Make Money Online

Mexican telecom tycoon Carlos Slim is the world's richest

2010-03-11T10:07:00.000-06:00

According to Forbes list of the richest billionaires. Mexican telecom tycoon Carlos Slim is the world's richest person, overtaking Americans Bill Gates and Warren Buffett. He is the first person from a developing country to top the list, according to Forbes magazine dated March 11, 2010.

Obama blames insurers for health care reforms delays

2010-03-10T12:52:00.000-06:00

In his speech on health care at Glenside, Pennsylvania, for promoting his health care plan , President Obama repeatedly said, “I am kind of fired up”, in the same tempo as he used to address the crowds during his presidential campaign.

President Barack Obama and his top health care officials recently stepped up attacks on US insurers on their arbitrary actions in increasing insurance premiums, as part of his efforts to mobilize public opinion and to persuade lawmakers to back US health care legislation that, among other things, stipulates that all Americans would be required to avail health insurance coverage.

Obama’s signature piece of legislation on health care is designed to cover 40 million Americans who lack health insurance coverage, while reducing medical costs, and to give the US government fresh powers to regulate insurance rate increases. The legislation is expected to bring in widespread changes to US health care in 45 years. But it still faces opposition from Republicans and some Democrats on various counts.

The White House has already spent a year trying to pass health care reforms and it has paid a heavy political price to the president and his party in terms of falling poll numbers and as the stalled health care reform bill has slowed down Obama's wider agenda.

Apart from insurance firms the health care reform also faces opposition from lobbies representing drug companies and health care industry. When health care legislation was drafted in 2009 the drug companies were asked to support the legislation in return for not allowing imports of drugs from foreign countries.

Pleading on behalf of the people, Obama recently said that lawmakers are oblivious to the suffering of ‘heartland Americans’, and he added, “Those of us in public office were not sent to Washington to do what’s easy.”

Obama accused insurance firms of making ‘a cynical calculation, that even if rate hikes cost them customers, they could rake in more cash through higher premiums on remaining plan holders.’

"The United States Congress owes the American people a final up-or-down vote on health care. It's time to make a decision," Obama said recently in Pennsylvania, the state that helped him claim presidency in 2008. “We can’t have a system that works better for the insurance companies than it does for the American people,” Obama said.

"Every year, they drop more people’s coverage when they’re sick and need it most. Every year, they raise premiums higher and higher," Obama said.

“They will keep on doing this for as long as they can get away with it,” Obama said. “So how much higher do premiums have to rise until we do something about it? How many more Americans have to lose their health insurance? When is the right time for health insurance reform?" Obama insisted that the right time to pass the legislation is ‘right now.’

Parodying the pitches made by insurance firm executives to investors in their companies, Obama quoted them as saying 'we are in the money; we are going to keep on making big profits.’

Also Obama cited the plan of WellPoint Inc. for a 39 per cent rate increase for some policyholders in California. Both he and Kathleen Sebelius, the Health and Human Services Secretary, also referred to the conference call held by ‘Goldman Sachs Group Inc. in which an executive from the London-based insurance broker Willis Group Holdings Plc said price competition has decreased and insurers are willing to “walk away” from clients.’

It may be noted, recently, Sebelius wrote to heads of insurance giants UnitedHealth Group Inc., WellPoint Inc., Aetna Inc., Health Care Service Corporation and CIGNA HealthCare Inc. reiterating a request that they disclose how much of premiums go towards customers’ medical care, as well as administrative costs, executive salaries and profit.

The insurance industry CEOs met with Sebelius on March 4 at the White House. Stephen Hemsley, CEO at Minnetonka, Minnesota-based UnitedHealth, said in an interview afterwards that the industry agreed on the need for transparency and was waiting for details from the administration.

Meanwhile Karen Ignagni, president and CEO of the trade association, said in remarks at the group’s national policy meeting recently, “Our industry strongly supports health-care reform because we recognize that the current system is unsustainable,” and added “Unfortunately, the path that has been followed is one of vilification rather than problem-solving.”

According to trade groups, Obama needs to find ways to reduce medical costs and rather than attacking insurers. But the meeting at a Ritz-Carlton hotel in Washington is being targeted by demonstrators pressing for passage of the healthcare legislation. The organizers said they will attempt citizens’ arrests of insurance company executives and Ignagni, who opposes the current bill.

One of the complaints of the Republicans is that Obama's health care plan would mean higher taxes and the costs would be partly paid for by cuts to government health care plans for elderly people. But President Obama maintains that his approach would cut costs, expand access, rein in abuses by health care insurance firms and help reduce the rolls of more than 40 million people in America who lack health coverage.

There are many ordinary people, especially the students’ community, who fear that Obama Administration plans to jam the Student Loan program through at the same time as the Health care bill, and put college students to hardships.

There are legislators who wants the House to ditch legislation it approved in November and pass the Senate's version, coupled with ‘fixes’ to that bill, but the approach is highly risky as some conservative Democrats oppose it.

According to the former US Secretary of Labor, Robert Reich, only a ‘big, national, public option’ can force insurance companies to cooperate, share information, and reduce costs. He said that scattered, localized ‘insurance cooperatives’ are too small to do that and are ‘designed to fail’ because of opposition by the moneyed forces opposing the health care reform.

One of the major obstacles to implementing any US healthcare reform that does not benefit insurance companies and the private health care industry is the power of their lobbyists. In a June 2009 NBC News-Wall Street Journal survey, 76 per cent of the people said it was either ‘extremely’ or ‘quite’ important to ‘give people a choice of both a public plan administered by the federal government and a private plan for their health insurance.’

According to the Institute of Medicine of the National Academy of Sciences, the United States is the only wealthy industrialized nation that does not provide health care coverage to all its citizens. Those in favor of universal health care argue that the large number of uninsured Americans creates direct and hidden costs shared by all, and that extending coverage to all would lower costs and improve quality.

Now Obama is mounting pressure on the House of Representatives to back his health care plan by March 18, when he leaves on a trip to Indonesia and Australia. Obama wants House Democrats to approve the bill that has already passed the Senate. Required changes then would be made to the legislation through reconciliation, which would require a simple majority of votes in the Democratic-controlled Senate.

President Obama talks on health care plan

2010-03-09T10:33:00.000-06:00

This video shows US President Obama visiting Glenside, Pennsylvania for promoting his health care plan and points out that most people in DC are more worried about the political score instead of results.

Marketing a single product versus multiple products

2010-03-07T12:46:00.002-06:00

There are hundreds of ways and marketing strategies to sell your products online. Though many experts may advise that you should continue promoting only one product at a time, inevitably, even they have many products being promoted at the same time. This is because when you start with an online business of the type of a multilevel marketing (MLM) or affiliate marketing program, or anything that is not your proprietary item, you simply do not know whether you will be successful with that product, or not. Only the process of active and practical marketing that takes time can determine whether you will be successful.

So, you do not want to be tied down by one product till it becomes clear that you are successful or not. Besides, even if you are successful with a particular product, it is no guarantee that the same product will keep on bringing wads of cash day after day and month after month for years. And, what happens, if the solitary product turns out to be a failure? You do not want to waste your time, energy and money till then. Do you?

Tastes and preferences of the buyers keep on changing day after day, as new technologies, better products and many more crucial aspects on customer preferences keep on changing. So, the best seller of today is bound to become the worst seller of tomorrow. If, and when, it happens, you do not want to be caught off-guards. So, the intelligent marketer or businessperson is always on the look out for new products, including intangible services, and when they find them, they just keep on adding them to their products lineup. That, in other words, means that the idea that you should concentrate only one product at a time for marketing is simply a fallacy. Or it can be safely said at any given time almost all successful online marketers are having an array of products and services on offer.

The benefit of promoting multiple choices of products at a time is that if your customer, or even a casual visitor to your site, does not like your main product or a set of your best sellers, they may even purchase the product that is of the lowest preference in your line of products. But, that too adds to your online income. So, why should you not promote it? Take that off your products list only when keeping it is no longer economical.

Now, let us agree that we may be promoting many items at a time, but there could be some products that make the most sales. Even out of them there will be one single product that makes the highest amount of revenue in comparison to all other products on offer. And that is the product centered on which all your marketing strategies are built upon. And as soon as this product become obsolete or another product takes up its place, the new best seller becomes the centerpiece of your marketing strategies.

So, instead of one product, always try marketing different products at the same time. It makes more sense, as products, their demand and the resultant sales-pulling power of products keep on changing.

Being focused on business targets is the key to making money!

2010-03-07T05:44:00.000-06:00

At the times when I started looking for means of making some extra money on the Internet, I was not a newbie in money-making programs like multilevel marketing, affiliate programs, etc., but I was doing such business ventures either using the traditional means like newspaper advertising, ads in mail order business magazines and mailing out my own flyers containing my business offers. So, I was only a newbie to internet marketing, and not to the business itself.

So, this newbie status on the net lead me often to dating sites, marriage sites, and sites that I never wanted to be even visiting, and sites with sort of illegal or immoral businesses for the orthodox types of people. And the types of businesses that you find today were not much, and blogs and social networking sites like Facebook, Twitter, and others were unheard of as they were not even born. But that was many years ago. But what all I came across offered me commissions varying from 35 per cent to 50 per cent. Then I thought, if they are not harmful, why not put up a few links in my web sites. So, I did exactly that. I lost nothing, but got a few bucks, and continued looking for genuine opportunities. And it paid off.

Let me confess to you first that I am not a hardcore money-maker or affiliate marketer. I just look for some extra money that I can earn by placing harmless links and ads and stuff of that sort in my sites and blogs and I try to use the traffic and interest of my visitors to make that extra dollar when I am already on my main objective of being on the internet that spans varied topics and pursuits. These are not essentially moneymaking ventures, but attract readers and money-minded folks into my sites. I just give them opportunities through my pages and I too earn something in that process. I have no regrets if I do not earn, but mostly, I earn nicely. So I keep on doing it and I get that extra buck for the extra mileage my car needs.

Then there is the determined, focused moneymaker or affiliate marketer who makes it big on the internet. They are always on the bull’s eye when any big-hitter in the money-making horizon appears, and they make it big. I always wondered initially about how they do it. But to my surprise, I understood that they do not have such a thing called big secrets but they follow a certain method that cannot fail. Most of them will tell you what to do to make money like them. It is simply because they too started like you and they now need people like you in their network. So, I tried that method and passed on the secrets to many of my friends. Funnily, while I did not make it good in affiliate programs, those who followed the leads that I provided made big bucks. Strange but true! Reason? I was not focused on what I advised, but those who followed my advice were focused and worked hard and it paid them well.

So being focused on your business targets is the key to making money!

Oscar-impact on box office of films like The Hurt Locker

2010-03-06T10:50:00.001-06:00

In this video Hollywood.com's Paul Dergarabedian examines the Oscar Awards' impact on revenues for a movie like The Hurt Locker. Listen to the video and think of how a movie’s fortunes are changed by an Oscar nomination and a Best Picture Oscar Award.

The best way to explain how a Best Picture Oscar can change the box office fortunes of a film can be found from the experience of last year’s Oscar Best Picture winner Slumdog Millionaire that had a limited release in North America on 12 November 2008, followed by a nationwide release in the United States on 23 January 2009. The film grossed only $360,018 in 10 theatres in its first weekend. In the second weekend, it was released in 32 theatres and made $947,795. The film largely depended on strong word-of-mouth promotion by viewers as the promotional budget of the film was negligible. The film was widely released on 25 December 2008 at 614 theatres and earned $5,647,007.

But following its Best Picture Academy Award (and seven others), the film's takings increased by 43 per cent, which was the highest for any film since Titanic. In the weekend of 27 February to 1 March 2009, the film reached 2943 theatres grossing over $140 million at the North American box office alone. As of the time of this post the Slumdog Millionaire had worldwide gross revenue of $377,417,293 with domestic revenue of component of $141,319,928 (37.4%) plus foreign takings of $236,097,365 (62.6%). Additionally, the film was released on DVD by Blu-ray in the United States and as of 12 November 2009 an estimated 1,964,962 DVD units were sold earning $31.32 million in revenue.

At the time of the announcement of Oscar nominations on February 2, Avatar was the highest earner among the Best Picture nominees with $706 million in domestic box office receipts, but as of now, it has domestic earnings of $714,464,000 (28.0%) plus foreign revenue of $1,839,000,000 (72.0%) making the worldwide box office revenue $2,553,464,000. If Avatar wins the best picture award, watch for the rate at which it will gain at the box office. Even if it loses out to The Hurt Locker or any other film, Avatar is bound to garner some of the important Oscar trophies out of the 9 nominations, and it will still boost its box office takings.

In the case of The Hurt Locker, at the time of announcing the Oscar Best picture nominations, the Iraq war film made at a budget of $11 million had taken in revenue of $12 million. Now it stands at domestic $12,671,105 (65.6%), and foreign $6,656,139 (34.4%), totaling worldwide revenue of $19,327,244. These are very small figures compared to what you have for Avatar till now, or Slumdog Millionaire after the Oscar Awards of 2009. But, if you watch for, definitely, The Hurt Locker’s fortune will make a quantum jump if it wins the Best Picture Oscar.

Also, compare the figures for Avatar and The Hurt Locker in terms of percentages worldwide out of their total revenue. Avatar earned only 28.0% from domestic market but The Hurt Locker earned as high as 65.6% of its revenue from domestic market, and it earned only 34.4% from the foreign market, against Avatar’s 72% from foreign market. Two reasons can be attributed to this vast difference: firstly, in the US, it being a war movie involving American forces and the terrorists or foreign forces, it will be acceptable to the audiences, but for the audiences outside the US, Iraq is a human tragedy, born out of miscalculations, and Avatar had a huge promotional budget and the theme was acceptable, especially for the younger generation and The Hurt Locker could not enjoy the luxury of such a huge budget and it had a limited foreign release.

Any way, if the Best Picture Oscar goes to The Hurt Locker or Precious (budget: $10 million, gross revenue: $50,867,591), these films are bound to have a big rerun and the revenues are going to jump many fold. The Academy Awards and all the run-up to the final award night is a big business in itself, including for the big fashion houses and designers that run all the way to dress up the celebrities out there for all the Oscar events.

Merkel allies advise Greece to sell islands to cut its debts

2010-03-04T14:12:00.002-06:00

File Photo: Elias Beach on the Greek island of Mykonos. Click on the photo for the enlarged view - 1600 x 1197 pixels.

There is a suggestion from the political allies of German Chancellor Angela Merkel that the bankrupt Greeks should consider selling some of its uninhabited islands to cut its debt.

Josef Schlarmann, a senior member of Merkel's Christian Democrats and Frank Schaeffler, an MP of the Free Democrats, which is a junior partner in the centre-right coalition Government, told Germany's Bild daily that Greece should sell stakes in all its assets to raise more cash. ‘Sell your islands, you bankrupt Greeks - and the Acropolis too’, says the headline in the Bild newspaper.

Mr. Schlarmann said those who face insolvency must sell everything they have to pay their creditors. He advised Mrs. Merkel not to promise any financial aid when she meets Greek PM George Papandreou in Berlin, later this week for talks about the Greek debt crisis.

According to reports, the two senior politicians of Germany wanted to start a debate about what Greece could do to help itself and bolster the battered Euro. And according to a poll published on Thursday, 84 per cent of Germans think that the EU should not help Greece out of its debt crisis.

Mr. Papandreou has already announced harsh austerity measures to bring the Greek deficit under control, and for the Greeks to tide over the financial crisis, and this has resulted in widespread resentment from the Greek labor force totaling over 5 million, who launched protest strikes against the government’s austerity measures.

According to the International Monetary Fund Greece had an estimated average per capita income of US$30,661 for the year 2008, well comparable to that of Germany, France and Italy. But now the Greek economy faces significant problems, including rising unemployment levels. In 2009, Greece had the European Union’s second lowest Index of Economic freedom, after Poland, ranking 81st in the world.

Greek economic growth turned negative in 2009 for the first time since 1993, with the highest budget deficit, although close to those of Ireland and the UK, as well as the second highest debt to GDP ratio in the European Union.

An indication of the trend of over-lending in recent years is the fact that the ratio of loans to savings exceeded 100 per cent during the first half of the year.

According to a real estate website, Greek islands evoke images of sunglass-sporting shipping magnates sipping champagne on enormous yachts, but these islands cost as little as US$2m, relatively 'affordable' islands, the website says, ‘unless, of course, you're a Greek’.

The Greek Islands are a collection of over 6,000 islands and islets that belong to Greece, only 227 of the islands are inhabited, and only 78 of those have more than 100 inhabitants. Many of them are privately owned by the world's super rich people.

The largest Greek island by area is Crete in the Aegean Sea, and the second largest island is Euboea, separated from the mainland by the 60m-wide Euripus Strait. After the third largest island Lesbos and fourth largest island Rhodes, the rest of the islands are two-thirds of the area of Rhodes, or smaller than it.

PayPal could have avoided confusion on suspension of withdrawals to India

2010-03-03T13:15:00.000-06:00

Following the suspension of personal payments to and from India and transfers to local banks in India by PayPal, there have been a lot of inconveniences for people using PayPal for collecting payments and using their services for transactions, including withdrawals. The problem was posted in this blog as PayPal suspends personal payments and local bank transfers in India on Feb 8, 2010. Now it seems the problems are sorted out by PayPal, as it involved questions of complying with the regulations of the Reserve Bank of India (RBI). The final outcome was notified to users by PayPal by email, and it is in the PayPal Blog titled "New Bank Withdrawal Instructions for Our Customers in India".

At the time of suspension of accounts, many question came up like how to cancel the withdrawal request that is already made and money was on the pipeline, the fees that PayPal deduct on reversal of payment, the difference in exchange rates when money is credited back by PayPal, how long will the suspension of withdrawals remain in force, what are the real problems with the regulators (RBI) and many more questions. Unfortunately most of these were not answered, and those who tried to contact the customer service either got ready-to-mail generic replies that had no relevance to the current problem or did not get any reply at all.

One pertinent question that was being asked by PayPal users through the PayPal Blog is why bank transfers to India were allowed by them even after the problem arose, and when PayPal knew that user is NOT going to receive the money? And interestingly, PayPal accounts showed the transactions as “completed” even when NO transaction was possible, or allowed by RBI. I transferred some money on Feb 8, and my account showed the transaction as completed, and now it is credited back to my account on March 3, 2010, but only a reduced amount on account of the exchange rate at the rate of ‘1 Indian Rupee = 0.0210343 U.S. Dollars’, as indicated in my account. Looks funny, as the money has not been received in my account and hence there was no transfer-back and there cannot be an applicable exchange rate on a transaction that never happened.

Now there are two main questions involved in the above transaction. Firstly, there was no transfer at all, and the money was with PayPal (if not with PayPal, where was it?), and what happens to the interest on the money? Though the money I transferred is nominal, there were people who had substantial amounts involved in stuck up PayPal transactions and the total sum that was held in suspension by PayPal must be huge. Therefore, at least they should have transferred the same amounts in terms of US$, as this loss to the customers is NOT because of them, but because of PayPal.

The next important question is why was the users not at least told where the money was, or at least the accounts should have shown the amount as ‘incomplete’ transaction, with some kind of indication that the money could not be transferred and it is safe. Yes, most people were concerned about the safety of their money, as there was no authentic answer on this at the PayPal blog. Most people who tried to contact PayPal were not answered.

One user rightfully commented in PayPal blog, “And wouldn’t it be wise for PayPal to add a message/announcement to PayPal (Indian) account to warn us on bank withdrawal?” Another user asked, “When PayPal have got instructions from RBI, PayPal team have immediately reversed all the money which have been transferred to or from India. Then in this case, why r u waiting for?? You can immediately stop of make reversal to our PayPal account. At least we can be trusted that our money is safe.”

Another user also asked, “Why the transfer was initiated, when PayPal knew that the payment is just going to be debited to the users’ account and the user will not receive the amount at all? There could have been some error message but it didn’t happened and then started the whole thing…!”

When he contacted PayPal, he was assured, ‘We are doing everything we can to process your withdrawal as soon a possible.’ And the source at PayPal said, “If you are unable to locate the deposit at your bank, and the status of the transaction is still listed as completed, we can initiate a trace on these funds once 14 business days have passed. In this case, please contact us and our Customer Service will provide all the information to initiate the trace procedure.” He writes, ‘so we have to wait for 14 business days from the day withdrawal is initiated, and then after they will initiate the trace and funds will come back to PayPal account. And then you can request a cheque or transfer to your credit card.’

PayPal is no doubt one of the best means of money transactions, especially for small businessmen, professionals and the small gal or guy with a blog. What we feel is that PayPal could have certainly avoided all the confusion by posting the updates and by showing the status of the payments that remained incomplete.

Any way, it is very nice to note that PayPal has resumed their services to India and posted the ‘New Bank Withdrawal Instructions for Our Customers in India’ in the PayPal Blog.

Paris Hilton ad too hot for Brazil

2010-02-28T12:54:00.001-06:00

It all started with her February 2010 advertising campaign for the launch of the Brazilian beer Devassa, but Paris Hilton's sultry appearance in the commercial is too hot for television, a spokesperson for Brazilian Government's Secretariat for Women's Affairs said. Now the Secretariat wants the ad spot removed.

As you can see in the short video clip above, the advert features the hotel heiress Hilton in a short black dress with a can of Devassa, to the delight of onlookers watching through the glass window. Devassa is made by Grupo Schincariol and its ‘Bem Loura’ - ‘Very Blond’ campaign also features an internet campaign with Hilton wearing lingerie and high heels.

Hilton was in Brazil last week during the Carnival (in Rio de Janeiro), which is considered one of the greatest shows on Earth, in the cabin of the Devassa for the opening of the ad campaign. Paris Hilton’s photos in Brazil’s local newspapers showed her crawling on the floor in a VIP room during the extravagant samba parades.

It may be recalled that in December 2007, Hilton campaigned to promote Rich Prosecco, a canned version of an Italian sparkling wine, and she traveled to Germany to promote the drink, appearing in various print ads for the product.

It all seems funny, as in the ‘land the postage-stamp-sized bikini’, the ad campaign may not be outrageous, but Brazil's laws say beer commercials cannot treat women as overtly sensual objects. The trouble started when the Women's Secretariat had received numerous complaints.

‘It's an ad that devalues women - in particular, blonde women,’ according to a spokeswoman for the Women's Secretariat, who spoke on Thursday to the Associated Press on condition of anonymity because she was not allowed to discuss the case with the media.

Eduardo Correia, a spokesman for the regulator Conar, said that ‘many Brazilian beer ads feature women in bikinis, but a key difference is that those are set on the beach’. Conar has initiated three separate investigations into Paris Hilton’s ad campaign. Conar, which is a private agency, cannot legally force a company to remove an advert. But according to Correia, in 23 years Conar has conducted more than 7,000 investigations and not one of its recommendations has been ignored by the government.

"The problem with the ad isn't a lack of clothing, but its sensual nature… A woman in a bikini on a beach isn't necessarily sensual; it depends on the context," Correia said.

Hotel heiress Paris Hilton, best known for her appearance on the television series The Simple Life, has engaged herself in occasional business pursuits too, apart from working as a model, actress and singer. Beginning modeling as a child, later she has appeared in numerous advertising campaigns, including Iceberg Vodka, GUESS, Tommy Hilfiger, Christian Dior and Marciano.

Hilton was also instrumental in designing a collection of purses for the Japanese label Samantha Thavasa and a jewelry line for Amazon.com. Also Hilton was involved in the creation of a perfume line by Parlux Fragrances, a line of hair extensions in partnership with Hair Tech International, a signature footwear line ‘Paris Hilton Footwear’ with Antebi, and a line of tops, dresses, coats and jeans at Kitson boutique in Los Angeles.

A user-friendly email marketing software

2010-02-22T10:20:00.000-06:00

In spite of the extensive usage of new marketing tools like social networking applications and other evolving technologies, email marketing continues to be the backbone of marketing campaigns. So the need for email marketing keeps on growing and it is expected to grow at a faster pace in the future.

I have compared the services provided by many companies and find iContact is one of the best options out there for anyone who wants to start email marketing campaign. It is an easy-to-use email marketing, surveying, autoresponder, and blogging tool that allow small businesses, non-profits, and associations to easily communicate online with their customers, prospects, and members.

Currently the company has over 15,000 customers and 100,000 users. Their email marketing software is used primarily by small businesses but they also have a number of Fortune 500 companies such as Bank of America, Ford, Nissan, Super 8 Motel, International Paper, and political campaigns like Barack Obama’s 2008 presidential election campaign. The company, founded by Ryan Allis and Aaron Houghton in 2003, is based in Durham, NC.

They have great inbox deliverability, a very easy-to-use interface, lots of templates, and also include surveying, autoresponder, and blogging capability from the same application at no additional charge. The prices are great too starting at $9.95 per month, and scaling upward based on list size. They also have an Enterprise product for larger organizations that starts at $660/month.

iContact offers a choice of over 300 professionally-designed email newsletter templates to make your campaigns attractive and easy to launch immediately. The application allows you to track the opens and clickthroughs on your emails, add a sign-up form to your web site, segment your list, and manage your subscribers. Additionally, they take care of managing bounces and unsubscribe for you.

Deliverability is the key to any email marketing tool. Through their ISP relations, feedback loops, and white list status, iContact also take care of making sure your message gets to the inbox of your recipients. If you are currently running into deliverability issues with your existing newsletter sending method, they will be very helpful and ensure inbox delivery of your messages.

Also, iContact is working to change the way businesses and non-profit organizations communicate online by making it really easy to manage all online communications from a single web application. If you are looking for any easy and inexpensive way to put your emarketing on autopilot and get great deliverability, check out this company and the marketing software they offer. You can even sign up for try a 15 day free trial.

New survey shows blogging is less preferred by young internet users

2010-02-08T03:42:00.000-06:00

If the outcome of the recent US survey by Pew Internet and American Life Project is any indication of the future of social networking, blogs are less preferred by the younger generation. The study shows that the young bloggers of the age groups 12-17 years and 18-29 years have come down drastically, with the former having halved to 14 per cent since 2006. The study also showed that about 55 per cent of 18-29 year-olds and 27 percent of 12-17 year-olds prefer to access the internet from mobile phones. The possible reason quoted is the preference for short and snappy updates, text messaging and similar features, while blogging requires typing longer text and text blogs which are content-driven needs patience to read the blogs.

Interestingly, the study also shows that there is a small increase in blogging by those who are 30 years or older, whose numbers had increased from 7 per cent in 2007 to 11 percent in 2009. The study suggests that this trend is responsible for the prevalence of blogging among overall grown-up internet population and their numbers remaining steady at about 10 per cent.

In recent times there have been tremendous technological improvements in the tools and other features showcased in social networking sites because of which such sites continue to grow at very fast rates. Because of this the younger generation seems to be exchanging macro-blogging for micro-blogging with status updates, which has made blogs less preferred by them. Any way, Twitter is not to be blamed for the new trends.

Twitter has emerged as a revolution in micro-blogging with those 140 characters, but it is not the reason for the reduced interest in blogging by the younger generation, as teens are not using Twitter in large numbers, although teens have been the biggest users of almost all other online applications, but Twitter is an exception, the study says. On the other hand, there is a surge of tweets from men and women of older age groups tweeting away on all possible topics or grabbing attention to what they find interesting with 140 characters.

PayPal suspends personal payments and local bank transfers in India

2010-02-08T01:06:00.000-06:00

The online payments and receipts service provider PayPal has suspended personal payments and local bank transfers in India, informs Anuj from the communications team at PayPal, in a blog posted at the PayPal Blog. This includes transfers to and from local banks in India.

He wrote, ‘I’m writing to let you know that personal payments to and from India and transfers to local banks in India have been suspended while we work with our business partners and other stakeholders to address questions they have about the service”. As per the post, ‘during this time, customers can still make commercial payments to India but merchants cannot withdraw funds in Rupees to local Indian banks’.

PayPal is trying to resolve the situation at their earliest and regrets the inconvenience that this may cause PayPal customers in India and around the world, the blog post says. If you are the one affected by the suspension of services you can check for updates on this problem from PayPal Blog.

I hope the problem is resolved soon as many thousands of Indians who depends on PayPal for online payments will be affected, especially the small guys like bloggers and small businesses using PayPal services for collection and transfer of payments using their services. As it looks, transfer of funds to your PayPal account may not be affected but getting the money back to banks located in India will be on hold till the problem is resolved.

10 Tips to tide over your financial problems

2010-02-07T13:57:00.000-06:00

10 Tips to tide over your financial problems

Deciding about how much one should spend at times like this when the flow of income is unduly restricted and we do not find easy, effective and legal ways to supplement the sagging income is rather difficult. While we rue the fact that the income has come down to uncomfortably lower levels, when spending we tend to follow the trends that used to rule us during the periods of surplus cash. It happens so because, the spending habits take time to change. While shopping, for anything for that matter, we conveniently forget our reduced financial status and spend as usual. Possibly, we remind ourselves that it was over-expenditure or a wasteful one only after parting with the cash. And, again possibly, we resolve to ourselves that we have to change the pattern of spending to strike a balance with the income levels so that all on a sudden we are not confronted with deficits in our home and personal budgets.

While we reconcile ourselves to the reduced income levels, it is a bit difficult to curtail the spending habits. It is a psychological riddle. Sometimes, especially in the presence of others, no matter the other person is an outsider, a friend or even a member of the family, we spend as before simply because our egos do not permit us to spend less. We may even be assuring ourselves that it does not matter much this time and the excess spend can be set off with a budgetary cut next time. But it never happens.

For the above reasons and many other reasons, a proper balance is not maintained between income and expenditure and it creates all the problems. Here are a few ways that can help you sail through the times of recession, or situations of low incomes, without much of heartburn.

01: Review your budget

The first step to restore comfortable spending habits is to review your personal or home budget. If you are a person who has never drawn up a budget, do it now. List all your incomes and expenditures and add them up. Draw the balance. If your income is less than your expenditure, it is certainly a cause for worry. If the gap is very wide, you are in for a bigger financial collapse. In that case, check each item of expenditure and strike off those spends that are not essential now. Such items may include expenditures that can be classified as avoidable luxury or other types that can easily be postponed for a future date, or for all times. In most cases, this first step itself will put you out of the red.

02: Cut on nonessentials

Expenditure on food, education, healthcare, etc. are mostly unavoidable, though one can reduce expenditure by avoiding expensive restaurants, costly partying and expenses of similar nature. But, if you have enough clothing and accessories you can comfortably avoid the temptation to add more on such expenses. We can indulge in them when the income levels are back to normal. By doing so, we hardly face any problems and mostly no one will notice them. So, while thinking of purchasing any nonessentials, ask yourself this question, “Do I need it now?” If the answer is NO, do not purchase that item. Remember, money not spend is as good as money earned.

03: Save something for the rainy day

Recession or no recession, income levels are very high or low, building on your personal savings is the key to your happiness and boosting your confidence levels. It not only keeps you out of monetary troubles, but also helps you earn more because of higher confidence levels and by investing the saved money in growth-oriented, income-generating investment opportunities. Building a good amount of savings also takes care of very bad situations like losing a job, unforeseen financial pitfalls, and loss of business incomes in the case of persons depending mainly on businesses.

04: Keep your savings above possible inflation levels

Inflation is a fact of life, wherever you are living, whether in a rich country or in a developing nation. In many economies, inflation ranging from 5-10 per cent is considered normal. In many developing economies inflation of even 20 percent or thereabouts was experienced in 2009. So, if you save $100 this month, the next year by this month, for the same goods and services you have to pay $110 if the inflation is 10 per cent. Generally, people save to pay for expenses on a future date or for building wealth of a permanent nature. It makes no sense to save now and pay more later with borrowed money.

05: Invest your savings wisely

In order to take care of situations of inflation, do not keep your savings in unproductive accounts or at home. Invest them wisely in portfolios that bring in returns more than the bank rates, inflation, etc. Some options can be stocks/shares, gold, and real estate if you have sizable savings. Always study the market trends and the rate of return on investments (ROI), before you invest. If you are not good at understanding these trends, seek the opinion of professionals or friends who are knowledgeable in such matters.

06: Avoid borrowing to spend

Well, everyone knows it is bad, but most people overlook the financial implications of borrowing to finance current spending, especially in today’s consumerist culture and overdependence on credit cards. Borrowing can hardly be justified unless the money borrowed is spent on some assets that will generate income now or in the future, for example, for investing in business. Other occasions when one has to borrow, though not prudent but cannot be avoided, are if a person is trapped in a harsh financial situation and do not find any other way out for survival.

07: Learn to live in the current situation

There is no fun in blaming the general cash crunch of the whole economy, employment levels or your own situations. You have to live with the current situations. Though it may sound harsh, the best option to avoid future financial troubles is to tighten the belt now. Always spend within your current means.

08: Invest in insurance

Put aside enough money to pay for insurance including personal accident insurance, and against investment losses, health insurance and other options available. It will take care of unforeseen circumstances you and your family may have to face in the future. Unless it is only to cover unforeseen expenses, most well-planned insurance policies will take care of your future financial needs too. Some of them even help you to retire comfortably without any financial worries.

09: Find emotional support

Do not hide your current financial situation from your family or the dearest ones who may have to face the problems with you. Discuss your budget with them, tell them about the financial problems and seek their opinion. It will sometimes help you to plan better than you yourself can do. Additionally, they will give you emotional support and the courage to brave the situations comfortably. They shall, many a times, treat your problems as their own and make you more confident and brave.

10: Hide your financial status where required

Yes, you have to hide your financial status at many places, from many people, not only in recession, but in affluence too. If you are super rich and keep on trumpeting about it, may be your enemies, burglars, and others may trouble you in many ways. If you are in financial trouble and keep on telling all the people around, again, it will be inviting your enemies or jealous people to trouble you as there can be people who look for a ‘poor you’ to settle some personal score or enmity. But you never know who such a person can be. So, the best thing is to disclose your financial status to only those people to whom you must disclose for one reason or the other, including legally required disclosures.

So, finally, from now onwards, start living in the real world. Stop dreaming about opportunities and projects that are not real. Weigh your options; discuss with professionals about your business or personal finance plans. There can be many people out there who can help you out of trouble without burning a hole in your pocket. There is nothing wrong in accepting help from others. Similarly, be helpful to others.

Burj Dubai opens on Jan 4, 2010

2010-01-01T19:22:00.004-06:00

Burj Dubai 03, originally uploaded by niman_lakra.

Burj Dubai (Dubai Tower; Burj in Arabic means tower), built by the company Emaar, will be inaugurated on January 4, 2010 by the UAE Vice President and Prime Minister and Ruler of Dubai Sheikh Mohammed Bin Rashid Al Maktoum, according to reports. Burj Dubai is now the world's tallest building. The Burj Dubai, intending to host the world's highest nightclub, is near the world's tallest fountain, called the Dubai Fountain.

Incidentally, January 4, 2010 marks the fourth anniversary of the accession day of Sheikh Mohammed as the Ruler of Dubai.

Though Dubai was through a financial crisis, it is all set to offer an entirely new experience of spending the rest of your days thousands of feet up in the air, as Burj Dubai is not only the world's tallest building but the world's tallest building by some 1,000 feet. At 2,683 feet (818 meters) height, it has the combined height of the current highest skyscraper Taipei 101 in Taiwan and the Eiffel Tower.

8 million cubic feet of concrete, 31,000 tons of steel, 167,000 square feet of stainless steel cladding, and 1.1 million square feet of double glazing have been mixed together to create a spire visible from 60 miles away across the desert or the sea. It is taller than the new 1,776 feet 1 World Trade Center or the "Freedom Tower", being built on Ground Zero in New York. Emaar's rival in Dubai, Nakheel, a subsidiary of Dubai World and the builder of the Palm Islands, proposed a one-kilometer tall tower in 2008 but it seems it is an abandoned idea for now while Dubai is grappling with its multi-billion dollar debts. As the global debt-fuelled property boom came to an end, Dubai's vision has turned to nightmare and with Dubai's fall from grace after admitting a multi-billion-dollar hole in its finances, the Burj took on a deeper symbolism.

On November 26, 2009, the government owned company Dubai World proposed to delay repayment of its debt, which is the largest government default since the Argentine debt restructuring in 2001. Then Dubai World wanted to delay for six months payment on US$26 billion of debt. The extent of the debt rattled many markets from Tokyo to New York causing many indices to drop including oil prices.

Dubai World had debts of US$59 billion, about 75 per cent of the emirate's US$80 billion debt. On November 28 Abu Dhabi, one of the emirates and the capital of the United Arab Emirates, announced that it would "pick and choose" how to assist Dubai World. But Dubai World said it was seeking to renegotiate only the US$26 billion in obligations held by the troubled real estate developer subsidiary, Nakheel. On December 14, 2009 the Dubai government received US$10 billion in aid from Abu Dhabi for assisting Dubai World.

Climate Change in India: food for thought

2009-12-10T22:21:00.000-06:00

In India, that usually holds buffer stocks of food supplies for the last two decades, after intermittent periods of shortages of food items and importing food items to meet the shortfalls before, has become self-reliant by implementing aggressive agricultural policies and modern agricultural methods. But the worst droughts that hit India in 2009, and followed by unexpected rains after the usual monsoon periods, which the climatologists claim is due to severe climate changes due to global warming, have brought down food production drastically.

Prices of food items in India have gone up by 19 per cent from the prices a year ago, as per government sources and other economic indexes, stung by supply crunch in staple items following one of the worst droughts in the last 40 years. The wholesale price index-based inflation figure has jumped 19.05 per cent for the week ended November 28 from the figures a year ago. The real implication is that the retail prices at which the households purchase food items tend to be much higher, adding the middlemen’s profits, retailers’ profits and other incidentals till the food stocks reach from the wholesaler to the retailers. Add to this the artificial shortages and subsequent price hikes due to hoarding and black marketing by unscrupulous traders at various levels, extending up to the retailers at the times of shortages, a usual practice to cash in on the common man’s woes.

Significantly, prices of staples such as potatoes have more than doubled from the prices a year ago, while the prices of pulses have gone up over 42 per cent hitting hundreds of millions of people. The rise in price of potatoes has gone up over 102 per cent, vegetables 31 per cent, onions 23 per cent, cereals 12.8 per cent, wheat 12.6 percent, fruits 12.5 per cent, and milk by 12 per cent. Against a demand of 18 million tons of pulses, the production was only 14.8 million tons. Against a demand of 23 million tons, the production of sugar was only 16 million tons. And the story is no better in the case of most other key items of food items from the agricultural sector.

As a knee-jerk reaction to the increase in prices, the government may be forced to import food supplies such as pulses and sugar to control prices. A natural fallout of the fluctuations in the food items market is that it has a tendency to pull down the prices of manufactured products because wages and input prices go up and excessive spending to pay for food at very high prices make little money left with consumers of low and middle income households to buy manufactured items. It will have a long-term effect in the cases of industrial sector, especially automobiles and most consumer durables that have registered exceptional growth in 2009, despite the global recession.

The Reserve Bank of India (RBI), which is the central bank of India studying statistical trends and suggesting regulatory measures for the central government, has forecast that by the end of the year the inflation will accelerate to 6.5 percent by the end of the fiscal year in March 2010.

India has been experiencing unusual climate conditions for the past several years, especially either very low precipitations in the months of the sowing of crops and sometimes by floods or unwelcome rainfalls at the time of harvesting. The result is a two-fold loss to the farmers; crops cannot be planted due to very dry climates and whatever is planted cannot grow healthy due to adverse climate and whatever crops are ready are destroyed by untimely rains and floods.

Farmers who suffer heavy losses depend on the weather gods for their farming, as most of them depend on natural conditions, with a very small percentage depending on irrigation from dams and other organized irrigation systems. In addition, the ever-worsening groundwater depletion over the years has made tube well irrigation too inefficient. The drying up of rivers in the Gangetic plains, which were perennially fed by the Himalayan glaciers are a cause of big concern as the glaciers have receded several kilometers away from the sources of the rivers that traditionally used to irrigate the northern plains that used to be the major food-producing region of India.

Hope for the best from Copenhagen

2009-12-07T19:57:00.001-06:00

The climate change summit at Copenhagen, COP15, on December 7, 2009, is the biggest meeting of global leaders after the last meeting at Rio de Janeiro in Brazil in 1992 where the United Nations Framework Convention on Climate Change (UNFCCC), the global policy guidelines on climate change was adopted.

About 100 leaders of from 192 nations and about 1500 delegates will deliberate at Copenhagen on how to tackle the climate change issues. On December 18, the last day of the conference, the summit is expected to announce an agreement, possibly, to reduce carbon emissions by 25-40 per cent relative to 1990 levels and scaling up to 80 per cent cuts by 2050. With this, the summit seeks to ensure that the global temperatures do not rise more than two degrees Celsius by 2050.

The Danish government’s proposal to replace the Kyoto protocol that expires in 2012 with a new protocol found acceptance from the US, Europe and Australia. India and China are of the view that they agree to the proposals, provided no mandatory emission cuts are imposed on developing countries, no mandatory peaking years for emissions are prescribed, and clear financial commitments are made by rich countries for the developing world to change to clean technologies.

Though USA, India and China were reluctant to announce any commitments initially, the United States has announced to cut emissions by 17 percent, China by 40-45 percent and India by 20-25 per on their 2005 levels by 2020. Europe has announced 20-30 per cent reduction on 1990 levels by 2020. Brazil announced a cut of its carbon emissions by 36-38 per cent of the projected levels by 2020. Japan would be reducing carbon emissions by 15-20 per cent on 1990 levels and Indonesia has announced a reduction of 26 per cent by reducing deforestation by 2020. South Africa too will be making reductions, it is reported, possibly, if financial support is made available.

As a financial support for the developing countries, the US committed to provide US$10 billion every year to fight climate change after 2012, while European Union promised US$100 billion every year.

According to UNFCCC Executive Secretary and the chief negotiator of the UN on climate change Yvo De Boer, who has been lobbying with the world leaders for a couple of years to arrive at a pragmatic consensus, the possibility of an agreement has emerged brighter. Rich countries should reduce emissions, developing countries should limit the growth of emissions, developing countries should be helped to fight climate change and funds must be made available for climate mitigation and adaptation.

As per reports, a petition signed by 10 million signatories calling for a fair, ambitious and binding action at Copenhagen would be delivered to the UNFCCC Executive Secretary Yvo De Boer on Monday. There are reports of demonstrations by climate change activists in London, and other cities of UK and Europe. There will be demonstrations by activists in Copenhagen and other places worldwide on December 12, 2009 to draw attention to the urgent need for cutting carbon emissions and other greenhouse gases.

Negotiations at different levels of governments and participating delegates and hard bargaining are expected in the coming days before the summit comes to a final decision on climate change on December 18, the last day of the conference. The figures and commitments as mentioned above may change by then, hopefully for the better, and more countries may be committing to positive measures to reduce emissions. Let us hope, the world leaders come to a more realistic understanding of the enormous threats climate change, melting glaciers, rising temperatures and sea levels pose to human existence, and they take more effective measures before it is too late.

Copenhagen Summit: Will it be a turning point in carbon reductions?

2009-12-07T00:41:00.001-06:00

As a result of intense lobbying around the world with leaders of nations including the political and government leaders of major countries emitting carbon dioxide and other greenhouse gases, industry leaders, scientists and others, it is reported, the UN's chief climate negotiator Yvo de Boer and UN’s IPCC chief Rajendra Pachauri are hopeful that some landmark commitments will be made at the Copenhagen Summit on climate change. We can have some hopes, as they say, because the United States, China and India have announced their readiness to cut emissions, though initially they were reluctant for any commitment. The latest to join in for a committed reduction in greenhouse gases is South Africa, making its first quantifiable target on emissions.

Earlier, USA was the topmost emitter of greenhouse gases that has come down to the second position as the Peoples Republic of China is now on top of the table, but the US still continues on top of a list as the top per capita carbon emitter. Russia is third on the list followed by India, as the fourth largest carbon emitter. The newly emerging fast growing economies like India and China depend largely on coal and fossil fuels for all their energy needs including electricity, clean sources like nuclear power stations, hydro-electric projects, wind energy, solar energy and other clean technologies accounting for a very minor percentage of their total energy production. The worst emitters are their coal-fired thermal power plants that depend on low-grade coal that emits more harmful gases, soot and suspended particles. Many of these power plants are very old and rely on old technologies that produce less energy and more pollutants. If this is the case with China and India which are economically well of compared to other developing countries, the lesser developed countries are still far worse technologically and they together emit the major bulk of the harmful emissions.

Practical, technological and financial constraints make it difficult for developing countries to reduce carbon emissions unless they want to shut down their power plants, factories, and stop running their transport systems including automobiles which are all depending on technologies and machinery that are many decades old when no one seriously talked about greenhouse gases or climate change. If they shut down such sources of gas emissions, their entire populations will suffer economically and in many other ways. In fact these countries started development projects in the last few decades, and their total emissions of harmful pollutants may work out to less than 10 percent of the total atmospheric greenhouse gases, because, most countries including European countries and USA were burning fossil fuels right from the times of the industrial revolution, adding most of the atmospheric pollutants present in the atmosphere now.

Everyone talking about climate change knows this, they also know that it is difficult to reduce emissions immediately and if immediate action is not taken the world will become incapable of sustaining life in the next few decades. Even the deadlines they talk about and the target they fix like for 2020 and 2050 will be too late as already many countries are suffering from severe droughts, floods, untimely rainy seasons, hurricanes and typhoons, and rising sea levels.

Even in the Copenhagen summit, not much is going to happen, as no country is ready to commit to legally binding agreements. Though UN's Yvo de Boer told reporters on the eve of the summit that offers of finance for clean technology for poor countries were also coming through and talks were progressing on a long term vision of massive carbon cuts by 2050, it may be clearly understood that no country has made any firm and binding commitment to help poor countries, excepting the promise by USA to provide US$10 billion and the European Union US$100 billion, every year after 2012. Considering the enormity of the work to be done and the cost of building new projects, this offer of financial help, to be spread over all developing countries in the world, is not even enough to construct one plant each in each country. Only talks are going on and 2050 is when nobody will be around to talk any climate change or offer help to anyone because, global warming does not wait for anyone and it is accelerating right at this moment, and worsening day by day.

The main points the Copenhagen summit will discuss include targets to control greenhouse gas emissions particularly by developed countries, financial support for adapting measures to reduce emissions by developing countries and a ‘carbon trading scheme aimed at ending the destruction of the world's forests by 2030’, as the UN representatives and other organizers of the summit point out.

Delegates from 192 countries are meeting in Copenhagen, with some 100 world leaders and 15,000 delegates taking part in the discussions. The leaders who promised to attend include US President Barack Obama, UK Prime Minister Gordon Brown, French President Nicolas Sarkozy and Indian Prime Minister Manmohan Singh. Danish Prime Minister Lars Lokke Rasmussen and the head of the UN's panel of climate experts Rajendra Pachauri will be addressing the opening session.

In a survey by Globescan, 64% of people surveyed were of the opinion that global warming a very serious problem, up by 20% from a decade ago. It is a positive indication that more people are concerned now. Also, there are reports that 56 newspapers in 45 countries will be publishing in 20 languages a jointly written same editorial on Monday warning that climate change will ‘ravage our planet’ unless action is agreed upon at Copenhagen. "At the deal's heart must be a settlement between the rich world and the developing world," the editorial says. Also, many thousands of environmental activists marched in London, and other cities of UK and European countries on Saturday and protests are planned in Copenhagen, and around the world, on 12 December to encourage delegates to reach the strongest possible deal for cutting emissions. These underline the importance of agreements will be made at Copenhagen because it will replace the Kyoto Protocol of 1997 on climate change as the targets set at Kyoto will be running out in 2012.

The fast rate at which the glaciers in Antarctica, the north pole and nearby areas, like Iceland and Greenland, and the Himalayan glaciers melt, as many recent surveys and researches conclude, will submerge many small island countries and even big cities on seashores. The indications are already there in many places as flooding at the time of high tides and receding coastlines in countries like India, for example, many villages in coastal Orissa have vanished under the advancing sea.

H.H. Sheikh Mohammed bin Rashid Al Maktoum

2009-12-03T00:23:00.002-06:00

H.H. Sheikh Mohammed bin Rashid Al Maktoum, originally uploaded by Don ibero.

Sheikh Mohammed Bin Rashid Al Makhtoum at Global Agenda 2009

2009-12-03T00:10:00.002-06:00

Summit on the Global Agenda, originally uploaded by World Economic Forum.

DUBAI, 20 Nov 2009: H.H. Sheikh Mohammed Bin Rashid Al Makhtoum, VP and Prime Minister of the UAE and the ruler of Dubai (in white dress) attends the opening plenary session at the World Economic Forum's Summit on the Global Agenda 2009, held in Dubai from 20 to 22 November 2009.

Copyright: (cc-by-sa) © World Economic Forum (www.weforum.org), photo by Sandeep Naik, uploaded by World Economic Forum on 20 Nov 09, 6.20AM PST.

Dubai World Artificial Islands

2009-11-29T16:28:00.001-06:00

The Dubai Vision: from dust to bust

2009-11-29T00:12:00.000-06:00

Until the 19th century, Dubai was a hot desert covered only with sand and dust, occasionally inhabited by nomadic tribes and sea pirates who landed on the coasts sometimes. In the beginning of 1800s, Al Abu Falasa clan established Dubai, which was a dependent of Abu Dhabi until 1833, when the Al Maktoum dynasty took over Dubai from Abu Fasala clan rulers. After that Dubai came under the British in 1892. Dubai became an important port of call for foreign traders and depended on its pearl exports until the 1930s, and its pearls industry was destroyed by the events of World War I and the Great Depression of the late 1920s.

Modern facilities like electricity supply, telephones and an airport were established in Dubai in the 1950s by the British. When oil was discovered in 1966, Dubai offered incentives to international oil companies and the affluent economy of Dubai was set up on oil revenues. Unlike its other neighbors, Dubai has only limited oil and gas reserves that contribute only about 6% of the economy. So it heavily depends on real estate development, tourism and trade for its revenues.

In 1971 Dubai, Abu Dhabi and five other emirates formed the United Arab Emirates (UAE) after the British left that year. As Dubai continued to grow from revenues from oil and trade, the Jebel Ali port was established in 1979, followed by Jafza (Jebel Ali Free Zone). During the Persian Gulf War of 1990 Dubai banks faced massive withdrawal of funds threatening to weaken Dubai, but, as a blessing in disguise, many trading communities from Iraq-invaded Kuwait and Shia unrest-stricken Bahrain moved their businesses to Dubai. Most importantly, Dubai reaped great financial advantage by providing refueling bases to allied forces lead by USA at the Jebel Ali Free Zone during the Gulf War and the 2003 Invasion of Iraq.

The success of Jebel Ali Free Zone was an inspiration and a model to establish Dubai Media City, Dubai Internet City, Dubai Maritime City and others, as Dubai had not much to expect from petroleum and natural gas exploration. So, Dubai turned to other sectors like real estate development for the well-heeled celebrity class of the world, port-development and investments worldwide, creation of the world’s most-sought after artificial island clusters with the most luxurious hotels, apartments, entertainment facilities, etc. Till recession hit the world economy, Dubai was riding on a real estate boom for six consecutive years.

With the real estate boom, Burj Al Arab (the world's tallest freestanding luxury hotel), Burj Dubai (currently the tallest building in the world), The Palm Islands, The World Islands, Burj Dubai and The Dynamic Tower, and many more modern structures were built. These, along with high inflation and a huge increase in cost of living made Dubai the second most expensive city in the Middle East and 20th most expensive city in the world. According to Morgan Stanley’s price index, property prices in Dubai rose 25% in 2008, after a rise of 79% in 2007.

But the global financial crisis forced speculators to sell out their assets in Dubai in view of the market collapse that crashed real estate prices by 41% in the first quarter of 2009, according to real estate consultants Colliers International. And the prices are falling continuously since then.

What is now described as the “Dubai Vision” is the brainchild of one man, Sheik Mohammad bin Rashid al-Maktoum, the ruler of Dubai, who has been accused of running the emirate single handedly, with the help of only his family and friends, and who failed to apply fair rules of open governance. He has outlined his ideas on development in his book “My Vision”. He has told the World Economic Forum last week that the worst of recession had passed for Dubai which was well-placed to continue its development plans. To prove that it was a white lie, news was released just before the Eid al-Adha and the UAE national day (Dec 2) that Dubai World could not pay a US$3.5 billion bond. The total debt of Dubai World being US$ 59 billion and the equally bust Dubai government being US$ 80 billion in debt, Banks in Asia and Europe quickly distanced them from Dubai.

The tell-tale signs of the current crisis were visible for the past several months. Accommodation on rent was unthinkable till last year, but slowly TO-LET boards started appearing on apartments and they are there in about 75% of the dwellings – not surprising as the original Dubai inhabitants are only about 20% of the population, the rest of 80% being expatriate workers, businessmen and others, most of whom have already left now. Roads used to be jammed with traffic and now they are almost deserted. One of the reports said that the airport had over 5000 abandoned cars left by people who escaped to their home countries. Pink slips for workers started many months ago and it is continuing. There are even stranded unemployed workers who cannot afford to pay airfare to catch their return flights. Those who are already employed in Dubai are afraid of losing their jobs any time.

Now the question in most of the financial circles is how the Dubai Bubble is going to affect others around the world. While European banks appear to have the most exposure to Dubai's debt - European banks hold about US$40 billion worth of exposure to Dubai - there are other broader implications. Besides, banks and companies from around the world who lent money to Dubai World are in a tight spot. The problem is not limited to Dubai, but it is considerably extensive considering it has presence in over 100 worldwide cites employing over 50,000 people around the world. Also thousands of big and small companies executing projects for Dubai World are going to be hit badly.

Now the whole hope is pinned on Abu Dhabi, one of the seven emirates and the oil-rich capital of the UAE, which has one of the largest sovereign wealth funds in the world. The Abu Dhabi Investment Authority (ADIA) invests the surplus government funds of UAE.

Al Jazeera and other news agencies report that Abu Dhabi is moving to bail out Dubai World on a selective basis. "We will look at Dubai's commitments and approach them on a case-by-case basis," an unnamed official told the Reuters, adding, "It does not mean that Abu Dhabi will underwrite all of their debts." It simply means that there will not be any immediate relief as Dubai would like to have. Instead of blanket assistance, the selective assistance is likely to disappoint many investors who expected Abu Dhabi to provide a safety net for Dubai.

Experts feel that the Dubai government has to come up with a clear plan in terms of what it wants to do to restructure its institutions and the debts related to them. According to Brian Caplen, editor of The Banker magazine, ‘Dubai's debt default is far smaller than the losses seen in the wake of the US sub-prime mortgage crisis in 2007’. The US exposure to toxic assets during the sub-prime mortgage crisis was US$1,000 billion.

The Dubai Model of development and financial planning were envious to most of the Persian Gulf countries, especially Saudi Arabia and Qatar, and some of them even tried to emulate Dubai, by aping ideas like establishing free trade zones, financial centers, advanced infrastructure, and inviting western capital and expertise. Some of them may even have financial exposure to Dubai. The larger world recession did not hurt many Asian countries much, but the much smaller Dubai Bubble may affect many Asian countries like India, Bangladesh, Sri Lanka, Pakistan, and many others as there is a huge chunk of expatriate population from these countries in Dubai and other Gulf countries. It is feared that other Gulf countries will tighten their purses and even stop hiring workers or even terminate the contracts of the present workers.

Burj Al Arab - view from the Jumeirah Beach Hotel

2009-11-28T16:48:00.002-06:00

Burj Al Arab, originally uploaded by Joi.

The Burj Al Arab exclusively houses the world’s only ‘self-proclaimed’ seven-star hotel located in Dubai, UAE and with a height of 321 m (1,050 ft) it is the second tallest building in the world, standing on a manmade island 280 meters offshore from Jumeirah beach. It is designed to resemble the sail of a boat.

The British architect of the building Tom Wright said about the Burj Al Arab, "The client wanted a building that would become an iconic or symbolic statement for Dubai; this is very similar to Sydney with its Opera House, or Paris with the Eiffel Tower. It needed to be a building that would become synonymous with the name of the country."

It took three years to reclaim the land from the sea and but less than three years to construct the building that contains over 70,000 cubic meter (2,500,000 cu ft) of concrete and 9,000 tons of steel. The hotel cost US$ 650 million to build.

Managed by the Jumeirah Group (formerly Jumeirah International Group, an international luxury hotel chain and part of Dubai Holding, owned by the Dubai Government), the Burj Al Arab is one of the most expensive hotels in the world.

Financial markets from Shanghai to New York shaken by Dubai World

2009-11-27T17:53:00.000-06:00

The man-made island Palm Jumeirah is one of the artificial islands of the Palm Islands group in Dubai, being constructed by Nakheel Properties, a subsidiary of Dubai World. The other islands in the Palm Islands are the Palm Jebel Ali and the Palm Deira. The photo shows as Palm Jumeirah as seen from the International Space Station, photographed by Expedition 10 Commander Leroy Chiao from the International Space Station in 2005. It is advertised as "being visible from the Moon," and this man-made palm-shaped structure displays 16 huge fronds framed by a 12-kilometer protective barrier. On completion the resort will sport 2000 villas, 40 luxury hotels, many shopping centers, cinemas, other facilities and it is expected to have a population of approximately 500,000 people.

The debts of government-owned Dubai World has triggered of shockwaves across the world’s financial and share markets. Dubai is one of the emirates (states) of The United Arab Emirates (UAE), the others being Abu Dhabi, Sharjah, Ajman, Umm al-Quwain, Ras al-Khaimah and Fujairah. Dubai's main income is from tourism, real estate and financial services, although it was originally built on oil industry, which now contributes only about 6% of the economy.

Dubai World is a Dubai government-owned investment company with main subsidiaries such as Atlantis - The Palm, Dubai Drydocks, Dubai Multi Commodities Centre, Dubai Ports World (the third largest port operator in the world), Inchcape Shipping Services, Island Global Yachting, Istithmar, Jafza, Kerzner, Leisurecorp, Limitless, Maritime City, Nakheel (residential estate development projects), One & Only, Tamweel and Tejari. Dubai World has more than 50,000 employees in over 100 cities around the world, and has huge real estate investments in USA, UK, South Africa and many other countries.

Due to global recession Dubai's real estate market took a downturn after a six-year boom. On 25 November the Dubai government announced that Dubai World intends to ask its creditors to extend repayment of debts until 30 May 2010. Months earlier Dubai World’s accounted debt was US$ 59 billion, which is about 75% of Dubai government's US$ 80 billion debt. Soon after the announcement, Asian equity markets crashed 3 to 5 percent. It was followed by knee-jerk reactions of financial institutions and investors in Europe, USA, Canada and many other parts of the world, including Japan.

Most financial analysts expect the Arab Monetary Fund, based in Abu Dhabi, the capital of the United Arab Emirates, to avert a financial crisis, as Dubai’s economy has shaken financial markets from Shanghai to New York. As Dubai brought back memories of the mortgage meltdown that led to the worst recession since World War II, some investors in US were busy buying US Treasury bills, pushing the US dollar up and bringing down the stock market and the price of gold and oil.

Upheaval in trading calmed down when European banks and governments around the world said that their exposure to Dubai World's debt is not a cause of worry. Credit Suisse, UBS AG, Barclays, ING Groep INV and Deutsche Bank said their exposure to Dubai World's debt is not going to have any significant impact on them, followed by similar announcements by the governments of Brazil, India, Philippines and Taiwan.

US banks’ exposure to Dubai World is only US$ 9.9 billion while it is US$ 49.5 billion for UK banks. Japan's top banks have hundreds of millions of dollars sunk in Dubai World, and Japan's largest banks Mitsubishi UFJ Financial and Sumitomo Mitsui are among the consortium of 11 creditors that lent to Dubai World. The remaining lenders are mostly European banks and Middle East banks lending about US$ 16.5 billion.

Most analysts feel the current market reaction is an overreaction because Dubai World’s short-term debt could be only about US$ 20 billion and medium-term debts about US$ 80 billion, whereas UAE’s Abu Dhabi Investment Authority alone manages over half a trillion US dollars. Abu Dhabi is one of the wealthiest states in the world and analysts feel it can easily bail out Dubai, both being prominent emirates of the UAE.

Can Yuan replace the US Dollar?

2009-11-25T12:43:00.000-06:00

The Chinese currency Yuan may well be an alternative to the US dollar in the coming 15 years, if we take the opinion of the World Bank president Robert Zoellick seriously, and, of course, other indications in the international trade trends. And it will be what the Euro could not, over the years as well as the future trends indicate. The biggest advocate pushing forward the Yuan’s case is the Chinese government itself.

There has been a consistent demand from China before international financial forums and trade and trade regulatory bodies that the American dollar must be replaced by a better and more stable alternative currency in view of the volatility of the US dollar. Interestingly, China holds the largest US dollar funds outside the US and China is one of the biggest trading partners of USA. Maybe, for the same reason, China is a bit upset about the performance of the dollar.

“Though the Yuan cannot be used easily overseas now, it will become more internationalized over the next 10-15 years”, said Robert Zoellick. “This does not mean the Yuan will replace the dollar, but it can provide an alternative”, he said.

It may be noted that there has been a persistent demand from the US and other trading partners of China to adjust the Yuan value in terms of the US dollar, which is state-controlled and often manipulated to suit China’s interests.

Yet another important point to note is that since December 2008, China has entered into agreements worth $95 billion (650 billion Yuan) for currency swap with the central banks of South Korea, Malaysia, Belarus, Indonesia, Argentina and Hong Kong to avoid being hit unfavorably by the US dollar’s fluctuations.

According to Zoellick, Yuan is not ready to become the global reserve currency as yet. But he added that the US consumers are no longer the engines of global demand and they should ponder over the possibility of the dollar no longer remaining the international reserve currency.

The Euro and Pound Sterling have been more stable and consistently improved over the dollar in recent times. But they are limited in exchange rate applications worldwide and their relevance as global currencies is not widely accepted, though Euro has a wider appeal because of its prevalence in most of the European trade and commerce. As it comes to the Yuan, unless one is exposed to the Chinese trade and culture, it largely remains unknown in the case of people of many countries.

It is for the international trading community and the people of the world to decide upon a commonly acceptable global reserve currency, if the dollar is forced to the backseat in favor of the Yuan, and it should not be left to the decision of only the World Bank or its officials to decide. The serious objection to the Yuan still remains as its value can be manipulated by the government of China, which is not even a democracy. All of China’s media and policy making, including monetary and trade decisions are controlled by the Chinese communist party, not the market forces like demand and supply. So, Yuan the value of which is set arbitrarily cannot be acceptable as an international reserve currency.

More reasons to invest in gold

2009-11-24T19:17:00.000-06:00

Less than three months ago I wrote in this blog about the trend of gold prices and suggested it as an investment opportunity at times of recession and unpredictable market situations affecting stock prices and traditional investment channels. In the article titled Invest in gold to beat inflation, I verified the significance of investment in gold quoting past instances. For example, since April 2001 the price of gold more than tripled, the highest 2009 price was on February 20, 2009 at $989, fluctuating between $870 and $993 till September first week when gold prices broke the symbolic barrier of $1000 an ounce. Now it has hit yet another milestone of $1,174 on Monday.

The percentage rise in gold prices from September 2008 to September 2009 was 21%. But now, in less than three months gold prices jumped up 17.4%, which will work out to roughly 70% on an annualized basis. But do not expect such an unrealistic rise, though you can safely expect around 20% increase in the coming one year.

Generally, the price of gold increases around this period of the year in Asian countries because of the marriage season for which winter months are preferred. The price of gold in India has already hit a record high of Rs 17,557 per 10 grams. One of the reasons analysts point out is that the dollar fell on Monday after comments from a U.S. Federal Reserve official that U.S. monetary policy would stay ultra-loose for a prolonged period. As everyone knows the weak dollar enhances gold's appeal as an alternative investment. Also the rising crude prices boost gold's appeal as an inflation hedge, most analysts feel.

There are more reasons why there can be a further spurt in prices as the coming seasons of Christmas and New Year also prompt people to buy more gold jewelry as a traditional way of celebration. If there is no panic selling by business investors because of their urge for profit-taking, or other unseen reasons, the trend is expected to continue at least till February 2010.