Jan

1

India’s GDP to further decline by 0.6 pc in FY 2009-10

Filed Under Economy, News | Leave a Comment

For those advocating that the impending recession in US would not hit India, here comes the shocker of news. The Indian Gross Domestic Product (GDP) is set to decline to 6.5 pc in the financial year 2009-10, down by 0.6 percent from the year 2008-09.

CEOs Survey based GDP growth forecast done by Associated Chamber of Commerce and Industry (ASSOCHAM) Business Barometer (ABB) has calculated it to be 7.1 % for 2008-09 and predicts a further drop in the coming financial year. This plunge is predicted in the wake of the negative vibes in the world economy.

“Ninety one per cent of the surveyed CEOs believed India needs a strong fiscal stimulus even if it has to come at the cost of FRBM targets”, quoted the sources.

 With the US economy slipping into recession sooner or later, termination of workforce, negative production growth rate and stagnant US economy is bound to severely impact the Indian economy. The mid term (July 2008) prediction of 7.6 pc too fell short by half a per cent due to the global economic crisis trickling into the Indian economy.

Dec

6

US forecasts by Credit Suisse

Filed Under Economy, Finance | Leave a Comment

Credit Suisse forecasted that U.S. home foreclosures over the next four years would amount to 8.1 million from 6.5 million, as a warning of a ‘subprime society’ as economic weakness and falling home prices take a larger toll on homeowners.

Credit Suisse analysts also state that this is an increase from April’s forecast representing a 16 percent hike of all mortgages. With the severe recession appearing more likely, coupled with the collapse of confidence in housing and resultant foreclosures, the impact on credit scores, risks at transforming the U.S. into a subprime society, say sources. The U.S. government is expected by economists to report the nation’s unemployment rate rose to 6.8 percent, the highest in 15 years, in November 2008.

Dec

3

US automakers ask for a $34 bn aid

Filed Under Economy, Finance | Leave a Comment

The crumbling economy has forced Detroit’s once-mighty automakers to be humbled and fight for survival. The have appealed to the Congress with a retooled case for a bailout as large as $34 billion.  With a promise to slash workers, car lines and executive pay in return for a federal lifeline, both GM and Chrysler said they needed an immediate cash infusion to last until the New Year. They also placed a warning that in the event that they crash they could drag the entire industry down.

Chrysler LLC said it needed $7 billion by the year’s end, and General Motors Corp. asked for a quick $4 billion as just the first installment of as much as $18 billion to stay afloat and weather even worse economic storms.  The new sales figures underscored the seriousness of the situation. U.S. light vehicle sales at General Motors and Chrysler as they had plunged more than 40 percent in November and were battered by an economic storm; sending consumer demand for new vehicles to unheard lows in decades.

Dec

2

Global financial run-down

Filed Under Economy, Stocks | Leave a Comment

Globally, the stock market has suffered one of its worst days since the financial meltdown on the week beginning December 1, 2008. Slicing close to 680 points off the Dow Jones industrial average, Wall Street snapped out of its daydream and again faced the harsh reality of a recession. More gains were erased and the Standard & Poor’s 500 stock index; one of the broadest market gauges, lost nearly 9 per cent.

Although better visibility is hoped for the forthcoming year, the question now stands as to how deep and how long the recession will be.

Thankfully, bond prices have jumped as investors seek the safety of government debt. The yield on the three-month Treasury bill, considered one of the safest investments, slipped to a very slim 0.03 per cent. This clearly indicates that investors are willing to accept tiny returns just to park their cash somewhere safe. Investors were also nervous after weekend sales figures indicated that many Americans will cut back their trips to the mall this holiday season.

Considering the stock radar, most financial stocks tumbled as investors grappled with doubts about the ultimate success of the government’s efforts to prop up the banking sector. Citigroup tumbled 22 per cent, while Morgan Stanley stock fell 23 per cent and Goldman Sachs Group Inc. fell 17 per cent. Meanwhile oil process have fallen sharply after the Organization of the Petroleum Exporting Countries decided not to cut production over the weekend and as investors bet slowing economic activity would hurt demand. Light, sweet crude dropped $5.15 to $49.28 a barrel on the New York Mercantile Exchange. With Gold prices and the dollar rate also falling steadily, one can only hope that the worst has been scraped through.

Oct

6

Job Losses Pile up in September

Filed Under Economy | Leave a Comment

The US economy is shedding jobs at the fastest pace in the last five years in a grim indication that the country is directly heading for a recession.

On Friday, the US Department of Labor released a report which put the number of jobs slashed in September at 159000, more than double the cuts made just a month ago. This was the ninth consecutive month of job losses and the present rate of job cuts is the highest since 2003. Till date almost 760000 jobs have been lost in this year alone.

Other figures from the Labor Department’s report reveal that the country’s rate of unemployment has climbed up to 6.1% from the much lower 4.8 % a year back. Moreover in the past one year, the number of unemployed people has increased by 2.2 million and now stands at 9.5 million. The unemployment rate among African-Americans stood at 11.4%, the highest since late 2003.

Many economists believe that despite the $700 billion bailout package for the finance sector, job losses will continue for some more time. Recession-like conditions could take the unemployment rate to even 7% in late 2009 before the situation turns around. All these concerns have made the economy the number one election issue as America votes for its next president in November.

Jul

27

Oil rates decreases by $5 this week

Filed Under Economy | Leave a Comment

Crude oil sinks as new home sales considered as stronger consumer sentiment and falling demand in U.S.

Economic reports calmed nervous investors as the oil prices sank this Friday, by more than $5 this week. Drop in demand also pressured prices to fall reports says.

A survey from the University of Michigan revealed that, consumer sentiments had a boost by government’s economic stimulus package, and the prices fell as new home sales were stronger than expected last month according to government report.

Above reports indicates that the increase in orders for durable goods drive the investors away from oil which has been used as a hedge against economic downturn.

A senior market analyst with Alaron Trading in Chicago said “The investors bought oil because they were worried about the economy”.

The reports from The Dow industrials gave the investors a confidence after a sharp sell off on previous day, the gains were nearly 100 points on Friday morning trading and were still up about 40 points till midday, as investors invest their money in the stocks.

Due to high fuel prices in recent days demand has indeed declined, which in turns causes fall in oil prices as confirmed by reports.

As compared to last year the gasoline demand in the United States had fallen 2.4% from the same period as per a report released on Wednesday from an Energy Department. For the 13th week in a row a weekly survey of filling station credit card swipes from MasterCard recorded a declining demand.

Fall in demand in July is of a main concern as usually Americans use maximum fuel in summers. This helps to push prices down $24 a barrel from a record trading high of $147.27. And some investors fear that the U.S. demand decline may spread to other countries as well.

The tensions between the Western countries, Iran and militant attacks in Nigeria the largest oil producer, has been main concerns that drove oil prices to their record highs.