UK Economy faces major slump, again

The world might have believed that the UK economy had prospered, but the results of the last three months reveal the ignored doomsday.

In the last three months, the Britain economy has shrunk in an never before expected manner.

When the Gross Domestic Product of UK’s economy fell to 0.5 pc. The last three months report a bigger drop to 0.6 pc now. The dip would severly effect UK’s standard of living.

Definitely, the UK market needs to wait a little longer to return to the pre-credit cruch state. Investment and constuction are the main reasons behind the continuing slump. The growth of production agencies like mining and manufacturing has been very slow.

Though, the value of pound against Euro might not change, remaining at 1.17 euros, it suffered a set back of 0.5%.

With cosumer confidence collapsing, the economy still needs to fight against inflation and growing unemployment.

Bounceback

Irrespective of the disappointing figures, the economists hope for a bounceback. The bigger squeeze in, starting from the mid of 2011, might pose treacherous risks.

With the value of imports overwhelming those of exports, the expediture and investment faces a strict danger.

Even the concern over the cuts programme foresee debates, if the same situation continues.

Why Mario Draghi should be the next President of ECB?

Mario Draghi, the Italian banker and economist might be the next president of the European Central Bank.  For the past one year, his succession to current President Jean-Claude Trichet, seemed impossible.

His main competitor Axel Weber, the President of German Bundesbank has already left the race. For economists from Germany and France, this is sad news. They wanted someone “German” enough to take the charge, taking into consideration the shattering plunges of financial crunch witnessed by the Euro Zone.

Though currently, Yves Mersch from Central Bank of Luxembourg is definitely another competition. Though, Mersch is known for option for display of force in international relations and economy rather than diplomatic tones.

Another opponent can by Cathy Aston, European Union’s representative of foreign affairs. Unfortunately, she is more in news for brooding over Cameron’s visit to the Middle East as she wanted to be the first “Westener” to do so.

Politics and fiasco

The future seems quite unpredictable for the European Union, as always after the tenacious recession hit the continent. The adoption of the single currency is causing more pressure on the Zone to unite and fight.

Rejecting Draghi does not make sense if the selection is based to suit the images of respective countries and not to actually opt for the best President. Its quite necessary for the European conglomerate to understand the repurcussions which would be caused by the delay.

Draghi and Presidentship

The President should know how to fight against inflation. Incidentally, that is what Darghi is trying to harp upon. He is also compared to Cardinal Richelieu, who is often called as the first prime minister of the world. All this is because, time and again, Draghi has shown how he can face politics and work around it, in a very intelligent and impressive manner.

He knows his deal about government finance and central banking. He has years of experience in both public and private sector.

What shall happen?

Just because he is Italian, does it mean that he should be discouraged? When will the entire European learn to differentiate that every Italian is not Silvio Berlusconi.

Secondly, his four years of work experience with Goldman Sachs is another bogus issue which people are pointing out.

Its high time when Germans should know that they have the right man and they indeed should support him.

The European Union in danger

The glass is smashed. The pieces are jumbled up together in confusion. Stuck. But falling one by one. Will this glass survive?

Well, the European Union faces jeopardising financial times with Ireland, Portugal, Spain and Greece going bankrupt. Who will save them? Let us put it in this way, can Britain and Germany save these nations?

Three year loan to Ireland

UK government has decided to offer a three-year direct loan of £7 bn to Ireland to rescue the once Celtic tiger from financial depression, says BBC. The naked melting of the Irish banking system might indicate the initial rift that might break the European Union.

At the same time, will the loan help a country which needs to strictly devise its budget, spending ways and economy?

On the other hand, will the UK economy face positive results after granting this loan? European officials believe that it might help the bleeding economy of Britain, as in three years, they can earn more by interest rates, business and even cross border negotiations.

The European monetary Union is being pushed too far. So, should Ireland discard the Euro? Till 2002, the Republic Ireland survived with the Irish Pound, which alarmingly fell in comparison with other currencies in the international market during the late nineties.

So, to save its skin, Ireland joined the Eurozone, utterly unaware of the fact that it might face the music again. What about the Irish pride?

At the same time, the officials from the European Union will not let the dream of single currency die. Unfortunately, they might face rejection. Sound nations like Germany and Finland are not ready to bailout Ireland without a coherent plan being in action, says the Daily Crux.

Financial downturn in UK

But how can UK save the entire scenario when her own banks are at high stake? The UK’s debts are expected to rise to 79.1pc of gross domestic product (GDP) in 2010, compared with 124.9pc in Greece, 64.9pc for Spain, 118.2pc in Italy and 85.8pc for Portugal, reveals theTelegraph.

The rescue package might affect the pockets of Britons with around £300 per household more investment in the form of taxes.

So, is Europe going to move in two different directions? Will the team of sisters break?

Surprisingly, United States might pressurize the International Monetary Fund to play a role in the bailout. The loan might prove to be financially advantageous with appealing interest rates and paybacks.

Though, it too is surviving recession, US could work better on a common currency because of having a mobile labor market, portability of pensions and common language, says BBC.

Shattering Glass

German Chancellor Angela Merkel in the site Prison Planet believes, “If the Euro fails, even the European Union will.”

So, should we get a new glass? Dump the broken pieces in trash? Or should we handle it with care and see a better reflection? After all, how many times would we change this glass? Blow after blow? Well, that is impossible.

 

Boeing wins $35bn Air force contract, EADS dissapointed

The $35bn US Airforce contract has been awarded to Boeing, the major American aerospace and defense corporation. It has to provide 179 refueling tankers.

This contract definitely speaks of a very convoluted history.

EADS, the European aerospace and defense corporation, expresses disappointment.

It would definitely be interesting to observe the reasons behind Boeing winning the deal. In 2008, EADS was a sub-contractor in this $35 bn contract for aerial refueling tankers.

It had then partnered with Northrop Grumman Group. The partnership was broken last year, forcing EADS to bid alone. Supposedly, Northrop understood that the clauses of the contract would favour Boeing.

Re-appeal by EADS

Whether or not, it would re-appeal, has not been disclosed yet. It has ten days to file a complain in the Government Accountability Office. The decision would come in next 100 days.

This would again add to the 90 day extension which EADS had requested for due to the sudden breaking in the partnership with Northrop.

Air refueling tankers

The US Airforce has dramatically enhanced its role in using the air refueling tankers after the wars in Vietnam, Afghanistan and Iraq. So, have the need of the small fighter bombers too, on the rise.

Boeing has already completed more than 60% of the testing conditions. Though, the tankers/planes are three years behind, taking into consideration the phenomenal hue and cry over the contract.

 

 

 

 

 

Financial U-Turn for GM, profit of $4.7bn

2010 proved to be very profitable for General Motors, Dan Akerson, the CEO, announces profit of 4.7 Billion dollars.  Encouraging car sales in China, US  and Brazil adds to rebound from bankruptcy.

This largest auto-maker has launched two new vehicles this year-Chevrolet Vault and Chevrolet Cruze Compact.

Though, GM still needs to struggle. The loss of $80 bn needs to be survived. But there are several other reasons as well.

Firstly, the lack of new business models adds to the loopholes. Secondly, the firm still needs to perform well in the European and British markets- a goal which seems difficult to achieve right now. Finally, the dramatic rise in gas prices might destruct the operations.

Fierce competition

GM has not updated its brand products like Chevrolet Impala, Chevrolet Malibu and GMC Sierra pickups. For 2011, it has only two new models to launch in the US Market- Buick Verano and Chevrolet Sonic subcompact.

On the contrary, the Chrysler Group, another multinational automaker which too faced bankruptcy has introduced 16 new models last year.

Fierce competition by Toyota Corolla and Honda Civic adds to the destruction. GM faces the constant threat of not being able to persuade buyers to invest in its smaller cars.

UAW would reap benefits

For United Auto workers, this is good news. After being blamed for the automotive industry crisis in the recession years, UAW is believed to play a restrained part this year.

Though, few believe that these high profits would have been impossible to achieve if GM did not undergo bankruptcy. The stupendous cut in employee numbers, complete revamping of management staff and revenue models has given birth to new GM.

 

 

 

 

 

 

 

 

Libya unrest, oil prices gush to $119 a barrel

As the entire world frantically watches the Libya unrest, the stock markets reveal another financial hullabaloo.

The wider unrest has caused the oil prices to gush to$119 a barrel.  Libya has also reduced the oil outputs by 1.2 million barrels a day, counting to 75% of its export. The matter grows of immense importance as Libya is the third largest oil producer in Africa.

Along with it, there are several international oil workers literally trapped in various camps in Libya.  Rescue operations are going on. Barack Obama, Nicholas Sarkozy and Cameron are planning to put pressure on the Libyan government to terminate the massive violence.

The International Energy Agency predicts that 7,50,000 barrels have been deleted from the world’s oil market.

The dramatic price rise followed after the number of shipments to other countries had been reduced by the Libyan government. Though Saudi Arabia, which is the highest exporter in the OPEC( Organisation of Petroleum Exporting Countries), assures that the reduction can be managed.

European shares

The world economy is definitely going to witness another spectacle, especially the forecourts and motorists in Britain. Investors are expressing their concern regarding the fall in oil prices. The European shares are falling, consecutively for the fourth time in a row.

Stock exchange crumbles

FTSE 100, the share index of 100 most capitalised UK companies noticed a down of 0.06%.  While, DAX, the German stock index fell by 0.89%.  CAC 40, the benchmark French stock market fell by 0.09%.

High stakes

Goldman Sachs, the American investment banking firm reports that such disruption could severely affect demand rationing. The outcomes would definitely caused decrease in the earning potential, mushrooming the recession, causing higher inflation.

 

 

 

 

Russia to buy French Mistral-class warships

The recent confirmation of Russia purchasing two mistral class ships from France is causing terrible mayhem for several NATO countries, Poland, Ukraine, Georgia and of course, United States.

This is the second attempt of Russia to penetrate into the European Union territories. The first one, undoubtedly being the building of Nord Stream, a gas pipeline which will connect Russia to Germany and to the European Union. This $5 Billion deal has been perceived as a means to foster “Energy security in Europe”. But is it really so? The 1224 km pipeline which started in 2005 could have treacherous outcomes.

So, what exactly is troublesome if Russia is filtering into the European Union? The answer lies in the ownership of the final destination. Both, the purchase of the ship and the construction of pipeline would involve the Baltic Sea and the Black sea.

We must not forget that the former Tsarist Russia started building its navy from the Black sea, later causing the Crimea War when Britain and France found about it. Baltic sea, on other hand, has already witnessed stupendous military confrontations with the Germans, Russians, Poles, Danes and Swedes trying to dominate it, every now and then.

Russia’s naval condition

Another interesting fact is that Russia, who once had a very strong naval force is currently facing its doomsday. The situation has declined to such a treacherous degree that Russia is not even able to repair an aircraft career which supposedly was meant for giving to India. Similarly, the decay in military and arms industry is literally forcing Russia to join hands with France.

Russia and Georgia

But the NATO allies are openly coming and showing “concern” over this deal of purchase of the mistral ships.  Georgia, which still faces the Russian wrath because of the two breakaway regions- South Ossetia and Abkhazia. These two regions are as disputed between Georgia and Russia as J&K is disputed between India and Pakistan.

Georgia was annexed by Russia in 1921 as as soon as USSR shattered in 1991, Georgia claimed its independence. Though, every now and then, the controversy erupts leading to local wars. Georgia, on one hand is trying very hard to be a member of NATO and European Union.

France supporting Russia

This is where the other twist comes. France, who is selling the ships to Russia, is a member of NATO. So, according to the spirit of “being allies”, France should not be supporting Russia. The reason behind Sarkozy’s honeywoon with Moscow cannot be understood so easily.

That is exactly what George Bush too, used to complain about. But who cares about what Bush said? After all, America never paid attention to France’s open boycott during the war in Iraq in 2003. So, here comes the time to do tit-for-tat.

Russia very frankly is causing a breach in the Non Proliferation Treaty by confirming the tactical use of nuclear weapons in local wars against countries which are do not have access to nuclear arms. All this makes me remember a quote which Charles de Gaulle, a French General once said  “I’ve tried to lift France out of the mud,” he wrote. “But she will return to her errors and vomitings. I can’t prevent the French from being French.”

The brighter side

The purchase might prove to be beneficiary for Saint Nazaire where the one of the mistral ships would be constructed. This deal is the first the shipyard has got in three years. Conditions had become so worse that last year, around 350 workers were asked to quit. Therefore, this order by the French Navy is definitely important for the workers making the ship.

France’s previous support

NATO definitely has been a threat to Russia, right from day one. But what might sound a little supportive is the fact that France also knows how to play against her own arms. In the Falklands War in 1982, between UK and Argentina, France came to the rescue. She provided dissimilar aircraft training which allowed the pilots to train against the French aircrafts which France had once sold to Argentina.

In a nutshell, what matters is the outcome of the purchase and its military usage. Anyways, this purchase marks the first business deal which Russia is striking with the Western World after the end of second world war.

P.S: So much of politics makes me wonder why the Third world war has not started yet.

China weds Pakistan, divorces India

It was in 2008, when Pakistan’s “all weather friend” China, declined to help the nation during a severe financial crunch. Times have changed now. Though, India might be China’s flourishing trade partner, China has been audaciously investing seven times more of finance in building nuclear weapons in Pakistan.

Well, marriage is definitely on the cards. But before that, lets look into the divorce.

When Wen Jiabo visited India, the two countries did not talk about

1. The stapled visa issues in which China did not stamp visas on the passports of Indians belonging to the Jammu Kashmir region. This episode has been causing ferocious controversy for the past months. It also questions the value of independence which Kashmiris have. They anyways feel isolated with the entire Indian constitution having different laws for them. A process of excluding them, deliberately enforced by China can actually rub them the wrong way.

2. The increase in Maoist insurgency in India. It is believed that concept of Maoism initiated as an emulation of Communist party of China. Maoists have been trained in regions of Sri-Lanka and China. Though, China denies such linkages. Even India, has not properly researched and investigated enough on this symbiosis of China, Naxalism and India.

3. The dramatic increase in Chinese insurgency in Ladhak. The rampant mushrooming of Chinese border incursions reached to 280 in the year 2008.

Basically, India needs a secure position in the Security Council of UN. The other four nations have openly supported. Who remains now? Well, China.

But there is another twist in this story of divorce between the two most populous nations of the world. Here comes the role of the USA. America has been an ally of India right from the Sino-Indian war. Thus, to counterweight its position, China chose to back Pakistan.

The very exact relationship gets revealed when you investigate the military defense level of these three countries. Flawlessly leading, America is followed by China and then India. The Indian Ocean proves to be one very strategic ground of import-export of trade items. After the Second world war, America has no option but to keep away from the route of Persian Gulf and Indian Ocean. That is exactly where China wants to hit the target.

One must also take into consideration that the trail of Indian Ocean subtly envelopes the Muslim population of South Asia. One of the major reasons of China hitting off with Pakistan is to secure a position in the Muslim world. Until and unless, China does not do so, it can not be a world power.

Apart from Pakistan, China has also been giving oodles of money to Sri Lanka to fight against the Tamil Tigers. Other countries which are receiving finance are Burma and Nepal.

What infuriated China against India is the 51 year asylum granted to Dalai Lama by India. Well, there are 1,30,000 Tibetans still facing the exile. China’s brutual rule still jeopardises the lives of many people in the Tibetan Plateau.

So, lets oversee how the proposal of marriage has been executed.

1. China plans to establish a rail link from Xinjiang in China to Khyber Pakhtunkhwa in Pakistan, crossing the Karakoram Ranges. Though, China wants to further penetrate into  the Iranian plateau with this endeavor. Its like a new Silk Route from China to the Meditteranean, linking Iran, Pakistan, Afghanistan and Central Asia.

2. With India, China promised to sign deals worth $16 Billion but with Pakistan, the number rose to $25-35 Billion. China is currently offering Pakistan 50,000 jobs also.

3. Pakistan is also getting a staggering financial aid for building two nuclear power plants at Chashma.

There are reasons why China initiated this relationship

1. Pakistan is an open door to the Muslim world.

2. Serves as an open market for Chinese goods.

3. China gets cheap metal from Pakistan

4. Diplomatic relations and modernization of the military processes.

5. Expansion of Navy in the Indian Ocean.
6. To keep India at her best behaviour
7. To threat America

All that India can do now is to wait for China’s verdict for the Security Council opinion. She needs to treat her relation withh China as a different one from the bilateral relationship which China shares with Pakistan.

What can be hoped is that 1962 would not be repeated. Lets hope these two-supposedly-would-be superpowers of the world know how to treat their differences with mutual agreement and understanding.

P.S: International politics is as ambiguous and raucous as Indian politics

U.S Raids in Pakistan

US Military commanders reveal that there would be more raids in Pakistan in the coming months.

But this very moment USA is dealing with two major concerns.

1. The sudden death of Richard Holbrooke last week. He was the special representative for US in Afghanistan and Pakistan in the Obama Administration. At the same time, Holbrooke had not caused any dramatic breakthroughs in US-Afghanistan relationship and unfortunately, was never able to evoke a productive understanding with Afghan President Hamid Karzai.
2. The Obama administration now needs to withdraw its military troops in Afghanistan in next six months. The deadline is approaching and not much has been achieved.

Well, Obama in this video clearly mentions the reasons behind deploying troops in Afghanistan, he diplomatically avoids the next big question- why US Raids in Pakistan?

In the past decade, US has been implementing rampant forays into the Pakistani grounds, especially in the tribal regions. All of this has been done by the unmanned aerial vehicles/drones under CIA to target the base units of Al Qaeda. Unfortunately, the normal civilians are being man-slaughtered with their mosques and hospitals being exploded in front of their eyes.

Right now, there are around 200 US military troops in Pakistan. Around 60-120 are guarding the American Embassy in Islamabad as you read this article. US claims that Al Qaeda has been taught a lesson now. They do not have grounds to train themselves, even travel and survive anymore. But is it the reality?

Why Pakistan?

Pakistan is six times the size of Afghanistan population. There are 5,00,000 army officials and a huge diaspora to boast of. The very top leader of Afghan Taliban resides in Baluchistan under flawless Pakistani millitary intelligence. Well, Pakistan has been also able to prevent US from launching drone attacks in this region.

Moreover, Pakistan also shares close ties with the Haqqani Network-an insurgent group and Hezb-e-Islami Gulbudin, another Afgah islamist political party.

But at the same time, the country also suffers from four serious issues of

Uncertain political rule
Despair among common civilians
Hunger
Fundamentalism
No one knows how Pakistan is, if it actually is, trying to root out the militants in its tribal areas. But at the same time, how can US, which could not give any positive output of his war in Afghanistan, even think for a minute that these raids can make a difference?

At the same time, there is no guarantee that the American Special Operations troop would be able to capture militants. US has launched only handful of incursions in Pakistan-Afghanistan border in the past nine years, without much positive impact but massive butchery of innocent lives.

For example, this October, an American helicopter killed few pakistani soldiers by mistake, considering them to be Afghan Talibans. in 2008, several Pakistani tribal people had been killed by the US military troops just because they thought they were insurgents.

Well, where is the justice?

Nothing concrete had been done by the diplomats and development experts who had been posted in Afghanistan. Even, Holbrooke just talked about how the agriculture industry should be helped and how the civilians should be employed more to get more funding, but nothing was actually done. There was no reconciliation to whichever level in what so ever possible manner. The co-operation between Pakistan and Afghanistan still remains a very blurred line.

It somehow is difficult to understand why Obama himself visited Afghanistan but has chosen to tour Pakistan next year. And at the same time, he is talking about implementing raids.

Unfortunately, today US is seeing or perhaps, pretending to show the world, that it would fight terrorism. Sounds very insidious. This is the same US which actually gave economical/financial support to Pakistan so that it does not support USSR. And now, when the same country is slowly turning into a bitter opponent, random raids which might kill innocent civilians proves to be the only answer.

P.S: For once, it should be beyond nations but towards people.

Why is Obama visiting India?

If you are the president of a nation which is literally raped by recession, would you still invest $200m-a-day to visit India? If your answer is yes, lets talk.

I fail to understand the reason behind the visit, especially at this time of the year when US itself is going through the mid term elections.

As usual, Obama is being criticized for some random choice or the other. Sometimes, I feel he is nothing more than a scapegoat who was honored for being the first black president and after that, trusted with so much of expectations and scrutiny that his entire identity got doomed.

Another question which comes in my mind is that is India being actually sold to American imperialism through this three day visit? I mean, we have become so Americanised that the only thing left is perhaps to have the US president out here.

If relationships with New Delhi are so important, why is nothing ever said about the funding which U.S did for Pakistan? Why Right to Information act does not work in this case? Why do we know, simply nothing?

On the other hand, is India ready to host Obama? The two priorities which are the main issues of discussion are
a. Nuclear Treaty
b. Higher education

What have been the updates regarding these two issues? Please do not mind sharing if you know them.

The only fact of International politics which appeals to me is that it is simply unpredictable. Even though, every move, every step is just so flawless and planned.

Once again, are Americans paying the tax to fund the travel costs of their president? On one hand, Obama has cut down outsourcing and employment opportunities for Indians in US and on the other hand, he manages to dream of improving relations?

Improving relations means more brain drain for India. So, what is the profit and loss statement for my country?

There would be a three day picture of cultural beauty, unity and flawless charm built all around, hiding the painful truths and differences in the fake disguise. Can Obama do anything?

If Obama can, I pray he should. Irrespective of whatever I hear about him, I respect the man. I respect the fact that he is taking out time and coming to India. Who does that? No one.

But I still do not understand one simple reason- why?

P.S: India Shining?