How quickly could the UK recover?

The UK economy is entering a sharp downturn, with most economic signals pointing down.

A junior minister was widely criticised for suggesting that there may be "green shoots of recovery".

But how is it possible to tell when the economy has reached bottom, and what are likely to be the first areas where that would be evident?

Leading indicators

Given the difficulty in forecasting the future, one approach is to look at "leading indicators" - the bits of the economic picture that change ahead of a recovery.

Although not perfect, they often help to forecast how the economy might change six to nine months in the future.

It can be instructive to see how investors and businessmen view the situation.

That is because as key economic actors, their beliefs are often quickly translated into action, in terms of orders or purchases.

For example, the CBI industrial trends survey often forecasts changes to the economy six months ahead.


Share markets still remain downbeat at the moment

The surveys ask business leaders how they expect business conditions to be in the future, and there is a reasonable correlation between their expectations and their actions, for example in placing new orders, or hiring or firing employees.

And traders on the stock market generally look ahead to the next six months of profits and sales by companies in deciding whether to buy stock.

However, at the moment most of these leading indexes are trending sharply lower, suggesting that economic conditions are still weakening.

The OECD's composite index of UK leading indicators has dropped by 6.7 points over the past year to 95.7 (with 100 being the long-term average), suggesting, they say, "a strong slowdown," although not as big a drop as in Germany or the US.

Unemployment and housing

In contrast, two of the key elements in the slowdown that concern many people the most are unlikely to improve quickly.
Unemployment has been rising sharply since the autmn

It is quite likely that unemployment will continue to rise even after other indicators have stabilised.

This is because firms delay making workers redundant for as long as they can, until they are sure of the size of the slowdown. But they are also usually reluctant to rehire until they are sure of the recovery, given the costs they incur both by laying off people and rehiring them.

And don't look to another housing boom to help boost consumer spending power.
There will be even fewer mortgages lent in the coming months, lenders say

The available evidence suggests the housing market remains sluggish long after property boom collapses, as it did in the 1990s.

Once people expect house prices to fall, this discourages further sales, because of the hope that waiting will lead to lower prices in the future.

This time, the contraction in the availability of mortgages is also a big factor, leading the Council of Mortgage Lenders to predict house sales will halve to 700,000 in 2009, compared with 1.6m just two years ago.

And one commonly-used measure, the ratio of house prices to average earnings, is still above its historic average, despite recent falls in property prices.

Credit market conditions

Given that the current economic downturn started because of severe disturbances in credit markets, another key area to look at is the performance of such markets.
The banking sector has not fully recoverd.

At the height of the crisis, the interest rate banks charged each other to borrow (the Libor rate) shot up, reflecting concerns that they were holding "toxic" assets that they might default on.

At the same time, the interest rate on government debt fell sharply, as investors rushed to buy up the safest possible assets.

By these measures, the severity of the crisis, which peaked in the autumn, has eased. But they are quite volatile - and it is much too early to say that conditions have returned to normal.

Key sectors

Another way to look for signs of recovery is to examine which sectors of industry might recover first, and which will be hardest hit.
Some retailers are doing better than others

Given the imbalances of the UK economy, the government is looking to the export sector to lead the recovery.

The UK does have some strong international companies, especially in such areas as pharmaceuticals and aerospace.

And the devaluation of the pound, which has fallen by an average of 25%, has made British goods more competitive in overseas markets.

But at the moment, the global nature of the slowdown has meant that demand is declining across all major markets, despite the advantage of a cheap pound.

So even highly productive Japanese car plants in the UK, such as Nissan and Honda, are cutting back on production.

Meanwhile, the domestic sectors that are most closely related to the housing market, including house builders, home furnishings companies and durable goods manufacturers, are suffering worst.

Meanwhile, food retailers and "value" clothing chains, such as Primark, are doing better.

A shift in this pattern would be another sign of a recovery in economic activity.

Lessons from history

There are many uncertainties in forecasting the future path of the economy, particularly in how long the downturn will last.

During the current crisis, the government has been over-optimistic about both the depth of the downturn and the speed of recovery, and even now many independent economic forecasters are sceptical of the government's forecast for recovery in the second half of 2009.

One way of answering the question is to look at the lessons of history.

Two US economists, Carmen Reinhart of the University of Maryland and Kenneth Rogoff, the former IMF chief economist, have looked at the aftermath of 18 major financial crises around the world.

They suggest that big "financial crises are protracted affairs" with severe effects on asset prices, the real economy, and government finances.

They say that on average after such crises, housing prices declined by 35% over six years, while stock market prices dropped by 55% over a three-year period.

Unemployment rose by 7% over four years, while overall economic output was down 9% over two years.

And government budget deficits soared by 85% as the downturn cut tax revenue.

Of course, the past is not necessarily a guide to the future and governments, both in the UK and elsewhere, are taking major actions to counteract the effects of the downturn.

But this history suggests we should be cautious in expecting many "green shoots of recovery" in the near future.

Source: http://news.bbc.co.uk/2/hi/business/7831946.stm, 23 Jan 2009

20 Jan 2009 – Examination for SM139, Organisation

I think this was the most stressful exam for my Y1S2 although it was just 50 MCQs.

One thing that I have learnt:
When personal interest is conflicting with your conscience, it would be better to give up your own interest (Personal interest is always selfish)

Intense Headache on 17 Jan 2009 (around 1230am-3am)

16 Jan 2009 @ 08.30pm – Finished my BM122 Statistics exam
16 Jan 2009 @ 11.30am – Completed my cleaning on both my room and myself (PJ)
17 Jan 2009 @ 12.00am – Found out that will not go back so early so started to go online
17 Jan 2009 @ 01.00am – After viewing the computer screen for some time, the headache started
17 Jan 2009 @ 01.30am – Lying on the bed after shutting down the computer but cant sleep due to headache which was getting more intense
17 Jan 2009 @ 02.30am – My brain was like exploding along the car journey back home
17 Jan 2009 @ 03.00am – Got into sleep. It was just slight/normal pain the next day

What was my feeling?
I felt like I might be dying but most probably will be staying in hospital first. Eventually, I thought I cant go to church and attend my exam on next week. However, I also felt that I still have many things yet to complete. Thanks to God that I am still alive!

'Tough jobs market' for graduates - UK

The jobs market for graduates is set to become much tougher, suggests a survey of leading employers.

A survey by High Fliers Research of 100 firms found recruitment targets had been cut by 17% for this year.

The economic downturn had particularly hit financial sector recruitment, with 47% fewer graduate entry-level jobs.

The report says "swingeing cuts" in recruitment, after years of a buoyant jobs market, make it one of the worst years to graduate for two decades.

'Campus panic'

"There is understandable panic on campus that this is shaping up to be one of the worst years of the last two decades to be graduating from university," says Martin Birchall, managing director of market research company, High Fliers Research.

Mr Birchall warns that more applications from university leavers will be chasing fewer jobs.

"Not only have vacancies been reduced substantially for those finishing university in 2009, but it is now clear that many of last year's entry-level jobs did not materialise either, leaving many graduates from the class of 2008 out of work too."

But the survey found a more positive message from the public sector, with graduate jobs increasing by 51% since 2007.

The warning that graduates will face a more difficult time in chasing jobs follows a sustained expansion in graduate employment - with a shortage of suitably-qualified applicants having recently been a bigger problem than a lack of vacancies.

Long-term changes in the economy have seen a growing demand for well-qualified staff, with a survey from the Association of Graduate Recruiters (AGR) in summer 2008 showing that graduate unemployment was at its lowest for five years.

That update from the AGR, based on a survey of major employers, showed that the graduate jobs market appeared to be "weathering the storm" of the credit crunch.

But this latest research claims that a corner has been turned and that economic uncertainty is now threatening the jobs market.

It claims that half of leading employers are lowering recruitment targets - and that compared with 2007 this will mean a 6.7% reduction in jobs available.

The research suggests that the biggest reductions in jobs will be in investment banking, retailing, accountancy and engineering.

Earlier this week, the government announced plans for university leavers struggling to find jobs, including three-month paid internships to help graduates gain work experience.

A spokesman for the Department of Innovation, Universities and Skills said: "We recognise that graduates are not immune from the effects of the economic downturn, which is why we are developing real help and support, talking to major employers about ensuring graduates get experience of work and a chance to show what they can do."

Source: http://news.bbc.co.uk/2/hi/uk_news/education/7826989.stm, 14 Jan 09

Buy none, get one free

Is the business model of the future one where the customer no longer pays? Already products in the digital marketplace are being given away free, yet companies are still making profits.


The internet has created a revolution for free products, says Anderson
One firm believer in this increasingly common business model is Chris Anderson, editor-in-chief of Wired magazine.

He claims the costs in the digital world are so low that both the companies and their customers are winners.

BBC Radio 4's In Business spoke to Chris Anderson ahead of the publication of his book, Free: The Future of a Radical Price.

In it, he explores the idea that the prices charged in the digital world will continue to reduce until they reach zero.

"Everything wants to be free," he says. "The new business model is one where companies grow rich by charging their customers nothing at all."

Is this too good to be true? Is there really such a thing as a free lunch?

"There are really two kinds of free," says Mr Anderson.

"There's fake free, which is just marketing -the buy-one-get-one-free model, the invocation of the word 'free' to grab consumer attention, but it does not change the underlying economics."

What has changed the economic model, Mr Anderson claims, is that in the last 10 years we have seen the amalgamation of digital technology, manifesting itself mostly via the internet.

"For the first time in history, [this has] created an industrial model where everything gets cheaper over time, as the underlying costs get cheaper."

Cheaper and cheaper

Mr Anderson refers to Moore's Law, which states that computer power doubles every 18 months. The economic reciprocal of that, he says, is "the cost of a net unit of computer power falls by 50% every 18 months, which means that everything gets cheaper by 50% or more every year and a half".

"Imagine a factory of the 19th Century where the labour got cheaper, where the steel got cheaper, where coal got cheaper, the real estate got cheaper, every aspect.

"That's why there's such an imperative to make things digital, because you go from an economy where things get more expensive, such as oil and food - the economy of atoms - to an economy where everything gets cheaper, which is the economy of bits". LISTEN TO RADIO 4: IN BUSINESS

Listen to the In Business Interview with Chris Anderson on Radio 4
Thursday, 8 January at 20.30 GMT & Sunday, 11 January at 21.00 GMT
Subscribe to the Podcast or listen via the BBC iPlayer

While we still live in a world of both old and new economics - a mixture of the old physical economy, and one where businesses can send complete representations of things across the world at no cost - Chris Anderson strongly believes that "free" is ultimately going to be part of the business strategy for everybody, even though they might find that hard to believe.

"At the moment, people are still suspicious of 'free' and are right to be so. They often pay further down the line or pay with their time or reputation."

"People are right to think that somewhere, somebody is going to have to pay."

But this, he says, is set to change.

"Digital economics changes our thinking about this. Everything that Google does is free to the consumer and yet Google is an extremely profitable company," he says.

"You've got open source, you've got Wikipedia, you've got the blogosphere, Craigslist. You've got all these strange free phenomena which have global scale and yet are free to the consumers."

This new model still uses cross-subsidies - the idea that someone is paying - but in this case, Mr Anderson says, it's not you.

In the digital world, a very few paying customers can subsidise everybody else.

"The new form of cross-subsidy is one where a tiny minority of people who really appreciate the product, really get value from it, can subsidise everybody else, because the underlying cost of doing things online, in digital, is so low that you can give away 90% of it for free."

For example, open-source computer software is free to users who can then alter and build upon the system, as long as they make it freely available to everyone else.

One of the best known examples of this is the Linux operating system, a free rival to proprietary systems such as Microsoft- a company which has been wrestling with free competition for some time now.

Tough to comprehend

This is, of course, extremely tough for traditional businesses to cope with.

"It's difficult. It's counter-intuitive," says Chris Anderson.

He claims that Microsoft's underlying costs of producing software were very low and, in turn, led to monopoly profits - and the market realised this.

"The marketplace said, 'We don't need shrink-wrapped boxes, we don't need retail stores to distribute operating systems, we can do it online for no cost.' Open source ultimately broke the monopoly in a way that the FTC (Federal Trade Commission), the American regulators, never were able to."

Initially, open-source software was developed by hobbyists and amateurs, but now companies such as IBM actually pay engineers to create free software.

BBC RADIO 4: IN BUSINESS

If you're of the Google generation, you intuitively understand that everything online is ultimately going to be free

Chris Anderson, Wired magazine
"What they are creating is a platform around which you can add value, you can create services, you can create other software, you can sell hardware perhaps."

The idea is to offer the majority of potential consumers something free which a minority are paying for by purchasing other add-on services.

Chris Anderson says it is happening in other industries, too, such as low-cost airlines. They may offer a free flight, but you pay for your baggage to be taken on board.

He believes there are numerous opportunities here for the airlines.

"If we can get your attention with the word free, if we can get you in the door with the word free, what else could we do?" he says.

"What could we do with the traffic? With the credibility that we've achieved by offering this extraordinary thing like a free flight?"

"Maybe cargo pays the way and the passengers ride for free? Or we're actually a tourism arm of these destinations who are paying us to bring (people) to them."

"It's all still cross-subsidy," says Mr Anderson, "but now it's somebody else who's paying."

Free is the future

So who are the people who are really getting to grips with this?

"They're kids. It's really a matter of experience. If you've grown up online, if you're of the Google generation, you intuitively understand that everything online is ultimately going to be free," says Mr Anderson.

"And you also intuitively understand that things offline are not going to be free, by and large."

Another aspect of the "free" model is the concept of "freemium".

Chris Anderson refers to the spray of perfume given away free in the department store to encourage customers to buy a whole bottle.

One per cent of the product is given away free in order to sell 99%. In the digital world, however, the opposite applies, "you give away 99% to sell 1%," he says.

An example is the online photo storage service, Flickr.

"Flickr Basic is free. Flickr Pro is for premium subscribers who have certain needs. They want more storage or they want special features. It only takes a few per cent of people to subscribe to Flickr Pro at a cost to subsidise everybody else who gets Flickr Basic".
Chris Anderson predicts gaming will become increasingly free-of-charge

The industry which he says will be most transformed by the freemium model is computer games.

This, he says, is because computer games are moving from the packaged software to the free model, as computer games move online.

The majority of players will play free and the games companies will make their money in different ways. A player may buy a new character, or clothing or gold or weapons or even time-savers within the game.

"The majority of the game players play for free," he says. "Some fraction of them, the really committed engaged ones, end up paying and they don't feel ripped off by it, because they're so bought into the game that they welcome the opportunity to play more efficiently or get certain advantages."

This model, says Chris Anderson, works for the customers and for the company which still makes money.

"The people you're charging are happy about it and the people you're not charging are the majority. So everybody's happy and the company makes money because the marginal cost of supplying that game to the free users is close to zero."


--------------------------------------------------------------------------------
Listen to the full In Businessinterview with Chris Anderson on BBC Radio 4this Thursday, 8 January at 20.30 GMT or catch the repeat on Sunday, 11 January at 21.30 GMT.

Subscribe to the podcastor listen via BBC iPlayer.

Chris Anderson's book Free: The Future of a Radical Price will be published in the UK in June 2009.

Source: http://news.bbc.co.uk/2/hi/business/7811481.stm, 08 Jan 09

Warning over 'third hand smoke'

Many people are unaware that even smoking away from babies or pregnant women presents a risk, according to US research.

Poisons in cigarette smoke can linger on fabrics or hair, but a survey of 1,500 households found that fewer than half of smokers knew this.

Only a quarter had strict rules about not smoking in the house, according to the report in the journal Pediatrics.

UK baby charity Tommy's said it was vital that pregnant women were alerted.

When you smoke - any place - toxic particulate matter from tobacco smoke gets into your hair and clothing.

Professor Jonathan Winickoff
Massachusetts General Hospital

There is plenty of evidence that "second-hand" smoke - breathed when you are in the same room as someone smoking - can be harmful, particularly to children, and some parents adopt a strategy of never smoking in their child's presence.

However, Professor Jonathan Winickoff, from Massachusetts General Hospital, said this would not offer complete protection.

Toxic particles in cigarette smoke can remain on nearby surfaces, as well as the hair and clothing of the smoker, long after the cigarette has been put out, and small children are susceptible because they are likely to breath in close proximity, or even lick and suck them.

Other studies have linked this exposure to learning problems in children.

Breastfeeding mothers who smoke also pass toxins on to their baby in their milk, he said.

His team surveyed more than 1,500 households, asking smokers and non-smokers about their attitudes.

They found that while 95% of non-smokers and 85% of smokers agreed that direct inhalation of second-hand smoke was harmful to children, just 65% of non-smokers, and 43% of smokers believed the same for "third-hand" smoke.

Just 26.7% of households which included a smoker had strict rules about not smoking in the home.

Complication risk

Professor Winickoff said: "The dangers of third-hand smoke are very real - when you smoke - any place - toxic particulate matter from tobacco smoke gets into your hair and clothing."

Professor Andrew Shennan, from Tommy's, said the results had "significant implications", particularly for pregnant women, who may have stopped smoking themselves, but are still in contact with others that do.

"It is vital that women are made aware of the possible risks associated with third hand smoke, and alert those around them of the impact it could potentially have on the health of their unborn baby.

"The chemicals in cigarettes are known to significantly increase the risk of serious pregnancy complications."

Source: http://news.bbc.co.uk/2/hi/health/7813124.stm, 06 Jan 09

如何面对2009年？（约书亚记1章）

约书亚的3大挑战
1）继承摩西的位子
2）管理全民，统管全军
3）战胜约旦河西岸所有的强大敌人

神给约书亚的3宝（3Ps）
1）Promise 神的应许，神的话（1：8）
2）Power 神的能力
3）Present 神的同在

约书亚的5大责任
1）刚强壮胆，体强心壮 （3次提醒）
2）起来行动1：2
3）与神接连
4）计划策略（窥探耶利哥）
5）全力以赴

Source: Sermon by Rev Yeo, 04 Jan 09

Australian researchers claim breakthrough on dengue fever

Australian researchers funded by US billionaire Bill Gates Friday claimed a breakthrough which could help in the fight against dengue fever by stopping the often deadly disease in its tracks.

University of Queensland researchers said they have successfully infected the mosquito which spreads the tropical disease with a bacterium which halves its 30-day lifespan, thereby reducing its ability to transmit dengue to humans.

Scientists hope their work will help halt the spread of the painful and debilitating disease which affects millions of people each year.

"The key is that really only very old mosquitos are the only ones that are able to transmit the disease," said researcher Professor Scott O'Neill.

"What we've done is put this naturally occurring bacteria into the mosquitos that actually halves their adult lifespan so they don't live long enough to be able to transmit the virus."

The research published Friday in the journal Science is the result of injecting 10,000 mosquito embryos with a bacterium that occurs naturally in fruit flies but has never been detected in dengue-carrying mosquitoes.

O'Neill said the test was designed to see whether the bacterium reduced the lifespan of the insects without killing them or preventing them from breeding and was able to be passed on to offspring.

He said while the laboratory tests, which involved researchers allowing the bacteria-infected mosquitoes to bite their arms because the species needs human blood to breed, had been successful, it would be several years before the technique would be tested in the wild.

"It's really a preventative strategy for preventing dengue fever outbreaks and what we've done is show that it's possible to be done in a laboratory," he told AFP.

"The next stage is now to move it into a more realistic field setting."

There is no known cure or vaccine for dengue fever, which is transmitted by mosquitos and kills more than 20,000 people each year. Also known as "breakbone fever," symptoms include high temperatures and muscle aches.

The Bill and Melinda Gates Foundation donated 10 million dollars to an international research team led by the University of Queensland into a means of defeating dengue fever in 2005.

Source: http://news.sg.msn.com/topstories/article.aspx?cp-documentid=1927049, 03 Jan 09

2009 - Deutoronomy 8

Important reminder for me to begin year 2009

Remember the Lord your God
1) God has led me all the way throughout the year(s)
2) God wants to humble me and test me
3) Humble: man does not live on bread alone but on every word that comes from the mouth of the LORD
4) Test: to know what’s is in my heart
5) Relationship: God treats me like his son
6) God is the one who gives me the ability to produce wealth, and so confirms his covenant, which he swore to your forefathers, as it is today.
7) God is faithful: GOD DOES NO BREAK COVENANT

Warning
1) When I am satisfied, my heart will become proud and I will forget the LORD my God
2) Do not follow other gods and worship and bow down to them


As the beginning of year 2009, I hope I will ALWAYS remember the Lord my God, especially during positive and good situations.

Deutoronomy 8
Do Not Forget the LORD 1 Be careful to follow every command I am giving you today, so that you may live and increase and may enter and possess the land that the LORD promised on oath to your forefathers. 2 Remember how the LORD your God led you all the way in the desert these forty years, to humble you and to test you in order to know what was in your heart, whether or not you would keep his commands. 3 He humbled you, causing you to hunger and then feeding you with manna, which neither you nor your fathers had known, to teach you that man does not live on bread alone but on every word that comes from the mouth of the LORD. 4 Your clothes did not wear out and your feet did not swell during these forty years. 5 Know then in your heart that as a man disciplines his son, so the LORD your God disciplines you. 6 Observe the commands of the LORD your God, walking in his ways and revering him. 7 For the LORD your God is bringing you into a good land—a land with streams and pools of water, with springs flowing in the valleys and hills; 8 a land with wheat and barley, vines and fig trees, pomegranates, olive oil and honey; 9 a land where bread will not be scarce and you will lack nothing; a land where the rocks are iron and you can dig copper out of the hills. 10 When you have eaten and are satisfied, praise the LORD your God for the good land he has given you. 11 Be careful that you do not forget the LORD your God, failing to observe his commands, his laws and his decrees that I am giving you this day. 12 Otherwise, when you eat and are satisfied, when you build fine houses and settle down, 13 and when your herds and flocks grow large and your silver and gold increase and all you have is multiplied, 14 then your heart will become proud and you will forget the LORD your God, who brought you out of Egypt, out of the land of slavery. 15 He led you through the vast and dreadful desert, that thirsty and waterless land, with its venomous snakes and scorpions. He brought you water out of hard rock. 16 He gave you manna to eat in the desert, something your fathers had never known, to humble and to test you so that in the end it might go well with you. 17 You may say to yourself, "My power and the strength of my hands have produced this wealth for me." 18 But remember the LORD your God, for it is he who gives you the ability to produce wealth, and so confirms his covenant, which he swore to your forefathers, as it is today. 19 If you ever forget the LORD your God and follow other gods and worship and bow down to them, I testify against you today that you will surely be destroyed. 20 Like the nations the LORD destroyed before you, so you will be destroyed for not obeying the LORD your God.

Childish activities are always beautiful