Business English Practice: US Dollar Near Record Lows

Click on the linked picture above to go to a newsy.com video on the low value of the US dollar. You can also find the written transcript together with the video at [http://www.newsy.com/videos/u-s-dollar-reaches-three-year-low/]

SOME EXTRA BACKGROUND:  Despite periods where the value of the US dollar spiked in the early 1980s and also for the most part of a decade around the turn of this century when the US dollar surged; the value of the US dollar as measured by the US Dollar Index created in 1973 has mostly been in broad decline. Starting at an index value of 100 in 1973, the index reached record lows around the low 70s mark not long before the Great Financial Crisis in late 2008. The market uncertainty of the Financial Crisis caused the value of the US dollar to shoot up. As that crisis becomes more distant, the value of the US dollar once again is testing the record low 70s range of 2008.

The video points to US debt from the Government deficit for this weak currency situation. A low US dollar means most everything measured against the US dollar is very high in US dollar terms. The video mentions the price of oil.

Commodity prices slumped in late 2008; however as the USD continued to weaken after its late 2008 spike, the USD value of commodities also continued on their rise to new records, as indicated in this Yahoo Finance chart, by market indices for oil in blue, copper in green, silver in red, and gold in brown.

Oil has now climbed over the the $US 120 mark, triple the financial crisis low of $US 40 set in early 2009. It has not been at this level since 2008, the year it went to a historical high of over $US 140 (the period when the US dollar was also at a record low) prior to crashing during the Great Financial Crisis.

The issue is even more stark in the metals sector of the commodities market. Gold, silver and even the industrial mainstay, copper - having gotten over the Financial Crisis - have punched through 2008 levels and are at highs never before seen in modern history. Things valued higher in dollar terms - that is exactly what inflation is; the very last item mentioned in the video.

The London Metal Exchange, with over 400 years of history, is the major world
market for physical gold as well as other metal contracts such as contracts for copper. This
picture comes from a story on record copper prices from the Guardian newspaper.

The NYMEX (New York Mercantile Exchange - now part of the Chicago Mercantile Exchange
group) - from a Guardian picture - is the major market for oil trading, as well as a major
trading venue for gold, silver, copper and many other mineral related contracts.

Some notes on the language:

- deficit - This is a word commonly used for discussion of economics (but not as common in casual everyday conversation). It refers to a "lack" of something, and  in economics it often refers to a situation where the value of something is negative. Hence in this video, "trade deficit" and "national deficit" are used. "Budget deficit" is also a common term in economics. Please note that prepositions often found with the noun "deficit" include "in" and "of". For example: "There was a deficit of funds, which is why there was a deficit in our budget." The opposite of "deficit" is "surplus".

- ceiling - This word which commonly refers to the upper overhead surface of a room, can be used figuratively. Here it is used in the term "debt ceiling" - that is, an upper limit to debt which should not be breahced. Another example of the figurative use of the word people say: "There is a glass ceiling for the career path of women in this organization."  This means that there is no explicit ban against promoting women to the highest positions in the organization, but women are never placed higher than a certain level - such that the ceiling is real, but the ban is not made explicitly visible as if it were made of "glass".

- "turn around and say" - This is a useful phrase. Although it can simply mean to physically turn around and say something, it can also be used to criticize people for trying to say or do something which seems to go in the opposite direction of their previously stated position. For example, to paraphrase what was said in the video: "You can't vote to spend more money in the federal budget, then turn around and say you don't want to raise the federal debt ceiling."


Practice your business English by watching and listening to the video above. For more detailed study, you can read the written transcript at the link given above.

Don't be scared if there is a lot that you don't understand. As long as you learn a little something new, then that is valuable: learning bit by bit is natural learning. By watching and listening, you will also be more exposed to, and more familiar with, various sentence structures and other language techniques used by English speakers.

I'll be happy to receive questions and comments from English learners, and I'll try to answer your queries here about the language in this video. I look forward to your comments!

[A rare opportunity for you to speak, practice, chat and learn English especially for business, finance, law, international economies & trade at the webpage for Mastery English.]

Business English Practice: Negative Outlook Placed by S&P on US Government Debt - first time ever!

Click on the linked picture above to go to a newsy.com video on the revision of the credit outlook on US government debt down to "negative", by the world's oldest and biggest credit rating agency, Standard & Poor's (S&P) - the first time ever! You can also find the written transcript together with the video at [http://www.newsy.com/videos/s-p-takes-first-plunge-declares-negative-debt-outlook/]

Thus there could be a risk that the US Government's AAA rating could be cut lower than that of other leading AAA rated nations such as Germany, Switzerland, the United Kingdom and Canada. [CLICK here for S&P's Ratings List for all the countries it rates.]

After the announcement, the Dow Jones Industrial stock market index which rose consecutively over the three previous trading days for a total 70 point gain, lost double that three day gain on just the one day of April 18, slumping by 140 points, or over 1%. Strangely, the effect was even greater in Europe, with London's FTSE index, the Frankfurt DAX index, and the Paris CAC 40 all experiencing very sharp drops of over 2%. (Greater perhaps because "sovereign" risk is even greater amongst Europe's PIGS - Portugal, Ireland, Greece and Spain. SEE the BBC article: Europe's PIGS: Country by Country.) The next trading morning, stock markets in Asia fell across the board, with Tokyo's Nikkei index, Seoul's KOSPI, the Shanghai Stock Exchange composite index, and Hong Kong's Hang Seng index all falling by over 1%.

Here is the sharp drop in the stock market on Apr 18 upon S&P's "negative outlook"
announcement on US government debt - from Google Finance.

What is the reason for S&P's negative outlook? The reason, according to S&P's own media release on the day, is

"because the U.S. has, relative to its 'AAA' peers, what we consider to be very large budget deficits and rising government indebtedness and the path to addressing these is not clear to us,"

 S&P goes on to explain:

"In 2003-2008, the U.S.'s general (total) government deficit fluctuated between 2% and 5% of GDP. Already noticeably larger than that of most 'AAA'rated sovereigns, it ballooned to more than 11% in 2009 and has yet to recover."

 According to OECD statistics, the US Government deficit as a percentage of GDP went from 2.9% in 2007 to 6.3% in 2008, and 11.3% in 2009 (and in 2011 is still expected to be at almost 9% of GDP). To see a comparison of the American deficit against some of her "peers", I have created here a list of deficit infamy among certain major economies:

List of Deficit Infamy (data source: OECD)

	Deficit as % of GDP
	2007	2008	2009
U.S.A.	2.9%	6.3%	11.3%
U.K.	2.8%	4.8%	11.0%
France	2.7%	3.3%	7.6%
Japan	2.4%	2.1%	7.1%
Canada	surplus	surplus	5.5%
Germany	surplus	surplus	3.0%
South Korea	surplus	surplus	0.0%

So, for the US, that is the biggest percentage in the biggest economy on the world. That's a lot of deficit! The US Government annual budget deficit for 2011 is expected to be an all time high of $USD 1.5 trillion (that is $1,500 billion; or $1,500,000,000,000). Clicking on this Google search will give you a good range of articles on America's new record deficit. That means that the U.S. Government will spend in 2011 around $USD 4,800 per citizen more than it will actually get in revenue for the year. Not only will the deficit be a record in absolute terms, you will see if you use the interactive chart here at usgovernmentspending.com, that, other than during the two World Wars last century, the US budget deficit as a percentage of GDP after the late 2008 Financial Crisis has never been higher.

Who knows for sure how this record deficit will play out ....?


Some notes on the language:

- Terminology here is important. You need to research your understanding of:

credit rating, interest rate.

It would also be good to have a clear understanding of these terms:

budget, deficit, surplus.

- "shot across the bow" - In the old dangerous days of sailing, with oceans filled with wars and pirates, it was essential that ships be able to identify each other before they got too close to each other. They mostly did this by flying flags on their mast. If there was a ship that could not be identified in this way, then the practice was to fire a "shot across the bow" of the other ship, so that they would be warned and notified to identify themselves. Thus this idiomatic expression came to mean a warning, a strong and stern warning. Did you notice its use in the video?

The caption to this picture from [http://truthandgrace.com/muslimslavery.htm] says "A steam pinnache of H.M.S. London puts a warning shot across the bow of a slaving dhow in 1881".

- haven - Use in the video: "America, once the safe haven of financial stability". First, some discussion of LINGUISTICS: Although you might think that "haven" comes from the word "heaven", the origin of the meaning of "haven" is somewhat different. To illustrate, the website dictionary.com lists the following for the origin of "heaven":

"Middle English heven, Old English heofon; cognate with Middle Low German heven; akin to Old Norse himinn, Gothic himins, German Himmel".

 And you will find that the English word "heaven" in the other modern Germanic languages are: German Himmel, Dutch hemel, Danish Himlen, Swedish himlen and Norwegian himmelen.

However, for the word "haven", dictionary.com lists for its origin:

"Old English hæfen; cognate with Dutch haven, German Hafen, Old Norse hǫfn; akin to Old English hæf, Old Norse haf sea".

 So the the meaning of "haven" is related to protection/refuge (from the sea - but now extended to other general situations), rather than the safety of a paradise in heaven. Just like "shot across the bow" above, "haven" is another term related to sailing! And in fact you will find that in all the modern Germanic languages, a sea harbor is: German Hafen, Dutch haven, Danish havn, Swedish hamn and Norwegian havn. Some other common related terms that you can research for Business English are: "tax haven" and "tax shelter".

The word "haven" - another term somehow related to sailing - comes from a word related to well protected/sheltered harbours and ports, rather than from the word "heaven". Thus in English speaking countries and in Northern Europe, "-haven", "-hafen" and "-havn" are common suffixes for names of places with harbours. This is a picture from Anderson Scandinavian Tours of Frederikshavn, a city in north Denmark where one of the functions of the city is to receive Oslo (Norway) ferries which come further from the north .

Practice your business English by watching and listening to the video above. For more detailed study, you can read the written transcript at the link given above.

[A rare opportunity for you to speak, practice, chat and learn English especially for business, finance, law, international economies & trade at the webpage for Mastery English.]

Business English Practice: Apple sues Samsung for copying iPhone - watch video

Click on the linked picture above to go to a newsy.com video on a new lawsuit by Apple Inc. against Samsung Electronics Co., for "slavishly copying" its market conquering products: the iPhone and the iPad. You can also find the written transcript together with the video at [http://www.newsy.com/videos/complex-relationship-overshadows-apple-samsung-lawsuit/]

Clicking on the copy above of the Apple vs Samsung lawsuit will take you the source of that image: an analysis of the lawsuit at [http://thisismynext.com/2011/04/19/apple-sues-samsung-analysis/] that quotes the allegation that Samsung "slavishly copied" Apple's designs (like a slave copies and follows his master).

Have a look at these photos from daylife.com: Samsung Galaxy phone vs iPhone, and Samsung Galaxy Tab vs iPad. What do you think?

Some background: Apple brought litigation against Taiwan's HTC in March 2010 aiming at HTC's Android powered mobile phones. In October 2010, a mutual litigation war broke out between Motorola and Apple, that included Apple citing infringement, by Motorola's use of the Android based system, of its iPhone user interface and operating system software.

The ironic point in the most recent litigation is that all of Apple's iPhones as well as iPads, from their very first release, have been designed to run their legendary Apple iOS mobile operating system on a Samsung manufactured chip at the heart of each iPhone and iPad (the chips are now built to an Apple design). In this way, Samsung's supply relationship with Apple has been at the heart of the iPhone's success.

But with Samsung's own consumer products increasingly aiming its competition at Apple's market leaders, the iPhone and the iPad, Apple has decided it's time to sue for what it claims are Samsung's illegal product designs. Within the week, Samsung has countersued Apple over various Samsung-owned mobile technology patents. Regardless of the outcome of the litigation, if the supply relationship between these two electronic giants become strained, it is not clear which party will be the loser.


Some notes on the language:

- blatant (used in "blatant copying" in the video) - This is a good word to keep in your vocabulary and to use. It means "very obvious", "openly and clearly obvious". It is usually used to describe things in a negative way.

- tight-knit (used in the video to describe the "tight-knit relationship" between Apple and supplier Samsung) - You can imagine when you knit with woollen yarn, you can do it very tightly, or you could knit more loosely. When tightly knit, it is like the yarn is closely tied together. This gives you the meaning of "tight-knit". GRAMMAR NOTE: This is an example of a "compound modfier": two words brought together by a hyphen, used to modify nouns, and the modifier acts like an adjective. There are many ways that the English language makes compound modifiers. "Tight knit" is one example where an adverb (but with no -ly suffix) and a verb in its past participle form are brought together to become a "compound modifier" that describes a noun. (Actually, this adverb - past participle verb compound modifier means "tightly knit"; here "knit " is the past participle of the infinite verb to knit, whose past simple form can also be "knit".) Further examples of this type of compound modifier are: well-run school, hard-fought battle. (Some other types of compound modifiers: adj. + adj., n. + n., adj. + n., adj. + present participle verb, n. + present participle verb , adv.[no -ly suffix] + past participle verb. SEE some real examples at the University of Sussex website.)

- back-room deal - This is an idiom meaning some deal or agreement that is not made in the open for others to see, but is hidden to keep matters secret - where the business is not made at the front of the shop, but completed in a hidden back room. Notice that this idiom can be seen as being made with another compound modifier, an adj. + n. modifier, that describes the type of deal. Here is another example from Britain's "The Independent" newspaper: "a Liberal Democratic Party (LDP) member of the upper house of the Japanese Diet, had done a back-room deal with political opponents to avoid being questioned..."


Practice your business English by watching and listening to the video above. For more detailed study, you can read the written transcript at the link given above.

[A rare opportunity for you to speak, practice, chat and learn English especially for business, finance, law, international economies & trade at the webpage for Mastery English.]

Business English Practice: Disneyland enters the Chinese market - watch video

Click on the linked picture above to go to a newsy.com video on the beginning of construction on the new Shanghai Disneyland - Disney's entry into "one of the most promising consumer markets in the world." You can also find the written transcript together with the video at [http://www.newsy.com/videos/shanghai-disneyland-smart-move-for-disney-and-china/].

Here is the Disneyland site marked out on OpenStreetMap.org at [http://osm.org/go/5niQTu9d-] around 20 km southeast of the center of Shanghai.

Here are some things I learned in my research about Disneyland's ventures outside of America:

- This will only be the fourth Disneyland outside of the USA, after Tokyo (1983), Paris (1992) and Hong Kong (2005).

- Tokyo Disneyland is only a licensee of Disney and is not owned by Disney.

- Disneyland Paris began Disney's overseas business model of: A) seeking out overseas locations, B) basing the project on negotiations with local authorities for favourable concessions (not least of which is the large expenditure needed for supporting public infrastructure), and C) taking only a minority interest in the ownership (between 40% to below 50% in Paris, Hong Kong and Shanghai).

- Hopefully Shanghai Disneyland does not replicate the early woes of Paris and Hong Kong. The initial financial performance of Disneyland Paris was so bad that the newly listed European public company had to renegotiate its debts in 1994, allowing Disneyland Paris to turn a profit in 1995. The financial performance of Hong Kong Disneyland has been even worse, underperforming attendance projections and losing millions for five straight years - every single year since opening its gates in 2005. However, the majority shareholder in Hong Kong is more subtantial than those that were in Paris - it's the Hong Kong Government itself, funded by all the lucky Hong Kong taxpayers. Attendance at Hong Kong Disneyland has been around 4 million per year since opening in 2005. In comparison, Disneyland Paris went over the 10 million p.a. mark in 1995 after only three years of operation, while Tokyo Disneyland attendance has been over the 10 million mark ever since opening in 1983. The video states that Disney expects 7 million per year at Shanghai.



Some notes on the language:

- merchandise - "Merchandise" used to mean just any type of physical economic goods that is bought and sold. However, in recent times the term "merchandise" has been increasingly used to refer to a wide variety of goods that use designs licensed from the entertainment industry, or from other entities with an image/name to sell - for example, a Mickey Mouse design licensed to a pencil manufacturer. Here is one example of a mechandise licensing agency.

- conglomerate - Separate companies can be grouped together by ownership of the "subsidiaries" by a "parent company" (which can be a company with normal operating business or just a "holding company"). A "conglomerate" is where this group of companies consists, not of very similar subsidiaries, but where the businesses of the group companies are of quite different types. In this case, Disney's partner, the Shanghai Shendi Group, is a conglomerate specially formed by the Chinese Government for this project, of three very different "state owned enterprises" - a property development company, an entertainment company and a hotel hospitality company: Shanghai Lujiazui (Group) Co., Shanghai Radio, Film and Television Development Co. and Jinjiang International Group Holding Company, respectively [SEE shanghaidisneyresort.com.cn].

- mainstay - "Mainstay" is a good word to use, even though it is not often encountered. It is something major that you depend/rely on most of the time. You can find a quotation from George Bernard Shaw that mentions the "atomic bomb" as possibly becoming a "mainstay of Peace", here at quotes.dictionary.com.


Practice your business English by watching and listening to the video above. For more detailed study, you can read the written transcript at the link given above.

[A rare opportunity for you to speak, practice, chat and learn English especially for business, finance, law, international economies & trade at the webpage for Mastery English.]

Business English Practice: high oil prices and the economic recession - watch video

Click on the linked picture above to go to a newsy.com video on high oil prices and the economic recession, titled "Will High Gas Prices Disrupt Economic Recovery?" That is where you can also find the written transcript together with the video at [ http://www.newsy.com/videos/will-high-gas-prices-disrupt-economic-recovery/ ].

The price of oil in April (Brent crude oil went over $125!) has been the highest since its peak before the 2008 financial crisis. This news story asks if this will cause the economic recession to get worse.

Some notes on the language:

- Of course you know that "gas" here refers to "gasoline" ("petrol" in British English), and it is not used here to refer to the physical state of matter that floats in the air above liquids and solids.

- Language to refer to increases and decreases is very important in describing economic issues. Can you find these mentioned in the video?:

• price increase, hike, are up, high, surge
• going down, less, dip

How many "opposites" can you think of for the increase/decrease vocabulary above?

- "ripple effect" - When some movement occurs on the surface of water, "ripples" spread out from the original point of that movement, so the "ripple effect" refers to changes in once place effecting and spreading to make changes in a wider area.

- "dip" - is a noun as well as a verb meaning to move lower (often to come up again; as in a "dip in the road" or "dipping a spoon in a bowl of soup"). If an economy shrinks, improves a little, then falls some more, then this can be called a "double-dip recession", which is referred to in the video.

Practice your business English by watching and listening to the video above. For more detailed study, you can read the written transcript at the link given above.

[A rare opportunity for you to speak, practice, chat and learn English especially for business, finance, law, international economies & trade at the webpage for Mastery English.]

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