Daily China-Taiwan Flights Begin

Daily passenger and cargo flights have begun between China and Taiwan. It’s the first time in 60 years that such direct transport has been allowed between the two states. It was a visit by a top Chinese official to Taiwan when these negotiations were agreed upon. The agreement is to allow up to 108 flights. Before, both planes and cargo ships would have to make detours to places like Japan or Hong Kong before going to its destination.

This new direct routes will not only save time, but will also decrease the cost of doing business. Supporters see this as a step to warmer ties with China.

Slump in Japan Firms’ Confidence

Japanese business confidence has had the biggest drop in 34 years. The drop was due to fears the economy is headed towards a very long recession. The Tankan survey, which measures business sentiment, fell to -34 from -3. This was the fourth straight decline of the index. Analysts speculate interest rates will be lowered sometime in the future, the exact date is unknown.

This is the first recession for Japan in seven years. Japanese exporters have been especially hard hit due to the global financial downturn and the yen’s surge to a thirteen year high. The current index of -34 was expected, but the next survey is expected to decrease to -36.

North Korea Launches First 3G Phone Network

The first hi-tech mobile phone network for North Korea has been announced by an Egyptian telecom firm. The firm, called Orascom, says that it will invest $400 million over four years. It is unclear who will be able to use the system since North Korea is one of the world’s tightest societies. The country launched a basic system in 2002, but most citizens are banned from using it.

The new system has been launched in the capital city of Pyongyang thus far. The new system will be able to accommodate all 22 million of North Korea’s citizens being able to handle fast internet connections and large quantities of information. Making phone calls out of North Korea is impossible. It is unsure if this new cell phone network will be available to all citizens, but the handset for the new network will cost about $700, which will be out of reach for the vast majority of the citizens

The chief executive of Orascom said that “he was astonished by the quality and advancement of the Korean people,” however the UN estimates that 40 percent of the population is in need of food aid.

Castro on First Presidential Trip

Cuba’s new president, Raul Castro, made his first oversees trip and visited Venezuela, a long time Cuba ally. On this trip, Castro met with Hugo Chavez where the two of them signed a series of joint energy and commercial deals. Also during this trip, 300 different projects in health, education, and culture were announced.

This visit was mostly symbolic in nature, but the two leaders discussed ways to deal with the global economic crisis and the low price of oil, which Cuba receives 90,000 barrels of oil from Venezuela everyday.

US Sales and Producer Prices Fall

Both producer and retail prices fell quite a bit in November due to decreased consumer spending and the reduction in energy prices. Sales fell 1.8 percent, which is the fifth consecutive decrease, but better than October’s 2.9 percent decrease.

The percentage fall is retail sales was not a bad as analysts had expected. Gas price reduction played a major part in the decrease in these percentages.

Pound Continues to Fall Against Euro

Pound Sterling has fallen to a new low against the euro. The US dollar also fell against the euro due to interest rate cut talks. For every one pound it costs 1.1084 euros, or for every euro its 90.22 pence. The dollar fell to $1.3662 against the euro and $1.5294 against the British pound.

The decline in the dollar is due to the uncertainty of the US carmakers and the state of the overall economy. A bailout plan is defiantly weighing hard on the value of the US dollar. The value of the euro was supported by speculations that the ECB will not change interest rates too much in the future.

US Industrial Output Falls by 0.6%

The US industrial production fell by .6 percent in November, which is less that analysts had expected. It was anticipated to fall by .8 percent. Compared to November 2007, industrial production is down 5.5 percent.

Output was up 1.5 percent in October, which is higher than the estimated 1.3 percent. Output at US mines, which includes oil drilling, was up 2.5 percent.

These not so horrible numbers could possibly have been padded due to the increase in oil production following hurricane Ike and the end to strikes at Boeing.

Obama Picks Nobel Man for Energy

US President-elect Barack Obama has picked Steven Chu for his energy secretary. He is a Nobel winner in physics. He is the director of the Lawrence Berkeley National Laboratory and is an energy specialist. Some of the other members of Mr. Obama’s energy team that were recently picked are:

-Lisa Jackson: Head of the EPA
-Carol Browner: will co-ordinate a council on environmental change
-Nancy Sutley: Head of the council on environmental quality

Mr. Obama has made climate change one of his top priorities, stating that we must “move beyond our oil addiction and create a new hybrid economy.”

Fraud Risk ‘Rises’ During Crunch

Fraud will likely increase in the workplace during the global economic downturn, a report has found. The reason for the increase will be because of false figures to make performance look better and because employees, who are facing tough times, are more likely to commit fraud. The typical person who commits fraud is a manager who is male between the ages of 35 to 55. This individual usually works in the finance department and has worked at the company for many years.

Overall, fraud is on the rise and the report states that during the global economic downturn it’s only going to get worse. It will take months to see if the reports findings will come true.

US Rate Cut Towards Zero Expected

The US Federal Reserve is expected to cut rates again from an already historical low of 1 percent. It is expected to decrease to .5 percent or possibly .25 percent. With these cuts, the policy makers at The Fed are running out of options. Other tools they have would be buying debt backed by home loans.

It was the failure of the housing market that caused the problems in the US to begin with, but an increase in demand in that sector could boost the economy. Another way to battle deflation is to use quantitative easing, which is when a central bank prints money and puts it in an economy. Deflation becomes more of a risk if interest rates are expected to decrease, as is the case in the United States.

Rates were at 5.25 percent in September 2007.

Massive Job Losses in Congo Mines

More than 200,000 jobs have been lost in the Democratic Republic of Congo. The reason for this is the decrease in mineral prices due to the global economic crisis. The number of job losses could increase by another 100,000 by the end of this month. The price of producing things like cobalt and copper are greater than the prices of the actual commodities. Forty firms have shut down in the past month due to the collapse in prices. The Democratic Republic of Congo produces 40 percent of the world cobalt. The situation could be helped if the government would decrease taxes on the mining sector.

A Visual Guide to the Financial Crisis

I found this link a while back through the website Digg.com and thought it was very interesting. Basically it gives a visual illustration to the current financial problems and shows how interconnected some of the problems are.

It starts out with what I personally believe has been a major problem, with historically low interest rates. This coupled with excess funds from the burst of the dot com bubble meant that a large investment went into the housing sector. The diagram also gives some nice quotes. I especially like the last one from President Bush.

The Onion

The Onion once again, read it for some lighter material.

After Rate Cuts: The Fed's New Ball Game

This article talks about the Fed's new plan to save the economy and bring us out of the recession. It says that the main instrument (that they hope will be effective) is to print a bunch of money. Everything I have learned in my economic education has shown that this is not the answer. This article acknowledges that the end result could be high inflation and even larger government debt when the recession is cleared. So what are they thinking?? Is a short term fix really that important that we want to cause irreparable damage??

Bankruptcy Filings up 30% this year

This article is about the rather large bankruptcy percentage increase in the United States. It explains that the number of company bankruptcies, as well as individual ones, have both risen. However, the article goes on to explain that the bankruptcy rates are actually lower than that of two years ago. This is rather surprising to me. Why weren't people worried about this two years ago when it happened... Most likely the recession is the simple answer, but any ideas?

Obama filling up the Energy Department

US President-elect Barack Obama has tapped physics Nobel Prize winner Steven Chu as his new energy secretary. Dr Chu shared the 1997 Nobel Prize for physics for his work on cooling and trapping atoms using laser light and is a leader in the field to combat climate change using scientific methods. He now is the director of the Lawrence Berkeley National Laboratory.

Mr Obama also picked former head of the New Jersey Department of Environmental Protection, Lisa Jackson, to lead the environmental protection agency (EPA), and has named Nancy Sutley, a deputy mayor of Los Angeles, as head of the White House's council on environmental quality.

Announcing the environment team, the president-elect vowed to "move beyond our oil addiction and create a new hybrid economy".

I don't know much about the new appointee-elect (is that what you would call them?) but I know their home state and towns don't have the best relationship with nature right now. Maybe they have done a lot respectively.

What's good with Russia?!?!?

A gang of seven racist skinheads, who killed 18 non-Slavic migrants, in Russia's capital have been sentenced to jail terms of between six and 20 years. The murders originally took place between August 2006 and October 2007. The jail sentences are so low beacuse most of the attackers were minors at the time. If you follow the link you can see some of the footage the youths took with a camera phone. The heaviest jail term was handed to Roman Kuzin, one of the leaders, who got 20 years.

I really hope they spend time trying to rehabilitate those kids, not just throw them in jail. You have to stop the racism at the source, not just punish bad behavior, otherwise it won't stop. I think a lot of it has to do with recources. If everything is prosperous and people have jobs I do not care who comes in and out the country that much. But when you see whoever from half-way across the world come and take your fathers job. And it is a recurrence then you'll will just think it is all their fault.

Siemens in corruption settlement

German industrial giant Siemens has agreed to pay over $1.3 billion to settle charges. Siemens is charged with bribery and falsifying its books. As part of the settlement, Siemens will still be able to bid for government contracts in the US. Once again, I feel that this is more of a slap on the wrist for this huge company than a true punishment. They got off easy.

Banks hit worldwide by US 'fraud'

Bernard Madoff has been charged with fraud in what is the biggest case ever in the history of markets. All in all, it amounts to a loss of $50 billion worldwide. A lot of banks in the UK, Spain and France are some of the biggest losers. US prosecutors say Mr Madoff, a former head of the Nasdaq stock market, masterminded a fraud of massive proportions through his hedge fund and investment advisory business. What he did is pay off people already invested in the hedge fund with money from new investors. If found guilty he could face 20 years in prison and a $5m fine. I think he would be getting off easy with this sentence, and he needs to be made an example of, what do you guys think?

Obesity 'controlled by the brain'

Seven new gene variants discovered by scientists suggest that obesity is largely a mental problem. The findings conclude the brain plays a major role in the functions of an appetite, and obesity cannot be blamed solely on metabolic flaws. All seven variants were picked up by a study led by Icelandic company deCODE Genetics, while six of the seven were also identified in a second, independent study by an international team dubbed the Giant consortium.

I think this can do more for people for losing weight. The more control they are aware that they have, the more motivated they will be to change their weight.

Around the World in 80 days

The Bush administration continues it's travels around the world embarks on a late series of foreign policy initiatives. This week the start of the show is Secretary of State Condolezza Rice working at the United Nations seeking help fighting Somali pirates, trying to avert a humanitarian disaster in Zimbabwe and reaching for momentum in Middle East peace efforts.

The State Department did not release details of Dr. Rice's schedule before her trip, but the U.S. is circulating a resolution that would authorize military force against pirates in Somalia, including land and air attacks on pirate bases. Again they are stopping one of the many symptoms of what is a bigger problem.

Dr. Rice, Russian Foreign Minister Sergey Lavrov, EU commissioners Bettina Ferrero-Waldner and Javier Solana, and U.N. Secretary-General Ban Ki-moon will participate in the 60-minute discussion, as well as a second meeting with Arab foreign ministers. Then on Tuesday Miss Rice will attend the Security Council session on Somalia.

Oil Prices Rise With Upcoming OPEC Meeting

Oil prices have risen to about $49 a barrel with the rumor of OPEC cutting supplies by 2 million barrels per day. The leaders in OPEC are trying to combat predictions that oil prices will sink below $30 a barrel in early 2009.

Saudi Arabia said $75 a barrel is a fair price. But what I want to know is shouldn't they have tons of money saved up from when oil was almost $150 a barrel? It seems only fair that prices sink really low for a period.

Christmas Shopping Down

This holiday shopping season has been the worst in decades. Some stores have had to slash their prices 50-70% to draw shoppers in. It is expected that many households will reduce their shopping budget to almost half of what it was last year.

Saturday Dec. 13 was the best shopping day of the season, but still did not compare to last year. Sales on "Black Friday" were 34.5% lower than they were last year. One positive that is coming from this is that shoppers can expect to see even bigger deals in the days to come. Large department stores and electronic stores are going to be looking to reduce their stock and trying to win over reluctant shoppers with great deals.

No End In Sight

U.S. homes are predicted to have lost $2 trillion in value over the past year. There is no end in sight for the mortgage crisis and the falling property values compound the problem. Now homeowners owe a mortgage that is worth more than their home.

Stan Humphris, CEO of zillow.com, said,"When we look for a turnaround we look for two or three consecutive quarters [of smaller price declines]...We also want to see sales numbers pick up, inventories go down and improvements in foreclosure figures. Foreclosures really muddy the picture."

One area of the country where home values are increasing are in metropolitan North Carolina and South Carolina.

Blagojevich Blunder

I know the economy is pretty bad right now, but resorting to auctioning off President-elect Obama's Senate seat? Really? When I first heard about this on the news, I honestly thought it was a joke, but unfortunately for myself and the rest of the country, it was only the tip of the iceberg. Rod R. Blagojevich has been charged with not only auctioning off the senate seat, but also for participating in "pay-for-play" schemes, harassing the Chicago Tribune, and trying to get himself either a chair position, or a better paying job for his wife. The kinds of stuff he is reported to have said in taped phone conversations in unbelievable, it sounds like something straight out of a movie.

U.S. Auto Bailout Remains Elusive

Along with the bailout in the finacial sector in U.S. market, there has been consideration for U.S auto industry as they are currently seeking for support from the government.

As credit became hard to obtain, the automobile industry has been facing decrease in demand for cars in addition to the increase in energy prices. Due to this, the U.S. hasendorsed the idea o a goverment bridge loan in return for signifcant stemps to retrucure automobile companies to make them more competitive. This bridge loan is projected as $14 billion dollars but still it remains elusive as the goverment faces other difficulties.

Semiconductors, helmets and ginseng are all No. 1

This article describes the major items that Korea produces that are high in demand by oversea countries. Especially in 2007, there has been 127 Korean products that clained top global market shares, and among them are semiconductor chips, LCD monitors, and Kimchi as wel.

With the maintanance of the high market share for these items, it is a hope for Korea to have increase in the export as these items are constantly in demand to recover from the current recession.

Japan machinery orders down 4.4 percent in October

Industrial Asia is composed of three countries; Japn, Austrailia and New Zealand, and as for december Japn is facing 4.4 percent decline which shows a rapidly worsening economy.
The primary reason for this decline is due to the less demand of goods as well as decrease in the investment for the firms as they are facing credit crunch.

Historically, Japan has been facing economic hardship but through the development of the industrial sector, they were able to make a comeback.

As the decline is expected to decrease further, there are concerns with the recession in Japan where industrial sector is the main driven force in the economy for Japan.

World stocks rocket on hopes of fresh policy action

The stock market is currently facing difficulties due to the current financial crisis. However, the global stock market has been rebounded sharply due to the fresh US goverment action to right the deepening recession in the massive job losses.

As the stock market around the world like Britain, France and EU have been facing declines of around 6%, and Japan, Hong Kong and Korea were also facing declines.

However, due to the new policies they ahve been facing increase in the stock market up to 8%.

Although they face faced recent increase in the stock market, the are hoping for more fresh policy become more stabilized.

OECD urges US health system reform, supports fiscal stimulus

This article emphasizes the importance of health system in US. Beofore the economy gets worsened, it is believed that they would inject more public money to help out the people in U.S. As 16% of the people are unprotected from healthcare, the goverment must step in to help out the people.

The goverment has currently imposed many fiscal stimulus like the curren huge bailing package for the financial institutions, and ther are some worries that continual support from the goverment may increase the debt in this country.

As the U.S. is th eonly OECD country that does not provide universal healthcare insurance, it would bring more devistation to people in U.S. especialy with the current recession as thounds of job cuts are being made everyday.

U.S. trade deficit grew in October as exports slowed

It seems that Asian countries are not only the ones who are facing decrease in the exports. According to this artcile, the U.S. exports also have declined, facing trade deficit for U.S. In October for the first tim, exports fell by 2.2 percents especially due to declines in sale of automobiles and consumer goods. The primary reason for this is due to the strengthening of the dollar against major world currencies, thus the price that foreigners would have to pay has increased on American goods.

As compared to the decrease in exports, the trade deficit may not be so devistating as it has occured due to the strengthening of the dollar. Although this may bring trade deficit, the strengthing of the dollar may bring other positive effects in return.

Econmic outlook for Asia and Pacific Region

This is an image that I found in the IMF website which shows how the current global recession is influencing the Emerging Asian Countries. The emerging Asian countries are China, India, Hong Kong, Korea, Singapore, Taiwan, Indonesia, Malaysia, Philippines, Thailand and Vietnam.

For the project of GDP for 2009, it will continue to decline further from 2008. The main component of this decline is due to decreas in private consumption and gross fixed investment but also due to the decrease in exports.

As there has been significant decrease in the general demand for goods from overseas due to the current recession, Asian countries where export is a significant part of the component in increase in production has been significantly decrased.

OECD warns of worst recession since early 1980s

This article is regarding the current economic recession. According to Organization for Economic Cooperations and Development (OECD), the world recession is the worst since the early 1980s. The output expected will decrease by 0.4 in 2009 for the 30 market democracies that makes up the membership of OECD countries. As a result, number of unemployment would also rise over 8 million, in addition to deflation.

Especially, for U.S, and Japan, the contraction is expected as 0.9 and 0.1 respectively.

According to the OECD's chief economist, many OECD economies are in a protracted recession of a magnitude not expected since the early 198s.

I think it gives another aspect of the current recession, by showing that even the members of the OECD countries arefacing slowing of growth and increase in unemployment

Chrina Will Not Invest In Risky Markets

China is expected to have a growth of 4.9% next year. Because of this large growth many other coutries are looking to China to help with investments. However, experts are saying it is very unlikely China will help. A major reason China will be doing so well in the face of world demise is that they have such a large number of emerging markets.

Attacked Mumbai hotels to reopen

Efforts are underway to open sections of two luxury hotels in Mumbai that were targeted during deadly attacks in the city last month. The managements of the two hotels have announced parts of the Taj Mahal Palace and Tower and of the Oberoi Trident will reopen on Sunday and they both have begun accepting bookings ahead of the reopening.

"To reopen the Taj with such speed but with no loss of attention to details, shows our resolve to commemorate all the innocent and brave people who lost their lives during the terrorist attacks," said Raymond Bickson, managing director and chief executive of the Indian Hotels Company, which owns the hotel.

I Love My State

Jesse Jackson Jr. said he wants his good name back after being identified in the "pay to play" scandal with Blagojevich. However, it is reported that reps for Jackson offered the governor one million dollars to have him selected.

It's pretty ironic that Obama won on a platform of change and this is happening with people he associates with for his old position.

Obama Picks Donovan

Obama selected Shaun Donovan, New York's Housing Commissioner, to be his Housing and Urban Development.

Obama said, "To stem the rising tide of foreclosures and strengthen our economy, I've asked my economic team to develop a bold plan that will dramatically increase the number of families who can stay in their homes...But this plan will only work with a comprehensive, coordinated federal effort to make it a reality."

The only thing I'm uneasy about is Obama is still pushing for every American to own a home right now- shouldn't we let things be fixed before we make more morgages to people who may not be the best candidates?

Calm returns to Athens after riot

Calm has returned to the Greek capital, Athens, after eight consecutive days of rioting sparked by the shooting dead by police of a 15-year-old boy. At the police station where the officer charged with the murder of Alexandros Grigoropoulos was based, people threw petrol bombs on Saturday night. A protest outside the police station is designated for Monday. Although things have calmed down a poll suggests most people think the riots are a social uprising, as opposed to just the reaction to a shooting. The poll concludes that sixty per cent of those questioned by the Kathimerini newspaper rejected the assertion that the disturbances have been merely a series of co-ordinated attacks by a small hard core of anarchists. Some 300 people staged a peaceful vigil at the site of the boy's death.

New Thai prime minister elected

Thailand's opposition leader, Abhisit Vejjajiva, has been confirmed as the country's new prime minister after a special vote in parliament.

It was announced by Chai Chidchob, speaker of the lower house, that the Democrat Party leader had beaten ex-police chief Pracha Promnok by 235 votes to 198 to become Thailand's fifth leader in just over two years. The last prime minister, Somchai Wongsawat, and several other People Power Party leaders were barred from politics for five years. The article also reports that there are accusations of behind-the-scenes bargains to persuade the MP's to switch sides, with enticing cabinet posts and large sums of cash offered by both sides.

Unemplyment Benefits Are Running Out

"With unemployment claims reaching their highest levels in decades, states are running out of money to pay benefits, and some are turning to the federal government for loans or increasing taxes on businesses to make the payments," Jennifer Steinhaur said.

Indiana has already had to borrow from the government and Ohio is close to having to do the same. Unemployment has reached a height not seen since 1982 and many states have not kept a fund to prepare for high unemployment. A major reason for the problem is that some states have not increased their taxes to fund unemployment benefits.