Rescue Plan for Greece Could Be Reached by Saturday

The Greece prime minister has said that there will be spending cuts and an increase in taxes. He was quoted as saying “the measures we must take, which are economic measures, are necessary for the protection of our country — for our survival, for our future, so we can stand firmly on our feet.” Part of the new plan gives the government the right to lay off the public sector workers since a lot of them receive high wages for a low level of productivity, which is a key factor in the countries debt. The country has very strong unions and jobs are "constitutionally guaranteed" which is the reason the government cannot lay off unproductive workers. A way in which they are going to decrease consumer prices is by deregulating the trucking industry. Their bailout plan will not only help Greece, but it will also help all countries that use the Euro. They said that even though the plan might be finished it will probably not be announced until Sunday or Monday due to the fact that Saturday is a national holiday in Europe.

Consumers Help Drive U.S. Economy to 3.2% Growth Rate

National output grew at a rate of 3.2% in the first quarter, but people are afraid that we are not growing fast enough to fix what happened with the recession. Consumer spending contributes to about 70% of the economy and is the driving factor in recovering from a recession. Throughout the last three months of 2009 consumer spending grew at a rate of 1.6%, but in the first quarter this year it grew by 3.6%. Chief United States economist at IHS Global Insight Nigel Gault said "we haven’t had consumer spending growth this strong in three years,” which is a good sign, aside from the fact that economist are worried that the dampened job market will keep consumers from spending more than necessary. The unemployment rate as of now is 9.7%, and there is a fear that if people do not start spending more, the unemployment rate will continue to be high over the next year and possibly the next few years.

Stocks climb on earnings, drop in jobless claims

More signals showing a strong economic recovery. Confidence in investments continues to soar as companies return to normal activity and their stock prices reflect the growing consumer confidence in these companies. Coupled with a drop in unemployment benefit claims, these are positive signs of a recovering economy and hopefully the unemployment level will soon drop as well.

H.P. to Pay $1.2 Billion for Palm

Today Hewlett-Packard announced its $1.2 billion purchase of Palm - the struggling maker of the Pixi and Pre smartphones - in order to remain relevant in the technological market. H.P. is the largest computer maker in the world and he deal gives H.P. access to Palm’s software that can run phones, as well as other types of devices. For Palm, the buyout means a "new life" for the company because of H.P.'s deep pockets and strong retail relations. It can be a win-win situation for both companies in terms of acquiring a larger marketshare for smartphone sales, but at the same time this article highlights some implications that H.P. and Palm still face.

Hewlett-Packard Agrees to Buy Palm

This article is about Hewlett Packard has agreed to purchase Palm for $4 billion which would unite the two companies that "have failed to make much recent headway in the smart phone business." Palm has been listed to be in $400 billion debt which would be solved by the $592 HP is buying Palm for. Since HP is a leader in the market, becoming bigger may be to its advantage and better for Palm as well because it is currently making losses.

Offshore oil platforms operate at ever-greater depths

A big British oil company, BP, announced cost cuts and measures to be more efficient on March 2nd because they hope to increase annual profits by $3 billion over the next few years. Along with BP, other big oil companies face the same problem when it comes to booting profits-- There has been a lack of discovery of new, cheap oil fields. Because oil fields that are easy to reach and worth drilling from a cost perspective have not been being discovered, firms want to look for oil even deeper below the sea. Since 1994, offshore oil wells have been reacher further and further into the sea. This year, Shell's Perdido rig is going to begin operation, as tall as the Eiffel Tower and chained to the seabed 2.4km below, capable of extracting oil at a maximum depth of 2.9km. Compare this to the first offshore oil well in 1947 that was able to drill 4.6 meters into the seabed.

Obama is a Bully: Kneale

This is an opinion piece I found on CNBC.com today. I find it fairly entertaining and maybe Kneale says somethings that some of us are thinking. I can't say I disagree with him. I wonder if this is how the other "malfunctioning corporation called the USA", (Wall Street, Gekko) will function for three more years under the leadership of the Obama Administration. Unions recieve better treatment from the government than our American businesses. Unions need businesses but I suppose that is a discussion for another time... This course has compared different countries and their economic systems and I can't help but taking a step back and looking at the USA and how we really stack up.

Trouble on oiled waters

On Tuesday April 20th, a fire followed by an explosion and now an oil leak occurred in the Gulf of Mexico on the Deepwater Horizon oil rig. It is located 41 miles off the Louisiana coast. 11 of the 126 workers were missing but the search was called off when the rig sank. Oil is releasing into the sea at a rate of 42,000 gallons, equivalent to 1,000 barrels a day. The oil slick measured 80 miles across and 42 miles lengthwise by Monday, with the western part only 36 miles from the coast of Louisiana. BP's technicians plan to activate the blow-out preventer, a huge valve that is operated by robot submarines but the weather has turned the water rough and needs to be more calm before this can take place. If this does not work, BP could drill another well to release pressure which could take months to do so they may plan to lower a massive dome over the site instead that will suck oil into vessels that can safely dispose it.

France Posing Burqa Ban

France has a proposal to ban the use of burqas and President Nicolas Sarkozy has the declared the burqa not welcome in France. France’s National Assembly will begin debate in early July on a bill banning Muslim women from wearing the full Islamic veil. On May 19, the final draft of legislation outlawing the veil from all public spaces as well as state institutions is to be approved by the cabinet.

Homeownership Falls Further

This is an interesting article on the falling rate of home ownership in the U.S. It is interesting to see how the U.S. relaxed regulations in the early 2000's to increase home ownership which definitely had a positive affect in the short run but has now been reversed. It is up to congress and the government to come up with legislation that will hopefully help turn the real estate market around and put some value back into the market.

$2.1 Billion Profit for Ford in Quarter

This article states how the Ford Motor company had its best quarterly performance in six years (2.1 billion dollars). Ford has managed to increase sales of new products drastically and at the same time closing plants and getting rid of a lot workers. The last time Ford earned profits near $2 billion were in 2004. Based on the profits in the first quarter, Ford expects to have "solid profits and cash flow." the profit was equal to 50 cents a share compared to a loss of 60 cents a year ago.

Greece Cut to Junk at S&P as Contagion Spreads

Some more news updates on Greece.

Greece brings the value of euro down by being the first euro member to lose its investment grade. The article suggests the EU member-state leaders may have to hold an emergency summit after the Greek government’s decision last week to tap a 45 billion- euro ($60 billion) emergency-aid package failed to reassure investors. As of today, Greece’s bonds have been lowered to the point where they are at the same level as the bonds issues by Azerbaijan and Egypt.

A Crowd With Pity for Goldman

This is an addition to the previous article on Goldman. The article basically talks about how Goldman has become the sacrificial goat for all the wrongs that Wall street has committed. I particularly find it very interesting that people are so morally outraged that Goldman helped clients profit by placing bets that the housing bubble would burst. The bottom line for the company is not to be moral or just, its to make profit and they saw their chance to make a good profit and took it. I don't see how this is different from any other kind of speculation besides the fact that they made the right call when others did not.

World Bank gives more clout to a rising China

This article discusses how China's growing economy has resulted in lifting their voting power in the 186-nation lending organization. China is now above Western powers like Germany, France and Britain. Their voting stake rose from 2.78 percent to 4.42 percent. The U.S. stake remains the largest at 15.85 percent, effectively giving it veto power. Japan follows at 6.84 percent. China is doing very well and booming that the increase in their voting power also gives other nations with emerging economies more voice in how the bank operates and lends.

SNL Spoofs Obama

This is hilarious, but it also has some relevance to our class!

How long should we help the jobless?

This article discusses whether or not unemployment benefits should last longer than 99 weeks. The current period of 99 weeks is already the longest in history. But some unemployed workers are begging for more, saying they cannot find work in this economy. Unemployment checks have helped to keep food on the table and prevented more mortgages from defaulting. The checks also stimulate the economy because the unemployed tend to spend every penny they are given. However, it is a huge strain on the government to be sending millions of checks out each month. And some believe it lowers the incentives for the unemployed to find work. Lately, there have been promising signs in the employment market, like an increase in the amount of temporary workers. It seems as if most economists believe we should wait and see if this upswing will be permanent before we make any adjustments to the unemployment benefit period. This just reminded me about how difficult it is to remove government intervention once it has started. Although we studied it in relation to economies transitioning from socialism to capitalism, it can definitely happen in a market economy as well.

The Institute for Supply Management™ Manufacturing and Non-Manufacturing Report on Business

A sign that the economic recovery is expanding from the goods-based sectors to the service industries, the ISM non-manufacturing index reported its fourth consecutive increase, rising 2.4 points to 55.4 from February to March. The service sector, which has lagged the recovery reported in the manufacturing sectors, is now improving as the index has been above the expansionary threshold of 50.0 for the first three months of the year. The employment index continued rising to 49.8, just shy of growth, while new orders and business output continued expanding above the growth threshold. The export index resumed growth after three months of contraction, reaching its highest level since June 2007. These reports are another good sign that our economy is headed in the right direction and hopefully we can maintain these numbers.

March jobs report shows growth

The growth rate for jobs for March, in the United States, was higher than any other month in the last three years. This hopefully is proof that the economy is going to continue to get better in the coming months and years. Although the job growth rate increased the unemployment rate remained at 9.7% which is high. The article goes on to explain that some of the jobs, around 50 thousand, were because of the census being this year and their hiring of people. President Obama is using this as proof that the stimulus package is working and that job growth rates will continue to increase. We will have to wait and see if that is true but as of right now it is a good sign that the rate of growth for jobs has substantially increased.

G-20 Summit: 6 Countries in Recovery

This article is a broad overview of how the six largest G-20 economies are recovering since the global recession. Some are looking better than expected, while others are still struggling. China struggled less than the rest, boasting a 7.9% GDP increase, while U.S. GDP decreased by 1%. Inflation, GDP, unemployment, and interest rates are given for the US, China, Germany, Japan, France, and the UK.

Shareholders V. Stakeholders

The economic crisis has revived the old debate about whether firms should focus most on their shareholders, their customers or their workers. Over the past twenty-five years, maximizing returns to stockholders, has been the sole aim of firms. However, given the current financial crisis many have come to believe "shareholder value is the dumbest idea in the world." In many ways today Goldman Sachs epitomizes these economic complications. How will we choose to remedy these problems and what direction will we go in the future? Shareholders? Customers? Workers?

When the niños run out

Mexio's birth rate has been falling, once among the world's highest to now comparable to the U.S. Mecian woman had around seven children each in the 1960s and now the average is just over two. Contraception, more women receiving education and work opportunity, as well as more expensive housing has decreased the size of the Mexican family more. More Mexicans are aging as well and the country is not prepared with a health-care system or social security that will provide for the aging. The U.S. has historically absorbed half of each Mexican generation and with fewer of them, this could impact the U.S. reliability on migrant labor.

Rebounding Economy?

This article discusses the recent increase in spending within the United States. It appears as if Americans have begun to spend again, but the question remains if this is actual recovery or a fluke. Some economists have pointed to the stimulus package as the reason for this spending. They say that we will have to wait to see if people get new jobs before we can know how well the recovery is actually working. Also, the growth rate has been about half of what is expected directly after a recession. Still, some say it is true recovery. Only time will tell.

After a Coup, Niger Resumes Business as Usual With China

I thought this article was fascinating in the sense that it shows China acting as a true capitalist would. It has no qualms about its lack of morals in its dealings and it is clear that it is in it for the profit.

In the long run, this consistency in behavior could prove beneficial to the Chinese, as they have consistently showed their willingness to invest and make a long term commitment to Niger in a very important resource- oil. Thus if it works out for the Chinese, this could be one good investment for them.

Book on Samsung Divides Korea

An interesting article about a man from Korea who was accused of stealing as much as 10 trillion won, or $9 billion, from Samsung subsidiaries and stashed it in stock and bank accounts illegally opened in the names of executives. It gives an interesting look at how the judicial system in other countries works.

Book on Samsung Divides Korea

Life has been a roller coaster for Kim Yong-chul since he began talking about Samsung Electronics two and a half years ago. He has been celebrated by some as a whistle-blower, but in a culture that emphasizes workers’ loyalty to their employers, he has also been vilified as a traitor driven by personal grudges.

Parties Edge Closer on Financial Regulation Bill

A top Republican on the Senate banking panel said Sunday that a deal with Democrats appeared closer on a bill that would tighten regulation of the nation’s financial system. But he also said his party was prepared to block debate until the key planks of the legislation are in place.

For Greece, Restructuring Is No Longer Unthinkable

This is an article from a series of articles covering the ongoing crisis Greece has been in. Experts are now saying that not only can Greece restructure its debt and not default on paper but that they actually will be able to restructure. Total government debt was $365 billion at the end of 2009 which is 115% of GDP. The best way politicians feel Greece can restructure its debt is to allow to repay this debt over a multi-year period.

Perils Remain Despite Recovery’s Pace, I.M.F. Head Says

This article is how the head of the IMF stated that altough the economic recovery was faster than expected, there may be long term unemplyment and "unsustinable public debts." The IMF has increased its lending capacity sice the economic downturn on 2007. It has extended its loans to Latvia and Hungary and now Greece. The IMF has also renewed a pledge to "approve a redistribution of power that would lessen the emphasis on the wealthiest countries."

Graham Pulls Support for Major Senate Climate Bill

Republican Senator Lindsey Graham has been actively participating towards an energy bill with Democratic Senators John Kerry and Joseph I. Lieberman. The moment Graham heard of a possibility of adding on immigration measures before the energy bill, he opted out as a supporter. Graham believes that focusing on issues like illegal imigration would make it 'impossible to deal with the difficult issues involved in national energy and global warming poicy.' He feels that energy must be the priority.

Immigration advocacy groups to challenge Arizona law

This is an interesting article I came across this weekend. The governor of Arizona, Jane Brewer (R), on Friday signed into law a bill that requires police to question people about their immigration status including asking for identification if they suspect that someone is in the country illegally. This has sparked fears among legal immigrants and U.S. citizens that they will be hassled by police because they look Hispanic. Immigrants unable to provide documentation of legal presence could be arrested, jailed for as long as six months and fined $2,500. Legal immigrants will be required to carry paperwork proving their status. Currently, the law in Arizona and most other states does not require police to inquire about immigration status, and many police departments prohibit officers from asking out of fear of losing immigrants' cooperation in other investigations.

The governor also ordered the state's law enforcement licensing agency to develop a training course on how to implement the law without violating civil rights. The measure will take effect in July or August, depending on when the legislative session ends. The law also allows suits against government agencies that hinder enforcement of immigration laws and hire illegal immigrants.