The Economy blog

Today, almost everybody on Earth is troubled about the H1N1 virus or better known as the Swine Flu which started from Mexico. After the boom of the news, deaths of numerous people in the country due to the said virus, and the spread of the fear in other parts of the world, how’s the economy of Mexico today?

It was only last week when Mexico announced that they had a major decline and they already felt it during the first quarter of 2009. It became worse when the breaking news about the swine flu hit the media and baffled the investors, tourists, and everything else that increases the income of their economy. As a matter of fact, Mexico’s income during the Q1 decreased by as much as 10 percent when they compared it to the income that the country had a year ago during the same quarter.

They are now hoping that the thriving tourism industry (as well as investors) will still survive despite the paranoia of the swine flu. The tourism industry is one of the biggest contributors in the economy of this third-world country.

During the past few months, everyone has been talking about the global crunch and how it affects the different industries around the globe. Powerful countries that are mostly located at the West are now experiencing a major decline in their economy. The question is, will they be strong enough to maintain their economic power after a few years?

Experts said that this “economic power” is now shifting from the countries in the West to the countries located at the East. Don’t believe it? Here are some facts that would make you think about the next best location where you could invest your money.

• · Brazil – now becoming popular in the field of agribusiness as well as explorations in offshore energy sources.

• · China – the industry of home appliances, steel, and the telecommunication equipments is now flourishing.

• · India – there is a booming business in this country related to auto parts, pharmaceuticals, and of course IT services.

• · Russia – is now turning into a major source of metals and energy sources as well.

Now don’t you think it’s time to move East?

DISNEY – home of the happiest creatures on Earth where everyone seems to be brought back to their childhood days got a very disappointing result when they unveiled the earnings that they got during the first quarter of 2009.

During the last year’s Q1, Disney had an average revenue of almost $11 billion. But in this year, it had decreased by as much as 9 percent since they only got at least $9 billion. The much-loved theme parks as well as the advertising market are still dropping despite the efforts of the company.

The income of the resorts and the magical theme parks (Disneyland) dramatically decreased by more than 20 percent this year. There were less families who travelled and visited the Disneyland during the past few months and most of the rooms were left unoccupied. This reduced attendance of the Disney fanatics was not only obvious in California but in Paris as well.

The Bureau of Labor Statistics or BLS can only consider a mass layoff  event if there are more than 50 unemployment insurance claims coming from one employer only. These claims must only be within 5 consecutive weeks.

The BLS already showed their Mass Layoff Report for the month of April including the first two weeks of May. According to the said report, there were about 3,000 events that involved mass layoff. This clearly deteriorates the job market of United States and would give a great financial ordeal to the lives of thousands of people as well. Because of this mass layoff, there were about 250,000++ who asked for their unemployment claims.

Whenever kids get their break from school and parents can have their week-long vacation, this is the time that travel agencies, hotels, and theme parks were so preoccupied. However, things might change this season.

Studies show that many families are not packing their bags for an escapade due to the unstable economy. But many of them are hoping that they would get better deals particularly in the accommodations and the air fares as well.

More and more Americans are trying to pass on their holidays and opt to stay at home or anywhere near instead. According to the survey conducted by Associated Press/GfK Roper Public Affairs & Media, one third of the one thousands Americans are no longer willing to go for a vacation due to their financial concerns.

But if there are great deals out there (low rates without compromising the fun and relaxation which is essential in a holiday), surely these people would love to take a break away from the depressing news about the economy – even for a while.

With the skyrocketing prices of the petroleum products today and all the talks about going green, many are now considering the benefits of sustainable energy. But would it really have effect in this already troubled economy?

Rather than importing fuel or energy resources from other countries like Dubai, the nation would only depend from the renewable energies such as solar, wind, and water. It will cut the expenses for importing and would just have to depend on the easy-to-construct panels and turbines. As a result, the cost for the electricity expenses will also be reduced by as much as 50 percent. Aside from that, it would also create a lot of employment opportunities since jobs are related to energy efficiency would open. There will be more investors that would help improve the distressed economy.

The effect of these renewable energies would not create a big impact on the economy of the whole nation immediately. Instead, it could be felt on the local economies first. But before it can become a sustainable energy economy, the officials as well as the locals must give their full commitment and support.

Because of the global economic crisis, thanks to the different complicated credits, the activities of the commercial real estate slowed down. This is according to the reports made by the National Association of Realtors. Aside from that, the prediction of the various indexes tells that the said sector will still become weak until the end of 2008.

Lawrence Yun, the chief economist of the NAR, said that due to the huge unemployment rate the demand for the commercial real estate declined. Moreover, there is also a great delay in the refinancing activities as well as transactions because of the lack of credit.

During the Q4 of 2008, there activity of the commercial real estate reached by as much as 108.7 percent. Unfortunately, it decreased to 103.5 percent during the Q1 of 2009. In 2008, of the same quarter, the activity reached 118.8 percent.

According to the Standard & Poor, best known as S&P, the crisis in the banks in America haven’t started this “new phase” yet. They were talking about the crisis that it is currently facing and they believe that it would last until the year 2013.

The popular credit rating agency also said that the banking and finance industry is currently being bombarded by support from the government. There are also other lenders who are supporting the banking industry as well and they are usually the ones who consider the sector as essential in the financial system.

Tanya Azarchs, the managing director of S&P said in a recent interview that it is needless to say that the banking industry will still experience the crunch for the next three or even four years.

Last Tuesday, the Chinese stocks in the light trade increased by as much as 1.49 percent. This includes the shares in the steel coal as well as real estate properties. However, there are still doubts whether if this improvement would continue and help the economy of China on its way to recovery.

The shares of the Shanghai A beat the others ending with 792 shares compared to the 124 of the competitors. However, investors were still confused and trying to be very cautious since they got mixed signals as well as diverse economic data for the month of April.

According to the analyst of Zheshang Securities, Zhang Yanbing, the increase in the China stocks is because of various factors. They were very happy to see that there is an improvement in the real estate sector last month. There is a 0.2 percent increase last March in the said industry and the development raised to 0.4 percent last April.

In Britain, the blue chip index of the country decreased by as much as 0.6 percent recently. One of the main factors to blame is the weaker prices of the raw materials which take toll on the miners and the oil producers at the same time. However, both Centrica as well as AstraZeneca were offering their support despite the index’s plunge.

Last week, the FTSE had an increase in points by as much as 5 percent. Unfortunately, their points fell down by 26.59 points closing at 4,435.5 only.

One of the most renowned sales traders of the IG Markets said that the rally for the past few weeks was the major influence for the corrections that they recently had. Philip Gillett eve said that they are thankful because they thought that the corrections would be more serious. They are also hoping that there would be improvement in the weakening economy of UK in the next weeks.