United Business Proposal
June 20, 2013
Operation Decisions: Reviewing the Beige Book dated April 17, 2013 for the San Francisco area it is stated in the manufacturing section that the manufacturing of the airplane industry is up. To elaborate on the meaning of this, it means the airline industry is also increasing in business and so it is responding by is purchasing airplanes so they can expand their services to more destinations throughout the world. United Airlines has been growing the last few years despite the slump in the market. United has purchased and merged with Continental Airlines starting in 2009, and as the business cycle is in mid-expansion it is a good time for United to be growing. The U.S. business cycle according to Hofschire at Fidelity.com is in mid cycle of expansion. Based on these few items it is a good time to invest in this airline business. ("Beige book," 2013) (Hofschire, 2013)
Projected Credit Markets: According to FOMC found on the Board of Governors of the Federal Reserve System, under the Monetary Policy tab, the Federal Fund Rate (FFR) would be 1% lower in 2014 than 2013. This would support the progress in achieving the Federal Reserve’s mandate for promoting growth in employment and creating stable prices. In the long run the FFR would range between 3 ¾ to 4 ½ percent. The projected credit market looks to remain close to the current rates in the near future. Because of these projections and information United Airlines should continue to buy airplanes and expand their business. (minutes from January 24-25, 2012) (Monetary Policy,2013)
Current Credit Markets: Interest rates for business loans and interest rates for consumers are lower than they have been in years. U.S. government credit exchange like Prime, FFR and discount rate are also low. For instance Prime rate is a 3.25% and banks are giving credit to about 10% more consumers loans that what they were giving in 2010. Business loans...
References: Board of Governors of the Federal Reserve, Twelfth District--San Francisco. (2013). Beige book. Retrieved from website: http://www.federalreserve.gov/monetarypolicy/beigebook/beigebook201304.htm?san_francisco
Hofschire, D. (2013, Jan 02). Business cycle update: Economies improving . Retrieved from http://www.fidelity.com/viewpoints/market-and-economic-insights/december-business-cycle-update
Lee, M. International Trade Administration, (2012). International travel to the united states. Retrieved from website: http://tinet.ita.doc.gov/view/f-2000-99-001/forecast/Forecast_Summary.pdf
McConnell, C. R., Brue, S. L., & Flynn, S. M. (2009). Economics: Principles, problems, and policies (18th ed.). Boston, MA: McGraw-Hill Irwin.
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