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.

The elephant riding entrepreneur

SMH.com.au

4/4/2011

http://www.smh.com.au/small-business/entrepreneur/the-elephantriding-entrepreneur-20110404-1cxim.html

This article is an interview with Sydney entrepreneur Creel Price, that started Blueprint Management Group with $5000, and 10 years later sold it for $100 million. Price, the captain of Australia in the sport of Elephant Polo, had unique business practices in his time, for example taking his staff to climb Mount Kilimanjaro and bicycle riding from Bangkok to Ho Chi Minh City. In this interview it explores some of his hardest challenges, business tips and what is next in the future.

At the moment in Commerce not too many other topics have been discussed as the class has had limited time on the topic of creating a business. However in this interview it covers many aspects discussed previously, such as taking no shortcuts- 'good business takes time', and his toughest challenge in business- 'starting a business (Blueprint) with only $5000 in capital and to try and compete with cashed up multi-national corporations.' He overcame this problem by installing a rule that customers pay him within 48 hours and stretching entry level people to do jobs beyond their previous experience. Successful entrepreneurs need to think outside the square, and he has done that.

Profile - Monique Conheady

Lucinda Schmidt, SMH.com.au, 12/5/2010

http://www.smh.com.au/money/investing/profile--monique-conheady-20100524-w65d.html

This article is about an entrepreneur called Monique Conheady, that owns a company called 'Flexicar' that is a car hiring service for people that do not generally need a car for their day to day lives. Flexicar is a business that has focus on an environmental concern- Climate Change- but she says it also has to be financially viable. "That's the philosophy behind Flexicar - it has to be financially viable but with a social and environmental benefit."

In Commerce we have learnt about entrepreneurs and ideas they have in order to make money and grow their business. In this example Monique Conheady started the idea of Flexicar in the 1990's, when she visited a friend in Boston that had a business similar to Flexicar, called Zipcar. She could see this car sharing venture needed in the everyday lives of people, as the world began to support climate change, or just did not have the money to buy a car to use.

Monique's father also planted a seed for her to start her own business, saying that you have to do your own thing, he was very independent minded."

Nowadays she has accumulated a $2 million turnover and is aiming to expand her company, especially in Sydney, after she won a 2009 Telstra business award.

Our Economy- Reflection

Total Mark: 29/30

This assessment task was to research the economy of Australia and one other economy of my choice- this country in question was Hong Kong. The assessment task consisted of a report describing the economy in both Australia and Hong Kong with a comparison of the two economies and describing the differences.

I learnt from the assessment task about Hong Kong's economy- that they were one of the last Laissez-faire economies in the world (with no government intervention) and how they suffered and recovered from the Global Financial Crisis. I found out that their GDP also fell after their split from the United Kingdom in 1997 as well as the GFC. Their GDP fell more than Australia's but ended up recovering better than the Australian economy, indicating that they are able to bounce back from economic struggles.
I also learnt that the split from the United Kingdom made inflation rates go backwards in the 1997-1998 year and the changes in the CPI have been more unstable than Australia's as they have not had an inflation target as Australia has.

I generally did all parts of the assignment well as shown by the 29/30 mark, however I struggled to find relevant graphs to back up my written work, as shown by my Australian GDP Growth Rate graph because I was only able to find a graph for 14 years instead for 20 years.

I can elaborate more in the aspects of Hong Kong's economy but however I wasn't able to find too much information apart from Wikipedia- with the exception of the CIA World Factbook.

This assessment task was generally well written but the word count was fairly difficult to adhere to.