Archive for November, 2008
There is a growing fear that Japan is quickly moving towards a prolonged recession and because of these fears its industrial production and consumer spending have considerably dropped.
In October, Japan’s industrial production dropped by 3.1 percent that was quite faster than expected.
Similarly, 3.8 percent drop was noticed in year on year consumer spending during October and it was also quite faster than analysts were expecting.
Richard Jerram, a Macquarie Securities economist, described the figures as ‘dreadful’.
Takumi Tsunoda, who is a senior economist at Shinkin Central Bank Research, says in this connection, “We weren’t expecting such quick falling in production, but many companies have been adjusting their production quite fast.”
According to the Organization for Economic Co-operation and Development (OECD), there might be a ‘severe’ economic recession in the UK in 2009, as it has predicted that will be 1.1% decrease in economic output next year.
Similarly, it has also been predicted that there would be considerable increase in unemployment that would rise to over 8 percent by the end of this next year, while it was 5.5 percent in 2008.
The forecast suggests that the US economy would shrink 0.9% during 2009 and similarly German economy to decline by 0.8%.
Customers worldwide are buying fewer computers and the 5% drop in the US computer maker Dell’s quarterly profits is a clear evident of it.
Dell profits in the third quarter were $ 766m a year back, while they are just $727m this year.
According to Brain Gladden, Dell’s chief financial officer, “We are expecting that the same challenging environment will continue.”
Dell told that there was a 3% (about $15bn) decrease in its sales that was a bit less than analysts were expecting.
In America, which is its largest region for sales to business, Dell’s profits dropped around 8%.
There is also a lack of product diversity in Dell, while its biggest rival, Hewlett-Packard has been enjoying this as it announces this week that it would exceed analysts’ forecast for the most recent quarter.
The bosses of GM, Ford and Chrysler (also known as big three US carmakers) ask Congress for a $25bn aid to rescue US car industry.
In a Senate hearing, they told that their firms were at greater risk of collapse without the rescue package.
Rick Wagoner, GM chief executive, said: “A financial chasm has opened up and the firm needs a loan to span it.”
On the other hand, Republicans and the White House do not seem to use the $700bn bank bail-out to assist car firms. Read the rest of this entry
The Japanese carmaker Mazda Motor has confirmed that troubled US carmaker Ford Motor will sell its 20% stake in the company.
Ford has a 33.4% stake in Mazda and the current move will decrease it to just over 13%.
Falling sales around the world has hit hard Ford and now the company is trying to raise cash along with its Detroit competitors.
After these reports about the possibility of the stake sale, shares in Mazda increased to 6.4% on Tuesday.
General Motors has already sold its 3% stake in Japanese carmaker company Suzuki. Read the rest of this entry
