The odds and predictions of another recession have changed so often that it is hard to say what the outcome will be. One thing is clear this has been the longest recession since the Great Depression. Many have referred to it as the Great Recession for the economic period that begun in December 2007 and ended in June 2009 according to the National Bureau of Economic Research.
Some analysts argue that we are not headed towards a double dip recession since the economy never actually came out of the recession as of this date. Whether the economy will head towards slow growth or a double dip is up for debate. Just a few weeks ago the market was trading as if we were headed towards another economic calamity.
Before letting the sky fall and before investors start selling securities at the slightest worry lets compare how the Great Recession measures up to the Great Depression.
The Great Depression started in 1929 and it lasted a decade.
The Great Recession started in 2007 and it lasted 18 months.
From 1930 to 1931 GDP decreased by 16% compared to a 6.2% decrease from 2007 to 2008.
At its peak the unemployment level reached 24.9% in 1933 compared to 9.5% in June 2009 although it did top 10% in October 2009. In 1933 about 4,000 U.S. banks closed compared to 25 U.S. banks closing in 2008.
One thing to consider is that during the 1920's even when the economy was doing well unemployment was fairly high as a result of technological improvements that increased manufacturing productivity. Currently unemployment hovers above 9% leaving Americans in uncharted territory. The prolonged length of time that the unemployed have endured has not been witnessed since World War II.
The Dow Jones fell about 89% between September 1929 through July 1932 compared to the near 50% drop in the Dow Jones from December 2007 through March 2009. Close to 7 trillion dollars in wealth vanished from the U.S. stock market in the 2007 recession.
As the Depression deepened in 1932 President Hoover decided to raise taxes, cut spending and raise interest rates. Unpredictable currency rates and tariffs brought world trade to a halt which made the situation a nightmare. In Contrast during the 2007 recession the Federal Open Market Committee lowered interest rates and is expected to leave them at the near zero rate until the middle of 2013. The present government also implemented stimulus packages and cut taxes to boost the economy.
After World War II there has consistently been at least one recession per decade ranging from mild to long in average. Recessions before the Great Depression lasted about 20 months, recessions after the depression have averaged about 10 months in length. On the other hand the 2007 recession lasted 18 months.
The Great Recession may not come close to the economic catastrophe lived in the 1930's but it did out due every other recession after the depression. Perhaps that memory is still very vivid in people's minds and they fear a double dip even when the economic data points to slow growth.
Friday, October 14, 2011
Sunday, October 2, 2011
Bitcoin a Digital Currency
In a time where banks are raising their fees and charging consumers for using their debit cards, going bankless and using other means of payment has caught on. About 1 in 5 people are reported to have gone bankless and have resorted to gift cards and prepaid cards as a means of payment and consumption. People are trying to avoid paying fees for transactions and services consumers also desire to protect their anonymity and privacy. A fairly new digital currency which was introduced in 2009 by Satoshi Nakamoto has emerged. A Bitcoin is a digital currency that can be used to purchase items online.
Bitcoin is an open source software that allows peer to peer digital transactions. Users create wallets which have an address, each transaction is broadcasted among the entire network and is stored to prevent double spending. Some privacy and anonymity is offered through Bitcoin. As a result politicians have criticized the currency of being used for illicit transactions such as money laundering. There are several exchanges where one can convert the digital currency into dollars, euros and yen as well as other currencies.
It is said that the total limit number of Bitcoins will reach 21 million, most trading for Bitcoins goes on in MtGox. Some people are warning others not to make large investments on the digital currency since it is seen as a high risk investment. On the other hand small businesses have started to accept the currency for payment. Many retailers remain skeptical to accept the currency since the exchange rate risk is high and there are no methods that allow to hedge against the wild currency movement and thin trading volume.
The currency and its value are sighted as being affected more by the currencies fluctuation correlated to goods rather than by major currencies. Since the currency is fairly new the value is influenced by speculators. There is also another concern that there isn't a single price quoted at any time rather several prices on different exchanges.
The Bitcoin wallet is a file on your computer therefore the threat of theft by hackers and viruses is a possibility.
Bitcoins as a digital currency has appreciated very fast, but this summer the currency suffered a security breach in which a large amount of Bitcoins where sold sending down the currency's value significantly. Since the hacker attack the currency has steadily decreased in value. Yet it still trades rather high compared to the dollar about $5 for 1 Bitcoin on MtGox.
All of this comes at a time when the Canadian dollar hit a 12 month low against the U.S dollar on Friday, the euro is also losing ground against the dollar. The U.S. dollar is looking attractive to the market because of its liquidity it is also a safe haven. The dollar was up against most major currency pairs on Friday.
Although this currency suffered its first crash and is fairly new, there are still questions to ask as Bitcoin moves forward. How safe and well monitored is this new form of digital currency? Will any other online currencies enter the game? Is this changing the way in which we will handle transactions and does this show a step towards a universal currency?
Bitcoin is an open source software that allows peer to peer digital transactions. Users create wallets which have an address, each transaction is broadcasted among the entire network and is stored to prevent double spending. Some privacy and anonymity is offered through Bitcoin. As a result politicians have criticized the currency of being used for illicit transactions such as money laundering. There are several exchanges where one can convert the digital currency into dollars, euros and yen as well as other currencies.
It is said that the total limit number of Bitcoins will reach 21 million, most trading for Bitcoins goes on in MtGox. Some people are warning others not to make large investments on the digital currency since it is seen as a high risk investment. On the other hand small businesses have started to accept the currency for payment. Many retailers remain skeptical to accept the currency since the exchange rate risk is high and there are no methods that allow to hedge against the wild currency movement and thin trading volume.
The currency and its value are sighted as being affected more by the currencies fluctuation correlated to goods rather than by major currencies. Since the currency is fairly new the value is influenced by speculators. There is also another concern that there isn't a single price quoted at any time rather several prices on different exchanges.
The Bitcoin wallet is a file on your computer therefore the threat of theft by hackers and viruses is a possibility.
Bitcoins as a digital currency has appreciated very fast, but this summer the currency suffered a security breach in which a large amount of Bitcoins where sold sending down the currency's value significantly. Since the hacker attack the currency has steadily decreased in value. Yet it still trades rather high compared to the dollar about $5 for 1 Bitcoin on MtGox.
All of this comes at a time when the Canadian dollar hit a 12 month low against the U.S dollar on Friday, the euro is also losing ground against the dollar. The U.S. dollar is looking attractive to the market because of its liquidity it is also a safe haven. The dollar was up against most major currency pairs on Friday.
Although this currency suffered its first crash and is fairly new, there are still questions to ask as Bitcoin moves forward. How safe and well monitored is this new form of digital currency? Will any other online currencies enter the game? Is this changing the way in which we will handle transactions and does this show a step towards a universal currency?
Thursday, September 22, 2011
Changes in Medicine
Just like in every industry technology and innovation changes how things are done. Online music and movies changed the whole entertainment industry to a point where it obliterated some well known companies. Medicine is also constantly going through changes, new procedures and vaccines eliminate sub specialties. The human genome has brought us a breakthrough genetic treatment for lupus; Benlysta by Human Genome Sciences.
A cardiac surgeon is not a lucrative profession as it once was. Medical breakthroughs and the elimination of coronary arterial bypass surgery have drastically changed the way medicine is being implemented. It is becoming hard to find a job in this field. The balloon coronary angioplasty is one of the sophisticated ways for a cardiologist to perform the procedure on the heart without ever picking up a scalpel. Only the most complicated cases will not benefit from minimally invasive surgery. In other words cardiologists have taken the work away from the cardiac surgeons.
GE has added a lot of innovative products to the healthcare sector. Their smart medical room is one of them. The room uses optical sensors, RFID tags, computer vision algorithms and facial recognition along with speakers and cameras. The software is designed to monitor healthcare staff as well as patients for various reasons, it is basically being used to monitor and improve performance. The room can track patients and their movements this is done to help the patient if they are out of bed and in risk of a fall. GE believes that some day we will be able to identify facial expressions to recognize the typical characteristics of a stroke by using these technologies.
Microsoft has also been working on medical innovations as well, they are using medical avatars that can interact with a humans just as a health care worker might do. With the use of probabilities and computer algorithms the avatar will recognize the symptoms a patient is experiencing and give a diagnosis. Although it is in its initial stages these futuristic concepts can become a reality. Seeing how robotic surgeries first started as a once a week procedure in operating rooms they quickly caught on with patients and turned into the norm.
As we move into a paperless society we can see that hospitals are starting to make the transition. There are advantages such as lower costs, greener environment and saving lives. The government is giving bonuses to the first hospitals to adapt and threatening penalties and cuts in monetary payments to those providers who resist to change. Hospitals are also testing patient digital hand prints as a form of identification in their emergency rooms. This is to identify patients and to have easy access to their medical information even if the patient arrives unconscious.
Some of the information for this blog came from the following book
Smart Medicine: How the Changing Role of Doctors Will Revolutionize Health Care (Macsci)
A cardiac surgeon is not a lucrative profession as it once was. Medical breakthroughs and the elimination of coronary arterial bypass surgery have drastically changed the way medicine is being implemented. It is becoming hard to find a job in this field. The balloon coronary angioplasty is one of the sophisticated ways for a cardiologist to perform the procedure on the heart without ever picking up a scalpel. Only the most complicated cases will not benefit from minimally invasive surgery. In other words cardiologists have taken the work away from the cardiac surgeons.
GE has added a lot of innovative products to the healthcare sector. Their smart medical room is one of them. The room uses optical sensors, RFID tags, computer vision algorithms and facial recognition along with speakers and cameras. The software is designed to monitor healthcare staff as well as patients for various reasons, it is basically being used to monitor and improve performance. The room can track patients and their movements this is done to help the patient if they are out of bed and in risk of a fall. GE believes that some day we will be able to identify facial expressions to recognize the typical characteristics of a stroke by using these technologies.
Microsoft has also been working on medical innovations as well, they are using medical avatars that can interact with a humans just as a health care worker might do. With the use of probabilities and computer algorithms the avatar will recognize the symptoms a patient is experiencing and give a diagnosis. Although it is in its initial stages these futuristic concepts can become a reality. Seeing how robotic surgeries first started as a once a week procedure in operating rooms they quickly caught on with patients and turned into the norm.
As we move into a paperless society we can see that hospitals are starting to make the transition. There are advantages such as lower costs, greener environment and saving lives. The government is giving bonuses to the first hospitals to adapt and threatening penalties and cuts in monetary payments to those providers who resist to change. Hospitals are also testing patient digital hand prints as a form of identification in their emergency rooms. This is to identify patients and to have easy access to their medical information even if the patient arrives unconscious.
Some of the information for this blog came from the following book
Smart Medicine: How the Changing Role of Doctors Will Revolutionize Health Care (Macsci)
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