2016 Economic Markets Start up with High Volatility

Colombia Gets Ready for New Offshore Crude Production

Colombian Minister of Mines and Energy, Tomás González, has announced the enormous potential of Colombian Atlantic offshore oil reserves. The current logistics, operations research, and enterprise planning are being performed in conjunction in conjunction with Barranquilla Chamber of Commerce, namely, ProBarranquilla and the National Agency of Hydrocarbon, — Agencia Nacional de Hidrocarburos —,  (ANH), for its acronym in Spanish.

Apple “Understimated” in the Economic Market

After self-assessment of their stock, Apple's CFO, Luca Maestri, suggests that Apple is being undervalued in today’s economic market. The report reveals that the strong dollar has affected the company sales and overall revenue overseas, but the an iPhone was sold at an average price of $691 [USD]. The 2016 economic markets startup has been driven by high volatility, and predictive analytics are using a much narrow interval of time of about 7 years, for long-term market predictions on aggregate rather than the 15 year span used at the end of the millennium.  Thus, for the first time Apple is forecasting that sales of its iPhone could remain with a flat trend until the release of its new iPhone 7.

Google to pay £130m (GBP) to the UK in back dated taxes

Google has reached a deal with HMRC to pay £130m [GBP] in back dated taxes. According to British Prime Minister, David Camerom, having Google pay more was a fair act.

Mosquito Epidemic in Brazil threatens to become a Worldwide Pandemic

The mosquito epidemic, which started in Brazil with epicenter in Recife, has prompted the World Health Organizations and the South American countries' Health Ministries to start a preventive medicine campaign in order to neutralize and eradicate the danger posed by the virus affecting particularly new babies and pregnant women. These organizations should look at the Caribbean strategies to neutralize the mosquito bearing the dengue virus, through which countries like Jamaica and Haiti have been able to considerably reduce its dramatic impact of that sometimes fatal virus — its signs and symptoms — with the assistance of incumbent NGOs.

WHO VIDEO

Yoga modernizes to overcome the “economic” stress

Yoga is one of the most practiced health activities to overcome daily life stress in the world. While yoga is practiced mostly by women in Western nations, there is quite a balance among genders among the EMEA nations. One brilliant innovation to yoga is called “Dog Yoga”, which is exercised with your favorite pet.

The 2015 Nobel Prize in Economics

On Consumption, Poverty, and Welfare

In a year where the S&P 500 had the largest losses (in commodities since 2008), the 2015 Nobel Prize in Economics was delivered to British-American Economist and Princeton University Professor Angus Deaton , whose contributions and research work are focused not only in Consumer Behavior, in large and small scale, and the difficulty to aggregate such Consumption Behavior, but also in poverty and welfare. His work should be inspirational to Latin American countries and other developing countries, such as African countries, and other third world nations, to find ways to overcome the hardness of leading currency markets and their effect on import-export balances.

I believe that implementing Foreign Exchanges strategies, including both private and mixed investments (a hybrid strategy with some institutional partners), will allow developing nations to overcome not only the effects of inflation, especially on imported goods, but also confront – in extreme scenarios – their inability to move in a balancing direction. An agile strategy of solid banking transactions utilizing ForEx arbitrage, in particular, triangular arbitrage can lead to a consolidated cushioning game design mechanism for the long-term. This is wonderful if the larger-scale investors can look into such as investments in the US Dollar, Euro, and British Pound, as key references, among others. This may also set limits and controls on other strategies against hard currencies, such as, the local currency devaluation.

VIDEO: Prof. Deaton speaks of his Nobel Prize Award

The Global Risk in Money Exchange: Can Exports help?

The Strong Dollar and the Risk of Money Exchange

During my MBA days, a few years ago, I studied how money exchange global strategies can affect the enconomy of developing countries.  In particular, how event exports of developing countries with a soft currency, such as African countries, did not make enough to obtain any earnings from their exports at all due to exchange issues.

Today's strong dollar calls for Latin American countries to take pro-active action against inflation and optimizing earnings from their GDP. Most importantly, there are few options, which in my macroeconomic perspective could help.  For instance, South American countries should drive their economic earnings from exports not just from major products or commodities such as oil (in declining price) or coal (with increasing demand), but also leverage their GDP with products that are easy to produce or manufacture. For instance, he agriculture of these countries could easily expand their exports of products such as banana and corn, whose demand is likely to be inelastic for the USA.
Likewise, domestically these countries could focus on their economies of scale leading to cost-effectiveness.

A reconciliation for the domestic currencies is critical for the entire Latin American countries; and therefore, investing in dollars is useful as a balancing momentum strategy. However, protectionist strategies may not work in the long term due to the required leverage value of global macroeconomics and international trading acts.

In summary, Latin American countries, such as those in the former Gran Colombia and the Andes, have the chance to leverage the strong dollar with the following long-term strategies:

1. Inflating their GDP by expanding the growth of natural products, such as corn and banana, whose demand is rather inelastic and clearly increasing.
2. Partner with technology manufacturers to leverage the cost of imports by producing, manufacturing and producing locally, and by investing in new technologies such as solar panels and other thermo- and photo-voltatic technologies, electric vehicles, and cell phones, among others.
3.  Adopt other historic measures to prevent and control inflation.
4. Leverage portfolios, which include primarily Euro investments.
5. Work consistently towards an improved organization of the domestic markets and add value in components such as the real-estate markets and experiencing the country via the touristic industry.

The current devaluation of the Chinese and Japanese currencies has recently affected the international stock markets, but since the strong dollar is mostly due to its reestablishment of the de facto international currency over the euro, as a direct consequence of the Greek crisis and possible exit, and not by a significant increase in the American Nominal or Real GDPs. This is why Americans may not be exempt to some inflation effect in spite of the oil prices. The USA in return is benefiting from his exports, and has even agreed to small oil exports to Mexico.  However, it is obvious that the Fisher effect will further impact and be more visible in countries where currencies tend to be more volatile, either by circumstances or by historic fiscal practices, independently from the country's economic development.

Useful Links 
http://ageconsearch.umn.edu/bitstream/19157/1/sp05ch10.pdf

N.B.  Numbers may not be current (from source link above).

http://www.investmentreview.com/analysis-research/the-fisher-effect-under-deflationary-expectations-5119

A Diplomatic Nuclear Agreement Relying on Diplomacy Could Relaunch Global Economic Growth

Historic Nuclear Agreement with Iran

Today’s historic nuclear agreement with Iran could be a turning point in the recovery of the world economy.  The idea that the economic reaction to geo-political tensions significantly affects global markets is not a new one.  However, commodities such as oil are expected to keep a study price in the best case with a decreasing trend at least for the next months.  The historic agreement has a starting scope of ten years and upon compliance Iran is liberated from previously existing economic sanctions.

This is a very important diplomatic success for the economic communities involved in the agreement. For the USA, in particular, it is an important achievement that comes just weeks after reestablishing economic and diplomatic relations with Cuba.  The geopolitic and socio-economic impact of the these two deals will soon reflect positively in the global economy.

Will Greece stay in the Euro Zone?

Greece got a third chance for repaying her debt after an European Summit this week.  The plan was laid by German Chancellor Angela Merkel. The greatest opposition against Greece’s economic proposals for repayment came from Finland, today pursuing conservative points of view with a forgotten USSR-oriented past, which had given the expression “the Finlandization of Europe” such an specific  connotation during the cold war. But at the same time, Greece’s referendum results seek an exit from the Euro Zone, which will not release them from their debt. Perhaps that could be the best solution for the global economic stability, but not for safety of the region.

The Global Economy Growths, but...

POSITIVE PERSPECTIVES ON THE GLOBAL ECONOMY

With the fast growth of stock market indexes and the quick decrease on unemployment rates, one wonders how real this indicators are in relation to the quality of life people involved are getting. Based on the current market trends, in conjunction with political and socio-economic trends, I would not be surprised if the Dow Jones would surpass the 20000 index in the next few years, as it is projected.

My perception in the quality of life and planning for most countries is that the creation of new employment, market growths, and overall business development investment is still not balanced with demographic explosion and other relevant economic indicators, and distributions methods, in general, whether controlled or not. In the European Union, the recent election prompted leaders for further growth and economic development with job creation, quite consistent with the current US policies.