Glen Luckman Economy Information
Current Issues with the Global Economy
By: dane
Though the housing bubble deflated about two years ago, its true effects are only now beginning to emerge. In late 2006, when the economy first began to show signs of weakness in the housing market, most economists predicted that a recession was very unlikely, and that any downturn in real estate prices would be localized and mild. In reality, a global downturn is now a real threat, with the final price of the credit crunch projected to exceed $1 trillion dollars.
Not only have falling house prices in the US spread to other markets abroad, they have contributed to massive losses in other areas of lending such as credit cards, and the financial industry, which is now reeling from the US government bailout of Bear Stearns. What does this mean for emerging economies like China and India? In the short term, volatility seems to be the order of the day, with India’s fledgling exchanges rocked by jittery investors. Until financial centers and investors can regain confidence, market conditions will be exaggerated. Early trading also plays a psychological role for investors, as news developments impact Asia before Wall Street opens.
The US and the UK both face difficult home pricing corrections which will continue to hamper growth. Most homeowners expect, if not to make a profit, not to sell their houses at a loss, which is a difficult pill to swallow. And if they can’t sell their homes for what they think they’re worth, then waiting it out contributes to prices falling, thus exacerbating the problem.
While government intervention has been exceptionally forthcoming in efforts to preserve confidence in financial markets, less attention has been given to homeowners who are being foreclosed on over the next year, which is only so low because of robust growth in Asia.
Another prospect which looms over every government is the specter of inflation, which threatens to overtake the slumping economy as the number one priority for the Federal Reserve and other central banks, who have had to take extreme action to prevent further liquidity losses. The Fed has sold off over $100 billion in auctions and lowered interest rates five times in an attempt to lower mortgage interest rates, but confidence will remain shaky until the full extent of investment bank’s sub-prime exposure is realized. Stuck between a rock and a hard place, central banks are taking decisive action in hopes that the economy will level out without pushing inflation to dangerous levels.
Article published by Glen Luckman
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How we can understand, what takes place in economy?
By: Alex Sam
Article selected by Glen Luckman
The economists use special economic datas to trace, to forecast and to analyse variations in economy in general and in its separate branches. From different economic datas published by state and other establishments, the economists are interested theme, which one mirror current or future state of economy. These reports are called as economic parameters, because they image state of economy. They can help to the manager to administer the company in changed conditions.
Where it is possible to receive economic datas? Except for specialized sources, you can find them and their analysis in business press, specially in the national daily business newspapers. In this publication we shall consider following key economic parameters:
* Level of economic growth vs. Price and inflation
* Interest rates vs. Unemployment
* Construction and sale of housing accommodation vs. Retail trade and sale of new automobiles
The largest parameter: a level of economic growth. This basic parameter mirrors percent (interest) of growth of all economy considered. Itself it is defined as out-to-out of economy. The given parameter consists of following summands: consumer spendings, investments, expenditures on public account and net export (export a minus import).
It is published monthly. But, unfortunately, it revise later. The difference between primal and final significances can reach one - two percents of interests for a parameter, the average significance constitutes which one approximately three percents of interests.
Consider deviations from this three-percentage level and find a trend. The trend is a most relevant element If there is a reduction of economic growth within several months or quarters, that, probably, the conditions of existence of many kinds of business become more difficult. During decrease of growth the buyers spend less, hence, companies do make the same. The companies do not wish to make and to accrue at themselves production, which one does not find sales, and reduce production. If you have noticed, that your business reduces revolutions, would be excellent idea to trace conduct of your buyers and schedules of sales, and, probably, you should reduce production, purchases of raw material and amount accepted on operation. Do not run into a panic, but be specially close during such slowing down.
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