theft Barometer reports that more people worldwide are resorting to thievery partly due to the money crunch brought about the recession. Thievery accounts for only 1.5% in retail stores in the previous years. However, recently, many people have started stealing in public places raising the incidence of shoplifting to 6% with an estimated business loss of $115 billion.
“…Though the problem was documented across all regions, the steepest increases occurred in North America (8.1%), the Middle East (7.5%) and Europe (4.7%). In terms of total losses, retailers in North America topped the charts at $46 billion, followed by Europe's $44 billion and $17.9 billion in the Asia-Pacific region. In North America and Latin America, store owners and employees were the leading pilferers; in Europe, Asia and the Middle East, it was customers who were swiping the most loot.---- Time.com (11/11/09, Crumley, B.)
Regarded as a “victimless crime,” stealing in retail stores seems benign. Many think it has almost no effect on the consumers at large. But on the contrary. just like hidden expenses of other businesses, losses from shoplifting are charged indirectly to the buying public. Coincident to the fraying of society’s moral values stealing is being rationalized by people. In the ranks of shoplifters are middle-class thieves who don’t only steal to survive, but to do it for fun.
Justifying stealing, shoplifters point to dishonesty in a corrupt society. A redirection of moral outlook is certainly needed. To curve the losses from stealing, security improvement is likewise required. By estimates, shoplifting brings an additional expense burden of $436 and $250 per American and European household respectively per year. (Photo Credit: ReneS) =0=
==============================================================
Money woes threaten the budget of at least 10 US states
It is not enough to know that New York State has its own money trouble. According to the Washington based Pew Center, California together with 9 other states are on the brink of budget disasters. The group’s analysis put lawmakers and governors in these financially troubled states on notice to the looming increase in taxes, employee lay-offs, and slowing of government services. The economy deteriorates in California, Arizona, Florida, Illinois, Michigan, Nevada, New Jersey, Oregon, Rhode Island and Wisconsin.
According to the report, quick action is needed to mitigate a fiscal disaster. Double digit budget deficits are rising with poor business, massive unemployment, and uncontrolled housing slump and foreclosures. The 10 vulnerable states are home to a third of the American population---California, with a huge economy is mentioned as having the highest risk
“California leads the most vulnerable states identified by Pew, which describes it as having poor money-management practices. According to the Legislative Analyst's Office, California has made nearly $60 billion in budget adjustments — in the form of cuts to education and social service programs, temporary tax hikes, one-time gimmicks and stimulus spending — since February as tax revenues plunged.
Many of those fixes aren't expected to last. The state's temporary tax hikes will begin to expire at the end of 2010, while federal stimulus spending will begin to run out a year after that.”--- AP (11/11/09, Lin, J.)
By estimates California will incur a huge deficit hovering at $12.4 billion and $14.4 billion next year. This may be about 17 percent of the state's $84.6 billion general fund budget that is used for daily operation. Governor Arnold Schwarzenegger predicts more budget cuts are in the offing as a corrective measure.
The poor economy is creating undue stress of many Americans. They are learning the hard way to live within their means. The public is realizing that USA can’t buy its way to prosperity (i.e. by extravagant stimulus packages, unbridled borrowing and spending) as what the current government is doing. The country under Pres. Barack Obama may go through extreme financial hardship if his economic planners don’t go slow in their flamboyance and cocky spending. In this financial crisis, the government should have little room for gimmickry and naive manipulation of the economy. (Photo Credit: library.thinkquest.org) =0=
===============================================================
US unemployment rate rises further to 10.2% in October
According to the Labor Department that new jobless claims fell to 512,000 last week, the lowest level in 10 months. This was the kind of news we all wanted--- to complement a rosy outlook that the manufacturing sector was on a rebound to usher in the recovery from recession. Yet, signs of recovery was not buoyed by the joblessness report from last month:
“U.S. employers cut a deeper-than-expected 190,000 jobs in October, government data showed on Friday, driving the unemployment rate to 10.2 percent, the highest in 26-1/2 years… Payrolls have declined for 22 consecutive months now, throwing 7.3 million people out of work since December 2007, when the recession started.”--- Reuters (11/06/09)
This new unemployment figure is the highest since 1983. The dismal figure, worse than most economists predicted, comes earlier than expected and it suggests improvement in the economy will not come fast. (Photo Credit: Debtfree.Daniloff) =0=
RELATED BLOG: "Credibility: a big factor in economic recovery" Posted by mesiamd at 11/04/2009
==============================================================
Credibility: a big factor in economic recovery
When Pres. Barack Obama was elected in November last year, Americans and the entire world were quick to embrace a charismatic man with a promise. Expectation was matched by soaring rhetoric and media support that made the prudent among us watchful.
There were quick infusions of capital to rescue the ailing banks, the collapsed housing market, and bankrupt auto industry---- as if the United States could buy its way out to prosperity. Short-lived jubilation came from cash-strapped Americans who believe that government entitlements would solve their money problems. They banked on Pres. Barack Obama who they thought could bring the Harvard magic and his talents to the realities of their household. At their peril, Americans suddenly learned their expectations couldn't be met as painted before the election.
A chorus of approval to Obama’s “changes” later degenerated into public insecurity. Trillions of dollars had to be paid by taxpayers on recovery plans riddled with questionable provisions. Interest groups, political allies, and large companies were direct beneficiaries while the people waited for some windfall that was hard to come by.
For instance, healthcare budget, comprising 16% of the US economy, had ominously ballooned from below $900 billion dollars to an astronomical $1.2 trillion. Many were not happy because this was not what they expected in the onset. The public saw moves to make Americans accept a plan that is very costly---a debatable proposal with hidden and confusing strings attached.
A year into Obama’s presidency, despite hopeful indications that the economy is recovering, millions of Americans are still jobless, the highest ever in 26 years. Financial experts say the recession is going away, but they are quick to qualify that the the future is uncertain and life ahead will be choppy. It's as if they don't want to be blamed if something far worse happens.
Unemployment rate has climbed to 10%. This breaks the psychological confidence of those who believe in the competence of the administration. The budget deficit has gone to the roof, worrying USA’s domestic and international business-partners. How will America be able to pay those trillions of debts from foreign lenders without mortgaging the people's future?
Despite rosy reports of improvements in US manufacturing, consumer spending has been sluggish. This causes markets to lose confidence. Investors have become panicky as the Christmas season is coming. They know tepid business will only delay the financial rebound everybody is wishing for.
“There seems to be lots of uncertainty in the markets," said Peter Lai, investment manager at DBS Vickers in Hong Kong. "I'm very cautious about the U.S. economic figures. It will be very damaging to sentiment if the U.S. unemployment rate crosses 10 percent."
Hong Kong's Hang Seng led Asia's losses, falling 380.13, or 1.8 percent, to 21,240.06 while South Korea's Kospi was down 0.6 percent at 1,549.92. Japan's market was closed for a holiday.
Elsewhere, Australia's S&P/ASX 200 closed down 0.2 percent and Taiwan's market lost 0.2 percent. China's Shanghai index bucked the trend, gaining 1.2 percent to 3,114.23 with sentiment still boosted by a weekend report manufacturing expanded for an eighth straight month in October.
As trading got under way in Europe, Britain's FTSE 100 was off 1.3 percent, Germany's DAX lost 1.4 percent and France's CAC 40 fell 1.5 percent. Stock futures pointed to losses Tuesday on Wall Street. Dow futures were down 49, or 0.5 percent, at 9,686 and S&P Futures dropped 5.9, or 0.6 percent, to 1,033.20." ----Philstar.com (11/02/09)
Aside from the economic front, there is doubt in how Untied States is dealing with the nuclear issue of North Korea and Iran which use deceitful diplomacy to proliferate weapons of mass destruction. With little options, USA is forced to deal with these rogue nations.
Lately, Obama has accepted the reinstatement of Pres. Hamid Karzai, known to have won in a rigged election which left his chief rival withdrawing in protest. Afghanistan, the center of the 911 disaster, is experiencing a resurgence of Taliban activity. Bomb attacks, killing soldiers and civilians are on the rise.
Pres. Barack Obama is ambivalent on his foreign policy in spite of the tough fight US military men are facing lately. He can only promise more US servicemen for troubled Kabul, but their number will be short of the 40,000 top US commander Gen. Stanley McChrystal is asking for to stablize the militant Islamists' lair.
Like in Afghanistan, the Al Qaeda and Taliban threats in Iraq and Pakistan continue to boil with no certainty of how to solve the terrorism problem which brazenly kills scores of innocent victims. Car bombs and suicide bombers continue to bring death and destruction the civilized world finds hard to comprehend.
If Pres. Obama can’t reverse this credibility problem, it will be hard for him to accomplish his election promises. As the public starts to know his liberal and socially progressive agenda with little laudable result, his approval rating (especially among conservatives) has gone low alienating many of the voters who supported his election early on.
His ardent supporters like US ex-president Jimmy Carter blames Obama's floundering support on race--- an assertion that many don't believe. If it is because the president is black that is a problem, how come so many Americans gave him overwhelming mandate in his election?
Obama's style of governance is creating more political divisions that make a bipartisan cooperative work difficult. Many observe the president has the tendency to blame problems on others without facing them squarely. His assistants in Washington seem out of touch with the people they serve. In the meantime, some say the president has become scrawny and fast losing weight. =0=
===============================================================
US unemployment expected to surge close to 10%
Since the stimulus measures that bailed out financial institutions, banks, housing and the auto industry, the ordinary American on the street continues to suffer. The latest unemployment number shows that 3 million jobs were lost since the bailouts raising anew the doubts that pester the Obama administration.
“The Labor Department is scheduled to release unemployment figures for September on Friday. Wall Street economists expect the rate to rise slightly to 9.8 percent, from 9.7 percent in August. Employers are forecast to have cut 180,000 jobs, which would be the fewest since August 2008.“ Myway (10/02/09, Rugaber, C.S.; Crutsinger, M.)
In spite of Barack Obama’s assurances and many economist's rosy predictions, the economy is not improving to come out quick from recession. The dismal job data indicates that employers are not enthusiastic to make new hires. Factories and businesses are finding it hard to make a rebound from a down economy. (Photo Credit: Ben Heine) =0=
================================================================
A slow recovery from recession is still a threat according to Dr. Doom
Nouriel Roubini, the economics guru of NYU who accurately predicted the morbid economic meltdown still warns of a double dip recession in spite of the rosy forecast made this week by the chairman of the board of governors of the US Federal Reserve Ben Bernanke--- that there are indicators that the recession is wearing away.
Called Dr. Doom for his precise economic forecasts, Roubini shared his thought-provoking opinion in an article he wrote in Ft. com (Financial Times) on Sunday August 23, 2009 entitled “The risk of a double dip recession is rising.”
Unlike many optimists who want to have a rapid V-shaped recovery, Roubini thinks a U-shaped slow healing from the economic downturn is more likely to occur, probably within a two-year period.
Among the Roubini's reasons for a sluggish recovery are the rising unemployment in US and other parts of the world topping 10% till next year. A crisis in solvency prevents banks to lend and the private sector to invest. Consumers are cutting on expenses. The financial system has still to recover from the damage and losses incurred during the meltdown. Energy and food prices are still rising. There is less profits with high risk of debts and defaults as companies avoid expanding their investments and hiring more workers. (Photo Credit: canoraa) =0=
==============================================================
US budget deficit jumps to 1.3 trillion
The biggest economy of the world is getting poor. For this year, in July, official records showed a sharp climb in America’s budget deficit that clouds trust in Pres. Barack Obama’s ambitious plan to re-structure the United States.
Anger and opposition are brewing as the Americans wake up to the reality that their country is drastically being changed to a direction that they can’t comprehend. The public is bracing for a more intrusive government which seeks to regulate the lives of its citizens.
In spite of Obama’s campaign promises that taxes will not go up, that the health care reform will be an improvement of the current system, and that the bail-outs of banks, financial institutions and the housing industry will save the economy, many Americans are convinced the United States can’t buy its way to prosperity. They are averse to excessive trillions of dollars of spending by the government.
“The deficit for the first 10 months of fiscal year 2009, which began October 1, reached 1.3 trillion dollars, close to 880 billion dollars greater than the deficit recorded through July 2008, said the US Congressional Budget Office (CBO).
Outlays rose by almost 530 billion dollars, or 21 percent, and revenues fell by more than 350 billion dollars, or 17 percent, compared with the amounts recorded during the same period last year, the non-partisan CBO said.” AFP (08/07/09)
The amounts above are too large to be understood by the ordinary Americans, but many are suspecting something ominiously wrong is going in the management of the country. It is unwise to incur big debts and massive spending at the expense of the taxpayers and ask the children of the next generation to pay for them.
The number of unemployed workers has declined for the first time in 15 months, but joblessness at still high at 9.4%; it is expected to breach 10% by yearend. There are pockets of improvement of the housing market, but housing prices are still falling and foreclosures are rampant.
In spite of the on-going financial crisis, government leaders of Capitol Hill and their supporters spend lavishly with little accountability. Barack Obama’s assurance that things are better under his watch and the recession is ending does not match with what the people are experiencing: Insecurity.
In spite of the rosy outlook the administration is saying, more money is needed to push the economy. There are talks of another stimulus package. There is pressure to borrow and collect more taxes from the people. Entitlements and welfare claims have risen---about 34 million Americans receive food stamps and many more are dependent on social security and unemployment subsidies.
A dangerous mix of a faltering economy, excessive government spending, a declining honesty in society, and a citizenry not used to a life of frugality has become a problem. In spite of America’s apparent strengths, there are obvious weaknesses that can undermine the nation’s future stability. (Photo Credit: Rich Seattle) =0=
==============================================================
Recession not the only reason for lack of nursing hires in the USA
The number of Filipino nurses seeking jobs in the United States fell 16% according to Trade Union of the Philippines (TUCP) secretary general and former senator Ernesto Herrera. The declining number of nurses trying to find work in USA was also reflected in countries like India, Korea, Canada and Cuba. NCLEX-takers who prepared for jobs in America showed a decrease.
“A total of 20,746 Filipino nurses took the NCLEX for the first time for the whole year of 2008 and Herrera said the number was lower by 3.5 percent compared to the 21,299 Filipino nurses that took the test for the first time in 2007.
Filipino nurses accounted for 37 percent of the 22,500 foreign-educated nurses who took the NCLEX for the first time in the first semester.”---Philstar (08/01/09, Maymalin, M.)
It’s hard to attribute the decline of hires to the economic meltdown alone occurring in the United States as Herrera explained. In the Philippines, factors such as unavailable visas for nurse applicants, lack of money to finance an expensive application, and preference to go to other countries or stay at home are significant reasons as well.
In the last 3 to 5 years, there is a current backlog of applicants waiting to be issued visas so they can work in the USA. The NCLEX and visa screens and other application fees have gone up. Many nurses have found alternatives in other countries like Saudi Arabia, Japan, United Kingdom and Australia as they impatiently wait for openings in USA.
For lack of jobs locally, thousands of nurses take employment in call centers, department stores and manufacturing. The staggering professional loss has not been addressed by the educational and labor departments.. With or without the recession, USA is still a preferred destination. Filipino nurses have very limited choices and many are willing to go anywhere and anyplace to find a job. (Photo Credit: Meijinmike) =0=
=============================================================
Economy is worse than what Obama wants the public to believe
When the Bureau of Labor and Statistics released its June 2009 joblessness rate, the number ballooned to 467,000, putting a total 7.2 million out of work since the onset of the recession. The unemployment rate had reached 9.5%, the highest in 26 years. It was the largest job contraction in a 6 month period since the 1940’s.
With lack of public confidence, the meltdown drags--- the huge job loss equaled the job gain in the last 9 years. As a consequence, U.S. Federal Reserve officials revised their unemployment forecast to top 10 percent, above the 9.6 percent that was previously predicted. Economists and financial analysts foresee the unemployment rate to rise between 9.8 and 10.1 percent in 2009.
States Above 10% Joblessness Rate:
Alabama,
California,
Florida,
Georgia,
Illinois,
Indiana,
Louisiana,
Michigan
Nevada,
North Carolina,
Ohio, Oregon,
Rhode Island,
South Carolina
Tennessee.
"Most Fed policymakers said it could take "five or six years" for the economy and the labor market to get back on a path of long-term health. To get there, consumers must return to a regular spending groove and housing prices need to start rising again."---AP (07/17/09, Aversa, J.)
According to Mortimer Zuckerman of the US News (07/15/09,) the June data include 185,000 people who are presumed to have work, but in reality, may be jobless. Not part of the unemployment list are the unpaid leaves that have become commonplace. The work-hours in many industries have dropped and fulltime jobs for workers are being converted to part time.
About 1.4 million people are available to work within the last 12 months, but they have not been looking for employment. The average duration of joblessness in this recession has lengthened to 24.5 weeks and the average pay of workers remained at $18.53 per hour. About 223,000 positions in the production sector have been lost, creating a dismal picture for labor.
Obviously, Obama’s good intentions did not translate into success. Instead, more whispers of difficult times spook Americans who could just wait and see how the administration churn the business climate to stimulate the economy and create jobs.
With Obama’s falling popularity and shortening of public patience, a second stimulus program is in the horizon, furthering the alarming big borrowing and spending of the government. The budget deficit has skyrocketted. Just as before, financial planners and legislators in Capitol Hill have little accountability. As doubt mounts and money flows into uncertain hands, it’s the American people who are caught between the stone and a rock-hard place. (Photo Credit: Darth Dragon) =0=
===========================================================
California inches close to bankruptcy
Affected by the biggest recession gripping the country, the state of California has failed to come up with a budget, bringing the golden state near financial insolvency. The state is spending like crazy more than it can generate income. Government revenue is down by 27%. Business has been slow forcing companies to down-size or stop operation.
If no budget is agreed upon, the state is expected to run out of money by the end of July.
“It will run out of cash within weeks if it does not balance its books, leaving it little option but to postpone a variety of payments, according to State Controller John Chiang, who estimated last week that California was "less than 50 days away from a meltdown of state government."---Reuters (06/15/09, Christie, J; Gevirtz, L.)
California's income has dwindled with rising joblessness rate of 11% and unchecked housing crisis making it hard to close the budget gap of about $24 billion. One option is to cut spending --- the curtailment of entitlements and welfare programs including health insurance.
Budget cuts may be needed by putting teachers, firefighters and police officers out of work and stopping medical-care services. More taxes could be levelled on the residents to generate income. Unlike in the past, Californians are learning to live within their means just lilke Americans across the country. (Photo Credit: Jose Antonio Galloso) =0=
===========================================================
US jobless rate slows, but still high at 8.9%
Banking on hope that USA is on its way to economic recovery, the Obama administration takes consolation in having less than the expected joblessness for the month of April. The US Labor Department reveals that unemployment rate last month has risen to 8.9%, the highest ever since 1983.
Many of the jobs filled are vacancies in the government bureaucracy and less from employment generated by the private sector. This is in spite of the bail-outs given to shore up the ailing financial health of big businesses. The companies which asked for help from the US government have hardly been rehabilitated.
"This was another bad report. There was a significant deterioration in the labor market again. The job loss is large, it is widespread, it is affecting every industry sector and every demographic group," Commissioner of the Bureau of Labor Statistics," Keith Hall said.---Voice of America News.com (08/09/09, Tate, D)
The data showed 539,000 jobs were lost in April, bringing the total number of unemployed to 13.7 million, up from 13.2 million in March. The half a million job loss was lower than what economic experts earlier predicted. It was unclear why the worrisome employment recond didn’t dampen Wall Street which ended in a positive territory as the week ended.
Americans are soberly waiting for the Obama "magic" to take effect. It's too early to say whether the US economy is on the road to recovery. The huge bail-out money infused into the financial market can't be a guarantee. Americans have learned a hard lesson from the reckless spending prior to the recession. Basically, the ordinary US citizen is on his own, just hoping that those who manage the economy of the country will come out doing the right thing. (Photo Credit: Ben Heine) =0=
===========================================================
Warren Buffet decries the dismal future of US newspapers
In last week’s shareholder's meeting of Berskshire Hathaway Inc.,attended by 35,000 people, Warren Buffet, the “Oracle of Omaha” decried the waning of readership of newspapers in America. The rich billionaire-investor together with his business partner 85-year old Charlie Munger spoke of the dismal future of newspapers which had been predicted even before the Newspaper Association of America disclosed the decline newspaper business.
In 2007, total print advertising revenue dropped 9.4% ($42 billion,) a huge fall in revenue since 1950. Newspaper revenue losses continued during the past 16 months of recession as readership contracted 4.6 percent in the April-September 2008. The drop in sales prompted newspapers to reorganize, cut down on jobs and lessen circulation.
Fewer readers are buying newspapers these days. They now depend on alternative sources of news which are available in online, internet, radio, and TV. Many are disappointed by the increasingly partisan stance of US newspapers, raising doubts on the truthfulness and reliability of their contents.
“Some readers instead are shifting to the free versions of newspapers that most publishers post on their Web sites. That trend helped increase the traffic on newspaper Web sites by 10.5 percent during the first three months of the year, according to a Nielsen Online analysis conducted for the Newspaper Association of America.”---- Yahoo News Finance / AP (04/27/09, Liedtke, M)
About 15 to 30% of major newspapers's revenue comes from subscriptions and copies sold at newsstands. The main source of income still comes from advertising, a money source that is now in danger of drying up. (Photo Credit: Maud77; photoburst)
============================================================
Fearless economic forecasts
Dominique Strauss-KhanIn a warning delivered by IMF Managing Dir. Dominique Strauss-Khan during a conference of African finance ministers and central bank governors, the International Monetary fund (IMF) speaks of the deepening global financial crisis and the possibility that the world's economic growth will be zero.
The financial meltdown can cause massive suffering, social displacement, and chaos in vulnerable countries.
The effects of the downturn may not be fast in reaching Africa, but Srausse-Khan said, “continued deleveraging by the world's financial institutions, combined with a collapse in consumer and business confidence, is depressing domestic demand across the world."----Philstar (03/10/09)
Warren Buffet
On the other hand, American billionaire Warren Buffet who has the common sense of living "below his means" believes America will bounce back even though “it has fallen off a cliff.” The “Oracle of Omaha” who predicted the worst case scenario in the last 6 months, watches a nation swept with a housing slump, high unemployment, and inflation. He sees lack of confidence, confusion, and fear are defining consumer behavior at this time.—The Washington Times/ AP (03/09/09, Funk J)
Harry S. Dent
Similar gloomy predictions have been made by American economist Harry S. Dent in his book “The Great Depression Ahead : How to Prosper in the Crash Following the Greatest Boom in History.” The book is a good read. He speaks of this year as a bad season---ushering economic turmoil that none of the current generation has seen.
Nouriel Roubini
Nouriel Roubini, professor of NYU’s Stern School of Busicness believes the US recession could last up to 36 months. With no hope of ending the recession this year, "Dr. Doom" said,, "Growth is going to be close to zero and unemployment rate well above 10 percent into next year."----CNBC (03/09/09, Wells, J)
Pres. Barack Obama
But President Barack Obama offers bright economic forecasts with his proposed $3.55 trillion budget. He predicts that the economy will shrink by only 1.2%, and will recover in 2010 with a growth of 3.2%. However, non-partisan analysts believe this is overly-optimistic.---McClatchy Newspapers (02/26/09, Hall, K)
The public is less upbeat than Obama, but people are willing to give him the benefit of the doubt. Midway in the 100-day honeymoon period after assuming presidency, he gets a 67% approval rating, a very good grade at this time when Americans are fearful and disconsolate over the financial ruin they are dealing.(Photo Credit: Atsibatsi)=0=
============================================================
Who says we are spared from the effects of recession?
Presidential spokesman Anthony Golez said the Philippines wasn’t among the Asian countries affected by the worldwide recession. It might be a lie that Malacanang Palace wanted us to believe. He based his conclusion to the non-inclusion of the country in the International Labor Organization (ILO) list which projects 113 million jobs loss in Asia as the world economy continues to falter (Malaya , 02/20/09 Bengco, R.) According to ILO, the expected unemployment number this year will be more than the 22.3 million jobs Asian countries lost in 2008.
It will do us good if we look closely at the data Golez is referring to before we celebrate. We aren't that trusting anymore. The effects of the financial meltdown are just beginning to show. It is foolhardy for him and the government he represents to assume that we aren’t affected.
The unemployment we see in the street is a better gauge than the assurances of government officials. We see what food we eat and what clothes we wear. Most of us are familiar of the signs of chronic job loss and their aftermath. The employment stagnation in the country is long-standing and antedates the global economic meltdown.
5,500 OFWs lose jobs—--Arroyo
"Some 5,500 Filipino overseas workers have lost their jobs abroad and returned home over the past four months, President Gloria Macapagal-Arroyo said Thursday. The Department of Labor announced earlier this week that 39,000 Filipinos had lost their jobs since October, a number which included overseas workers."---Agence France-Presse/ Inquirer (02/26/09)
Foreign companies are pulling out their business operations in Manila. Unemployment among fresh graduates continues to rise. There is pervasive underemployment and lay-offs. The rush for jobs abroad doesn’t abate even if applicants downgrade their qualifications just to grab work even if it is risky and suffers from inadequate pay. With a bearish investment climate, people are afraid to shell out money that stir spending and growth. The number of impoverished Filipinos continues to rise.
Pres. Gloria M. Arroyo’s job creation is too little to assuage the fear and anger of the public. The government projects that are quick-disbursing, high-impact, and labor intensive (according to Management Dir. Hermogenes Esperon) don’t come close to reality when one sees the widespread unemployment, poverty, and corruption in the country. That’s why we rely early on ourselves more than depend on announced legislated measures by the administration. (Photo Credits: Slavishtubesocks; JRIOrion)=0=
3,000 IT & 10,000 semiconductor jobs at risk
"At least 3,000 information technology (IT) jobs are at risk in first quarter alone while 10,000 positions in semiconductor industry could be shed during the first half of the year due to the global economic slump."---GMANewsTV (02/28/09)
=========================================================
Obama psyches the Americans of grim economic times
I don’t know of anyone who hasn’t been affected by the financial crisis caused by the meltdown of business in America. The most pitiful are the people who honestly saved and invested only to find out their portfolio has failed. They don’t have the luxury of youth and time to recoup the loss. Those who rely on fixed income may find themselves without money if retirement and pension don't pay. The jobless and hungry are easily agitated. Economic hardship is a perfect recipe for social unrest. With the public's high expectations on the new administration, it's dangerous if Barack Obama fails.
Barely two weeks before Obama is to be inaugurated as president, his campaign promises don’t jibe well with the gloomy realities of the times. His dire warnings prepare the spooked public of the bumpy road ahead. Spending is needed more than what the government originally told the people.
Obama can only say in grim and gray terms on how he'll solve the economic problem, but he doesn't give specifics. The cost of the stimulus package he asks the congress on Thursday, January 8, 2009 hasn't been determined, but experts say it should not be more than $1 trillion dollars. The federal budget deficit is huge and critics warn of deeper pain if the government shoulder the money woes of private entrepreneurs.
There's no guarantee that the bail-out of the banking system, the auto manufacturers, and housing industry will work. The economy is rife with dreary predictions of worsening unemployment, bankruptcies,and unrelenting housing slump. Americans are confused and want transparency in the transactions which put their life savings and taxes in line.
At a Glance, January 8, 2009:
540,000 unemployed projected for Jan. '09 (up from 492,000 in Dec. '08)
4.5 million workers on unemployment aid
2.4 million jobs lost in 2008
1.2 trillion dollars Federal Budget deficit
1 trillion dollars---estimated stimulus package needed
As of January 8, 2009, the joblessness is expected to have risen from 492,000 to 540,000 based on the number of newly-laid off people seeking state unemployment aid. The approximate number of workers taking unemployment benefits is at 4.5 million, many of whom are finding hard to get jobs.
Assuming that 500,000 additional jobs have been lost last month, it is estimated that at least 2.4 million jobs disappeared in 2008. Business downsizing and closures continue. The trend will be more elucidated on Friday, January 9, 2009 when the Department of Labor releases the most current employment report. The federal budget deficit is expected to reach $1.2 trillion this year, about 3X bigger than the previous year.
Like most Americans, I want Obama to succeed. Casting away politics, I feel it's in our interest that the economy bounces back on its track. Yet, the public is suspicious and worried; their confidence is at its deepest low. In spite of bipartisan support, many aren’t optimistic that a quick recovery will come. Obama is asking for more government infusion of money, a stage for a possible run-away spending that isn’t in his "change" and "yes, we can" campaign plan.
The uncertainty which fuels this lack of confidence is magnified by the ugly economic picture. Even if the public keeps quiet, the cultural and social environment which made the people endure and outlast the Great Depression in the 1930's might be slipping away--- at worst, it might be nonexistent. Today's Americans belong to a different generation of innovators. Whether the values of trust, honesty, and fair play have been eroded to impair recovery, nobody seems confident to answer.
There's real fear as there's hope. But many are shocked that the rules of governance and citizenship are quickly being changed to suit a social agenda whose end they don't know. They aren’t used to live in poverty or be dictated upon on how they will use their money. Even if they pride themselves of resiliency, industry, and independence, the overall picture isn't good. (Photo Credit: bscott2007)=0=
RELATED BLOG: "Dr. Doom’s economic crystal ball & the need to say the truth"
Posted by mesiamd at 10/30/2008
==============================================================
Longer recession blues as more jobs are lost in USA
As the first week of December ends, Americans are bracing for bleaker economic news today as the report of joblessness from last November will be released by the Labor Department. From October’s 6.5%, the unemployment rate is expected to rise to about 6.8% as more pink slips for laid-off workers, estimated to be about 320,000, are issued as the Christmas holiday closes in.
“Just in recent days, household names like AT&T Inc., DuPont, JPMorgan Chase & Co., as well as jet engine maker Pratt & Whitney, a subsidiary of United Technologies Corp., and mining company Freeport-McMoRan Copper & Gold Inc. announced layoffs.”---AP (12/05/08, Aversa, J)
It is said that since the start of the year 1.2 million jobs have been lost. It is feared that this can further aggravate the financial woes being suffered by the three big US auto companies: General Motors Corp (GM,) Chrysler LLC and Ford Motor Co.
Partly due to confusion, anger, and lack of knowledge, ordinary Americans are divided if bail outs of these companies are the solution to the problem. Capitol Hill is still weighing in whether to give the $34 billion asked for by the auto industry managers for their company's survival.
The guarantee of tax-payers’ money to rescue these failing companies are the last that Americans want, but they seem to have little options. With a national debt of about $10.7 trillion dollars, America still talks big about money and spending. There are those who have been not been roused to the reality that the economy is truly in bad shape.
But, the conscientious public is thinking whether the nation can afford the extravagance, greed, and recklessness its leaders and citizens have been used to. In spite of assurances, the competence and ethical integrity of those running America are now being questioned. The issue of confidence in the American system is causing ripples in business circles worldwide.
As predicted by many business analysts, USA is likely to be stuck for a long haul in a deep recession whose post-war average duration is 10 months, the longest at 16 months. This December marks the 12th month of the current recession whose existence has been muddled for sometime by economic experts until just recently.
At the disclosure of the recession, President-elect Barack Obama announces a 2.5 million job generation plan which may cost the government $500 billion to finance. The staggering amount make the ordinary citizens dizzy as the new administration is headed for a glittery inaugural bash in January 20, 2009.
Confidence on America's leaders has been under the cloud of doubt since the down-turn of the stock market and the failure of banking and housing industries. Next comes the the auto industry. The fall-out of these economic troubles to the world in spite of optimistic assurances isn’t completely known, but many are hurting and many more are going to be hurt. (Photo Credits: wwww.fortunewatch.com) =0=
RELATED BLOGS: "Mr. Fix & the tall challenge to keep USA & the world to believe that we can quickly come out of the financial mess" Posted by mesiamd at 11/22/2008; "Like Filipinos, Americans Have Money Troubles Too!" Posted by mesiamd at 7/16/2008
Mr. Fix & the tall challenge to keep USA & the world to believe that we can quickly come out of the financial mess
It is said that when a new president gets elected in the United States, Wall Street gets exuberant and the market becomes cocky. Renewed confidence and optimism bring an upward trend in stocks trading in America and the rest of the world. The upward trend hasn’t happened in President-elect Barack Obama, the Mr. Fix expected by many to deliver the world from this troubling economic mess.
Since the Great Depression (1930’s to the 1940’s,) America suffers from the worst financial downturn. On Friday, November 21, 2008, on midday trading, the Dow Jones Industrials (DJI) tumbled 67.47 points further, or 0.89 percent, to 7,484.82. The Standard & Poor's 500 Index (.SPX) lost 8.85 points, or 1.18 percent, to 743.59. The Nasdaq Composite Index (.IXIC) was down 17.82 points, or 1.35 percent, at 1,298.30.
In spite of the $700 billion bailout, the market continues to slide. With the public confused of what is going on, economic planners need more money for bailouts to keep the economy on track and stable. There are those who seriously doubt whether this will work as instability and business losses continue. Financial leaders like Ben Shalom Bernanke of the Federal Reserve and Henry Paulson of the Treasury have a short window period to work on before the full blown effects of the crisis appear early next year.
Joblessness at 6.5%, the highest since 1994, is expected to top 8.5% in 2009. It feeds the fire of uncertainty, raising doubts on the usefulness of helping the floundering US auto and banking industry.
More business close-downs are feared. The housing market has almost screeched into a halt leaving many homes in foreclosures. American auto manufacturers brace for bankrupcies. The public is spooked by advisories of store closings. Americans are angered and worried. The usual honeymoon period given to an incoming administration may not last long as the impatient public can’t wait for the magical fruition of Obama’s promise during the campaign. A scramble to form a government cabinet to help the new president shows signs of old hands from the Clinton administration which make people to ask if it’s the same traditional politics that will be at play. Without guarantee of success, there is palpable anxiety over leaders with checkered past trying to reprogram the nation’s socio-economic direction.
Obama is in a bind. There is a growing belief that the recession will last longer than what has been experienced in recent history. Some are thinking that it can grow worse to precipitate the hapless conditions of the Great Depression. Though not much can be done by individual US citizens to prevent the worse, sensible measures like focusing on one’s job, belt-tightening in personal finance, and deciding wisely on investment strategies are recommended.
Global economies are suffering. The American sniffle has worsened and spread into a global pneumonia whose end result is basically unknown. A protracted economic malady is likely to bring instability and stagnation. It makes civil unrest and chaos more likely particularly in the poor countries where hunger is common.
Meanwhile, the public overwhelmingly craves that Obama comes victorious in reversing the ugly course of business. How best he can do it is subject to debate and entails vigilant waiting. While he prepares for his inauguration in January, Americans gripped with worry need to give him time and the benefit of the doubt. (Photo Credits: JSDart)=0=
RELATED BLOG: "Dr. Doom’s economic crystal ball & the need to say the truth" Posted by mesiamd at 10/30/2008
Layaway comes back
As a sign of difficult times brought about by the financial crisis, stores in America like K Mart, Marshalls, T J Maxx etc. are going back to the payment practice of layaway, a departure from the convenient credit card that modern-day Americans are used to. Lending institutions are tightening their borrower’s rules and store customers may use layaway to buy their favorite gifts for this coming Christmas. “Layaway plans aren't free -- most stores charge a fee for setting aside the merchandise, and ask for a down payment. Kmart requires customers to pay a $5 service fee and a $10 cancellation fee upfront, or put down 10% of the item's cost, whichever is greater. Customers must make biweekly payments over eight weeks to pay the balance. In case of default, the item goes back into stock and the customer receives a refund, minus the $15.” Wall Street; Yahoo Finance (10/22/08, Bustillo, M.)
Layaway was popular in the Great Depression when credit crunch drove Americans to pay installments for merchandise to buy. It is again an option now that affordability and money have suddenly become scarce. Certainly, USA isn’t as different as different as Philippines when economic bad times strike. (Photo Credits: Crocidillicus.com; USCredit)=0=
==========================================================
Subscribe to:
Posts (Atom)
