The article:
http://www.multihousingnews.com/multihousing/content_display/industry-news/e3i140609747acf4889d8c4a8002c8cd808
Summary:
This article from Multi-Housing News states the National Association of Realtors (NAR) recommended that government should continue to involve in the secondary mortgage market in order to insure there is sufficient capital to support mortgage lending to qualified borrowers. As there are more and more housing issues, NAR developed the principles for consideration which “call on the government to ensure an active secondary mortgage market; support affordable mortgage rates for qualified borrowers; require that institutions pass on the advantages of lower borrowing costs by making lower rates on mortgages available for qualified borrowers,” and so on. With these being said, someone brings up that safe and affordable mortgage must be available throughout the nation to make a balance; which would lead to the requirement of higher loan limits passed in the economic stimulus bill earlier must be permanent. Government must keep in mind that sufficient capitals are needed to support mortgage lending in all types of markets.
Connections:
The connection to Chapter 3 of Economics is the role of government in a market economy. As mentioned in the article, government’s involvement in the secondary mortgage is necessary. It not only keeps the secondary mortgage market in active, but also gives more options to qualified borrowers. In this case, it’s like a positive mannered third party effect. Because in the market, there is not enough demand for housing, it results in a surplus of houses. As the government in between buyers and seller gives a hand, like support affordable mortgage rates and so on. It’s easier for borrowers to decide whether or not to buy a house in these days. Also, it’s easier for buyer and seller to reach a deal with lower mortgage rates and hopefully reduce the surplus of houses.
Reflection:
I agree with McMillan saying “The federal government must also insure that there is sufficient capital to support mortgage lending in all types of markets.” As this recession affects all aspects and all around the world, I believe not only housing needs government to fund, but also other types of markets. The federal government must have a better plan where their money should go and insure there is sufficient capital to support other potential problems. With this being said, I think housing in United State is really a big problem. It affects lumber industry in Canada. Because there is not enough demand for housing, numbers of new houses decrease. As a result, the demands for lumber decrease as well.
Monday, November 24, 2008
Tuesday, October 28, 2008
Chapter Two - The operation of market
The article: http://www.canada.com/calgaryherald/news/story.html?id=d8974b03-5c22-4daf-bc08-e7a9af8badb6&p=1
Summary:
This article from Calgary Herald talks about how lower prices of oil effect our life in different area and how people react to these lower prices. The recent slide in prices has a positive effect on Alberta, because it catches in the age-old balancing act between consumers and industry giants in the province’s commodity-based economy, which will provide a healthy tonic for consumers; however, it’s bad for Calgary’s producers who need to push back all their plans. On the other hand, analysts say they don’t expect the price of oil to sink much lower before it bottoms out and they forecast the prices for crude oil could return to the $80 to $100 US a barrel range this spring. Consumers also say they are not too excited about these low prices, because it’s probably going to go back up anyway.
Connections:
The connection to Chapter 2 of Economics is the concept of supply and demand. As mentioned in the article, “Motorists are heading into a low-volume driving season, which reduces demand for fuel.” This proves that consumer’s preference, driving less, results in a decrease of oil demand. As a decrease in quantity demand, the prices of oil drop as well. Also, oil/gas is inelastic because it’s a necessity. Even though there is a big change in prices, there is small effect on demand. Compare to last summer, the oil prices are very low right now; however, we do not use oil much more than we did in summer.
Reflection:
Since I am a driver, I do pay attention to the oil prices. It’s true that oil prices have dropped to around $1.10 per liter these days in Vancouver, but I don’t think the oil price will return to the $80 to $100 US a barrel range this spring. I under consumer’s preferences affect demand of oil; however, it’s not the only factors. We should notice that the “hurricanes” has a global affect as well. Economy is going downward in general everywhere in the world. I don’t think economy will resuscitate until late summer next year. The reason is by that time (around summer), more and more people will drive, which will increase the demand for oil. As demand increase, the price will increase as well.
Summary:
This article from Calgary Herald talks about how lower prices of oil effect our life in different area and how people react to these lower prices. The recent slide in prices has a positive effect on Alberta, because it catches in the age-old balancing act between consumers and industry giants in the province’s commodity-based economy, which will provide a healthy tonic for consumers; however, it’s bad for Calgary’s producers who need to push back all their plans. On the other hand, analysts say they don’t expect the price of oil to sink much lower before it bottoms out and they forecast the prices for crude oil could return to the $80 to $100 US a barrel range this spring. Consumers also say they are not too excited about these low prices, because it’s probably going to go back up anyway.
Connections:
The connection to Chapter 2 of Economics is the concept of supply and demand. As mentioned in the article, “Motorists are heading into a low-volume driving season, which reduces demand for fuel.” This proves that consumer’s preference, driving less, results in a decrease of oil demand. As a decrease in quantity demand, the prices of oil drop as well. Also, oil/gas is inelastic because it’s a necessity. Even though there is a big change in prices, there is small effect on demand. Compare to last summer, the oil prices are very low right now; however, we do not use oil much more than we did in summer.
Reflection:
Since I am a driver, I do pay attention to the oil prices. It’s true that oil prices have dropped to around $1.10 per liter these days in Vancouver, but I don’t think the oil price will return to the $80 to $100 US a barrel range this spring. I under consumer’s preferences affect demand of oil; however, it’s not the only factors. We should notice that the “hurricanes” has a global affect as well. Economy is going downward in general everywhere in the world. I don’t think economy will resuscitate until late summer next year. The reason is by that time (around summer), more and more people will drive, which will increase the demand for oil. As demand increase, the price will increase as well.
Thursday, September 25, 2008
Chapter One----Introductory Concepts
The article: http://www.economicnews.ca/cepnews/wire/article/single/125403/
Summary:
The article I read, "Oil falls below $106 on weak US energy demand" is from Associated Press. The article analyses why oil prices ended a choppy session in different respects. In the beginning, it gives background information that crude prices have risen about $15 in the past week because investors funnel money back into commodities on worries of a proposed $700 billion bailout of financial firms will undercut the dollar and boost inflation. Some analysts say crude could be heading higher amid falling global supplies. About 66 percent of oil production and 61 percent of natural gas output in the Gulf of Mexico remains shut-in after the passage of Hurricanes Gustav and Ike, according to the U.S. Minerals Management Service. The Gulf area is home to a quarter of U.S. oil production and 40 percent of refining capacity.
Connections:
The obvious connection to concepts in our text is scarcity. As mention in the article, 66 percent of the oil and 61 percent of natural gas come from the Gulf of Mexico. Because of the passage of Hurricanes Gustav and Ike, Gulf of Mexico remains shut-in. This means less oil will be provided to the public. Oil becomes a more scare source with more demands. It's obvious that oil price will increase. Also, this article states that economic experiments are conducted under conditions that cannot be easily controlled. Unlike an experiment in chemistry or physics, there are lots of external factors could influence the economic experiment, such as Hurricanes and dollar values in this case.
Reflection:
With more and more demands for oil and natural gas with limited amount, I am sure the price will increase even more. I remembered 3 years ago, the gas in Vancouver was only around 90 cents per liter and it's $1.30 per liter these days. I am wondering what the price of oil will be if nothing else used instead of it. If this situation continue on, when the oil will be used up? Also, related to this article, I agree economics is a science. Economics is based on facts that are obtained from careful study of experiments as well as others. The only difference is that there are lots of uncontrollable external factors influence the economic.
Summary:
The article I read, "Oil falls below $106 on weak US energy demand" is from Associated Press. The article analyses why oil prices ended a choppy session in different respects. In the beginning, it gives background information that crude prices have risen about $15 in the past week because investors funnel money back into commodities on worries of a proposed $700 billion bailout of financial firms will undercut the dollar and boost inflation. Some analysts say crude could be heading higher amid falling global supplies. About 66 percent of oil production and 61 percent of natural gas output in the Gulf of Mexico remains shut-in after the passage of Hurricanes Gustav and Ike, according to the U.S. Minerals Management Service. The Gulf area is home to a quarter of U.S. oil production and 40 percent of refining capacity.
Connections:
The obvious connection to concepts in our text is scarcity. As mention in the article, 66 percent of the oil and 61 percent of natural gas come from the Gulf of Mexico. Because of the passage of Hurricanes Gustav and Ike, Gulf of Mexico remains shut-in. This means less oil will be provided to the public. Oil becomes a more scare source with more demands. It's obvious that oil price will increase. Also, this article states that economic experiments are conducted under conditions that cannot be easily controlled. Unlike an experiment in chemistry or physics, there are lots of external factors could influence the economic experiment, such as Hurricanes and dollar values in this case.
Reflection:
With more and more demands for oil and natural gas with limited amount, I am sure the price will increase even more. I remembered 3 years ago, the gas in Vancouver was only around 90 cents per liter and it's $1.30 per liter these days. I am wondering what the price of oil will be if nothing else used instead of it. If this situation continue on, when the oil will be used up? Also, related to this article, I agree economics is a science. Economics is based on facts that are obtained from careful study of experiments as well as others. The only difference is that there are lots of uncontrollable external factors influence the economic.
Subscribe to:
Posts (Atom)
