Buying a home now is a no-brainer

This article explains why this is the ideal time to buy a new home if you can afford one. Back in January home prices had dropped 28% from their peak. More important, interest rates were at historical lows. By locking in a mortgage for 15 or 30 years on a value-priced home, you were getting an incredible deal, even if home prices decreased.

Even Dem foes of tax cut plan see it passing soon

Income tax increases are going to increase for everyone january 1st if the bill does not pass. Even with a test vote in the senate, democrats who control the house will not let obamas proposal even be discussed with out it being scaled back.

"We believe that when it comes back to the House, that we will get a vote, and that we'll prevail there, because at the end of the day, no one wants to see taxes go up on 150 million Americans" on New Year's Day, Axelrod said. "No one wants to see 2 million people lose their unemployment insurance and everybody understands what it would mean for the economy if we don't get this done."

What does this mean for the US economic system?

Collapse of Minnesota metrodome

In Minnesota 17.1 inches of snowfall caused the Vikings stadium to collapse under the weight of snow. Workers were unable to clear snow off of the dome because of the longevity of the blizzard. The collapse has forced this Sundays game against the Giants to be changed to Monday and played in Detroit. The game will only be played to New York and Minnesota markets as well as Direct Tv and NFL subscribers. The metrodome cost $68 million dollars to built and is estimated to cost a couple million to repair.

Proposal for tax cuts in the public sector

When elected, Obama spoke of letting tax cuts for the wealthy expire while increasing tax cuts for those in the middle and lower class. However, in his new proposal taxes will increase for those working in the public sector. Instead of paying social security, many workers in the public sector pay into a public pension and this plan will change this. At the same time it keep a $900 million dollar tax cut package to those in the top 1 %. Therefore, taxes will increase for mainly middle class workers, but not for the most wealthy.

More Protests Against U.K Austerity Measures

As the British government continues announcing cuts in government spending, social strife continues to rise. In protests similar to those against Thatcherism, students have already been protesting massive cuts in education spending which will result in a tripling of tuition. Now the government has announced it will end "education maintenance allowances" which were paid to encourage low-income students to stay in college. In response to this latest announcement, protests are expected at about 100 British colleges.

As China Rolls Ahead, Fear Follows

For the last two years China's economy has been growing at a substantial rate. This is somewhat due to the government issued stimulus program and aggressive lending by state-run banks. However now economists are arguing that China may be headed in the wrong direction. Some reasons include high inflation, large amounts of government debt, and asset bubbles. The problem with this is that if China experiences an economic slowdown, this will then greatly affect the U.S.'s economy as China is a major holder of United States Treasury debt and a major destination for American investment in recent years. So if China does in fact begin to slowdown in their economic growth it could have large impacts on many other countries including ours... Any Opinions?

Ireland's financial crisis

The 85 billion euro bailout of the Anglo Irish Bank has increased taxes, reduced incomes, and overall decreased living standards of the Irish people. This is a result of a tightened government budget aimed to increase foreign investment and recover the economy. It is still unclear if the 85 billion dollars will be enough to tie the countries banks over until they recover, but government officials and economist are hopeful that it will be. To fix their crisis there have been ideas to either sell troubled loans to foreign banks and investors or sell Irish banks to foreign bidders. The government, however, is still unsure of what method it will employ.

Decrease in Trade Deficit

In October, the US trade deficit was lower than it has been since January, which leads economists to be hopeful that our economy will show growth in the fourth quarter. There are now estimates of a 2.5 % annual growth rate in the fourth quarter. The trade deficit is at 38.7 billion which is down from 44.6 billion in September. US exports increased mainly increased to Asia, in particular China, and also to Mexico. US recovery in this recession is built around export growth and capital investment so this lower than expected trade deficit makes economists very hopeful that the economy is on the right path to recovery.

Be afraid

As everyone has heard, the new establishment of Wikileaks has governments worried. Yet they are not the only ones who are becoming nervous with the new development of the whistle-blowing website. As the Economist article goes into detail about how, "businesses were struck by an alarming thought: even if this threat proves empty, commercial secrets are no longer safe." Coorperate transactions have already been listed on the site including the post which was, a " leaked internal report from Trafigura, a commodities giant, discussing a hazardous waste spill in Côte d’Ivoire." Another instance which effected companies was, "In January 2008 the site released stolen documents from Julius Baer, a Swiss bank, including bank records of about 1,600 clients with accounts at a subsidiary in the Cayman Islands. The bank sued to stop WikiLeaks publishing the documents, but then dropped the suit."

With companies now having their secrets brought forth, how will they be able to operate when their main operations are now open for public display.

PIIGS to become less-developed is a threat

This article from Forbes is interesting and ties into many of the things we have talked about in class, especially recently. It suggests that the PIIGS must be especially careful, as well as S Korea, because although they are developed markets, there are threats that could ultimately shrink their economy, including war in S Korea. Moving from a developed market to an emerging/developing market is not very common, but has been seen and is possible. Again tying into class, the article uses Argentina as an example of moving backward in the development process, saying that they had a top-five economy 100 years ago, and have since fallen.

Home sales to increase?

This article from Fortune shows that mortgage rates have hit the highest level in 6 months. Though this doesn't sound like it would increase buying of homes because people will be more able to be financed, it gives the argument that home-buyers are assuming that the housing market has hit it's lowest point already, and are on the way back up. This means that housing prices are (on average) at the lowest point and that the time is now to buy. This, in turn, would increase the number of houses bought, and also the prices.

We all want to be liked: Facebook's narcissist effect

Almost all college students have and use Facebook daily. It is the easiest way to update what the person has been doing or to check out other people's status. However, Facebook has become more than a mere individual updates! It also has a psychological narcissistic effect in which people want others to comment or "like" their status. Facebook, therefore, is just the latest product to recognize that basic human desire and successfully exploit it.

Socrates Says Portugal Does Not Need IMF Aid

The Prime Minister of Portugal, Jose Socrates, said that Portugal's government has the ability to deal with its budgetary problems and they do not need help from the IMF. Furthermore, the IMF has not pressured Portugal to request aid. In my opinion, this is because Portugal doesn't have anything of value capable of being exported cheaply through premature privatization (like mineral extraction in Latin American countries).

Microfinance - Leave Well Alone

As we heard from Scott Bellows, the use of microfinance as a poverty-alleviating tool has grown rapidly in many countries, but many criticize some of the for-profit microlenders, saying they exploit the borrowers through high interest rates. The Economist explains that microfinance institutions (even the for-profit ones) have small margins due to the high costs of dealing with many small borrowers; the high interest rates account for this added cost. When interest rates are capped (like in Bangladesh), the ability of microfinance institutions to attract capital and grow is diminished. Also, interest rate caps would cause impoverished people to take out more loans with informal loan-sharks, whose loans are usually more expensive.