BOSTON (AP) — A Massachusetts man convicted of main an Islamic State group-inspired plot to behead a conservative blogger is scheduled to be sentenced. Prosecutors will ask the decision Tuesday in Boston to sentence 28-yr-antique David Wright to lifestyles in prison for his role in the plot to kill New York resident Pamela Geller. The…
During the past week, the world has witnessed a series of events that influenced the various sectors of the growing global economy. On one hand, some events promised more developments and expansion not only in the international trade but also in specific countries. On the other hand, some occurrences may negatively impact or alter certain aspects of world trade including the economy of the country specifically involved.
Oil Price Rolls Back in the World market
The entire week is full of good news for oil importers worldwide. Since Monday, the oil price decreased by $2 per barrel in the world market. Prior to that, the value of oil kept on increasing due to the disruption of supply in Iraq as well as in Nigeria. According to the report by Mohamed El Baradei, director of International Atomic Energy Agency, Iraq has been planning to empower its production of nuclear fuel. The news has caused tension and raised concerns regarding nuclear weapons. Discussion about the issue is currently ongoing. The IAEA will talk about the subject on its scheduled meeting on March 6. After which, the report will be handed to the U.N security for final assessment.
The almost $2 decrease of oil price in the world market was caused by a failed terrorist attack that took place at the largest oil plant in Saudi. The situation though was immediately controlled by the Saudi forces that were roused to full alert because of the tension. The oil supply though was not disrupted within the country despite the attack. The value of light crude oil decreased by $1.91 while the price of brent crude oil lowered to $1.61.
The opposite situation, however, is taking place in Nigeria. Just recently, the oil price rose up to more than $2 per barrel. The sudden increase was influenced by the news of the Saudi terrorist attack. Moreover, another reason was oil supply within the Nigerian region was cut by 13,000 barrels per day due to the discovery of a leak. The series of militant threats and attacks within the region also prompted the increase of the oil price.
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According to energy analysts, the improvement of the oil price in the world market would have been even better. However, there are several factors (like the focus of the oil market on short-term inventory data) that prevent more positive results. Currently, the oil price still remains close to $61 per barrel as a result of Algeria’s plea to OPEC for market stability.
Meanwhile, Shell, which is the third leading oil company, has gained a total of $23 B profit last year. This should be an enough reason to celebrate, but the huge oil company is currently facing the need to improve and expand its oil resources. Otherwise, it will run out off supply in the future. According to reports, Shell was only able to replace between 60% – 70% of the gas it used for production last year. In 2004, the percentage was even lower with only 19% or replacement.
Shell, however, is making use of its large assets in order to meet the stiff market competition. Its oil reserve projects located in Nigeria, Sakhalin Island, and Gulf of Mexico are currently underway. The success of these projects would definitely empower the company’s future possibilities.
Regions in the U.S particularly East Coast and Nigeria are also facing issues with regard to their oil supply. This problem may eventually result to changes in the price of fuel. This situation is primarily caused by the shift in the chemical used in the fuel refining process. Formerly, MTBE (methyl tertiary butyl ether) was used during the process. The use of MTBE, nevertheless, led to problems and protests regarding water pollution and the contamination of water supply. As an alternative, fuel companies in the U.S particularly in the East Coast and Texas are utilizing ethanol. The problem though is that ethanol is not abundantly produced within the country. Moreover, the fuel refining needs are greater than the amount of reserve available. As a solution, the U.S government is currently importing ethanol from Brazil while it continues to construct more ethanol plants within the country.
The campaign for energy independence in the U.S is also receiving negative feedbacks. Critics such as Tom Friedman of The New York Times commented that the government should focus on other more relevant issues aside from it. The claim that while energy independence may be motivated by noble purposes, it might not be the wisest move now. The government should look for other more practical alternatives. Besides, the big budget energy independence demands could be allotted to the other sectors of the economy and government.
The Various Auto Companies Continue to Grow and Expand in the World market.
The discussion regarding oils issues leads us to another important area, which is the car industry. Generally, auto companies reported notable developments and expansions during this week. Last Wednesday, Nanjing Automobile acquired the MG Rover plant at Longbridge, England for a 33 year lease from St. Modwen Properties Plc. The leading Chinese auto maker is said to have paid 1.8 M pounds for the 105 acre factory. Nanjing surprised the global car industry last July 2005 when it bought MG rover for around 53 M pounds thus outbidding its fellow Chinese competitor, Shanghai Automotive Corp. The big move is part of the company’s vision to become one of the leading car brands in the world.
Honda Motors Co. is also getting more attention form the international auto market after it disclosed its plans to produce a hybrid yet low priced version of its Fit subcompact. The car maker intends to release the hybrid design next year. Honda representatives, nevertheless, clarified that the hybrid technology will be distributed only at a lower scale. This is due to the design’s very expensive production cost. However, Honda is also developing smaller battery and motors that would help reduce the hybrid cost in the future. This venture is part of Honda’s goal to beat the problem of high-gasoline consumption through specially designed automobiles. Aside from Honda, other companies that have joined the market for hybrid cars are Ford and Toyota.
Based on its recent report, Ford Motor Co. has dropped down in its sales by 4% last month. Another company that has followed the same trend is General Motors. According to GM, its sales also decreased by 2.5%. Meanwhile, the total sales of both Toyota and DaimlerChrysler continued to improve this year. Particularly, the Chrysler Group jumped in its sales by 3% of around 190,367 cars. Some of the most popular automobiles sold by the company are: Dodge automobiles, Chrysler, and Jeep. Chrysler’s Mercedes-Benz also improved by 28%. Toyota reported that its sales within the U.S alone rose by 2.4% to around 166,940 cars last February.
Although Ford’s sales on Jaguar have decreased last year, the auto maker declared that it has no plans of selling Jaguar. Ford bought the famous car brand back in 1989 for around 1.6B pounds. This year, the car company is positive that Jaguar sales is going to recover and improve. Ford is also set to release a new car model that would be hitting Europe soon. This is part of its strategy to keep up with the strong competition against other auto giants especially those that come from Asia.
As part of its move to recover from its losses, General Motors officially tasked Jerry York as its newest member of the board. York is noted for its remarkable achievements at Chrysler and IBM. Although GM has been receiving negative feedbacks lately, York is positive that the company is going to recover. During his January speech, he proposed five things to the GM management: first, to make the expectation of revenue and cost more realistic; second, reduction of product offerings; third, review the whole company with an unbiased perspective; fourth, focus on core businesses; fifth, set a clear vision for the company.
Several Computer Companies Seek for Expansion
In terms of technology, Intel Corp. recently got the official permission from Vietnam in order to construct a microchip plant within its territory. Earlier, the leading microchip company, proposed the $605M project, which will be built at Ho Chi Minh city. Vietnam would surely benefit from the budget since the project is expected to attract more foreign investors in the country.
Meanwhile, Lenovo computer company has announced its plans to release computers that bear the company’s name. Lenovo computers formerly carried the logo of IBM. The company stated that the move is part of its plans to establish itself in the worldwide market of computer technology.
Just recently, Apple computers invited several analysts and new reporters to its Cupertino base in order to check out its so-called “new and fun products.” So what’s up with the big bang? Rumor has it that Apple is intending to expand its technological products into Hollywood. Apparently, its iTunes has been contributing to the promotion of many TV programs. Again, there’s a possibility that the latest rumors could again turn out to be wrong. Yet then invitation given by Apple is surely a good sign that the company is up of a big bang of a surprise for everyone.
As part of China’s vision to improve its local technological industries, Vice Premier Wu Yi vowed last Thursday to strengthen the fight against illegal copying of softwares, music, and videos. Piracy has been a growing problem in the country for years. Despite several attempts to combat it, the problem continues to spread. In fact, piracy in China has roused international complaints including the report made by Washington. Now, the Vice Premier pledged to strengthen the battle against piracy not only as a response to these foreign complaints, but also as part of China’s goal to improve its local technology.
More Developments in Various Sectors to Boost Global Trade
Just recently, Morgan Stanley decided to invest around $68 M to Mantri Developers Private Ltd. which is a property development company based in Bangalore, India. The decision is part of Morgan Stanley’s plan of venturing into the global stream of real estate. At the same time the investment, would also help Mantri in its plans for national expansion. Real estate is currently booming in India due to the increasing demands for housing projects and office buildings. This economic rise is also attracting many foreign investors now.
In terms of health, Roche finally got the approval from the U.S drug regulatory board to release Rituxan as the newest drug to treat rheumatoid arthritis. The approval of the new medicine does not only promise more profit on the part of Roche, but it gives likewise hope for the patients who have not responded to other standard treatments of rheumatoid arthritis.
U.S faces Several Economic Concerns
Based on the latest report, the trade gap between exports and imports in the U.S has increased during the past year from 18% – 75% of a trillion dollar. This is due to the fact that American consumers have continued to demand for more imported products such as oil, vehicles, and other goods. According to analysts, only a 57% increase in exports can bridge the gap. It must be noted the U.S. is a leading exporter in certain goods such as aircraft. Although the sales of durable goods decreased during the past year, producing companies such as Boeing hope to improve in their sales in the succeeding years.
Meanwhile, the huge damage left by hurricane Katrina has also caused the insurance companies in the U.S to adjust their premiums. The adjustment is deemed necessary in order to cover the potential loss that would be caused by future catastrophes.
Once again, it’s that time of the week to catch up on the latest happenings in the world of international trade. To start off this week’s world trade news round up, Proctor and Gamble recently announced that they will cut down jobs that cover technical posts.
About 300 scientists and researchers are expected to be let go from the multimillion pharmaceutical company’s payroll. The research center located in Ohio will be the most affected by Proctor and Gamble’s decision. The downsizing will also affect employees in London, Toronto and New York.
According to Tom Milkin, the spokesperson for Proctor and Gamble, the decision was not influenced by the desire to cut back on company cost. He said that the company’s move to let their employees go is a business strategy. Milkin added that despite the numerous job losses, this decision will benefit domestic research companies.
Job cuts aren’t the only decisions that the company has made this month. Proctor and Gamble recently signed a contract with Nastech to sell Nastach’s nasal spray that promises to cure osteoporosis. Aside from the expansion of Nastach’s nasal spray, Proctor and Gamble is said to give more focus in developing pharmaceutical products for women, muscular-skeletal problems and gastro-intestinal medicine.
While Tom Milkin denied that the Proctor and Gamble is not having any financial trouble, the head of the Palestinian Authority Mahmoud Abbas, admitted that his government is currently facing financial difficulties.
Earlier this month, the World Bank has given the Palestinian Authority a warning about the country’s financial problem. Palestine’s budget deficit is continuously expanding and if the necessary procedures aren’t taken to ease the crisis, this could possibly be the downfall of the Palestinian Government.
The origin of Palestine’s financial crisis is traced to the violent events in the West Bank against Israel. Israel has taken measures to slowly cripple the Palestinian Government. Security checks between the boarders of Israel and the Gaza Strip. Israel went as far as banning the passage of equipments for the Palestinian security forces and even asking all foreign donors to stop sending payments to the Palestinian Authority. Israel is adamant in letting the Palestine Government suffer; calling on international powers to boycott the Palestinian Government and ignoring calls from the United States to release funds.
Another factor that has influenced financial crisis Palestine is experiencing right now is the election victory of the radical Islamist group Hamas. This group is considered as terrorist by the United States and the Palestinian Authority’s biggest donor, the European Union. In fear of their donations reaching Hamas, the United States asked Palestine to return its $50 million donation and the European Union has warned to stop sending funds.
To make up for the loss, Ismail Haniyeh, the Palestinian Prime Minister, said that they will seek aid to Arab nations instead.
As answer to the criticism he received from the United States, Hugo Chavez warned that to halt the supply of oil to the US if Condoleeza Rice continues to undermind his administration. Rice previously released statements that the relationship of Venezuela and Cuba endangers the democratic system of other Latin countries. Chavez also faced accusations of using Venezuelan oil to interfere with trades of nearby nations. Chavez said that the Americans’ attempt to turn other nations against Venezuela would be a failure. Chavez doesn’t consider stopping the supply of oil to the US as a loss; in fact it is the US that will face a loss because they are dependent on Venezuela’s oil supply. He is confident that other oil consuming countries will continue to acquire oil from Venezuela.
On other oil related events, nine foreign oil workers have been held hostage by the Movement for the Emancipation of the Niger Delta. The hostages consisted of three Americans, two Thais, two Egyptians, one Filipino, and one Briton all working under a Shell subcontractor, Willbros. The rebels claim that they have staged the hostage situation in order to keep foreigners from getting their oil and to reclaim the Nigeria’s rightful share of the country’s oil assets. Though Nigeria is the biggest oil producer in Africa, the country is still experiencing severe poverty.
This situation caused dramatic oil hikes in different countries such as Japan because the export of crude oil from Nigeria has been cut back by twenty percent. Some operations have also been suspended because of this.
Still on the talk of oil, Petroecuador, Ecuador’s national oil company, has decided to suspend their exportation of petroleum products because of the sabotage that the Trans-Ecuadorian pipeline has experienced. The numerous violent demonstrations are held responsible for the sabotage of Petroecuadors major pipeline.
Eduardo Naranjo, the company’s top executive, said that the pipeline was completely paralyzed and oil stations have been severely damaged because of the demonstrations. These violent protests, including putting up roadblocks, were participated by Napo (a poverty-stricken province in Ecuador) residents and other Amazon Indians. This caused the production of 144,000 barrels of oil per day to be discontinued. The suspension of oil export will cause Ecuador an estimated $ 30 million worth of revenue daily. The demonstrators demanded that the Ecuadorian government should give poor areas like Napo their fair share of the National budget.
Speaking of giving its fair share, the United State criticized China for not giving theirs. According US Deputy Trade Representative Karan Bhatia, China has been gaining profits from their access in the US market while the US has yet to benefit from their trading relationship.
Rob Portman, US Deputy Trade Representative, stated that a task force will be assigned by the US to monitor China’s observance to global trade policies. There have been proposals made by legislators to lower US trade relations with China. Tariffs will also be imposed on low-priced products from China that is flooding the US market.
Chinese Foreign Ministry Spokesman Qin Gang said that if such policies are implemented, these could prove to be unfavorable for American business interest. Analysts agree, saying that these actions could backfire at the United State government.
Although the United States is unhappy with their trade relation with China, the same cannot be said for Anglo American. The company’s profits reach a new high when China’s demand for metal increased. Their earning last year ($ 3.7 million) increased by 39% compared to their 2004 total earning. The company is plans on expanding its production of coals and iron ore because the price of metal products is expected to increase this year. The company’s chief executive officer, Tony Trabar, sees indications for the stronger demand for metals.
Anglo American isn’t the only company currently expanding its products. IBM has released multifunction printers to the market recently. IBM’s new brainchild is capable of faxing, copying, and printing documents. The design for the multifunction printer was influenced by a study which shows that a significant amount of time is exhausted by companies on printing, copying and faxing documents.
Currently, there are four models out in the market, each designed to different capacities of workload. The Infoprint 1540 and Infoprint 1570 can be used by small companies. These printers cost $11,542 and $3,259, respectively. Medium sized companies can use the Infoprint 1560 which costs $12,858 and for large companies, the Infoprint 1580 is designed to handle rough office environment. The Infroprint 1580 costs around $14,462.
Product expansion isn’t the only growth the world market is seeing these days. The growth of European Union members is set to accelerate by 2006. According to the forecast made by the European Commission, 25 members of the union are expected to have a 2.2% economic growth, while 12 others are expected to grow by 1.9%.
Among European countries, Spain saw the largest growth projecting a 3.1% boost in their economy. A far second is the United Kingdom with a 2.4% economic growth. Joaquin Almunia, European Union’s Economic and Monetary Affairs Commissioner, warned that the biggest set back in the economic growth of European nations are the inevitable increase of the price of oil.
In other European news, an announcement was made by Germany’s E.ON regarding its 27.50 euros per share or 29.1 billion euros offer to Spain’s Endesa. The deal is expected to be completed this year if Endesa will accept E.ON’s offer. The biggest European power firm E.ON’s business offer to Endesa is said to be 29% higher the Gas Natural’s previous bid.
If the merge of these two power companies take place, 50 million clients in 30 nations will be served by a potentially top power company in the world. The merge will also put E.ON on the lead over its competitors and provide the company a stronger position in the Latin American markets.
Another business deal is in the works. It is between Dubai Ports World and the United States. Dubai Ports World wants to run six major seaports in the United States. Although the US Congress is in opposition of such a deal, President George W. Bush threatened to veto any law that would hinder the deal.
Bush defended the sale of the ports by saying that his administration has carefully examined the matter. He also added that if the deal is successful, it will serve as a sign that the United States treats other countries fairly. Of course, the issue is scored major heat from critics. According to them, the takeover will only make the country more vulnerable from terrorist attacks. Al Queda, the group responsible for the September 11 tragedy is has members based in the UAE, which is where Dubai Ports World’s origin.
Speaking of President Bush, it has been announced that he will be visiting Asian countries in November. Bush will be the second president of the United States to ever visit Vietnam, the first being former president Clinton back in 2000. It should be remembered that Clinton made the decision to stop the embargo against Vietnam. Incidentally, Vietnam missed a place in the World Trade Organization last year when the spot was given to Tonga. Although it should be noted that being a member of the WTO could boost Vietnam’s economy, it doesn’t necessarily mean that not being able to join is a bad thing. There are a lot of things Vietnam needs to organize before become a WTO member.
For the 14th consecutive time, the interest rate of the United States Federal Reserve increased once again. The meeting held last month saw Alan Greenspan as the head of United States Federal Reserve for the last time after heading the Federal Reserve for 18 years. During Greenspan’s tenure in the Federal Reserve, he encountered numerous low points in the US market history. His administration faced the market crash of 1987, the market crisis of the 90’s and the September 11 attacks.
Greenspan was replaced by Ben Bernanke which was nominated by the president of the United States last year. The new chairman will discuss the interest rate issue in his first meeting which will be held on March 27. Bernanke’s biggest challenge is ending the increase of interest rates which economists think will continue to rise because of the current inflation.
In more recent turn of events, a bank robbery saw The Securitas Cash Management Ltd. lose at least $ 43.5 million. Officials are still unsure just how much cash is still unaccounted for. It should be noted that this is one of the biggest back heists in the history of Britain.
In a detailed statement, it was revealed that the robbers dressed as policemen blocked the bank managers on his way home and was told to do what he was ordered. Another group of men in cahoots with the bank robbers were successful making the manager’s family believe he met and accident and agreed to go with the group of robbers.
The manager was cuffed by the posing policemen and threatened to hurt his family if he did not cooperate. They proceeded to a Tonbridge cash center and tied up 15 bank employees before taking all the cash in the depot. The incident took over and hour, fortunately no one was hurt.
On a more positive note, it seems that an alliance has been formed by international banks, which includes the World Bank and the International Monetary Fund, to employ carefully though out strategies to combat corruption. These organizations have reached an understanding for the need to support each other and to reach a common ground if the corruption is to be stopped. They have decided to form a team that will be responsible for reporting a standardized framework the financial firms should employ to fight fraud. The group has conducted numerous surveys pin-pointing countries and sectors that is plagued with widespread corruption.