Day: October 5, 2014

Formerly two neighbouring states with a noted disdain for each other,  the Democratic People’s Republic of Korea and the Republic of Korea – better known as North and South Korea – have begun an unexpected series of negotiations amid a state of civil unrest in the North. Just yesterday, it was reported by BBC that the two factions had agreed to resume diplomatic talks, in the wake of a surprise visit by North Korean officials.

As it stands right now, only the people involved actually know what the reopening of negotiations actually means, but given the level of hostility between the neighbouring nations in recent years, the start of constructive communication could prove to be a breakthrough. The start of warmer relations could potentially change the entire economic and financial landscape of that specific Asiatic region. If for whatever reason North Korea decides to loosen its trade barriers with its southern neighbours, or simply open its doors like China back in the 1840s, there would be untold economic and political effects. Suppliers in China, South Korea, and Japan would suddenly gain a new, massive market base upon which they could sell their products. All the talk about what these negotiations signify is simply speculation at this point, but many believe that if things turn for the better, that the Koreas could be heading into very exciting times.

Evans, Stephen. “North and South Korea ‘agree to Talks'” BBC News. N.p., 4 Oct. 2014. Web. 04 Oct. 2014.

Image source (1) & source (2)

Ebola is a virus which has experienced a rampant outbreak in many countries along the West African Coastline, killing thousands and infecting thousands more. Health officials initially informed North Americans that ebola could be contained, but somehow, it still managed to jump the ocean into both Texas and Toronto. When this happened North American authorities told the public not to panic, so being North Americans, they did.

A handful of health experts have indicated that they believe a small outbreak of Ebola in North America is all but inevitable. This slight possibility of an ebola outbreak represents a slew of potential macroeconomic effects that could come forth, affecting the North American market.  The healthy care industry is the most obvious example in this case; a company that successfully launches and  markets a drug for the treatment of the virus will see their share prices increase significantly. However, some susceptible industries, such as the airlines, may also experience a downturn due to the emergence of the disease.  The looming threat of a worldwide epidemic will discourage people from traveling, and thus global human air transportation will experience a gradual decline in activity. It would not come as a surprise if airline shares begin to drop while their healthcare counterparts rise, as the impending threat of ebola grows larger. Worldwide events like ebola always produce macroeconomic effects, and in the financial world, those who can correctly predict the outcome of these trends typically come out on top.

Sources

Diamond, Dan. “Yes, Ebola Is Scary. But It’s Also Beatable. Here’s Why.” Forbes. Forbes Magazine, 03 Oct. 2014. Web. 03 Oct. 2014.

Image source (1) & source (2)