Americans have flown over the cuckoo’s nest! They are so pissed off and desperate with the way the economy is doing and have started swearing publicly on TV. Here, take a look..
Archive for March, 2009|Monthly archive page
Global economy is expected to contract by 2.75% this year according to OECD (Organization for Economic Co-operation and Development). American, Japanese and Euro-zone economies are expected to shrink by 4%, 6.1% and 4.1% respectively while world trade is going to fall by 13.2%. OECD also reports that “The world economy is in the midst of its deepest and most synchronized recession in our lifetimes, caused by a global financial crisis and deepened by a collapse in world trade”. Economic recovery will appear during 2010 when global growth will approach 1.2%, only under the condition that governments act soon and collectively. Moreover, the OECD urges Central Bankers to cut interest rates to zero levels to boost more credit into the ‘dry’ markets and get the economy moving again.
Complementary to monetary loosening, OECD suggests that countries able to undertake fiscal manoeuvre like Germany, Canada, Australia, Netherlands, Switzerland and the Nordic countries, should do so asap in a co-ordinated manner.
OECD Chief Economist Klaus Schmidt-Hebbel embraced Geithner’s plan to remove banks’ toxic assets from their balance sheets but mentioned that it still faces “significant risks” lending it a probability of success of 50%.
Despite OECD’s pessimism, it rejects any scenarios of recession turning into a 1930s depression due to the high vigilance of all governments and their respective measures employed to tackle this global crisis.
Finally, unemployment levels will ‘touch’ double digit rates and they will keep growing during 2010. Central and Eastern Europe will struggle with their external payments and domestic banking “intensifying the global downturn and raising the demand for external funds”.
A rather pessimistic report but to the point. Things will get worse before they get better. OECD tries to prepare the ground for the G20 summit in London and convince the leaders to take immediate co-ordinated action.
The tight restrictions posed by Washington to the two automakers yesterday, GM and Chrysler, will bring severe changes on the structure of the firms and their products. One of the very first victims seems to be Hummer. Its sales over the last year have fallen about 51% – the biggest drop in the US auto-industry. GM had been trying to find a buyer for the brand since June 2008 but no light has been shedded yet. Sale or closure, Hummer is no longer in GM’s plans. I really can’t see any prospects for this luxurious brand considering the crunchy financial times and the new environmental stance that Obama seems to be standing firm about.
Rumor has it that GM plans to stick with only two brands from its existing eight, and lead those two back to profitability.
Technology and innovation combined their creativity and practicality and gave birth to the new pizza vending machine, ‘Let’s Pizza’. This machine that “makes and delivers pizza in three minutes will make its appearance in offices and factories around Italy from this week”. The pizza is prepared from scratch; “a window in the front allows customers to watch as the flour is kneaded, the pizza disc formed, tomato paste and other ingredients spread on top and the finished creation baked under infra-red rays” at the cost of 5 euros. Following the success of cappuccino vending machines in Italy, Claudio Torghele, the inventor of ‘Let’s Pizza’ hopes that his product will share part of that success. Traditional pizza makers are (obviously!) upset, feeling the pinch of this new venture that can undercut them. Although ‘Let’s Pizza’ lacks of the natural aroma of a wooden oven, its success is highly likely given the times.
With all these massive stimulus packages employed to revamp the global economy, we have get used to hearing humongous amounts that couple of years ago were only used to measure a country’s GDP. US government and the media have been ‘brainwashing’ us with all the rescue plans that it has now become a regular thing hearing about billions or even trillions sometimes. No it’s not! I am talking about the inflation of words. What I mean by that is that we don’t really ‘process’ the amounts we are hearing about when referring to billions. As a result, this creates panic and inflated firm and assets valuations. Speaking of which..
Attention! The following video contains strong violence
Many of us leave our laptops on overnight so that the next morning we won’t have to spend all this time booting it up, relaunching our applications, filtering our spam and so on, a process that usually takes 5 minutes but feels as an eternity in the morning! A study has finally attempted to measure the aggregate power that is wasted from computers sitting idle overnight; $2.8bln a year just in the US! “On a CO2 basis, that’s 20 million tons of carbon dioxide, about the amount produced by 4 million cars on the road.” Needless to say that PCs and Macs function better when rebooted. The more time your laptop is on, the faster your battery is being worn so by turning your laptop off you save more money than you actually think!
Following the G20 summit in New York almost four months ago, global leaders are meeting again in London this coming week to discuss and try to resolve our world’s major threats. Economic crisis and environmental issues are expectedly at the top of the agenda. What is worth noticing, though, is that there seems to be a climate of divergence in economic policies that Europe and the US are adopting. Not so long ago, the Czech PM described Obama’s economic stimulus plan as “a road to hell”. Europe holds a rather reactive stance on recession as it’s afraid that massive spendings and zero interest rates could soar inflationary pressures in about two years time. Well, isn’t this what the ECB exists for? – to increase interest rates and withdraw money from the economy to curb inflation. The main issue though is that policies should be co-ordinated because if one country decides to bolster its domestic consumption this will only increase its imports assuming its trading partners have not adopted similar expansionary policies. This is a global recession and requires globally collective and simultaneous action.
Needless, to say that protests have been escalating all over the world as the G20 summit culminates.”Tens of thousands of trade unionists, environmental campaigners and anti-globalization activists took to the streets of London on Saturday to start five days of protests before the G20 summit.” The agenda is bigger than ever and the stakes are really high. As unusual as it sounds, it’s time that leaders put the world’s interest ahead of their country’s interest.
There will be post-G20 Summit coverage next week..