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.

Map to venturing out into business

Mark Bouris, Sunday Telegraph- Money, 27/3/2011
Obtained from Ms Owen

This newspaper article is a beginners guide when they are entering the Australian business market and it shows the steps one has to take- obtaining legal advice, the set-up of the business, and looking at your own personality so that your business can suit it, and the other way around.

This article relates to the topics discussed in Commerce as currently we are looking at 'Being an Entrepreneur'. This article shows the steps required to further that, by starting a business and noting what other steps are to be taken- expert advice, the decision making whether to have a high-growth start-up, buying an existing business or becoming a franchisee owner, which are all entrepreneurial but at different levels, and some with more risk.

Being an entrepreneur means that there must be a desire to make it succeed, and also actions to back that up. This theme is not only explored in this article, but also in the example of Jesse Hancock in the textbook (p 313) as he built his company NueVue Graphics from the ground up. He says to not underestimate the power of passion- 'If you are passionate about what you do and where you want to go, then you will get there.'

Aussie Dollar expected to stay strong for months

SMH.com.au

Oct. 26 2010

http://www.smh.com.au/business/markets/aussie-dollar-expected-to-stay-strong-for-months-20101026-1715s.html

This article, published back in October of 2010, indicates that the Australian Dollar will be above 90 US cents throughout 2011 as the Reserve Bank of Australia continues to raise interest rates in the aftermath of the Global Financial Crisis.

During this period in October 2010 the Australian dollar had reached parity with a high of 100.04 US cents, and that has been driven because the US Federal Reserve will print money to stimulate the economy has depreciated the US dollar against the Australian dollar and lifted commodities.

The Reserve Bank of Australia received a report that stated that Australia's economy is unlike the United States, it 'dances to a different drum' and continuing good economic news is likely for the RBA to lift interest rates again.

Since then the Australian dollar has jumped above parity and only going below that in March after the Japanese earthquake and tsunami, but since recovering over that again.

In Commerce we have found that the Australian Dollar can appreciate and depreciate against different currencies. At the moment as the Australian dollar is recovering from the Global Financial Crisis is it appreciating against the US Dollar, which has begun to print money- which can lead to hyperinflation, as we have learnt that in Commerce as well with cases in the past such as Germany, Zimbabwe and Argentina.

Dollar rises against yen as calm returns to markets

Newspaper- SMH.com.au

March 22 2011

http://www.smh.com.au/business/dollar-rises-against-yen-as-calm-returns-to-markets-20110321-1c3qi.html

The consistency of the Australian dollar against the Japanese Yen means that the global financial market was stabilising after the Japanese earthquake 10 days earlier and the Libyan conflict. The Australian dollar was trading at ¥81.39 yesterday (Monday 21st March), up from ¥77.33 on Thursday.

Global investors have been buying the English Sterling and European Euro on the expectation that the Bank of England (England's equivalent to the RBA) and the European Central Bank would raise rates. This means that investors have been staying away from the US Greenback, due to speculation that the US Federal Reserve would be the last out of all major currencies to rise, which has helped the Australian dollar in the past as it has stayed near parity to the US dollar throughout the last few months.

The VIX Index in America traded above 30 last week when it usually averages about 15-20, another sign that world markets are beginning to strengthen, which means that the Australian dollar will again gain ground of the US dollar- having reached parity today for the first time in a week.

In Commerce we have learnt about how foreign exchange rates affect the Australian dollar, and how other currencies can appreciate and depreciate against the Australian dollar. In recent times the Australian dollar has depreciated against the US Dollar due to global instability but today it has appreciated back to parity. The Australian dollar also has appreciated against the Yen, trading at 1 AUD= 81.39 YEN.

Oil drops, yen gains in wake of Japan's disaster

March 12, 2011, SMH.com.au

http://www.smh.com.au/business/markets/oil-drops-yen-gains-in-wake-of-japans-disaster-20110312-1brsn.html

World oil prices and the economy in the world in general has shaken in the aftermath of the Japanese Earthquake. Australian stocks lost 4.5% in one week, signalling the end of its worst week since May last year. Meanwhile the Japanese Nikkei dropped 1.7% as the Japanese Government pledged financial stability after this earthquake.

Around the world the price of oil has continued to rise hitting US $100 a barrel, and Japanese oil exporters JX Nippon have closed due to the earthquake and resulting tsunami, and their three plants produce 600 000 barrels of oil a day, providing even more pressure on the market that has had trouble in the Middle East currently.

Meanwhile the S&P 500, Bloomberg Europe 500, MSCI Asia Pacific Index have all fallen due to the earthquake.

In Commerce we have discovered that the economy is influenced by overseas pressures that have introduced recessions over the years that had not been begun on Australian shores. In this case oil is one pressure that is driving up prices in Australia and around the world, and combined with the earthquake in Japan it would mean that prices would continue to rise.

Trade boom survives flood shock 3/3/2011, Blog Post 2

3/3/2011

SMH.com.au

http://www.smh.com.au/business/trade-boom-survives-flood-shock-20110303-1bfk3.html

The commodities boom is what is driving the Reserve Bank of Australia to drive up its interest rates (or cash rate as described here). The trade surplus in the past 10 months has reached over $1 billion Australian Dollars and last month's $1.88 billion surplus has exceeded expectations due to flooding and cyclones in Queensland, which in the end was offset by coal exports. The reason why the RBA is holding interest rates despite this data is the fact that Australians are spending less and saving more, even though household incomes jumped by 8.7% last year (in which Australians chose to save).

This shows that the economy is influenced a lot through imports and exports, and that patterns in spending and saving by Australians influences the interest rate. Also the natural disasters in Queensland have lessened the value of exports as coal lost 39 and 32% of their value in the past month. Imports have also dropped in January as there was a 29% drop in fuel imports.

However Australian commodity prices are set to increase as exports earnings are forecast to rise 29% in the year to June 2011, and miners are taking that opportunity to increase their spending so that in the financial year of 2011-12 their spending should reach $76 billion. Because of this spending by the mining sector it should increase exports, wage and tax receipts, and helping the country recover from the GFC.