Economic Storms Approach

Economic forecasts tell of an approaching Economic Collapse or Crisis. States will not be able to balance their budgets in 2011 without severe cuts or massive taxes increases due their constitutional requirement mandating a balanced budget. Increased taxation worsens the Economy (see Laffer Curve) and by 2012 the States are in worse shape. Austerity Cut violence spreads throughout Europe and destabilize the European Union. China flexes its military muscle as the U.S. weakens because of its indebtedness

Rising costs for the motorists

With today rise, not only duty at the pumps, but world demand for oil, is hitting the poor motorists hard.

It is not only the motorists but the businesses from airlines to transportation, who will end up passing the costs onto the consumer.

Listening to people today around me, who always drive everywhere; now have to think before using the car.

We have to think of alternatives ways of travelling which is cheaper and perhaps healthier.

It is food for thought, and for all of us to revise how we use transport.

The True Cost Of Petrol

Jennifer Hill, writing for MSN Money, 28/04/2010 11:31

Filling up your car has become more expensive in recent years – and the cost could rise higher still. But, with the price of a barrel of oil down 40% from its peak, why are petrol costs still increasing?

Image: Paul Sakuma – AP

What are you paying for when you fill up at the petrol pumps on one of Britain’s forecourts? It’s something many of us wonder, particularly when the price of oil is falling.

But there are a number of factors at play. Read on as we lift the lid on the true cost of petrol.

The real price at the petrol pumbs.

Jennifer Hill, writing for MSN Money, 28/04/2010 11:31
The true cost of petrol
Filling up your car has become more expensive in recent years – and the cost could rise higher still. But, with the price of a barrel of oil down 40% from its peak, why are petrol costs still increasing?

Image: Paul Sakuma – AP

What are you paying for when you fill up at the petrol pumps on one of Britain’s forecourts? It’s something many of us wonder, particularly when the price of oil is falling.

But there are a number of factors at play. Read on as we lift the lid on the true cost of petrol.

The ‘black gold’ factor
Oil is a crucial factor in the price of petrol. With Brent crude at an 18-month high of about $87 (£56) a barrel, rises in the wholesale price of fuel have produced steady petrol price increases since the beginning of the year.

Having said that, the price of oil is a far cry from its peak of $147 reached in July 2008 – some 69% higher than today.

That spike was driven by soaring demand from China and other developing nations, dwindling petroleum reserves, increased unrest in the Middle East and greater pressure from oil speculators.

China is still displaying a healthy thirst for oil. This has helped to push Brent crude up by more than $35 (£23 at today’s exchange rate) or 67.6% in the past 12 months, according to figures from investment website Digital Look.

Speculators push up prices

Image: Digital Look

Graph showing the price of Brent crude this year
Petrol refining companies and investment banks can push the price of petrol higher through speculation – that is, investing in a commodity to try to influence the price by limiting supply.

With global interest rates at a prolonged low and the stock market rally appearing to have run out of steam, speculators know that investors will be looking for returns from other asset classes such as commodities, including petrol.

Why oil prices are headed for a fall

Blame the weak pound…
As oil is priced in dollars, movements in the dollar exchange rate affect the price of oil in other currencies.

If the dollar gets stronger against sterling, anyone using pounds to buy petrol will have to pay more than when the dollar is weak.

When the price of oil was $147 a barrel, £1 bought you $2. Now £1 buys you $1.55. That means to buy the same oil, we need to spend 22.5% more. This difference filters down to what we are charged when filling up.

Free guides on making money from exchange rates

…And the taxman
Successive governments have been happy to apply above-inflation rises to fuel duty, with tax rises since December 2008 alone adding about 10p to the cost of a litre of fuel.

Indeed, the actual cost of petrol is less than half what you pay at the pumps: the rest is tax that goes directly to the Treasury.

According to Petrolprices.com, which helps people find the lowest-cost petrol in their area, if petrol is priced at 119.9p a litre, 57.19p is fuel tax – a mammoth 47.7%. Another 17.86p (or 14.9%) goes in VAT, and just 5p (or 4.2%) goes to the cost of delivery and a cut for the retailer. So the actual cost of the fuel is only 39.85p (33.2%).

As VAT (levied at 17.5%) is applied to the cost of petrol after fuel tax, it’s effectively a tax on a tax: the taxman wins twice.

‘Dark day’ for motorists
The AA warned last month (March) that motorists should brace themselves for record high petrol prices this year, with the cost of unleaded fuel set to surge to £1.20 a litre (equivalent to over £5.40 a gallon) and beyond.

No sooner had it spoken than petrol hit that average all-time high, eclipsing the previous peak of 119.7p in July 2008, thanks to a fuel duty rise of 1p a litre on 1 April.

Adrian Tink, a motoring strategist at the RAC, branded it a “dark day” for motorists. “This is only the average: in some areas, motorists will be paying close to £6 a gallon (131.9p a litre),” he added.

Forecourt variations
Some garages in the UK were already demanding well over 120p a litre before the new peak was reached, while others were still charging around the 117p mark, according to Petrolprices.com.

As of 25 April, the average price for unleaded petrol was 121.1p a litre, while the cheapest was just 116.7p and the most expensive a whopping 130.9p – a 12.2% difference between the best and worst deals. For diesel, the average was 122.3p, while the cheapest was 117.9p and the dearest 134.9p – a margin of 14.4%.

Why such variation?
Some variation will be caused by the time the garage last bought a tanker of petrol and set its prices: the longer ago it made the purchase, the cheaper the fuel is likely to be.

The discrepancy can also be partly attributed to the “Asda” factor, according to experts: supermarkets sell huge amounts of petrol, so can negotiate better deals with suppliers.

Supermarket giants, such as Asda, Tesco and Sainsbury’s, operate just 1,200 of the 10,000 petrol stations in the UK, but they account for an average of 12 million litres of the 14.5 million litres of petrol sold every year.

And that’s not all
The cost of running a car is now more than 20% higher than it was in 2007 – driven by higher fuel costs, as well as steep hikes in insurance premiums. Indeed, the cost of motoring is up by almost 9% in the past five months alone, research by Sainsbury’s Finance showed earlier this month.

It calculated that the average annual cost of motoring (including fuel, tax, insurance, MOT and servicing, but excluding any interest repayments on loans taken out to purchase a car) is now around £2,539 – up 8.6% from £2,338 late last year and 20.9% higher than in 2007.

The research found that the biggest cost increases in the past five months have been for car insurance and fuel, up by 11% and 10% respectively.

The average car owner is now spending around £1,398 a year to fill up their vehicle on Britain’s forecourts, based on driving 10,000 miles a year in a Ford Focus – one of Britain’s most popular cars. On average, it does 37.7 miles per gallon.

Tax, meanwhile, has gone up by 3.4% in five months and by 26% over the past two-and-a-half years. Servicing costs have risen the least, at just 1% over five months.

Will politicians help?
Only the Liberal Democrats have so far pledged to reduce fuel duty, primarily in recognition of the disproportionate costs of living in the countryside where fuel costs more and there tends to be less public transport.

The Labour party is expected to persist with its plans to increase fuel duty in October and January, by 1p and 0.76p respectively. It had intended to hit motorists with a staggering 2.76p a litre increase on 1 April, but decided to offer some respite by pushing through the increase in stages.

The RAC has joined calls for the government to hold back new fuel duty charges, saying petrol prices were well below the £1 a litre mark when the levy was announced in last year’s Budget.

How much higher will petrol go?
Experts say petrol is threatening to hit new highs. Brendan McLoughlin, founder of Petrolprices.com, thinks prices could rise to as much as 150p a litre this summer, driven by the weak pound and rising oil prices.

“Oil prices are rising due to global demand and there’s a lot of speculative investment going into commodities, but the real worry is weakness in our currency,” he told MSN Money.

“It depends what happens in the election and how markets take it. A hung parliament would create uncertainty, but it may also be that a party gets in that isn’t committed to paying down the [nation's] deficit.

“There’s a chance that something could happen to our currency a bit like what’s happened in Greece – and the pound gets downgraded. That’s the real thing I’m concerned about.”

reference:Jennifer Hill msn money.

Down Memory Lane of Winter’s past

Ian Jones, MSN UK News, 07/01/2010 11:51

It’s not that cold. It’s just winter

Ian Jones offers a historical perspective on the current cold snap.

Rex Features

A sentry stands in the snow outside Buckingham Palace, January 1982

On January 10, 1982, Kenneth Williams wrote in his diary:

“The news was all about the dire state of the country in the grip of the freeze, with cattle dying and travellers stranded. Oh! It is unrelieved gloom! In desperation one begins to lose caution. I sat drinking sherry and eating crisps and chocolate, in fact, doing all the things I should normally avoid!”

The winter of 1981/1982 was indeed a bitter one. I remember it well. My primary school closed because the outside toilets froze and the boiler broke down. Milk froze in bottles on my mum and dad’s doorstep. Power lines were felled by the snow, leaving us without electricity. And all this in a large East Midlands town.

The cold snap we’re experiencing currently has some way to go before equalling conditions of almost 30 years ago. Back then, sub-zero temperatures and heavy snow arrived in early December and persisted uninterrupted well into the new year.

Rex Features

Schoolchildren play in the snow, January 1982

The politician Tony Benn recorded in his diary: “Bitterly cold. The country is under the worst conditions within living memory.” Writer and comedian Michael Palin talked in his journal of: “An almost apocalyptically gloomy day… a bleak snowswept, wind-howling evening… Another heavy snowfall – the third already this winter and the papers are full of articles about The New Ice Age and the Frozen Eighties.”

Many in the media, particularly the tabloid press, have been talking of the present chilly spell in uncannily similar terms.

As observed by Roy Greenslade, the Sun trumpeted: “BRR-RITS poised to wake to snow more than a foot deep today – in the iciest winter for A CENTURY”. The Daily Mirror proclaimed “BRRRITAIN!” and asserted: “Britain froze to a halt in -15C blizzards yesterday – and another dollop of snow will pile on the misery today.” The Daily Express, meanwhile, tried to twist circumstances to fit its usual anti-science agenda: “As one of the worst winters in 100 years grips the country, climate experts are still trying to claim the world is getting warmer.”

Something has gone awry here. The general tone of reporting throughout the media implies a crisis betokening a breakdown of civilisation, but this is out of proportion with reality.

It’s not that cold. It’s just winter. Yet turn the pages of the national press or switch on a 24-hour news channel and it’s like the country has lost not just an appreciation of what counts as a “bad winter” but an awareness of its not-too-distant history.

If you want to see properly frozen BRRRITAIN, look at the winter of 1981/1982. Or the winter of 1986, another chiller. Or the winter of 1990, when our house was without power for three days after snow once again brought down power lines.

PA Wire

A bus abandoned in a snowdrift on the Poole-Dorchester road, December 1962

Yet even they can’t compete with the truly worst winters of the last 100 years. Prior to 1981, the most extreme winter had been that of 1962/1963, when snow fell from late December all the way to February. Kenneth Williams records in his diary how “a terrific snow blizzard started about 1am and it was still raging when I started out at 9am. Even with drifts of over a foot on roads, the buses were running…” Temperatures fell so low that the sea froze.

PA Wire

The sea freezes at Minnis Bay near Margate, January 1963

However, that pales in comparison with the first few months of 1947: truly the most desperate winter the UK had experienced for many generations.

On the night of January 23, snow began to fall over much of the country. Within two days almost the whole of the UK was covered. But that was just the beginning. As the historian Patrick Hennessy records, the temperature didn’t rise above freezing between February 11 and 23. Coal boats bound for London were icebound in north-east ports. The RAF had to drop food for people and animals.

As businesses and factories shut down, unemployment went up from 400,000 to 1.75m. Those who were able to keep their jobs worked by candlelight. National newspapers were cut to four pages. Nobody was allowed to cook using electricity between 9am and 12pm and from 2pm to 4pm. The River Thames froze. The Observatory at Kew recorded no sunshine at all from February 2 to 22.

PA Wire

A man walks on the frozen River Thames, February 1947

There was already a shortage of fuel in a country still recovering from the Second World War. The bad weather made a beleaguered situation catastrophic. Eyewitness accounts tell of scenes that were literally bonechilling. The journalist JL Hodson observed: “Drifts fifteen feet deep in Northumberland, railways in parts impassable, and queues of professional women in St John’s Wood with buckets at a water-tap in the road, like a night after a blitz.” An ex-serviceman told historians from the Mass Observation organisation that “I wish I were anywhere but in this goddamned country where there is nothing but queues and restrictions and forms and shortages and no food and cold.”

According to historian David Kynaston, January 29 was the coldest day in the UK for more than 50 years. Power failed all over the country. Gas in most cities was at about a quarter of its normal pressure. Kynaston quotes a housewife, Florence Speed, writing in her diary: “I’ve borrowed a balaclava helmet from Fred [her brother] to wear in bed.” Another contemporary diary-keeper, Mary King from Birmingham, wrote: “One thinks of the shortage of food, the difficulty of transport, and the unemployment of thousands of workers in factories due to lack of coal and materials. Never in my lifetime have I known such a period of history.”

PA Wire

Men clear snow from the main Gravesend-London road, 1947

The playwright Christopher Isherwood summed it all up: “Soldiers turned out to fight [the snow] with flame-throwers. The newspapers spoke of it in quasi-military language: ‘Scotland Isolated’, ‘England Cut in Half’. With coal strictly rationed, gas reduced to a blue ghost and electricity often cut off altogether, everybody was shivering.”

It didn’t last. The cold weather eased in the second week of March. But one catastrophe was replaced by another. The thaw that followed the snow flooded entire counties and left tens of thousands homeless.

So yes, this winter’s snow has caused inconvenience and disrupted travel services and spoiled people’s holidays and left people, including me (yet again), without power.

But it hasn’t been devastation on a historic scale. And it shouldn’t have come as a surprise. Instead of thinking up ever more extreme ways to describe the sort of weather that is only to be expected at this time of year, perhaps we should be thinking more of how to respond better to such conditions when they happen again.

New Year and New Century

This is the time of year that you review not only your life but your business. What are you objectives for this year over all. Design a new company profile, update your website, focus on what is working for you and do not be afraid to say no to work, projects and people.

View the past year, do an SWOT on the last year, ask yourself why it did not work and analysis where is went wrong and why. Be honest with yourself when doing this.Then work out the solutions so you can move forward with positive vibes.

We meet and associate with people and businesses for a reason, so learn from it and move on. Have a great year with love, happiness and your dreams finally come true.

TIMES ARE CHANGING

The world recession had hit everyone from individuals, banks to corporate businesses. The construction industry has been particularly hit by this recession, in view of the many mega constructions around the world in particular the Middle East.

The Middle East is seeing mega constructions in the re construction of the many countries.  Let us take Dubai, in UAE for example.  There is immense construction and investment in to the area and mega buildings and visions, then what happened, the recession arrived.  Banks closed and no longer able to provide the bank guarantees, therefore not able to provide  necessary loans for companies to continue building of their programmes they have, let alone the planned projects for the future.  So what happens in the recession, people are laid off work, and if foreign worker they return back to their country.  What are the real effects on the construction industry?  Housing projects no longer have a buyer as they cannot afford the houses, the construction company is then stuck with a development not sold and therefore cannot move onto the next phase of the project or a new project. To address this problem, the construction company will have to look at different ways for people to finance and be attractive and affordable to buy.  This is also for the commercial developments as well, to be attractive and affordable and options of finance available to buyers. But why must the construction companies arrange this? It is important for construction companies to find ways to fund the projects and sell quickly and having options for buyers to afford to buy is a good marketing tool.  If the construction company is planning a new development, it is wise to have deposits on the development properties from buyers in advance and the balance on completion.  The reason for the deposits in advance is to cover the cost of the development, and as each unit is completed the final payment is made making the construction company cash flow more efficient.

The Middle East with its traditional family businesses, where it is passed down through the generations father to son as head of the family business, is now threaten  by outside  competition, and the recession.  The whole family concept of business must now be completely reviewed, from top to bottom.  It does not matter if a small business or a large corporation the concept is the same procedure.  The traditions must compete with world market, as the doors have now opened to the world market. The leadership is the most important part of any business. The eldest son may not be the right leader material, may be another member of the family will be, or the business will have to look to bring in someone from outside. The next stage is to look at the structure of the business.  Have strategies in place, from marketing to finance. Does the business have budgets?  Does it have objectives, and vision? Does it have a business plan? Remember your competitors from outside have this entire in place.

Financial planning needs to be reviewed. Research into the different types of funding that can be made available for your projects.  Construction industry have one advantage, it will have assets in form of land and development that can be sold at end of day. What types of funding are available? Private placement programmes, are excellent way to raise money whilst earning money, from the investment in the programme, at the same time. Bank guarantees, plus there are many other types of instruments available.  What if you don’t qualify? Consider joint venture partners and share profits.

It is important to spread the risk, and by choosing construction projects that are essential, like housing, but not the luxury end of the market, as the basis of the business.  The construction company will then be able to consider a bigger project for long term.

Hazel J Hill