Inflation is Very, Very Low. Time to Worry?

This article explains that inflation that is too low can actually be harmful to an economy. The Fed usually aims to have inflation at about 2% a year-- a healthy amount for a growing job market and gradually rising wages. The article also reports that its been shown that some economies have actually performed at their best with a 3% inflation rate.

The article explains four main reasons that too low inflation is bad. 1) Companies that don't have any room to raise prices are more likely to cut costs which may result in job cuts and higher unemployment. 2) Low inflation does not motivate consumers to spend in a timely manner. 3) Low inflation doesn't act as a very helpful buffer against deflation and this can freeze up spending. Consumers will not spend when they expect goods to be cheaper in the future. And 4) low inflation brings low wage and revenue growth.

It seems to me that having low inflation is much better than the alternative. I'm not totally convinced from this article that addressing low inflation is a top priority right now, and we should be grateful it's not skyrocketing.

http://money.cnn.com/2013/04/19/news/economy/low-inflation-risks/index.html?iid=HP_LN

Questions behind Putin's Wealth

This article details the questions behind the truth of Putin's wealth. There are many claims of how much money he really has, however, many sources cite different levels of wealth. The base of their claims come from his lavish lifestyle, that is seemingly sustained on his income from his position in public service. The article discusses a few interesting points: Putin owns a few planes, he has 20 residences, a watch collection that is reportedly worth over $680,000, and a personal yacht collection. Although this article is from 2010, it relates very well to our discussions in class regarding Russia, corruption during the economic transition, and the relationships between oligarchs and public officials. The article is quite short but very interesting.

Take a read: http://www.economist.com/blogs/easternapproaches/2012/08/putins-perks

The future of the car: Clean, safe and it drives itself

source: http://www.economist.com/news/leaders/21576384-cars-have-already-changed-way-we-live-they-are-likely-do-so-again-clean-safe-and-it

This article from the economist discuss the future of cars. As regulations become stricter, car companies are researching and investing in cleaner technology. Furthermore, they predict that the future of driver-less comes is nearing. With the pace of advancement in technology, it will be possible to develop driver-less cars that will be able to drive safely and not pollute. This will be advantageous for the elderly and the crippled. Although initially some people may fear the new technology, more people will pick it up and soon enough, driver-less cars may become the new trend. Just like how we are moving to a cashless society, we will have to overcome technophobia.

CEO is not the top earner at Apple

Tim Cook, the CEO who took the reigns after Steve Jobs died, was not the top earner at Apple this year. This is a strategy to keep key executives and top employees who helped push Apple to their most recent success. Retaining talent with large compensation packages is seen as a tactic to hold off Samsung and Google who are challenging Apple. For example, Peter Oppenheimer, the Chief Financial Officer, who has the duty to oversee Apple's large cash holdings and investments, earned a total of $68.8 million in compensation.

Link: http://www.bloomberg.com/news/2013-04-15/apple-dominates-best-paid-as-board-retains-jobs-deputies.html

Greece's youth facing difficult times, in terms of food

We all know that Greece is struggling and has been facing some serious austerity cuts. The unemployment rates have been increasing, especially for the youth; however, kids of all ages are now facing challenges: malnutrition and lack of food. With parents and other family members being laid off or not receiving paychecks from their respected company, families are having difficulty getting food. Even families who have access to food are not able to serve the appropriate diet. The article below gives insight into kids having trouble finding food and the trouble that comes with it.

Link: http://www.nytimes.com/2013/04/18/world/europe/more-children-in-greece-start-to-go-hungry.html

Freedom Fighter

This article discusses how Margaret Thatcher's political changes created such benefit for her country.  It  talks about how she made such an impact even in a peaceful time.  She changed her party as well as her country.  This article discusses how Thatcherism could be affective in today's economy.  Would her principles really solve today's issues?

http://www.economist.com/news/leaders/21576094-now-especially-world-needs-hold-fast-margaret-thatchers-principles-freedom-fighter

Industrial Eclipse

The current economy in China is changing.  They are moving from a very industrial style economy to a more service oriented economy.  This is more difficult to plan for within their economy.  Why is their service industry growing so fast? Is there enough disposable income to support this in the Chinese economy?

http://www.economist.com/blogs/analects/2013/04/economic-rebalancing

The Price of Gold Is Crashing. Here's Why

Gold prices are declining. This may be a terrible news for gold speculators but a good news for economies. According to the article, US economy is showing sign of recovery. Inflation is fast decreasing to 2% that make people feel no need for hedging by gold. What do you guys think? Is the US economy really recovering in the face of sequester budget cut? Is that possible that prices continue to go down in upcoming time? I don't think this is a good explaination.
Click to read the article

A positive deal for Greece

Greece has reached a deal with its lenders early this morning. Talks have been going on for quite a while, but hit a stall in March due each side having different opinions on what to do with civil servants. In the end, the sides agreed upon 15,000 civil servants leaving the public sector by the end of next year. These workers are people close to retirement and some who have been accused of disciplinary defenses. Despite the cut, Greece states that they are looking to refuel the public sector with upgraded, new recruits. Other details of the deal include allowing Greeks who owe taxes and social security debts to pay it back in monthly installments over the next two years. Also, the agreement allows Greece to obtain more debt relief. The public officials and others who are knowledgeable about the talks are very optimistic of Greece's future.

Link: http://www.nytimes.com/2013/04/16/business/global/greece-reaches-new-deal-with-lenders.html?hp&_r=0

Inflation Is Miserable. Unemployment Is Worse.

Whats worse than inflation? Unemployment. According to this New York Times article, unemployment makes people about 4 times more unhappy than inflation does. Higher unemployment and higher inflation correlate with lower levels of reported well-being, the research shows. But the impact of unemployment is much larger. But what do you guys think? Does unemployment really have a great impact on happiness?

http://economix.blogs.nytimes.com/2013/04/12/inflation-is-miserable-unemployment-is-worse/?ref=economy

No recovery for U.S. government workers

This article discusses the "recovery" in the job market for U.S. Government workers. Federal government jobs fell by 4,200 in February, the fifth month in a row those jobs have been zapped from the economy. And, thanks to the automatic budget cuts, it's going to get worse. A total of 33,000 federal worker jobs have been lost since January 2012. This seems to be contrary to the recent report of the U.S. having the lowest unemployment rate since 2008. For the moment, maybe the fed isn't place to be looking for jobs. 

http://money.cnn.com/2013/03/08/news/economy/federal-worker-jobs/index.html?iid=SF_BN_River

China GDP Growth Slows to 7.7%

April 14, 2013, 10:08 p.m. ET

BEIJING—China's economic growth slowed unexpectedly in the first quarter, raising concerns that a recovery that started in the second half of last year is already losing steam.

Gross domestic product grew 7.7% on a year-to-year basis in the first quarter, down from 7.9% in the fourth quarter of 2012 and lower than many economists forecast, according to Chinese official data released on Monday. The median GDP forecast of 14 analysts polled by The Wall Street Journal was 8%.

With the recovery in the U.S. economy still weak, and problems in Cyprus underscoring Europe's lingering debt issues, disappointing growth in China could cast a pall over the global investment outlook. Asian markets fell broadly after the data release Monday morning.

Government officials on Monday cited both the global situation and domestic controls such as efforts to slow property speculation. They also said the data reflected China's increasing emphasis on stable growth rather than the breakneck pace that has resulted in social and environmental woes and other imbalances.

Source:http://online.wsj.com/article/SB10001424127887323346304578423431110506270.html?mod=WSJ_hp_LEFTWhatsNewsCollection

U.S. Offers Direct Korea Talks

Kerry Proposes Dialogue With Pyongyang in Exchange for Nuclear Retreat

TOKYO—Secretary of State John Kerry said he would be willing to open a direct U.S. diplomatic channel to North Korea's leadership in a bid to reduce tensions in Northeast Asia, if Pyongyang signaled it would move to begin dismantling its nuclear-weapons arsenal.

The U.S. proposal marked a considerable softening by the Obama administration of its rhetoric toward North Korea after a massive display of U.S. military force on the Korean peninsula—including the deployment of B-2 bombers, F-22 stealth fighters and advanced missile-defense systems.

But by requiring a North Korean move in the direction of disarmament, the offer appeared to stand a limited chance of succeeding. The North on Sunday rebuffed an earlier offer for talks from South Korea, calling that overture a "crafty trick."

Mr. Kerry's offer to negotiate with Kim Jong Eun over the nuclear program, as well as sanctions on and aid to the country, came as the U.S., Japan and South Korea braced for the potential launch of a medium-range missile as soon as Monday to commemorate the birthday of Mr. Kim's late grandfather, North Korea's founder Kim Il Sung.

April 14, 2013, 3:35 p.m. ET

source:http://online.wsj.com/article/SB10001424127887324485004578422752063067998.html?mod=WSJ_hps_LEFTTopStories

Japan's Monetary Policy

This article from the Economist talks about Japan's monetary policy, and how Japanese officials are determined to finally combat deflation in the country. Prime minister Shinzo Abe has set a 2% inflation target for next year, and Japan has committed to doubling its monetary base to achieve that goal. Maybe now Japan will finally get out of its deflationary spiral that started in the 1990's.

Will Baby Boomers Drag Down Growth?

LINK

This article talks about the potential impact of the aging of the Baby Boomers.
There are a lot of speculations about what might happen with the changing demographics, especially with the potential pressure it will have on the U.S. budget.
I recently saw a graph that showed that the debt to GDP ratio will grow to more than 280 percent if the same policies on entitlement programs continue.
This article states, however, that the effects may not only be negative. There may be various factors such as rise of the retirement age that could offset the potential negative impacts of the aging population.
Regardless, this is a problem that the current college students will have to face so I find this to be very relevant.

Unemployment Claims Fall

The number of Americans claiming unemployment benefits in the month of March fell. Seasonally adjusted, it fell to 346,000. There is hope that this signifies a betterment in employment figures. The overall unemployment level did fall to 7.6% but the number of jobs added was a paltry 88,000 compared to the four-month average of 220,000. While the fall in claims could signify that April may boast higher employment figures, it could also mean that there are simply more discouraged workers. There are also concerns about growth.

http://www.guardian.co.uk/business/2013/apr/11/us-unemployment-claims-fall

Your Web Browser Can Determine Your Potential Job

This article analyses how hiring companies make deductions about hiring prospective employees. Evolv is a firm that monitors and evaluates data for recruitment purposes. Evolv suggests some alternative methods of evaluating a prospective employee. The article suggests it has analyzed 3m data points from over 30,000 employees. It has compared qualities of candidates with those of existing workers, to establish which traits work best for various jobs to meet their criteria.

Their analysis came up with some interesting results. The analysis found that prospective employees who go through the hassle of installing web browsers are better job applicants as compared to those who use browsers that are already installed (such as Google Chrome and Firefox) in their computers (i.e. Internet Explorer on Windows and Safari on Mac computers).

Some of their other findings also suggested that candidates who used one or two social networking sites had the tendency to stay in their jobs for longer as opposed to the one that use four or more social networks.

                                                                                                            .

It is interesting to find these details for college students who are applying for jobs.

Article Link: http://www.economist.com/blogs/economist-explains/2013/04/economist-explains-4

The housing boom a bust?

http://www.economist.com/news/finance-and-economics/21575737-lessons-americas-long-history-property-booms-betting-house

This article States that a lot of times in housing booms that people are influenced by what economist say are "animal spirits". These are unknown reasons for people to get excited about housing that drives the prices up and also the demand for goods. The article warns that people need to be more careful about their spending as well because at some point the bubble may burst again, not as badly as during the recession but enough to cause some financial woes.

Is It Art, or Is It Just Real Estate?

In this article from the New York Times, they discuss marketing tactics used from real estate developers. High end real estate is usually bought and sold by people who have an appreciation for art. Thus, we are starting to see art exhibits take place at new high end developments as a way to catch peoples attention and set them apart from the crowd in the ever competitive market. I think this is a great idea by those developers who have the extra capital to put on such a show for their marketing.

Buying a House? Selling? They Can Do Your Taxes, Too

In this article in the New York Times, the author discusses the still prevent offices in Manhattan that offer several types of services under one roofs. One office may do real estate, taxes, funerals, and more. Initially this was used as a way to split some overhead costs. Now the last few businesses that still use this route say that it increases foot traffic and builds synergy. I think this is a good strategy for small business owners who can share some overhead cost while being able to send referrals to one another.




http://www.nytimes.com/2013/04/09/nyregion/outside-manhattan-hybrid-real-estate-services-survive.html?_r=0

China breaking UN sanctions to support North Korea

http://www.telegraph.co.uk/news/worldnews/asia/northkorea/9991907/China-breaking-UN-sanctions-to-support-North-Korea.html

This article discusses a recent choice made by Chinese politicians to engage in brinksmanship. China funnels billions of pounds of foreign currency to North Korea through Dandong, a sketchy border city between the two nations. While some of the financial operations have stopped, recent reports suggest that a significant number of government-sponsored operators are still transferring money from Dandong to Pyongyang. This action suggests that despite UN sanctions, China remains very supportive of the North Korean regime and facilitates numerous illegal transfers of goods and services. When push comes to shove, I hope China will make the right decision and not sacrifice world stability for a dangerous authoritarian nation.

Trader, Kareem Serageldin, pleads guilty to role in banking crash

 http://www.independent.co.uk/news/uk/crime/trader-kareem-serageldin-pleads-guilty-to-role-in-banking-crash-8572216.html

The former global head of Credit Suisse's structured credit trading, Kareem Serageldin, is expected to receive about five years in prison when he is sentenced in August for his role in the banking crash. Serageldin, “deliberately inflated the value of mortgages and bonds … and ordered two others in his team to do the same.” Serageldin's artificial valuations led to a £1.7 billion write-down in the company's 2007 year-end financial results and contributed to masking the failure of the sub-prime mortgage market that caused the collapse of the banking system. I hope to see more of these arrests in the near future to show bankers that the US government will not tolerate unethical and illegal behavior. 

UK construction output remains weak

http://www.bbc.co.uk/news/business-22120451

The article discusses the figures from the Office for National Statistics (ONS) which show output in the construction industry rose 5.5% in February from the month before. However, the output was still 7% lower than February last year  which is not a good sign. Construction accounts for just 7% of the UK economy, but the sector's troubles have been a drag on growth. Last year, its poor performance was blamed for driving the economy back into recession.

The UK's economy shrank by 0.3% in the last three months of 2012, and if it contracts during the first quarter of this year then it will be back in recession for the third time in five years. Let's just hope that it is not the case.