Category Archives: Finance

The Pitfalls of Freelancing

Pitfalls of Freelancing
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What’s the World’s top economies in 2050 will be…?!!

The global research department of HSBC has released a report predicting the rise and fall of the world’s economies in the next 40 years.

The world’s top economy in 2050 will be China, followed by the United States. No surprises there – since China’s reforms in the 1980s, economists have said it’s not a question of if, but when, China’s collective economic might will top the U.S.

But among the smaller, developing nations, there are several surprises by HSBC prognosticators:

* By 2050, the Philippines will leapfrog 27 places to become the world’s 16th largest economy.

* Peru’s economy, growing by 5.5% each year, jumping 20 places to 26th place – ahead of Iran, Columbia and Switzerland. Other strong performers will be Egypt (up 15 places to 20th), Nigeria (up nine places to 37th), Turkey (up six spots to 12th), Malaysia (up 17 to 21st) and the Ukraine (up 19 to 45th).

* Japan’s working population will contract by a world-top 37% in 2050 – yet HSBC economists predict it will still be toward the top performing economies, dropping only one spot to the 4th largest economy. India will jump ahead of Japan to 3rd on the list.

* The big loser in the next 40 years will be advanced economies in Europe, HSBC predicts, who will see their place in the economic pecking order erode as working population dwindles and developing economies climb. Only five European nations will be in the top 20, compared to eight today.  Biggest drop will be felt northern Europe: Denmark to 56th ( -29), Norway to 48th ( -22), Sweden to 38th (-20) and  Finland to 57th (-19).

HSBC 2050 list of top economies (change in rank from 2010)

1) China   (+2)

2) U.S.     (-1)

3) India     (+5)

4) Japan   (-2)

5) Germany (-1)

6)  UK      (-1)

7) Brazil    (+2)

8) Mexico (+5)

9) France (-3)

10)  Canada (same)

11)  Italy      (-4)

12)  Turkey (+6)

13)  S. Korea (-2)

14)  Spain    (-2)

15)  Russia (+2)

16)  Philippines (+27)

17)  Indonesia (+4)

18)   Australia (-2)

19)  Argentina (2)

20)  Egypt (+15)

21)  Malaysia (+17)

22)  Saudi Arabia (+1)

23)  Thailand (+6)

24)  Netherlands (-9)

25)  Poland (-1)

26)  Peru     (+20)

27)  Iran      (+7)

28)  Colombia (+12

29)  Switzerland (-9)

30)  Pakistan (+14)

“If we step away from the cyclicality, there are two ways economies can grow; either add more people to the production line via growth in the working population, or make each individual more productive,” the report says.

In other words, demographics – the size of your working population – along with the opportunities to flex that muscle help determine long-term economic trends. Big factors on the back half of that equation: Education opportunities, democratic governments or strong rule of law (a caveat that explains China and Saudi Arabia’s high placement).

“We openly admit that behind these projections we assume governments build on their recent progress and remain solely focused on increasing the living standards for their populations,” the report says. “Of course, this maybe an overly glossy way of viewing the world.”

Chief factors that may derail economies moving forward, the report says: War, energy consumption constraints, climate change, and growing barriers to population movement across borders.


Apple chief Tim Cook in $378m pay package

Apple chief executive Tim Cook was awarded a pay package worth $378m (£244m) in 2011, most of which came in shares payable in the coming years.

Tim Cook was previously chief operating officer at Apple

Apple’s board granted Mr Cook 1 million restricted stock units, worth $376m, to signal its confidence in him when he took over from Steve Jobs in August.

His salary and performance bonus, about $900,000 each, made up the rest, a company filing showed.

Mr Jobs, who died in October, owned 5.5 million Apple shares.

He famously received a salary of only $1 a year.

Aaron Boyd, head of research at Equilar, an executive compensation data firm, said Mr Cook’s stock award was the largest single award given by a company for a decade.

Mr Cook will receive half of the shares in 2016 and half in 2021.

Analysts expect the Apple chief to have been the highest paid chief executive in the US in 2011.

The best paid boss in 2010 was Viacom head Philippe Dauman, with an $84.5m haul based on a new contract that granted him shares and stock options.


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How Amazon Became the World’s Largest Online Retailer

Image representing Amazon as depicted in Crunc...

Image via CrunchBase

Amazon, the world’s largest online retailer, has exponentially grown throughout its 17-year history. The company, which began selling books online out of Jeff Bezos’s Bellevue, Wash., garage in in 1994, has expanded to become an ecommerce and tech giant.

This infographic from Frugaldad puts Amazon’s goliath size into human terms. For instance, if Amazon were a country for active users, it would be twice the size of Canada. Amazon serves as many customers each week as the city of Beijing’s population.

Take a look at these nine facts about Amazon. Are you surprised by its size? Is Amazon your go-to online retailer? Let us know in the comments.

HSBC says it may quit London

HSBC, Caernarfon. It is located at Castle Square

Image via Wikipedia

The London-based bank posted a 36 percent third-quarter fall in profits

HSBC has threatened to leave the UK due to new capital rules as it posted a 36 percent third-quarter fall in profits, the bank said on Wednesday.

The bank blamed lower investment banking income and higher bad debt in the US for the higher-than-expected drop in profits.

HSBC also criticised the City of London, saying the cost of UK regulatory reform could be as high as $2.5 billion (£1.6 billion), and that it might move its headquarters out of the country where it has been based for the past 20 years or so.

Shares in Europe’s biggest bank fell by more than 5 percent in early trading on Wednesday, after HSBC said its underlying pretax profit was 36 percent lower at $3 billion in the three months to the end of September.

“Trading conditions showed some improvement during October, but they remain very difficult and continuing turbulence in global markets may result in further downside risk,” the bank said in a earnings statement.

HSBC chief executive Stuart Gulliver aims to cut annual costs by $3.5 billion and sharpen the bank’s focus on Asia, quitting countries where the bank lacks scale in an attempt to revive profitability.

By 9:22 a.m., HSBC’s London-listed shares were 4.4 percent weaker at 513.7 pence. The stock has fallen more than 20 percent this year – still not as bad as a 31 percent drop in the wider DJ index of European banks.

HSBC said loan impairment charges and other credit risk provisions were $0.7 billion higher at the end of the quarter compared to a year ago, which was mainly due to an increase in its run-off portfolio in North America.

The increase was largely linked to the moratorium on foreclosures in the US, HSBC said.

Its cost efficiency ratio so far this year also worsened, to 54.6 percent from 54.0 percent last year, while it had reduced headcount by 5,000 since the first quarter.

“The outlook for the global economy is very challenging as problems in developed markets begin to affect growth rates around the world,” HSBC said.

Global debt crisis: Waiting for Superman

The news that Italy, the eurozone’s third largest economy, was downgraded by credit ratings agency Standard & Poor’s dealt another blow to hopes of a sustained market recovery Tuesday.

The second paragraph of S&P’s report on the downgrade speaks volumes about the debt-laden tumult spreading across developed economies:

“In our view, Italy’s economic growth prospects are weakening and we expect that Italy’s fragile governing coalition and policy differences within parliament will continue to limit the government’s ability to respond decisively to domestic and external macroeconomic challenges.”

It’s a script torn from the same page as the U.S. – the gold standard of debt worthiness – when it watched its debt rating reduced by S&P in August ,  as partisan brinkmanship put Washington near the edge of defaulting on its credit card bill.

The Greek debt drama will turn two years old this December, and still the European Monetary Union appears to lack the leadership to get chart a clear solution out of the debt contagion that has hit Ireland, Portugal, Spain and now Italy.

Meanwhile in Japan, the world’s third largest economy just elected its sixth prime minister in five years.

Italy recently turned to China to help the nation with its debt woes, much like the rest of developed world appears to rest their hopes on a Chinese-led global recovery. But Chinese leadership has problems of its own – as Premier Wen Jiabao recently told a group of business leaders that “countries must first put their own house in order.”

A few weeks ago, the media world seemed to prematurely eulogize Steve Jobs when he announced he was stepping down as Apple CEO for health reasons. Since then I’ve had the Flaming Lips’ song “Waiting for Superman” in my head.

Somehow, watching a brilliant business leader take a step back from the company he founded underlines how few leaders – in politics or in business – truly inspire public trust and confidence.

As today’s downgrading of Italy shows, our wait for a Superman to lead us out of the credit crisis may be more like “Waiting for Godot.”