George C. Dimitriou

Technology and Strategy Consulting
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Archive for the ‘Economy’

Eurozone agrees €110bn loan for Greece.

May 03, 2010 By: George Category: Economy No Comments →

Eurozone states and the IMF have agreed a three-year lending package for Greece worth €110 billion. The decision taken by euro area finance ministers in Brussels on Sunday evening (2 May) follows months of market turmoil, during which Greece’s borrowing costs have risen to record highs, sparking fears of a sovereign debt default and breakup of the single currency area.

Eurozone governments will provide €80 billion under the three-year deal (2010-12), with the first disbursement to be ready before a crucial debt deadline on 19 May when Athens is due to pay back roughly €8.5 billion to bond holders. EU economy commissioner Olli Rehn said installments will be subject to a system of “quarterly reviews”.

The agreement comes after ten days of talks between EU, IMF and Greek officials regarding the lending terms were wrapped up in Athens on Saturday, with the centre-left Greek government subsequently announcing a fresh round of tax increases and spending cuts as part of its bid to bring the budget deficit to below three percent by 2014. The deficit currently stands at 13.6 percent.

The measures include the scrapping of bonus payments for public sector workers, an end to increases in public sector salaries and pensions for at least three years, raising VAT from 21 percent to 23 percent, and increasing taxes on fuel, alcohol and tobacco by 10 percent.

Oracle’s CEO $999,999 Pay Cut.

August 24, 2009 By: George Category: Digital World, Economy No Comments →

Oracle CEO Larry Ellison is taking a $999,999 pay cut. According to a company filing with the Securities and Exchange Commission, Ellison will receive a base salary of $1 for fiscal 2010, down from the $1 million he collected in fiscal 2009. “The compensation committee recognizes that Mr. Ellison has a significant equity interest in Oracle (ORCL), but believes he should still receive annual compensation because Mr. Ellison plays an active and vital role in our operations, strategy and growth,” Oracle said in the filing. “Nevertheless, during fiscal 2010, Mr. Ellison agreed to decrease his annual salary to $1.”

A wise gesture from Ellison, who took a bit of flak at Oracle’s annual meeting last October after made $543.8 million by exercising 36 million stock options. But still, a gesture only. Ellison is the fourth wealthiest person in the world, according to Forbes. He is also Oracle’s largest shareholder, with 23.4 percent of stock outstanding, as of July 21. That stake is valued at more than $25 billion today. So as long as Oracle continues to outperform the market, Larry will be just fine.

Growing Optimism About Recovery According to Nielsen.

August 21, 2009 By: George Category: Economy, Trends No Comments →

The notion that the global economy may be on the verge of recovery has not yet translated into improved consumer spending or confidence, although consumers in the emerging countries – Brazil, India and China – seem to be more optimistic than others and are loosening their purse strings ever so slightly, according to the new edition of the Nielsen Economic Current.  Of the 12 countries Nielsen now tracks, all but Taiwan (which declined) showed no significant change in measures of spending.  Canadian, Western European and American spending was, at best, restrained.

Nielsen KPI

Nielsen KPI

U.S. Energy-Efficiency Potential.

August 06, 2009 By: George Category: Climate, Economy, Renewable Energy No Comments →

The potential for energy-efficiency improvements throughout the U.S. economy is huge and entirely within reach if annual investments increase fivefold, according to a new McKinsey & Company report.

The global consulting firm estimates that $520 billion in investments would reduce U.S. non-transportation energy usage by 9.1 quadrillion BTUs by 2020 – roughly 23 percent of projected demand. As a result, the U.S. economy would save more than $1.2 trillion and avoid the release of some 1.1 gigatons of annual greenhouse gases, an amount equal to replacing 1,000 conventional 500-megawatt coal-fired power plants with renewable energy.

If the United States applied all available efficiency technologies, the country would save more energy by 2020 than is used annually by all of Canada’s homes, commercial buildings, and industries combined.

The U.S. economy currently spends $10-12 billion each year on energy-efficiency measures, McKinsey said. This does not include federally funded programs authorized in the $787 billion economic stimulus act, which President Barack Obama signed in February.

US Administration Launches IT Spending Tracker.

July 01, 2009 By: George Category: Digital World, Economy No Comments →

President Barack Obama’s Chief Information Officer Vivek Kundra announced the launch of an “IT dashboard” that allows people to see how the US government is spending taxpayer dollars on information technology projects.

The IT dashboard, allows users to view data for various federal agencies, including major investments and dollars spent, as well to view the “health” of projects through graphs comparing planned and actual expenditures.

Kundra said the IT dashboard represents a “democratizing of information.” The data used is available on the government’s data.gov site, but the dashboard makes accessing and understanding the raw numbers much easier.

The Global Financial Crisis: Analysis and Policy Implications.

April 15, 2009 By: George Category: Economy No Comments →

“There seems to be no international architecture capable of coping with and preventing global [financial] crises from erupting,” a newly updated report from the Congressional Research Service observes.

“The financial space above nations basically is anarchic with no supranational authority with firm oversight, regulatory, and enforcement powers. There are international norms and guidelines, but most are voluntary, and countries are slow to incorporate them into domestic law. As such, the system operates largely on trust and confidence and by hedging financial bets.”

The 109-page CRS report reviews the origins of the current crisis and summarizes its impact in different regions and countries.  See “The Global Financial Crisis: Analysis and Policy Implications,”

Global Financial Market Losses Reach $50 Trillion, Says Study.

March 09, 2009 By: George Category: Economy No Comments →

The global financial crisis slashed the value of financial assets worldwide by a massive $50 trillion last year, with developing Asia suffering more than other emerging market regions.

 

 According to a new study commissioned by the Asian Development Bank (ADB) entitled Global Financial Turmoil and Emerging Market Economies: Major Contagion and a Shocking Loss of Wealth?, losses on financial assets in developing Asia in 2008 totaled $9.6 trillion, or just over one year’s worth of gross domestic product (GDP).

 

Asia was hit harder than other parts of the developing world because the region’s markets have expanded much more rapidly. The value of financial assets to GDP rose to 370% of GDP in developing Asia in 2007 from 250% of GDP in 2003. In Latin America, the ratio only rose by 30%, with the result that estimated losses on financial assets were a much lower $2.1 trillion, or 57% of GDP.

The ADB estimates measure the losses in equity and bond markets, including those backed by mortgages and other assets, and the depreciation of many currencies against the U.S. dollar. Not included are financial derivatives such as credit default swaps that further multiplied the size of the financial markets.

The data provide clear proof of the close connections between the markets and the economies around the world, leaving few, if any, countries immune to financial or economic fallouts elsewhere. A recovery can only now be envisaged for late 2009 or early 2010, according to the study.