Q. As in when will it gain a firm foundation for economic growth?
A. Actually, the recovery is getting underway now. The problem is, it doesn't seem, like that to most folks in the US, Canada, Japan, the UK,.....and other places.
But China's economy is expanding already. Manufacturing output was up by more than 15% in October. Australia, a big producer of the iron and copper ores needed by China's mills and smelters is closely linked to "the big dragon" and recovery is underway there also.
The US and Europe are a bit behind that but recovery is beginning there also. You see the early wisps of it in the modest increases in retail sales.
The foundations for economic growth were set by the stimulus plans and bank rescues initiated by the US, Britain, Germany and China over the past 14 months. However, to use a construction analogy, you can pour a foundation but it takes a while to "set."
And a key part of the "foundation" is the rebuilding of confidence among banks and buyers. Confidence is critical to economic growth. If you aren't confident that the coffee shop you want to set up will succeed, you just wait for better times. If the bank isn't confident, they won't lend you money for the espresso machine. And sure enough, a key US statistic "C & I loans," which is lending by banks for commercial and industries purposes, is still drifting downward. So is consumer credit card debt outstanding. The confidence isn't quite there yet.
After the pounding the investors took and the massive layoffs of the past 18 months many industries and people are quite "shell shocked." Recovery for the economy is measured by data. Recovery for you is measured by your situation: even if you have a job, you are not sure you will keep it. If you don't have a job you are looking (or you gave up and joined the "discouraged worker" army. Either way, if you are looking for work you are in competition with a great many others. So it doesn't feel like a recovery until (a) you find a job, or (b) the job you have gets back to full hours and full -- or better pay. By that measure, the global recovery is starting now but recovery for you may be 8-12 months away.
But China's economy is expanding already. Manufacturing output was up by more than 15% in October. Australia, a big producer of the iron and copper ores needed by China's mills and smelters is closely linked to "the big dragon" and recovery is underway there also.
The US and Europe are a bit behind that but recovery is beginning there also. You see the early wisps of it in the modest increases in retail sales.
The foundations for economic growth were set by the stimulus plans and bank rescues initiated by the US, Britain, Germany and China over the past 14 months. However, to use a construction analogy, you can pour a foundation but it takes a while to "set."
And a key part of the "foundation" is the rebuilding of confidence among banks and buyers. Confidence is critical to economic growth. If you aren't confident that the coffee shop you want to set up will succeed, you just wait for better times. If the bank isn't confident, they won't lend you money for the espresso machine. And sure enough, a key US statistic "C & I loans," which is lending by banks for commercial and industries purposes, is still drifting downward. So is consumer credit card debt outstanding. The confidence isn't quite there yet.
After the pounding the investors took and the massive layoffs of the past 18 months many industries and people are quite "shell shocked." Recovery for the economy is measured by data. Recovery for you is measured by your situation: even if you have a job, you are not sure you will keep it. If you don't have a job you are looking (or you gave up and joined the "discouraged worker" army. Either way, if you are looking for work you are in competition with a great many others. So it doesn't feel like a recovery until (a) you find a job, or (b) the job you have gets back to full hours and full -- or better pay. By that measure, the global recovery is starting now but recovery for you may be 8-12 months away.
Can the global economy sustain recovery when the stimulus exits?
Q. Your views please..
Thanks.
Thanks.
A. It's tough to say. Yes, I do believe the global economy can have a sustained recovery but I do worry about Europe and the US (Canada, Australia and other Western Nations too).
The problem is that the stimulus took the place of the consumer and has tried to get the consumer back in shopping malls. With this recession, consumers have cut back and started to save money and pay down their debt.
The cutbacks by consumers have a huge impact on economies that rely heavily on consumption for economic growth.
Some of the government programs have managed to get consumers buying some items (such as cars). But all the data and reports given out by companies recently suggests that they are making money by cutting costs and not by increased sales which are flat.
So in a sense, the world will recover with developing economies such as China, India and Brazil leading the way.... BUT developed economies such as America, and the European Union will probably lag with slow growth or almost no growth.
Ed seems to think consumer confidence will return, he could very well be right. I have my doubts though... the American (and Western) consumer is still very much in debt and shell shocked after the financial crisis. I do believe consumer confidence will eventually return but it's going to take at least another year for things to really pick up.
The problem is that the stimulus took the place of the consumer and has tried to get the consumer back in shopping malls. With this recession, consumers have cut back and started to save money and pay down their debt.
The cutbacks by consumers have a huge impact on economies that rely heavily on consumption for economic growth.
Some of the government programs have managed to get consumers buying some items (such as cars). But all the data and reports given out by companies recently suggests that they are making money by cutting costs and not by increased sales which are flat.
So in a sense, the world will recover with developing economies such as China, India and Brazil leading the way.... BUT developed economies such as America, and the European Union will probably lag with slow growth or almost no growth.
Ed seems to think consumer confidence will return, he could very well be right. I have my doubts though... the American (and Western) consumer is still very much in debt and shell shocked after the financial crisis. I do believe consumer confidence will eventually return but it's going to take at least another year for things to really pick up.
What are the effects of Java Tsunami 2006?
Q. Did it change the physical features? economics? How did it change Java?
A. The tsunami that struck the south coast of Java in Indonesia on Monday is now reported to have killed at least 300 people, with another 140 missing and over 50,000 displaced.
The earthquake that generated the wave struck at 1519 local time (0819 GMT), 245 kilometres south of Java's coast. As more seismological data has been collated, its magnitude has been upgraded from 7.2 to 7.7. The logarithmic scale used means this signifies a fivefold increase in energy from the previous estimate. The earthquake's depth has also been recalculated, from 45 kilometres to just 10 km.
Local witnesses say that two or three large waves arrived within about 30 minutes of the tremors being felt. The biggest wave was said to be 2 metres tall and smashed into resorts and coastal villages in the region around Pangandaran beach.
According to seismic data posted online by the US Geological Survey (USGS), there had been 20 aftershocks between magnitude 4.9 and 6.3 by 0700 GMT on Tuesday. However, despite reported local scares, no further tsunami waves are expected.
Christmas Islands
An Associated Press report says that another Indonesian island, Sumatra, now has a tsunami alarm system which can alert people to leave coastal areas. But Java's system is not scheduled to begin operation until 2007, it says.
The nearest land to the earthquake's epicentre was Australia's Christmas Islands, 215 km away. The Australian tsunami warning system delivered an alert to residents of the islands 20 minutes before any tsunami was expected to arrive, and about 300 people moved to higher ground.
In the event the highest wave seen at the Christmas Islands was just 60 centimetres tall. The small size of the wave is due to the islands' volcanic origin, which means they are steep-sided. For a tsunami wave to reach a large height, it needs to roll towards the coast across a continental shelf that gradually gets shallower.
Extremely active
The earthquakes were the result of the Australian tectonic plate, overlain by the Indian Ocean, moving northwards and being thrust under the Sunda plate, upon which Java sits. The Australian plate advances by 59 millimetres every year, relative to the Sunda plate.
This plate boundary is very active. Previous large tremors in the region noted by the USGS include a magnitude 7.8 in 1994 that created a tsunami with a maximum run up height of 13 metres and which killed 200 people. That quake occurred 600 km from Monday's quake.
And in 1977 a magnitude 8.3 earthquake, 1200 km from Monday's tremor, produced a tsunami with a maximum run-up height of 15 metres which killed almost 200 people.
The devastating Yogyakarta earthquake, which struck in May 2006 and was magnitude 6.3, occurred at shallow depth within the overriding Sunda plate. It killed over 5000 people as it occurred very close to populated areas.
Indonesia and other places around the Indian Ocean were also struck by a devastating tsunami in December 2004 which killed 235,000 people. See our Asian Tsunami Disaster special report
Brief Description: On July 17, at 1519 local time, a magnitude 7.7 earthquake struck off the southern coast of Java, triggering a tsunami that affected the Central and West Java provinces of Indonesia. On July 18, the Indonesian Department of Social Affairs (Depsos) reported that the tsunami killed approximately 300 people and injured more than 400 others. These numbers may increase as recovery efforts continue. The tsunami damaged buildings, homes, and fishing boats along a 175 km stretch of the southern Java coastline. The resort area of Pangandaran Beach in Ciamis District sustained the greatest amount of damage.
On July 18, U.S. Ambassador B. Lynn Pascoe declared a disaster due to the effects of the tsunami in southern Java. In response, USAID/OFDA immediately provided $50,000 to the Indonesian Red Cross (PMI) and the International Federation of Red Cross and Red Crescent Societies (IFRC) through USAID/Indonesia to provide emergency relief assistance to tsunami-affected communities. A three-person team from the U.S. Embassy and USAID/Indonesia is monitoring the situation on the ground.
tsunami crashed into beach resorts and fishing villages on Java island, killing at least 226 people, leaving scores missing and sending thousands climbing trees or fleeing to higher ground to escape.
A house lies in ruins after a tsunami swept past a beach in the Indonesian city of Pangandaran July 17, 2006. The tsunami, triggered by a strong undersea earthquake off the coast of Indonesia's Java island on Monday, killed 226 people, swept away buildings and damaged hundreds of fishing boats, officials and witnesses said. Picture taken July 17, 2006. [Reuters]
As darkness fell at least 30 bodies were piled up at one clinic near the coast, including several children covered in white sheets, and thousands of terrified residents set up camp in the hills overlooking the sea.
Regional agencies issued bulletins Monday saying a 7.7-magnitude earthquake that struck 240 kilometers (150 miles) off Indonesia's southern coast was strong enough to create a tsunami. But they did not reach victims on Java, which was spared by the devastating Asian tsunami of 2004, because the island has no warning system in place.
The hardest-hit area appeared to be Pangandaran, an idyllic beach resort on the coast popular with local and foreign tourists. People shouted "Tsunami! Tsunami!" as the more than two-meter-high (two-yard-high) wave approached, some clinging to tree branches or crowding into inland mosques to pray, witnesses said.
Boats crashed to shore, some slamming into hotels, and houses and restaurants were flattened along a 180-kilometer (110-mile) stretch of the densely populated island's southern coast.
Jan Boeken, from Antwerp, Belgium, said he was sitting at a bar when his waiter started screaming.
"I looked back at the beach and saw a big wall of thundering black water coming toward us," said the 53-year-old, who escaped with minor cuts to the head and knees. "I ran, but I got trapped in the kitchen, I couldn't get out. I got hit in the body by debris and my lungs filled with water."
The Indonesian Red Cross, police and district officials said at least 82 people were killed and 77 others were unaccounted for, most in Pangandaran and nearby Cilacap. El-Shinta radio reported four other deaths.
"We are still evacuating areas and cross-checking data," Red Cross official Arifin Muhadi told The Associated Press.
Most of the victims were believed to be Indonesians, but at least one Swedish tourist was being treated for injuries at a hospital near Pangandaran and his two sons, 5 and 10, were missing, said Jan Janonius, a Swedish Foreign Ministry spokesman.
A witness told el-Shinta he saw the ocean withdraw 500 meters (1,500 feet) from the beach a half-hour before the powerful wave smashed ashore, a typical phenomenon before a tsunami.
"I could see fish jumping around on the ocean floor," Miswan said. "Later I saw a wave like a black wall."
Local media reports said the wave came as far 300 meters (900 feet) inland in some places. Buildings sit close to the beach in Pangandaran.
Pedi Mulyadi, a 43-year-old food vendor, said he was waiting on the beach for customers when the wave struck, killing his wife, Ratini, 33. The pair were clinging to one another when they were swallowed by the torrent of water and pulled 300 feet inland, he said.
"Then we were hit, I think by a piece of wood," Mulyadi said. "When the water finally pulled away, she was dead. Oh my God, my wife is gone, just like that."
Roads were blocked and power cut to much of the area.
"All the houses are destroyed along the beach," one woman, Teti, told el-Shinta radio from Pangandaran. "Small hotels are destroyed and at least one restaurant was washed away."
Indonesia has installed a warning system across much of Sumatra island but not on Java. The government has been planning to extend the warning system there by 2007.
Java was hit seven weeks ago by a 5.9-magnitude earthquake that killed more than 5,800 people, but was spared by the 2004 tsunami that killed 216,000 people, nearly half of them in Indonesia's Aceh province. The May earthquake did not affect the part of the island hit by Monday's tsunami, which was spawned by a quake that struck 240 kilometers (150 miles) beneath the Indian Ocean.
The quake struck at 3:24 p.m., causing tall buildings to sway hundreds of kilometers (miles) away in the capital, Jakarta. The strength of the temblor was revised upward from magnitude 7.1 after a review by a seismologist, the U.S. Geological Survey said. The quake was followed by a series of powerful aftershocks.
After the quake, the Pacific Tsunami Warning Center and Japan's Meteorological Agency issued warnings saying there could be a tsunami in the Indian Ocean. The tsunami struck Java about an hour later and its effects could be felt as far as Bali island and near Australia's Coco Islands.
Indonesia is on the so-called Pacific "Ring of Fire," an arc of volcanoes and fault lines encircling the Pacific
The earthquake that generated the wave struck at 1519 local time (0819 GMT), 245 kilometres south of Java's coast. As more seismological data has been collated, its magnitude has been upgraded from 7.2 to 7.7. The logarithmic scale used means this signifies a fivefold increase in energy from the previous estimate. The earthquake's depth has also been recalculated, from 45 kilometres to just 10 km.
Local witnesses say that two or three large waves arrived within about 30 minutes of the tremors being felt. The biggest wave was said to be 2 metres tall and smashed into resorts and coastal villages in the region around Pangandaran beach.
According to seismic data posted online by the US Geological Survey (USGS), there had been 20 aftershocks between magnitude 4.9 and 6.3 by 0700 GMT on Tuesday. However, despite reported local scares, no further tsunami waves are expected.
Christmas Islands
An Associated Press report says that another Indonesian island, Sumatra, now has a tsunami alarm system which can alert people to leave coastal areas. But Java's system is not scheduled to begin operation until 2007, it says.
The nearest land to the earthquake's epicentre was Australia's Christmas Islands, 215 km away. The Australian tsunami warning system delivered an alert to residents of the islands 20 minutes before any tsunami was expected to arrive, and about 300 people moved to higher ground.
In the event the highest wave seen at the Christmas Islands was just 60 centimetres tall. The small size of the wave is due to the islands' volcanic origin, which means they are steep-sided. For a tsunami wave to reach a large height, it needs to roll towards the coast across a continental shelf that gradually gets shallower.
Extremely active
The earthquakes were the result of the Australian tectonic plate, overlain by the Indian Ocean, moving northwards and being thrust under the Sunda plate, upon which Java sits. The Australian plate advances by 59 millimetres every year, relative to the Sunda plate.
This plate boundary is very active. Previous large tremors in the region noted by the USGS include a magnitude 7.8 in 1994 that created a tsunami with a maximum run up height of 13 metres and which killed 200 people. That quake occurred 600 km from Monday's quake.
And in 1977 a magnitude 8.3 earthquake, 1200 km from Monday's tremor, produced a tsunami with a maximum run-up height of 15 metres which killed almost 200 people.
The devastating Yogyakarta earthquake, which struck in May 2006 and was magnitude 6.3, occurred at shallow depth within the overriding Sunda plate. It killed over 5000 people as it occurred very close to populated areas.
Indonesia and other places around the Indian Ocean were also struck by a devastating tsunami in December 2004 which killed 235,000 people. See our Asian Tsunami Disaster special report
Brief Description: On July 17, at 1519 local time, a magnitude 7.7 earthquake struck off the southern coast of Java, triggering a tsunami that affected the Central and West Java provinces of Indonesia. On July 18, the Indonesian Department of Social Affairs (Depsos) reported that the tsunami killed approximately 300 people and injured more than 400 others. These numbers may increase as recovery efforts continue. The tsunami damaged buildings, homes, and fishing boats along a 175 km stretch of the southern Java coastline. The resort area of Pangandaran Beach in Ciamis District sustained the greatest amount of damage.
On July 18, U.S. Ambassador B. Lynn Pascoe declared a disaster due to the effects of the tsunami in southern Java. In response, USAID/OFDA immediately provided $50,000 to the Indonesian Red Cross (PMI) and the International Federation of Red Cross and Red Crescent Societies (IFRC) through USAID/Indonesia to provide emergency relief assistance to tsunami-affected communities. A three-person team from the U.S. Embassy and USAID/Indonesia is monitoring the situation on the ground.
tsunami crashed into beach resorts and fishing villages on Java island, killing at least 226 people, leaving scores missing and sending thousands climbing trees or fleeing to higher ground to escape.
A house lies in ruins after a tsunami swept past a beach in the Indonesian city of Pangandaran July 17, 2006. The tsunami, triggered by a strong undersea earthquake off the coast of Indonesia's Java island on Monday, killed 226 people, swept away buildings and damaged hundreds of fishing boats, officials and witnesses said. Picture taken July 17, 2006. [Reuters]
As darkness fell at least 30 bodies were piled up at one clinic near the coast, including several children covered in white sheets, and thousands of terrified residents set up camp in the hills overlooking the sea.
Regional agencies issued bulletins Monday saying a 7.7-magnitude earthquake that struck 240 kilometers (150 miles) off Indonesia's southern coast was strong enough to create a tsunami. But they did not reach victims on Java, which was spared by the devastating Asian tsunami of 2004, because the island has no warning system in place.
The hardest-hit area appeared to be Pangandaran, an idyllic beach resort on the coast popular with local and foreign tourists. People shouted "Tsunami! Tsunami!" as the more than two-meter-high (two-yard-high) wave approached, some clinging to tree branches or crowding into inland mosques to pray, witnesses said.
Boats crashed to shore, some slamming into hotels, and houses and restaurants were flattened along a 180-kilometer (110-mile) stretch of the densely populated island's southern coast.
Jan Boeken, from Antwerp, Belgium, said he was sitting at a bar when his waiter started screaming.
"I looked back at the beach and saw a big wall of thundering black water coming toward us," said the 53-year-old, who escaped with minor cuts to the head and knees. "I ran, but I got trapped in the kitchen, I couldn't get out. I got hit in the body by debris and my lungs filled with water."
The Indonesian Red Cross, police and district officials said at least 82 people were killed and 77 others were unaccounted for, most in Pangandaran and nearby Cilacap. El-Shinta radio reported four other deaths.
"We are still evacuating areas and cross-checking data," Red Cross official Arifin Muhadi told The Associated Press.
Most of the victims were believed to be Indonesians, but at least one Swedish tourist was being treated for injuries at a hospital near Pangandaran and his two sons, 5 and 10, were missing, said Jan Janonius, a Swedish Foreign Ministry spokesman.
A witness told el-Shinta he saw the ocean withdraw 500 meters (1,500 feet) from the beach a half-hour before the powerful wave smashed ashore, a typical phenomenon before a tsunami.
"I could see fish jumping around on the ocean floor," Miswan said. "Later I saw a wave like a black wall."
Local media reports said the wave came as far 300 meters (900 feet) inland in some places. Buildings sit close to the beach in Pangandaran.
Pedi Mulyadi, a 43-year-old food vendor, said he was waiting on the beach for customers when the wave struck, killing his wife, Ratini, 33. The pair were clinging to one another when they were swallowed by the torrent of water and pulled 300 feet inland, he said.
"Then we were hit, I think by a piece of wood," Mulyadi said. "When the water finally pulled away, she was dead. Oh my God, my wife is gone, just like that."
Roads were blocked and power cut to much of the area.
"All the houses are destroyed along the beach," one woman, Teti, told el-Shinta radio from Pangandaran. "Small hotels are destroyed and at least one restaurant was washed away."
Indonesia has installed a warning system across much of Sumatra island but not on Java. The government has been planning to extend the warning system there by 2007.
Java was hit seven weeks ago by a 5.9-magnitude earthquake that killed more than 5,800 people, but was spared by the 2004 tsunami that killed 216,000 people, nearly half of them in Indonesia's Aceh province. The May earthquake did not affect the part of the island hit by Monday's tsunami, which was spawned by a quake that struck 240 kilometers (150 miles) beneath the Indian Ocean.
The quake struck at 3:24 p.m., causing tall buildings to sway hundreds of kilometers (miles) away in the capital, Jakarta. The strength of the temblor was revised upward from magnitude 7.1 after a review by a seismologist, the U.S. Geological Survey said. The quake was followed by a series of powerful aftershocks.
After the quake, the Pacific Tsunami Warning Center and Japan's Meteorological Agency issued warnings saying there could be a tsunami in the Indian Ocean. The tsunami struck Java about an hour later and its effects could be felt as far as Bali island and near Australia's Coco Islands.
Indonesia is on the so-called Pacific "Ring of Fire," an arc of volcanoes and fault lines encircling the Pacific
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