Saturday, 26 March 2011

Is Libya so important for us?

America is busy in Libya. America is suffering from recession. GDP is not performing well. Then in spite of thinking about our economy , administration is busy in Libya. Unlike Iran & South Korea , Libya has no effect on America. Then why America giving so much importance to Libya? China & Russia are not taking interest in these things. There main target is growth. But some western countries do not want to think about their future but want to keep busy themselves in pity maters. Keeping oil price low with political pressure is not a solution of crude. It may be more dangerous for us.
American administration should really think about it . America already knows there is no risk from Libya having dangerous weapons. Then what is need to participate in such activities? This is harmful for American image. We will get nothing from it except hate from world. Is Libya so important for us or our economy is more important for us.

Monday, 21 March 2011

Outlook of Insurance sector after Japanese quake

Outlook of insurance sector may change after damage of assets worth more than $ billions. Swiss Re is being considered biggest victim of this event. American giant AIG
also has to face big claims. But exact figure is not declared by companies. Earlier earthquake in New Zealand also created liabilities for Swiss Re. But is just an accident and does not happen regularly. Confidence in insurance sector can return with time.
Japan has v. big GDP. Loss of assets is not main problem. Main problem is decreasing confidence. Japanese economy was not in good situation even before this quake. Now it is time to watch what steps Government take to handle this situation.

Thursday, 17 March 2011

Will Japan’s quake would discourage nuclear energy uses

Japan ‘s nuclear crises enforced word to think about their nuclear reactors.
It is not first event but it is most critical event in history. No one can imagine it.
Actually nuclear energy is very important in modern economy.We cannot think
about better future without nuclear energy specially at present. Crude oil may
be guest of a decade. Crude oil already above $100 and would go much high ,
how it can be substitute of nuclear energy. Nuclear energy provides about
13-16% of world electricity and most countries were planning to increase it.
France already produces more than 80% of electricity from nuclear reactors.
Major economies are already in back gear, and cannot bear this burden.
Japan is highly quake risky location. But many other countries have not
such background. Yes some countries will take some steps to discourage
nuclear energy but in long run we have to accept nuclear energy.Until we find
a good substitute of crude, we cannot leave nuclear energy.

Sunday, 13 March 2011

Japan after quake

Earthquake made a series of trouble for Japan. After a long period of
recession , a next problem knocked at door of Japan. Biggest effect quake
on economy may be interruption of power supply. Most nuclear plants have to shut down.
Industrial production will also reduce due to shortage of power supply. Budget deficit may increase due to reconstruction activities. Japan has largest public debt among all industrial nations. It is generally believed that Nikkei would open negative of Monday. Most economist believe that effect of such disasters would be in short run. In long run, economy can easily fill its gap if other conditions remains good.

Wednesday, 9 March 2011

Recovery signals: Prudential, EATS reports big profits

After increasing employment data in US, two other good news are coming from Europe.Big defense giant EADS have shown a profit for 2010. The company had given bad results for 2009. It returned to profit this year. It was a big victim of downturn.
Another European giant Prudential have also shown good results. Pre tax profit almost doubled. Result of both companies are being seen as a recovery from downturn.
This will surely boost confidence in investors specially in Europe. But oil prices are still
a big problem. Although oil prices little decreased on promise for extra production from Saudi Arab. Dow Jones & NASDAQ responded positively.

Monday, 7 March 2011

Crude oil touched $106 level

Crude oil touched $106 level. Now world is feeling high inflationary pressure. Most
countries are already fed up with high inflation rate. High crude price will pick oil into
fire. Time will tell at witch level price stabilizes . At the moment it is difficult to estimate.
Most economists estimates oil price may stabilize in rage of $ 90-110. Situation of Libya is major reason behind it. Libya is a big oil exporter of Africa. Supply of oil decreased in these days. Europe is main importer of oil from Libya.
SOME HAVE PAIN & SOME HAVE GAIN – it may be a problematic time for major economies of world but some countries have reasons for celebrations. Rising price are beneficial for them . Saudi Arab, Russia ,Iran, Venezuela, UAE etc are main producer of oil. Now they would have more profit margin. Impact of rising price will be positive on them. But exchange economic effect may be negative. Exchange economic effect is a affect on one economy result of relations with other economy. For example if America went into recession. It may reduce Russian export to America. It may decrease other country ‘s investment in Russia.
It will also give one lesson. It will force people to think about alternatives of oil. In long run you can not depend on oil. Unlike law of energy, law of oil is different.
Law oil tells oil can never be created, it just can be wasted. France is really a good example how we can do better.

Friday, 4 March 2011

US unemployment rate in Feb

There is a good news after long time. US employment rate in February is under 9% . Unemployment rate for February is 8.9%. It was unexpected . A few days numbers of consumer spending were not good. But is a big relief for government .It is interesting to watch , will unemployment rate fall in coming month.
Crude oil reached above $100/barrel. Crude oil may effect economy.
Household income in January had risen 1%. But this was not converted into consumer spending . This was converted into saving. This saving was also positive for economy. More clarity will come in next quarter. Overall it is good news but would be better if it comes without tax cuts.

Thursday, 3 March 2011

Unemployment : Biggest challenge for Obama

Unemployment rate in America is very high. There is very little growth in GDP.
In January unemployment rate was about 9%. Highest unemployment rate was
in 1982 above 10%. Now it is very big challenge for whole America how to face it.
Cheap labor of emerging economies like China & India have given a thread to demand of labor. Rate of crude oil may increase problem in future. Unemployment rate in Canada in January was above 7% . Problem is more deeper in America than Canada.
Canada has a very small economy compare to America. It has huge oil reserves & export side is strong. It is very easy to achieve low employment rate than America.
Highest employment rate of Canadian history were in 1982 above 13%.
It is biggest challenge for America.