URBAN GROWTH AND DECLINE Where is it happening? Broken Hill Why there? Mining: The mining industry is what put BH on the map. Over 100 tears of constant mining has resulted in depleted resources.The prosperity of mining in BH hinges on several things. The strength of the Aussie dollar impacts on exporting, metal prices effect profits, and a slowdown in the global economy will reduce the demand (particularly from China) for the metal produced in BH.
The big financial-center banks that erivatives may have won a Nobel, but are they really a sell derivatives, moreover, may have an incentive to push a good idea? Companies have suffered huge losses trading product without clearly explaining the risks to a customer. in the type of derivative financial products whose invention was “You see a gap between the sophistication of Wall Street firms facilitated by the work of Fischer Black and the Nobelists. and the client firms,” notes Suresh M. Sundaresan of the Options and other derivatives—including futures, forwards Columbia University Graduate School of Business. “Because and swaps—are instruments for speculation as well as hedges bonuses on Wall Street are tied to transaction volume, this creagainst a drop in an asset’s value.
After the massive stock market crash, the public became wary of spending money and began to reduce expenditure. A decrease in goods purchased caused a decrease in production making thousands lose their jobs, raising the unemployment rate to 25%. In an effort to reduce the damage that had been done, the American Government decided to place a heavy import tax which was designed to protect American companies. This tax instead reduced trade between America and Europe drastically, this tax was called the Smoot-Hawley
In 1980, with the influx of North Sea oil, the pound appreciated strongly relative to currencies in which Massey sold its products. Lack of alignment between production sites and market also lead to currency losses. As engine production was heavily concentrated in the United Kingdom, strong British pound increased Massey’s cost of goods sold from U.S.$2381.8 millions in 1979 to U.S.$2568.5 millions in 1980 and hurt the profit margin. Another factor was high interest rate .From the income statement (Exhibit 2), it illustrated that the interest expense rose from U.S.$128.8 millions in 1979 to U.S.$229.9 millions in 1980 despite the improvement of net sales. The high interest rate of 1979 and 1980 had a negative impact on Massey’s sales performance.
However during bad times there was an access of inventory which led to problems. Another issue in the auto industry is the interest rates as high interest rates led to a decrease in consumer demand for vehicles due to higher monthly payments. Eaton’s strategy to counteract a downturn was to set aside built up cash balance of $7.6 Billion or $21.13 per share as a cushion for the next downturn. Eaton’s move had critics but results showed that Chrysler’s pension was fully funded for the first time in almost 40 years and their credit rating was also upgraded to single A by major credit agencies. Without the implementation of Eaton’s strategy Chrysler’s credit rating would be poor.
* Why do you think Valmont’s stock has “fallen out of favor” with Wall Street analysts? Do you think EVA can solve Valmont’s stock price problem? The fall in stock price is due to the recession in the US, the end of the drought, and the Gulf War. The $15 million restructuring charge could be to blame as well. EVA can possibly solve the problem because EVA focuses on maximizing shareholder value, which in effect can improve stock prices.
(Still think we are in a Depression not a rescission) Also the CEO of Enron for conspiracy and multiple counts of fraud is one example of dishonesty, fraud, disregarding one professional responsibility by given themselves Astronomical salaries and enormous benefits this reduces profits of the stockholders, who own the company. (Per the book Bus. 309 pages
“Another negative factor was a 6.6 percent drop, on an annualized basis, in federal defense spending.” She supports that the decrease in GDP is directly related to the decrease in government spending g which proves how fiscal policy can affect overall economic growth. Monetary policy can be defined as: A central banks changing of the money supply to influence interest rates and assist the economy in achieving price stability, full employment, and economic growth. The article discusses how decline in economic growth can in part be due to uncertainty of interest rates which is directly controlled by the Federal Reserve. The author supports this idea by showing that uncertainty of interest rates has affected business investments and the slowing of the housing
2. Question : (TCO 6) In the 1980s, Caterpillar was negatively affected by a strong dollar and lost significant market share to Japanese competitor Komatsu. The situation prompted Caterpillar to revise its global strategy and by the 2000s, the company was in a much better position to deal with volatile currency values. More recently, a strong dollar has actually helped boost Caterpillar’s bottom line. In the 1980s, a stronger dollar hurt Caterpillar’s competitive position, but in 2008 a stronger dollar did not seem to have the same effect.
The cause however, has its controversy. Most Americans believe that the stock market crash was the cause of the Great Depression, which is untrue. “The stock market crash did not so much cause the Depression, then, as help trigger a chain of events that exposed long-standing weakness in the American economy.” (B, 661; CD) The stock market crash cause events that occurred in the Great Depression which made it more of a hardship and showed the first sign of crisis, although the Great Depression was inevitable at the end of the 1920’s. In reality the depression was caused by lack of diversification, maldistribution of wealth, declining exports and unstable international debt structure (B, 660). The great depression and the dust bowl brought a new myth to the 1930’s which was the misconception of self-blame and personal responsibility which evolved from the earlier self-made man myth.