Mittwoch, 26. November 2008
About my blog : Financial News !
The banking institutions described in my blog were once the crown jewels of the financial and banking industry. Today, job losses, default and uncertainty affect them in a way no one ever thought possible. Even the brightest minds of the investment world, such as Warren Buffet and Prince Sultan Al Waleed Bin Talal were not able to foresee the impact of the crisis on institutions such as Goldman and Citigroup, respectively.
Investment advisors, private bankers, wealth managers and hedge fund managers who used to talk about the euro hitting the 2USD barrier, or the barrel of oil at 200USD; are nowhere to be seen. The world has become so complicated, and the economic system has expanded beyond our understanding, that few people are able to look at what is happening now and give a proper explanation or analysis. In fact, my blog aims at presenting a fresh, easy to understand and dynamic approach to the financial crisis.
This word “crisis” is what determines our behaviour these days. I recently came across a very good joke which defined optimism as “a private banker ironing five shirts on a Sunday evening”. Some of my friends, and friends of friends, and many more strangers in the city of London, and all over the world, have lost this optimism. When there is a lack of confidence in the market, then the game is paused, if not over. Problems expand, and what started as a virus in the financial market becomes a contagious disease affecting other industries, as the automobile.
Another example of how things can change, and how fast this change happens is seen with the American and European car manufacturing companies. More and more, as people reduce their spending, as the credit crunch forces Americans and Europeans to wake up from a dream of cheap credit and high liquidity; manufacturers bear the pain, orders are reduced and people loose their jobs. My family has been directly affected by this situation, and I have seen the difficulties with suppliers and a immediate reduction of sales. With the plans being drafted in both sides of the Atlantic and a change of Government in the US, things may well start to change.
Our world has changed, as fast as in the 20s, as strong as in the 40s and as dynamic as in the 80s. This time, the system is pushed to the limits of our understanding, and the phrase written in the dollar “in God we trust” becomes something of a premonition. To say what awaits us is to look into the future, and I will not attempt to do that; better know what is going on today, and what better way than using the internet.
By Jim Kohn
Dienstag, 25. November 2008
CITIGROUP TO SHED MASSES OF JOBS
In these times of deep financial crisis, many industries and companies lay in the balance, at the mercy of the sometimes unforgiving nature of economics. Are these the times of profound American financial change? Have both New York and Detroit’s life cycles reached their death? Are they even fit to survive?
Montag, 24. November 2008
BRITISH AEROSPACE (BAE) SYSTEMS FEELS THE PINCH
The peak of the Iraq war was ironically a good time for business at BAE Systems when orders were ripe. Now that Britain’s involvement in Iraq and elsewhere has declined, orders are reasonably down. Many factors have contributed to the slowing down of orders at BAE Systems, for example, the decrease in world travel and the effects of the financial crisis on the travel and tourism industry has affected BAE Systems as orders from airline companies have decreased.
However, the news is not all bad, for just recently, BAE Systems was awarded a new $1.6 Billion U.S. Army contract for a 10,000 additional family of Medium Tactical Vehicles order. America’s long term presence in Iraq and Afghanistan has helped BAE Systems during tough times.
Samstag, 22. November 2008
GM, CHRYSLER AND FORD MOTORS have run out of control !!
Simply put, financing a car for consumers has become harder in the current stagnant economic climate, where, for automakers, inventories begin to stock up and become tougher to shift.
The companies have had to slash manufacturing production across factories globally due to the current worldwide recession. All three companies have appealed for a modest $25 billion bailout by the U.S. congress. In an effort of damage control, the company has got rid of two of its luxury jets. GM was also forced to sell its stake in Suzuki due to this financial meltdown and the lagging consumer demand for its cars.
U.S. president elect, Mr. Obama has repeatedly stressed the need to help the sector, since winning the presidential election, and has urged President Bush to take immediate action to save America’s home-grown automakers. He has described it as the "backbone of American manufacturing." Considering that Detroit city, home to GM, Chrysler and Ford, is the spine to America’s auto-making industry, it seems that the government will be more than likely and happy to offer a helping hand. The question is when and how. Or should they ride out the current tides independently? Would it make sense for the U.S. congress to turn a blind eye on such a crucial American industry and allow it to collapse? I think not.
Mittwoch, 19. November 2008
GOLDMAN SACHS RECEEDING
Analysts at Goldman Sachs predict the U.S. recession to deepen even further and unemployment to hit around 9% at the end of 2009. This gloomy outlook has prompted financial companies to re-evaluate their positions and exercise caution. With the markets in chaos and the domino effect of bank woes, banks are returning to traditional and more clients focussed financial methods. Have Goldman Sachs and the other financial giants, such as JP Morgan and Citigroup Services, reaped what they have sewed? Sewing the seeds of greed has led them to their ultimate collapse and demise.
Dienstag, 18. November 2008
TOYOTA GETS RID OF JOBS IN THE MIDST OF ECONOMIC FEARS
With consumers putting their car purchasing decisions on hold, downsizing and cutting costs for these auto makers has become an important, practical and logical necessity, taking into account the scope of the situation and the future livelihood of these conglomerates. Selling off stakes or factories/plants to keep a healthier cash flow is also another option. There are no immediate or easy solutions, however, making the most logical and sensible financial decisions and exercising sound economic policies are imperative in order to avoid failure and rise above the crunch. However, with all said, for consumers, it remains the best time to actually buy cars as carmakers and dealers start slashing prices to spur on demand and move inventory, that’s if you have the money. Brighter horizons are on the way though and I think Toyota will learn from this experience and come out stronger.
Samstag, 8. November 2008
JP Morgan Stanley chases axes jobs
To re-forge a sustainable financial business model and return to ‘normal times’ the financial industry may need a lot of re-engineering and ‘bailing out’.
I think it is time for federal banks like these to learn from these hard lessons and always have responsible, adaptable and responsive back up plans for worst case scenarios, like the current scenario taking the financial industry by storm.