Month: November 2008

President-elect Barack Obama has announced the creation of 2.5 million jobs in the coming year. This is a good news in present circumstances. Recently there have been numerous announcements of job cuts from leading companies which has increased the fear of a global economic recession. The gravity of the situation can be judged from the fact that only citibank has announced more than 50,000 job cuts worldwide.

The statement by the President-elect will have a favourable effect and it will bring some confidence in the market. Barack Obama has to fulfill a number of promises which he made during his election campaign. I am sure that he will bring about a change in the coming days. A change for the betterment of the people.

The IMF Board will meet soon to approve loan to Pakistan. It is said that the first installment of the loan may be disbursed in a few days. This news has brought some calm in the money market and rupee has gained some ground against dollar.

Pakistan has been receiving financial aid from IMF for a long time. The real problem is that the money which comes to the country in the form of heavy loans has almost always been squandered by rulers. It is an open secret that Pakistani politicians have amassed millions and millions of dollars in foreign bank accounts. I wonder how can someone gain such phenominal wealth without having any known source of income!

While the country is struggling to get a few billion dollars international donors, it is an irony that Pakistanis are taking their money out of the country.

Citigroup which is one of the biggest banks in the United States may sell some part of its business. According to a story published in the Wall Street Journal it may merge with another bank. The share price of Citibank have lost more than half of their value and even a big investment by a Saudi Prince have not been able to boost the confidence of investors.

If Citibank has to merge with another bank in order to survive, I think that this would be the worst casuality of the financial crisis. This also indicates that the crisis is far from over.

Petro Steel & Wire is one of the leading suppliers of steel. The company is based in Houston, Texas. They have considerable experience in steel products for petrochemical, architectural, construction, agriculture, mining and marine industries. Their product range includes perforated metal panels, custom fabricated welded wire mess and architectural panels. PWS guarantees their strength and durability of their products.

If you need steel products I would recommend you to visit their website. PWS can manufacture products according to customer specifications. If you are looking for anything which you want to be prepared according to your specifications, you can simply inform them as to what you need.

Oil prices fell again on Wednesday and reached close to $50 a bareel due to weak energy demand. Oil prices have been continously falling for quite some time now. Worldwide financial crisis has hit the oil market because more and more people are trying to cut expenses on fuel which has resulted in considerable decline in demands worldwide.

I believe that the increase in oil prices was purely speculative. The abnormal increase in oil prices badly affected developing countries which have to bear heavy oil import bill. The economies of countries like Pakistan were devasted because of ever increasing oil prices.

Credit is a two-edged sword. It cuts both ways. The best policy is to avoid credit as much as possible and if circumstances arise which force you to take credit, you must plan it because an unplanned debt can lead to financial problems in future. I have seen that people avail consumer credit facilities without any planning and go on spending without seriously considering that one day they will have to make payment as well. The honeymoon period ends soon when they come to know that they can’t even make minimum payments against their loans and credit cards.

If you are faced with a similar situation and are finding it difficult to make your payment on time and the situation is being compounded by the addition of late payment and over-limit charges, I would advise you start managing your affairs before it becomes too late. Bill.com is a company that can come to your rescue and save you from defaulting on your loan payment. They have various Debt Consolidation plans which you can discuss with them. Debt consolidation, as the name itself suggests, means consolidating your loans into one loan so that you make one light payment instead of many.

The worthy adviser to the prime minister had boasted about plan A, B, and C for taking the country out of its economic mess. In the end we are told that there is no other option but to seek help from International Monetary Fund. Shoukat Tarin announced yesterday that Pakistan has successfully negotiated a loan with the Fund. He said that IMF has not laid down any condition for the approval of loan.

Was taking loan from IMF was a part of any of the plans because I think that borrowing does not require any planning. At least in Pakistan’s case borrowing has always been done at the expense of general public without any planning. The irony of the fact is this that this loan will used for the luxury of the likes of Zardaris and Gilanis and it will be repaid by the hard earned money of the people of Pakistan who will have to bear additional taxes one way or another.

It was time the people of the country rise up and say that they do not need this loan. Pakistan is a resourceful country. We only need a good manager. In Pakistan, perhaps being the president of Citibank is considered the height of the knowledge of econimics, which is not true. Being the president of a small bank is one thing and making policies for a big country is another thing.

Pakistan has formally approached International Monetary Fund for a loan and it is learnt that the Fund has reached an initial understanding with the government of Pakistan and has approved a $7.6bn economic package for the country. Pakistan urgently needs this money to meet the growing balance of payment crisis.

The loan is a stand-by arrangement for a period of 23 months and it is subject to approval by the executive board of IMF. IMF has put forward some pre-conditions for the approval of loan which the government of Pakistan has approved. The increase in discount rate by the State Bank of Pakistan is a step in this direction. According to the agreement, IMF will have rights to economic affairs of the country for which it will designate its own experts.

The other day adviser to the prime minister on finance said that the loan is being taken without any condition. He said that Pakistan was taking loan on its own conditions. I think that this is not true. I also believe that the loan would not benefit the common people of the country and it will be  pocketed by the corrupt politicians.

In Ukraine, it was the parliament which approved the loan whereas in Pakistan it is a few individuals who are taking decisions. Such important issues must be discussed in the parliament. What is the relevance of parliament if such important decisions are to be taken by a few individuals?