Author Topic: Some Economic News  (Read 1367 times)

0 Members and 1 Guest are viewing this topic.

_JS

  • Hero Member
  • *****
  • Posts: 3500
  • Salaires legers. Chars lourds.
    • View Profile
  • Liked:
  • Likes Given: 0
Some Economic News
« on: January 11, 2008, 01:25:10 PM »
Goldman Sachs sees US recession

The investment bank Goldman Sachs has predicted that the US economy will go into recession in 2008.

Its forecast follows comments from Merrill Lynch, which said that the US economy is already in recession.

Goldman Sachs said that the slowdown would force the US Federal Reserve to reduce interest rates to 2.5% from the current level of 4.25%.

But a survey of 62 economists by the Bloomberg news agency suggested the slowdown might not lead to a recession.

Taking the mid-point of the economists' predictions for US growth in the first six months of 2008 gave an average figure of 1.5%.

Prepare yourselves

"It's soft economic activity that feels like a recession, but we probably won't have one," Bloomberg quoted Mickey Levy at Bank of America as saying.

In a note to client entitled "Prepare for recession", Goldman Sachs cut its forecast for US growth this year to 0.8% from 1.8% and said that gross domestic product would decline in the second and third quarters of the year.

It predicts that US unemployment will rise from the current 5% to 6.5%.

Last Friday's labour market figures, which showed the jobless rate rising to 5%, set stock markets falling around the world and were described by Merrill Lynch as the final proof that the recession had started.

It recommended that investors should reduce holdings in the financial sector and information technology and opt instead for healthcare stocks.

Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/7179298.stm

Published: 2008/01/09 14:50:44 GMT

? BBC MMVIII


 
US trade deficit widens sharply


Petroleum imports hit a record

The US trade deficit expanded to its highest level in 14 months in November as imports, especially of oil, overshadowed a rise in exports.

The Commerce Department said that the trade deficit expanded by 9.3% to $63.1bn (?32bn) driven by a 16.3% jump in America's foreign oil bill.

US exports rose by 0.4% to a new record of $142.3bn, getting a boost from the weaker dollar.

Analysts said the growing deficit could weigh on US economic growth.

But they added that the trade deficit, the gap between imports and exports, should narrow in the longer term as the weaker dollar makes US exports more competitive on world markets.

The trade gap widened by more than expected, with economist forecasting a deficit of $59bn compared with $57.8bn in October.

The US trade deficit with China shrank slightly to $24bn, down from a record high in October when shops were receiving shipments of toys in time for Christmas.

However, the figures brought the year-to-date deficit with China to $237.5bn at the end of November, already eclipsing the annual record of $232.6bn set in 2006.

Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/7183403.stm

Published: 2008/01/11 15:15:42 GMT

? BBC MMVIII


US prices jump most in two years
US inflation rose at its fastest pace in two years during November, spurred on by higher energy prices, according to figures from the Labor Department.
Consumer prices rose 0.8% in November from October, above market forecasts.


The figures come as US and UK central banks have been cutting interest rates to bolster weakening economic growth.

The higher than expected inflation figure saw the dollar post its biggest one-day rise against the euro in more than three years.

This is because traders now expect the Federal Reserve to delay any further rate cuts.

By late Friday afternoon trading in New York, the euro was down 1.5% to $1.4412 against the dollar.

This is the strongest the dollar has been against the single European currency since October.

"The fear is that inflation will become the bigger concern," said John Forelli of Independence Investment in Boston. "It would be a lot easier to carry out their plans if inflation was not a concern."

US shares fell on concerns that the Federal Reserve would now not cut interest rates. That expectation helped strengthen the US dollar as investors looked for assets in currencies that offered higher returns.

'Dilemma'

Earlier on Friday, a report showed that inflation in the eurozone, which covers the 13 nations that use the single European currency, also surged.

According to figures from Eurostat, consumer prices rose 3.1% in November compared with the same month in 2006, the biggest rise in more than six years and up from October's 2.6%.

Central banks are battling to keep inflation in check as a slump in the price of the US dollar, and higher energy costs have pushed up prices.

However, at the same time they are also trying to limit the impact of a global credit crunch caused by problems in the US mortgage market.

There are fears that the high energy costs and problems in the financial markets will act as a brake on consumer spending, and hamper economic growth.

Analysts said that central banks including the US Federal Reserve will have a number of factors to consider when setting borrowing costs in coming months.

"The data highlights the huge dilemma the Fed is under between trying to quell the financial dislocations in the market, easing policy, all the while inflation rates are starting to climb higher," said Kim Rupert at Action Economics.

"It's going to be a difficult road."

Background figures

The last time US inflation rose by such a large amount on a monthly basis came after an energy shortage in the wake of hurricane Katrina in September 2005.

As well as energy, the cost of clothing, airline tickets and medication also rose in November in the US.

Consumer prices increased 4.3% on a yearly basis - the most dramatic rise since June 2006.

While the US central bank has cut interest rates three times in recent months to boost the economy, analysts suggest that these figures will make another interest rate cut less likely.

For the year to date, inflation is at 4.2% - compared with 2.6% in the same month in 2006.

Separate figures from the Fed on Friday showed further evidence that the economy may not be slowing as quickly as first thought, analysts said.

Industrial production rose 0.3% in November, reversing October's 0.7% drop, the Fed said. This reversal stemmed from higher output at auto factories, contributing to the overall 0.4% rise in manufacturing output.

Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/7144519.stm

Published: 2007/12/14 20:32:17 GMT

? BBC MMVIII



Tacoma, WA - Friday, January 11, 2008 

Profits climb for insurers

Report says surpluses rising faster than costs

M. ALEXANDER OTTO; alex.otto@thenewstribune.com
Last updated: January 11th, 2008 01:21 AM (PST)


State Insurance Commissioner Mike Kreidler said two consumer groups got it right Thursday in a report claiming the state?s leading health insurance providers are making record profits while covering fewer people and spending a smaller portion of their revenues on care.
 
The Washington Community Action Network and the Northwest Federation of Community Organizations analyzed annual financial data from Kreidler?s office for Premera Blue Cross, Regence BlueShield and Group Health Cooperative, which together cover some 2 million Washingtonians, about half of the state?s health insurance market.

Among other things, the groups found the companies together made on average about $18.23 profit per member per month in 2006, up from less than $1 per member per month in 2002.

Meanwhile, net income for the companies climbed 23 percent during those years, while medical expenses increased just 16 percent, according to the report.

The report also found that the companies? surpluses rose from $833 million in 2002 to $2.2 billion in 2006.

The report ?is accurate. I stand behind it,? Kreidler said Thursday. The companies ?surpluses are rising faster than the cost of health care.?

Company spokesmen said Thursday that the report doesn?t capture the full picture.

?Insurance companies have to project what (their) medical costs are going to be and set rates accordingly,? said Group Health spokesman Mike Foley.

?It turns out health care costs didn?t go up as much as we projected, so we had an increase in our surpluses and revenues,? he said.

Kreidler said the companies did need to increase their surpluses ?which act as hedges against unexpected costs ? after hard financial times in the 1990s, but he believes now they are ?continuing to build surpluses that go beyond what they have a legitimate need for.?

So far, the extra money has not been used to lower premiums for policyholders, he said, adding at this point, ?it?s hard to justify the surpluses? while premiums have gone up ?across the board.?

The problem is worst, Kreidler said for people who buy insurance directly, instead of obtaining coverage through their employers.

Those people have seen ?significant increases in costs, and significant reductions in benefits,? he said.

The report also found that net income for the three companies rose form $244 million in 2003 to $431 million in 2006 and that subscribers dropped from 2.37 million in 2002 to 1.97 million in 2006.

Kreidler said he supports the groups? proposed legislative fixes, which include a publicly funded alternative to private health insurance and expanded oversight of health insurance companies by state government.

Kreidler said in particular he should have the ability to review and approve premiums for people who buy individual policies.

The advocacy groups? political aims prompted Premera spokesman Scott Forslund to call the report ?a misleading effort to support (an) agenda.?

?If you only look at numbers they selected and not the whole story,? the report ?may (lead) you to misleading conclusions,? he said. ?Our profit on the dollar in 2006 was 4 cents, for example.?

Forslund said the real problem is rising health costs, and the need to control them by healthier lifestyles and services aimed at preventing heart disease and other chronic conditions.

Company spokesmen said they are making changes that will reduce costs.

Some of the report?s numbers are also off, Forslund said, at least as far as Premera is concerned. He noted that the company has actually added 250,000 members since 2002, not reduced membership.

But report co-author Julie Chinitz stood by her work Thursday evening.

?We showed these calculations to an outside (health policy) expert? at the University of Washington, ?who said they were correct,? she said.

In sum, ?It appears there is a mismatch between what?s good for the health insurance companies and what?s good for the public right now,? Chinitz said.


 
I smell something burning, hope it's just my brains.
They're only dropping peppermints and daisy-chains
   So stuff my nose with garlic
   Coat my eyes with butter
   Fill my ears with silver
   Stick my legs in plaster
   Tell me lies about Vietnam.

Amianthus

  • Hero Member
  • *****
  • Posts: 7574
  • Bring on the flames...
    • View Profile
    • Mario's Home Page
  • Liked:
  • Likes Given: 0
Re: Some Economic News
« Reply #1 on: January 11, 2008, 01:27:40 PM »
Well, since the last time this happened in early 2000, we were told it was because people were afraid the Bush was gonna be elected, and now people are assuming that the winner this November will be a Democrat, I guess we can blame this one on the Democrats.
Do not anticipate trouble, or worry about what may never happen. Keep in the sunlight. (Benjamin Franklin)

_JS

  • Hero Member
  • *****
  • Posts: 3500
  • Salaires legers. Chars lourds.
    • View Profile
  • Liked:
  • Likes Given: 0
Re: Some Economic News
« Reply #2 on: January 11, 2008, 01:30:06 PM »
Well, since the last time this happened in early 2000, we were told it was because people were afraid the Bush was gonna be elected, and now people are assuming that the winner this November will be a Democrat, I guess we can blame this one on the Democrats.

2 minutes and 30 seconds, that may be the quickest whinging in 3DHS history.  :P
I smell something burning, hope it's just my brains.
They're only dropping peppermints and daisy-chains
   So stuff my nose with garlic
   Coat my eyes with butter
   Fill my ears with silver
   Stick my legs in plaster
   Tell me lies about Vietnam.

Amianthus

  • Hero Member
  • *****
  • Posts: 7574
  • Bring on the flames...
    • View Profile
    • Mario's Home Page
  • Liked:
  • Likes Given: 0
Re: Some Economic News
« Reply #3 on: January 11, 2008, 01:33:41 PM »
Just pointing out how to avoid an obvious double standard.
Do not anticipate trouble, or worry about what may never happen. Keep in the sunlight. (Benjamin Franklin)

_JS

  • Hero Member
  • *****
  • Posts: 3500
  • Salaires legers. Chars lourds.
    • View Profile
  • Liked:
  • Likes Given: 0
Re: Some Economic News
« Reply #4 on: January 11, 2008, 01:58:21 PM »
I understand. I never made the above claim, nor have I made a claim right now.
I smell something burning, hope it's just my brains.
They're only dropping peppermints and daisy-chains
   So stuff my nose with garlic
   Coat my eyes with butter
   Fill my ears with silver
   Stick my legs in plaster
   Tell me lies about Vietnam.

Plane

  • Hero Member
  • *****
  • Posts: 26993
    • View Profile
  • Liked:
  • Likes Given: 0
Re: Some Economic News
« Reply #5 on: January 11, 2008, 06:29:49 PM »
Last year the insurers of Satilite launches lost money , after three years of makeing money.

Each risk should be considered individually, even though it is true that they can come in waves and groups , each risk deserves its own evaluation.