Demand for Oil....DOWN

For the first time since 1983, demand for oil is projected to be down for 2008 by approximately 200,000 barrels a day. The International Energy Agency, which calculated this projection, also says 2009 calculations show even lower amounts of consumption. If this happens, it will be the first time in 30 years there is a two year decline in consumption.

As gas prices have been falling further and further to a national average of $1.66 last week, there are some signs of higher consumption; For the first time in 33 weeks, gasoline demand finally saw an increase.

These prediction are interesting, but with the amount of change we have seen in gas prices over the last four or so years, who really knows whats going to happen.

No Change!!

This funny but still serious article looks "Inside the Worlds Most Annoying Economic Crisis". Argentina, with Buenos Aires especially, is struggling with keeping coins in circulation. The writer talks about his experiences and tells examples of not being sold items because of not having right change or being given back MORE so the seller did not have to give him change. As of now, the one peso coin is worth more to people than a two peso paper note because they can make change easier with the coins, and possible not be shut out of a sale.

The artilce says its not for sure why the problem is happening. The government is accusing Argentines of hording their coins, which many are at this point. In turn, citizens are accusing the governemnt of not minting enough, even though they have produced a record amount of coins this year and the problem has only gotten worse. Everyone is blamming the bus companies who only accept coins, and are then running a legal side business of exchanging paper notes to coins for a fee.

This economic crisis may seem like something minor, but what a pain to deal with. I was in Buenos Aires for a week early this summer and saw what a pain it was for that short time. It seems the problem has only amplified since then as well.

$14 billion auto bailout dies in Senate

$14 billion emergency bailout for U.S. automakers collapsed in the Senate Thursday night after the United Auto Workers refused to accede to Republican demands for swift wage cuts. The collapse came after bipartisan talks on the auto rescue broke down over GOP demands that the United Auto Workers union agree to steep wage cuts by 2009 to bring their pay into line with Japanese carmakers.
Majority Leader Harry Reid said he hoped President George W. Bush would tap the $700 billion Wall Street bailout fund for emergency aid to the automakers. General Motors Corp. and Chrysler LLC have said they could be weeks from collapse. Ford Motor Co. says it does not need federal help now, but its survival is far from certain.
The White House said it was evaluating its options in light of the breakdown.
"It's disappointing that Congress failed to act tonight," a White House statement said. "We think the legislation we negotiated provided an opportunity to use funds already appropriated for automakers and presented the best chance to avoid a disorderly bankruptcy while ensuring taxpayer funds only go to firms whose stakeholders were prepared to make difficult decisions to become viable."
The Senate rejected the bailout 52-35 on a procedural vote -- well short of the 60 required -- after the talks fell apart. Now that the three giant automakers are not far from bankruptcy, millions of employees are also panicked about losing their jobs. This will exacerbate the already critical situation of unemployment in the US right now. Just last week, the government reported that the economy had lost more than a half-million jobs in November, the most in any month for more than 30 years.

France and China

Apparently they are having a diplomatic chilling period right now because of Sarkozy's overtures that he is going to see the Dalai Lama, as well as criticism of China over Tibet and his threatened boycott of the Olympics. The rather outspoken French President was recently snubbed, as was all of the EU, by China when they canceled last minute on a summit between the EU and China meant to discuss such things as the cooperation needed to solve the global financial crisis, ironically enough.

The layman's finance crisis glossary

Let's play Buzz Ｗord!!! recently with this credit crunch news papers has been throwing vasts amounts financial buzz words and confusing jargon, but fear not !!!! I have found on the BBC website an a to z glossary of such buzz words, with an short explanation of them. I feel with this tool we are able to read financial new paper better with a more thorough understating.

Singapore seen emerging Asia's weakest economy

Singapore is poised to be emerging Asia's worst-performing economy next year, when it is likely to remain entrenched in recession as the global downturn erodes demand for its exports, a Reuters poll shows.

The government pledged $1.5 billion last month to help firms secure credit and said it was prepared to run a bigger budget deficit to boost the economy.

Rising unemployment will dent consumer spending, which is not being helped by a decline in tourism since August.

Singapore slipped into recession - defined as two quarters of negative quarterly growth - in the third quarter.

Kissing to cause deafness?

This has got to be the weirdest story every! Actually second, I just remembered a really weird I read about a week ago.

A young Chinese woman was left partially deaf following a passionate kiss from her boyfriend. The 20-something from Zhuhai in Guangdong province arrived at hospital having completely lost the hearing in her left ear, said local reports. The kiss reduced the pressure in the mouth, pulled the eardrum out and caused the breakdown of the ear!!!!

Luck for her she is expected to regain her full hearing within about two months.

S.Korea to announce Japan, China currency swaps

South Korea's central bank said on Friday that it expects to announce deals to expand its bilateral currency swap facilities with Japan and China later in the day.

Under current arrangements, South Korea can tap up to $13 billion credit line from the Bank of Japan and $4 billion from the People's Bank of China.

Wanted: A New Miracle

China has gone through a large and painful change since the 1970's with Deng's Economic policy that introduced Capitalism to China, now that China has become a "Big Economy" it'll have to find a way to conjure a new economic miracle which is to turn itself into a "Strong Economy" with domestic technological formidable manufacturers, rather than just producing inexpensive goods for the rest of the world. And begin developing its service sector and knowledge-based companies. China needs to find a way to turn savers into spenders, leveraging China's enormous domestic markets. Michael Tseng, an executive at Taiwan's BenQ Corp., which runs a hospital in Nanjing: "China was the world's factory, but manufacturing is yesterday's story now.". The Chinese saves much of what they earn because the government fails to provide a comprehensive social safety net, thus the government needs to fix the social infrastructure to get the people to start spending.

Japan’s Nikkei Rises in Longest Streak Since May on Car Bailout

Japan stocks rose, sending the Nikkei 225 Stock Average to its longest advance since May, on expectations a bailout of U.S. carmakers passed by the House of Representatives will alleviate a global economic recession.

The House approved a $14 billion loan package intended to prevent a collapse of American automakers that would threaten millions of U.S. jobs. The vote sends the measure to the Senate, where Republican party opposition could delay or kill the legislation.

Crude oil, which has fallen more than $100 from its record in July, gained 3.4 percent to $43.52 a barrel in New York yesterday, and the contract rose as much as 2.2 percent today.

Efficient Fridges

This article from the New Yorker talks about the new possible Secretary of Energy, Steven Chu, a Nobel Winning Physicist that is widely respected. He talks about efficient fridges as a template for change within America in the effort to stem Global changes. He is talking about how in California strict fridge efficiency laws were imposed despite the hard lobbying and whining of appliance makers, and of course fridges are still around and have adapted to these new standards which were applied nationwide. This is the same sort of hard line that must begin to be taken in Washington, with standards being imposed regardless of the protests of industry because desperate times call for desperate measures and because becoming environmentally friendly and efficient is the smart and productive thing for the American economy.

While Detroit Slept

Thomas Friedman, the author of "The World is Flat" offers his opinions on what he thinks is a wasteful bailout of the American auto industry.

The reason is that there is a lot of innovation going on in the car industry in other parts of the world, starting with Denmark. Basically it relies on electric cars and a national electric car charging network, generated from clean energy such as wind and solar. Consumers can then buy their milage on their car batteries from the firm Better Place like you would buy minutes for your cell phone.

This model has the effect of being cheaper (6 cents a mile for electric cars, compared to 12 cents a mile for gasoline transportation), and cleaner for the environment. The set up also makes it more convenient for consumers.

Thomas Friedman argued that the US is missing its chance to join in the new trend by its bailout of the old technology. "If we miss the chance to win the race for Car 2.0 because we keep mindlessly bailing out Car 1.0, there will be no one to blame more than Detroit’s new shareholders: we the taxpayers. "

However, I don't think the picture is all that rosy. To popularize this model on a larger scale takes innovation in the harnessing of clean energy as well. The disadvantage of clean energy is that it is difficult to generate a lot of electricity compared to using fossil fuels. In addition, wind and solar energy are subject to weather changes, therefore their supplies are sometimes unpredictable and inconsistent. That leads me to question the costs of building the national charging network for electric cars. It's likely to be more costly.

What do you think?

Study Finds White-Collar Unemployment Spreading

This article reports that unemployment has spread to white collar professions such as lawyers, architects. Construction, retail and service jobs are also going to be affected.

What profession is going to be most hardly hit? I think the financial sector's jobs are among the first that experience the recession, followed up with construction, automobile industry jobs, and other professional jobs.

World Bank predicts global gloom

The World Bank predicted that the world's annual economic growth will slow to 0.9%, from 2.5% this year.

Even for strong developing economics such as China and India, it is predicted that their economic growth rate would slow down. The World Bank projects China's growth to slow from 11.9% in 2007 to 7.5% in 2009, while India's growth prospects will be cut from 9% to 5.8%.

However, predictions remain positive for long-term growth. The Bank says that the long-term growth prospects for developing countries remain strong, and this will lead to substantial reduction in world poverty rates by 2015, with just 15% of people living on less than $1.25 per day, compared to 25% in 2005.

Bank of America to cut 30,000 jobs

Bank of America has is planing to cut between 30,000 and 35,000 jobs over three years following the completion of its takeover of Merrill Lynch.

Bank of America said the move would reflect both post-merger efficiency savings, and "the weak economic environment" which had hit business and could affect about 11% of the combined firms' 308,000 workforce.

The $50bn (£33bn) takeover of Merrill was announced in September. It came after Merrill had seen $40bn losses.

Bank of America said the job cuts would come across both businesses, and that it could not give exact numbers until early 2009.

US 'willing to lead climate push'

According to former US presidential candidate John Kerry the US is ready to lead the world towards a new climate deal qualifying "but only if other countries pledge emission curbs too."

Senator Kerry made clear that the UN climate conference that the aim of agreeing a new global deal next year must remain on track and that a deal could not work unless it involved all countries.

A number of dignitaries said they were looking forward to working with Barack Obama's incoming administration.

The Massachusetts senator, is currently set to preside over the Senate committee on foreign relations as chairman of the influential committee.

It's so nice having people like you again isn't it?

Belgium detains al-Qaeda suspects

Belgian police have detained 14 people suspected of being members of the al-Qaeda network including a man believed to have been about to launch a suicide attack, officials said.

Federal prosecutor Johan Delmulle said police did not know where the suspected suicide attack was to have targeted and it is thought he is likely in to be from Afghanistan or Pakistan.

Thus far, a total of 242 police officers carried out 16 raids in Brussels and one in the eastern city of Liege, officials said. When they seize, they usually,seize computers, data storage equipment and a pistol during the raids, reports say, and the men and women arrested are due to appear before anti-terrorism judges later.

Pakistan moves on Mumbai accused

Pakistan has put Cleric Hafiz Mohammad Saeed founder of Lashkar-e-Taiba an Islamic militant group accused of having links to last month's Mumbai attacks under house arrest.

Pakistan, denied any involvement in the multiple attacks, is also closing offices of Mr Saeed's Jamaat-ud-Dawa charity, after it was put on a UN blacklist.

Pakistan has been under intense pressure to do more since the 26 November attacks. Indian Prime Minister Manmohan Singh has said Pakistan needs to do "much more" to combat terrorism.

Meanwhile, India is doing much more as well. They recently announced a major overhaul of their security and intelligence services.

Newly-appointed Interior Minister Palaniappan Chidambaram said the measures would include:

• Reinforcing coastal security
• Creating a new national investigative agency
• Improving police training and strengthening anti-terror laws

Sarkozy comments spark Iran row

Iran has summoned the French ambassador in Tehran over comments made by the French president about his Iranian counterpart, Mahmoud Ahmadinejad.

Nicolas Sarkozy said earlier this week that he would not be able to shake hands with someone who said Israel had to be wiped off the map. Ambassador Bernard Poletti was told there would be repercussions for relations if such remarks were repeated.

In the speech, given on 8 December on the 60th anniversary of the Universal Declaration of Human Rights, Mr Sarkozy said: "How is it that a people such as the Iranian people - one of the world's greatest peoples, one of the world's oldest civilisations, sophisticated, cultured, open - have the misfortune of being represented as they are today by some of their leaders?

"I have said this to my friend Kofi [Annan]: I find it impossible to shake hands with somebody who has dared to say that Israel must be wiped off the map.

Rebels kill '90 Sri Lanka troops'

About 90 Sri Lankan soldiers have been killed in the latest fighting in northern Sri Lanka, says the pro-rebel TamilNet website says.

The army, thus far, denies the figures, but officials have conceded they have met "stiff resistance" from the rebels.

Both sides are accused of routinely understating their own casualties while overstating those of the enemy and independent reporters are banned from going to the war zone, so confirmation of conflicting figures is impossible.

Military spokesman, Brig Udaya Nanayakkara, claims the TamilNet pictures were "staged" and it's impossible to tell when they were taken, though confirming the clashes had occurred.

US to 'rethink' N Korea strategy

Washington said it wants to "rethink" the handling of North Korea, following the failure of the latest talks aimed at ending the country's nuclear program.

White House spokeswoman Dana Perino said Pyongyang had missed an "open door" and the US could now reconsider its "action-for-action" strategy.

North Korea had agreed, in principle, that it would receive fuel and other aid in exchange for dismantling its nuclear program but talks have stalled over verification procedures for nuclear material.

No date has been set for future talks and analysts say it is unlikely that anything will be concluded before President George Bush leaves office in January.

AU troops leaving Somalia

The Prime Minister of Ethiopian, Meles Zenawi, has told parliament African Union peacekeepers in Somalia want to leave.

Ethiopian troops, who are due to pull out of Somalia at the end of the month, are to cover their withdrawal.

Ethiopia originally went into Somalia two years ago to help government forces drive Islamist forces from the capital, but different Islamist forces have been gaining ground in recent months and now control much of southern Somalia once more.

AU troops from Uganda and Burundi are expected to stay and possibly increase their numbers to make up for the planned Ethiopian pull-out.

Auto bailout might fail to pass?

Everything seemed to be going well for the auto industry since the bailout they had requested started to take form and passed in the House. However, within the Senate there is strong opposition from the Republicans and some of the Democrats on this issue. The Republican leader of the Senate strongly opposed the legislation, and not even the White House's urge to save the auto industry changed his mind. The big three in Detroit could be in a bunch of trouble if this auto bailout doesn't pass, seeing as how the executives of GM and Chrysler have said that they could run out of cash within weeks.

Illinois not the most corrupt state

Even with Illinois being in the news for having their governor arrested for trying to sell the former senate seat of president-elect Barack Obama, they still fall lower than many states based on the total number of convictions. North Dakota comes in at the highest percentage of convictions for every 100,000 people at 8.3%. Even Ohio(4.8%) has a higher percentage than Illinois(3.9%). So even though Illinois has been in the news for having their governor being arrested, and prior ones before this one too, based on total population and the number of convictions, Illinois is not that bad of a state.

Massive job losses in Congo mines

Due to the collapse of mineral prices from the global economic downturn, more than 200,000 jobs have been lost in the Democratic Republic of Congo. Some fear that the jobs loss could reach 300,000 by the end of this month. More than 40 firms in the mineral industry have shut down in the past month in the southern Katanga province(the richest province in Congo). Expert says that the costs to process minerals like cobalt and copper are currently higher than the price of the minerals in the world markets. About half of the world's cobalt and 4% of the copper are produced in Katanga alone and generates early half of the country's revenue. Provincial Minister of Mines Barthelemy Mumba Gama said that the situation can be save if the government gives tax relieves to the mining sectors.

Weight loss easier when you get paid for it: study

This article is about a study that used monetary incentives for people to lose weight. It turns out that when people are being paid to lose weight, they lose a lot more. There were three groups. One group had a lottery that they could win only if they met their weight loss targets. The second group deposited their own money and only got it back at the end of the month if weight loss goals were met. The third group was a control. The first group made about $380 and lost 13 pounds, the second group made about $275 and lost 14 pounds. The control group only lost 4 pounds.

As Dr. Gitter always says, people respond to incentives.

Obama's infrastructure plan

This is an interesting article about Obama's proposed plan of invigorating the US infrastructure program through a protracted investment plan. The article plays the "what if" game a little bit more than I would like, looking back nostalgically about what might have happened if Gore were elected. But it does make good points about the Neo-Keynsian aspects of some of Obama's proposed plan, in terms of investing in America's ability to be productive again, a completly logical step in my opinion. In order to reform from this crisis we need to invest in the capabilities of America and get us back to point where we are competitive with the rest of the world in something other than bubbles.

China export declining

This article from the Economist talks about the declining trade figures for China especially in exports that the deterimental effect this may have on the global economy. The unfortunate prognosis is that the dismal performance of China the last few weeks is a bad sign for the economy as a whole since China was meant to be a staple consumer and producer while richer countries went into a recession, a hope that these trade numbers severely diminish.

India Moves to Cut Prices on Fuel

India is cutting their fuel prices by five rupees because of the falling oil prices. They did this to help boost the economy. This is the first fuel price drop in 22 months. In India the fuel prices are partly subsidized by the government.

The government had increased fuel prices in June before the record high $147 a barrel

Canada’s Rate at Half-Century Low

The Central Bank of Canada has slashed their interest rate to the lowest level it has been in fifty years to 1.5 percent. The cut was to hopefully promote economic growth. The Central Bank said, “The global recession would be broader and deeper than previously anticipated.” The action by governments across the globe has begun to rebuild the trust in financial markets.

The decline in trade and income has made households and business more cautious. To help restore this confidence, the Canadian government has just recently passed a $19 billion bailout package that would let them buy mortgages from troubled banks. The economy of Canada is closely tied to that of the United States, the largest importer of Canadian goods.

Oil Prices Up on Talk of OPEC Cut

Oil prices have increased since its four-year low of $40.35 a barrel. Oil prices increased $2.90 to $43.71 barrel. The president of OPEC, Chakib Khelil, said on Saturday that they could “surprise” markets with a production cut at their meeting in Algeria later this month; however, he did not state how large the cut would be. Analysts expect the cut to be approximately 2 million barrels.

Analysts now forecast lower prices amongst the global recession. Merrill lynch said that oil could hit $25 a barrel if China is hit hard by the global recession.

Russian Firms ‘Lead Bribe List’

Companies from the emerging economies of China and Russia are more likely to take bribes when doing business in other countries, a survey states of 2,742 senior business executives. Other countries that faired poorly were Mexico, India, and Italy. Belgium and Canada were the least likely to take bribes; the United States raked ninth on the list.

The Bribe Paying Index, or BPI, has shown that companies located in major exporting countries use bribes to win business in other countries, even though it can have detrimental effects on the reputations of the company or the community. Russia, India, and China are countries who have not signed the OECD’s convention against bribery. Russia’s President has said “corruption in his country is a threat to national security.”

Trichet Hints No Cut in January

The president of the European Central Bank or ECB Jean-Claude Trichet “hinted” that there would not be an additional interest rate cut at their January meeting. He says that the current cuts need to be “transmitted into the real economy.” The current rate is 2.5 percent, down from 3.25 percent.

He also cautioned European countries to be careful about borrowing; confidence is lost with countries near their maximum. EU countries are only allowed budget deficits of 3 percent of their GDP; some member countries have called to have that rule eased.

German Investor Confidence Rises

The sentiment with German investors is a little less negative in December, the index rising from -53.5 points to -45.2 points. The historical average is +27.1 points. The recent cut in interest rates has contributed for the slight increase, but investors realize of the tough times ahead and know the economy is slipping deeper into a recession. Overall things will get worse before they get better.

Germany just recently passed as €480 billion bailout package as well as a tax holiday for the sale of new cars.

EU Wants End to Old-Style Bulbs

The banning of conventional incandescent bulbs by 2012 has been suggested by a European Union report, citing reason of energy savings and cutting down on greenhouse gas emissions. The report said that Europeans could save $12 billion a year, $64 a household, with the switch. The report needs approval by all 27 EU member states and backing by the European Parliament.

When approved, the old bulbs would be phased out between September 2009 and September 2012. When the old bulbs are taken away, consumers would have the choice between long-life fluorescent or halogen lamps, both of these being 25 to 75 percent more efficient.

Other countries looking into similar rules are Australia, New Zealand, Canada, and the Philippines.

Monaco Drops Bid to Expand Land

Monaco has stopped pursing plans for a multi billion-dollar plan to expand the tiny city-state into the ocean. The project, which was slated to start in 2011, would of cost between $5 and $10 billion dollars and would increase their land area by 5 percent. It was abandoned because of environmental concerns, but more notably because of the global economic crisis. The large artificial peninsula would have had housing, shops and other tourist attractions. They said this project was necessary because there is just simply nowhere else to build.

Daewoo Leases African Plantation

Daewoo, a South Korean firm, has released plans to lease one million acres of land in Madagascar for 99 years. The land, which is half the size of Belgium, will be used for corn production in hopes of cutting South Korea’s reliance on US imports. Daewoo hopes to produce 5 million tons for corn by 2023 using all local help. Palm oil will also be grown on another 300,000 acres that the company plans on leasing.

Countries in Asian have been trying to ensure food supplies, after prices soared this past year. Daewoo also has a 50,000-acre farm in Indonesia.

Countries like Saudi Arabia and Kuwait, whose land is not fit for crops, is also seeking agricultural investments in Africa and Asia. Many African countries like Angola and Ethiopia have expressed interest in foreign investment in this sector.

China’s exports fall for first time in seven years

China’s exports fell in November for the first time in seven years as global demand weakened, data showed on Wednesday, adding to pressure on Beijing to reverse a worsening economic slump and avert heavy job losses.

The November trade surplus widened to a new monthly record of $40.1 billion as exports fell 2.2 per cent from the year-earlier period and imports fell even faster, dropping 17.9 per cent, the customs agency reported.

The sharper-than-expected decline adds to pressure on Beijing, which has launched a massive stimulus package to boost consumer spending in hopes of insulating China from the global slowdown.

‘The data breakdown shows a disturbing picture, indicating that in fact there is much to worry about,’ said Sherman Chan, a Moody’s Economy.com economist, in a report.

‘Exports will continue to contract in the next few months – at least until the U.S. and European economies show any solid signs of a bottom.’

Auto Bailout Hopes Lift Stocks

Wall Street is maintaining its optimism about a potential government lifeline for the U.S. automakers and largely looking past a sharp drop in wholesale inventories.

The Commerce Department said Wednesday wholesale inventories plunged by 1.1 percent in October. It is the largest drop in seven years.

Investors' relief over prospects for the automakers is dominating trading. Lawmakers are believed to be close to approving a $15 billion bailout for Detroit.

The Dow Jones industrials are up 67 at the 8,758 level.

Interest on T-Bills hits zero

The Treasury Department said Tuesday it had sold $30 billion in four-week bills at an interest rate of zero percent, the first time that's happened since the government began issuing the notes in 2001.

There's good news in all this for taxpayers: Low interest rates on government debt mean the United States is financing its $700 billion bailout of the financial system very cheaply. The Treasury has sold mountains of debt to pay for it. But the trend also underlines stubborn anxiety in the financial market that could keep the economy sluggish for years to come, and it translates into stagnant returns for people who have their money in places like money market funds.

Earning zero percent on an investment for a short while may not seem that dire for the average person. But a zero percent rate will have serious consequences for the complex credit markets. Those markets have been dysfunctional since Lehman Brothers Holdings Inc. went bankrupt in September, scaring away investors who normally buy bonds from seemingly creditworthy borrowers. Lending, the lifeblood of the economy, has frozen up. And high demand for government debt rather than corporate debt could stifle economic growth.

Corporate bond rates have been surging to record levels compared with Treasury's, which makes it more expensive for companies to raise money. And when companies can't raise money, they often have to cut costs, sometimes through layoffs. Many worry that the government will become the most attractive lender and borrower in the market -- crowding out others in the private sector.