China's Transition

http://www.economist.com/news/china/21601564-leaders-discover-some-transparency-can-help-make-society-more-stable-right-know

This is the best example of a change in the Chinese economic system. An opening up of the system will help economists better judge and make predictions for the economy. People can study the real story of China better and understand the economic system of China.

Age Invaders

http://www.economist.com/news/briefing/21601248-generation-old-people-about-change-global-economy-they-will-not-all-do-so

The article by the economist talks about the shift in the demographics that will happened around the world in 25 years. This is a widely discussed topic today and economists say that the entire global politics will have to change in order to adjust for these changes. The authors talks about three channels through which the demography influences the economy: changes in the size of the workforce, changes in the rate of productivity growth, and changes in the pattern of saving. By examining those three channels we can estimate how the economy will shape up in the future. The trend shows that there are more workers in the labor force past the age of 65 today. This means that the new policies either extended retirement age or cut back on the supply of pensions. There is also a discussion of privatizing Social Security, which posses both opportunities and threats.

I would be interested to see what solutions do you have to resolve a problem that we will all face in not so distant future.

Twitter Offers Investors Silver Lining but No Rainbow

http://www.forbes.com/sites/jeffbercovici/2014/04/29/twitter-offers-investors-silver-linings-but-no-rainbow/

Twitter has been struggling in the 6 months since it became a public company, not because it is not doing well but because there has not been enough user growth.  More and more advertisers are signing on, but user growth is relatively stagnant.  Instagram and Whatsapp have both surpassed Twitter in the amount of users.  However, the company and investors are still holding out hope that growth will increase and the company will continue to do well based on its business model.  

A Billion Shades of Grey

Focusing on the increasing aged population, this article looks at the old population as they continue to participate within the work force well into retirement years. 65% of well-educated older american workers are working significantly longer period than their only high-school degree counterparts 32%. By working into their retirement, older educated workers are able to reap the rewards from their skill for much longer, increasing their savings for a future period or to give through inheritance. This will contribute to inequality as that inheritance gets passed down. Over the next 20 years the population of 60 year olds will double and will mean many more people collecting pensions, while the higher educated work force will be able to increase the productivity, this will hurt other countries with high population of uneducated workforce like China. Technological advance will allow for more skill from the older population, requiring less physical work to be done and more mentally based. This differs from manual labor which become more difficult as the body ages.

A Billion Shades of Grey

Comcast to shed 3.9 Million Subscribers

As most people know, for the past several months, the cable company Comcast has been attempting to purchase Time Warner Cable.  Doing so would increase Comcast subscription numbers by 50%, and also narrow down what few cable options you have.  Comcast has argued that its purchase would not limit cable options since Comcast and TWC provide services in different places.  However, it does not seem so with this latest move.  It sounds horrific that Comcast is going to simply trade consumers with another firm.  I think this really shows the signs that Comcast has obtained or already had a monopoly over digital cable.

http://www.reuters.com/article/2014/04/28/us-charter-communi-comcast-idUSBREA3R0N620140428

The New Censors of Hanoi

The article mentioned how the artists, authors in the north of Vietnam has been giving up on their ideas for a 'compensation' of material stuffs.
This is a common way to deal with defiant minds in socialism, when the government either make a 'buy out' incentive or punishment incentive. However, the fact that artists can make a deal with the government may mean that the condition is still 'live-able'. Even the media is controlled by the government, people are still aware of what is going on, the corruption in the parties' member, the political fight, or the nepotism.
And interestingly, to the author, it seems to happen only in Hanoi, instead of the whole nation.
http://www.nytimes.com/2014/04/28/opinion/the-new-censors-of-hanoi.html?ref=opinion

U.S. - Japan Trade Talks

U.S. - Japan trade talks yielded no major breakthroughs this past Thursday,spelling trouble for the Trans-Pacific Free Trade Agreement.  The latest hangups are Japan wanting to protect its agricultural sector, and the U.S. wants to protect U.S. automakers from Japanese competition. While several rounds of negotiations over a couple of years have ensued with no major gains, these talks have the potential to import quotas and lower tariffs and open Pacific Industries in the U.S.

http://money.cnn.com/2014/04/24/news/economy/obama-tpp-trade/index.html?iid=SF_E_River

Recovery in the Job Market

This article points to research done by the National Employment Law Project that indicates that a greater number of jobs in middle- and high-paying industries were lost than low-wage jobs during the recession, but the greatest job growth in the economic recovery has happened in low-wage industries. In particular, fast food restaurants and strip malls have been hiring at a much higher rate than law firms and health care industries.

With a shrinking middle class that has lost its traditional manufacturing base, economists are worried about a greater stratification of classes and higher income inequality. Some recommend raising the minimum wage, a policy that has been opposed by many Republicans and business owners. Others suggest a need to vamp other social safety programs in order to support low-wage workers and reduce income inequality. Others are wondering what the middle class will look like if jobs continue to be created in low-wage industries and if high-wage industries catch up in job creation. 

http://www.nytimes.com/2014/04/28/business/economy/recovery-has-created-far-more-low-wage-jobs-than-better-paid-ones.html?hp&_r=0

Ambitious New PM Forges Ahead Against Corruption, Towards Bridge Building

The Serbian National Assembly has just approved former First Deputy PM Aleksandar Vučić as the country's new Prime Minister. Vučić has a storied political history, particularly with respect to tabling his nationalism in favor of stronger ties with the European Union. As with many aspiring new members, the EU imposes requirements on potential new member nations to improve their stability, especially prior to joining the monetary union. Vučić's approach to this seems sufficiently fresh: in a bombastic speech to the assembly, the new Prime Minister declared that they shall sleep and eat in the parliament building until market-oriented reforms are passed by a July deadline. Since Vučić seems to still enjoy majority support, his term may yield a new approach for how war-torn transition economies fare.

Warren Buffett Calls Out Coke's 'Excessive' Executive Pay Plan

The renowned investor, Warren Buffett, the owner of Berkshire Hathaway is the largest share owner in Coca Cola's stock (KO). Recently, Coke's Chairman and CEO Muhtar Kent presented an equity plan at the company's annual shareholder meeting this past Wednesday. This has been a very controversial plan, but Muhtar Kent maintains the pay-for-performance plan is in line with the company's goals. Warren Buffett was not convinced by Coke's CEO and abstained from voting at the annual shareholder meeting. Hedge fund manager David Winters argued the plan will dilute Coke's existing shareholder value by 14.2%. The plan based on one equity investment will award executives with $13 billion over four years, which Winters claims will be taken from shareholders. The fundamental purpose for firms in capitalism is to maximize shareholder wealth, but it appears this plan might not accomplish this goal. On April 23, 2014 Coke's equity plan passed without Buffett's vote. There was much discussion about Buffett's decision to abstain from voting. He did not agree with the plan, but instead of voting against it he abstained. I believe that he assumed the plan would pass even if he voted against the equity plan. However, if he did vote against the plan, Coke investors would likely overreact and possible sell the stock which would drive down share price, thus decreasing Mr. Buffett's profitability. By abstaining, he made it clear to Coke's executives that he did not agree with the equity plan, but did not cause a panicked sell-off of shares. A great tactical move by Mr. Buffett, but the fact remains for Coke its largest share owner does not exactly see "eye-to-eye" with the executive team and could create potential problems considering how significant Mr. Buffett's actions have on the market.

http://www.insidecounsel.com/2014/04/25/warren-buffett-calls-out-cokes-excessive-executive

Another BRIC out of the wall?

http://www.economist.com/blogs/buttonwood/2014/03/emerging-markets?zid=295&ah=0bca374e65f2354d553956ea65f756e0

This article discusses the potential future of Russian economy. In 2001 Russia has been included to the list of BRIC countries (Brazil, Russia, India and China) as he emerging markets with a lot of importance for the global economic community. Russia has shown the best performance out of the four countries, primarily due to the commodity boom.

The chain of recent events with Ukraine have significantly damaged Russia's position in the world and its future forecast. Foreign investors, who were very enthusiastic about Russia's growth, have voiced their concerns with sanctions having negative effect on Russia's economy. Foreign investment is declining and will continue to until the situation is resolved. Forecast predict Russian economy to grow 1% in 2014 and 2% in 2015.

Rebirth of America's dead factories

http://money.cnn.com/gallery/smallbusiness/2014/04/21/factories-plant-manufacturing/index.html?iid=HP_LN

There is a resurgence for manufacturing factories in the U.S. The article quotes the president of Industrial Reality Group Stuart Lichter, “Demand for closed factories has picked up since the recession”. International firms have also dramatically shifted their production to the U.S. as a way to grow their business and cut costs. This is interesting since the norm for the past decade or so for international business has been to use Chinese factories as a hub for manufacturing, not the other way around. This may be positive for the U.S. overall by creating new jobs and rejuvenating idle assets, as there are thousands of closed factories, industrial plants and military bases that have been idle for many years. If manufacturing begins to boom in the U.S. this may change details of our economic situation in many ways. 

Many low-wage workers not protected by minimum wage

http://money.cnn.com/2014/04/23/smallbusiness/minimum-wage-exemptions/index.html?iid=SF_E_River


Recently, President Obama has proposed raising the country's minimum wage rate. The writer looks at the unfortunante group who will not recieve any benifit from the wage increase because certain rules make them exempt from receiving minimum wage.

Here are some examples of people who do not have to receive minimum wage:

• Disabled workers 
• People who work for very small businesses 
• Teenage trainees 
• Tipped workers
• Home care aids 
• delivery people 

China's Enticing Attempt

It seems very converse to think that Chinese population hardly contributes to their own economy, but this is the truth. Except for in major cities like Beijing, Shanghai, Guangzhour and Shenzhen, Deng Hong is beginning to implement infrastructure that promotes further spending. He aims to slightly reverse the trend of saving in China to incorporate slightly more spending. They recently build the Global Centre which is a meant to symbolize consumption - an increasingly essential ingredient of China's economic development, according to the article. But this article suggests that these are only small steps that China is going to. They prescribe further measures that China should be taking for the country to really take off economically. While these policy prescriptions could easily aid the country, what does this mean for the United States in term of economic power? How will this effect the international system?


http://www.economist.com/news/special-report/21600801-chinese-consumers-are-spending-plenty-they-could-do-even-better-billion-shoppers