Because of concerns over an ailing U.S. auto industry, a string of layoffs and the lowest closing of the Dow Jones since 2003, the global stock markets were down and the price of oil took a dive under $50 a barrel.
In mid-July the oil price reached an all-time high and now, due to bad economic forecasts and economic recession, the price has sunk under $50 a barrel. Because of the recession, the demand of crude oil has gone down a lot.
Also the high number of unemployment reached a maximum in 16 years. Because of this, the number of unemployment insurances raised to its highest levels. The number of initial filings for state jobless benefits have increased by 27,000 to 542,000 . This is really bad news and the American government is considering to give more benefits for the jobless.
White House press secretary Dana Perino said that the economy has slowed down a lot due to the recent financial and credit crisis, and the president is concerned about the people who have lost their jobs. He wants that anybody who wants to work, can find employment.
Elsewhere, in Europe and Asia, stock markets didn’t do well. In Europe, most important stock markets like the London’s FTSE and the Paris’ CAC have lost 3% while in Asia the Japanese market slumped.
The investors are still very fearful and are holding back their investment. They are also afraid of a bankruptcy in the automotive industry. According to some analysts this could be a sign to the broader economies. According to Todd Morgan, senior director of Bel Air Investment Advisors, this situation brings back the focus on the lack of confidence of the investors.
The markets cry for a solution, that will change the attitude of the investors.
Again really bad news for the stock markets. They make a lot of losses and the fear of the investors just can’t be taken away. I don’t know where this will end. A recession Is inevitable. But thanks to the recession, the price of crude oil has declined a lot. This is good for the people because winter is now coming and a lot of people will have to buy gas for their heating. The high number of unemployment is a real problem for the US, and the government will need to come up with a good plan to tackle this situation. The automotive industry is now also suffering a lot of losses and this will probably cause more layoffs. This is not a good sign towards the investors. The governments really need to do something quick to prevent a further crisis.
Source CNN : Asia stocks sink after Wall Street tumbles (20/11/2008 18u30)http://edition.cnn.com/2008/BUSINESS/11/20/global.markets/index.html
zaterdag 22 november 2008
Citigroup plunges as bank mulls next move
Citigroup is the next victim in this global crisis. This is the conclusion after the share decreased with more than 20 percent. Despite the top management did some efforts to save the bank but the shareholders weren’t convinced so the share decreased.
On Friday morning their was an extraordinary meeting for the managers to discuss the problems because when we look to the figures we can see that the share of Citigroup decreased this week with 60 percent.
The share hit a low of 3.05 dollars Friday but when the new president of the United States proclaimed that Timothy Geithner would be his nominee for Treasury Secretary the share decreased.
The media proclaimed Thursday that the management is concerned about selling parts of the bank or maybe the whole bank. The management wants to focus on the strategy.
Friday was also a bad day for the employers, the management said that they want to fire 50,000 workers. After losing 25 percent of its value Wednesday, Citigroup stock fell down with 26% on Thursday to $4.71, its lowest level in more than a decade, and now they are dropped under the 4 dollars. This is a crisis for the bank.
There is a lot of pressure on Citigroup now, shortsellers thought the share would drop down so there are a lot of people that are speculating. Also institutional investors are not allowed to have shares under the 5 dollars, so it’s difficult to come out of this negative circle.
There are a lot of solutions said analysts and professionals.
One rumor is that they could break up parts of their organization and sell it to other companies.
But this is denied by the management in a conference call.
Another solution is a possible tie-up with a peer but that would be the end of Citigroup.
The question we have to ask is who has the potential to organize and run an organization in this difficult times and in this negative circle.
This is an evolution in the financial crisis. Citigroup was influenced by the news of Lehman Brothers and Bear Stearns. The only way to put Citigroup in bad papers is when loan losses were so overwhelming that it barred off cash flow. So they need to keep the rest.
I think it is really necessary to protect Citigroup to go bankrupt. They are very important, they operate in a lot of countries so they really need to be protected, otherwise a lot of customers will get in trouble. I don’t know how, maybe the government can save them when they are in bad papers but I don’t know because the government can’t give money all the time to financial institutions.
We really need rest on the markets now, and especially on the financial markets. The financial shares are on a bad point and it’s difficult to come out of this negative light but when their would be rest again on the markets, the shares of the financial institutions will increase again.
So first we have to create rest and confidence in the markets, than can we work on the saving plans and see what the consequences are.
Source: http://money.cnn.com/2008/11/21/news/companies/citigroup/index.htm?cnn=yes
On Friday morning their was an extraordinary meeting for the managers to discuss the problems because when we look to the figures we can see that the share of Citigroup decreased this week with 60 percent.
The share hit a low of 3.05 dollars Friday but when the new president of the United States proclaimed that Timothy Geithner would be his nominee for Treasury Secretary the share decreased.
The media proclaimed Thursday that the management is concerned about selling parts of the bank or maybe the whole bank. The management wants to focus on the strategy.
Friday was also a bad day for the employers, the management said that they want to fire 50,000 workers. After losing 25 percent of its value Wednesday, Citigroup stock fell down with 26% on Thursday to $4.71, its lowest level in more than a decade, and now they are dropped under the 4 dollars. This is a crisis for the bank.
There is a lot of pressure on Citigroup now, shortsellers thought the share would drop down so there are a lot of people that are speculating. Also institutional investors are not allowed to have shares under the 5 dollars, so it’s difficult to come out of this negative circle.
There are a lot of solutions said analysts and professionals.
One rumor is that they could break up parts of their organization and sell it to other companies.
But this is denied by the management in a conference call.
Another solution is a possible tie-up with a peer but that would be the end of Citigroup.
The question we have to ask is who has the potential to organize and run an organization in this difficult times and in this negative circle.
This is an evolution in the financial crisis. Citigroup was influenced by the news of Lehman Brothers and Bear Stearns. The only way to put Citigroup in bad papers is when loan losses were so overwhelming that it barred off cash flow. So they need to keep the rest.
I think it is really necessary to protect Citigroup to go bankrupt. They are very important, they operate in a lot of countries so they really need to be protected, otherwise a lot of customers will get in trouble. I don’t know how, maybe the government can save them when they are in bad papers but I don’t know because the government can’t give money all the time to financial institutions.
We really need rest on the markets now, and especially on the financial markets. The financial shares are on a bad point and it’s difficult to come out of this negative light but when their would be rest again on the markets, the shares of the financial institutions will increase again.
So first we have to create rest and confidence in the markets, than can we work on the saving plans and see what the consequences are.
Source: http://money.cnn.com/2008/11/21/news/companies/citigroup/index.htm?cnn=yes
donderdag 20 november 2008
BASF cutbacks will affect 20,000 staff
BASF is one of the largest chemicals companies in the world, not to say the largest. It employs almost 100,000 people.
But this week they came out with some very negative news. The company revealed that it would reduce its working hours by 20%, which means that 20,000 people will have “flexible use of working time arrangements such as overtime and vacation”.
But that was not all, they will also reduce a part of the production in about 100 factories and close down 80 others.
BASF causes the measures to a strong decrease in orders, especially from car manufacturers.
This is a serious difference with the past few weeks, when the firm announced that the sales in 2008 would be similar to those in 2007, also the operating profits would be comparable.
This situation shows us that the financial crisis still has its effect on several companies. As a result of the news, the shares of BASF suffered a setback of 17 per cent to €21.19. Jürgen Hambrecht, the chief executive, said that the next months will be a very difficult time for the company.
There is also positive news. The chemicals giant promised that the takeover of Ciba, a Swiss company, would not be put aside.
As I said in earlier blogs, we see that the crisis is definitely not over yet, it will drag on for a long time. I think that more companies will follow and also get into trouble, especially when the markets indices keep drifting down.
I think it is too bad that BASF has to completely shut down 80 factories, but I think that it is a good idea of the company to regulate flexible arrangements for the employees. It is better than losing their jobs entirely.
I really hope that BASF can fix their problems soon and that they become a healthy company again.
However, Europe is in a recession and we will have to wait for the moment when the economy recovers. The sooner the governments find good solutions, the sooner the global economy can restore and grow again.
Source: The Financial Times – BASF cutbacks will affect 20,000 staff - http://www.ft.com/cms/s/0/e1a19a1a-b637-11dd-89dd-0000779fd18c.html
But this week they came out with some very negative news. The company revealed that it would reduce its working hours by 20%, which means that 20,000 people will have “flexible use of working time arrangements such as overtime and vacation”.
But that was not all, they will also reduce a part of the production in about 100 factories and close down 80 others.
BASF causes the measures to a strong decrease in orders, especially from car manufacturers.
This is a serious difference with the past few weeks, when the firm announced that the sales in 2008 would be similar to those in 2007, also the operating profits would be comparable.
This situation shows us that the financial crisis still has its effect on several companies. As a result of the news, the shares of BASF suffered a setback of 17 per cent to €21.19. Jürgen Hambrecht, the chief executive, said that the next months will be a very difficult time for the company.
There is also positive news. The chemicals giant promised that the takeover of Ciba, a Swiss company, would not be put aside.
As I said in earlier blogs, we see that the crisis is definitely not over yet, it will drag on for a long time. I think that more companies will follow and also get into trouble, especially when the markets indices keep drifting down.
I think it is too bad that BASF has to completely shut down 80 factories, but I think that it is a good idea of the company to regulate flexible arrangements for the employees. It is better than losing their jobs entirely.
I really hope that BASF can fix their problems soon and that they become a healthy company again.
However, Europe is in a recession and we will have to wait for the moment when the economy recovers. The sooner the governments find good solutions, the sooner the global economy can restore and grow again.
Source: The Financial Times – BASF cutbacks will affect 20,000 staff - http://www.ft.com/cms/s/0/e1a19a1a-b637-11dd-89dd-0000779fd18c.html
zondag 16 november 2008
Shares fall on more economy fears
Shares all over the world have been falling down this week. This is because the fear investors have. They think there will be a global recession. On Tuesday the Down Jones lost 2 percent.
The fact that the future of General Motors is uncertain has lead to more doubts.
In Europe and Asia the shares also fell. Just as the oil price, who felt from 147 dollars a barrel in July to 59 dollar on Tuesday 12/11.In the UK the FTSE 100 share index lost 3.6 percent. In Japan the Nikkei lost 3 percent.Along Neil Mackinnon, chief economist at ECU Group, markets are afraid of the economy and the daily bad news.On Monday European and Asian markets made some profits after the Chinese government had announced they would invest 586 billion dollar in the economy. But all the shares who made profit that Monday lost everything again on Tuesday.Jim Herrick, manager of equity trading at Baird & Co thinks we need clarity. Without clarity the bad times could last a long time.
I think our economy will slow down because of the bank crises and because of the fear people and organizations have at the moment. Investing your money in these times is very risky. People also prefer saving their money than spending it. They don’t know what will happen in the future so they are playing safe. I agree with Jim Herrick on the fact there must be clarity. When companies keep silent about problems they could get further into these problems. The perfect example is Fortis.
Another problem is the car industry, I think the governments need to invest in these sectors. It are big companies and when one of those companies goes bankrupt, there could be a new and harder crises.
source:
http://news.bbc.co.uk/2/hi/business/7723127.stm
The fact that the future of General Motors is uncertain has lead to more doubts.
In Europe and Asia the shares also fell. Just as the oil price, who felt from 147 dollars a barrel in July to 59 dollar on Tuesday 12/11.In the UK the FTSE 100 share index lost 3.6 percent. In Japan the Nikkei lost 3 percent.Along Neil Mackinnon, chief economist at ECU Group, markets are afraid of the economy and the daily bad news.On Monday European and Asian markets made some profits after the Chinese government had announced they would invest 586 billion dollar in the economy. But all the shares who made profit that Monday lost everything again on Tuesday.Jim Herrick, manager of equity trading at Baird & Co thinks we need clarity. Without clarity the bad times could last a long time.
I think our economy will slow down because of the bank crises and because of the fear people and organizations have at the moment. Investing your money in these times is very risky. People also prefer saving their money than spending it. They don’t know what will happen in the future so they are playing safe. I agree with Jim Herrick on the fact there must be clarity. When companies keep silent about problems they could get further into these problems. The perfect example is Fortis.
Another problem is the car industry, I think the governments need to invest in these sectors. It are big companies and when one of those companies goes bankrupt, there could be a new and harder crises.
source:
http://news.bbc.co.uk/2/hi/business/7723127.stm
Eurozone officially in recession
The Eurozone is officially in a recession today. Everybody thought this would happen and now it’s officially. The EU came with figures today and they are not satisfying. The economy shrank with 0.2 percent and this figure shows that the Eurozone is in a recession.
This figure is about the third quarter of this year so it’s shrank when we compare it with the last quarter.
Also the second quarter the economy shrank and technically that will say that we are in a recession now.
This figure isn’t a surprise because Germany and Italy, 2 big countries in Europe, already came with their figures and they weren’t satisfying at all. When two big countries their economy is bad they pull the rest of Europe with them.
It’s the first recession Europe has to deal with since we came with the Euro but analysts think the worse has to come for Europe. They say we will have bad figures till the third quarter of 2009 so we got a difficult year to deal with and we haven’t seen the impact of the unemployment and the financial crisis.
Especially the car industry got bad figures. The car industry is the biggest in Europe and very important. Their figures aren’t satisfying, they show that the sales went down with 14 percent.
Also the export is important and especially for Germany, they get the biggest economy in the world, their economy went down with 0.5 percent.
Also Italy and Spain followed this trend and for Spain this is the first such drop since 1993.
Analysts think the household spending will drop down.
The ECB already cut their interest rate but it’s possible they will cut their interest rate further.
This is bad news on the end of the week but the stocks did well on the markets this week.
I think this is a logical step after the crisis we got. We have to deal with this and we all know this would happen.
It’s now the ECB and the EU that will have to come with some solutions. They have to do that because we need some rest right now. It’s normally that we are in a recession nowadays and households will not spend as much as they did. Everybody knows this and also the leaders of Europe. They have to come with a solution so we can come out of this crisis.
Source: http://newsvote.bbc.co.uk/2/hi/business/7729018.stm
This figure is about the third quarter of this year so it’s shrank when we compare it with the last quarter.
Also the second quarter the economy shrank and technically that will say that we are in a recession now.
This figure isn’t a surprise because Germany and Italy, 2 big countries in Europe, already came with their figures and they weren’t satisfying at all. When two big countries their economy is bad they pull the rest of Europe with them.
It’s the first recession Europe has to deal with since we came with the Euro but analysts think the worse has to come for Europe. They say we will have bad figures till the third quarter of 2009 so we got a difficult year to deal with and we haven’t seen the impact of the unemployment and the financial crisis.
Especially the car industry got bad figures. The car industry is the biggest in Europe and very important. Their figures aren’t satisfying, they show that the sales went down with 14 percent.
Also the export is important and especially for Germany, they get the biggest economy in the world, their economy went down with 0.5 percent.
Also Italy and Spain followed this trend and for Spain this is the first such drop since 1993.
Analysts think the household spending will drop down.
The ECB already cut their interest rate but it’s possible they will cut their interest rate further.
This is bad news on the end of the week but the stocks did well on the markets this week.
I think this is a logical step after the crisis we got. We have to deal with this and we all know this would happen.
It’s now the ECB and the EU that will have to come with some solutions. They have to do that because we need some rest right now. It’s normally that we are in a recession nowadays and households will not spend as much as they did. Everybody knows this and also the leaders of Europe. They have to come with a solution so we can come out of this crisis.
Source: http://newsvote.bbc.co.uk/2/hi/business/7729018.stm
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