Peak of Erudition

The entire globe was into recession at the beginning of 2009, but by the end of 2009 most of the countries came out of recession. Japan, Singapore, Australia, US, China and India were all recording decent GDP growth. But Europe has been facing major resistance even during that period, as most of the countries were running on huge budget deficit.
Greece, Spain, Portugal and Ireland are all running on huge public debt , and that was growing at alarming rate.

The Greece problem is still not out, and it is snowballing into a big problem for the entire European region. The European Union is planning to pump another 50 billion dollars to Greece, while others like Spain and Portugal may also come with a begging bowl.

UK is also not far behind, as the country is heading for a political backlash with a hung parliament. That could make tough economic measures impossible to implement, which in turn could aggravate the economic situation of the country.

And with inflation haunting most of the countries, we can expect the global majors to cut down their stimulus measures in the coming days. Also that could mean lesser international funding for European countries in the coming days.

Nothing seems to be going right for the European Union as of now. So expect it to get into another round of recession in the near future, say experts. Any takers ?

A high speed global railway network is going happen in China. China is planning to reach 17 nations with a new silk route. The whole railway route is completely made of steel. The negotiations between china and other countries are going on. A high speed railway network will be owned by china by 2013. Around 800 bullet trains will be seen between China and other nations.

Till the year 2008 China did not have any bullet trains. The railway spokesman announced the railway network between 17 nations. Beijing envisages a network between different nations most of nations will be from Asia and Europe. The project will happen by 2025 Wang Mengshu, a member from state run Chinese academy announced. Just think a journey from London to Beijing 350 kmph train. The project will hold some strategic concerns for India especially as India and China share a longest disputed border.

Much production for bullet trains with foreign collaborations is going on. The Chinese fast train technology market will be India. Problems such as discrepancies in track, line direction, gauge, expense allocation are under discussions with the other countries. From the recession Beijing has invested billions of Yuan in railway infrastructure. Railway lines as much as 33,000 km are being built at break neck speed.

It is now seen that in the monthy of february, the nature also has conspired to hurt the US recovery process. The Construction of new US homes fell in February – with disruptive heavy blizzards experienced in some areas of the country being partly blamed.

The building of new residential properties slid 5.9%, said the Commerce Department. But January construction was revised up to a 14-month high.

While the total of 575,000 new builds in February was down from the previous month, it was up 0.2% on a year ago.

The recovery of the housing market is seen as crucial to economic recovery.

The US economy is driven by consumer spending and hence the government is hell bent on improving the consumer confidence in their future and also their perception about the future of the economy. But the high rate of unemployment coupled with weak housing market conditions seem to be badly hurting the consumer confidence.

The February 2010 reading of the US consumer confidence index has hit a 10 month low due to the above factors.
The US government might have to work very hard to pull back the confidence to healthy levels in the coming months. Any further deterioration in the consumer confidence index would be very harmful for the economy as a whole.

The Chinese government is worried at the massive rise in property prices across all major cities. China has seen a massive 50% plus rise in property prices over the last one year due to increasing demand from millions of middle class consumers.
Now the Chinese government wants to avoid another bubble burst, and hence has decided to raise the interest rates by 50 basis points. The Chinese government has already asked the three main banks of the country to cut down on new loan issues in the coming months. All these are expected to result in further drop in demand for products and services inside China.

The US private sector comprises of hundreds of global multinational companies and thousands of supporting small / medium sized companies. All these companies have been able to exploit the global recession to their advantage in the last two years, by cutting down the work force. These companies have also ensured higher output from the retained work force.
But all those are going to turn the other way round in the coming months, because talents will be in demand across categories due to rising demand. That could force many companies to hire people in a hurry over the coming months and also start giving more comforts for existing work force. So expect the US unemployment rate to drop below 8% by the end of 2010.

The Indian economy is running fast and has recorded a spectacular 7.9% GDP growth in the last quarter. The industrial output and also the service sector output have gone up substantially. The exports have gone down due to poor global economic scenario.
The Indian economy is riding high only on the back of a healthy domestic demand which is continuing to grow. The current quarter GDP is also expected to be around the same level, in spite of agriculture sector failing due to weak monsoon.

The US retail sales have bounced by a healthy 1.4% in the month of October 2009, and that has been enough to push the Dow Jones and Nasdaq indices to year high today. The Dow Jones crossed the 10400 mark while the Nasdaq climbed to 2200 level.
Analysts are expecting the US stock markets to remain range bound for the next one or two months, till major trends of the global economy appear.

The US congress is working on a revolutionary amendment to the US regulations which would effectively cut the power of US FED in making the decision on interest rate changes. The politicians have always been against the upward changes in the interest rates being done by US FED and have been seeking to gain control over it.
Now the Obama administration seems to be working on legalizing this through this legislation. If it comes through, then there could more economic upheavals in US in the near future.

The US unemployment rate has hit the double digit mark in October 2009, with the official figure jumping to 10.2%. There has been more job losses in the month of October 2009, due to weak economic conditions. This is the highest level of unemployment in US in the last 26 years which is haunting the Obama administration.
The US government is likely to face tougher times in the months to come because soaring unemployment base could pose serious threats.