The Canadian Dollar and World Strike a New Low
http://www.canadianbusiness.com/markets/headline_news/article.jsp?content=b102715A#adskip
Summary
The article that I have chosen to base my blog upon, is mainly about the devastation of the Canadian dollar, softening of oil prices, and what this means for the global economy. As of Monday October 27, 2008 the various stock markets are continuing to plunge into the unknown, and its wraith is being felt all over the world. The Hong Kong stock market dropped 12.7 percent while the Tokyo stock market dropped 6.4 percent. The Wall Street index pointed to early losses for investors, a huge plunge in commodity prices, and while we are in the mist of a depression. In retrospect to Canada the loonie is trading 77.74 cents to the Us dollar, down 16 cents since the start of October. Crude oil fell $1.87 a barrel, and slid 35 percent since the beginning of the month, even with the Organization of Petroleum Exporting Countries to cut production quotas by 1.5 million barrels a day. Also gold is down $9.00 US an once and copper is down 5.5 cents US a pound. Overseas investors are slowly withering away as they had invested yen in the higher-yielding US dollar assets, causing the US dollar to fall to 92 yen. The worlds future at this point is uncertain and action will emerge. But according to Simon Derrick, currency strategist at the Bank of New York Mellon, this action should be lead by the U.S. Treasury. At this point there is no action and stocks are quickly being sold away, so investors can cover their loans and prevent a depression.
Connection
This article connects to synoptic jounals, cash discounts and Ch.12 in a whole, in many ways. Firstly if the Canadian dollar and the other global currences continue to fall at their current rate, there will be a huge discrepency on the synoptic journal of various companies (wholesaler, merchandising and service businesses). For example, an accoutant and a company will see a drop in sales, less money in the bank, and a lower number of account recievables on the synoptic journal. This will lead to a company purchasing less, to try to stay in business. With a huge discrepency on a companies synoptic journal, the company say a wholesaler would have to give merchandising businesses a larger cash discount for early payments, to build customer loyalty and thus stay in business.
Reflection
Firstly I would just like to say it must really suck to be a stock broker, at this current time period. This article also builds upon the simple fact that an accountant needs to know about events that happen outside his/her company. If an accountant, working for an American wholesaler business for example, did not know about the global economic concerns their international sales would go down, and they would possibly go out of business, even though this could be a fixable problem. If the stock markets crash completely, then we will have another depression meaning that there will probably be a low need for accountants where it will then be survival of the most efficient. But if what I read today (Oct. 29/08) is to come true then the economic concerns would be forgotten.
Subscribe to:
Post Comments (Atom)
2 comments:
Hey.First of all, thanks for commenting my blog. I can see that the topic of your article is related to mine. They are both about the recent economics slowdown. I totally agree that being a stock broker at a time like this sucks. According to my research, the slowdown will continue for a few more months. The currencies and stock of most countries will continue to fall, while US dollar will continue to rise.We are not expecting an end to this until the second quarter of 2009. Well, Tough luck for the stock brokers~~~
I agree that because of the economic slowdown, many businesses would have a chaotic synoptic journal. Their sales may decrease, their profit may decrease, and also a lower number of account receivables. But I think they’re pretty lucky to have technology now since most businesses would probably be doing their accounting and financial statements on computer instead of hand written.
Also, because of the economy going down, I agree that there will definitely be a decrease in company’s sales since everyone is having a decrease in their businesses. Other businesses would order less merchandise from their wholesalers but in order for the wholesaler to maintain their business connection with their consumers, they would have to improve their cash discounts for sure.
Post a Comment