Japan’s Recession and Cheaper Fuel Prices

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Nov 17 2008
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One of the scary parts about recession is the fact that it does not infect only a certain sector. It is just like a virus or worm and it will not stop infecting until the right antivirus signature is used to uniquely identifies and quarantine or clean the specific virus. For this same reason people in the I.T. field somehow got suspicious that it could be the fellows from the anti-virus companies that wrote or design the virus, spread it and claimed overnight after the release of the virus or worms that their antivirus software was the first in the world that could contain the virus. The catch – you need to buy their antivirus software to clean up thousands of your organization’s workstations, servers or notebooks.

I’ve wrote why this time around the recession is for real because it infected the banking system so i’m not going to elaborate on it. From here onwards it will spread to other sectors and it appears the automakers are screaming for bail-out. While President-elect Barack Obama urged outgoing President Bush to rescue the auto-makers, some said it should be left to survive on its own. Frankly, how many more companies and how much money more do you plan to dump into this black-hole in the name of bail-out? You can only do so much with the taxpayer money although personally I don’t think some of the greedy banks should be rescued. I’m not going to scream again that the bad time will stay for a little bit longer than expected so go and read previous articles if you’re still not sure what I’m talking about.

Japan enters recessionNow the bad news – Japan‘s economy officially entered the technical recession for the first time since 2001 when its economy shrank at an annual pace of 0.4 percent in the July-September period after a declining an annualized 3.7 percent in the second quarter. With two straight quarters of contraction, Japan has joined the recession club together with 15 other Euro nations. But Japan should know and well-prepared on what to do after facing recessions before. Being the world’s second largest economy powerhouse, such recession announcement also means it is bad news to the Gulf countries because it means the demand for crude oil is worsening. Seriously I doubt the call by Iran or any country for that matter to cut production by 1.5 million barrels a day can have any effect on the black gold’s price.

However lower crude oil prices also means country such as Malaysia has no choice but to cut the fuel prices accordingly after the ruling government hiked it by almost 41 percent not many months ago. So here’s the good news – petrol and diesel will be 15 sen cheaper per liter from Tuesday onwards. The pump prices of RON97 petrol will be RM2 a liter from RM2.15 while the retail price of RON92 petrol and diesel is RM1.90 a liter. Of course don’t expect the prices of other goods such as foods to be reduced accordingly because it would be an uphill task to get the whole supply-demand chain to pass down the benefits to the consumers. Hmm, is PM-in-waiting Najib plans to call for a snap election soon?

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