Monday, September 28, 2009

People's Perception on Industry Segments

Gallup conducts an annual survey to gauge Americans' feelings about business and industry sectors. Here are some observations from 9 years of data:

Always Negative:
· Oil and Gas Industry
· Healthcare Industry
· The Legal Field

Always Positive:
· Computer
· Farming and Agriculture
· Travel Industry
· Retail Industry

Pharmaceutical and Federal Government were negative in all years, except one.

Banking was always positive until 2007; Went into red in 2008 and 2009. Do people ever change their perceptions ? Yes, they do; Banking is one of the key examples that demonstrate this. A change from positive to negative might be quick one !!!


Friday, September 25, 2009

G8 and G20

The announcement that G-20 will supplant the G8 as the main international economic forum is a historic shift in geo-political and economic sense. Though geographically the center of gravity shifted slightly (moved into Eastern Hemisphere – see map), the key players will still have undue influence on the total Group. G8 controlled 60% of the world GDP. By embracing G20, the membership went up by 150% but the contribution of GDP went up only by a marginal 33%. Is this a tactical move played by the G8 countries to further fuel growth in their own economies? We can’t say. But one thing is sure – the Group is now more representative. G20 represents more than 66% of the world’s population vis-à-vis G8’s 14%.

We have to see how successful the G20 would be – with more members the group dynamics change and it would be difficult to building consensus.

(M represents Center of Mass)

Wednesday, September 23, 2009

US-India Trade Deficit

I don't know why people scream at India when they talk about jobs and outsourcing (I was disgusted to see some comments to a blogpost previously).

Check these facts:Infosys and Wipro offer services in US. But companies like PWC and IBM offer services in India. The magnitude of services offered by US companies in India is more than what Indian companies offer in US. According to Office of the US Trade Representative “Sales of services in India by majority U.S.-owned affiliates were $4.2 billion in 2006 (latest data available), while sales of services in the United States by majority India-owned firms were $3.1 billion.”

FDI Flows from US to India is to the tune of $10.6 Billion (net flows). Again this is because companies like Pepsi and HP want to tap the local market with their product and services.U.S. goods and services trade with India totaled $61 billion in 2007 (latest data available).

Exports totaled $27 billion; Imports totaled $34 billion. The U.S. goods and services trade deficit with India was $7 billion in 2007.

US goods and services trade with China totaled $410 billion in 2007 (latest data available). Exports totaled $79 billion; Imports totaled $330 billion. The U.S. goods and services trade deficit with China was $251 billion in 2007. Here is my interpretation on this: Trade Deficit with China is 61% of the total trade. This is preposterous. Trade Deficit with India is 11.5% of the total trade. It isn't huge from either in percentage terms or in absolute dollars. It's about 3% of the trade deficit that US has with China. For that matter, US might have more trade deficit with atleast 10 contries than what it has with India (more research needed).

I see people scream at India when they discuss about Jobs and develop hatred towards it – but the trade deficit is just 11.5% ; Take a trip to India and see how US Corporations are selling their goods and services – In every sector - Pfizer, Boeing, GM, Caterpiller, J&J, Citi Bank, HP, IBM, Accenture just to name a few. Indians never scream at US companies.