Bloggy Business Today

Many were expecting an interest rate cut of 0.5% but actually got something better from the Federal Reserve led by chairman Ben Bernanke. The Federal Reserve actually cut the rates in the vicinity of 0 to 0.25% just to avert this crisis and hopefully limit the length or recession that is upon us now.

We have seen the effects of recession. Companies going bankrupt, people losing their jobs and severe budget cuts made by people themselves. We cannot avert the impending crisis but we can manage and manage hard. Extreme sacrifices are sure to be needed as all sectors of the world from business to real estate are experiencing the hard effects of the credit crunch.

“The Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability,” the Fed said.

Brace yourselves for the worst economic catastrophe since the 1930s. It is not going to be pretty.

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As expected, the government is exhausting all means to extend financial aid towards the embattled car manufacturing giants of Detroit, General Motors and Chrysler. While the first auto bailout plan did not pass the grade for refusal of the labor unions to take a significant salary adjustment that can be compared with the salary structure of Japan’s own line of car manufacturers, the new auto bailout plan hopes to put all these to rest and save the two car manufacturing giants from officially filing chapter 11 or bankruptcy

The alternative? The Troubled Asset Relief Program or TARP. The TARP is actually the $700 billion bailout approved by Congress in October.

The Bush administration said Friday it might use taxpayer dollars set aside to bail out banks and Wall Street firms to keep troubled U.S. automakers out of bankruptcy.

The move could provide an 11th-hour short-term lifeline to General Motors and Chrysler LLC, which have warned they are within weeks of running out of the cash they need to continue to operate.

With this development, the government is reversing the initial round of talks where the Senate all but killed the initial funding for the auto bailout plan which has amounted to $14 billion. Will this resolve the problem the U.S. economy is facing? Everyone is hoping that it does while some sectors are holding out other opinions.

Republican critics of a bailout have argued that the automakers should use bankruptcy to shed debt and onerous labor obligations. They point to the success of companies in other troubled industries, such as airlines and steelmaking, to use bankruptcy to reorganize.

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Is there really something wrong with the financial and banking system today? Going into recession, it is apparent that most countries have been exhausting all means to be able to try and cope up with the impending crisis. However, the fact remains, is the financial system really to blame?

Perhaps it would be best to take them one by one. Each nation has its own policy as far as managing finances and funds of their respective economies. However, though one system may change from the others, it is obvious that general cooperation and agreements can be the only thing that can save the world from potent recession and economic breakdown. So who is to blame?

Trade barriers have been up in most countries and for the next 12 months at the least, these will be torn down. The decision is aimed at strengthening the weakening economy and hopefully it can help the global crisis where financial bailout plans and interest rate slashes have obviously done nothing to change the whole thing.

Will the trade barriers agreed upon by the meeting at the G20 summit of the world leaders make a difference? Keep your fingers crossed. After this, a lot of other issues have to be tackled since a lot are still critically unsolved.

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Unlike most companies who are sulking their sorrows of a potent drop in the economy by 2009, American Express seems to have lined up its own share of contingency measures to keep its head above water. It is no secret that even the 4th U.S. credit issuer is having its own share of problems addressing the weakening economy and despite disturbing business scenarios in 2009, they are ready for it.

Of course, AmEx is not expected to drop down just like that. They have made the proper adjustments and have reportedly sought $3.5 billion from the U.S. government’s $700 billion financial services rescue fund, at an attractive rate of 5 percent on preferred stock with warrants, the publication said.

So while other companies are trying to figure out how they can make it through the year, here is a company looking ahead despite experiencing its shares fall 3.8 percent to close at $19.99 on Friday. They were trading at $51.90 at the beginning of the year.

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After officially being adjudged the 44th President of the United States of America, Barack Obama’s true colors have finally been revealed. He has had a mapped out plan from the start and mind you, unless you are in a country where the U.S. will benefit, consider yourselves in trouble.

Countries in Asia are not in the prime list. They are actually second on his agenda. Among the main countries that Obama has talked to are the ones who he will have certain itineraries, most notably helping lift the economy of the U.S. back on its feet like France, the United Kingdom and so on. As for the rest? No one knows what his real intent is.

The Philippines is far from the list. Not that I am siding with controversial Philippine President Gloria-Macapagal Arroyo but it seems that Obama knows that the Philippines will only ask for aid and help from them. Apparently at the moment, the U.S. would rather save it for their own countrymen which is understandable. But is that fair? Isn’t that discriminating? You can just imagine one of his ignorant staff could have asked: “Where is the Philippines?”

Well, we have to wait and see in 2010. But from the things that are happening now, it doesn’t look good. I hate to say it but it looks like the motto of Obama right now is if you don’t have anything to offer, you are the least of my problems.

“I think [an Obama-Arroyo] meeting is unlikely because the president-elect, as I understand it, is not yet meeting with foreign leaders. He is busy assembling his Cabinet,” the US ambassador said.

The sidelining of the Arroyo call gave a glimpse of the importance of the Philippines to the United States at a moment of change of administration.

It is clear that the Philippines stands on the outer perimeter of US concerns in world affairs.

The first telephone conversations reveal the Philippines is not within the charmed circles of the Obama administration. It is a leper outside looking in.

It is imperative that Manila should rearrange its priorities vis-à-vis Washington. Obama is not our friend.

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