Tag Archives: economics

Endless Plummet? Gas Prices Continue to Drop

Oil prices have hit a record low falling below $60 per barrel. Although for gasoline consumers the drop in prices are accompanied with happy bank accounts, other production sectors and countries are starting to feel the effects.

From oil fields in places like Texas to those in Saudi Arabia and Russia, along with extraction plants and businesses, are being affected by the fall in prices. Countries like Venezuela and Russia, whose economies greatly depend on oil extraction and exportation are some of the hardest hit as they try to maintain production quotas in the face of a saturated market.

“Russia’s rouble went into free-fall in Tuesday trading, falling repeatedly to hit record lows, despite the central bank’s dramatic decision to raise interest rates from 10.5% to 17%,” according to BBC.

Why are oil prices down?

The simple answer is that there is a surplus in the supply of oil, but a decreased demand for oil in the global market. This problem has been perpetuated by the exploration and the energy independence revolution in the United States and Canada. The extraction of shale oil in the United States has boomed and created alternative energy sources that are messing with the natural flow of oil trade (Boston Globe).

 

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Unexpected Runoff: Rousseff vs. Neves

Official results, as of 7:01 p.m. ET, Brasil’s presidential election is forced into a runoff between: Rousseff and Neves.

According to CNN,

Preliminary election results from Brazil show President Dilma Rousseff in the lead. With nearly 88% of votes counted, Rousseff had 40.68% of votes, Brazil’s Supreme Electoral Court said. Aecio Neves was in second place with 34.71%. And Marina Silva was in third place with 20.99%. If no candidate wins more than 50% of votes, there will be a runoff between the top two candidates.”

Today, as voting was obligatory for all Brasilian citizens, the expected runoff to be between Rouseff and Silva, has taken an unexpected turn. Silva has been outvoted by Neves. Neves’s campaign coordinator José Agripino Máia said prior to results flowing in,

Going into the second round, the PSDB [Brasilian Social Democrat Party] will get in touch with the PSB [Brasilian Socialist Party], but no channel of communication has been opened about this issue. We intend to get to the second round.”

And so Neves had made it to the second round. Neves had been attacking Silva for weeks, saying she was inexperienced and “prone to flip-flops,” however the two had very similar economic plans for the country. Those economic policies being greater support for Central Bank autonomy and implementing new monetary policy.

Rousseff, although recently condemned for a faltering economy, is still being shown favoritism within the nation from voting polls. According to CNN,

She democratized Brazil’s electricity sector through the “Luz Para Todos” (Light for All) program, which made electricity widely available, even in rural areas.”

Rousseff also defends governmental spending, saying that the majority of funds went toward infrastructure projects and not toward the 2014 FIFA World Cup. She also claims that because of her and former President Lula da Silva’s work, a mass amount of Brasilians have come out of poverty.

From a social standpoint, Rousseff is “pro-life” in consideration to abortion as she told Aparecida TV, a Catholic network. However, under her administration Civil Union for gays has been legalized, as she has pledged to fight for gay rights.

If Rousseff wins, will things really be different? Alberto Ramos, Senior Latin America Economist at Goldman Sachs states, that yes,

there is this perception that the economy is trapped in a poor equilibrium of low growth, high inflation and an un-competative economy, a misaligned exchange rate, excessive activism on the fiscal front through the budget, quasi-fiscal through the public banks…bottom-line, the economy is showing significant macro-imbalances…it is hard to imagine that investment will pick up until we sort out those imbalances.”

Ramos, does says though that things will definitely different after this election. Whether Rousseff or Neves, there will be great problems to be tackled for the next president in order to realign Brasil for the international market and as well as for internal development.