U.S. woes are not our fault, Chinese economists say

I find it humorous that China still denies running a mercantilist economy. They knew just as well as everyone else that American's rely all too much on debt, and I don't think China has anyone to blame but themselves for being in the spotlight.

Are we there yet? America’s recovery will be much slower than that from most recessions; but the government can help a bit

This article talks about the somewhat unusual slow recovery rate of the American economy post-recession. Some of the possible reasons for this include a complete breakdown in the finance sector, which delays growth, and poorly structured morgages that are worth more than the actual house. The author suggests a number of solutions. The one I found most interesting suggests keeping Bush's tax cuts and running a loose fiscal policy. This will no doubt increase the deficit. So, is it more important to cut the deficit or encourage growth?

Budget deficit in U.S. narrowed 13 percent to $90.5 billion in August

The article gives a summary of the changes going on in the US economy currently. The tax revenue has helped to narrow the August budget deficit by 13% even thought it still remains high at $90.5 billion. However the Congressional Budget Office is still forecasting a $1.34 trillion deficit for the year, which would be the second largest on record. The US Treasury says that government revenue has climbed 13% compared with last year while government spending has increased by 2.2% yoy. The highest spending so far this year has been by the Defense Department, Social Security Administration and the Department of Health and Human Services. Even though the US economy started to recover in the second half of 2009, the growth in 2010 has been sluggish with unemployment, budget deficits and economic growth being the key macroeconomic factors which are lagging. As a result these topics will come under heavy fire as the November Congressional elections draw closer.

White House defends $814 billion stimulus, highlights top projects it says are creating jobs

This article talks about how the white house is backing there 814 billion dollar stimulus package, which is suppose to go towards about 100 new programs which will give some americans jobs temporarily. All of this spending is good in the short term, and will make growth look better then it actually is. Down the road this stimulus package I think is just gonna be another dead end way to spend 800 billion dollars, and since the Obama administration is becoming desperate to appeal to people again its sounds like a way to keep the heat off of them for a while..

France Moves to Raise Minimun Age of Retirement

French President Nicolas Sarkozy was able to pass a vote in the lower-house of the French government to increase the age of retirement in France to 62. The previous age of retirement in France was 60 and one of the lowest ages of retirement in Europe. This increase in retirement age may seem very small for most countries. Retirement age in the US is 65 and Britain and Portugal have committed to moving retirement to 68. However, France has reacted less than favorably to the changes. Sarkozy's approval rating are at a record low and there have already been strikes of discontent from the French people last week. Another strike is scheduled for September 23. The retirement age will reach 62 by 2018 increasing by 4 months a year. Sarkozy offered commission for people with grueling jobs or who began working at a younger age. The move to 62 will begin to save the pension system with people living longer and baby-boomers beginning to retire. "It's about preserving the pension system for out children." says Jean-Francois Cope, leader of the National Assembly.

Barclays, BNP Sell Record Samurai Bonds as Yield Demand Trumps Europe Rise

As European markets dropped on friday on US consumer confidence news banks and utilities were especially hit hard. European banks sold an incredible amount of Yen bonds in Japan this quarter.

Barclays Plc, BNP Paribas SA and three other European commercial lenders raised 499.7 billion yen ($5.83 billion) in Japan since July 1.

A staggering amount of money for a recovering economy. Since the sell off Japan is in trouble and is dealing with the lowest domestic yields and spreads to date. However European banks and taking on more and more debt every year especially since buying Greek, Spanish and Portuguese bonds.

What are your thoughts? Do you think we are going to see a trend going back to the European bonds since banks are selling off the Yen Bonds? Also the Yen to USD has been a strong play this summer, now that all the bonds are being sold back is it still a strong play?

ZEW Indicator of Economic Sentiment - Expectations Decrease Strongly

First to Clarify ZEW is a survey conducted in Germany which helps forecast the development of the German Economy. Almost like the economic sentiment indicator (ESI) in the US.

This article states that the ZEW indicated that the German economy is to decline sharply in the next half of the year. The indicated last month was up 14 points but now stands at a negative 4.3. This is due to terrible industrial production that was dormant in july. This will most likely lead to an economic slow down. How bad it will get we will have to find out.

Analysts are especially nervous because of all the money they loaned to Greece. The article seems to state that there will a complete slow down of economic activity.

Thoughts? What should they do?

Elizabeth Warren to Head Creation of Consumer Financial Protection Bureau

President Obama has tapped Elizabeth Warren, a primary architect of this summer's financial reform bill, to head the Consumer Financial Protection Bureau (CFPB) that the legislation created. Warren writes: "The new consumer bureau is based on a pretty simple idea: People ought to be able to read their credit card and mortgage contracts and know the deal." Warren is committing the CFPB to correct market failures resulting from imperfect information being passed on to consumers in the form of deceptive credit agreements. Warren believes that if such safeguards had been in place, our current recession could have been prevented by government intervention to stop deceptive and predatory lending.

Another nose in the trough

The world has two major plane manufacturers. THese being Boeing and Airbus. Anyone who has flown a commercial plane has been in one of these two brands. This article talks about the subsidies these companies are receiving and the complains from Airbus that Boeing is getting an unfair advantage. As it was later pointed out, "The trade referee found that much of the $22 billion benefit Boeing enjoyed from tax breaks and defence and research contracts was also an illegal subsidy. Airbus has long complained that, whereas it repays the launch aid with interest, Boeing never has to pay back a cent." So Boeing was gaining money from the US government. Yet, I do believe that the US government will continue to do so as they feel it is a necessity to keep Boeing alive as it helps with governmental contracts for the DOD. Does the WTO really have any say in what one of the most influential countries is doing since they are also highest contribution to the WTO?

Small Businesses are getting help

The senate passed a bill that will next go on to the House, then to President Obama where it will likely be signed into law. This bill is intended to help small businesses by increasing their ability to receive credit, which in turn will allow them to increase hiring. An estimated 500,000 jobs will be created, in all types of markets, thanks to this bill. The increased credit and job creation will lead to growth within the businesses, and hopefully be one way to stir the economy back up.

BP chief tells MPs Gulf spill was "devastating to me"

So devastated is the BP chief after the gulf spill that he wants his normal life back. In his hearing at Louisiana, Mr. Haywards mentioned that BP had spent $14 billion in safety, maintenance and hiring of the right kind of individuals. According to him, the gulf oil spill was particularly devastating for him due to "the immense progress the company had made in the past three years." Even though the company has reimbursed the families of the 11 workers it has still not taken sufficient steps for the conservation of environment. And this is not the first time that BP has come under fire due to negligence. So my question is, why is the government allowing a company like BP to move on with normal proceedings after so much colossal damage? Shouldn't there be a regulation where negligent companies like BP should be fined so heavily that other companies take more steps to ensure safety and environment conservation?

A step closer toward religious discrimination in France?

The French senate has recently approved the law banning any veils that cover the face -- including the burqa which some Muslim women wear. This makes France the first European country to initiate such measure. The law imposes a fine of 150 euros as a fine for a person wearing any face covering veil.

Obesity costs US 215 billion dollars: study

This article is about obesity and how it cost America so much money ($215 billion a year). The study went on to explain that through direct and indirect causes obesity costs the economy the $215 billion by medical expenses and lost productivity. The study was conducted by Brookings Institute found that medical costs for obese adults costs $147 billion more than their healthy peers and $14.3 billion more for obese children. Don't you feel it would be cheaper to put together extensive programs to prevent people from becoming obese? (i.e. school classes, government funded lunches for all schools, or some kind of government funded exercise facilities). Besides the direct costs of the medical expenses you also have to consider the other effects the obesity has on the economy such as costs that come from lost productivity, absensteeism, disability and premature death. With all this in mind would could be the answer to solve this problem? It doesn't seem to be this big of a problem in other countries.

Strong Yen Fuels Rise in Japanese Takeovers

Japanese companies are known to be strong, disciplined and patriotic. The strong yen has allowed Japanese companies to have greater purchasing power overseas. Within this year Japan has spent about 27 Billion USD in buying companies outside their country. Examples of this trend would be, "The purchases pale in prestige compared with deals like Sony’s takeover of Columbia Pictures, or Mitsubishi’s purchase of the Rockefeller Center." What does this say about the US economy? that it does not have enough presence to keep their own companies domestically? Will the yen, in the near future feel a change in this trend as more of their money goes overseas?

Organic Glow

Light is taken for granted in society today. This article takes into consideration a new break through by the Philips corporation and how it has found a light that saves both energy and emissions. This new light is "Compared to an incandescent bulb, which might cost only about 50 cents and burn for 1,000 hours, CFLs cost around $3—although they use up to 75% less power and last much longer. LED lights cost a lot more, but they are even more efficient. Osram, which is part of Germany’s Siemens, recently launched the Parathom Classic, a LED lamp shaped like conventional 60 Watt light bulb. It uses 90% less power than an old-type bulb and has an average life of 25,000 hours." Although this may seem insignificant to most, the new trend of countries wishing to go more green. THis may be a way to increase their environmentally friendly side while saving money.

Cuba to cut one million public sector jobs

Cuba's communist government is making radical changes to its economy due to the crisis they faced over the last two years. Being a communist nation, most people work for the state; however, this is going to change. "Cuba has announced radical plans to lay off huge numbers of state employees, to help revive the communist country's struggling economy".

The Cuban labor department said that more than 1 million people will lose their jobs but will be encouraged to work in the private sector wherein some of the restrictions will be lifted or become self employed. The article states that this will be a good thing because either way the state employees were hardly paid much and they would earn more by working in private firms.

All this said, how many jobs can the private sector create? Will it be able to absorb the 1 million or even if people become self employed and open new businesses, in todays competitive world are they going to be profitable businesses? Will they last?

Does this show a shift towards a market system?

Would a political stalemate lead to a rebuilt economy?

This article presents a theory of purely open and free markets. It says nothing about Democrats or Republicans having a better strategy to rebuild the economy or stock market, but rather implies that with a split Congress, little to no regulations will get passed, therefore freeing businesses from "regulatory uncertainty". This theory is one of pure laissez-faire economics, in practice though not by definition; stumbled upon by political coincidence.

Bill Clinton, president during one of the best economic stretches in US history (certainly modern) is referenced in the article- how he essentially "let the government shut down in response to the Republican stalemate."

Chinese inflation causes concern that China will slow growth

The Consumer Price Index (CPI) in China has risen 3.5 percent in the month of August, up from a 3.3 percent increase in July. This increase is due mainly to an increase in Chinese food prices, which account for approximately a third of China's CPI. This inflationary trend has caused concern in the global market that China may slow its growth in order to tame inflation. Doing this would substantially impact the global market because China is currently the driver of economic growth in many other countries. Though, traditionally China has been much more partial to promoting economic growth than to combating inflation, many expect China to raise their interest rates in an effort to prevent domestic unrest in the form of food production employees demanding higher wages.

Turmoil in Global Wheat Prices

Environmental instability in Russia is proving to have a direct impact global markets. The massive fires and droughts of this absurdly hot summer diminished Russian what supply by about a 1/3. This dramatically decreased supply (seeing as Russia is the one of the world's largest wheat producers) has nearly doubled the price of wheat worldwide. This prompted nationalist policies in Russia, further reducing supply to developing nations which are highly dependent on Russian production. Riots in Mozambique point to the desperation caused by the price hike. Is Russia justified in pursuing nationalist policies in the face of what could be an international food crisis?

Extending the Bush tax cuts for a while may turn out to be prudent policy

This has been a controversial issue recently. President Barack Obama's proposal of renewing of cuts for all but the wealthy t would save perhaps $700 billion over the next ten years compared with a full extension. It is, however, dangerous way to attack the deficit at present. What should the government do? and Why?

Central bankers reach deal on new bank regulations

The new regulations, called Basel III, would force banks to more than triple their current reserves and would be phased in from 2013...this additional reserve "help to ensure that banks maintain a buffer of capital that can be used to absorb losses during periods of financial and economic stress", said regulators.

Cotton shortage = Pricey T-shirts and jeans

Better by that T-shirt now because as of next year, CNN reports that the average price of cotton-based products is going up! This price increase in cotton can be blamed on the recent drought in China (number one exporter of cotton), restricted exports in India and the devastating floods in Pakistan. The article mentions that the price of raw cotton has almost doubled in the past year from almost a 40-50 cent average to about 90 cents a pound. CNN highlights the fact that this is already a tough time for the Apparel Industry in the American economy - there has been a small rise in demand, but it can be expected to fall back down with the rise of cotton prices.

On another note, polyester is expected to make a pretty good come-back!