Archive for the ‘Important Announcements’ Category

What Ifs for the 2012 Election

Wednesday, November 7th, 2012

As the two nominees still lay in deadlock on the on-going election, many are eagerly waiting for the results. According to the latest news, Obama is gaining advantage on winning the election but the key states results are yet to announced. Some polling states are still open and there may be some delays especially on the states where Sandy struck the most. For the meantime, I thinks better to contemplate on the “what ifs” of this election.

What if Romney wins?

An indeed a successful businessman, no one can doubt Mitt Romney’s capability as a businessman. He was donned with the business knowledge and skills from the prestigious Harvard University and has proven his worth in the corporate world through his Bain Capital.

But many are in doubt to whether he can put his business theories into reality. Moreover, certain individuals are also pessimistic in the application of his business theories into political arena. It seems that he has invested more effort in this campaign rather than in his experience on managing the state of Massachusetts, warding an impression of a less experienced political candidate than his competitor.

If in case he is elected, he have to deal with a congress, divided by difference in ideals unlike his business group, which may really give him a hard time. Also, being a less experience candidate may have its toll once he won the seat. Unlike Obama who already handled the rein in the past four years, Mitt Romney will start from the scratch in governing the most influential and most powerful country in the world. The health care programs of Obama will most probably terminated and the Bush cut tax for the wealthy may be made permanent according to some. He also must be prepared to face the issue about Iran’s nuclear material.

What if Obama wins?

Some of his supporters may have been waned off this past few years but most still have their faith on the first African-American president. Obama talks about the withdrawal of troops in Afghanistan and building educational program. But the plans may be hindered by the budget. After winning the election, the health care plans will probably push through and so are the pressing concern over Iran’s nuclear materials. Similar to Romney’s case. He has plenty of issues to handle if he would regain that White House seat of his.

Conclusion


In my opinion, I think its better if Obama wins. The experience and agenda are really two important factors to this election. But I hope that it won’t hurt much if the new kid in the block will be given the chance to steer the wheel.

Stephen Stevenson

Understanding the Fundamentals | Producer Price Index

Thursday, October 25th, 2012

Almost all products, before landing into our very own hands, goes through a lot of process. Along those processes, are changes in its price. The basic framework goes like this: semi-products are first gathered and transported to manufacture or producer, after which it will be assembled or putted on together by the laborers to come up with a finished product. The finished product will be displayed and sold on the market afterward.

PPI takes into account all of this through its weighted index of prices. It is done through a wholesale level and consists of three major sub-categories: initial, intermediate, and final.

PPI Commodity Index (Initial) – changes on the average price of commodities( for the previous month are displayed in here.

PPI Stage of Processing (intermediate) – the current prices of the goods that had gone through certain level of processing which will be passed on to the producer for the final output are reflected in here.

PPI Industry Index (final) – this is the source of the core PPI and reflects the price for the finished products.

The first two sub categories are followed due to its capability to reflect inflationary or deflationary pressures. Meanwhile, most investors follow the third because it reflects the prices of the goods which will be for sale to the consumers. But the apple of the eye for the investors are the core PPI which is published along with the main index. Core PPI is a byproduct of the finished goods index minus the energy and food components.

Though the monthly PPI cannot affect the market reaction, its annual data are under the watchful eyes of the analysts mainly because PPI gives a sneak-peek of the CPI (Consumer Price Index). It will later on validated after the latter is released. As we all know, CPI is the inflation indicator which is very important in fundamental analysis.

Stephen Stevenson

Giant’s Slow Recovery

Friday, October 19th, 2012

After a devastating seven-quarter beating which took place on the year of the dragon and rabbit, it seems that China is back in the ball game. Earlier this year, the Chinese economy is monitored by the world’s watchful eyes because of its economic slow down. The second largest economy, whose leadership transition will take next month, is slowly recuperating from its weakened economy.

Signs of recovery has materialized on its GDP as it expanded 7.4 in the third quarter compared to the previous year. “China’s economy is performing better than expected, and the bottoming will be clear in the fourth quarter,” a statement given by a chief China economist for JPMorgran Chase & Co. to Bloomberg last October 17. several monthly data also backed up the mustered strength as the industrial production in September leaped more than its expected increase and retail sales also took a step up at 14.2 percent which is the most significant positive movement since March. The fixed-asset investment, rural household not included, increased 20.5 percent for the first nine months.

But amidst the signs of recovery, several important factors are still in the deep. One of which is the foreign direct investments. As relayed by the Ministry of Commerce in Beijing, spending fell 6.8 percent as compared to the previous year. Furthermore, One of the probable reason given on a news report was inclined to the fact that foreign investors are concerned over the evident slowdown of the country’s economy.

Aside from its economic slowdown, China is also being putted on the spotlight because of its sovereignty talks about the disputed islands along the south china sea. Several countries are already been infuriated and diplomatic relationships are slowly disintegrating as the Chinese government still showing an aggressive stance on its claim.

Stephen Stevenson

A Peek at the Greenback’s Election

Thursday, October 4th, 2012

After winning the 2008 election, beating the republican John McCain, and being the first African-American president who extinguished any trace of racism left in the American soil, Barack Obama is once again on the poll.

This time, the African-American president is up against the former governor of Massachusetts – Mitt Romney. The 65 year old Republican is the 70th governor of Massachusetts who has a good educational background in Business Administration. He obtained his joint Juris Doctor and Master of Business Administration from the Harvard University. On the other hand, President Barack Obama is a graduate of Harvard Law School and has proven his worth in the past 4 years. He signed various legislation to counter the economic recession in 2007 to 2009. Some of which are the American Recovery and Reinvestment Act of 2009; Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010.

The clash between the two Harvard University graduates had already begun at the first round of the presidential debates. Romney said the current president favors a form of “trickle-down government” with more taxes and regulations according to a Bloomberg report. Obama rebutted the argument by saying that Romney favors the wealthy through his “top-down economics” and loading the burden to the shoulder of the middle class Americans.

According to past statistics, although the debates really has a huge impact on the outcome, it still fails to decide the result of elections. The election which will decide the fate of the greenback for the next 4 years is scheduled to be held on November 6,2012.

Stephen Stevenson

Understanding the Fundamentals – Unemployment Rate

Friday, September 28th, 2012
Understanding The Fundamentals –  Unemployment rate
Unemployment rate is the percentage of the labor force who doesn’t have a job but are willing and actively seeking work. It is one of the macroeconomic indicators that most fundamental analyst are observing in case of a long term investment decision and is usually published at 8:30 EST (NY) on the 1st Friday of the  month.
The unemployment rate is calculated by dividing the number of unemployed individuals by all individuals currently in the labor force.
Effects of Unemployment in the Society and Economy:
Counter-productiveness
Instead of spending their time, effort, and resources in performing a job, the unemployed part of the labor force are obligated to drain their efforts first in seeking out  new jobs. The individual’s counter-productiveness may even worsen if the hunt will turn out to be a failed attempt.
Impoverishment leading to social unrest
Idle individuals have lesser financial means to dispose thus allocating most of it only on the “needs” in order to survive. In the the long run, this may result to dissatisfaction which may escalate once certain individuals started to fill-in their “wants” through dishonest means. The dishonest means which is used to gratify the “wants” may then lead to unrest in the public.
Exploitation of labor
Since there is a surplus of workers because everyone is seeking out a job, there is a high tendency that laborers will be exploited. Most company will take an advantage on this situation since laborers are forced to accept what is offered to them because of fear to lose their job. The exploitation may be in different forms like lower wages, fewer to none benefits, unpaid overtime pay, longer working hours, etc.
Less People Pay Taxes
An individual without any source of income cannot pay his dues to the government. Only those that are employed have the capability to pay the taxes and no tax is certainly a “no no” to the government. Without taxes, the economic activity will slow down because taxes is like a fuel that keeps the economy running.
Bankruptcy of Businesses
Unemployed individuals spends only for things that they needed to survive. The decrease of purchasing activity of consumers will certainly cut those companies that manufactures products that are not essential in the day-to-day activities of individuals.

Unemployment rate is the percentage of the labor force who doesn’t have a job but are willing and actively seeking work. It is one of the macroeconomic indicators that most fundamental analyst are observing in case of a long term investment decision and is usually published at 8:30 EST (NY) on the 1st Friday of the  month.

The unemployment rate is calculated by dividing the number of unemployed individuals by all individuals currently in the labor force.

Effects of Unemployment in the Society and Economy:

Counter-productiveness

Instead of spending their time, effort, and resources in performing a job, the unemployed part of the labor force are obligated to drain their efforts first in seeking out  new jobs. The individual’s counter-productiveness may even worsen if the hunt will turn out to be a failed attempt.

Impoverishment leading to social unrest

Idle individuals have lesser financial means to dispose thus allocating most of it only on the “needs” in order to survive. In the the long run, this may result to dissatisfaction which may escalate once certain individuals started to fill-in their “wants” through dishonest means. The dishonest means which is used to gratify the “wants” may then lead to unrest in the public.

Exploitation of labor

Since there is a surplus of workers because everyone is seeking out a job, there is a high tendency that laborers will be exploited. Most company will take an advantage on this situation since laborers are forced to accept what is offered to them because of fear to lose their job. The exploitation may be in different forms like lower wages, fewer to none benefits, unpaid overtime pay, longer working hours, etc.

Less People Pay Taxes

An individual without any source of income cannot pay his dues to the government. Only those that are employed have the capability to pay the taxes and no tax is certainly a “no no” to the government. Without taxes, the economic activity will slow down because taxes is like a fuel that keeps the economy running.

Bankruptcy of Businesses

Unemployed individuals spends only for things that they needed to survive. The decrease of purchasing activity of consumers will certainly cut those companies that manufactures products that are not essential in the day-to-day activities of individuals.

Stephen Stevenson