UAE may allow full foreign businesses ownership

United Arab Emirates is working on allowing foreign companies to own 100% of their business in the region. Whereas before they were only allowed to own 49% of the business which requires an Emariti partner. The process will reach to a final decision within next two and this change is happening due to world financial crisis and this will invite the foreign "hi tech hi value businesses" to invest in the region.

A Record Deficit, Put in Perspective

This article discusses the United States' new amount of federal budget deficit for the 2009 fiscal year - a record high. It explains a few of the possible sources and reasons for the drastic increase in the amount - $459 billion to $1.4 trillion. After this, it gives an interesting way of understanding the amount of money that really is - explaining it in several different ways. It is an eye-opening view of the amount of the deficit incurred by the US.

World financial crisis 'not over'

According to the New University professor economic crisis are not over yet. He says in the future the consumers will be suffering with debt and they will cut back on spending and save more. This is not a very optimistic way of seeing the future of the economy but we sometimes do need to realize what is happening with our economy.

Will Anyone Mourn Saturn?

This article discusses one of the results of the GM crisis - the plan to sell their Saturn car line to another automaker. After attempting to make this happen, all deals have fallen through. There will no longer be any production of Saturn cars after GM ends in 2011, joining other defunct GM product lines like Pontiac and Oldsmobile.

While this came as a shock to consumers and retailers alike, the line had not been as effective as hoped for years. While sales were actually looking towards increasing, it was overall a brand of car that had typically been losing money for GM overall.

Oil's dollar pricing 'under review'

This article discusses how talks have started to begin held between the Gulf states and countries like Russia, China, Japan to replace dollar with a different currency. This article is interesting because it talks about the reaction of the world to the weakening of American dollar. Iran is already setting his prices of crude oil to euros.

Gold price returns to fresh high

This article talks about an increase in gold prices and it may conitnue to rise if the dollar continued to weaken. The fall in the value of the dollar had a negative impact on the price of gold, which rose to a record high of $1,036.60 an ounce.Gold price rose because a weaker dollar in which gold is valued increases its attractiveness to investors. If the dollar continued to weaken it will lead to a lot of problems regarding the U.S. for people wont invest in the U.S. economy and imports will also fall...

Support Builds for Tax Credit to Help Hiring

The idea of a tax credit for companies that create new jobs, something the federal government has not tried since the 1970s, is gaining support among economists and Washington officials grappling with the highest unemployment in a generation. The proposal is aimed to help smaller businesses develop when unemployment is hovering around 10%. Additionally, the tax credit is expected to help create 2 million jobs within its first year. However, there are worries that the unemployed and larger companies will try to exploit the new policy. Also, people argue that the tax credit will be a waste of money because companies do not need more workers because there will be no work for them if demand for their products/services continues to remain low.

Sports and the Law: Supreme Court Gearing Up to Address NFL's Single-Entity Argument

This article discusses the upcoming Supreme Court case, American Needle v. National Football League.  American Needle Company believes that the NFL violated the Section 1 of the Sherman Act because restrained the American Needle Company from purchasing rights to NFL logos by giving Reebok the exclusive licensing rights.  The article discusses the potential outcomes of the case and what it specifically means to the National Football League.

Norway 'the best place to live'

Based on the UN's Human Development Index, Norway is the best place to live on earth. Norway ranked best on criteria representing a high quality of life. Lowest ranked was Niger, while the US is ranked 13 and the UK 21. I think this relates to the efficiency-equity trade off we have talked about. Norway, like its Scandinavian counterparts, practices a "welfare state" economic and governmental system. Norway's high ranking is attributed to a heavy emphasis on social welfare and equality, but this is funded through heavy taxes.

So, the question is, which side of the trade off would you rather be on?

When State Universities Lose State Support

The budget of the public higher education system of California has been slashed by over 20 percent, on top of previous cuts. Faculty and student protests kicked into place the first week of classes, reflecting enormous contention over the best way to respond. What’s happening in California is both a harbinger of things to come in other states and an amplification of a national trend. The percentage of total spending at state universities provided by state tax revenue has been sinking for more than 20 years. As Jim Duderstadt, former president of the University of Michigan put it, “We used to be state-supported, then state-assisted, and now we are state-located.”

Profits for Buyout Firms as Company Debt Soared

Private equity firms, former executives and Wall Street investment banks profited as the Simmons Bedding Company fell into bankruptcy, devastating its bondholders and employees.

Socialists win in Greece; 'hard work' ahead, Papandreou says

Greece's opposition Socialist party on Sunday defeated the incumbent center-right government of Prime Minister Kostas Karamanlis, as Socialist leader George Papandreou promised to chart a new course for an economic comeback. Papandreou's belief for rebuilding the economy won over his democratic opponent, who wanted to cut spending, as Papandreou wants to propose an economic stimulus package. However, there are arguments over where will the money come to fund this stimilus.

Prepaid College Savings Plans Might Not Cover All Costs

This article discusses the economic downshifts effect on prepaid college saving plans.  The article specifically covers how the Ohio Tuition Trust Authority is dealing with the situation.

Schumpeter: Thriving on adversity

Often, we think recessions are bad. But, if viewed from Schumpeter's "creative destruction" perspective, it is a hotbed for innovation and revolution. This article recounts how past recessions shaped companies who took advantage of it into industry leaders. One way to view a recession is that it weeds out the weak, leaving the strong who will only get stronger.

In the current recession, there are three groups of winners:
1. Firms that went into the recession strong, with a lot of cash and a competitive advantage.
2. Firms that are innovative.
3. Firms that will use the recession to reposition their business.

The main reason why these three groups will succeed is because they ultimately embrace "creative destruction", rather than fearing change.

WB warns on growth, inflation risks for Asia

This is a short article that talks about the inflation risks the East Asian economies, in particular China, may experience if they keep interest rates low in line with the US federal reserve. East Asian economies are starting to recover but inflation is a concern with the growth in credit it could result in an "inflationary bubble effect". They need to be careful to ensure growth is steady and viable, with as little negative effects as possible.

This is a short article that talks about the inflation risks the East Asian economies, in particular China, may experience if they keep interest rates low in line with the US federal reserve. East Asian economies are starting to recover but inflation is a concern with the growth in credit it could result in an "inflationary bubble effect". They need to be careful to ensure growth is steady and viable, with as little negative effects as possible.

Market fatigue

The following article discusses the drawbacks of the Anglo-Saxon system. It is important to notice that it compares the "arm’s-length finance" to the more relationship-based structure as in Japan or Germany.

Dynasty and durability. European family firms in the recession

This article talks about family businesses, which are a common for the European model. Family-owned or closely held firms dominate Germany in particular. Of the 1,000 biggest German companies, only 170 are listed. System under which they exist reflects the principle of long-term consequences. The author states that family businesses survived the two world wars mainly due to their long-term orientation.

However, the author points out several weaknesses of the "family capitalism." The first is that one of its main strengths, the alignment of ownership and management, can become a weakness when control passes to the next generation. Second, family-owned firms also seem to lose caution as they get bigger. When they become too big to rely on a single bank, resorting to syndicated loans, their many bankers tend to monitor them less closely.

Struggling farmers not getting a fair share of the retail food dollar, some agriculture experts say

This article shows why dairy farms are losing profit while food companies are making a lot of money. This is a good example of imperfect competition. Dairy farmers hope to reverse this trend with antitrust regulation. Because many dairy farmers are going out of business, there are fewer suppliers in the market, leading to less competition. While dairy farmers struggle more and more each month, the food industry is making higher profits because they are able to raise their price.

Deflation Threat Pushes Fed to stay at Zero

This article discusses the possibility of deflation for the first time since the Eisenhower administration. Some companies are already blaming deflation for decreased earnings. Joseph Stiglitz also points out to the importance of that issue. Currently, the US faces disinflation, which is a slowing in the pace of increase in consumer-price index.

Who should pay to dismantle 'too-big-to-fail' institutions?

The following article describes the dilemma that lawmakers face when deciding how to fund the failing mega-institutions. It is a main point made that the taxpayer should not be forced to bear any of the brunt of this problem. However, its not so easy to decide when financial firms don't want to have to fund this problem either. If these firms in fact are "too big to fail," then a decision has to be made. Regulators are attempting to maintain a careful balancing act between keeping the economic system functioning and not spending wildly. The main solution proposed would be to have an agency collect periodic upfront fees from systemically significant institutions to fund a 'too-big-to-fail' fund.

Greenspan predicts unemployment will hit 10%

This article describes Alan Greenspan's prediction that unemployment is going to rise in the 3rd quarter of this year, although growh is expected to rise as well. He predicts that unemployment will reach 10% and likely stay there for a little while before it goes down. Greenspan cites firm's lack of new job openings as a main reason for the continued rise in unemployment. The current unemployment figure is 9.8%, which is the highest since 1983.

Rio’s sporting carnival

Rio de Janeiro will host the 2016 Olympic games. This is the first time this event will be held in South America. This article takes a look at the economic benefits and disadvantages for countries hosting the olympics. I thought this was just an interesting article that did not deal with the US economic crisis but was different and not so heavy. It is great read and talks about things we never really think about. One of the comments that stuck out to me most was by Robert Baade of Lake Forest College, who describes the Olympics as a “high risk, low reward proposition”, but concedes that the games may prompt spending, say in transport, which boosts a region’s economy in the long term." 

How Many Mexicans Does it Take to Drill an Oil Well?

This article describes the state of the government owned oil industry in Mexico. It is extremely inefficient, and the effects of this- lost government revenue from taxes and having to import oil in the future- will be catastrophic for Mexican citizens. Taxes from oil accounts for 2/5 of government revenue, meaning serious implications in the near future as output is declining sharply. Unfortunately, politics have gotten in the way of true reform as presidents have been hesitant to make rational changes which would upset the unions. This is a perfect example of public failure.

Restructuring South Korea's chaebol

The following article discusses the restructuring of the South Korea's indebted family-owned conglomerates or "chaebols." The author states that in the movement towards free market economy the "chaebols" are splitting up into smaller pieces. Overall, they are performing worse than other South Korean firms and carry a huge amount of debt. Their inefficiency is better seen now because of the development of capital markets.