http://www.vancouversun.com/news/Chilling+legacy+bailout+socialists/1661236/story.html
June 9, 2009
In this article, it talks about the eventual bailout in which the Canadians would give to the once powerful GM company. Prime Minister Stephen Harper claims that there wasn't any choice, but to commit $9.5 billions dollars in the bailout. Harper said his Conservative government faced two options: "Either participate in the restructuring of GM, which directly and indirectly account for literally hundreds of thousands of jobs, or stand idly by as they are completely restructured out of Canada." U.S. President Barack Obama noted the Canadian contribution and made a remark that "GM is an American company with tens of thousands of employees in this country, and responsibility for its future ultimately rests with us." According to Canadian Prime Minister Stephen Harper, the deal can ultimately lead to being "regrettable" but it's also "necessary," since Harper argues that a bailout was implemented so an economic catastrophe in Ontario would not happen. The Conservative party also believes that the new company will be leaner and less burdened with debt. The GM bailout is certainly a deal that taxpayers will certainly regret because your share, by the way, is about $300, or $1,200 for a family of four, all on the government's credit card, to be paid with interest through your taxes.
Connections to Introduction
The connection I make with this article and Chapter 10 has to do with the term foreign ownership. In this story, this is exactly what is happening for the Canadians because GM is an American automotive company that provide thousands of job for many Canadians. The Conservative government is hesitant in providing the bailout, but they also understand that many Canadians will be unemploy if a bailout is not put to action. The possibility of the GM company continuing to fail even after the bailout is highly possible, but The Conservative government believes that the bailout is a neccessity because the Ontario economic picture will face many problems. This is basically the problems in which GM have caused for Canada because of the foreign ownership which the company have over here in Canada.
Reflection
Overall, I think the bailout is not very neccessary because GM will never be that power they once were. Even if the Canadian and American government offer a huge bailout, I highly doubt GM would be better than what they once were because many consumer have lost interest and trust in these American car company. In fact, many economist thinks that company that is falling should stay down because a bailout would not benefit the economy at all. It can possibly keep many workers to be employed, but in the long run it's not beneficial at all. I think the Canadian tax dollars should be put to better usage than this because all they are doing is reviving a company that will never return to what it once were. At the end of the day, we are only helping the Americans more.
Thursday, June 11, 2009
Friday, April 17, 2009
How monetary policy influences mortgage decisions
March 25, 2009
In this article, it explains the different combatants in which the banks are using to fight off inflation rates through it's monetary policy. When inflation rate for monetary policy is in stable, then mortgages also maintain stability due to the interest rate lever. Bank has set an inflation target of two per cent and interest rates are raised or lowered to increase or reduce borrowing, which in turn depresses demand. In this way, the banks are then able to control inflation. The bank has also been trying to encourage lending by injecting liquidity into the financial system, however many also fear that this injection of liquidity would cause the threat of stagflation. However, the bank is currently not "printing money" to carry out this task. Rather, they are purchasing assets, such as commercial paper and bankers' acceptances, from financial institutions, then later replacing these assets with cash and more liquid government securities. For inflation watchers, this should be good news because in January, the banks predicted that the inflation rates will return to the 2% range by the first half of 2011 because this is also the time where most people predict the economy will return to it's fullest potential once again.
Connections to Introduction
The connection I make with this article and chapter 8 has to do with the term stagflation. Stagflation is a term used to describe a situation of depressed levels of real output in the economy, combined with rising prices. In simpler sense, stagflation is basically an inflation with no economic growth. In the article, the banks were plotting to input a large cash flow to try to jump start the financial system, in order to encourage lending. However, many people are widely concerned with this point of practice mainly because of the threat of stagflation. If the money they implemented into the financial system ended up with results that is unproductive, then many fear that this money would only increase inflation since many assume that this large cash flow is basically going to be produced by "printing money." But in reality the bank is going to accomplish this by purchasing assets, such as commercial paper and bankers' acceptances, from financial institutions that have been unable to trade them because of tight credit markets and replacing them with cash or more liquid government securities.
Reflection
Overall, I think it's still a mystery to many people in how the banks are actually going to implement their strategy in jump starting the financial system again. Up until now, many people have speculated that the banks only strategy is to "print money." However, I was actually surprise to hear that the banks was using another strategy to increase the demand for lending. This strategy is actually something I have never really heard about, but I think it's actually a better idea than to "print money," because this strategy of purchasing assets can lower the chance of stagflation. I also feel that it's good news to hear that the economy will eventually rise back up to its potential by 2011.
Connections to Introduction
The connection I make with this article and chapter 8 has to do with the term stagflation. Stagflation is a term used to describe a situation of depressed levels of real output in the economy, combined with rising prices. In simpler sense, stagflation is basically an inflation with no economic growth. In the article, the banks were plotting to input a large cash flow to try to jump start the financial system, in order to encourage lending. However, many people are widely concerned with this point of practice mainly because of the threat of stagflation. If the money they implemented into the financial system ended up with results that is unproductive, then many fear that this money would only increase inflation since many assume that this large cash flow is basically going to be produced by "printing money." But in reality the bank is going to accomplish this by purchasing assets, such as commercial paper and bankers' acceptances, from financial institutions that have been unable to trade them because of tight credit markets and replacing them with cash or more liquid government securities.
Reflection
Overall, I think it's still a mystery to many people in how the banks are actually going to implement their strategy in jump starting the financial system again. Up until now, many people have speculated that the banks only strategy is to "print money." However, I was actually surprise to hear that the banks was using another strategy to increase the demand for lending. This strategy is actually something I have never really heard about, but I think it's actually a better idea than to "print money," because this strategy of purchasing assets can lower the chance of stagflation. I also feel that it's good news to hear that the economy will eventually rise back up to its potential by 2011.
Tuesday, March 31, 2009
Canada's banking system: A blueprint for the world?
March 31, 2009
http://www.vancouversun.com/Business/Canada+banking+system+blueprint+world/1446540/story.html
This article basically praises the banking system of Canada and it also suggest that the banking system in which Canada uses should be a blueprint for other countries. The combination of Canada's macro-economic framework, regulatory oversight of our financial sector and the specific management practices of the private sector has resulted in a strong, well-capitalized and successful banking sector. With such positive approaches, Canada banking system should be highly regarded as a global solution. On the flip side, Canada has also done an explicit job keeping inflation rates low and stable vastly due to the Bank Act's mandated review, regulations separating the traditional four pillars of the financial sector -- banks, insurers, trust companies and investment dealers -- were largely eliminated. Most importantly, by 1990 Canada has already created an assimilated bank model which gives The Office of the Superintendent of Financial Institutions (OSFI) all the power. Besides having a strong framework, what makes Canada bank so stable and unique is chiefly due to their private banking sector which is trained to offer risk management practices. With practices which eliminates high risk, Canadian banks are insured to offer lower risks and deeper relationships with our customers. With such great moderation and balance, this is vastly the reason why Canadian bank should be highly regarded as a blueprint for the entire financial world.
Connections to Introduction
The connections I make with this article and Chapter 7 has to do with the Banking system which Canada offer which is referred to as branch banking. What makes branch banking so stable is vastly due to the diversified assets and liabilities which allows funds to be transferred between branches to accounts where they are needed the most. This is basically the safeguard in which Canadian branch banks offers because if bank branch was independent, then a large portion of its loans are in one area or are concentrated in certain industries. This can be risky. At times branch banking is often criticize for giving centralization of financial power to a country, but if we look at present day facts, then we can clearly see that we are one of the few countries in the world that is actually weathering this storm relatively well. This is also the reason why I think many other countries should give the branch bank system a try.
Reflection
Personally, I think many countries should use the Canadian banking system as a blueprint for the future because if we follow the Canadian banking system, then the chances of a global recession happening again would sharply decline mainly because the Canadian banking system operates with very little risk involved. As a Canadian citizen, I can easily acclaim my money to be safe because I wouldn't have to worry over banks filing for a bail out or any other risky events. Our neighbour down south on the other hand is in a way different story because many of their large financial corporations are falling down like lightning chiefly because their banks has extremely high risk, but with high rewards. But if high reward ends up in a recession, which makes unemployment high, then why not just use the Canadian banking system as a blueprint for the future.
http://www.vancouversun.com/Business/Canada+banking+system+blueprint+world/1446540/story.html
This article basically praises the banking system of Canada and it also suggest that the banking system in which Canada uses should be a blueprint for other countries. The combination of Canada's macro-economic framework, regulatory oversight of our financial sector and the specific management practices of the private sector has resulted in a strong, well-capitalized and successful banking sector. With such positive approaches, Canada banking system should be highly regarded as a global solution. On the flip side, Canada has also done an explicit job keeping inflation rates low and stable vastly due to the Bank Act's mandated review, regulations separating the traditional four pillars of the financial sector -- banks, insurers, trust companies and investment dealers -- were largely eliminated. Most importantly, by 1990 Canada has already created an assimilated bank model which gives The Office of the Superintendent of Financial Institutions (OSFI) all the power. Besides having a strong framework, what makes Canada bank so stable and unique is chiefly due to their private banking sector which is trained to offer risk management practices. With practices which eliminates high risk, Canadian banks are insured to offer lower risks and deeper relationships with our customers. With such great moderation and balance, this is vastly the reason why Canadian bank should be highly regarded as a blueprint for the entire financial world.
Connections to Introduction
The connections I make with this article and Chapter 7 has to do with the Banking system which Canada offer which is referred to as branch banking. What makes branch banking so stable is vastly due to the diversified assets and liabilities which allows funds to be transferred between branches to accounts where they are needed the most. This is basically the safeguard in which Canadian branch banks offers because if bank branch was independent, then a large portion of its loans are in one area or are concentrated in certain industries. This can be risky. At times branch banking is often criticize for giving centralization of financial power to a country, but if we look at present day facts, then we can clearly see that we are one of the few countries in the world that is actually weathering this storm relatively well. This is also the reason why I think many other countries should give the branch bank system a try.
Reflection
Personally, I think many countries should use the Canadian banking system as a blueprint for the future because if we follow the Canadian banking system, then the chances of a global recession happening again would sharply decline mainly because the Canadian banking system operates with very little risk involved. As a Canadian citizen, I can easily acclaim my money to be safe because I wouldn't have to worry over banks filing for a bail out or any other risky events. Our neighbour down south on the other hand is in a way different story because many of their large financial corporations are falling down like lightning chiefly because their banks has extremely high risk, but with high rewards. But if high reward ends up in a recession, which makes unemployment high, then why not just use the Canadian banking system as a blueprint for the future.
Monday, March 9, 2009
Growth forecast for just four provinces this year
March 5, 2009
http://www.vancouversun.com/business/fp/Growth+forecast+just+four+provinces+this+year/1356756/story.html
This article basically talks about how Saskatchewan, Manitoba, Prince Edward Island and New Brunswick are predicted to be the only four Canadian provinces to have growing economies this year, according to the Conference Board’s Provincial Outlook. According to the Conference Board's Provincial Outlook Director, Pedro Autunes, “No province is immune to the effects of the global recession, but the momentum in the domestic economies of Saskatchewan and Manitoba will cushion the blow from the downturn in the resource sector.” This basically implies that Saskatchewan and Manitoba will definitely get their fair share of the effects from the global recession; however, these two provinces will be safeguarded by their domestic economies. For example, Saskatchewan’s strong potash prices and infrastructure spending will bolster construction activity, thus labor markets will expand and provincial income tax cuts will keep retail sales growing at a healthy pace this year. Saskatchewan will again post the strongest growth among the provinces at 1.6 per cent. In Manitoba, large public and private capital projects, a resilient labor market and personal income tax cuts will be very beneficial to Manitoba’s 1% growth this year. Both of these provinces will be relying heavily on their domestic economies this year. In Prince Edward Island, the real GDP is expected to grow to about 0.6 per cent in 2009, since the province is preparing for the massive development of wind power energy on the Island. While in New Brunswick, $100 million in tax cuts and $1.2 billion in infrastructure spending over the next two years is expected to raise the GDP growth by 0.2% this year. The economic activity in 2009 is forecast ed to be a down year for the the other remaining provinces, however, all provinces are expected to bounce back in 2010, as the U.S. economy hits bottom and begins to recover.”
Connections to Introduction
The connections I make with this article and chapter 6 has to do with the term GDP. GDP is defined as the value of all goods and services produced in a given year. This directly relates to my article, because the whole reason why we are able to even know why these four provinces are showing signs of a growth in their economy is chiefly due to the GDP. If their wasn't GDP, then we would not be able to understand how much of a decline or an increase a province's good and services have done. In fact, the GDP is also one of the tools which we use to tell us whether or not a country is in a recession or not, because when a country GDP reaches negative growth, then that is basically when the country is declared to be in a recession. With the four provinces making positive growth right now, we can also easily predict that these four provinces will most likely be the first four to step out of the recession, and also these four will most likely be having the highest economic growth in 2010. This is also where the GDP is put to full use, because the GDP can easily tell us when the specific province started having positive growth, and also by how much has it improved or declined by. This is what makes the GDP so important to not just Canada, but to any economy.
Reflection
Personally, I think it's great to see that there are provinces in Canada that are now having beneficial GDP growth, because this also signifies that the entire country of Canada will also be rebounding in a distant future. For example, with the 2010 Olympics lurking around the corner, this will definitely help BC economy to start getting back on track. By 2010, I think Canada's GDP and economic growth will start producing healthy numbers again since many provinces are expected to have major improvements next year. With the winter Olympics, this will most likely help improve the economy in BC by a lot. In fact, I wouldn't be too surprise to see BC leading the way as one of Canada's highest GDP growth as of 2010.
http://www.vancouversun.com/business/fp/Growth+forecast+just+four+provinces+this+year/1356756/story.html
This article basically talks about how Saskatchewan, Manitoba, Prince Edward Island and New Brunswick are predicted to be the only four Canadian provinces to have growing economies this year, according to the Conference Board’s Provincial Outlook. According to the Conference Board's Provincial Outlook Director, Pedro Autunes, “No province is immune to the effects of the global recession, but the momentum in the domestic economies of Saskatchewan and Manitoba will cushion the blow from the downturn in the resource sector.” This basically implies that Saskatchewan and Manitoba will definitely get their fair share of the effects from the global recession; however, these two provinces will be safeguarded by their domestic economies. For example, Saskatchewan’s strong potash prices and infrastructure spending will bolster construction activity, thus labor markets will expand and provincial income tax cuts will keep retail sales growing at a healthy pace this year. Saskatchewan will again post the strongest growth among the provinces at 1.6 per cent. In Manitoba, large public and private capital projects, a resilient labor market and personal income tax cuts will be very beneficial to Manitoba’s 1% growth this year. Both of these provinces will be relying heavily on their domestic economies this year. In Prince Edward Island, the real GDP is expected to grow to about 0.6 per cent in 2009, since the province is preparing for the massive development of wind power energy on the Island. While in New Brunswick, $100 million in tax cuts and $1.2 billion in infrastructure spending over the next two years is expected to raise the GDP growth by 0.2% this year. The economic activity in 2009 is forecast ed to be a down year for the the other remaining provinces, however, all provinces are expected to bounce back in 2010, as the U.S. economy hits bottom and begins to recover.”
Connections to Introduction
The connections I make with this article and chapter 6 has to do with the term GDP. GDP is defined as the value of all goods and services produced in a given year. This directly relates to my article, because the whole reason why we are able to even know why these four provinces are showing signs of a growth in their economy is chiefly due to the GDP. If their wasn't GDP, then we would not be able to understand how much of a decline or an increase a province's good and services have done. In fact, the GDP is also one of the tools which we use to tell us whether or not a country is in a recession or not, because when a country GDP reaches negative growth, then that is basically when the country is declared to be in a recession. With the four provinces making positive growth right now, we can also easily predict that these four provinces will most likely be the first four to step out of the recession, and also these four will most likely be having the highest economic growth in 2010. This is also where the GDP is put to full use, because the GDP can easily tell us when the specific province started having positive growth, and also by how much has it improved or declined by. This is what makes the GDP so important to not just Canada, but to any economy.
Reflection
Personally, I think it's great to see that there are provinces in Canada that are now having beneficial GDP growth, because this also signifies that the entire country of Canada will also be rebounding in a distant future. For example, with the 2010 Olympics lurking around the corner, this will definitely help BC economy to start getting back on track. By 2010, I think Canada's GDP and economic growth will start producing healthy numbers again since many provinces are expected to have major improvements next year. With the winter Olympics, this will most likely help improve the economy in BC by a lot. In fact, I wouldn't be too surprise to see BC leading the way as one of Canada's highest GDP growth as of 2010.
Wednesday, February 11, 2009
China wants bigger role in world economy
February 11, 2009
http://www.vancouversun.com/Business/China+wants+bigger+role+world+economy/1272476/story.html
This article basically talks about how China is currently showing slight signs of being the first major economic powerhouse to be undergoing a slight rebound from the wrath of the economic downturn. In a paper sent out from Beijing, it has set out its position on calls for more power for developing countries at the World Bank and International Monetary Fund, according to a report from Reuters. In the Chinese paper it also demanded a "strengthen oversight over macroeconomic policies of all parties, particularly the major reserve currency economies, and provide oversight information and improvement recommendations to its members on a regular basis." The Chinese paper is scheduled to be presented at a key meeting for a group that will consist of 20 leading industrial nations that will take place on April 2 in London. For the time being, China is currently still being expected to have a rather shaky GDP growth in 2009, but in recent weeks, there have been some practical signs of resurgence from the Chinese economy. Loan growths are heightening at incredible speed, steel traders are restocking, and materials prices and shipping rates are rejuvenating strongly. With the sudden improvement in which China's economy have cultivated, new U.S. Treasury Secretary Timothy Geithner said the new administration in Washington needs "to send a strong signal that we are ready to give developing countries a voice within the IMF that is commensurate with their importance to the world economy." Even analysts were extremely surprised to see the sudden rebound right now for the economy in China. It is still uncertain right now when China's economy would be fully healed from the global recession, but at the present stage the economic activity in China seems to be maintaining slight stability.
Connections to Introductions
The connections i make with this article and chapter 5 has to do with the term recession. According to the textbook, an economic recession is described as a drop in economic activity and this is exactly the current state of our economy at the present stage. With the present economy undergoing a price decrease, countries are encouraging people to put more money into the economy so they do that by lowering the prices of goods, thus making this a complete opposite of what inflation is. This is called a deflation because right now there is an increased in unemployment since there is a lower level of demand in the economy. My article directly ties into the concept of an economic recession mainly because this article is talking about how China seems to be the only country in the world right now that is starting to feel a rebound from the global recession. This significant current event is very important, because with China's economy being in rebound, this also automatically turns China's economy into a big role in the world economy. My article also demonstrates a triumphant victory over the global recession in China's part.
Reflection
Personally, I think it's good to know that at least one country is actually rebounding from the terrible global recession. Unfortunately, the reason why China economy is probably maintaining such stability is vastly due to the fact that they have shored up a lot of money from recent years, thus this can also be a blessing in disguise because other countries are different from China. Countries like Canada don't have as much money as China, thus this can possibly explain why our economy have still not shown much improvement. Another factor which explains why China's economy have rebounded so quick has to do to the fact that China has a large population, thus making money flow easier. However, in Canada and all of the other countries, they are all stuck in a situation where the money is not flowing, but it is actually "frozen." Hopefully, by the end of 09 the economy for not only China, but the whole world will resume stability once again.
http://www.vancouversun.com/Business/China+wants+bigger+role+world+economy/1272476/story.html
This article basically talks about how China is currently showing slight signs of being the first major economic powerhouse to be undergoing a slight rebound from the wrath of the economic downturn. In a paper sent out from Beijing, it has set out its position on calls for more power for developing countries at the World Bank and International Monetary Fund, according to a report from Reuters. In the Chinese paper it also demanded a "strengthen oversight over macroeconomic policies of all parties, particularly the major reserve currency economies, and provide oversight information and improvement recommendations to its members on a regular basis." The Chinese paper is scheduled to be presented at a key meeting for a group that will consist of 20 leading industrial nations that will take place on April 2 in London. For the time being, China is currently still being expected to have a rather shaky GDP growth in 2009, but in recent weeks, there have been some practical signs of resurgence from the Chinese economy. Loan growths are heightening at incredible speed, steel traders are restocking, and materials prices and shipping rates are rejuvenating strongly. With the sudden improvement in which China's economy have cultivated, new U.S. Treasury Secretary Timothy Geithner said the new administration in Washington needs "to send a strong signal that we are ready to give developing countries a voice within the IMF that is commensurate with their importance to the world economy." Even analysts were extremely surprised to see the sudden rebound right now for the economy in China. It is still uncertain right now when China's economy would be fully healed from the global recession, but at the present stage the economic activity in China seems to be maintaining slight stability.
Connections to Introductions
The connections i make with this article and chapter 5 has to do with the term recession. According to the textbook, an economic recession is described as a drop in economic activity and this is exactly the current state of our economy at the present stage. With the present economy undergoing a price decrease, countries are encouraging people to put more money into the economy so they do that by lowering the prices of goods, thus making this a complete opposite of what inflation is. This is called a deflation because right now there is an increased in unemployment since there is a lower level of demand in the economy. My article directly ties into the concept of an economic recession mainly because this article is talking about how China seems to be the only country in the world right now that is starting to feel a rebound from the global recession. This significant current event is very important, because with China's economy being in rebound, this also automatically turns China's economy into a big role in the world economy. My article also demonstrates a triumphant victory over the global recession in China's part.
Reflection
Personally, I think it's good to know that at least one country is actually rebounding from the terrible global recession. Unfortunately, the reason why China economy is probably maintaining such stability is vastly due to the fact that they have shored up a lot of money from recent years, thus this can also be a blessing in disguise because other countries are different from China. Countries like Canada don't have as much money as China, thus this can possibly explain why our economy have still not shown much improvement. Another factor which explains why China's economy have rebounded so quick has to do to the fact that China has a large population, thus making money flow easier. However, in Canada and all of the other countries, they are all stuck in a situation where the money is not flowing, but it is actually "frozen." Hopefully, by the end of 09 the economy for not only China, but the whole world will resume stability once again.
Thursday, January 22, 2009
Big chill reaches Asian banks
January 22, 2009
http://www.vancouversun.com/Business/chill+reaches+Asian+banks/1205489/story.html
This article talks about the fear which had stricken the Asian banks, vastly due to the Global Recession. Through the Recession, Asian banks are now facing escalating loan losses and a fall in profitability as the economic activity in the region struggle to come to grip with the rapid slowdown in global trade. In the current situation, banks throughout Asia are now being hampered by bad debt charges and now are forced to raise additional capital to shore up their balance sheets. According to Fitch Ratings Ltd. some of the countries that will be hit the hardest is going to be Taiwan, South Korea, Hong Kong, India and China. According to analyst David Marshall "The forecasts look harsh but could end up seeming optimistic later in the year if Asia's economies suffer deeper than expected downturns," which basically implies that the economy this year will certainly not have any drastic changes in terms of improving, so everyone can only hope right now that the economy will rebound next year. Besides Asia Pacific index dropping down by13% this year, shares in China's biggest bank, Industrial and Commercial Bank of China, have slipped down to 4.6% yesterday, while shares in China Construction Bank dropped 3.8%. Most economists right now are predicting that China's GDP growth will slip below the 8% mark and with China's current economy continuing to decline, the GDP of China's neighbour like Taiwan and Singapore are also in a decline.
Connections to Introduction
The connection I make with this article and chapter 4 has to do with the term gross domestic product (GDP), because according to the text, GDP is the value of all the goods and services produced in a given year. This directly relates to this article since this article basically explains about how the economic activity in Asia is in sudden turmoil. With almost all the economic power house in Asia suffering from the global recession, the best way right now for economist to grade how much a countries economy have declined from previous year is to use GDP. Basically, the best way to truly understand how much a countries economy have dropped is to basically look into a countries GDP because the GDP is a reflection that tells everyone how much a countries goods and services have been doing this past year. This is simply why GDP links directly into my article because overall, this whole article is basically proving the importance of the GDP. If the Asian countries were to have successful economic growth this year, then the GDP would have risen upward, but since the economic stature is currently in total turmoil, the GDP shows that the most powerful Asian countries are in absolute chaos right now.
Reflection
Personally, i think it's really a shame to see how not only Asian countries, but every country in the world today is being hampered hard by the global recession. Unfortunately, economist have even said that the economy will not be improving this year, so everyone can only cross their fingers and wish that things will improve next year. With GDP for every country declining from previous years, we can truly see how much this recession have taken its toll on every country. I think this is what makes the GDP so significant because through the GDP, we can see which countries have taken the worst hits and which countries are still hanging by the tips of their fingers. Luckily, with the Vancouver 2010 Olympics next year, Vancouver economy should be back in the right directions and hopefully things would get better next year.
http://www.vancouversun.com/Business/chill+reaches+Asian+banks/1205489/story.html
This article talks about the fear which had stricken the Asian banks, vastly due to the Global Recession. Through the Recession, Asian banks are now facing escalating loan losses and a fall in profitability as the economic activity in the region struggle to come to grip with the rapid slowdown in global trade. In the current situation, banks throughout Asia are now being hampered by bad debt charges and now are forced to raise additional capital to shore up their balance sheets. According to Fitch Ratings Ltd. some of the countries that will be hit the hardest is going to be Taiwan, South Korea, Hong Kong, India and China. According to analyst David Marshall "The forecasts look harsh but could end up seeming optimistic later in the year if Asia's economies suffer deeper than expected downturns," which basically implies that the economy this year will certainly not have any drastic changes in terms of improving, so everyone can only hope right now that the economy will rebound next year. Besides Asia Pacific index dropping down by13% this year, shares in China's biggest bank, Industrial and Commercial Bank of China, have slipped down to 4.6% yesterday, while shares in China Construction Bank dropped 3.8%. Most economists right now are predicting that China's GDP growth will slip below the 8% mark and with China's current economy continuing to decline, the GDP of China's neighbour like Taiwan and Singapore are also in a decline.
Connections to Introduction
The connection I make with this article and chapter 4 has to do with the term gross domestic product (GDP), because according to the text, GDP is the value of all the goods and services produced in a given year. This directly relates to this article since this article basically explains about how the economic activity in Asia is in sudden turmoil. With almost all the economic power house in Asia suffering from the global recession, the best way right now for economist to grade how much a countries economy have declined from previous year is to use GDP. Basically, the best way to truly understand how much a countries economy have dropped is to basically look into a countries GDP because the GDP is a reflection that tells everyone how much a countries goods and services have been doing this past year. This is simply why GDP links directly into my article because overall, this whole article is basically proving the importance of the GDP. If the Asian countries were to have successful economic growth this year, then the GDP would have risen upward, but since the economic stature is currently in total turmoil, the GDP shows that the most powerful Asian countries are in absolute chaos right now.
Reflection
Personally, i think it's really a shame to see how not only Asian countries, but every country in the world today is being hampered hard by the global recession. Unfortunately, economist have even said that the economy will not be improving this year, so everyone can only cross their fingers and wish that things will improve next year. With GDP for every country declining from previous years, we can truly see how much this recession have taken its toll on every country. I think this is what makes the GDP so significant because through the GDP, we can see which countries have taken the worst hits and which countries are still hanging by the tips of their fingers. Luckily, with the Vancouver 2010 Olympics next year, Vancouver economy should be back in the right directions and hopefully things would get better next year.
Sunday, November 23, 2008
Bigger is not always better for HDTV
Wednesday, November 12, 2008
http://www.canada.com/vancouversun/story.html?id=dc8e7f1b-e07b-46d8-8ab3-2c52b820154d&p=1
This article talks about the imperfections and agony that many consumers feel after they have purchased a brand new HDTV, because many consumers often makes the quick assumption that bigger TV is always better. This is in fact a false assumption because many experts have claimed that big HDTV has many downsides which consumer should look into, because HDTV is definitely not suitable for everyone. In fact, the optimal size of the television depends on the distance of the viewer from the screen, so you have to make sure that your room is big enough to have extra space in between both you and your HDTV. Besides a big room, you must also decide what shows and channels you like, because If you're watching HDTV programming, then bigger is indeed better, but unfortunately there isn't a tremendous variety of HD channels that consumers can pick because the majority of HD channels are all sport. This is the reason why many shoppers have "buyer's remorse", which is a post-purchase regret for either not picking up a larger size, or picking up too big of a size. To avoid "Buyers remorse," many experts have suggested people to "Get yourself regular holiday wrapping paper and cut out the size panel you want to buy, such as 50-inches,and then stick it to the wall where the television will go. Live with it for a week and you'll know whether or not this size works for you."
Connections to Introduction
The connection I make with this article and chapter 3 has to do with Market Imperfections because according to the textbook, a lack of Information is a criteria of Market Imperfections and a lack of information is definitely one of the cause for why some consumers would end up suffering from "Buyers Remorse." Because most consumers have information that is often inadequate, they end up making the wrong decision because they were never stock up with the correct information. There are probably a lot of consumers that has a big HDTV but lacks a big room, so they are unable to use the big HDTV to it's fullest potential, and this is a total shame because there are probably many people that have never heard of the experts telling the them to "Get yourself regular holiday wrapping paper and cut out the size panel you want to buy, such as 50-inches, and then stick it to the wall where the television will go," in fact this is the first time i have ever heard of such a method. If more people knew about this method, then there would probably be less Market Imperfections among the HDTV market.
Reflection
Personally, I think it's a shame that market imperfection happens among the HDTV market, but i think the consumer's are the most at fault because if they don't have the sufficient amount of knowledge to decide on what they want, then they should just ask because there is a reason why stores have experts to help you with. Theoretically, the free-market system assumes that buyers have adequate information to make the correct decision, so in my opinion, the consumer are the most at fault for causing the market imperfections of HDTV. Besides the consumer's at fault, the experts are also at fault because the tips they provide are good, but they did an atrocious job of spreading the tips because of the lack of advertising they did for their tips. Basically put, both the consumer and the experts are at fault because i think they both could have done a better job.
http://www.canada.com/vancouversun/story.html?id=dc8e7f1b-e07b-46d8-8ab3-2c52b820154d&p=1
This article talks about the imperfections and agony that many consumers feel after they have purchased a brand new HDTV, because many consumers often makes the quick assumption that bigger TV is always better. This is in fact a false assumption because many experts have claimed that big HDTV has many downsides which consumer should look into, because HDTV is definitely not suitable for everyone. In fact, the optimal size of the television depends on the distance of the viewer from the screen, so you have to make sure that your room is big enough to have extra space in between both you and your HDTV. Besides a big room, you must also decide what shows and channels you like, because If you're watching HDTV programming, then bigger is indeed better, but unfortunately there isn't a tremendous variety of HD channels that consumers can pick because the majority of HD channels are all sport. This is the reason why many shoppers have "buyer's remorse", which is a post-purchase regret for either not picking up a larger size, or picking up too big of a size. To avoid "Buyers remorse," many experts have suggested people to "Get yourself regular holiday wrapping paper and cut out the size panel you want to buy, such as 50-inches,and then stick it to the wall where the television will go. Live with it for a week and you'll know whether or not this size works for you."
Connections to Introduction
The connection I make with this article and chapter 3 has to do with Market Imperfections because according to the textbook, a lack of Information is a criteria of Market Imperfections and a lack of information is definitely one of the cause for why some consumers would end up suffering from "Buyers Remorse." Because most consumers have information that is often inadequate, they end up making the wrong decision because they were never stock up with the correct information. There are probably a lot of consumers that has a big HDTV but lacks a big room, so they are unable to use the big HDTV to it's fullest potential, and this is a total shame because there are probably many people that have never heard of the experts telling the them to "Get yourself regular holiday wrapping paper and cut out the size panel you want to buy, such as 50-inches, and then stick it to the wall where the television will go," in fact this is the first time i have ever heard of such a method. If more people knew about this method, then there would probably be less Market Imperfections among the HDTV market.
Reflection
Personally, I think it's a shame that market imperfection happens among the HDTV market, but i think the consumer's are the most at fault because if they don't have the sufficient amount of knowledge to decide on what they want, then they should just ask because there is a reason why stores have experts to help you with. Theoretically, the free-market system assumes that buyers have adequate information to make the correct decision, so in my opinion, the consumer are the most at fault for causing the market imperfections of HDTV. Besides the consumer's at fault, the experts are also at fault because the tips they provide are good, but they did an atrocious job of spreading the tips because of the lack of advertising they did for their tips. Basically put, both the consumer and the experts are at fault because i think they both could have done a better job.
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