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Saturday, May 01, 2010

ENRON ECONOMIES


There are successful economies.

And there are 'Enron economies'.

Singapore's economy grew by 32% in the first three months of 2010. (Singapore's GDP soars 32 percent in first quarter - BusinessWeek)

Schumpeter, in The Economist, reports that Mexico's CEMEX is now the largest cement company in America.

Acer of Taiwan is hoping soon to become the world’s second-biggest manufacturer of personal computers.

Brazil's Aracruz is now the world’s largest and most profitable producer of pulp for paper and tissues.

Russia's Gazprom now controls more gas reserves than all the West's big oil firms combined.

South Korea's Samsung is one of the world’s best known makers of electronic goods.

Mexico's Grupo Modelo produces one of the most recognised brands of beer in the world, Corona.

According to The Economist (April 2010), Germany's houses are undervalued by 14%.

North Africa is one of the areas where the economy has problems - FT.com / Global woes spread to north Africa

Who's got problems?

Australia's house prices are overvalued by 56%.

The Greek economy may need $200bn to survive (Greece may need €150bn rescue, analyst warns )

Standard & Poor's Ratings Services has cut Portugal's credit rating and downgraded Greece's debt to "junk" territory. (Crisis Spreads in Europe )

In the USA, Obama presumably will have to increase taxes and reduce spending in order to cut the giant deficit. (Bernanke Says US Needs Budget Deficit-Cutting Plan Soon‎ / Obama suggests value-added tax may be an option - Yahoo! News)


Money doesn't buy happiness.

In the UK, there will be brutal choices over the deficit.

According to the Financial Times: the next UK government will have to:

1. Cut funding to Scotland and Wales by 10 per cent.

2. Cut public sector pay by 5%.

3. Freeze benefits.

4. Slash jobs.

5. Abolish a range of welfare entitlements.

Means test child benefits.

Abolish winter fuel payments and free television licences.

6. Axe programmes such as school building and road maintenance.

Cut prison numbers by a quarter.

Axe the two planned aircraft carriers.

Withdraw free bus passes for pensioners.

Delay Crossrail for three years.

Half spending on teaching assistants and NHS dentistry.

"or make a set of equally politically perilous choices."

The UK spending cuts are to be the deepest since 1970s, the think tank IFS says



 
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