"U.S. Primacy Is Seen as Ebbing"

http://www.nytimes.com/2015/04/18/business/international/at-global-economic-gathering-concerns-that-us-is-ceding-its-leadership-role.html

At the semiannual meeting between the International Monetary Fund and World Bank in Washington DC, countries suspect US to be retreating from “global economic leadership” at the most crucial point. Many believe United States government is too divided and is unable to maintain its economic power compared to the past. The greatest of infights came from efforts to carry out a 12-nation Pacific trade agreement. The infights included his own party, trade unions, environmentalists and liberal activists. Another great concern is the economic growth in Asia. Obama recognized the “fastest-growing markets” and hopes to set up rules in order to compete with China. In addition, bolstering IMF and other institutions have been difficult for the West and have consequences in confrontations such as with Russia over Ukraine.

I wrote another blog about the Asian Infrastructure Investment bank. This bank has influeced policy makers and marked “the moment the United States lost its role as the underwriter of the global economic system.” Other opinions include waiting to see, that there is too much that can be predicted at the moment.

Greece's credit rating is downgraded once again

Greece's credit rating was downgraded by the ratings agency, Standard and Poor because of Greece's debt and other financial commitments are unsustainable.  The rating was dropped from a B-/B to a CCC+/C.  The ratings agency said the Greek economy has shrunk by 1% in six months and without deep economic reform, the debts will become unsustainable for Greece.  The finances within the government have improved but was overall dented by weaker economic activity.  There also new fears in regards to its debt because the borrowing costs rose by 3.5%.  The new Syriza government started negotiating with IMF, the European Commission, and the European Central Bank in order to reduce the burden of debt repayments.  The next debt repayment is scheduled for May 12 and is supposed to be about $800 million dollars.  If Greece and its creditors do not reach a new deal, the economic conditions will worsen in the country.  Is there a possibility of Greece and its creditors reaching a new agreement?  Will the Eurozone, especially Germany, even be willing to make such deal?

http://www.bbc.com/news/business-32326547

The Pound: to gain or to lose

http://econ.st/1OeZRPn

Currency volatility is always something to be concerned about. For the last several years between the recession and the subsequent recovery, stability has seemed like a far distant dream. According to this article, the pound will continue to increase in volitility over the summer. What surprised me is that the volitility is estimated to be above where it was during the Scottish referendum, which means that the situation feels quite serious indeed. 

The World Economic Outlook: The pendulum swings

http://www.economist.com/blogs/freeexchange/2015/04/world-economic-outlook

The IMF recently released its World Economic Outlook, a health-check on the world economy.  In January, the IMF expected the American economy to grow by 3.6%; the IMF is now expecting the American economy to grow 3.1%.  Because of the strong dollar, exports are falling which is taking away from corporate profits.  Investment is not doing well either as energy producers are holding back in the hope of higher prices.

In the euro zone, things are looking better.  Growth forecasts for Spain have increased from .3% to .5%.  Reasons for this increase in growth include the weak euro, low oil prices, and quantitative easing which has boosted equity and bond markets.  However, neither France nor Italy are expected to have growth levels above 1% this year and longer-term prospects are looking even worse.

Since February, the Russian ruble has appreciated by nearly a third.  The IMF believes that Russia will see a deep recession of about 4% this year.  However, no other big economies are expected to do as badly.

Do you think the IMF's predictions sound accurate? Are there any other areas that are a cause for concern?

Apple Watch US Pre-Orders Estimated at 1 Million

http://www.nbcnews.com/tech/apple/apple-watch-us-pre-orders-estimated-1-million-n340546

Apple has already had 1 million customers pre-order an apple watch. The hotly-anticipated watch sold out online within hours. Buyers of some models won't receive their devices until May, while others will have to wait until July. A range of estimates have flooded in regarding how many Apple Watches will be shipped. JPMorgan predicted that Apple will ship 26.3 million units in 2015, and Bernstein projected that 7.5 million units will be sold in the second half of the year, and 20 million sold in 2016.

Japan's Fiscal Policy

When Shinzo Abe became prime minister he chose Haruhiko Kuroda to be the central bank governor, together they attempted to revitalize Japans fiscal policy through monetary loosening. Now with a GDP of 6.6% Mr. Kuroda fills as though Mr. Abe is not doing enough to being the deficit down. Prices are at a standstill and Japan is having trouble fulfilling the promise of bring inflation up to 2%.. At first businesses and households were doing great with increase of spending and government began to gradually increase consumption tax. The increase of tax was had devastating effects putting japan into a recession. Now the bank is having trouble reaching the 2% GDP and the banks high spending is making buyers in the market suffer. With reluctance to cut spending and low growth it will be interesting to see what happens.

http://www.economist.com/news/asia/21648020-government-shinzo-abe-increasingly-odds-central-bank-end-affair

Brazilian Protests Return

http://www.nytimes.com/2015/04/13/world/americas/brazilian-protests-return-as-scandals-intensify.html?ref=international

   According to this article on New York times, there have been recent events of  protests in different parts of Brazil. Most prominently, protesters have marched over Rio de Janeiro, calling for impeachment of their current president.
   The current presidency has been stained with corruption, bribery scandals, bad policy, etc. Confidence in the country is low because the expected growth rate was not met. Some protesters have accused the president of providing false information. The future for the current presidency looks weak in Brazil. It will be interesting to see how this affects the already high level of unemployment.

Venezuela Inflation Seen Pushing 200% as Rationing Deepens

http://www.bloomberg.com/news/articles/2015-04-10/bofa-sees-venezuelan-inflation-spiraling-to-as-much-as-200-

Venezuela's inflation rate, already high, is expected to rise even higher in the coming months, potentially exceeding 200 percent. Meanwhile, the economy is predicted to shrink at 4% over the next year. The economy, which was already doing poorly, has been adversely affected by the falling oil prices, which is a major import for the country.

Meanwhile, foreign exchange reserves have fallen 15%. While Venezuela still possesses the assets to pay off it's debts, those assets are rapidly falling. The economy is in dire straits now, but if an effective solution is not found, the economy could continue tumbling into complete failure.

China's March Exports Drop 14.6 Percent

http://www.nytimes.com/reuters/2015/04/12/business/12reuters-china-economy-trade.html?ref=international

The trade performance left China with a trade surplus of $3.1 billion last month, much smaller than forecasts for a $45.4 billion trade gap.

"Chinese vice premier Wang Yang was quoted by Xinhua state news agency as saying earlier this month that authorities must act to arrest China's export slowdown lest it further dampens economic growth.
Wang was quoted as saying that local governments should offer "preferential policy support" and encourage more private investment in the export sector."

"Tepid growth in the trade sector could hurt jobs, which the government wants to protect for fear that widespread unemployment could fuel social discontent and trigger unrest."

GE dismantles GE Capital; Plans $90B to Investors

http://www.usatoday.com/story/money/business/2015/04/10/ge-selling-real-estate-assets/25564855/


This article discusses how GE is selling the majority of their business stock in order to simplify the conglomerate and make the company more efficient, focusing on the best sectors of the company.  The article also goes into talking about how the company started out selling their real estate assets, like factories, apartment buildings, and other such things making about $26.5 billion.  Because of this, GE will take a $16 billion after-tax charge.

Because of this change, GE's stock has seen an 8.9% increase in the past week.  Wall Street has given GE a lot of credit for this, saying that they are really making an effort to get back to their manufacturing roots.  Along with the company and Wall Street liking this recent change, shareholders are also very excited about the change because it will give more back to investors.

While GE will be getting rid of and selling most of their financial responsibilities, they will still be keeping things like aircraft leasing operations, and lending energy and health care customers.  I personally feel as though this is a smart move to keep providing this energy because they currently serve over 3,000 health care customers.

Outlaw economics

Housing debt is one reason people end up short of cash. Focusing in on American homeowners, the researchers find that of those with small mortgages, only 20% live hand to mouth. But once total debt approaches the value of the house, a much higher number—close to 50%—are income-constrained. Age is also a factor. Although the likelihood of genuine poverty tends to fall with age as workers build up buffers, the chances of being wealthy but cash-strapped peak around the age of 40.


http://www.economist.com/news/finance-and-economics/21648044-policies-shift-income-rich-poor-may-prove-less-effective

Towards a Better Understanding of Inflation

http://blogs.wsj.com/economics/2015/04/06/how-the-rich-and-poor-spend-and-earn-their-money/?mod=WSJ_hp_EditorsPicks

This article examines the differences in how inflation is being felt by different segments of the population. The important thing to note is that while the Fed consider inflation to be very low, for some segments of the population, inflation has continued apace~especially for those who are paying for college.

IMF Warns of Mediocre Economic Growth

http://www.ibtimes.com/imf-chief-christine-lagarde-warns-mediocre-economic-growth-emerging-markets-1877596

The IMF Chief Christina Lagarde is warning leaders of emerging market nations of a sustained economic slowdown. Six months ago, she warned these leaders about what she called "a new mediocre" which is a slow growth for a long time. But now, she is trying to help prevent this mediocre from becoming their reality. This mediocre growth is not an environment that respects financial stability. She also stated that in some places, growth just doesn't seem to be good enough. Global economic growth last year was 3.4% which was about the average for the past 30 years. The main problem is that the lingering impact of the great recession on top of 50% youth unemployment. The eurozone seems to be improving due to their quantitative easing program which started in January. Emerging and developing countries aren't seeing as bright of a future. Their forecasts are slightly worse than last year. She is recommending combinations of structural reforms to improve productivity, labor force participation, trade policy, and financial policies to help boost investment.