PET TALK 2


On the 14th of March, around 25 people have gathered in the Old Common Room for Pet Talk 2. The discussion topic was on Recession and below was the report on what have been discussed on that night.

Definition of Recession: In macroeconomic term, recession describes the decline of Gross Domestic Product (GDP) of a country for two quarter. On the other hand, according to National Bureau of Economic Research, recession is “ a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real gross domestic product (GDP), real income, employment, industrial production and wholesale-retail sales”. [Haizum]

Causes of Recession: The major cause of recession is inflation. Inflation occurs when prices of goods and services are increased. Only small amount of goods and services can be purchased with the same amount of money. Consequently, consumers tend to save money and this leads to decline of GDP. To add on that, unemployment rates increase as well. [Amir]

Credit crunch can also cause recession. Credit crunch occurs when banks do not have enough loans to give out. World economy: Credit crunch could bring recession : http://www.wsws.org/articles/2007/sep2007/cred-s07.shtml

Recession in the United States :Ex-president of the US, George W. Bush spent too much funds on military. Current earning of the US cannot cover the country’s debt. [napee] Bush administration is also another reason to the country’s recession. The US has two major political parties, the Democratic Party and the Republic Party. One of Democratic Party’s policies is to increase taxes and provide welfare to citizen. On the other hand, one of the Republican Party’s policies is to cut down taxes. However, also due to tax cut, the United State earning is not able to cover the debts. [ka-mun]

Recession in Malaysia back in 1998 : Recession in Malaysia occur during in 1997/1998 during Asian Financial Crisis. The crisis started with falling currencies of Thai baht, Philippines Peso, Malaysian Ringgit and Indonesian Rupiah. Dato Sri Dr Mahathir claimed that George Soros’ speculation of currency is the reason to the Financial Crisis. More info on Asian Financial Crisis 1997-1998 : http://www.fas.org/man/crs/crs-asia2.htm Dato Sri Dr Mahathir had also introduced Inflasi Sifar Kempen [raja].

Recession and industries:

1. General Motor Corp. (GM)

General Motors Corporation (GM) (NYSE: GM), is the world’s second-largest automaker after Toyota.  On March 5, 2009, GM’s independent public accounting firm (Deloitte & Touche LLC) issued a qualified opinion as part of GM’s 2008 annual report that stated “these conditions raise substantial doubt about its ability to continue as a going concern”. A qualified going concern audit letter like this is only issued by the auditors when the company is in extreme financial distress and it is likely that they may file for bankruptcy protection.  On March 12, 2009, GM’s CFO Ray Young said that it would not need the requested $2B in March noting that the cost-cutting measures are starting to take hold.

2.Insurance Companies

American International Group (AIG) was facing bankruptcy and was bailed out by the US government.  Major cause of AIG financial crisis was due to the credit default swap (CDS) which the company sells.  Credit default swaps is insurance on bond. A bank which buys bonds from another company [B], can purchase CDS from insurance company. If company [B] bankrupts, the bank loses its bond but it can get money from insurance company.  Once recession hit, many companies face bankruptcy and can’t pay the bondholders. Consequently, CDS issuers like AIG have to fork out huge sum of money. More information on AIG’s financial crisis and CDS: How AIG fell Apart: http://www.reuters.com/article/newsOne/idUSMAR85972720080918?pageNumber=1&virtualBrandChannel=0

Top 10 Recession-Proof jobs/industry (from forbes.com): Sales Representative, Account and customer service representative, Accountant, counseling and social work, software design, administrative assistant, networking and system administration, nursing, mechanical engineering and sales executive.

Response to Recession

1.Deficit Spending

Deficit spending means spending exceeds earning. By putting more money into the country, purchasing power of consumer can be increased. Following that, demand will increase, manufactures will also hike up and this can stimulate economy of a country. [amir]

2.Human Capital

Human Capital should be developed to overcome recession. Students should study smart, develop themselves and be knowledgeable. Countries with better human capital should be able to recover from recession much faster. [ka-mun]Unemployment rate during recession is high; students should continue their studies and do graduate studies.

3. Islamic Banking : Can Islamic banking resolves recession? Islamic banking is a banking system which base on principles of Islamic law. More info on Islamic Banking : What is Islamic Banking http://www.islamic-banking.com/ibanking/whatib.php Advantages of Islamic Banking http://www.siddiqi.com/mns/Advantages.html Students’

Personal experience

Radin did his internship at an integrated circuit (IC) company and the sales of the company decline by 50% due to recession.

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Top 5 To-dos: Term Break

Term break is incoming soon enough and the last week is usually the intense week for most of us. Good luck finishing your assignments and tests!

However, it is not too early to think about the break. Here is the Top 5 list of possible events/to-dos that you can do during the break.

1. Entré Napkin Challenge

Not exactly during the break, but the closing date is this coming 3 March. Grab your chance to get NZD100 just by briefly writing your business venture idea on a piece of napkin! For more information, visit Entré Napkin Challenge.

2. April Graduation

http://www.canterbury.ac.nz/acad/graduation/

Venue: Christchurch Town Hall Auditorium

Timetable as following:

Tuesday 7 April 10.00am Faculties of Science and Creative Arts
2.00pm Faculties of Humanities & Social Sciences, Education and Continuing and Bridging Education (Adult Teaching & Learning)
Thursday 9 April 10.00am Faculty of Engineering & Forestry
2.00pm Faculties of Commerce, Law and Continuing and Bridging Education (Business)

3. The New Zealand International Jazz and Blues Festival (Monday 13th–Sunday 19th April 2009)

“2009 will be no different featuring some of New Zealand’s best musicians as well as a line-up of top international performers, including soul legends, jazz virtuosos, exciting fresh talent, popular standards, tributes and much more…Don’t miss out.

Line-up includes the soul legends Blind Boys of Alabama, Midge Marsden and Harry Harrison, Peter Urlich, Emma Pask, Frank Gibson and Mike Nock and many more….”

If you are Jazz and Blues lovers, don’t miss out this event. Performance details and ticket can be found in their website http://www.jazzfestivalnz.com/

4. World Cinema Showcase (Thursday 19th March–Wednesday 1st April 2009)

“The World Cinema Showcase, the mini-festival presented every autumn by the organisers of the mammoth mid-winter International Film Festival, celebrated its first decade in 2008 with an acclaimed programme and record attendances.

For two weeks each autumn, filmgoers in Christchurch can feast on a menu of quality films from around the world. This friendly and accessible festival aims to celebrate all genres of film, celebrating the talents of new and not-so-new filmmakers.

This year’s programme promises to be another stunner as we bring you a programme full of exceptional films. Confirmed highlights including The Class – last year’s Cannes Film Festival Palme D’Or winner; Jonathan Demme’s sensational new film Rachel Getting Married featuring an Oscar worthy performance from Anne Hathaway; comedian Bill Maher’s Religulous, a scathing comic tour of the world’s religions; plus a stunning collection of documentaries.”

For more info, visit http://www.worldcinemashowcase.co.nz/

5. Free Kayak Demo Day (Saturday 4th April 2009)

A chance to try out a whole range of kayaks and paddles in sheltered waters – sit on tops, fishing kayaks, sea kayaks and more.

Completely free, bring the family – or just yourself!

  • Time: 10am – 1pm
  • Venue: Cass Bay
  • Official Website: www.paddlerzone.co.nz
  • This is a free event
  • Contact Phone: 03 372 3353