Shares snap winning streak

12/10/2011
SMH.com.au

Today the Australian share market has closed lower for the first time in a week as Australian investors turns its attention to the European debt crisis and the US economy. This is not good for the future of the stock market as these are the two largest economies in the world and if they are affected by a possible downturn or recession it may translate to a lot of worldwide panic across the world especially as they are just recovering from the GFC.

In the last week the Australian dollar was very close to parity again with the US dollar, showing instability overseas but also how Australia has been riding out the recent economic times. Shares (also shown by the analysis of the share market game) have also risen but analysts have said that the market was due for a fall especially after the unprecedented run of good form.
‘‘Throughout the day, I noticed that every time we saw a bit of weakness, we’d gravitate back to the 4200 level; that tells me that there is a lot of conviction in the rally which we’ve seen over the last week,’’ he said. ‘‘Certainly we’ve got the catalyst for a sustained rally to year end.’’

He is becoming optimistic about the share market being able to rally further still towards the year end but that will be very dependent on the US economy and how it will ride out the effects of the GFC and the European debt crisis, in which they are certainly not out of the woods yet.

Myer doubles its oursourcing from China

SMH.com.au
16/5/2011
http://www.smh.com.au/business/myer-doubles-its-outsourcing-from-china-20110515-1eo8n.html

In Commerce we have learnt that outsourcing can help businesses cut costs but in the long run it may cause backlash from many people who are asking questions at why their jobs are being moved overseas instead of stimulating the Australian economy.

In this case Myer are hoping to increase their profits by outsourcing fashion to China where it has originally been cheap to send jobs there but due to working conditions and concerns of recent times it may increase prices in the stores. This is due to the Chinese economy being stronger than ever and as a result China is being 'Westernised', and their workers are now 'seeing people work 44 hours a week as the sort of mandatory hours, seeing people earn rates that have double and triple time when they work over the 44 hours and have Sunday shifts where they get double and triple time.'.

This can translate to good and bad outcomes for the consumers that may be pleased that there are better working conditions overseas but may also be distressed at seeing prices rise as a result. It may also question outsourcing strategies in the future as companies may now need to seek new countries in which to outsource from, or to stop this practice altogether as it may become difficult to find a good deal in China in the near future.

Samsung ambushes Apple's iPhone 4S launch in Sydney

12/10/2011
SMH.com.au
http://www.smh.com.au/digital-life/mobiles/samsung-ambushes-apples-iphone-4s-launch-in-sydney-20111012-1lk0d.html

In Commerce we have been learning at how consumers are able to make choices and they are usually influenced by price. As Samsung are offering their new smart phone for $2 people are exercising their right to comparison shop and it is working, as this time the line is longer than the line outside the nearby Apple store, where people are waiting for the release of the iPhone 4S.

In some ways the decision to camp outside the Samsung (or the Apple store) is an example of consumer decisions as they are able to get the new product first, and cheaply in the case of the Samsung store. In the news article there is a story of two people waiting in line so they could sell their new Tablets and go on a trip to India.

In the news article there is also an example of impulse buying as two teenagers are waiting in line for the Apple iPhone 4S. It may not be necessarily be getting the best deal money can buy but they are approached if they want to line up for the Samsung product, in which they decline because they believe that an iPhone is better.

Australia Post upgrades its parcel operation

TheAustralian.com.au

11/10/2011

http://www.theaustralian.com.au/business/companies/australia-post-upgrades-its-parcel-operation/story-fn91v9q3-1226163390804

In Commerce we have learnt that online shopping is becoming increasingly popular due to its convenience and the strong Australian dollar, which means that overseas items will be cheaper to the Australian consumer. As a result, Australia Post will be upgrading its delivery service to cope with the new influx of deliveries by opening 24 hour parcel collection and flat rate delivery for domestic shipping.

With the recent surge in email usage there are increasingly less letters sent across Australia, but according to Australia Post 'E-commerce is the new core of our business', as parcel deliveries increased by 10.9% over 2011, and a massive 57% in increase in parcels sent from overseas. This is due to the increasing demand of websites such as eBay and Amazon.

This new venture by Australia Post would be of more value to the customer and increase the amount of jobs, as it adds more services and therefore convenience to the public.

This change therefore reflects the changing times of Australia as it continues to look abroad, but also to the internet as an increasing destination for their shopping and their needs.

Australian Court Overturns Gillard Plan to send refugees to Malaysia

Bloomberg.com

31/8/2011

http://www.bloomberg.com/news/2011-08-31/australia-barred-from-sending-refugees-to-malaysia.html

This article is stating at how the Malaysia deal was overturned by the High Court of Australia as it does not meet the criteria for dealing with refugees, as Australia is part of the UNHCR, and also from public backfire under this plan for the same reasons. At the time of the overturning of the Malaysia deal Gillard's approval rating was 33% and she was the most unpopular Labor leader of all time due to this asylum seeker deal and the carbon tax.

In Commerce we have learnt that laws reflect change in society- this reflects the change of the Labor Party's current popularity and how serious Australia is in its protection of asylum seeker policy, or possibly how desperate Australia is to get into the UN Security Council from this ruling. Through this it also shows the Australian people and their dislike for this Malaysia deal as it does not give protection from asylum seekers, who are attempting to get into Australia for its good human rights record and protection.

It also shows the power that the Australian High Court has over the Government to keep it in check and to only let through policy that is constitutional.

Dollar jumps in relief rally

SMH.com.au

9/10/2011

http://www.smh.com.au/business/markets/dollar-jumps-in-relief-rally-20111007-1lc86.html

As the Eurozone attempted to reach an agreement over their debt crisis the Australian dollar was affected as it rose to nearly 98 US cents, up from 96.56 cents on Thursday. The Australian dollar is influenced by global economic news which makes the dollar rise and fall depending on other currencies around the globe, and the influence that those economies have on Australia's- mostly the European and US economies and markets.

As the dollar had appreciated (then depreciated) against the US dollar in recent times it has pushed up the price of imports as the United States is one of Australia's largest trading partners and they are not as willing to import here as it would cost more for the business and supplier. As the Australian dollar had also risen against other currencies it also would affect trading in their countries, meaning that it would cost less for buyers in Australia, therefore more overseas.

Meanwhile the current depreciation of the Australian dollar against the US dollar has pushed it below parity meaning that Australian products are more profitable for overseas buyers, but overseas products are more expensive for Australian consumers. The rise of the US dollar is now better for investors as it is mainly a stable currency against Australia's, except for the recent GFC which meant that Australia was better off against America which was reflected in the currency exchange rate.

Shares pile on 90 bn in 3 days

SMH.com.au
8/10/2011

http://www.smh.com.au/business/markets/shares-pile-on-90b-in-three-days-20111007-1lc72.html

In Commerce we have learnt that because of the many foreign investments in Australia we are highly affected by overseas financial news. In this case the ASX had jumped $90 billion in 3 days as Australian investors were more confident over the European debt crisis- the European Central Bank decided to keep interest rates steady despite fears of recessions in countries using the Euro, and as a result had decided to construct re-financing operations. The renewed confidence means that investors, governments and consumers are more ready to invest amd buy products in companies which pushes the share price up, indicating more confidence which drives this cycle.

Because of this renewed confidence shares in the US went up, as did Australia's, recovering from the recent downturn in share prices. This follows the pattern of the business cycle in the short team- shares fall but usually they expand again over time.

However this pattern is not to continue for long due to the general uncertainty in Europe over their debt crisis and the natural cycle of the business cycle- the economy (and other economies) will eventually slow down and contract.

RBA tipped to stay on hold until 2013

SMH.com.au

30/9/2011

http://www.smh.com.au/business/rba-tipped-to-stay-on-hold--until-2013-20110930-1l10u.html

The Reserve Bank of Australia is to keep interest rates on hold for another policy meeting and a Reuters poll shows that interest rates may follow a trend of staying steady next year as well.

In Commerce we have learnt that the business cycle is affected by rising and falling interest rates- in booms there is a lot of spending that pushes inflation and interest rates up. There are other features of a boom such as high income and production, high employment levels and high salaries. Meanwhile in a recession there is little spending that pushes interest rates down- there is low income, unemployment is high as there is not enough money to sustain it, and therefore business demands are low.

In this case as Australia is not in either category the Reserve Bank has decided to keep interest rates on hold after it had risen significantly as Australia seemed to be recovering from the Global Financial Crisis.

Australia is a mixed economy which means that consumers and producers in Australia have power to decide what Australia produces, but there is also government involvement, in which the government through the form of the RBA regulates the economy- in this case, keeping interest rates on hold.

Latest Qantas strike hits 8500 passengers

SMH.com.au

30/9/2011

http://www.smh.com.au/travel/travel-news/latest-qantas-strikes-hit-8500-passengers-20110930-1kzsi.html

Qantas employees have begun a one hour strike today at 8am on the 30th of September. As a result 2 flights were cancelled and 33 were rescheduled or delayed. This followed a strike by the Transport Workers Union on September 20 and yesterday Customs and Quarantine staff stopped work for separate pay problems. Meanwhile today Qantas baggage handlers and ground staff were protesting over ongoing pay and conditions.

Trade Unions are the result of people in the same area of work coming together to bargain for more strength of improved pay and conditions. They generally aim to protect the interests of union members by negotiating higher pay rates, improve the working conditions of members and promote quality of life issues. When strike action occurs, it stops or slows the flow of profit that the company receives, and in the case of Qantas, it inconveniences the public as well, which may influence the public's decision in which airline carrier they decide to fly in the future. Here in Qantas they are attempting to exercise their right as part of the Trade Union to attempt to stop work and force Qantas to consider their case for better pay and conditions.

Australian bonds follow US Treasuries higher

SMH.com.au

29/9/2011

http://news.smh.com.au/breaking-news-business/aust-bonds-follow-us-treasuries-higher-20110929-1ky3f.html

Investors in Australia have chosen to go with more secure sources of investment by going with government bonds, and have followed suit with the US Treasuries, after a 10 year bond futures contract was trading at 95.750, while on Wednesday it was trading at 95.690, with a yield of 4.25%.

This is due to the ongoing uncertainty over Greece's debt crisis and the measures the G20 and the Eurozone are going to initiate to solve this problem.

In Commerce we have learnt that Government bonds hold less risk, but also less return. People that purchase these bonds generally prefer the security of these bonds, and therefore are prepared to take less risk. In these current times of economic uncertainty it is therefore a good time to hold these types of investments as stocks are likely to fall, or be very uncertain for an extended period of time. These types of assets are called Income or defensive assets. This is a particular area in most investment portfolios, which can also consist of investment accounts, shares, property, managed funds and superannuation.

BHP reveals WA Ambitions

SMH.com.au

28/9/2011

http://www.smh.com.au/business/bhp-reveals-wa-ambitions-20110927-1kvdw.html

BHP has said that its growth ambitions are bigger than its main rival Rio Tinto. As both companies are doing battle in the current Australian mining boom, they are aiming to sell more iron ore to growing countries such as India and China, who are currently leading steel production growth.

This would mean that BHP would now have a consistent higher share price, possibly coming close or catching up to Rio Tinto as they attempt to grow their business at Pilbara by growing it to obtain 240 million tonnes annually, and an overall target of 350 million tonnes a year.

This growth would mean more money into the Australian economy because of the amount of exports BHP are producing to China and India, and this would mean more economic stability for Australia's economy as it prepares for another recession due to the European debt crisis, and also because mining accounts for over 5% of Australia's Gross Domestic Product.

Aussie stocks set to surge (Live blog)

SMH.com.au

27/9/2011

http://www.smh.com.au/business/live-blog-aussie-stocks-set-to-surge-20110927-1kub4.html

This article is about how Wall Street's latest gains overnight will mean that Australian shares will jump as well. This optimism is caused by the fact that Europe may find a way to resolve its debt crisis, and the ASX is set to rise as much as 2.7% after the US rose 2.5% and Europe rose 2%.

This means that the rise in confidence in Europe will equate to a further rise in share markets around the world, as it is due to the increasing reliance of globalisation around the world. As Australia is heavily reliant on Western stock exchanges for its confidence.

However Australia is also reliant on the US dollar, as America is one of our largest trading partners. It has fallen against the US dollar in recent times, but it has only fallen half as much as BHP since May, and the dollar is the reason why Australia's economy has been able to go through the debt crisis better than other nations.

Debt Crisis- Saying goodbye to Greece- softly

SMH.com.au

25/9/2011

http://www.smh.com.au/business/saying-goodbye-to-greece--softly-20110926-1ksaa.html

This is a column by financial journalist Michael Pascoe that believes that Greece will default on its bailout by the Europeans. He shows that Australian Treasurer, Wayne Swan, cannot give a simple answer on Greece's problems, as he knows that Swan knows that it is impossible for Greece to pay off its debt. Therefore the EU should no longer be funding Greece to not default

Usually if a country like Greece was in debt it wouldn't be much of a problem as Greece does not have a rather large economy. However it is part of the European Union, which services the second largest stock exchange in the world. And therefore it had been bailed out by the European Central Bank, in a loan in which Greece will not pay back. This will leave Europe in plenty of debt, and meaning that stock markets around the world but especially in Europe will fall, possibly sparking a double dip recession, which will be worse than the GFC of 2008-09.

Pascoe does not believe that the IMF or the G20 will do anything about this problem except to throw more money at Greece that seems incapable of sorting its finances.

G20 plea falls on deaf ears as shares nosedive

The Australian

24/9/2011

http://www.theaustralian.com.au/business/markets/g20-plea-falls-on-deaf-ears-as-shares-nosedive/story-e6frg916-1226144913121

Shares from around the world and in Australia tumbled on the 24th as shares fell again after its horror day on Thursday. Korean shares fell 5.6%, Hong Kong fell 2.2% and even China fell 1.1% in the Asian region, meanwhile in Europe the STOXX 600 fell 4.6% and the S&P 500 also fell 3.2%. The G20 in the possibility of a second financial crisis has stated that it is committed to an action plan of policies to ensure global economic stability by introducing its bailout fund of $605 billion AUD.

However due to the Australian dollar falling below parity with the US dollar it means that stocks with offshore earnings rose, especially BlueScope steel rising 6.2%, but with mining stocks came a fall, with both mining players BHP and Rio Tinto both falling around 3%.

This fall was due to American and European stocks falling, which affects Australian and overseas stocks heavily due to their influence in foreign trade. Australia exports 7.3% of its products to the US and imports 13.6% from America which means that whatever happens overseas is bound to affect Australia. The countries of the EU is another large trading partner (including the UK) but trade has fallen throughout the last couple of years.

Dollar licks wounds after heavy loss

SMH.com.au

23/9/2011

http://www.smh.com.au/business/dollar-dives-in-black-day-for-global-sharemarkets-20110923-1knsq.html

The Australian Dollar has fallen to a 10 month low of 96.92 US cents. This over the last 20 years is an extremely high figure but in recent times any price below $1.02 is a cause for worry.

It has lost 5% so far this week, showing the instability of foreign markets and currencies as they brace for worse economic times ahead, as Greece may default on its loans.

This is bad news for Australians buying overseas as the dollar depreciated below parity against the US dollar meaning that items, especially through online shopping, will be more expensive. This will mean that exports will be more of a viable option for overseas buyers but with the current instability the Australian exports may not be bought as it may go over parity again in the near future, even though experts predict it may hit a 'low' of 95 US cents.

Along the same lines of the Australian dollar it may not increase tourism to Australia as prices may change in the near future.

This current currency fluctuation will affect global business as there is a lot of currency risks riding on the Australian dollar as it flaunts above and below the parity line.

ASX plunges below 4000 points

The Australian Share Market (ASX) fell below 4000 basis points today after the US Federal Reserve warned that the US economy is heading towards bad economic times and after they had found evidence of China's economy slowing. As a result the Australian dollar fell to a level of approximately 103 US cents and the loss of 4000 points means that $31 billion in value has been wiped off, and the ASX is trading at its lowest point since April... which was when the last share market game was played.

This relates to Commerce as with economies world wide being battered by this news and news of the Eurozone debt crisis this is not good news for investors as markets world wide are being hit similar to Australia. For example, previously stable mining companies such as Rio Tinto had dropped $4.49 in one day, while BHP Billiton had fallen $1.50, at 6.45% and 4% respectively. Big 4 banks all dropped 2% of their value as the worsening economic crisis could hurt their long term profitability and growth.
This news is therefore not good for players of the share market game and for real investors as the uncertainty in Europe and America are hurting the market. However investors in Fosters will have something to smile about as SABMiller took over the company in an offer worth $12.3 billion. As a result Fosters jumped 8.2% and other liquor based groups such as Treasury Wine Estate and luxury accessories group OrotonGroup also rose after sales had exceeded expectations.

This hit on the share market has not helped the Australian dollar that is to go below parity against the greenback as it has been steadily dropping within the last few days, that could spell the end of the Australian dollar's strength against the US dollar.

US Debt Deal wins approval in US House of Representatives

SMH.com.au

2/8/2011

http://www.smh.com.au/business/world-business/us-debt-deal-wins-approval-in-house-of-representatives-20110802-1i8um.html

This article is about the US Debt Deal that passed the US House of Representatives to appease the US of a possible economic crash to increase the amount that the United States can borrow.

This article relates to Commerce as this deal tests the stability of the US economy. Also if the economy ran out of money the US would lose its triple A credit rating, which can limit the amount of spending the United States can do in maintaining the country. This deal will raise the US Government's $14.3 bn borrowing limit and it will remove the risk of the US not being able to borrow money to pay its bills.

However this late deal has prompted world economies to slump in days previous, and it has also bothered overseas governments which were anxious for a deal to pass, and for the political war between the Republicans and Democrats to end, as it has hampered the making of a deal within the past week. This has caused critics to not be happy with the United States Government as it was playing a large risk in delaying the passing of this bill; playing a political game.

If the AAA rating were to be downgraded it would raise US borrowing costs, hamper its economic recovery and rattle global investors, and also worsen the European debt crisis.

Phone hacking scandal- London

SMH.com.au

July 8 2011

http://www.smh.com.au/business/media-and-marketing/phone-hacking-scandal-rupert-murdoch-closes-down-the-news-of-the-world-20110708-1h5bk.html


After many high profile resignations were caused by the News of the World phone hacking scandal now David Cameron, the Prime Minister of the United Kingdom, is under fire. He has called an emergency meeting of MPs the day after the Murdoch parlimentary committee is to take place, and there are accusations of senior MPs and high profile police taking bribes from senior executives from News of the World, after the case was closed in 2009.


This relates to Commerce as this phone hacking can impact world economies and governments due to distrust among different parties.
This is a major impact on Rupert Murdoch's media empire and his credibility of his various newspapers, after it has been revealed that phone hacking is commonly used as a source of information. This also impacts the credibility of Scotland Yard police, as the resignations of the police was caused by either negligence in the 2009 case or corruption. David Cameron also has had contacts with various members of the Murdoch family, as had other previous high ranking MPs and Prime Ministers, and various government ministers in the United Kingdom also may be in danger of being charged due to the scandal.

Cut above: the tycoon tailor who survived war and terror

Theage.com.au

12/05/2011

http://www.theage.com.au/small-business/entrepreneur/cut-above-the-tycoon-tailor-who-survived-war-and-terror-20110512-1ejue.html

This entrepreneurial profile by The Age, a Melbourne newspaper, covers Abraham Hatoum- he lived in Lebanon in his childhood, came to Australia in 1985 and founded LookSmart in 1994, and now has a $28 million/year turnover.

His life has a entrepreneurial start, as he sold drinks in his Palestinian refugee camp where he lived when he was 10 years old, but luck dropped off from him later in life when his father was murdered, young Hatoum was bashed and sustained more injuries from a bomb blast. After arriving in Australia he took 12 years to gain his Bachelor of Commerce degree but now has won the 22nd national Ethnic business awards.

Entrepreneurs can accomplish anything- a view shared by Hatoum, as he shared his view about his drinks business. His view on life as well- you make your own luck- is also like that with entrepreneurs because they only get out what they put into it.

One lesson that he has learnt from business is to choose the right people. 'If you choose the right people, a business will succeed. If you put your people first, sales and profit follow.' In Commerce we have learnt that putting people first and thinking about what they want is essential- there would be no business if there were no people.

Entrepreneurs can change the world

YouTube.com- GetGrasshopper


Uploaded on May 3 2009

http://www.youtube.com/watch?v=T6MhAwQ64c0


This video sums up what entrepreneurs do in the world. Although the target audience is American (as shown at 0:27 with the American flag and country) and this video is a form of advertising the message is internationally understood. Entrepreneurs show that one individual can make a difference (0:19) and that this individual, with a 'single brilliant idea' (0:34) 'change the way we think about what is possible' (0:50).
In Commerce we have been learning about what is an entrepreneur, and these main points sum it up. We also have been finding about what challenges entrepreneurs face but the video shows that 'turbulence creates opportunities for success, achievement, and pushes us to discover new ways of doing things.' (1:01-1:10)
This video also covers the rewards of being an entrepreneur. They 'drive innovation changing people's lives, creating jobs, fueling growth, and making a better world' (1:19-1:28)
The remainder of the video lists what entrepreneurs do for the world, such as designing tools to help us stay connected, solving society's oldest problems, but also covers one important point- an entrepreneur can be anybody.