The World Bank Is Remaking Itself as a Creature of Wall Street

Jim Yong Kim, the World Bank's president, is attempting to revitalize the institution with his controversial support of Wall Street.  The World Bank, which was once a powerhouse of global finance, is looking for relevance.  Kim's unique solution: embracing Wall Street.  The model that the World Bank has been following for decades is under strain as some 1.3 billion people still live in poverty, the bank's war chest is depleting by the funds going into developing countries through financial markets.  Additionally, the World Bank's biggest benefactor and largest shareholder, the United States, has become it's most vigorous critic. In order to revitalize the World Bank, Kim's mission is to change how the bank operates. 

Rather then relying only on contributions from reluctant donor governments, Kim is pushing towards private investors.  Sovereign wealth funds, private equity firms and insurance companies.  His pitch is that the bank can reap rich returns by putting their money to work alongside the World Bank.  Kim's proclaimed dream is to persuade the private sector to help the bank achieve its goal of ending extreme poverty by 2030.

https://www.nytimes.com/2018/01/25/business/world-bank-jim-yong-kim.html?rref=collection%2Fsectioncollection%2Fbusiness

Consumer Confidence Is Lifting the Economy. But for How Much Longer?

This article takes a look into how consumer confidence has played a large role in the US economy's recent expansion. Consumer confidence in the US has risen since the recession in 2008. It was interesting to note that the article mentioned that consumer confidence levels are forecasted to increase in the upcoming year as well. This was tough to believe for me, mainly because of how long we have experienced a bull market.  Because of this and the knowledge we have of business cycles, I would expect consumer confidence to decrease at some point in the near future.

It was good to see that the article mentioned that consumer confidence is not the only factor that plays a role in economic growth. I feel that consumer confidence is a good indicator of how the economy will change in the future, but sometimes can be misleading. The author referred to John Maynard Keynes' use of the term "animal spirits," which causes consumers to be overly optimistic in economic decision making. This can potentially be true with respect to the growth of the S&P 500 as of recent.

Overall, this article was really intriguing to see how important consumer confidence really is when it comes to economic growth. The article definitely makes you question how long the trend of economic growth and increasing consumer confidence will last.



https://www.nytimes.com/2018/01/26/business/consumer-confidence-lifting-economy.html

GDP: Economy grew 2.6% in Q4, less than expected

US GDP grew 2.6% in Q4 of this past year, a slight decline from 3.1% in Q2 and 3.2% in Q3.  Economists had expected a 3% growth due to President Trump's success in boosting business confidence through the cutting of corporate taxes, but the increase in consumer spending resulted in a 13.9% increase in imports when compared to Q3, so that jump in imports, ultimately, hurt growth as a whole.  The tax cuts imposed by the Trump administration are expected to boost growth in 2018, but continuing the trend of a 3% increase seems to be a bit questionable.

With the holiday season in Q4, this was the driving force behind the increase in imports, so chances are it is still possible for the economy to continue to grow at a 3% rate, because consumers are benefitting from sturdy job and income growth and record stock prices.  This was the government's first estimate for economic growth in Q4 and they plan to release two more updated publication in the near future, so time will tell if the 2.6% is as accurate as initially thought.



https://www.usatoday.com/story/money/2018/01/26/economy-grew-2-q-4/1067535001/

Trump and Davos: Not Exactly Best Friends, but Not Enemies Either

Donald Trump attended a conference of the world’s financial and political elite this week in Davos, Switzerland. The only US President other than Bill Clinton to ever attend the conference, Trump’s rhetoric of isolationism and his actions of pulling out of the TPP have left the group of elite worried that the US would end their movement of a global market. However, this year, the Davos conference welcomed Trump and was excited about the tax cuts that the Republican party just passed. In comparison with many political leaders who claim the tax law benefits the wealthy, the billionaires of Davos applaud it because of its cuts to regulations. 

While the tax bill has won over many of the world’s business elites, other aspects of Trump’s presidency have kept them concerned. One liberal financial trader called Trump the new wave of authoritarian ruler, financial leaders from South Africa are reeling from Trumps disparaging comments earlier this week, and many others are seriously concerned about the United States “disengaging from the global trade arena.” 

While reading, I wondered again about the perception of the United States abroad, even in circles that Donald Trump may have previously considered more welcoming towards him, as a former businessman. I also wonder how much of an effect the unpredictability of Trumps actions and words will have on the economic standing of the US, even after he leaves office. 

https://www.nytimes.com/2018/01/25/world/europe/davos-trump.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region&region=top-news&WT.nav=top-news

 

Venezuela Calls for Early Elections, and Maduro Aims to Retain Control

Politics have a big impact on how an economy operates. Chavez was president from 1999-2013 who was a socialist. He was then succeeded by Nicolas Maduro, another socialist, who won the election narrowly. Throughout this period, the country has had problems with economic crisis, violence and poverty. With less and less national support, Maduro has decided to move the elections up, hurting his opponents. There have been protests, some becoming violent and leading to arrests. With many of Maduro's major opposition either barred from seeking office or in exile along with the change of election date, it seems that Maduro will have little opposition in the coming election.

https://www.nytimes.com/2018/01/23/world/americas/venezuela-election-maduro.html?rref=collection%2Fsectioncollection%2Fworld&action=click&contentCollection=world&region=stream&module=stream_unit&version=latest&contentPlacement=27&pgtype=sectionfront

Decreasing Amount of Foreign enrollment in U.S Colleges and Universities

So this video discusses the fact that less people from other countries are enrolling at universities in the U.S. The commentators speculate over many things such as sentiment toward the U.S regarding the new government officials in office as well as the new foreign policies that are being put in place.
They also talk about student visas and what may is going on with that program and thus far nothing will change. However, the fact that the question was asked proves that even American are wondering if changes to policies regarding any foreign policy may be changed.

On the bright side universities and organizations are advertising to other countries that they are welcome in to U.S higher education. Many universities are sending out "you're welcome here" messages across the world to help change some of the negative sentiment for the U.S. Hoping that this will get students to enroll in U.S colleges.


https://www.bloomberg.com/news/videos/2018-01-23/foreign-enrollment-drops-at-u-s-colleges-and-universities-video

Trump's Tariffs on Solar Mark Biggest Blow to Renewables Yet

            This week President Trump approved a four-year tariff starting at 30% on internationally manufactured solar equipment. The United States solar industry relies heavily on imported parts for their installations, so this tariff will affect this 28 billion dollar industry tremendously. The industry is now projecting a 23,000-person job loss this year. Trump argues this tariff is targeted at China, one of the key solar panel manufacturers and to level the playing field for domestic manufacturers. This move by Trump poses a trade risk as foreign nations could now establish new trade barriers, and I assume have a variety of repercussions on many different national industries.

This is not the first act by President Trump to hurt the renewable energy market, as he has already pulled out of the Paris agreement, as well as dropped regulations on power plants. With the threat of climate change looming on the horizon, and countless studies validating its existence, I believe these current acts are inhibiting innovation and growth in a key sector. Renewable energy not only is an opportunity for job growth but also to reduce our carbon footprint, which looks to be linked to the rise in current natural disasters we have been facing. Our nation is lagging an incredible amount when compared to other countries investing in research and development in renewable energy such as Japan and the U.K; only time will tell how impactful this is on our economy and our place on the global market.

https://www.bloomberg.com/news/articles/2018-01-22/trump-taxes-solar-imports-in-biggest-blow-to-clean-energy-yet