Exchange rates | The Big Mac Index
July 28, 2008
Currencies are very dear in Europe but very cheap in Asia
THE Big Mac Index is The Economist’s light-hearted guide to exchange rates. The index is based on the theory of purchasing-power parity, which says that exchange rates should move to make the price of a basket of goods the same in each country. Our basket contains just one item, a Big Mac hamburger. The exchange rate that leaves a Big Mac costing the same everywhere is our fair-value yardstick. Many of the currencies in the Fed’s major-currency index, including the euro, the British pound, Swiss franc and Canadian dollar, are overvalued and trading higher than last year’s burger benchmark. Only the Japanese yen could be considered a snip. The dollar still buys a lot of burger in the rest of Asia too. China’s currency is among the most undervalued, but a little bit less so than a year ago. The full index is available on our website by 7pm London time on Thursday July 24th.
Exchange rates | The Big Mac Index | Economist.com.
According to this, the Swedish Kroner, along with other European currencies, are very much overvalued. Damn.
Zimbabweans battle money shortages as collectors buy hundred billion dollar notes on eBay
July 23, 2008
Amid Zimbabwe’s mind-boggling hyper inflation, a new 100 billion dollar bank note has more value as a novelty item on eBay than on the streets of the capital.
The note, launched this week, is worth enough to buy a loaf of bread _ if you can find one on Zimbabwe’s depleted store shelves. Meanwhile on eBay, the bill was on offer for nearly US$80.
Notes in the millions of dollars are useful only as toilet paper and it’s cheaper to light a fire with low denomination bills than with newspaper.
In the political and economic turmoil since disputed March 29 elections, prices have risen almost daily. Factories and businesses have shut down amid empty order books and chronic shortages of gasoline, power, water and spare parts for equipment repairs.
Zimbabweans battle money shortages as collectors buy hundred billion dollar notes on eBay – News.
I still want some of these!
OSLO (AFP) – In Norway, many motorists are up in arms over why they have to pay the highest petrol (gasoline) prices in Europe when the country is the world’s fifth-largest oil exporter and a recent tax hike has done little to cool tempers.
“It is really strange: we have lots of oil and we’re a rich country. Why do we have to pay so much?” asks Per-Arne Skjerpingstad, a 38-year-old hospital porter as he fills up the tank of his Peugeot 307 at an Oslo gas station for 750 kroner (94 euros, 148 dollars).
Diesel costs 14.23 kroner (1.78 euros, 2.82 dollars) a litre (quarter gallon) and 95 unleaded 13.84 kroner, putting it at the top of the European league, EU figures show.
And while many countries are discussing how to soften the blow of skyrocketing oil prices on consumers, Norway on July 1 increased its already heavy tax take by 0.05 kroner per litre on petrol and 0.10 kroner (0.1 euro cent, 0.2 dollar cent) on diesel.
In oil-rich Norway, petrol prices most expensive in Europe – Yahoo! News.
McCain ad blames Obama for rising gas prices
July 21, 2008
WASHINGTON (AP) — Republican presidential candidate John McCain is launching a new television ad that blames Democratic rival Barack Obama for rising gasoline prices.
The ad, airing on national cable and in 11 battleground states, argues that the cost of fuel is rising because of opposition to oil drilling in the United States.
The announcer in the ad says, “Gas prices – $4, $5, no end in sight, because some in Washington are still saying no to drilling in America. No to independence from foreign oil. Who can you thank for rising prices at the pump?”
A photograph of Obama appears on the stage as a voiceover of a crowd chants: “Obama, Obama, Obama!”
McCain ad blames Obama for rising gas prices – Jul. 21, 2008.
You gotta be effing kidding me?!
Roche makes $43.7bn Genentech bid
July 20, 2008
Swiss drugs firm Roche has offered to buy all outstanding shares in its US partner Genentech for $43.7bn(£22bn).
Roche – which makes the antiviral drug Tamiflu – acquired a majority stake in Genentech in 1990 and currently owns 55.9% of all outstanding shares.
It has offered $89 per share to buy up the remaining stake, a 8.8% premium to Genentech’s Friday closing share price.
BBC NEWS | Business | Roche makes $43.7bn Genentech bid.
I wish I had held onto my Genentech stocks from January!
Zimbabwe introduces Z$100bn note
July 19, 2008
Zimbabwe is to introduce a bank-note worth Z$100bn in response to rampant inflation – but the note will barely cover the cost of a loaf of bread.
Some Zimbabweans are already calling for higher denominations in a country where the official annual inflation rate has exceeded 2,200,000%.
Independent economists believe the real rate is many times higher.
Zimbabwe’s meltdown has left at least 80% of the population in poverty, facing mass shortages of basic goods.
The country’s central bank has introduced several new notes already this year in response to the hyperinflation.
In January, a Z$10 million note was issued, followed by a Z$50 million. By June the denominations had reached tens of billions.
Oil tumbles below $130 a barrel
July 17, 2008
NEW YORK — Oil prices fell below $130 (U.S.) a barrel for the first time in more than a month Thursday, as a dramatic slide entered a third day along with a sharp selloff in natural gas.
The declines accelerated amid growing concerns about the weakening U.S. economy.
“The entire buillish scenario … is starting to crack,” said James Cordier, president of Tampa, Fla.-based trading firms Liberty Trading Group and OptionSellers.com.
Light, sweet crude for August delivery dropped $5.31 to settle at $129.29 a barrel on the New York Mercantile Exchange. Prices have fallen more than $15 in just the past three days.
The consumer price index, used to gauge inflation, has jumped 5% since June 2007. Figuring it out means the Bureau of Labor Statistics staff must collect prices for items such as pizza, laptops and ca
Kim Gomory treks more than 850 miles each month, stopping by more than 120 grocers, gas stations, restaurants, stores, health clubs and other businesses.
But Gomory, a Honda Civic hybrid owner in her 40s, isn’t a soccer mom drawing a bead on bargains. Trace a line from her calculating consumerism in Claremont, Walnut and other communities and you’ll see how national economic policy gets made.
Shielding a tablet computer with skill worthy of a CIA operative, Gomory is among 400 Bureau of Labor Statistics staffers, including about 13 in the Los Angeles area, who compile data used to calculate the consumer price index, the best-known gauge of U.S. inflation.
The latest survey, released Wednesday, calculated that the consumer price indexrose 1.1% in June — the second-largest increase since 1982 — and jumped 5% compared with June 2007. Prices in Los Angeles, Orange and Riverside counties rose 1.1% in June and 5.4% compared with a year earlier.
To the consternation of critics who say the index fails to reflect Americans’ struggles to make ends meet, the CPI is holy writ for bankers, economists, policymakers and politicians as they set mortgage and credit card interest rates, wages and government benefits programs such as food stamps and Social Security.
It costs what?! Calculating the CPI requires a lot of shopping around – Los Angeles Times
I’ve always wondered how they calculate the CPI. I didn’t realize that they actually send out individuals to shop around for these things. It’s absurdly time consuming and very subjective.
Zimbabwe inflation at 2,200,000%
July 16, 2008
The figure is the first official assessment of prices in the troubled African nation since February, when the rate of inflation stood at 165,000%.
Zimbabwe, once one of the richest countries in Africa, has descended into economic chaos largely blamed on the policies of President Robert Mugabe.
London parking fees top global price list
July 15, 2008
London is the most expensive place in the world to park a car, according to a report analysing costs across every large city.
Monthly parking rates in the City topped the list at $1,167 (€733, £586), with the West End of London second at $1,136. This is about twice that of New York’s midtown area, where it costs $585 a month, and Tokyo, where it costs $552.
Daily parking costs follow a similar pattern. The most expensive place is again the City, where it costs $68, followed by Amsterdam, London’s West End, Moscow and The Hague. The cheapest city to park is Delhi, where it costs $1.75 a day.
Scared yet? Sure, but don’t panic
July 15, 2008
NEW YORK (CNNMoney.com) — This is one of those days you probably wished you stayed in bed.
Scared yet? Sure, but don’t panic – Jul. 15, 2008
I wish that was an option. It was such a roller coaster morning.
6:30am (west coast!) – Yikes. *sets buy order* Can’t get much worse right?
6:45am – Oh yes it can. *panics*
7:45am – Go for a run to take mind off this mess.
8:30am – Checks again. Why me?!
9:45am – Leaves for class. *avoids checking on the way there*
11am – Things are turning around. *feels smart for buying*
12am – I’m seeing green!
1pm (market close) – Wait, what?!
NEW YORK (Reuters) – Oil dropped more than $6 on Tuesday, the largest drop in dollar terms in 17 years, as growing concern about the economic health of top energy consumer the United States stirred demand worries.
U.S. Federal Reserve Chairman Ben Bernanke said financial markets were under “considerable stress,” adding to concerns about the strain of the weak housing market and high energy and food prices on the U.S. economy.
U.S. crude settled down $6.44 at $138.74 a barrel, the biggest one-day drop since 1991, when prices retreated at the start of Operation Desert Storm. The session low was notched at $135.92 earlier.
Oil plunges $6 on mounting economic concern – Yahoo! News
Nothing was safe today.
Bank shares sink to 1996 levels on loss fears
July 15, 2008
NEW YORK (Reuters) – U.S. bank shares fell to their lowest level since 1996 on fears of greater credit losses for an already battered sector.
The 24-member KBW Bank Index (.BKX), consisting mainly of the biggest U.S. banks, fell as much as 7 percent on Tuesday.
They closed down 3.1 percent, recovering some losses after Federal Reserve Chairman Ben Bernanke affirmed that helping financial markets return to normal functioning was a top priority for the central bank.
Stella firm buys Budweiser brewer
July 13, 2008
BBC NEWS | Business | Stella firm buys Budweiser brewer
The US brewer Anheuser-Busch has agreed to be taken over by Belgium-based InBev, in a move that will create the world’s largest beer maker.
The $50bn (£25bn) takeover bid by InBev, which makes Stella Artois beer, was accepted by Anheuser’s board.
The combined company will now be called Anheuser-Busch InBev.
Anheuser makes Budweiser – the most popular beer in the US – and some US politicians had expressed anger at the prospect of a foreign takeover.
S.& P. 500 Enters Bear Market as Stocks Plunge
July 9, 2008
S.& P. 500 Enters Bear Market as Stocks Plunge – NYTimes.com
Half an hour was all it took for a dreary day on Wall Street to turn dire.
Widespread fear about the health of the mortgage industry took hold Wednesday afternoon, and investors could not shake the jitters. The Dow Jones industrial average, already swimming deep in negative territory, dived 75 points in the final 30 minutes of trading and finished down 2.1 percent at its lowest close of the year. The sell-off marked the third consecutive day that trouble at big mortgage lenders has resulted in steep volatility in the stock markets. Slumping shares of financial firms dragged the Standard & Poor’s 500-stock index, the broadest measure of the equity markets, into its first official bear market since 2002.
Not looking good.
lyndon. 