European Economy showing signs of recovery

http://www.timesleader.com/stories/European-economy-on-upswing,258825

The economy of Europe has been showing signs of recovery. Inflation has reduced and unemployment has also reduced. The stock markets are performing better and investors are sounding positive. Though debt continues to be a main concern, the biggest focus is unemployment.

The fall in inflation has reduced burden on consumers and may also lead to further aid from the European Central Bank. Though the economy is not doing its best, one can say that the worst is most probably over.

Construction jobs are difficult to fill

Construction has been a major driver of hiring in recent months, but now builders are having difficulty finding skilled workers. About 18% of the jobs created in January belongs to construction as home building has rebounded. 2013 is predicted to be a good recovery for housing due to low mortgage rates, rising home prices and low inventories of new homes for sale.
However, builders say hiring has been crimped because the qualified workers can't be found. One of the reason is that many skilled workers left the field to find other jobs after the housing bubble burst.
So is that a new path for students and unemployed people to consider working in? I guess it's worth to give it a little thought.
Source: http://money.cnn.com/2013/02/01/news/economy/construction-jobs/index.html?iid=SF_E_Lead

Google ending antitrust in europe

http://www.nytimes.com/2013/02/02/business/global/google-submits-proposals-to-resolve-european-antitrust-concerns.html?ref=business&_r=0

Google for the past 3 years has been locked in an anti trust case against the European union and also Icomp who claims that they are monopolizing the internet search engine market and making it impossible for other people in the market to claim a stake. Recently they had an agreement with the country of France for 60 million euros to agree to remove the anti trust laws and make Google a viable search engine again. After an extensive search however it was found that even though Google did not break any laws, it just had many complaints filed against them due to the fact that they were pretty much a monopoly in Europe  Google is supposedly looking to end the case as soon as possible but many competitors are looking to prolong the case for obvious reasons.

Health insurance in America The insured and the unsure

http://www.economist.com/news/business/21570756-will-obamacare-spur-firms-drop-workers-health-cover-insured-and-unsure

Obama's health care plan has brought up a lot of debate on whether or not the plan will be effective or if it is even the right thing to do. In 2014 the main portion of the Obamacare plan will come into affect. This article takes a look at how the Obamacare plan will affect the existing health care plans that many Americans have with their employers. There are many surveys of companies of different sizes and how they will change their health care plans. Since people will be able to get individual personal health care much easier, employers are seeing a chance to save money on there high employee health care bills by dropping employees from company plans and just paying the 2000 dollar fine per worker. One survey found that 30% of employers will definitely or probably drop insurance in the years after 2014.

Federal Debt Limit Suspended Temporarily

http://www.washingtonpost.com/business/economy/senate-votes-to-temporarily-suspend-federal-debt-limit/2013/01/31/256cae78-6bde-11e2-ada0-5ca5fa7ebe79_story.html

The U.S. Treasury Department will have the ability to borrow more and more money due to the limit of federal debt being suspended temporarily. Without this limit, the Treasury can ignore the debt ceiling and continue borrowing. The debt limit will come into play again on May 19. The Treasury is predicted to run up about $450 billion dollars in debt until this date. The debt ceiling is likely to be raised when it comes into play again. Lifting the debt limit cannot mean anything but bad things for our economy in the long run. It worries me that the debt limit has been completely lifted for the next few months rather than simply raised.

Beer Merger Blocked Mid Sip

The U.S. government has stepped in and officially blocked a deal that would have brought Anheuser-Busch InBev with the Mexican beer company, Grupo Modelo. Supposedly, the government blocked this mega-deal in the best interest of American consumers. Anheuser already owns half of Grupo Modelo, but the government feared that complete ownership would be "a significant competitive threat." The head of the US Justice Department's antitrust division, Bill Baer, commented on Anheuser's domination in the beer market and how they have repeatedly increased prices of the years.

Link: http://www.cnn.com/2013/01/31/us/justice-beer/index.html?hpt=hp_t2

Technology Taking Over

In this article, Thomas Friedman, the highly regarded author of "The World is Flat,"talks about the affect that technology is having on employment, innovation, income, and other areas of life. Interestingly, he quotes author and professor Erik Brynjolfsson on the idea that most economists argue that technology advancement increases the overall size of the pie, and with time, all else will follow; however, Brynjolfsson points out that not everyone benefits from the developments of technology. Brynjolfsson continues his thought with "those with more education start to earn much more than those without it, those with the capital to buy and operate machines earn much more than those who can just offer their labor, and those with superstar skills, who can reach global markets, earn much more than those with just slightly less talent."

Friedman believes that graduates - and all workers for that matter - must develop skills that technology can't provide or that can be complements to it.

Link: http://www.nytimes.com/2013/01/30/opinion/friedman-its-pq-and-cq-as-much-as-iq.html?src=recg

Why secretary is still the top job for women

http://money.cnn.com/2013/01/31/news/economy/secretary-women-jobs/index.html?iid=Lead

This article compares the top five jobs for women in 1950 and 2010.  There were similarities between these lists, and one of those is that the top job for women is still being a secretary.  The other top jobs are being a cashier, an elementary or middle school teacher, a nurse, and a nurses aid.  Over the years there has been a push from feminist groups to call change the title of the job to administrative assistant and equal out the level of pay between genders.  However, in 2011 the term secretary started to make a comeback.  This list doesn't really surprise me, especially because generalists make up the majority of the job market regardless of gender.  The top job for men in 2010 was a truck driver.  

European demography: Working-age shift

link: http://www.economist.com/news/finance-and-economics/21570752-growth-will-suffer-workers-dwindle-working-age-shift

In addition to combating its current economic problems, Europe may have to look forward to dealing with future economic problems as well. In 2013, data shows that the working-age population (20-64) in the EU will fall and is predicted to continue to fall for the next 50 years.In addition, the old-population will increase significantly which will reduce the labor force participation in the economy and dent growth. It is predicted that employment and labor productivity may rise until 2020, and from then on, it will start to fall. Europe will face a similar demographic problem as Japan does. As we have seen with Japan's lost decade(s), Europe's may not recover any time soon.

Obama unveils his own proposal for immigration reform

http://www.washingtonpost.com/politics/obama-unveils-his-own-proposal-for-immigration-reform/2013/01/29/b27dcb78-6a47-11e2-95b3-272d604a10a3_story_1.html

This article has a series of important economic implications.
It will be interesting to see just how the sudden influx of legal workers (a process that has already been started with Obama's executive orders), will affect various aspects of the economy.
The increase in basic labor will most likely diminish real wages across the board and increase the payoff for human capital, or for educated individuals. 
One can envision an increase in demand in the housing market, now that many immigrants will be able to take out a mortgage.
The proposal even includes provisions to make it easier for immigrants with doctorates in science and technology to obtain a green card, thereby increasing the influx of highly educated individuals who will also be big time consumers in the American economy.
I personally think this is great news and that this has been the sensible thing to do for quite a while.
I imagine that the U.S. will experience a significant shift not only in its economy, but also in its political ideology across the board.

Win-Win for Bailed Out Executives

Firms that have been bailed out by the government are still receiving huge bonuses that are approved by - yes, you guessed correctly - the government. Three companies - Ally Financial, AIG, and General Motors - all received money from the Troubled Asset Relief Program and had to abide by strict rules when handing out bonuses and giving raises to top executives. Despite the guidelines imposed for these firms, they somehow convinced the Treasury to rethink the guidelines that were set and no longer imposed the tight parameters: "“In 2012, these three TARP companies convinced Treasury to roll back its guidelines by approving multimillion-dollar pay packages, high cash salaries, huge pay raises and removing compensation tied to meeting performance metrics,” Christy Romero, the special inspector general, said in a statement."

What are your thoughts on the Treasury changing their policy and allowing big bonuses and raises to firms that were recently bailed out?

Link: http://www.nytimes.com/2013/01/29/business/generous-executive-pay-at-bailed-out-companies-treasury-watchdog-says.html?hp&_r=0

Official Report from the special inspector general: http://www.sigtarp.gov/Misc/2013_SIGTARP_Bailout_Pay_Report.pdf

The Road to Renewal

http://www.economist.com/news/international/21570677-after-centuries-stagnation-science-making-comeback-islamic-world-road

This Economist article highlights much of the recent scientific, technological, and business progress within Islamic nations. Although the article uses religion as the main form of comparison between nations, it is clear that most Islamic societies tend to operate under different economic systems from Western societies. There exists a clear disparity between the level of scientific achievement between the two geopolitical systems, much of which has been previously described as cultural or societal. Many of the 'Islamic countries' mentioned in the article were affected directly or indirectly by the political protests of the Arab Spring. In this greater movement towards more democratic, free-market economic systems compatible with Islam, we begin to see this slow change manifesting in other parts of society. As discussed in class, population growth and technological development are the two driving factors behind change within an economic system. Perhaps these factors may be signaling broad economic advancement spreading throughout the Muslim world.

Housing to drive economic growth (finally!)

http://money.cnn.com/2013/01/27/news/economy/housing-economic-growth/index.html?iid=SF_E_MPM

There was a survey among economists about the economic growth this year and the housing market was one of the main growth drivers. Compared to previous years, the supply isn’t in excess as before. After five years buyers are brought back to the market. As the demand for housing increases, more construction and manufacturing jobs will be created. Also, because the supply is tight, this should lead to increased home values and have a huge impact on the consumption in general. However, even though the housing market is supposed to recover, the economic growth is predicted to increase only of 2.4% in 2013, and the biggest concern is a standoff on Capitol Hill. 

Why Disability Figures Are Good for Job Market

http://blogs.wsj.com/economics/2013/01/26/number-of-the-week-why-disability-figures-are-good-for-job-market/?mod=WSJBlog&mod=marketbeat

This article discusses Social Security Disability Insurance and their declining numbers. Social Security Disability Insurance pays benefits to you and certain members of your family if you are "insured," meaning that you worked long enough and paid Social Security taxes. Currently the number of people applying and getting approved for disability benefits hit multiyear lows in 2012, a potential sign of an improving labor market. There has long been a corelation between high unemployment and rising applications for disability. Usually this is due too the increase in poor americans and them reaching the end of their unemployment benefits. On the other hand this could be a positive sign that the economy is getting better. As the job market grows and new jobs are added people there is a trending decrease to file for Social Security Disability Insurance. What do you think?

Healthy People Create Economic Health

The World Economic Forum met this past week in Switzerland to discuss trending economic issues in the world and share ideas on how to solve them. An inevitable topic was healthcare universally. It was commented that the healthcare is "sick and injured" and in the US it is the only growing big-ticket expense item at around 18% of government spending. Clearly healthcare needs to become more affordable, but more preventative as well. Only 1.5% of healthcare spending is spent on diagnostics, but  upwards of 80% is spent on those diagnoses. Technology and information are key. A deeper focus is needed for providing education and information to those in need of medical attention, and this will drive  healthcare costs down as treatment becomes more preventative.

But how much is this the government's responsibility? The article inserts an interesting piece about how regardless of the technological change, and without a cultural change, will not be enough to support the healthcare system. Some of the private investors suggest that they would like to see those pay for their own healthcare to suggest that fitness and exercise is cheaper than operations and insurance. So it appears that this is not only an economic issue but a societal one as well. As the health of society remains as a top priority on the world spectrum, the question posed is whether to attack it with more changes to the system itself, or begin efforts in helping those to become more responsible for their own health first.



http://www.bbc.co.uk/news/business-21183984

Working Age Shift in Europe

According to experts and policymakers, the economic climate in Europe has turned the corner from its struggle with recession. However, even if the EU can overcome its problems with economic policy and achieve higher growth rates, the long-term outcome still appears dismal. This article claims that substantial- and uncontrollable- changes in the EU's demographics are the cause for this negative outlook. The region's working age population is significantly declining starting in 2013, and will continue to do so. Moreover, the older age population is also shrinking. This combination raises the old-age dependency ratio from 28% to 58% within the next forty years. The result of this is the decline in employment rates, as more people are outside of the workforce and more people depending on the earnings of the younger population. This puts pressure on states' public finances, which will have to increase their spending and deal with less income.


http://www.economist.com/news/finance-and-economics/21570752-growth-will-suffer-workers-dwindle-working-age-shift

Wage Stagnation In the United States

Wages in the United States have stayed relatively the same since the 1970's for male workers. The median salary for male workers has hovered between $40,000 and $45,000 for the last for decades. Women's wages have been rising steadily over the same time period, but started from a much lower wage than men in the 70's. As the article states, education is one source of potential growth but educational attainment in the United States has slowed down, especially for men. It seems that an overhaul of the educational system with a renewed focus on innovative ideas is necessary to buck this recent trend for Americans.

Obama's Abuse of Power

An appeals court says his recess appointments are unconstitutional.

President Obama has shown increasing contempt for the constitutional limits on his power, and the courts are finally awakening to the news. A unanimous panel of the D.C. Circuit Court of Appeals ruled on Friday that the President's non-recess recess appointments are illegal and an abuse of executive power.

On January 4, 2012, Mr. Obama bypassed the Senate's advice and consent power by naming three new members of the National Labor Relations Board and appointing Richard Cordrayto run the Consumer Financial Protection Bureau. Other Presidents have made recess appointments and we've supported that executive authority.

But here's the Obama kicker: He consciously made those "recess" appointments when the Senate wasn't in recess but was conducting pro-forma sessions precisely so Mr. Obama couldn't make a recess appointment. No President to our knowledge had ever tried that one, no doubt because it means the executive can decide on his own when a co-equal branch of government is in session.

In Noel Canning v. NLRB, a Washington state Pepsi bottler challenged a board decision on grounds that the recess appointments were invalid and that the NLRB thus lacked the three-member quorum required to conduct business. The D.C. Circuit agreed, while whistling a 98 mile-per-hour, chin-high fastball past the White House about the separation of powers.

Nokia Makes a Profit

http://www.guardian.co.uk/technology/2013/jan/24/nokia-returns-to-profit-smartphones

The article talks about how Nokia has ended an 18-month period of losses amounting to over €4bn. The turnaround is mostly attributed to the the increased demand for smartphones, which rose over the Christmas period, and the flagship product is the company's new 'Lumia' phone. The company also cut costs by reducing the workforce as sales rose in comparison to the previous quarter, and scrapped the 2012 dividend. An interesting factor is that consumers have responded well to a perceived rise in quality of the products sold and this has seen an increase in the average selling price. Nokia has attempted to increase its competitiveness by switching to Microsoft's operating software to keep it on par with Apple's iPhones and Google's Android phones.

Mortgages - Appraising High-End Homes

In this article published in the New York Times it discusses the issues that many high end buyer and sellers are facing. Although there has been a pick up in million-dollar-plus-market for homes there has been an unexpected issue. Appraisers are called in when the deal is going to be financed. The problem is that there is a lack of comparable properties to these high end deals and the appraisal values are coming in well under the asking price. There is a difficulty arising here with the sales price. If a lender uses a certain ratio based on appraised value then that typically leaves a large gap between asking price and funds available to spend. The question I pose is what should the seller do? If I were a seller my asking price would be derived from my opinion but mostly my real estate agent who is responsible to price my property accordingly. When I hear an offer significantly off from my asking price I have two options. Wait for a cash buyer. Which would be few and far in between due to the very low interest rates that many people are choosing to take. Or I could take the deal with the understanding that every person financing will be coming in with similar offers due to the appraisers. However, I could wait until more properties have been sold that are comparable so my appraisal could be more accurate. Either option is filled with pros and cons and it would take an immense amount of time and consideration to determine what is right.

http://www.nytimes.com/2013/01/27/realestate/mortgages-appraising-high-end-homes.html?ref=todayspaper

Is Obama a Socialist?

http://www.dailyfinance.com/2012/12/05/obama-socialist-dictionary-most-popular-words/

This article tries to address concerns raised by Americans that President Obama is a socialist. It can be said that though Obama's policies which focus on a stronger, more centralized Government may be taken as marginalization of the private sector. However, this may be more of hype than substance. Socialism, in this regard, cannot be confused with a Soviet-style regime. This is only monitoring of the private sector and in that too, the focus is on the financial sector. One can say that since Obama's 1st term also coincided with the Global Financial Crisis, he had to take strong Governmental measures in order to reduce its impact on citizens. Since then, a view has been formed regarding Obama that shows him as a socialist. However, his policies were necessary for benefiting a large portion of the population, and in doing so if he had to restrict some freedoms for the private sector, then that is only good governance and not socialism.

When You Don’t Do What You Meant To, and Don’t Know Why

The research showed that we, human, do not make decision on rational basis as economists long believed but tend to do all sort of things much under the control of our emotions. For example: You promise wake up early, do homework then go to class on time but end up doing exactly what you didn't intend to do: lying in your bed till noon. The reason for the procrastination is our underestimation of the seriousness if not doing what was planned or trying to rationalize our choices towards our bias rather than rational judgements on facts. One of the methods to reduce regrets and make more good decisions is to "Step back and do what you will tell you best friend to do."

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