08S7A's Economics Blog
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Wednesday, April 30, 2008
posted byRecession!!



7:01 AM

Monday, April 21, 2008
posted byOil @ $114.00!!!


Oil @ $114.00, AT&T laying off 1.5 % of work force, Citibank 5.1 Billion in the red for the first qtr, and the market goes up over 200 points?! What is really going on here? Anyone care to comment?

7:07 AM

posted byShi Huan


4:42 AM

Wednesday, April 16, 2008
posted byMr Chris Ho: Sample of Article Review


This is a sample of an article review that Miss How posted on SMB. Use this as a guideline when you are doing your article review for the econs blog.

8:13 PM

posted byMr Chris Ho: Participate in Wanted! to Earn CASH, Participation Points, GNA$, etc


Dear all,

You are strongly encouraged to join the Wanted! Competition! We are extending the deadline till as long as the blog competition is on!

As long as I see some good stuff you have put up and stand a chance of $50 cash, I will alert you and ask you to participate.

Also, it's already mid of 3 terms in which you are graded for 5% participation points..... well, by posting article reviews on this blog will entitled you to gain some class participation points, and also to stand a chance to win best blog - $200 cash, etc. Why not?

You will be given more details on how to score higher for your participation points.

Mr Chris Ho

8:01 PM

Tuesday, April 15, 2008
posted byPak Chuen


Brazil in 'major oil field' find

Petrobras workers in front of an oil platform
Further tests are needed to assess the potential of the find

Brazil has discovered what could be the third biggest oil reserve in the world, according to the head of the country's National Petroleum Agency.

The deep-sea find by state-run oil firm Petrobras could yield 33 billion barrels in reserves.

Further tests are required to assess the scale of the find, off the coast of Rio de Janeiro, but analysts say it could have significant implications.

Brazil announced sizeable new gas and oil discoveries last year as well.

'Big number'

In December 2007, Brazil said it had found a new reserve in the Espirito Santo region a month after a reserve in the nearby Tupi oil field of up to eight billion barrels was found.

According to the US Energy Department, Brazil's existing proven oil reserves total 11.8 billion barrels, while the US holds 21.8 billion.

Referring to the latest discovery, Citigroup analyst Tim Evans said: "It's a big, big number".

Petrobras said "more conclusive data" about the potential of the discovery would only be known after further evaluation.

A spokesperson for the National Petroleum Agency said the statement by its president Harold Lima about the find was based on unconfirmed sources.

Even if the reserves are proven, it is likely to take ten years before the latest find can be turned into significant supplies.

8:09 AM

posted byIsabella


6:22 AM

Monday, April 14, 2008
posted byMr Chris Ho: Ford + GM = Gord?

Indecent Proposal? What a Ford/GM Merger Could Mean

Would Americans Buy Cars From A Company Called 'Gord'?

Sept. 18, 2006 —

Times are so tough in the American auto industry that the country's two biggest nameplates have actually talked about a massive combination. Reports out of Detroit suggest that GM and Ford had discussions about the possibility of a merger or alliance.

"It's a joke, there's no real meat on that bone," said Kevin Tynan, senior auto analyst at Argus Research Company. "They need to get smaller, not bigger. They need to be more flexible, not continue in their old way of doing business."

But the tantilizing possibility of a mega merger has many industry experts rubbing their eyes in disbelief, wondering if these two icons could actually find a way to marry, and if they did, how that would change the auto industry landscape.

"Does it become General Ford? Gord? Ford Motors?" asked Karl Brauer, editor-in-chief of auto web site "That's actually one of the strengths of a merger -- they'd be combining two of the world's most recognized brands."

Combined, Ford and General Motors would be a force to be reckoned with.

Based on their most recent sales reports, a merged company would have accounted for more than 4.6 million cars and trucks sold in the United States so far this year. That's an astounding 41 percent of the U.S. auto market and almost three times the size of Toyota's slice of the auto pie.

That new sizable company would have leverage with suppliers that neither has enjoyed for decades. Experts say a combination could allow for better deals on everything from steel components to tires, air conditioners to ad time.

But in this case, size doesn't necessarily make for success in the car business.

Today the companies are too big, with expensive plants that are not running and thousands of union workers they have to pay even when they do not need them. Combine that with the financial burden of pensions and providing health care to workers and their families, and you see that size can, in fact, hurt a company.

"Even if a merger happened, they'd still face these costs," said Brauer. "Becoming a single company doesn't reduce their obligations to the UAW or their health care costs. Unless they made these issues a part of the alliance negotiations and included the unions in whatever deal they struck."

Asian competitors Toyota and Honda -- both of which have made big headway in grabbing market share from GM and Ford in recent years -- have a younger work force, which means lower pension obligations and less expensive health care costs. Those foreign competitors have used those lower financial burdens to make cars in the United States for less than their American competitors.

A merger would allow the combined company to negotiate simultaneously with its unions about cost reducing moves, but GM is already a few steps ahead of Ford in cutting these costs with aggressive hourly-worker buyouts and layoffs of salaried managers.

GM chief Rick Wagoner says that the company's restructuring plan, announced late last year, has already succeeded in cutting some $9 billion out of the struggling company's expenses.
Ford's recent acceleration of its "Way Forward" plan is taking a line from GM's script, offering one-time payouts of up to $140,000 to workers willing to walk away from their jobs and drop corporate health insurance in their retirement years.

But success is not just about reducing costs. It is about making cars and trucks that people want to buy.

"You could easily end up with a stronger line-up of vehicles and nameplates," said Bauer. He says both GM and Ford have brands that they could jettison without having a negative effect on their bottom lines. Losing the car and truck nameplates that haven't found a place in the marketplace would make the overall car market stronger; a Darwinian thinning of the herd.
A big auto merger like the one reportedly discussed by GM and Ford has happened before. The $38 billion combination of Chrysler with German auto giant Daimler-Benz in 1998 offers a precedent. It took years and a shift in top management to get the merger to work.

"The real challenge will be getting somebody that can actually manage it and make it stronger, instead of just creating an unwieldy monster," said Bauer. "It would take a hell of a management effort."

But the speculation about a merged GM/Ford is just that: speculation.

Most analysts are not confident that a GM/Ford marriage is in the offing, pointing out that there's no real financial benefit to either company that would justify the Herculean effort of pulling off a combination.

11:26 PM

posted byMr Chris Ho: Video clip - Microsoft bid for Yahoo


Why do you think Google is involved in this?

10:41 PM

posted byMr Chris Ho: Video clip - Delta & Northwest Airlines Potential Merger


This video clip was shown before discussing Tutorial 10 Question 2.

Do you think the merger between Northwest and Delta Airlines will work out? Why and why not?

10:22 PM

posted byElaine


Cartoon depicts 2 men with oil on their overalls, commenting how expensive their oil splattered would be. The cartoon is basically trying to illustrate the growing oil prices.

Price has been increasing, because oil supply growth is slowing down. This is due to oil production surpassing new discoveries in 1980. Supply curve gradually shifts leftward, causing a gradual increase in price.


7:42 AM