Rhode Island's Deal on Pension Overhaul Falls Apart

A fight over Rhode Island's 2011 pension overhaul is heading to trial after state officials and public-sector unions to soften the law collapsed Friday. The law decreases one of the nations most unfunded pension systems in the country from about seven billion to four billion and will affect 66,000 active and retired workers. After more mediation recently, members from both sides agreed to decrease the retirement age from 67 to 65 and revising a plan that will include increasing the frequency of cost-of-living adjustments and restoring a traditionally defined retirement plan. Rank and file members from six unions and the state legislature still needed to approve the act and this is why mediation talks have broken down. The dispute is now heading to court with a trial date set for September. A court victory for Rhode Island could settle the dispute on whether or not pensions are contracts that can't be changed under the state constitution. Other states will be keeping a close eye on what decision the courts make to see what their future pension plans will consist of.

http://online.wsj.com/news/articles/SB10001424052702303873604579495991860073278?mod=WSJ_hp_LEFTWhatsNewsCollection&mg=reno64-wsj

Beijing to Put Limits on Mobile Spending

http://online.wsj.com/news/articles/SB10001424052702303949704579458533987293234

China's banks and regulators are pushing back on the success of internet firms who are "elbowing their way onto the turf of the state-run banks". The central bank said that it would set limits on the amount Chinese can spend using smartphone payment services. This move could cut off a multibillion-dollar business for companies such as Alibaba Group Holding and Tencent Holdings Ltd.

The big state banks have already moved to cap the amounts depositors can transfer into online products and Chinese media reports that the central bank had proposed a cap on mobile payments of 10,000 yuan a month. Alibaba Chairman, Jack Ma, had an interesting response:

"What determines success in the market shouldn't be the monopolies and those with power, but the consumers" - Jack Ma  

China's regulation of internet firms does seem like an indicator of Beijing's commitment to overhauling state-run enterprises.

The central bank has also temporarily suspended online payments and it has also been suggested that online investment products could be forced to hold reserves on funds they attract.

It is interesting to think about the future of the worlds exchange system. With the internet and increasing new technology people have easy access and availability  to  services to buy products from or control their personal finances. China seems to be frightened of this since it takes power away from the central bank, it is interesting to think how other countries will respond in the coming years.

Fed Recognized Change in Unemployment Goal Could Be Misunderstood

The Fed is slowing down the stimulus campaign because the strength of the economic recovery that we are experiencing. Interest rates are trying to be kept near 0 at least until the unemployment rate is not as high. The Fed believes that the economy is growing very well right now, and the couple of months that we experienced a decline will happen every once in a while no matter how strong the economy is. They do not want to commit to a future policy in order to allow the economy to grow like it is now. There is a lower supply for employment than there is a demand. This will create high inflation if the Fed does not wind down their stimulus campaign.

http://www.nytimes.com/2014/04/10/business/economy/hesitant-fed-decided-time-was-right-to-change-stimulus-campaign-minutes-show.html?ref=economy&_r=0

JPMorgan profit weaker than expected as trading revenue falls

According to an article on Reuteus, JPMorgan Chase & Co posted far weaker-than-expected quarterly profit. The bank was consistently profitable during the financial crisis, but is struggling to figure out how to navigate the current environment.

Earlier this week, JPMorgan report possible weaker earnings due to litigation expenses. However, Friday's results showed how the bank's troubles appear to be more than just legal settlements and meeting new rules, and into areas more fundamental to the business, such as loan demand and trading volume. “Most of the bank's big businesses, including commercial lending and credit cards, delivered lower profits. JPMorgan's bond trading revenue plunged 21 percent, and mortgage lending revenue fell 84 percent from the same quarter last year.”

JPMorgan’s CEO remains optimistic, however, “the business will grow over the next decade or two.”

Mortgage banking net income and production revenue drop significantly compared to a year earlier. U.S. mortgage lending has cooled after rising rates in the second half of last year have given fewer homeowners reason to refinance their loans. Wells Fargo & Co, the biggest U.S. home lender, also reported results Friday and said its income from mortgage banking fell 46 percent from a year earlier.

This weak earning from JPMorgan shows the financial sector may expect a difficult time ahead because when investors and consumers are still uncertain about the state of the economy. Lower mortgage is also a big concern for the economy, because the housing sector is usually the one that helps the economy recover. However, not all banks are suffering weak earning. In contrast, first-quarter earnings at Wells Fargo, less dependent on such Wall Street profit generators, rose 14 percent, fueled in part by gains on one-time items such as auto lending and loans to corporations.

http://www.reuters.com/article/2014/04/11/us-jpmorgan-results-idUSBREA3A0RB20140411

Taking a Risk, Investors Snap up Once-Shunned Greek Debt

After four years, Greece has returned to the bond market, and investors are looking to get their hands on as many bonds as possible.  This comes with some risk, however.  Greece’s unemployment is still around 27%, but investors are not necessarily looking at the long term health of economies, they are more focused on return rates.  So, just because investors are looking to buy as many Greek bonds at the moment, does not mean that the long term outcomes of the economy will be good.  There is also a chance that all of the money will suddenly leave the Greek financial market, which could be disastrous for Greece.

http://www.nytimes.com/2014/04/11/business/international/greece-trumpets-its-return-to-international-bond-market.html?hp&_r=0

France Bans Work Emails after 6:00pm

     It is widely known that compared to the American worker, the European worker works on average less hours per work week. This is due to the strong unions in Europe that fight for benefits such as: fringes, longer vacations, and the aforementioned shorter work week hours. In 1998, France adopted a thirty-five hour work week considerable much less than the 2012 average American work week of forty-six hours. These worker benefits were taken to a new level when France introduced rules to protect people in the digital and consultancy sectors from work emails outside office hours. The employers federation and unions signed a deal stating employees will have to switch off work phones and not check work emails. Additionally, the firms cannot pressure employees to respond to email after 6:00pm.

     France has not been the country to adopt this email ban. In December 2011, German automaker Volkswagen announced their servers would stop sending emails thirty minutes before the of employees' shifts. The servers could not resume sending emails until thirty minutes before the employees' shifts began the next morning.

     Could such a deal find its way into the American workforce in the near future, I think not; but who knows, America is adopting more progressive attitudes by the day……..
   
http://www.bbc.com/news/magazine-26958079

Obama Signs Directive to End the Gender Wage Gap

Tuesday, Obama took action and called GOP members to take action to support equal pay for female workers, earning 88 cents for every dollar of their male counterparts. This action has been a long time coming and is of great concern to me. President Obama spoke about his two daughters and his hopes that they will be viewed, and more importantly paid, no differently than men by the time they enter the work force. I certainly hope it does not take that long. While, in the GOP dominated Senate, the Paycheck Fairness Act is seen as having little chance of passing, the president also took action by signing an executive order banning federal contractors from retaliating against employees who discuss their compensation. Hopefully we will soon see the end of this clear discriminating factor. 

Rich Nations Lifting Growth from Recession

The International Monetary Fund’s latest forecast predicts that the countries whose property bubbles and collapsing banks set the world into recession in 2009, are now lifting growth.  Growth has especially strengthened within the United States, and the recovery continues to be positive.  2014 predictions suggest the world economy will grow by approximately 3.6 percent this year.  Christine Lagarde, IMF managing director said, “the recovery is finally becoming a bit more balanced, and beyond the burden of developing economies.”  While things are looking positive and strong for the US, things are not as strong in all countries.  The US has been increasingly strong due to the Fed’s efforts in stimulating investment, and improvements in the housing industry.  The American economy has picked up globally as well, and the monetary fund expects the country to expand by 3 percent this year.  New geopolitical risks and global economic activity remain as downturn risks in the global economy structure. 

http://www.nytimes.com/2014/04/09/business/rich-nations-bolster-global-growth-imf-says.html?ref=business

Comcast Argues Merger with Time Warner Cable Will be Good for Consumers

http://www.forbes.com/sites/dorothypomerantz/2014/04/08/comcast-argues-merger-with-time-warner-cable-will-be-good-for-consumers/

Comcast and Time Warner Cable will be defending their request to merge by saying that it will actually benefit consumers.  Comcast claims that as there become more and more cable options available to consumers, its company is not big enough to compete with others such as Apple, Netflix, and Google Fiber.  Another argument is that the merger will not really affect consumers because the two companies operate in different areas and do not compete with each other.  Therefore, the "competitive landscape" will stay the same.  However, many public interest groups are opposing the merger because they say the two companies could raise prices which will actually harm consumers.  It will be interesting to see if the senate judiciary committee actually allows the two companies to merge and how it will actually affect consumers and prices.

Arts Education Lacking in Low-Income Areas of New York City

This coming Monday, a report is set to be released by the New York City comptroller that discloses not so shocking information regarding the lacking of arts education programs in low-income areas. Much of arts education is “disproportionately” absent from low-income neighborhoods. According to NYC Education Department data, “20 percent of public schools lack any arts teachers, including roughly one out of seven middle and high schools, even though state law requires arts instruction for middle and high school students.” Additionally, more than “42 percent of the schools that do not have state-certified arts teachers are clustered in those areas.” Shockingly enough, arranging and hiring a certified art teacher to each school that does not have one would, “cost about $26 million, which represents about a tenth of a penny for every dollar spent by the Education Department.” It’s interesting to think about how the allocation of scarce resources/funds can apply to the struggling arts programs across the country. This article also shines a light on how much students from low-income areas are predestined to receive a “less than” education based on their location. Music and art programs have also been proven to stimulate children’s brains in different ways that can only help other areas of academia. Ultimately, this severely minimizes the number of opportunities that could be given to students who are just as deserving as those from higher-income areas. Considering the capabilities that the Education Department has to change these sad statistics, I can only hope they do so soon. 

http://www.nytimes.com/2014/04/07/nyregion/arts-education-lacking-in-low-income-areas-of-new-york-city-report-says.html?hpw&rref=education

Nigeria: Economy $510 Billion, Biggest in Africa

http://abcnews.go.com/International/wireStory/nigeria-set-africas-biggest-economy-23211573

Nigeria's recalculated economy is worth $510 billion and it is the biggest in Africa. The new value of Nigeria's GDP adds previously uncounted industries like telecommunications, information technology, music, airlines, burgeoning online retail outlets and Nollywood film production that didn't exist when the last GDP count was made in 1990. Then, there were 300,000 landlines. Today, Nigeria has 100 million cell phone users.

Investors' attention will be drawn by the fact that while oil remains the biggest source of government revenue, about 80 percent, oil production is declining while Nigeria's agriculture, communications and service sectors are enjoying healthy growth. Nigeria has been Africa's biggest drawer of direct foreign investment despite myriad woes, from massive corruption and oil thefts costing the country some $20 million a day to an Islamic uprising in the northeast that has killed more than 1,200 people so far this year, to a paralytic electricity supply that keeps businesses dependent on diesel-run generators.

Should people without kids pay higher taxes?

http://money.cnn.com/2014/04/07/pf/taxes/childless-parents-taxes/index.html

The CNN article I've posted is a reaction to a piece written on Slate. In the article, the writer argues that those without children should pay higher taxes. More specifically, "any non-parent who makes more than the US median income of roughly $51,000.

He justifies the suggestion by arguing that parents take on the burden of keeping the US from becoming an "economically moribund nation." He believes that the value parents add to our economy is worth more than what they recurve in tax breaks.

His suggestion has been refuted by many because of it's implications. For example, if somebody is physically unable to have kids, should they be charged?