NaHee Kim- ISP

19 06 2011

Revised Journals

CashIncentives For Students…Not a Good Idea.

 

Marked Journals

Economic Challenges: What Canadians will face

Wal-Mart:What’s Wrong?

How Much Milk Is Too Much?

 

Four Comments to be
Marked

Comment 1

Comment 2

Comment 3

Comment 4

 

Ten Comments

Comment1

Comment 2

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Consumer Debts, Mortgage Prices and Housing Prices Summary

3 06 2011

Key Concerns/Issues

– Possible burst of the housing bubble, as housing prices continue to rise (as a result of surging multimillion dollar property sales and increasing foreign investors that bids up the price) and number of sales go down (as the interest rate and household debt rises).

– Consumer debt is rising lately

– The economy is growing but the growing slows down due to decreased consumer spending

– Many Canadian aren’t aware of the current economic downturn that can affect their financial situation and debt is continuing

Resulting Challenges to Canadians

– If the housing bubble is burst, there will be a rise in housing foreclosures as middle class Canadians fail to pay their mortgages, debts or simply lost their source of income (More middle class Canadians will lose their homes)

– This rise in foreclosures will increase the supply line in housing, significantly dropping the housing prices and shutting away more jobs in the housing market.

– They also have to deal with their mortgages especially when they’re taking out home equity.

– Another major hurdle Canadians may have to deal with is the housing bubble bursting, dropping housing prices and value, leaving Canadians with more debt than they own in home value

Supporting Statistics and Evidence

– Average price of home sold in April across the country was $372,544, which is 8% rise from last year.

– Slow April sales figures shows that there is an activity dip of 4.4% from March, which is 14.7% down from last year.

– When the housing bubble burst inToronto andVancouver in the past, in the worst case had 35% of average housing value wiped out

– Household debt rose to $1.3 trillion in 2008

– 42% of people said that their personal debts were rising in the last three years

32% of respondents have no saving

– People under $35,000 a year, 49% people reported that their debt levels rose in the last three years. In comparison, 42% of those making $35,000 to $75,000 a year reported their debt levels rose, while 38%of those making over $75,000 annually reported an increase.

– Personal loans from banks was $48.5 billion, up 8.1 per cent from a year earlier, bank credit-card receivables were up 8.9 per cent at $51.5 billion.

– Consumers normally are 60% of the GDP, but high debt levels and the rising cost of living has brought that number down substantially.

– 3-4% of all mortgage holders representing about 200,000 home owners say they have no room for additional monthly increases in their payments

– Graph 

Possible Solutions

– Price ceiling for housing  to prevent skyrocketing housing prices

– Allow the market to burst the housing bubble and fall down quickly before demand rises again

– A series of mortgage rules set out by the government (such as increasing the interest rate on mortgage and decreasing the insurable amortization period) to prevent an unrealistic rise in housing demand and eventually burst of the housing bubble.

– In general mortgage laws and regulations should be changed to promote lowering debt for consumers, which would in turn promote consumer spending.

– Stricter laws on consumer borrowing, to prevent those already deep in debt from sinking further

Sources:

http://finance.yahoo.com/tech-ticker/article/152178/Best-Way-to-Fix-Housing-Market-Let-Prices-Fall-(Fast)?tickers=^gspc,^dji

http://www.theglobeandmail.com/report-on-business/banks-trim-mortgage-rates/article2037912/

http://www.moneyville.ca/article/997903–canadians-to-get-rate-hike-reprieve

http://okotoksmortgages.com/shawn-blog/a-warning-for-canadian-consumers-household-debt-could-spark-‘made-in-canada’-recession/#axzz1OB4zTm4H

http://www.iveybusinessjournal.com/departments/viewpoint/executives-should-monitor-household-debt

http://www.montrealgazette.com/business/Canadians+load+mortgages/4843035/story.html

http://www.theglobeandmail.com/report-on-business/economy/growth/consumer-fatigue-an-ominous-sign-for-economy/article2039584/

http://www.vancouversun.com/business/Report+cautions+that+over+indebted+consumers+drive+economy/4869489/story.html






Napa Cabbage Crisis in South Korea: shortage

6 03 2011

In 2010, the price of Napa Cabbages in South Korea was rising because of an unusual long stretch of bad weather. The price had increased up to $14 from $4 per head. Before winter comes, everyone in South Korea buys Napa cabbages for preparation of the traditional Korean pickling called Kimchi. However, in that year, many people couldn’t afford to buy cabbages because the prices had shot up. The cabbages crop in Korea was largely ruined by excessive September rain pushing the prices of cabbages to go up. The Napa cabbage harvest decreased about 40 percent to 151,000 tons. South Koreans usually consume about 1.45 million tons of Napa cabbages to make one year’s quantity of Kimchi every year before winter. Because of the shortage of Napa cabbage caused Kimchi prices to soar, some restaurants, unusually, did not serve it as a side dish. This supply and demand graph shows that that people’s demands stay the same because they will still want to buy regardless of the weather. They still want to buy the same amount. However, the supplies are decreasing from the abnormal weather in September. It has made the price of Napa cabbages to go up. Even though prices have gone up, people were trying to buy it as much as they need for winter. The shortage in supply of Napa cabbage caused a Market Equilibrium crisis in South Korean.

http://www.npr.org/templates/story/story.php?storyId=130371965





Napa Cabbage: supply and demand

5 03 2011

http://www.npr.org/templates/story/story.php?storyId=130371965

i will be using this article.