Current Affairs Archives - Page 3 of 11 -

Yahoo’s Tieup

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Internet voice over Jajah, became a part of the Yahoo group on Tuesday. Jajah became the phone service for Yahoo Messenger. Jajah will replace the current VOIP of Yahoo. It looks like that both Yahoo and Jajah will be in an advantageous position. Yahoo will be relieved of the obvious problem that it faces with the ever changing VOIP. Jajah will also be in a more advantageous position too as it gains from the partnership monetary side and in terms of exposure.

With the ever changing quality of voice over internet services it has become imperative that both the quality and the numbers are kept up. So this wise move by yahoo would definitely turn in its favour!

The News

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Back home, the news seems to be the increase of the CRR by the RBI to tackle inflation. This move is aimed at making the rupee stronger, but since tuesday there seems to be no change to this effect. It looks like the favourable position of the Rupee would be around 39/- per dollar. In a move that was supposed to make the Rupee stable, one cannot see any such improvement. One of the reason might be that the oil dealers had bought dollars in large numbers to tackle the growing crude oil prices. This increased buy of dollar might have off set the effect that increased CRR should have had on the rupee.

Well Since the RBI has involved itself and has bought in monetary measures to tackle the inflation, we need to see how the policy would improve the situation. RBI in a statement on televisions had said that they would like to reduce the inflation to the tune of 5.5%

Financial Crisis Extending?

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Yes, you guessed it right, I am busy traveling, but yet as many others I do keep a tab on the happening of the global economy. The Financial crisis in the United States as you all know does have a global impact. When many analysts are speculating if the time has come for the economy to take a ‘U’ turn, the crisis just seems to present itself in a whole new picture. This time it is the worlds largest brokerage firm ‘Merrill Lynch’ which has posted its first quarter loss, after taking down billions in write downs. The first quarter net loss seems to be in the tune of $1.96billion. This news did have an effect on its share prices and according to ‘Reuters’ the shares were down 16.4 percent.

What impact would this have on the rest of the economy is quite understandable. The effect of the financial crisis is definitely affecting the global economy and measures to curtail the effect need to be implemented at the earliest.

Nosedive

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With the skyrocketing fuel prices, and slower economic growth, the U.S Airline industry is poised for a downturn and reports have that about three smaller airlines have closed shop. One of the major solutions for this seems to be consolidated airlines; yes I am talking about mergers. According to ‘Reuters’, Delta Airlines will buy Northwest for more than 3 billion, to create the worlds biggest Airlines.

After taking up $35 billion in losses in 2006, mergers seem to be the only solutions which would lead to higher fares and preferably lower cost. Never before has the Airline industry felt the need to cut cost in a combined effort. The new combined Airline is awaiting regulatory approval, on receipt of which the new Airlines would be headed by Richard Anderson and would be headquartered in Atlanta.

With both the management awaiting regulatory approval there seems to be some ‘union’ issues between both the Airlines, which is yet to be sorted out. The issue seems to be that the unions could not come to an agreement as to how to work under one security umbrella!

Boeing in for Trouble?

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Boeing has put forth a further six month delay for its 787 dream liner plane. This is a third time that there has been a delay, first delivery is to be in the third quarter of 2009 (initially the release was in to be in the May of this year). Well looks like Boeing would have to pay the price for this delay, Air New Zealand, Air India, a Nippon Airways and Japan Airlines say that they might lay claims for the delay.

It looks like that there are 50 airlines are waiting for 892 Boeing 787’s worth $145 billion at list prices. Even with such a trouble brewing it looks like they seem to be performing well at the market with their shares jumping to the tune of about 4.8%. 787 is still the most sought of the airlines and looks like the customers of 787-3 would have to wait for the longest, as Boeing plans to concentrate on 787-8 and 787-9.

Where is the economy heading

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I have always wondered about the rate of growth in India and the growing rate of Inflation. What would be the outcome? My question seems to be answered with Reuters blog, which seems to analyze both Indian and Chinese economy. Elvis Picardo’s * article in ‘Reuters’ has analyzed the trend in both these markets. According to a study, India and China though boasts of a growth trend in the stock market as follows:- “China’s benchmark CSI-300 index is still up almost 250 percent over the past two years. India’s BSE-30 or Sensex index has surged 390 percent over the past five years.” Yet this year there is a massive drop in the performance with a drop of 28% in case of China and 22% in case of India.

In the flip side both countries currency seems to have appreciated by about 16%and as you all know inflation in case of India has touched the staggering 7% level and that of china at 8%. The second concern that Picardo writes about is called as valuation and when investors take a hard look at the stock markets in both the countries, it may be that the stock markets might be overvalued.

Yes I agree with Picardo when he says that the party has been good so far but both the countries need to look at the situation right now and take steps to improve the situation

Yahoo’s new tool

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When the corporate world is deep into mergers and acquisitions, Yahoo has decided to introduce a new advertising tool called as AMP, through AMP Advertising agency or advertisers can purchase or sell a variety of ad. inventory.

“AMP’s code name is APX. which is again a part of the Yahoo’s internal development and part of the technology acquired by Yahoo”.

According to RedHerring, advertisers can use AMP to locate ad space in over 600 U.S newspaper. Redherring reports that AMP would be introduced in the third quarter of 2008. While many welcome the new tool which was built on the observations that even committed customers always look at other sites, many are are of the view that there is a mismatch between Yahoo and AMP.

U.S in the same situation as Japan?

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In an article in ‘reuters’, Investment Analyst Elvis Picardo compares U.S situation currently to that of Japan’s during 1980. According to picardo in the 80’s Japan was caught in the vicious circle of real estate and debt crisis, the mistake was lack of transperancy, delay in the measures by the Central Bank etc. But in case of U.S the situation is different and I couldnt agree with him more. Every effort is taken to make sure that the crisis is arrested, there is absolute transperancy in fact about $200 billion has been declared as mortgage related write downs in the U.S, Fed has been giving rate cuts to boost the confidence of the people and to increase the investment level.

In conclusion the debt trap might be identical but the U.S economy has been handling the crisis in such a way that it is arrested and situation is being reversed and it is quite soon that we would see the morale of investors surging and the economy on an upward swing. This is quite vital as the same would affect the global economy too.

Rate cut boosts the economy.

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The Federal Reserve on Tuesday went ahead with its plan and slashed interest rates to 3/4 points. The reaction of the economy was good after the rate cut. Infact the global market was up after the news, by the end of the U.S trading the DJIA jumped to 420 points or to a tune of 3.5%, NASDAQ and S&P 500 rose to around 4%. Fed has also assured to those who had expected a further rate cuts that there is room for further rate cuts in the future but those cuts would take into consideration the ‘inflation rate’. Fed has not ruled out about the slowing economic growth in spite of the rate cuts.

The rate cuts have so far given positive response and the market would definitely be on the up with anticipation of further rate cuts. Taking the conditions of the economy the Fed. have promised reducing the borrowing rates in case of need. The Fed.’s as you now have been on a rate cutting spree since September when the economy started slipping down.

The rate cut not only spells good news for the U.S economy but also to the world because the other economies have been acting on cues or signals sent from the U.S economy and this would only help the situation to get better.

Follow Up: MSFT & YHOO

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Like the rest of you, even I am quite curious to know about the outcome of the Microsoft and Yahoo partnership. As a best source of information like always I trust Reuters. Apparently both Microsoft and Yahoo met on Monday for a session, in which Microsoft talked of the ‘vision’ ahead of a combined company. No bankers were present at the meeting and hence no negotiation could have been done. Well as you all remember the entire process was stalled when Microsoft’s offer for $42 billion was considered too less a sum by Yahoo. I guess it has been almost three months since both the companies since the first talk. What would be Yahoo’s reaction has become the most interesting guessing game.

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