Drugs Pervade Sport in Russia, World Anti-Doping Agency Report Finds

Last year during the Olympic games, Russian secret service impersonated drug testing laboratory engineers, Russian athletes adopted fake identities, bribed anti-doping authorities, and top sports officials took bogus urine samples all in order to cover up the drugs being taken by the Russian Olympic athletes.  These allegations were among hundreds found in a report by the World Anti-Doping Agency.  323 pages lay out what could be the most extensive state-sponsored doping program since the East German Regime of the 1970's.

It was stated by Dick Pound, founding president of the World Anti-Doping Agency, "It's worse than we thought...This is an old attitude from Cold War days." Russia has responded to these allegations saying, "Whatever we do, everything is bad....if this whole system needs to shut down, we will shut it down gladly.  We will stop paying fees, stop funding the Russian anti-doping agency, the Moscow anti-doping laboratory.  We will only save money."

Through the report they are recommending a lifetime ban on 5 coaches and 5 athletes. In 2013 Russia had 225 or 12 percent of all violations globally, a fifth of these from track and field athletes, and this number only continues to rise.

The WADA foundation is the one investigating and facilitating these reports and will meet next week to discuss these punishments and the possible implementation of them.


http://www.nytimes.com/2015/11/10/sports/russian-athletes-part-of-state-sponsored-doping-program-report-finds.html?hp&clickSource=story-heading&WT.nav=top-news&_r=1&module=ArrowsNav&contentCollection=Sports&action=keypress&region=FixedLeft&pgtype=article

Oil Actually Responding to Supply and Demand

From Standard Oil in the late 1800s, through the Railroad Commission of Texas in 1930, and OPEC in modern times, oil - the world economy's most foundational commodity - has virtually never been priced via supply and demand. Monopoly or cartels have been able to control prices. However, it seems as if oil's price is actually indicative of market forces.

On the supply side, producers have cancelled over $150B in investments. In addition, OPEC has pretty much abandoned its quotas (that restrict oil output. On the demand side, consumption is up (as expected). However, oil consumed per unit of economic output is declining.

With prices hovering in the upper 40's, lower 50's, where do you expect them to go by 2020? (the article mentions two estimates, $50-60 and $80)

http://www.economist.com/news/finance/21678198-once-prices-are-responding-supply-and-demand-not-opec-why-market

A New Technique for Producing Diamonds

A new company called Diamond Foundry has recently made a breakthrough in discovering a way to manufacture high quality diamonds more quickly and cost effectively with existing technology. They have created a sustainable alternative in which they will buy solar power credits in order to reduce carbon footprints to zero. The technique of choice is "chemical vapor deposition", in which they grow diamonds by depositing layers of carbon atoms in a high energy plasma field. They alter the shape of the plasma field in order to create the diamonds more rapidly and efficiently in larger quantities. The plasma is so intense that they are able to create Type IIa diamonds at about 150 times the usual pace. The rate at which these diamonds are produced can be compared to the rate at which natural diamonds are mined. 

Diamond Foundry has been able to brand themselves off being ethically and environmentally concerned and has received solid financial backing due to this (including being endorsed by Leonardo DiCaprio). The company's plan is to launch an online website in which they can sell their diamonds, featuring well known jewelry designers. They will compete with competing jewelry stores by providing more affordable prices and marketing an environmentally friendly approach. The article confirms that the average consumer won't be able to tell the difference between a natural diamond and a manufactured diamond, as the distinction requires equipment and expertise. Furthermore, the new tactic of production will not negatively affect consumers' demand for the diamonds. 

Although the new technique of production sounds ideal for both a consumer's wallet and for the environment, it seems almost too good to be true. Do you think the fact that the diamonds aren't natural will ultimately affect consumer demand for the product?

http://www.nytimes.com/2015/11/12/science/borrowing-from-solar-and-chip-tech-to-make-diamonds-faster-and-cheaper.html?ref=business

US economic recovery has 4 more years to go, experts say

Investors who worry that the U.S. economy is speeding toward another inevitable recession can relax: The likelihood that the recovery will continue is actually pretty good. Because main street is could possibly outdo Wall street.

Since 1950, periods of expansion in developed markets have lasted an average of eight years—though the average in the U.S. over the same time has been around five years. And

Goldman has created a scatter plot of 255 expansions across 14 developed economies, depicted below. This implies that the current expansion, at six and 1/3 years old, will likely endure, Goldman says. The current expansion started in July 2009, according to the National Bureau of Economic Research, so we only have a couple more years to go. And the likely hood of a recession is minimal.

Link: http://www.msn.com/en-us/money/markets/us-economic-recovery-has-4-more-years-to-go-experts-say/ar-CCflwF

Chinese Taxi Driver Turned Billionaire Bought Modigliani Paiting

In one of the most expensive art sales ever, a Chinese art collector bought "Nu Coché" by Amedeo Modigliani. It is the sixth most expensive piece of art ever sold at auction.

The painting was expected to go for about $70.7 million, but Liu Yiqian purchased it for $107.4 million after fees. Yiqian and his wife plan to bring it to Shanghai where he owns two private art museums.

Yiqian was a taxi driver and sold smalls goods. However, during the major economic reform that happened in China, he was able to make his fortune through trading stocks in real estate and pharmaceuticals. He is worth approximately $1.5 billion.

I think this is a very interesting case. It shows how the opening and liberalization of China's economy has led to people being able to acquire mass amounts of wealth. It also shows how overvalued the art market is.

Do you think China will have a growing art market due to the increase in wealth? Will there be a bubble in the art market in general?

http://www.nytimes.com/2015/11/11/arts/international/liu-yiqian-modigliani-nu-couche.html?_r=0

Where did the miracle on 34th street go? Macy's reported a lag in sales for the third quarter

In a recent report released today, Wednesday, November 11th, the iconic renowned retailer Macy’s, owner of the Bloomingdale’s chain, reported third quarter sales down 5% from a year ago. With this report, Macy’s also stated that sales in the upcoming fourth quarter, typically the strongest of the year for the company, are anticipated to be lower than last year as well. The article then went on to state that this drop in sales could be attributed to “sluggish demand from American consumers and a continued slowdown in visits from foreign shoppers… [since the] strong dollar has caused many European and Asian tourists to stay home…” Due to this, Macy’s has also decided to no longer consider plans to spin off its real assents into a new company – further disappointing consumers – and driving down consumer demand even more…

           

            Why do you think this slowdown is the case when the American economy is stronger than ever? Is it solely due to the strong presence of the American dollar in the global marketplace? Other companies like Amazon, Walmart, and Kohl’s have also reported being hit hard this quarter due to concerns about increased competition. That being said, Macy is not the only one feeling the lose. So, what do you think the future holds for the upcoming holiday season? Will these companies be able to make up their loses or will the lack of consumer demand and high value of the American dollar continue to drive down sales?

            Link: http://money.cnn.com/2015/11/11/investing/macys-earnings/index.html?iid=SF_LN

The Changing Face of the Fed

http://graphics.wsj.com/fed-composition/

Above is a link for a very cool graph by the Wall Street Journal that shows the shifting background of Federal Reserve leadership.  Overtime the leadership of the Fed has moved from a majority of Bankers to now one mostly run by those with backgrounds in Academia and Research.  Yellen and Bernanke, the two most recent Chairs of the Fed have backgrounds in Academia.  A reason for this growing shift of more academic leadership, could be because of regulatory capture.  Those with a background in banking are more likely to return to banking or consulting after working at the Fed, than those with an academic background.  Look at Alan Greenspan, the former Chair of the Fed who had a background in banking and following his tenure as Chair of the Fed became a consultant to many investment firms and banks like Deutsche Bank.

Overall it's a pretty cool interactive graph that shows the changing nature of the Federal Reserve.

Taiwan Debates Its President’s Meeting With Xi Jinping of China

http://sinosphere.blogs.nytimes.com/2015/11/09/taiwan-china-xi-ma-meeting/?ref=asia

While Chinese commentary was resoundingly positive aboutSaturday’s meeting between President Xi Jinping of China and President Ma Ying-jeou of Taiwan, reactions in Taiwan to the historic encounter were decidedly mixed.

On his trip home, Mr. Ma told reporters accompanying him on the plane that he felt most of his goals for the encounter had been accomplished, with the biggest being the meeting itself, bringing together the leaders of the two sides for the first time since the end of China’s civil war in 1949. But he added that he was not satisfied with Mr. Xi’s assertion on Saturday that the Chinese missiles arrayed along the Taiwan Strait were not targeting the island.

The United States said that it welcomed the meeting of Mr. Ma and Mr. Xi. “The United States has a deep and abiding interest in peace and stability in the Taiwan Strait, and we encourage further progress by both sides toward building ties, reducing tensions, and promoting stability on the basis of dignity and respect,” John Kirby, a State Department spokesman, said in a written statement.

China considers Taiwan to be part of its territory that must eventually be unified and has threatened the use of force if Taiwan pursues formal independence.

China exports fall for fourth consecutive month

http://www.rttnews.com/2577614/china-s-exports-fall-for-fourth-month-imports-decline-more-than-forecast.aspx

The world economy is struggling at the moment and China is a big reason why. China's exports fell for the fourth consecutive month in October at the same time that imports declined due to weak domestic demand. On a year-by-year comparison, exports decreased by 6.9% in October, which is even greater than the 3.7% decrease in September. It is interesting that China's forecasts have been too high, yet their economic growth "eased" to 6.9% in the third quarter of this year. It just shows the size of their economy compared to that of the United States.

China to Announce Cap-and-Trade Program to Limit Emissions

Article: http://www.nytimes.com/2015/09/25/world/asia/xi-jinping-china-president-obama-summit.html?ref=international&_r=0

            President Xi Jinping of China will be making history by starting a national program in 2017 that will limit and put a price on greenhouse gas emissions in China. The program President Jinping is planning to implement is a called a cap-and-trade system. Cap-and-trade is a regulatory system that is meant to reduce certain kinds of emissions and pollution and to provide companies with a profit incentive to reduce their pollution levels faster than their peers. Under a cap-and-trade program, a limit on certain types of emissions or pollutions is set, and companies are permitted to sell the unused portion of their limits to other companies that are struggling to comply. This will greatly reduce the negative externalities that come with the high pollution emissions in China that has caused countless social issues across the country.

            Tension between the two nations is still heated caused by countless cyber-attacks over the past several weeks waged by China. But this program will bring about change and is the first step for China and America collaboration to achieve one ultimate goal of reducing pollution emissions in the two largest economies in the world. On the hand, the Chinese economy will be taking a bit hit when this program is implemented. China always strived on having high production output but with regulations in place, the expenses for various industries will increase and they will have no choice to reduce output. This might lead to a decrease in foreign investment and they will relocate to an area where there are fewer regulations.    

Best U.S. wage growth since 2009

http://money.cnn.com/2015/11/06/news/economy/best-wage-growth-in-years/index.html?iid=SF_LN

The United States economy added 271,000 jobs in October which helped lower the unemployment rate to 5%, its lowest level since 2008. This can largely be attributed to the fact that more part-time workers found full-time work. As we move on from the Great Recession, employers are starting to gain more confidence in the economy as a whole and its current direction which gives them greater confidence in adding more full-time workers.
Wages also grew 2.5% in October from a year ago, which is the best increase since July 2009. This is important as higher wages are the key to driving consumer spending, which is the largest portion of U.S. economic growth. The only negative aspect about the economy at this point is the fact that the global economy is not as healthy as the United States' economy. The current global slowdown is significantly hurting our trade and manufacturing.

December Interest Rate Increase Is ‘a Live Possibility,’ Janet Yellen Says

Fed chair Janet Yellen has again hinted at an interest rate hike, saying it's a real possibility in the month of December. She believes that, barring a decline in economic expectations, a rate hike is on the horizon. This caused a slight dip in stocks, as businesses brace for economic contraction. While inflation indicators remain low, a much better than expected October job report signals a possible tipping point in the economy.
People remain polarized on the issue. Many say that near zero interest rates are not sustainable, while others say that an interest rate hike would stall an economy is not ready for any contractionary policy. I personally believe that the rate hike is needed, but december may be too soon. While job reports are promising, peoples consumer confidence is still shaken by the recession. Near zero interest rates are too low to be sustained, but an interest rate hike may need to be saved for a later date.


http://www.nytimes.com/2015/11/05/business/economy/fed-yellen-congress-interest-rates.html?_r=0

Recapitalising Greek banks The damage The bill is cheaper than expected

Before the major Euro crisis Greek banks were one of the strong elements in the economy. However; as the years have progress this has not been the case. Unfulfilled monetary and fiscal policies have led them to be the cornerstone of Greece’s financial crisis. Since the radical party Syriza won the election last year it has been a dodgy year in Greek politics. Deposits in the economy have swiftly depleted which has given rise to concerns that Greece might revert to the Drachma and denounce the Euro. This act would have a very negative impact on depositors.

For Greek bank, their woes continued to grow when the ECB denied further liquidity which forced the government to shut them down for three weeks in the summer ( capital controls were also put in place). However; the Greek government was able to receive a bailout and stay in the Euro. Although this may have solved the issue at hand for a short period of time, but; in reality it had a massive impact on Greek banks. The main issue that they are dealing with as of right now is that local depositors have lost confidence.This means that Greek banks rely heavily on international investors, however; that in itself is an issue considering the shaky nature of Greece’s future in the Euro zone.

http://www.economist.com/news/finance-and-economics/21677646-bill-cheaper-expected-damage

Issue 3 Not Passing Was Not Because of Anti-Marijuana

A common misconception that has come up this week after Issue 3 not passing was that it was because of anti-marijuana views. Those, although frequent in Ohio, were not the reason Issue 3 was not passed. In fact, many marijuana activists did not want Issue 3 to be passed. The highest vote percentage was 42.9 % in Jefferson County in Eastern Ohio, which still isn't close at all to winning. The reason Issue 3 was not passed was simply because of its poor structure. It would've given power to an oligarchy of 10 sites in the state, and in the process market competition would be stifled, and it would limit consumer choice, particularly with medical use. Prices would be too high to the point that people wouldn't be able to afford it. And that's something that got the disapproval of a lot of pot users. Marijuana activists are looking for better ways to implement legalization in Ohio, which would not involve matters in an oligarchy setting. http://www.cleveland.com/datacentral/index.ssf/2015/11/how_the_marijuana_vote_lost_ev.html

Abenomics - An examination

Abenomics is the term popularly given to the economic revival that Japans current prime minister seeks to administer under an economic plan popularly dubbed Abenomics. Abenomics has to deal with a lot because japan not only needs to grow but it needs to grow at a point where it is able to hand its great public debt. He gave himself an end goal to raise the nominal GDP from 500 Trillion Yen to 600 Trillion Yen, a rise of 20 percent. While the Economy has been shifting in the right direction, it is still woefully far from where it needs to be. Recovery has been stopping and has in fact slumped in the second quarter of the year. Prices are yet again falling and the "new core" inflation index has remained short of the 2 percent inflation target. The Monetary policy seems to not be stabilizing in order to counter Japans sovereign debt which is 240 percent of its national debt.

Abe hoped that his nation would quickly return to rapid growth and thus prosperity would follow but it has not panned out that way. Japan needs to make tax revenues from somewhere in between 30-40 percent in order to stabilize its GDP debt and the fact that raising taxes from 5-8 pecent in consumption tax slowed down consumption rates is worrying. Japanese peopel have always tended to save more and at a time when the economy needs them to spend it is ever worrying that they choose toa ct more conservatively with their money 9as they have eery right to do so however). Japan needs to be careful at current growth rates because any offsets introduces by tax rises or cuts could mean plunging back into the recession Abenomics is trying so hard to cut off. Productivity is also an issue because even though output per worker is high, the problem with a shrinking working population is that it offsets higher productivity per worker.  Japan needs to increase its current inflation. Some options it could explore include

1. At current rate of bond purchases, the BOJ will own two thirds of government bonds by 2020. In effect, the govt will owe itself money in the form of seigniorage as debt payments made to the central bank will be returned to the govt itself.

2. Wait for a point where the government is pushed into a debt crisis of monetary madness which could potentiall spiral out of control or work either way...

Either way, Mr Abe has alot of work to do before he can say that his Abenomic policies can be called a definitive success.


http://www.economist.com/news/finance-and-economics/21677648-despite-shinzo-abes-best-efforts-japans-economic-future-will-be-leap

Fight Escalates Between Super 8 Franchise Owners and Their Franchisor

http://www.bloomberg.com/bw/stories/2010-01-18/fight-escalates-between-super-8-franchise-owners-and-their-franchisor

The franchisor of Super 8 hotels is the Wyndham Hotels group and the franchise owners are not very happy with them. The main reason that the franchisees are unhappy is because of the enforced upgrade of a property management system that will be very expensive. Franchisee owners believe the upgrade will create financial difficulties. It is true that the franchisor makes the decisions about the pricing, franchise fees, and maintenance needs, so the franchisees are subject to the decisions of the franchisors, but this does not mean that the franchisors can do whatever they want as is clear in the case of Super 8. The franchisees must be able to at least give their input to the franchisor. Being heard goes a long way. This allows the franchisor to keep the franchisees profit margins in mind. In theory, Wyndham Hotels Group has the ability to make a huge profit by narrowing the profit margin of their franchisees, but this is not practical because the franchisees will not want to renew their franchise agreements if they are not profiting from the arrangement. Wyndham Hotels Group must allow its franchisees to succeed if it is to succeed itself.

Traditional TV: A Thing of the Past

With the increasing changes in technology emerging every year, one in particular could be running a decades old industry into the ground. About 45% of all TVs sold in the US this past year were Internet Capable Smart TVs, meaning they are capable of connecting Over The Top (OTT) devices (such as Rokus Amazon Fires, and Chrome casts) and stream from applications built into the TV, thus being able to stream TV shows and movies without having to pay a ridiculous cable provider bill. 69% of all TVs in America are now connected to the internet, instead of paying to a cable provider, consumers are now subscribing to video applications, such as Netflix, Hulu, HBO Go, NFL Network, and many more to consume their video entertainment. These individuals are known as "chord cutters". Though these connected TVs are changing the television industry as we know it, it doesn't mean cable providers are going bankrupt, it means that they have to change their approach as the times change, learning to work with theses connected TVs and OTT devices. http://www.mediapost.com/publications/article/257343/connected-tv-devices-reach-tipping-point.html