Desperately Needing Accountants

An increased demand for auditors and accountants is noticed as the economy is making an exit from the crisis period. I know, accounting is the boring college major but you should not regret signing up for it. Companies want their accounting files in order, a prerequisite to avoid accounting scandals like the ones that erupted in the last several years and financial blunders that pushed us in recession in 2008. Managers no longer avoid being bombarded with numbers, statistics and spreadsheets and seem even interested to have a tighter grip on their company figures rather than leaving others to bother about this.

Colleges are scrambling to find more accounting teachers and professors to replace those retiring. Not an easy task, since there are twice as many accounting faculty openings than applicants to fill them.

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The USA is the first economy of the world but the race for supremacy continues

Figures show that in 2010 China had become the world’s second largest economy while Japan fell on the third place. In the last few years we have also seen India overpass Germany, and Russia and Brazil overtake the UK and trends clearly show that China is determined to take the first place by 2027. Most probably, in early 2020s Chinese GDP will equal the US one. Although the two economies will not be equal in composition - the huge underdeveloped countryside of China remaining a serious problem, most experts consider that the total size of the Chinese economy will surpass that of the United States by 2027. Differences are expected to remain as regards the income per capita until 2050. Although estimations going up to 2050 could be considered as speculations, some experts dared to predict that by then India is expected to be the world’s largest economy, surpassing China and the US.

According to present trends India will overtake Japan becoming the third most important economy in the world by 2015, and Mexico is expected to enter the Top Ten replacing Italy.

Here is the Top10 countries, as listed by PPP GDP, using 2010 GDP figures:

Ranking	Country	GDP- Purchasing Power Parity (billion USD)
1	United States of America	$14,624.18
2	China	$10,084.37
3	Japan	$4,308.63
4	India	$4,001.10
5	Germany	$2,932.04
6	Russia	$2,218.76
7	Brazil	$2,181.68
8	United Kingdom	$2,181.07
9	France	$2,146.28
10	Italy	$1,771.14

The expected Top Ten list in 2027 could be: China, USA, India, Japan, Germany, Russia, Brazil, UK, France, and Mexico.

If we consider the EU as an economic entity, in 2007 this became the world’s largest economy, with a combined GDP of 14,400 billion USD, but even so, China will certainly overpass them both by 2030. 

Icelanders refuse to pay

UK and Dutch investors lost 3.5 billion pounds and USD 5.8 billion (a total of almost 4 billion Euro) in the “Icesave” saving accounts ran by Landsbanki of Iceland that collapsed in 2008 almost simultaneously with Glitnir and Kaupthing, two other major banks in that country. The British and Dutch governments reimbursed 400,000 of their citizens and claim that Iceland has to repay that money. Icelanders consider they are under no legal obligation to pay for a private bank's losses and complain that the deal would put a heavy burden on the nation. The sides are in a process of negotiations to settle the issue but diplomatic tensions are mounting. The government of Iceland compensated national savers but refused to repay overseas customers although repayment could come from selling the assets of Landsbanki at a cost not exceeding 50billion kronur (£168m) from government coffers.

A first plan to repay the debt with a 5.5% interest between 2016 and 2024 was rejected by 93% of Icelanders in a March vote. A second plan, to settle the debt over 30 years (2016-2046), with 3.3% interest to the UK, and 3% to the Netherlands was backed by the Parliament of Iceland, but President Olafur Ragnar Grimsson turned it down, thus leading to the new referendum. Icelanders refused this second plan in the April referendum that resulted in a 58% NO and only 42% supporting the deal.

The case may be referred to an international court that is expected to issue a ruling within several years. A third attempt to convince voters to accept a repayment deal seems to be excluded. Delaying settlement blocks Iceland's return to the financial markets to receive funding and keeps prospects for economic recovery slim.

Iceland intends to join the EU but has no chances to get the support of the two creditor countries.

Market developments due to Japan crisis

New York Stock Exchange opened Tuesday's session down almost 2%, while market losses continue due to the developments in Japan. After the meeting opened with a stock market decline of 2.2%, the Dow Jones Industrial Average has decreased reaching a low of minus 1.73%. S & P 500 Index had a 1.81% decline in half an hour after opening, while the Nasdaq Composite index fell by 1.95%, having opened with a decline of 2.7%.

On the other hand Oil fell to its lowest price in almost three weeks in London as concern that damage from Japan’s earthquake may limit crude demand outweighed speculation of supply disruptions in the Middle East. Crude oil may fall to $92 a barrel after declining from a 29-month high, according to a technical analysis by brokerage Auerbach Grayson.

Nevertheless, the International Energy Agency exercises caution by keeping its outlook for global oil demand in 2011 with very little change, saying more time is needed to determine the impact from the worst earthquake in Japan’s history.