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Unemployment Claims Report

July 2, 2009

Is less bad news a good news? Some might say last week’s unemployment claims report might seem like it is. The figure for initial claims was down 16K from the previous week to 614,000. The four week moving average tumbled at a lower pace, and the figure came out to 615,250, down by 2,750 from the previous week’s revised average of 618,000.

On the other hand, not all’s good with the report. The unemployment rate has gone up from 9.4% to 9.5%, so already unemployed people like me have been joined by more and more people last week.

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Jobless Claims Report 06/18/2009

June 18, 2009

Finally some good news…

The Labor Department said Thursday that the total unemployment insurance rolls fell last week by 148,000 to 6.76 million, the largest drop in more than seven years and an indication that layoffs may be easing (or may be that excessive capacity is shrinking to a level where “easy” layoffs are no longer possible).

Also, the initial claims rose 3,000 to a seasonally adjusted 608,000 last week, above analysts’ expectations. The four-week average fell by 7,000 to 615,750.

The drop in continuing claims could signal a slowing in the rise of the unemployment rate (which means we haven’t bottomed out yet, and there is more bad news to come), which reached a 25-year high of 9.4 percent in May. Many economists forecast the rate could reach 10 percent by the end of the year (that could be the bad news).

Economists also are closely watching the level of first-time claims for signs the economy will recover by mid-summer (which I believe is a highly optimistic view of current trends), as many analysts predict.

First-time jobless claims are a measure of the pace of layoffs and are seen as a timely, if volatile, indicator of the economy’s health. Initial claims stood at 390,000 a year ago (remember, they are at 608,000 right now, so a long way to go back to the normal levels around 400K).

Among the states, Pennsylvania (followed by Florida, Ohio, California, New York, Puerto Rico, Wisconsin, Arizona and Nebraska) reported the largest increase in initial claims for the week ending June 6. (I wonder where is Michigan in all this, oh… I forgot, MI already has the highest unemployment rate in the country, so not many jobs to lose anymore… and I’m seeing this first hand).

So I were I (which I am), I would not put all my hopes on getting a job very quickly. Another couple of months in hibernation could cool things down.

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CPI for May 2009

June 17, 2009

The Consumer Price Index (CPI) is a measure of the average change in prices over time of goods and services purchased by households.

How is it calculated: The CPIs are based on prices of food, clothing, shelter, and fuels, transportation fares, charges for doctors’ and dentists’ services, drugs, and other goods and services that people buy for day-to-day living. Prices are collected in 87 urban areas across the country from about 50,000 housing units and approximately 23,000 retail establishments-department stores, supermarkets, hospitals, filling stations, and other types of stores and service establishments. All taxes directly associated with the purchase and use of items are included in the index. Prices of fuels and a few other items are obtained every month in all 87 locations. Prices of most other commodities and services are collected every month in the three largest geographic areas and every other month in other areas. Prices of most goods and services are obtained by personal visits or telephone calls of the Bureau’s trained representatives.

In calculating the index, price changes for the various items in each location are averaged together with weights, which represent their importance in the spending of the appropriate population group. Local data are then combined to obtain a U.S. city average.

The latest report can be found here. Here is a snapshot of the latest figures:

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Unemployement insurance weekly claims report

June 4, 2009

The most (un)popular weekly statistic, especially during the recession, is out and things are not getting better, or worse (or for the eternal optimist they are, because of a slight dip in unemployment). According to the report, in the week ending May 30, the advance figure for seasonally adjusted initial claims was 621,000, down from the previous week’s revised figure of 625,000. The 4-week moving average was 631,250, up from the previous week’s revised average of 627,250.

On the other hand, U.S. productivity has improved at a great pace, mostly due to large amount of shedding in number of workers and cutting hours, which occurred at a great pace than the slump in output.

So, let’s connect this to today’s drop in treasury rates. During the recession, US has been borrowing a lot to make up for its public and private spending. To cover for its fiscal and trade deficit, US has continually issued govt. securities (bonds/notes/bills) to lenders (like the Chinese govt. and companies). Since the entire world believes that investments in US, especially in govt. securities are one of the safest bets (called the safe haven effect), a lot of treasuries have been sold in the past few months. Since the government has to service this debt, the fed kept the interest rates pretty low (and sometimes almost zero) on its securities. As less and less people file for unemployment benefits, more private and corporate tax is paid in to the government, helping it to reduce its deficit and service (and also reduce) the debt. So, the better the unemployment numbers, the higher the yields on treasures.

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Economic Calender – Week of May 18, 2009

May 21, 2009
Date Time (ET) Statistic For Actual Briefing Forecast Market Expects Prior Revised From
May 19 8:30 AM Building Permits Apr 494K 530K 530K 511K 516K
May 19 8:30 AM Housing Starts Apr 458K 525k 520K 525K 510K
May 20 10:30 AM Crude Inventories 05/15 -2.10M NA NA -4.63M
May 20 10:35 AM Crude Inventories 05/15 - NA NA NA -
May 20 2:00 PM FOMC Minutes 04/29 - NA NA NA -
May 21 8:30 AM Initial Claims 05/16 631K 620K 625K 643K 637K
May 21 8:30 AM - 05/15 - NA NA NA -
May 21 10:00 AM Leading Indicators Apr 1.0% 0.7% 0.8% -0.2% -0.3%
May 21 10:00 AM Philadelphia Fed May -22.6 -18.0 -18.0 -24.4

Courtesy – Yahoo Finance

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Economic Review 2009-05-21

May 21, 2009

The first thing I learned in my economics class was the difference between a news and a report. A report is something that comes out as expected. E.g. I did okay in some of the accounting classes, that is a news. Because everybody expected me to do so. However, I did pretty well in my sales class, much better than anybody (including me) expected. This is news, because it raised some eyebrows, or was a surprise.

So, how does the jobless claim numbers look today? The number of U.S. workers filing new claims for unemployment benefits fell more than expected (and that’s what makes it a news) last week. Initial claims for jobless benefits fell 12,000 to a seasonally adjusted 631,000 in the week ended May 16, as compared to previous week’s figure of 643,000 (revised from 637,000).

The four-week average of new claims fell 3,500 to 628,500. Continuing claims rose 75,000 to a new record 6,662,000.

Not adjusted to reflect seasonal fluctuations, Michigan reported the largest jump in new claims (no surprise there) during the May 9 week due to a double-digit increase in layoffs in the struggling auto sector. Kentucky, Virginia, Indiana, Tennessee and Ohio also reported increases in layoffs in the auto sector.

So, the 12K drop is news…

Now, is this a good news? Let’s find that out. All we have to do it look at the leading stock indexes (isn’t INDICES the word?).

As of now (1:00 PM), the major stock indexes look like this

Last Change % Chg
DJIA 8298.03 -124.01 -1.47
Nasdaq 1694.59 -33.25 -1.92
S&P 500 889.88 -13.59 -1.50
DJ Total Stock Market 9095.94 -145.60 -1.58
Russell 2000 480.01 -9.34 -1.91
Global Dow 1605.21 -22.44 -1.38
Japan: Nikkei 225* 9264.15 -80.49 -0.86
DJ Stoxx 50* 2098.76 -44.01 -2.05
UK: FTSE 100* 4345.47 -122.94 -2.75

So, the stock markets took a collective nose-dive after the disappointing unemployment claims. It is because even though the number of claims were down this past week, they have been at a record high in the last few months. However, more importantly, one more thing has effected the stock market. Former Federal Reserve Chairman Alan Greenspan suggested that the financial crisis has yet to end.

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And I’m back…again!

May 15, 2009

So, I’m officially an MBA. The graduation weekend was whole lot of fun, but it was a bittersweet moment for me. Leaving all my friends behind, I embarked on a very special trip back to my wife, who lives in this lively city of Detroit (or Auburn Hills to be precise).

So, what do you get out of an MBA… let me see… ummm… uh… okay… I guess the following:

1. A hangover – In my case usually on a Friday morning (after Thursday Kegs)

2. A HUGE loan – The risk and inflation adjusted rate of return is very high for me to even think about paying the loan back

3. A need to get back to personal stuff – For the whole of my student life, my family made sacrifices. And now it’s my turn to get back to more personal things. So Sundays are reserved for pillow talk.

4. Looking for a job – If you graduate in this economy, chances are you don’t have a job. So, it’s high time to get back to job search.

5. Daily chores – Until you find a job, help out at the home front.

So it’s time to work on the above things…

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Slope day

April 22, 2009

What is Slope Day?
The last day of class is this Thursday (Apr 23rd), where everything (for the 2nd years) is a downward SLOPE from until graduation!!!!  Being the last day of official class, there will be lots and lots of celebratory events to commemorate this special day to send off our 2nd years.

RULES and TRADITIONS OF SLOPE DAY
1) Technically, HAVE to attend all classes
2) Must wear wacky shirt, not necessarily inappropriate, just weird.  See doc attached for examples.
3) breakfast, lunch, and dinner on GBA at school, either in commons or in courtyard
4) beer, alcohol, and non-alcoholic beverages provided from 10am – 10pm Thurs (and into friday AM also)
5) Music will be playing really all day
6) Randomness encouraged
7) Plan to stay at school until late on Thursday evening
8) camping out on lawn is likely to occur

Schedule of SLOPE DAY
9-10am Bagels in Commons
11:30-1pm Lunch in Courtyard
2-3pm Snacks, commons/courtyard
4pm Music and games begin
4:30pm CornHole for the Kids Tourney begins (email Greg Barnes to sign up)
5pm First Round of Dinner (thanks to Grad Senate)
7:30pm Second Round of Dinner (thanks to GBA)

MY TO DO LIST = get the work done and my t-shirt ready now!!!

from-mikes-camera-301

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SONY PRS-505/LC Digital Book Reader

March 27, 2009

big_prs505lc_open

The best investment one can make to learn new things is in books. And doesn’t matter if you’re this tech-savvy geek, or a casual reader, the Sony PRS-505 book reader is one of the best investments you can make. Thanks to Vrushali, I got mine a month ago, and I’m loving it! The reader is amazingly light, has an excellent battery & display, and a great software to transfer almost anything available on the web to the book (in calibre).

Now, first things first; the best features of the reader are :

Battery life – Since the display is not LCD, Its long battery life lasts up to 7,500 continuous page turns. I charge mine in two weeks (and I read my books on it everyday)

Ultra portable - As I said, it is like carrying a Reader’s Digest with you.

Impressive, paper-like display – Doesn’t strain your eyes, paper like display which uses least power

Content Storage Capability – Add any SD card and store as many books as you want

Not so impressive features:

Multiple eBook titles available – Sony doesn’t has the most impressive collection, but I’m hoping it will grow soon

More Than eBooks – I don’t use it for listening to music or watching pictures, and I don’t know why anyone would.

Now a couple of lines about calibre – By Kovid Goyal – It is a one stop solution to all your e-book needs. It is free, open source and cross-platform in design and works well on Linux, OS X and Windows. calibre is meant to be a complete e-library solution and thus includes library management, format conversion, news feeds to ebook conversion, as well as e-book reader sync features and an integrated e-book viewer.

All you reading enthusiasts, get one now!

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jaw-sun from GBS

March 16, 2009

As part of our MBA program here at Goizueta, we have the opportunity of attending mid-semester international lead week module in spring. This year we had Dubai, Brazil or China as options. And because my love for Asian food, Jackie Chan and 16 hour long flights, I chose the latter. Around 30-ish of my classmates and I left Atlanta on the morning of 26th February to embark on this 16 day trip, and landed at the Pudong Airport in Shanghai next day. The flight was long and boring; however, I carefully chose an exit row seat and hence was spared by any inconvenience generally caused by fitting a 6′3″ body into an airline coach class seat. We had a lot of fun on the flight, but after hours and hours of chatting, watching movies (btw, I happened to see two hindi movies on a Delta flight from Atlanta to Shanghai. Is Bollywood so popular now days, or was it the Slumdog effect) and playing poker (my friends and I are prepping up from Macau), we were happy to finally get back on the ground.

At Pudong Airport

At Pudong Airport

From the first minute in Shanghai, we started to see why everyone was so excited about the country. Shaghai has become one of the most modern and advanced cities in the world, and one doesn’t need to go far to discover that. The airport is connected to the city by MagLev – the magnetically elevated train that reaches the top speed of 431 kmph, and covers a distance of about 30Km in 7 mins and 10 seconds. The ride was obviously short, but very exciting.

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We finally managed to check in at about 5PM local time. Sofitel is right in middle of the commercial district. The surrounding places are very bustling and there are a lot of things to see in and around that area. There are loads of departmental stores, and other interesting stuff, and a popular nightlife destination, The Bund, is a few minute’s walk away. We had our dinner in a local Chinese restaurant, and the food was, let’s see how I put it, Interesting. But then I have another 14 days to experiment, and with the ever present fast-food chains all around the city, I had my backup plans ready. But my visit to Ronald came sooner than expected. I was too tired to go anywhere in the evening. So I grabbed fries and shake from McDonalds, and I regretted it.

We started our tour with a visit to the Shanghai World Financial Center, the tallest building in the world open for business. The design of the building is unique and the visit to the top floor was very entertaining as well. As you wait for the elevator to go up, the height at which the elevator is currently, shown on the ceiling. And the floor is lit with dancing lights, it was really catchy, and there were short light n music effects while you spend about a minute to travel 470m up in the air. Unfortunately, the view from the top wasn’t that great because of the fog and clouds. But one could still see the Oriental Pearl Tower and the Jin Mao building, and the skyline of Shanghai looked very impressive. Our guide, Allan, told us that everything around the old town has been built within the last 20 years or so, which makes this development even more impressive.

SWFC and Jin Mao tower dominte the Shanghai skyline

SWFC and Jin Mao tower dominte the Shanghai skyline

The city also has an urban planning museum, where a 2000sqm futuristic model of the city which reflects the government’s vision for this port city.

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In the afternoon we headed towards the Yuyuan Garden and the old city. The place is right in the middle of the city, and it’s hard to imagine how the authorities have managed to save the ancient architecture and old look of the buildings with so much of modern development going on all around it. In fact the local authorities constructed some old fashioned buildings around the garden just to preserve the look of the place.

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See the above picture and guess which building was built earlier….

And then we went to a place called French Concessions, a nice little neighborhood with European architecture and pretty good bars. We bar hopped for some time, played roulette when it came to paying checks (and I learned that game the hard way, by winning it, and therefore ended up paying first). I tell you, it was not a lot of fun winning the game.

For the night we had a very interesting pub in mind. Bar Rouge is an amalgam of European and Asian feel. Loud Euro music, expensive drinks and a lot of people dancing till wee-hours in the morning is exactly what we had hoped for, and we enjoyed every bit of our night there. I remember coming back to the hotel around 4am, but that is just a guess. I woke up pretty early (almost everyone’s been doing that every morning), for the breakfast, which is simply the best on this trip, highly recommended by everyone. You’ve got almost all the food you would want to eat in the morning, and more.

We had Ted Hornbein speak to us in Shanghai about the way business is usually done is China and the challenges. One of the most exciting topics he presented was about notion of China as a low cost manufacturing destination, and how that is no longer true. He presented some recent trends in the business cycle in China, and how the government now wants to move the country from a “toll assembly” model to high skilled design and production hub, and what are the challenges in achieving the long term goals.

Caterpillar manufacturing facility near Shanghai

Caterpillar manufacturing facility near Shanghai

We also visited the Shanghai Port, located at about 2 hrs drive from our hotel. The port is built on a reclaimed island, connected to the city by a 31.5 KM long bridge, 3rd longest in the world. And it is HUGE. We spent some time understanding how the port works and how efficient it is. It is amazing how quickly the port was developed, the land was acquired about 5 years ago, and now it’s one of the world’s modern engineering marvels.

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Then we flew to Hong Kong for our trip to the south end of this interesting country, and I was expecting a lot of fun and excitement from our four day stop visiting HK & Macau. I felt HK was much more like Mumbai; on the water, crowded and “happening”. There are loads of people everywhere, and due to the colonial history of this city, the mix of people is more diverse as compared to any other Chinese city. The first night we tried some local food in a restaurant called Jade Garden, easily one of my best meals on this trip. And then after meeting some interesting folks from Mediterranean at the Martini Bar, we moved to my favorite place in town, a classic British bar called Bulldogs on the Kowloon Island. As a big fan of live music, I really enjoyed my time, often singing with the band, and most of the times requesting songs that the band didn’t knew (most of them were classic rock hits that I thought they’d know). In fact I so wanted to listen to one of the songs, that I sang it on stage with the band. And somehow everyone seemed to like it. So Oasis’s Wonder-wall became my karaoke song for the rest of the trip.

Picture from Bulldogs

I loved the place so much that in fact, for the next three nights, my schedule kind of included a visit to Bulldog’s at the end of my day, even if I was completely exhausted from my day trip to Macau, or hours of exploration of the local street markets in this beautiful and lively city of Hong Kong. I made a couple of good friends, and I look forward to visiting Bulldog’s again.

We visited the American Chamber of Commerce in the heart of business district in HK, and met representatives from AmCham and US Commercial Services. The speakers talked about how the two associations are helping US businesses get acquainted with the Chinese government, culture and markets. It was very interesting to know that any exporter from US could walk in to a USCS office in America, and make use of the services provided by the office and start doing business in China. Of course it sounds easier than it actually is, but it is good to know that even small and medium business can take help from these associations to grow globally.

One of the most exciting visits on our tour was the visit to The Venetian, in Macau. The presentation was hosted by the Strategic Marketing Department of the famous casino, and we were given some insights into how they manage their resources to become more cost effective without compromising on the customer experience. It was a very unique experience to understand the cultural differences when it comes to gambling, and how the casino has adapted to the market needs. The presentation ended with a tour of the casino, and later, some gambling enthusiasts tried their luck in the casino.

Our final destination on the trip was Beijing, the capital city of China. After a long and boring 4 hour flight, we finally reached our hotel, which had definitely the best rooms. The recommendations from the lonely planet guide, and Frommer’s proved to be really helpful, and hence we tried some more local hangouts mentioned in the tour guides, and they didn’t disappoint. “Serve the People” is one of the best restaurants in town serving Thai food, and was another “must-go-to” restaurant in our list.

Our sightseeing tour in Beijing started with the Forbidden City, the Olympic Sites and Hutong. Beijing was different from either Shanghai or Hong Kong in a sense that it was more spread out and definitely more diverse. The next day we visited the local Home Depot store in Beijing. The management team was very excited to have us at the premises, and after a brief tour of the store, we were given a presentation about the many differences in the business model for China as compared to US, and the market dynamics. The business model for Home Depot, Do It Yourself or DIY, is no more applicable in China. Instead, it is now “Do It For Me”, or DIFM. Since the labor costs are so low in China, it makes more sense for people to just hire laborers to get the work done. Hence, HD is adapting to the needs of the local markets to grow, and the going hasn’t been that easy. However, now the management is aware that the learning curve is steeper than they initially thought, and hence are studying the market in more detail before taking their next steps.

group-photo-at-home-depot-china

In the tail end of our trip, we visited the Great Wall. For me, this was the most exciting day of the trip. We were amazed by the vast spread of the wall through the mainland, and spent most of the day walking on the wall. Equally exciting was the slide on the way down, and that made our day even more fun.

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Finally, we flew back to Atlanta via Shanghai, and I am certainly looking forward to another trip to the country.