Wednesday, December 17, 2014

Russia Economic Crisis

Russia hiking their interest rate failed to rescue the free-falling rouble and it may lead to full-blown currency crisis. Russian Central Bank had an emergency midnight meeting and raised their interest rates by 6.5%.

Deputy governor of Russia’s central bank Sergei Shvetsov said “Believe me, the choice that the central bank council made yesterday was a choice between the very bad and the very, very bad.” They don't have a choice but push the economy closer to a deep slump by hiking borrowing costs, they just could not sit back and do nothing as the rouble slump further.

Shvetsov added that, it was just a very bad day.

Their strategy to shock the interest rates up from 10.5% to 17% in one go was a one big flop. The Russian currency ended another turbulent day’s trading below where it started and plumbed new record lows against the US dollar. Russia has been spending the past nine months fighting an economic war against the US and Europe's selfish sanctions. This Tuesday December 16 they clearly lost.

Russia should say what the hell and begin dumping US Debts and US dollars and take everyone with him.

Friday, December 12, 2014

Oil Slips a new Affects European stocks

U.S. crude oil sustained heavy loses as it slip further to under $60 a barrel. Brent crude has recorded its five and a half year low and on its way for sharp weekly loss. Europe stocks are glowing red, while German 10-yr bond yield at record low.

Falling crude oil prices have exposed weakness in U.S. high yield markets and increase volatility across asset classes.

The STOXX Europe 600 Oil & Gas Index went down about 1% in early trading, it pulled down the pan-European FTSEurofirst 300 index to 1,347.45 points. The euro zone's blue-chip Euro STOXX 50 index slide by 0.8% to 3,133.36 points with political concerns over Greece also hurting European stocks.

Global crude prices went down in recent weeks because of enormous oversupply, raising fears that deflation could hit economies around the world.

China data added up to more concerns for investors, with factory growth slowing more than expected last month to its second-worst reading since the global crisis and investment expansion hovering near a 13-year low.

Thursday, December 4, 2014

IMF: America Slipped to No. 2

IMF, America Slipped to No. 2, world economy, PPP, China, US

The United States of America is no longer the top economy, the country has slipped to number 2. China has just overtook the US economy to become the largest in the world. This is the first time that it happened since Ulysses S. Grant was president, the US is no longer the leading economic power on earth. This is a major shift in world affairs.

The International Monetary Fund (IMF) announced the latest numbers for the world economy. They use the measurement of national economic output in “real” terms of goods and services, China this year produce $17.6 trillion against $17.4 trillion of the US.

China now is responsible for 16.5% of the global economy when you use the real purchasing-power measure, compared with 16.3% for the U.S. This is a major economic earthquake. In 2013, China overtook the US for the first time in terms of global trade.

This was already reported by economist that China will overtake the US but it came sooner than expected. Chinese Government has recently decided to bring gross domestic product calculations in accordance with international standards this has revealed economic activity that had previously gone uncounted.

The IMF used the well-established and widely used economic measure known as purchasing-power parity (or PPP).

IMF reports

Thursday, November 27, 2014

Oil price are Down ahead of Opec meeting

Oil futures drop down to a new 4-year lows overnight as Opec members meet in Vienna this Thursday to decide whether to cut production.

ICE January Brent fell $2.27 to $75.48 a barrel (4-year low), while Nymex West Texas Intermediate was off $1.48 at $72.19. Brent crude is down -1.4% at $76.67. WTI is down -0.8% at $73.08.

Saudi Oil Minister Ali al-Naimi said yesterday that he believe that the oil market will stabilize itself eventually.

If they don't cut production, obviously the price of crude oil will continously fall. US rising oil production and Opec supplies surplus occured simultaneously with the low demand for it in China and Europe.

Tuesday, November 18, 2014

Japan's Economy Contracts Into Recession

Japan economy, world economy, business, finance

Japan's (3rd largest economy in the world) economy shrank for the second consecutive quarter that put them in recession surprised the world. Gross domestic product (GDP) went down at an annualised 1.6% from July to September, compared with forecasts of a 2.1% rise. It followed a revised 7.3% contraction in the second quarter, this is the biggest fall since the March 2011 earthquake and tsunami.

Japan's Prime Minister Shinzo Abe will be calling a snap election to obtain a mandate to delay sales tax rise to 10%, which is scheduled for 2015.

The economy shrank 0.4% in the third quarter from the quarter previous. The data showed that growth in private consumption, which accounts for about 60% of the economy, was much weaker than expected.

Saturday, November 1, 2014

Manufacturing Growth in China Falls in October Unexpectedly

BEIJING, November 1 - China's manufacturing growth fall to a five-month low in October along with a slowing economy and a weak global demand. The official Purchasing Managers' Index (PMI) fall to 50.8 in October from September's 51.1, according to a survey from the National Bureau of Statistics that was released on Saturday. They also noted that it is still above the 50-point level that separates growth from contraction on a monthly basis.

The PMI showed foreign and domestic demand fall to five- and six-month lows, respectively, with overseas orders shrinking slightly on a monthly basis.

China's growth fell to 7.3% in the third quarter, its lowest level since the 2008 and 2009 global financial crisis, as the housing market sagged and domestic demand and investments are down.

Chinese government have said that full-year economic growth may fall short of their 7.5% target, but that it would be acceptable as long as inflation stays low and the economy continues to produce jobs.

The World Bank has said that China's growth could possible go down to about 7% next year, they said that Beijing should found a way to promote competition and efficiency through reforms in their labor and real estate markets along with its state-run financial system.

Thursday, October 23, 2014

Spain Jobless Rate Drops Economy Recovers

Spain Jobless Rate, Spain economy, Spain news

The unemployment rate of Spain went down to its lowest since the end of 2011, Spain's economy is now the fastest-growing in Europe. The jobless rate is down to 23.7% in 3 months up to September. Previous quarter's jobless rate is at 24.5%. Their economy grew about 0.5%.

Prime Minister Mariano Rajoy go easy on laws about wage cuts and dismissal from work back in 2012 to encourage the hiring of people from companies. However, unemployment rate is still the 2nd highest in the European Union after Greece.

Analyst Diego Trivino said that “It’ll take the economy about 8 years to recover pre-crisis job levels. Unemployment will remain high and close to 18% for the next five years.”

Economists surveyed by Bloomberg News forecast a decline in joblessness to 24.1 percent in the third quarter.

The number of jobs rose 1.59 percent from a year ago in the third quarter, INE data released today show. In seasonally adjusted terms, job creation increased from the previous three months, marking the fourth straight quarterly gain.