October 26, 2007 – 2:58 pm
Hong Kong is a global financial center, and a city famous for its “laissez-faire” economic policy. However, it is also a city with one of the highest income gaps in the world. The United Nations’ 2006 human development revealed that the Gini index of Hong Kong was 43.1, the highest among developed countries and cities in the world.
The best way to discover the difference between lives lived by the rich and the poor in Hong Kong is to spend a whole day following individuals and watching them earn their income in the city. Read More »
A friend of mine, X, lives in a town called Y. She resides in a relatively egalitarian neighbourhood that is a far cry from the faceless “gated communities” that are so popular with certain segments of the middle class. The houses are older, made of solid brick and in possession of true character. There is a good school nearby and an eclectic shopping district. There are also the bums. Read More »
In the United States, oil prices will go up this summer - surprise! For much of the American media, this is a headline. For most US consumers, it is something that happens fairly regularly - albeit more of a rise than in the past couple of years.
And what do we hear from much of the media? That the price of oil has gone up because oil companies seek “excessive profits,” and companies like ExxonMobile gave their CEO a $400 million retirement package - certainly the height of “excessive profits.”
Consider the following: In 2003 and 2004, ExxonMobile CEO Lee Raymond’s compensation was roughly $66 million, but he generated $46 billion in profits. And he invested $30 billion in capital expenditures. So for $66 million in compensation, the CEO generated $46 billion in profits. Is $400 million really that much when considered this way? Katie Couric’s offer from CBS is estimated anywhere from $10-15 million. How many jobs did she generate? What energy supplies is she providing consumers? Read More »
The total world demand for oil reached 85.71 million barrels per day (mbd) in 2005. The main consumers were North America that accounted for 30.6 percent (or 25.65 mbd), the Pacific and Asia, including China, that accounted for 29 percent, and Western Europe for 19.5 percent. The remaining 21 percent of the total demand came from Africa, the Middle East, countries of the former Soviet Union, and Latin America. At this point, the demand is growing most rapidly in the Pacific and Asian region (due to the resurgence of China) and in the Middle East (due to wars), whereas demand growth has slowed down in Eastern Europe (due to deindustrialization) and in Western Europe (due to conservation and the use of alternatives to fossil fuels). Thus, in 2005, world demand grew at about 2 percent over the previous year.
Meanwhile, the declared world refining capacity stood at 85 mbd in 2005. Taking into consideration the likelihood of bad weather events, additional wars, and oligopolistic shenanigans, negative supply shocks appear more likely than demand shocks. This means that by the end of 2006, there will probably be severe pressure on the price of oil, already oscillating around $65 a barrel. Read More »
August 10, 2005 – 9:20 pm
Politics influenced the final outcome of bargaining for Unocal. China lost, but we can expect it to retaliate.
On April 4, directors of Unocal, the twelfth largest U.S. oil company (rated by the Forbes survey of 2000 World’s Biggest Companies) accepted a $16.5 billion offer to be bought by Chevron, the second largest U.S. oil company. The offer was one quarter in cash and three quarters in Chevron stock. However, on June 22, the Chinese National Offshore Oil Corporation (CNOOC), the third largest Chinese oil company, and a company smaller than Unocal, made a counteroffer of $18.5 billion in cash, financed in part by low interest rate loans from its state-owned parent company.
In mid-July 2005, Chevron increased its bid to $17.3 billion, turning up the heat on CNOOC to respond with a higher bid of its own. Although higher, CNOOC’s offer faced “unprecedented political opposition” in Washington , leading it to withdraw its bid on August 2, thus leaving it to Chevron to complete the takeover. This comes as no surprise, for when it comes to oil bargaining, political factors rule over economics. Read More »
November 24, 2003 – 9:21 pm
Three giant trading blocs account for more than one half of the value of world’s trade at current prices. The biggest is the European Union (EU-15) whose intra-trade in 2001 was worth $1,418 billion. The second is Asia (a bloc that excludes Japan and Australia, but includes Greater China—Taiwan and Hong-Kong— South Korea, Singapore, Indonesia, the Philippines, Malaysia, Thailand, Vietnam, Laos, Mongolia, Cambodia and Brunei); in 2001, it had $722 billion in intra-trade. The third in importance is the North Atlantic Free Trade Association (NAFTA) consisting of the US, Canada, and Mexico), with $637 billion in intra-trade. Read More »
