Posts for category ‘Global Crisis’

Panasonic Inc

Crisis found his victims. As written on Reuters, Worldwide Magazine, Panasonic Inc booked $3.9 million net loss last year. The reason is very clear, low in demand parity power and high cost as high input and operation costs. Deeper, Panasonic suffered net loss first in six years due the highest value of YEN against US Dollar (It means, foreign trading-export and import is harming due the crisis). Panasonic will follow others Japanese worldwide companies (export base) in red ink companies, the most industries that are suffered by crisis. Internal staff said, next quarter report shall not be announced for some reasons.

Appreciation YEN against US Dollar in Exchange rate is main reason why most Japanese Industries are suffered in overseas demand. Although booked net loss, Panasonic is the Japanese healthier electronic industries based on the performance in recovery struggling such as cost-cutting abilities.

Hitachi Inc

It is easier to recover our business if we have less different products then larger. It takes too much time and cost. Hitachi. Inc one of the worst Japanese industries suffered by economic downturn has many businesses such as nuclear reactor to TV and rice cooker and it takes time to recover although we have financial.

Hitachi booked lowest loss since 28 years and worst loss then others Japanese industries, such as Sony, Panasonic and Toshiba. Reported net loss $8.7 million in current quarter made investors shocked, seen on stock market. Through negative business result, Hitachi took necessary recovery plans to avoid red ink label.

Quarterly Report
Exxon Mobile Corp announced their forth quarter report some days ago. There were 33 percent declined of net income as the cheap oil crude. But before we see the data, we have to know that before oil crude price running low, last year when oil price run up over $100 per barrel Exxon had booked great net income.
Exxon booked $7.8 billion compared $11.7 billion in the same period a year earlier. I predict oil crude is till cheap (below $60 per barrel) so, Exxon and others Companies will book normal income and it takes time for oil price to run high due the crisis.
Job Cut
To partner with economic crisis, Morgan Stanley and Goldman Sachs decide to cut their employees (Reuters said). Morgan Stanley is predicted to cut 5 percent from total staff while Sachs is higher around 10 percent. It indicates, United States will accept unemployment again and becomes big case for new president Mr. Obama. Additional information, Morgan Stanley has been housed 7000 employees last year and this is the second plan to house staff. Crisis pushes them to cut any operating costs.
NEC Electronic Japan also decides to cut their worldwide job around 20.000 people. This is a big plan for NEC as decision to exit liquid-display-electronic related business.

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I attempt to include any economic news (global economic news). I just want to know when the new hope comes, when new equilibrium created. In economic cycle, all economic factors were attacked very hard. Producers (Supply Side) run in high operating cost, overstock, and oversupply and decide to house and cut jobs, Household then enter to lower demand, declining on rill money, lower on parity power to consume. Government as the referee, playing as policy maker is also attacked. Government spending and expenditure Budget is also attacked well. Government plays as two roles, Demand side and Supply Side.

There many tools to see the result of recession. On eyes, we see and read the news that demand for oil is significantly declined, oil price is set cheaper on the spot, and Companies to house their staff, cut more jobs for efficiency, demand fir import goods is lower due the declining on internal demand.
China, ASEAN, SOUTH AMERICA and others exporters countries also suffered by this recession. Lower on export demands made their companies (included foreign direct investment) to cut their production because of overstocks. Cutting on operating cost and efficiencies are on the hand.

Finally no countries are running on save place. England and Germany spend more money for emergency. America still runs on bailout and bailout for industries, to save million dollars, Obama seeks stimulus package from Congress for economic recovery plan, to create more job vacancies.
Most Analysts predicted on Quarterly report said that crisis (imaged on quarter data) will continue to harm in second quarter. Economic weakness will be happened because companies and industries still play in recovery plan to avoid profit loss again. Expansion plan is still on the garage. Read more »

Bank of America gets fresh fund from government bailout Troubled Assets Relief Program (TARP) around $20 millions USD for second bailout program with 8 percent of preference shares as the deal. Through the $20 millions USD, Bank of America becomes the highest financial institution in Troubled Assets Relief Program that receive fresh fund from government. In first bailout, Bank of America got $25 millions USD so there is $45 millions USD as total injection fund from government. The deal between Bank of America and Government (TARP) also includes some conditions such limitation on salary, executive board compensation, modification on residential credit program implementation.

With $20 million extra fund, Bank of America will get easier acquisition process on Merrill Lynch. Financial Department of America also gives extra backup with protection on worst condition on loans, residential loans and securities backed from loaners and others assets.
According to US Department of Finance official taken from AFP, the injection and protection on Bank of America is a sequence programs from department to stabilize financial institution with Non Performing Loan and Financial market in order to recover and to strong market, to protect labors, saving and pension insurance.

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Bill Gatet rank as richest men in the world went down as global crisis; Lehman and WaMu were collapsed, Major Wordwide Industries housed their employers, cut their production and went to debt problems. Central Banks tried to help with lowering interest rate to recover the crisis and to refresh market. FED were third time to cut their interest rate, but so far so good. Government tried to recover with debt help, injection fund, restructurization and to buy back any bankrupts and bad financial reported.

Both Governments and Central Banks fight force to recover the crisis before too late or getting worst with their stimulations. Like a doctor and patient. If patient didn’t check their health, there was no cancer but once doctor analyzed the patient, the cancer will be worst. The same case happened on Economic. Time lag took long period with crucial problems on companies. Lower demand forced companies to reduce their production as over stocks. this crisis took very long time lag to recover. Estimated more than million people were housed and the number will increase in near if fundamental economic doesn’t resolve, To increase Purchasing Power Parity.

There is one tool we dont hear so far. Economists believe that Invisible Hand will born to solve this situation. Does the battle of Israel and Hamas play the insivible hand? or the lowering oil price is invisible hand? or both of them?

Keynes, the Invisible Hand Hater believed Government and Central Bank are two main points of the solution. Keynes also put investors as the third to make one economic goes bad or good. As the example, the battle of Hamas and Israel has been increase the gold price in stock market. Many companies stocks were depreciated and appreciated by their financial reports in crisis. Investors make it worst in crisis.

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Retailers in the United States during this year are beginning complicated in big problems. Starting next month, they faced a problem in the closing outlets, bankruptcy, and corporate takeovers due the significantly decline on their sales during the holiday season is the worst figure in the last 40 years.

Based on data from the International Council of Shopping Centers (ICSC), estimated, the Retailers will close retail outlets around 73,000 in the first quarter 2009. Talbot’s Inc. and Sears Holdings Corp. are a few companies will close some stores in several locations with lowest sales rate. In addition, more than dozen retailers, including the Circuit City Stores Inc., Linens N Things Inc., Sharper Image Corp., and Steve & Barry’s LLC are in bankruptcy protection (bankruptcy protection) in this year as the restriction on credit from FED and the companies become more careful agaisnt profit loss as impact on their low sales.

According to Burt Flickinger, Manager Director of Strategic Resource Group, investors will see retailers whom seeking bankruptcy protection in February when financial reported is launched. “You will see many department stores, specialty stores, discount stores, wholesale stores, drug store, and others, both national and multinational companies, will be out of business. The amount will rise to new concerns,” said Flickinger. By using data from the Bureau of Labor Statistics, ICSC also predicts, 148,000 stores already closed in 2008. Largest since 2001 where 151,000 stores were closed. According to the ICSC Chief Economist Michael Niemira, percentage of store growth will decrease 3 percent this year. In addition,  total outlets spread in any locations have the same conditions. Niemira says, about 73,000 locations also will be closed in the first quarter 2009. However, difficulties conditions by the retailers to provide benefits to the consumers. “If you shop, you may find discounts on many products,” said Patrick McKeever, a senior equity Analyst MKM Partners LLC. This strategy- to discount any goods is to increase their sales but so far the result showed the bad results. Read more »