econs rocks your socks

Heard this Joke?

2008-05-21T22:19:00.000-07:00

Here's a joke that relates to RECESSION AND INFLATION.

Once there was a man who claimed to be a WALKING ECONOMY. "What's that?" someone asked. The man replied, "Look my hairline is in RECESSION, my waistline is a victim of INFLATION and both are putting me into a deep DEPRESSION." Got it? :)

tax

2008-05-21T07:24:00.000-07:00

Hello, every one

I think every one knows that in the US, the tax is very high and the government say that it is to ensure that the income gap between the rich and the poor does not broaden that much. Thus, the government charge high tax on almost everything.

As you know, the taxes will result in a dead weight loss of consumers' and suppliers' surplus. The higher the tax, the greater the dead weight loss is. As a result, much consumers' and suppliers' surplus is lost and many Americans are against such government policy. So many artists produce cartoons to express their resentment about such high taxes.

The below are cartoons about the criticism on high tax in the US:
http://www.cartoonistgroup.com/store/add.php?iid=22999
http://www.cartoonistgroup.com/store/add.php?iid=23301
http://www.cartoonistgroup.com/store/add.php?iid=23571
http://www.cartoonistgroup.com/store/add.php?iid=23571
http://www.cartoonistgroup.com/store/add.php?iid=22968

The cartoons are very funny and they are real life examples of the disadvantage of high tax.

Enjoy!

Xiaoyi

Hello 6G

2008-05-19T22:03:00.000-07:00

This is my final weekly visit before the end of the Inter-CT econs blog judging takes place. Well, must say after my last posting at least 2 wonderful people in 6G have taken the challenge to liven up your class blog. Now its the final push to the finishing line... Go 6G Go.... dont take it lying down Ok :)

Monday, May 19, 2008

2008-05-19T05:21:00.000-07:00

Myanmar agrees to Asean-led cyclone aid effort: S'pore

'The foreign ministers have agreed to establish an Asean-led coordinating mechanism,' said Foreign Minister George Yeo (above). -- PHOTO: REUTERS
SOUTHEAST Asia's regional bloc will set up a task force to handle distribution of foreign aid for cyclone victims in Myanmar, which estimates losses from the killer storm to exceed US$10 billion (S$13.6 billion), Singapore's foreign minister said on Monday.
An emergency meeting of foreign ministers from the 10 countries of the Association of Southeast Asian Nations (Asean) decided that the bloc will work with the UN to hold a donor conference in Yangon on May 25, Minister George Yeo told reporters.
In a major concession after being slammed for blocking foreign aid, Myanmar also agreed to open its doors to medical teams from all Asean countries, Mr Yeo said.
At least 134,000 people were killed or left missing in the May 2-3 cyclone, and another 2.5 million people are living in poor conditions, most of them without shelter, enough food, drinking water or medical care.
Mr Yeo said the ministerial meeting, which included Myanmar Foreign Minister Nyan Win, agreed to set up an Asean-led task force for redistributing foreign aid. Asean Secretary-General Surin Pitsuan will go to Myanmar soon for planning.
'This mechanism will facilitate the effective distribution and utilization of assistance from the international community, including the expeditious and effective deployment of relief workers, especially health and medical personnel,' he told a news conference.
Each Asean country would send a team of 30 medical personnel into Myanmar 'very soon', with unrestricted movement in the country, said Indonesian Foreign Minister Hassan Wirajuda. Thailand has already sent its team.
The Myanmar foreign minister told the meeting that losses from the cyclone are expected to be 'well over US$10 billion'.
The bloc hopes to raise funds for Myanmar at the May 25 meeting and will also work closely with the World Bank and Asian Development Bank on aid packages.
Mr Yeo said Myanmar is also prepared to accept the expertise of international and regional agencies to help in its rehabilitation efforts.
But this does not mean the junta will open its doors to foreign experts immediately, which aid agencies and the United Nations say is required immediately.
'There will not be an uncontrolled entry of foreign personnel into Myanmar.'
Aid agencies say millions of lives are at risk because Myanmar does not have the infrastructure, expertise and logistics to handle a humanitarian crisis of this magnitude.
French Foreign Minister Bernard Kouchner said in an editorial in the daily Le Monde on Monday that the UN Security Council would be guilty of 'cowardice' if it does not force Myanmar to accept international aid.
But the Asean meeting rejected suggestions foreign ships carrying aid make a forced entry into Myanmar.
'That will create unnecessary complication. It will only lead to more suffering for Myanmar people,' Mr Yeo said. -- AP

Analysis:
As you know, Myammar at first refused to receive the financial aid from foreign countries such as other Asean member countries. But it soon was slammed by the unimaginary number of casualties and loss from the killer storm.

Since Mymmar has been outraged by the killer storm, countless infrastructures were destroyed. Therefore, the supply of the food and daily necessities was largely decreased, illustrated as left shift of suppply curve in the supply-demand diagram. Futhermore, as the economy of Mymmar was slashed, it entered an economic recession, resulting in the increasing demand of daily necessities. As a result, the price of these daily necessities, including daily food, would obviously largely increase based on the supply and demand theory. Then the survived citizens in Mymmar would have greater problems maintaining their basic needs in daily life.

So Mymmar government had to agree to receive the aids from foreign countries, or its economy might topple thoroughly. After receiving these aids, the supply would increase, hence the price of daily necessities would deceased largely to an acceptable extent. through this way, the economic crisis might be relieved.

So hope all the information will be useful.
Yours sincerely
Xu Yanjun

Earthquake in Sichuan

2008-05-18T03:59:00.000-07:00

Hi, every one

This week, the worst earthquake in the recent 32 years in China stroke in Sichuan province. This is a catastrophic natural disaster. I just pray more people could be rescued and nobody else would be harmed.

So how would this quake affect China's economy? The links below are 3 article about the impact on China's booming economy.

http://www.shanghaidaily.com/sp/article/2008/200805/20080514/article_359484.htm

http://blogs.wsj.com/economics/2008/05/12/the-earthquake-and-chinas-economy/

http://www.chinadaily.com.cn/opinion/2008-05/15/content_6686511.htm

So the articles above basically state that this quake will not have much impact on the economy other than agricultural ones. Besides that, I believe that this quake may spur certain industries to grow even faster.

During the rescue, many food and medicals are needed. Thus, the demand of food and medicals will increase, resulting in the rise in price of them. As a result, more people will enter the industry to make a profit. Moreover, after the rescue, many cities and towns in Sichuan will be reconstructed. This will cause a huge demand of things related to construction, from raw materials to contruction workers. Thus, more jobs will be probably created and the contruction industry will grow even faster.

However, in the macroeconomic sense, this will cause inflation, loss of workforce and etc. Most importantly, this is a devastating disaster which millions of people suffered. It is a tremendous humanitarian disaster. No matter how the impact on economy it will be, human beings are the most important and any loss of lives will be critical.

Once again, all the best for those people who are still suffering from the quake. And I'm confident that you can beat this earthquake monster.

All the best for those who are suffering, and for those who are living happily like us.

Xiaoyi

HSBC

2008-05-12T02:14:00.000-07:00

HSBC says Q1 profit up, bad debts jump

LONDON - EUROPE'S biggest bank HSBC Holdings said its profit in the first quarter was ahead of a year earlier as growth in Asia and elsewhere helped counter another big hit for bad debts on US home loans.

HSBC said on Monday its bad debt charge related to its US consumer finance business was $3.2 billion (S$4.38 billion) for the first quarter, down from $4.6 billion in the previous quarter but double the level of the first quarter of 2007 as problems in the subprime housing market work through its loan book.

HSBC said its underlying revenue growth in the first quarter was comfortably ahead of a year ago, even after absorbing a $2.6 billion write-down in its global banking and markets investment banking unit. -- REUTERS

http://www.straitstimes.com/Latest%2BNews/Money/STIStory_236586.html

Hello, every one,

The above is from today's straits time article. Since in lecture series 9-10 we learned size of firms and cost theory, i think HSBC is a very good example of big firms.

--My analysis of HSBC--
Since banks are special kind of firms in the market, the most critical activity of banks is investing. I think HSBC is a very successful bank in the world. It has a very long history of development. After merging with many other banks all around the world, it has become the Europe's biggest bank now.

As mentioned in the article, even HSBC was affected by the USA subprime housing market and bear a huge loss, it can still have a growth of profit in the first quarter of this year. I think the most important thing is that HSBC diversifies its investment very well:

1. It now has many branches all over the world, USA, Hong Kong, China, Sigapore, Maylasia, Turkey, Spanish, etc. This is spatial diversification of investment. As such, even HSBC is making a loss in the USA subprime housing market, it can still earn much profit from the investment in many other countries.

2. It diversifies its investment in many different sectors. It provides customers with different services according to different demand. Firstly, it offers large amount of loans. Secondly, it provides service of insurance. Thirdly, it provides an award-winning range of custody services. It also offers other different services in different areas. For example, in Hong Kong, HSBC is one of the 3 issuers of Hong Kong yuan. This brings HSBC much profit since the bank itself is partially playing the role of government and it has sufficient influence on the local economy.

Hence, by diversifying its investment all around, the ability of risk-bearing is much greater than other banks in the world. Another important factor of HSBC's success should be that HSBC keeps on merging with other banks or investing to hold shares of other banks. This allows HSBC to exert a great influence in many regions. And this influnce is sometimes big enough to be considered by government. Thus, it can receive more incentives from the government. Moreover, by merging with other banks, HSBC is enjoying greater internal economies of scale and this also gives HSBC more monopolistic power.

In conclusion, i believe that HSBC is a very good example of big firms and the bank is still growing.

For more informaiton HSBC, you may refer to the below links:
English site: http://en.wikipedia.org/wiki/HSBC
Chinese site: http://bbs.hiall.com.cn/viewthread.php?tid=17176

So hope all the information will be useful.

Yours sincerely,
Li Xiaoyi

happy mummy's day!

2008-05-11T07:22:00.000-07:00

Mother's Day stands immune to economic woes

by Melissa Burden | The Flint Journal
Saturday May 10, 2008, 5:51 AM

Ryan Garza | The Flint Journal
Lorie Gavulic puts together a Mother's Day arrangement while helping out with orders at Curtis Flowers in Flint Township on Friday. "Luckily people still love their moms," Gavulic said about the economic hardship people are facing.

GENESEE COUNTY, Michigan -- Don't worry, Mom, it looks like the weak economy hasn't dampened plans to treat you to a nice Mother's Day.

Consumers are expecting to spend about the same as last year on Mother's Day, despite job losses and higher prices at grocery stores and gas pumps.

Mother's Day spending

Here's samples of how much people will spend in certain categories on Mom.

• Special dinner or brunch: about $3 billion.

• Jewelry: $2.7 billion.

• Flowers: $2 billion.

• Gift cards/certificates: $1.6 billion.

• Clothing/accessories: $1.4 billion.

• Consumer electronics: $1.2 billion.

• Personal service gifts: $1.1 billion.

• Housewares/gardening tools: $696 million.

• Greeting cards: $672 million.

• Total: $15.8 billion.

Source: National Retail Federation's 2008 Mother's Day Consumer Intentions and Actions Survey conducted by BIGresearch.

"When something is important to consumers -- regardless of what's going in the economy -- they're going to dig in their savings if they have to, basically to show Mom how they appreciate her," said Kathy Grannis, a spokesperson for the National Retail Federation.

A National Retail Federation Mother's Day survey conducted by BIGresearch shows consumers will spend an average of $138.63 on Mom this year, down about 50 cents from last year's average.

Charisse Edmonson, 28, of Grand Blanc Township spent about $100 on Mother's Day last year, and this year plans to give her mom a gift and take her to dinner.

"I think I'm going to spend more because I love Mom," said Edmonson, an engineer.

Mother's Day is the most popular day of the year to dine out, and six in 10 Americans who celebrate with a special meal do so in a restaurant, according to the National Restaurant Association.

And some local restaurants and banquet halls expect to be busy and serve the same number of patrons as in year's past, even while the National Retail Federation survey says consumers will spend about $2 less taking mom to eat this year.

Tim Walli -- manager of Walli's East in Burton, which is featuring breakfast and dinner buffets Sunday -- said Mother's Day is its busiest day of the year. They expect to serve about 1,500 people.

Reservations as of Thursday also were on par to match previous Mother's Days at Redwood Lodge in Mundy Township, General Manager said Ruth Waibel, the restaurant's general manager.

And the Genesys Conference & Banquet Center in Grand Blanc Township expects to see 1,000 to 1,200 people, which could be more than last year, because it didn't raise prices and dropped its brunch for seniors by $1.

General Manager Collene Eller said those 60 and over will pay $16.95 to dine this year, a discount of $3 off the adult price.

"We just felt like, with the economy, it was a little bit easier to justify them going out to dinner," Eller said of the seniors' price cut.

Flowers are another popular item for Mom and Curtis Flowers in Flint Township expects sales will be similar to last year, with customers spending an average of $45 to $50 an order, said co-owner Carmen Skidmore.

Higher gas prices have pinched the floral shop and Curtis Flowers within the past few weeks added $2 to its delivery charge for Genesee County orders.

"Nobody's even had a problem with it," Skidmore said.

And some businesses are expecting a leap in Mother's Day related sales.

Gift card sales at The Spa at Gateway Centre in Mundy Township could top a the typical $80,000 total for Mother's Day by 20 percent or more, owner Julie Weber said.

Weber said the spa, which opened three years ago, hasn't noticed any slowdown with gift buying for Mom.

"A lot of people buy for gifts," she said. "Their holidays still come up and they're still going to buy. We've just been thrilled with our growth."

shiyun :)

Happy Mothers Day

2008-05-11T04:17:00.001-07:00

Thought of sending u an article on the economic contribution of mums to the economy.
Its in the email. I have visited other blogs and I must say some of them are really BUZZING with lots of economic activity. A total transformation like a fairy land full of colour and life ! Er...Hmmm.. like Mars... I am still looking for signs of life in your blog. So, people get going Ok..

regards

mr tan:)

Hi People

2008-05-07T17:50:00.000-07:00

This is my weekly visit to your blog. Glad I can detect there is life in your blog ... keep up the good work and do more to spice up the economics enriching content Ok:)

2008-04-30T07:50:00.000-07:00

The new face of hunger

Apr 17th 2008

From The Economist print edition

Global food shortages have taken everyone by surprise. What is to be done?

SAMAKE BAKARY sells rice from wooden basins at Abobote market in the northern suburbs of Abidjan in Côte d'Ivoire. He points to a bowl of broken Thai rice which, at 400 CFA francs (roughly $1) per kilogram, is the most popular variety. On a good day he used to sell 150 kilos. Now he is lucky to sell half that. “People ask the price and go away without buying anything,” he complains. In early April they went away and rioted: two days of violence persuaded the government to postpone planned elections.

“World agriculture has entered a new, unsustainable and politically risky period,” says Joachim von Braun, the head of the International Food Policy Research Institute (IFPRI) in Washington, DC. To prove it, food riots have erupted in countries all along the equator. In Haiti, protesters chanting “We're hungry” forced the prime minister to resign; 24 people were killed in riots in Cameroon; Egypt's president ordered the army to start baking bread; the Philippines made hoarding rice punishable by life imprisonment. “It's an explosive situation and threatens political stability,” worries Jean-Louis Billon, president of Côte d'Ivoire's chamber of commerce.

Last year wheat prices rose 77% and rice 16% (see chart 1). These were some of the sharpest rises in food prices ever. But this year the speed of change has accelerated. Since January, rice prices have soared 141%; the price of one variety of wheat shot up 25% in a day. Some 40km outside Abidjan, Mariam Kone, who grows sweet potatoes, okra and maize but feeds her family on imported rice, laments: “Rice is very expensive, but we don't know why.”

The prices mainly reflect changes in demand—not problems of supply, such as harvest failure. The changes include the gentle upward pressure from people in China and India eating more grain and meat as they grow rich and the sudden, voracious appetites of western biofuels programmes, which convert cereals into fuel. This year the share of the maize (corn) crop going into ethanol in America has risen and the European Union is implementing its own biofuels targets. To make matters worse, more febrile behaviour seems to be influencing markets: export quotas by large grain producers, rumours of panic-buying by grain importers, money from hedge funds looking for new markets.

Such shifts have not been matched by comparable changes on the farm. This is partly because they cannot be: farmers always take a while to respond. It is also because governments have softened the impact of price rises on domestic markets, muffling the signals that would otherwise have encouraged farmers to grow more food. Of 58 countries whose reactions are tracked by the World Bank, 48 have imposed price controls, consumer subsidies, export restrictions or lower tariffs.

But the food scare of 2008, severe as it is, is only a symptom of a broader problem. The surge in food prices has ended 30 years in which food was cheap, farming was subsidised in rich countries and international food markets were wildly distorted. Eventually, no doubt, farmers will respond to higher prices by growing more and a new equilibrium will be established. If all goes well, food will be affordable again without the subsidies, dumping and distortions of the earlier period. But at the moment, agriculture has been caught in limbo. The era of cheap food is over. The transition to a new equilibrium is proving costlier, more prolonged and much more painful than anyone had expected.

“We are the canary in the mine,” says Josette Sheeran, the head of the UN's World Food Programme, the largest distributor of food aid. Usually, a food crisis is clear and localised. The harvest fails, often because of war or strife, and the burden in the affected region falls heavily on the poorest. This crisis is different. It is occurring in many countries simultaneously, the first time that has happened since the early 1970s. And it is affecting people not usually hit by famines. “For the middle classes,” says Ms Sheeran, “it means cutting out medical care. For those on $2 a day, it means cutting out meat and taking the children out of school. For those on $1 a day, it means cutting out meat and vegetables and eating only cereals. And for those on 50 cents a day, it means total disaster.” The poorest are selling their animals, tools, the tin roof over their heads—making recovery, when it comes, much harder.

Because the problem is not yet reflected in national statistics, its scale is hard to judge. The effect on the poor will depend on whether they are net buyers of food or net sellers; for some net buyers, the price rises may be enough to turn them into sellers. But by almost any measure, the human suffering is likely to be vast. In El Salvador the poor are eating only half as much food as they were a year ago. Afghans are now spending half their income on food, up from a tenth in 2006.

On a conservative estimate, food-price rises may reduce the spending power of the urban poor and country people who buy their own food by 20% (in some regions, prices are rising by far more). Just over 1 billion people live on $1 a day, the benchmark of absolute poverty; 1.5 billion live on $1 to $2 a day. Bob Zoellick, the president of the World Bank, reckons that food inflation could push at least 100m people into poverty, wiping out all the gains the poorest billion have made during almost a decade of economic growth.

From: http://www.economist.com/world/international/displaystory.cfm?story_id=11049284

ANALYSIS:

(the bold points are those which i have extracted ideas from)

This article deals with two topics that we have learnt so far, price ceiling and demand and supply. It is mainly talking about the increase in food prices because of the increase in demand. The increase in demand causes a shift of the demand curve rightwards, thus increasing the quantity demanded and the price of the food products. This is because of the increase in affordability of the chinese and indians in china and india. These two countries also contribute largely to the global population size, and hence its increase in affordability is very impactly to the impactful by increasing the market size at the same time.

According to the demand and supply curves, an increased in quantity of demand will require a proportionate increase in quantity supplied of food products. However, the length of the production period is long (the need to grow crops and harvest) and thus it is not possible to increase supply as an immediate response to the change in demand. This results in a shortage of food and therefore exerting an upward pressure on the equilibrium price (this is the food price rise)

-end-

note: to any econs teacher and classmates or students, is it possible if you can provide additional comments on the analysis for better learning of the class, and also, is it possible if anyone out there can teach me how to draw a demand and supply curves when there's consumer subsidies (like for tax there might have deadweight loss, not about subsidies?)? thank you!!

-Yee Ching

Hi 6G

2008-04-27T17:53:00.000-07:00

Great to be invited to your class econs blog. Want to give credit to those who help set it up and those who have made contributions. The judging panel will be visiting your blog evey week to award scores for (1) content relevant (2) consistent participation (3) creative use of multi-media.

cheers:)

mr andrew tan

2008-04-23T05:58:00.000-07:00

http://youtube.com/watch?v=3WNCnQZhpZQ

ogliiopoly vid.highly content based. will try to find a better vid next time.

2008-04-23T02:54:00.001-07:00

o_O yo peeps! we're on the topic of monopoly now xD, and im sure all of u heard of the term antitrust, heres some videos on youtube. Enjoy =D

EU fines Mircrosot 1.3billion USD for breaching antitrust law

Antitrust (Donald Boudreaux)

Anw, theres a movie called antitrust also!! i haven't watch the movie yet, mayb we can find a chance and watch it together =)

2008-04-18T08:42:00.000-07:00

The topic of ‘Rice’ hogged the headlines of local news this week following its soaring price all over Asia, including Singapore.

Reasons for the increase in price boils down to these three main factors:
1) Higher fuel costs, with crude soaring above US $100 a barrel and threatening to stay that way, have been a major factor in the crisis, making fertilizer more expensive and increasing transport costs.

2) In Southeast Asia, disease, pests and an unparalleled 45-day cold snap that extended from China to Vietnam in January and February have also hurt harvests. Flooding in the Philippines and Vietnam has added to the growing crisis.

3) Medium-grade rice exported from Thailand, the world’s biggest rice exporter, reached $760 a metric ton, up from $360 a ton at the end of last year.

Singaporeans, including me are feeling the pinch when we witness our forking of extra few hard-earned dollars for the same kilogram of rice.Some hawkers in Singapore may also be capitalising on this surge of rice price to increase the price of their rice dishes by a few cents. I patron regularly a food stall which sell reasonably-priced ‘chap chai ben’ but now for the same few dishes and the same amount of rice, the hawker charges me an additional 20 cents!I asked the hawker why the price increases, he replied me that it was ‘a natural thing’ to do and he had ‘no choice’ but to increase his price following the surge in price of rice.Well, he certainly has other alternatives, not all the hawkers in Singapore are increasing the prices of their rice dishes to defray the rising cost of rice. This hawker is certainly killing his business and disappointing his ‘loyal customer’ by his price-increase feat. I would think twice before buying food from him again in future.How apt is the man’s lament ‘This rising, that rising’ in the recent ad by the retailer Courts.Meanwhile, governments of rice importing countries, such as the Philippines and Indonesia, are expressing concern that rising prices could spark unrest.

http://singaporeshortstories.blogspot.com/2008/04/ricing-rising-cost.html

The Princes & the Pauper

2008-04-12T04:53:00.000-07:00

ok, i shall start posting. anyway shuyan, i think the teachers will see this blog. so hmm.. your post. haha.

A consumerism video based on donuts manufactured in Singapore that i found when i was doing ilp... enjoy???

Shi Yun

yay first blog post

2008-04-11T08:19:00.000-07:00

Hi guys,

yay, econs blog been set up, so if you have anything econs related and stuff to post, please do.
Haven't gotten any nice skins yet though, so could someone help me find something nice? Or just log in to the class blog and edit it from there yourself.

どうぞ　よろしく　おねがいします、

Shu Yan