Wednesday, June 30, 2010

Internet and Economics !!

Gone are the days when you had to travel miles to get a book, to buy grocery items, to purchase clothes or to book a movie ticket in advance. Now it's just a matter of some mouse clicks and there you go, Home delivery!!. Internet transcends boundaries. No matter where you are you can get whatever you want from anywhere in the world. If you live in the California, USA and really want to buy Parisian lingerie, you can easily order it on Internet. Thats the kind of impact Internet has brought about in our lives. It has revolutionized the way people do businesses by expanding markets to a global level and thus has contributed in growth. Growth is dependent on consumption and spending. The more the consumers consume, the greater will producers be willing to produce, which in turn increases the output and thus growth of an economy. This kind of globalization also increases competition not just at a domestic level, rather at an international level, which is again advantageous for the consumers. It is a win-win for both the consumers as well as the producers.
E-commerce sites like Amazon and ebay who are the pioneers in this field of selling and buying online have made it comfortable for the consumers to purchase the desired items while sipping a cup of coffee under A/C at home. Isn't that amazing compared to the effort we used to make to get the smallest of things earlier.
And now with the growth of broadband and wireless services and with the advance of Internet facilities in developing countries, the markets are going to heat up and the spendings and revenues are bound to go north. Internet and economics have a long way to go together.
Hail Vinton Cerf!!(Inventor of internet)

The Great American Dilemma !!

Ever since the recession started with the break-out of Lehman Brothers in September 2008, Chinese have been teasing the superpower in one way or the other. USA doomed by it's financial instability has been caught off guard by the Chinese, who are leaving no stone unturned to harass the Americans. Chinese has been manipulating their currency right since the beginning, but it is only now that it is causing tremors in the American and European economies. They have deliberately regulated their currency to keep it at a lower level in order to boost it's exports. As a result of which the demand for cheap Chinese products have increased astronomically, and that of the costlier domestic goods has declined drastically. Dead are many american manufacturing industries because of this. Europe is also reeling under pressure created due to excessive demand for Chinese exports which are much much cheaper than their own. This has in turn raised the unemployment level to an all time high.
On one hand US government is criticized for adopting protectionist policy and at the same time, this ploy by the Chinese is their game plan to overtake the US economy. One would say that lowering of prices is good for the consumers, but the question to be asked is How long an economy can survive the negative output growth due to reduced demand for domestic products. Ultimately consumers are also producers. They earn through producing and consume using their disposable income. If all the goods we consume are from other countries, what will be the source of income for our men. If it's only USA which is expected to consume the Chinese products and Indian services, what would our men do? Developing countries on the other hand encourage their citizens to save and also provide considerable incentives for that matter. Is the whole world contemplating to overcome recession only through US spending?. President Barack Obama has got a lot of work to do to keep the American expectations alive. He needs to handle the matter diplomatically and try to put international pressure on Chinese to remove unwarranted regulations on their currency to make the playing field leveled for everybody.

How did Apple beat Microsoft?

Apple Inc shot past Microsoft Corp as the world's biggest tech company based on market value, the latest milestone in the resurgence of the maker of the iPhone, which nearly went out of business in the 1990s.

Shares of Apple are worth more than 10 times what they were 10 years ago, as it has profited from revolutionizing consumer electronics with its stylish, easy to use products such as the iPod, iPhone and MacBook laptops.

The last time Apple had a higher market value than Microsoft was December 19, 1989, according to Thomson Reuters Datastream.

Microsoft, whose operating system runs on more than 90 percent of the world's personal computers, has not been able to match growth rates from its hey-day 1990s. Its stock is down 20 percent from 10 years ago.

Apple, which struggled for many years to get its products into the mainstream, resorted to a $150 million investment from the much larger Microsoft in 1997 in order to keep it afloat. At that time, Microsoft's market value was more than five times that of Apple.

Microsoft still leads Apple in sales. In the latest quarter, Microsoft reported $14.5 billion in revenue compared with Apple's $13.5 billion.

Cupertino, California-based Apple is now the second-largest company on the Standard & Poor's 500 index by market value, behind energy behemoth Exxon Mobil Corp.

Tuesday, June 29, 2010

Facebook Threatened !!

Facebook which is adding users astronomically has been recently threatened with the news of Google launching a facebook competitor. The rumour mill began churning after Digg founder Kevin Rose posted a tweet last weekend (saturday to be precise), saying, "Ok, umm, huge rumor: Google to launch facebook competitor very soon 'Google Me,' very credible source."
Wondering how Google Me will really work? Experts believe that Google already has almost 30 different social properties that it has acquired or built including YouTube, Picassa, Google Profiles, Google Docs, Google Friends Connect and Google Latitude. So, the company largely has almost every component that it requires to built a Facebook killer. All it needs to do is a bit of organisation and create a common platform for all these networks.
With facebook keen on expanding it's operations and having already spend millions on the blueprint of the expansion palns, this news can shake it financially. Google is known to give a tough competition in whatever field it enters.
Writes eWeek's Clint Boulton, "Google challenging Facebook in social is like Facebook challenging Google in search," he writes. "People are comfortable socializing on Facebook, which is where their friends (and their friends of friends are) and they are comfortable searching on Google, which is where all of the data about businesses, places and other facts live. Unless and until there are technological improvements on both sides, paired with practical user behavior shifts from consumers, never the twain shall meet."
While analysts may continue to debate the issue, the rumour has been further fanned by Adam D’Angelo, former Facebook CTO and now founder of Q&A service Quora (on Quora only).

Here's what Angelo wrote on Quora.

* This is not a rumor. This is a real project. There are a large number of people working on it. I am completely confident about this.

* They realized that Buzz wasn't enough and that they need to build out a full, first-class social network. They are modeling it off of Facebook.

* Unlike previous attempts (before Buzz at least), this is a high-priority project within Google.

* They had assumed that Facebook's growth would slow as it grew, and that Facebook wouldn't be able to have too much leverage over them, but then it just didn't stop, and now they are really scared.

Funny economic quotes:

Lets start with a few funny quotes on economics which state a fact as well:

An economist is a surgeon with an excellent scalpel and a rough-edged lancet, who operates beautifully on the dead and tortures the living.
More funny Nicholas Chamfort quotes
Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidise it.
More funny Ronald Reagan quotes
An economist is a man who states the obvious in terms of the incomprehensible.
More funny Alfred A. Knopf quotes
An economist is a man who knows a hundred ways of making love but doesn’t know any women.
More funny Art Buchwald quotes
I've talked to you on a number of occasions about the economic problems our nation faces, and I am prepared to tell you it's in a hell of a mess—we're not connected to the press room yet, are we?
More funny Ronald Reagan quotes
For those of you who don't understand Reaganomics, it's based on the principle that the rich and the poor will get the same amount of ice. In Reaganomics, however, the poor get all of theirs in winter.
More funny Morris Udall quotes
Economy is going without something you do want in case you should, some day, want something you probably don't want.
More funny Anthony Hope quotes
Blessed are the young, for they will inherit the national debt.
More funny Herbert Hoover quotes
In all recorded history there has not been one economist who has had to worry about where the next meal would come from.
More funny Alfred A. Knopf quotes
If God had meant there to be more than two factors of production, He would have made it easier for us to draw three-dimensional diagrams.
More funny Robert Solow quotes
In the dog-eat-dog economy, the Doberman is boss.
More funny Edward Abbey quotes
In all recorded history there has not been one economist who has had to worry about where the next meal would come from.
More funny Peter Drucker quotes
Inflation is when you pay fifteen dollars for the ten-dollar haircut you used to get for five dollars when you had hair.
More funny Sam Ewing quotes
A budget tells us what we can't afford, but it doesn't keep us from buying it.
More funny William Feather quotes
Ask five economists and you'll get five different answers - six if one went to Harvard.
More funny Edgar R. Fiedler quotes
An economist is an expert who will know tomorrow why the things he predicted yesterday didn't happen today.
More funny Laurence J. Peter quotes
An economist's guess is liable to be as good as anybody else's.
More funny Will Rogers quotes


Economics, What importance does this term hold for an individual? For some, a minuscule change in the economic policy of their respective country can bring about a huge change in their incomes and thus in their lives, while others are not affected at all. In this era of globalization countries are interdependent, a slight change in US monetary policy can send Indian stock market south without many individuals even comprehending the reasons. A fall of a financial institution In Greece can send not only the European economy but the world's economy into depression. So, it is not just sufficient to know what's happening in one's own country, it is quite vital to know how the other economies are acting. In this world of cut-throat competition, those who react to the aberrations first are like to be in the lead. For ex. a rise in the interest rates is likely to make it difficult to acquire capital and thus can result in the lowering of output and consequently lower profits. In short, the market will react negatively to this news and the individuals who understand this will sell their securities first and thus will avoid the slump, the others would bear a loss. It is thus all the more important for the investors of future investors to keep track of the economics of the world.
In this time of recession where the world, specially the developed countries, are trying to avoid a depression, it is all the more important to keep in touch with the advances in the policies world around. And for those who want to have some fun along with some learning in this most widely studied field, this blog will explain real time activities that directly affect our lives, For ex. Why is the IPhone so cheap in USA while exorbitantly expensive in countries like India and China ?

Looking forward for your comments.