Friday, November 14, 2008

Bleak Forecast

(edited / updated)

America has finally exported its newest and biggest national product to the Eurozone -- Recession. As of today, Italy and Germany are officially in recession and the United Kingdom thinks the country too is or in the brink of an imminent recession.

Nothing surprising really as the German economy has been ailing for quite some time thus it is the most vulnerable among the Euro pack. As for Italy, who in the world could be serious with the clown Berlusconi? His recent “suntanned” remark about Obama created a wild debate – Was he being a racist or just being himself, an idiot?

BBC articles:

German economy now in recession

The UK is on recession watch

Eurozone in recession

Recession means negative growth of Gross Domestic Product (GDP) for two consecutive quarters. If this continues for a couple more quarters, Depression will occur.

On the BBC site, it quoted an old line – “A recession is when your neighbour loses his job - a depression is when you lose yours.”

Of course, the media will always focus on bigger countries in the Eurozone because they obviously have bigger economies, GDP per capita, etcetera, while smaller yet rich countries are always overshadowed. Its also a good thing I reckon as exposure for smaller rich countries are not as risky as big countries like France, Germany, Italy, UK and Spain.

Anyhow, there will be some churn definitely in the flatlands as UK and Germany are important trading partners. On the news on TV tonight, Minister Bos of Finance warns the public for some downturn in the Dutch economy in 2009, although right now no one here really feels the crisis, well perhaps not just yet?

Sinterklaas is fast approaching and I am very curious if spending will again be a breakthrough this year, as it is known every year.

I personally am beginning to get a bit worried how the business will pick up in the first quarter of 2009 and moving onwards. But yeah, this is typically me, although I risk, I balance my business outlook with criticalness, conservatism and skepticism. Not the most ideal situation really when you are in a stressful sales job confronted daily and constantly with numbers - targets - profits.

Market and technology analysts say that with the type of business we are in, SaaS (Software as a Service), will not be directly affected as compared to businesses with traditional software licensing models, and in fact steady growth might even ensue due to this crisis.

Well, we wait and see as this downturn does not seem to have an end on sight.

Here is an economic statistics gallery from CNN of 11 nations (Brazil, China, Germany, Iceland, India, Japan, Russia, Saudi Arabia, South Africa, United Kingdom and United States of America) going through an economic slump:

Apologies for the bad quality but to see a much better view, please click to enlarge.

CNN article:

Gallery of 11 nations in global crisis

In the chart Germany registered as the most expensive gas per gallon (we use liter in Europe but CNN is an American firm of course), but this is cheaper compared to the Netherlands. We are probably paying between $9-$10 per gallon and of course this is inflated with the milking cow product of the country – tax.

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