Monday, October 5, 2009

Back to Business

First of all, I would like to thank the ones who have always asked me to write more in this blog. It was a really busy period for me but now the lectures have begun in my university, many things are becoming raoutines. So it is now time to enlarge the information pile in the blog :)

The Demise of Dollar

Dollar has been going up and down for the last recent months. However the latest news do not bring good news for US economics. The secret negotiations between Arabic states and France, Russia and China indicates that there will be a new currency -consisting of Yen, Euro and Gold- in the marker which determines the petrolueum prices.

"Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars." (The Independent)

Monday, July 20, 2009

Freud&Consumerism: Century of self-4

Sunday, July 19, 2009

Ali G with an economist

By the way, sorry about the delay of the latest post of the series.

Sunday, June 28, 2009

Country on focus series..

Hi all!

The new post of the effects of the economic crisis series will be here soon. Keep following..

Sunday, June 7, 2009

Freud&Consumerism: The century of the self-3

Monday, June 1, 2009

Country on focus: Turkey-Part 1

Being an important economical dynamic in Middle E ast and South-East Europe, Turkey has severely feeling the effects of the sub-prime mortgage crises followed by the global crisis. Due to the fact that Turkey is a newly industrialized country -despite overcoming may of its properties- its economics heavily depends on the stable global economics. Turkish lira (TL) has lost 25% of its value since Jan. 2008. In addition, it saw the deepest point on the 5th of March 2009: 1 $ = 1.79 TL. It has been a while since the TL has been suppressed by the Central Bank of Turkey(CBT). During the times of crisis CBT provides liquidity and preserves the markets to avoid the atmosphere of panic. However the Turkish economy couldn't stand along anymore. The "Mayday" from General Motor (GM) has shaken the world markets and the current situation has added up many negative pressure for a country like Turkey whose market's two-third is circulated by foreign capital.

The industry's capacity has decreased with a rate of sharp 22.9% in March. The effects are still green for the automobile industry-known as the second biggest industry in Turkey after textile. Thousands of workers has been laid off from the factories located in the capital of car industry, Bursa. This depression in the car industry also affected the growing rates for the first quarter.

Turkey is a partially globalized country. Thus this gives several advantages like protection in short term. In addition the Turkish executives are highly experienced in crisis management. (remember the 1999&2001 crisis) However the question is: are those factors enough to avoid the effects of the global crisis in wide range in the real sector in Turkey.

According to the expectations of IMF and EU commission, Turkish economy will lose value of 5.9% during the year 2009 and the inflation will be around 6.8%. These numbers, however, not always reflect the truth. If one takes a look at the commodity prices like natural gas, electricity and water it can be directly marked that these are in a trend of increase up to 40% in average. The price of natural gas has increased 72.6% via 4 stages by the beginning of Feb. 2009. Later on there occured several cuts in the price -18% in industrial and %17 commercial- , but those were never enough to compensate the unstoppable rises.

The unemployment rate of 16% is a serious fact to be considered. Hosting a very young population (40% of 78 mil.) Turkey will suffer from these rates. the 40% decrease in the export volume. 

The numbers sometimes seem to be fuzzy, but definately not in the case of Turkey. They are strictly pointing the direction of economics problems. 


Chinese petrol corporation PetroChina's market values reached $336 billion on May 22 2009, exceeding briefly this day for the first time the market value of leading Exxon Mobil Corp. Good news for China!

Sunday, May 24, 2009

Consuming Kids: The Commercialization of Childhood

This award winning documentary is about the influence of the children on the consumption.

“A cri de coeur on behalf of people too young to suspect how their ‘share of mind’ is being jealously divided. . . . Linn does a fine job of exposing the wickedness of preying commercially on the young.”
–The Wall Street Journal

"A measured, but ultimately devastating, critique of consumerism and American childhood.”
–Mother Jones

In Consuming Kids, psychologist Susan Linn takes a comprehensive and unsparing look at the demographic advertisers call "the kid market," taking readers on a compelling and disconcerting journey through modern childhood as envisioned by commercial interests. Children are now the focus of a marketing maelstrom, targets for everything from minivans to M&M counting books. All aspects of children's lives—their health, education, creativity, and values—are at risk of being compromised by their status in the marketplace.

Interweaving real-life stories of marketing to children, child development theory, the latest research, and what marketing experts themselves say about their work, Consuming Kids reveals the magnitude of this problem and shows what can be done about it.

Some Facts:

From 1992 to 1997, the amount of money spent on marketing to children doubled, from $6.2 billion to $12.7 billion.[i] Today they are spending at least $15 billion.

Children influence purchases totaling over $600 billion a year.[ii]

Children spend almost forty hours a week outside of school consuming media, most of which is commercially driven.[iii]

The average child sees about 40,000 commercials each on television alone.[iv]

65% of children eight to eighteen have a television in their bedroom as do 32% of children two to seven[v] and 26% of children under two.[vi]

The marketing industry has found that babies are requesting brands as soon as they speak.[vii]

In 2002, McDonald’s spent over $1.3 billion on advertising in the United States.[viii]

Children are more vulnerable to marketing than adults. Very young children are not able to distinguish between commercials and television programs.[ix]

Until the age about eight children can’t understand persuasive intent–that the purpose of commercials is to entice them into buying the product being advertised.[x]

In 2000, a federal report from the General Accounting Office called marketing in schools a growth industry.[xi]

More children recognize the Budweiser Frogs than Smokey the Bear.[xii]

85% of American parents would like to see children’s television programs commercial free.[xiii]

[i]. Lauro, PW (1999) Coaxing the smile that sells: Baby wranglers in demand in marketing for children. New York Times, November 1, C1+.

[ii]. Packaged Facts. “The Kids Market.” New York:, March 2000.

[iii]. Roberts, DF et al (1999) Kids & Media @ the New Millennium. Menlo Park, CA: The Henry J. Kaiser Family Foundation.

[iv]. Kunkel, D. (2001) Children and television advertising. In D.G. Singer & J.L. Singer (Eds.), The handbook of children and media. Thousand Oaks, CA: Sage Publications, 375-394.

[v]. Roberts, 1999.

[vi].Rideout, V.; Vandewater, E.;and Wartella, E. Zero to Six: Electronic Media in the Lives of Infants, Toddlers and Preschoolers (Melnlo Park: CA: The Henry F. Kaiser Family Foundation, 2003) pg. 5.

[vii]. Paul Kurnit quoted in Duncan Hood, “Is Advertising to Kids Wrong? Marketers Respond,” KidScreen, November 2000, 16.

[viii]. “100 Leading National Advertisers,” Advertising Age, 74 (25) 23 June 2003, 2.

[ix]. Atkin, C. (1982) Television Advertising and Socialization Consumer Roles. In D. Pearl (Ed.), Television and Behavior: Ten Years of Scientific Progress and Implications for the Eighties. Rockland, MD: National Institute of Mental Health, 191-200.

[x]. Kunkel, D. (2001) Children and Television Advertising. In D.G. Singer & J.L. Singer (Eds.), The handbook of children and media. Thousand Oaks, CA: Sage Publications. 375-393.

[xi]. Shaul, MS. Public Education: Commercial Activities in Schools. Report to Congressional Requesters. Washington, D.C.: United States General Accounting Office, 2000.

[xii]. Lieber (1996) Commercial and character slogan recall by children aged 9 to 11years: Budweiser frogs versus Bugs Bunny. Berkeley, CA: Center on Alcohol Advertising.

[xiii]. Lake, Snell, Perry, and Associates. Television in the digital age: A report to the Project on Media Ownership and the Benton Foundation, December, 1998. Susan Linn ©2004

Note: Sorry about the slovakian subtitles but this is the only full version of the documentary I could find. If you find the link without subtitles please let me know.

Freud&Consumerism: The century of the self-2

This part of the documentary is called "Engineering of the Consent".

Again, Frued's ideas are explicitly used to prove how masses are controlled.

Through the middle of this chapter of the documentary you can see the shocking similarity between Guatemala (so called back than "Banana Republic") and Iraq both of which have suffered from the acts/lies of "democratization".

If you are interested in how people are turned into modern consumers instead of modern citizens, don't miss this part of the documentary!

Wednesday, May 20, 2009



Saturday, May 16, 2009

Marx & The Mortgage Crisis

The current economic crisis, which is originated from the credit crisis in the US, has a strong background of Marx’s ideas. One should understand the ideas brought up in the Communist Manifesto clearly in order to discover the actual dynamics behind the crisis: fail to consider the consequences of creating risky mortgage opportunities and the gap between the supply and demand in the housing sector.

One major actor of the crisis is the credit share of the private investments banks in the Wall Street. The crisis is originated from the fact that more and more householders were created by the low mortgage interest rates. However after the safe primary mortgages had met the demand exactly, investments bankers wanted the gain more profit from the mortgage system. This brings out the sub-primary mortgages, which aimed the relatively lower class people who ended up in defaults. Not being recognized as a serious problem at the first stages, a whole series of defaults followed those. As a result of this, the capital pool of the investments banks couldn’t receive any cash inflow. “But not only has the bourgeoisie forged the weapons that bring death to itself; it has also called into existence the men who are to wield those weapons - the modern working class – the proletarians.” These financial weapons as Marx proclaimed created a class of people who all obliged to pay their monthly payments to make the rich investors and Wall Street even richer. The fatal mistake was to introduce mortgages that requires no down payment and many other attractive characteristics that attracted low-income “risky” population.“It ... has left remaining no other nexus between man and man than naked self-interest, than callous cash payment.” The mortgage system was definitely a unique way to make money out of waiting capital which also stimulated with highly-leveraged trades –that created virtual billion-dollars in the market from which we are currently suffering.

The demographic shift towards home ownership followed by the decrease in the state-owned rented housing since the year 1979 also played an important role for the crisis environment. This trend definitely contradicts with Marx’s idea of centralization of credit in the banks of the state, by means of a national bank with State capital and an exclusive monopoly.

If the mortgages are viewed as the products of the financial system, it is easy to realize that there occurred an overproduction which ended up in a gap between the supply and demand. This is the main cause of the sudden decrease in the housing prices in the US. This is simply the crisis of overproduction: “There is too much civilization, too much means of subsistence, too much industry, too much commerce.” The whole idea behind the growing trend of the investment banks via leverage is the dark consequence of this overproduction. Without having a good understanding of different classes’ relationship with the economics, this gap played a role of catalyzes. Investors created future-defaults from the people –not surprising though as Marx stated “Production not only creates an object for the subject but also a subject for the object.”
Competition in the market also contributed to the crisis. Some banks feared that the big ones would crush them my using the profits gained from lends given to works so they jumped into consumer lending. However one can find the trails of this mistake back in years 1980s, 1990s; and 2000s, especially in the deregulated financial world, provoked wild profit-driven excesses and corruption (the stock market “bubble” and then the real estate “bubble”). The natural result of competition is the accumulation of capital in a few hands, which is the most frightening type of monopoly, said Marx. This also holds for the recent situation as the capital is gathered in the hands of some which later faced with bailouts.

Written the Communist Manifesto nearly 160 years ago Marx has detected the crucial points of the relation of the society and the capitalist system, reasons of crisis and industrialization.

Monday, May 11, 2009

Freud&Consumerism: The century of the self-1

"This series is about how those in power have used Freud's theories to try and control the dangerous crowd in an age of mass democracy." - Adam Curtis

Consumerism = happiness + consumption + purchasing material possessions

An excellent mirror to the darkest secrets of consumerism that we are facing today.

Some quotes from the documentary:

"So why don't we use propoganda in the times of peace. It was a bad word as the Germans used it. So we used the word 'Public Relations' instead. "

"..most dramatic experiment was to persuade women to smoke...We were losing half of our market because there was a taboo for woman not to smoke in public..April [the first psychoanalist in the US] said that cigarettes were the symbol of penis and male sexual power and if he could find a way of idea to challenge that power than the woman would smoke because than they'd have their own penisses."

"Torch is freedom."

"The idea that smoking made woman freer is actually irrational. But it made them feel more independent."

"People are engaging themselves emotionally or personally to the product or service. You think you need a piece of clothing but you feel better with the piece of clothing."

"What the manufacturers were fearing was overproduction. At some point people might have enough goods and simply stop buying. Up to that point the goods were sold to the masses in the basis of need."

"We must shift the americans from the needs to a desire culture."

"Transfer people into constantly happy walking machines; machines become the key to the economics progress."

"Democracy was turned into a feel-good-medication."

Watch this video if you want to learn how the world economics is centered in consumption! Many ideas expressed on the documentary may not be new to many but it will enlighten the prior-knowledge about the consumersim. Other episodes are on the road..

Sunday, May 10, 2009

How did the tax-payers end-up?

Tax-payers have been the tour de force for the government to get the banks out of the ocean of debt. However the side that is mostly affected from the crisis is again the tax-payers!

Credit Crisis explained

I have found this amazing video on vimeo. Hopefully, it will clarify the dynamics behind the current mortgage crisis in a more basic way.

God bless simplicity!

Buy?! Sell!?

End of recession?

Saturday, May 9, 2009

Is it the reality?

According to some we are not officially in a mood of depression. But is it really the truth? Well..No! Numerical facts will certainly lead us to the path of lies. Thousands of people are fired in the US and in many European countries. Trillions of dollars are spent to recover the banks and credits. Even if some bars in the graphs indicate that the crisis is not that serious, one should take it account that huge amount of capital has flown away from the pockets of governments just to keep the world economics alive.


Friday, May 1, 2009

The C-Word

  • In the fourth quarter of 2008, consumers over 60 had an average of 5.6 open bankcard and retail accounts. Overall, consumers had an average of 5.4 cards. A year before, those over 60 had 6.1 open cards and consumers overall had 5.5. In 2006, those over 60 had 6.2 open cards and consumers overall had 5.5. (Source: Experian marketing insight snapshot, March 2009)
  • According to data from the U.S. Census Bureau, there were 159 million credit cardholders in the United States in 2000, 173 million in 2006, and that number is projected to grow to 181 million Americans by 2010. (Source: Census Bureau)
  • In 2006, the United States Census Bureau determined that there were nearly 1.5 billion credit cards in use in the U.S. A stack of all those credit cards would reach more than 70 miles into space -- and be almost as tall as 13 Mount Everests. (Source: NY Times, Feb. 23, 2009)
  • The top 10 U.S. credit card issuers held an 87.55 percent market share of $972.73 billion in general purpose card outstandings in 2008. That includes Visa, MasterCard, American Express, and Discover and is up rom 84.70% in 2007. (Source: Nilson Report, April 2009)
  • Eighty-four percent of the student population overall have credit cards, an increase of approximately 11 percent since the fall of 2004. (Source: Sallie Mae, "How Undergraduate Students Use Credit Cards," April 2009)
  • Only 2 percent of undergraduates had no credit history. (Source: Sallie Mae, "How Undergraduate Students Use Credit Cards," April 2009)
  • Half of college undergraduates had four or more credit cards in 2008. That's up from 43 percent in 2004 and just 32 percent in 2000.  (Source: Sallie Mae, "How Undergraduate Students Use Credit Cards," April 2009)
  • Since 2004, students who arrived on campus as freshmen with a credit card already in-hand have increased from 23 percent to 39 percent. (Source: Sallie Mae, "How Undergraduate Students Use Credit Cards," April 2009)
  • Two-thirds of survey respondents said they would consider switching their primary credit card if a better feature were offered. (Source: ComScore, September 2008)
  • 76 percent of undergraduates have credit cards, and the average undergrad has $2,200 in credit card. Additionally, they will amass almost $20,000 in student debt. (Source: Nellie Mae, "Undergraduate Students and Credit Cards in 2004: An Analysis of Usage Rates and Trends")
  • 41 percent of college students have a credit card. Of the students with cards, about 65 percent pay their bills in full every month, which is higher than the general adult population. (Source: Student Monitor annual financial services study, 2008)
  • Approximately 74.9 percent of the U.S. families surveyed in 2004 had credit cards, and 58 percent of those families carried a balance. In 2001, 76.2 percent of families had credit cards, and 55 percent of those families carried a balance. (Source: Federal Reserve Bulletin, February 2006)
  • About a quarter have no credit cards, and an additional 30 percent or so pay off their balances every month. (Source: Federal Reserve Board survey of consumer finances, 2004)
  • On average, today's consumer has a total of 13 credit obligations on record at a credit bureau. These include credit cards (such as department store charge cards, gas cards, and bank cards) and installment loans (auto loans, mortgage loans, student loans, etc.). Not included are savings and checking accounts (typically not reported to a credit bureau). Of these 13 credit obligations, nine are likely to be credit cards and four are likely to be installment loans. (Source:
  • The average consumer's oldest obligation is 14 years old, indicating that he or she has been managing credit for some time. In fact, one out of four consumers had credit histories of 20 years or longer. Only one in 20 consumers had credit histories shorter than two years. (Source:
  • Approximately 51 percent of the U.S. population has at least two credit cards. (Source: Experian national score index study, February 2007)
  • At about 20 percent, New Hampshire and New Jersey have the largest concentration of consumers with 10 or more credit cards. (Source: Experian national score index study, February 2007)
  • Consumers carry more than 1 billion Visa cards worldwide. More than 450 million of those cards are in the United States. (Source: Visa USA internal statistics, 4th quarter 2006)
What the..?!

Lecture 2: Principles of Economics

#1: People Face Tradeoffs
 #2: The Cost of Something Is What You Give Up to Get It
#3: Rational People Think at the Margin
#4: People Respond to Incentives

#5: Trade Can Make Everyone Better Off
#6: Markets Are Usually a Good Way to Organize Economic Activity
#7: Governments Can Sometimes Improve Market Outcomes

#8: A Country’s Standard of Living Depends on Its Ability to Produce Goods and Services
#9: Prices Rise When the Government Prints Too Much Money
#10: Society Faces a Short-Run Tradeoff between Inflation and Unemployment 


Lecture 1: What is economics?

The word "economics" comes from a Greek word meaning "the one who manages the households".

"The mode of production of material life determines the social,political and intellectual life process in general.” said Karl Marx, German philosopher and economist (1859) for economics.

In a broader sense economics is the science which studies human behaviour as a relationship between given ends and scarce means which have alternative uses. But all these definitons make our job harder. Because the definitons self do not clear our vision about what exactly is happening in today's world. Many of us sold lemonade at the age of 5 -and actually circulate some capital in the system- without even knowing the word economics. So there should be some way to figure out the ideas behind it and fully understand what is going on in the market's. 

Q: What is a good economy?

A: Prosperity, new ideas, equality.

Prosperity doesn't merely mean to have more and more stuff. It is being able to enjoy the absolute equilbrium between the the production, consumption and also the time between these things: having fun. 

New ideas -innovation- is also essential to the economics. As we have seen so far, global aspect of the new trend, so called capitalism is tend lose its prior popularity or at least b means of the world markets. Economists on the TV are talking about the possible change in this trend of capitalism -and never mention the new option. What an irony!-  So innovative minds are the crucial elements of economics.

Equality doesn't show up without production and an efficients logistics. The world population is growing everyday, 6.5 billion upto now and it's expected to reach 15 billion by the year 2020. We limited areas. So how are we going to cope with this problem. Are we going to produce nothing but hopes to those people? If the world will not be in the search of equality we'll be in trouble.

Further in this blog, I'll try to discover the basic concepts of economics: microeconomics, macroeconomics and little bit game theory to understand today's world in addition to the interesting facts about concumerism, capitalism and of course the latest news about the world economics.

Keep an eye on your credit-card! :)