Wells Fargo's Rosy Results May Soon Wilt

Although Wells Fargo had a relatively successful first quarter the company
is now coming out and stating that due to a billion dollar settlement in consumer
business its progress this quarter is short lived. Wells Fargo has suffered
extensively in the past year due to the very public scandal of unethical sales
practices in their consumer banks, making them face large examination by the
U.S Department of Justice. Shares of Wells Fargo fell 2% this week, and have
already dropped over 13% this year. This would be the second quarter in a row
that the company’s finances have been drastically affected by a legal charge. I
am curious how long it will take for Wells Fargo to bounce back after this scandal
and what drastic measures it will take.

https://www.bloomberg.com/news/articles/2018-04- 13/wells-fargo- s-revenue-
beats-estimates- despite-punishment- by-fed

Irish Government has Brexit Northern Ireland impact papers

I'm starting to get sick of hearing about the what-ifs of tariffs, and more analysis of the effects of Brexit have come out... so. This article talks about the effect of Brexit on Ireland, since half of the Irish land mass is technically a part of the United Kingdom, and the soft, open border that was negotiated in 1998 has the potential to be closed when Brexit comes into full force. Since some people cross the border daily for work, a hard border could mean many of them could lose their jobs, and the cost of the time wasted and trade fees at a border control could mean industry loses profits. This article specifically mentions health services, agri-food and manufacturing in the north as the industries that would be hit the hardest. If there is no trade agreement made before Brexit occurs, this article estimates the Northern Ireland economy would take a 12% hit, and even if there is a deal, they agree that the economy would take an 8% hit. The UK just released these potential numbers and Irish Parliament members are trying to find a way to both abide by the Brexit vote while maintaining their economic growth. The question of what to do with the divided Ireland is upcoming in the Brexit negotiations that are required to come to an end by March 29 2019.

http://www.bbc.com/news/uk-northern-ireland-politics-43673264

Don’t Nudge Me: The Limits of Behavioral Economics in Medicine

This article discusses peoples unwillingness to follow a course of treatment by physicians and the economic hit it takes on the medical industry.  The article states that two-thirds of medication-related hospital admissions in the United States were because of noncompliance, costing about $100 billion every year.  Not only is this an expensive fix, but more than 100,000 deaths a year come from noncompliance.  When looking for a solution, researchers have began speculating behavioral economics, which did not prove to be very helpful.  Another solution was to do a study using a "kitchen-sink approach".  It involved direct financial incentives, social support nudges, health care system resources and significant clinical management.  This proved to be quite unhelpful as well, as it failed.  The research suggested that financial incentives tend to work better in public health than in more direct health care.  The article then concludes that behavioral economics can offer interesting theories, but health and the healthcare system are both very complex, and maybe even too complex, with no single solution to the problem of patient noncompliance.
*click here for article*

Elon Musk Likes it Here. Will Other Tech Innovators Follow?

This article is interesting because it talks about ideas that the Australian government has and has been using in order to attract companies to Adelaide. This is a city in South Australia that used to have a lot of industries and factories, but in the last decades, a lot of companies have been shutting down their companies and moving to a different place. One of the ideas that they have in order to get more companies to move there, is to get more workers that would charge less, which is why they have decided to give out many visas for foreign workers that decide to go work in Adelaide. With this, they are trying to make labor cheaper and encourage companies to open factories there. Another decision that the government had in order to attract more companies is to hire Steve Wozniak, the co-founder of apple, in order for him to give ideas to attract more people and companies to Adelaide. It will be interesting to see if this will work, or if the Australian government is spending a lot of resources trying to get this city back to its prime and at the end, it will not end up working. 

https://www.nytimes.com/2018/04/09/world/australia/adelaide-tech-innovation.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business&region=stream&module=stream_unit&version=latest&contentPlacement=6&pgtype=sectionfront

More turmoil at Germany's biggest bank: Deutsche Bank's CEO is out

This is an interesting article on the crisis surrounding Germany's biggest bank, the Deutsche Bank. For the past three years, the bank has posted losses of 500 million Euros, 1.4 Billion Euros, and 6.8 billion euros. Since the financial crisis of 2008, the bank hasn't been able to recover in terms of the losses it incurred due to the recession. During John Cryan's tenure as CEO, the company lost two-thirds of its stock value and investors have been pessimistic about his management and policies. The supervisory board involved in his firing believed that a new executive branch is what's most needed to implement the framework laid down by ousting CEO. The board has approved the promotion of a long-term employee who has been with the company for almost three decades. With the new CEO taking charge the stocks have already risen 3 percent and investors have signaled their optimism in this decision. It would be interesting to observe what the future holds for the bank given the change in its executive management.

http://money.cnn.com/2018/04/08/news/companies/deutsche-bank-new-ceo-cryan-sewing/index.html

Fed should continue raising rates, Powell says

The article briefly summarized the expectations of the Fed addressing the rising inflation and employment issues. The Fed expects to keep increasing interest rates to realize the expansionary monetary policy to achieve the target goal of economic growth. The Fed chairman said it was too early to make predictions and outlook on imposing tariffs for the trade disputes, it might be an indicator that the imposing tariffs will not be implementable for the trade war.

https://www.bloomberg.com/news/articles/2018-04-06/powell-backs-gradual-hikes-as-tame-wage-gains-have-room-to-run

Uber buys a bikeshare company as it looks beyond cars

Uber announced that they have bought a bikeshare company to compete w/ Lyft and to have multiple modes of transpiration available in its app. Bicycles have become trendy because they offer affordable mobility while limiting traffic congestion and pollution. Rzepecki told CNNMoney. "Now it's just about shifting mode and perception and getting people willing to try a bike instead of a car."

http://money.cnn.com/2018/04/09/technology/uber-jump-bikes-bikeshare/index.html

Tough Questions Facebook’s Zuckerberg Can Expect From Congress

Amy Peters

Tough Questions Facebook’s Zuckerberg Can Expect From Congress

            Mark Zuckerberg is due in congress for hearings this week regarding Russia’s manipulation of Facebook to meddle with the 2016 election.  Zuckerberg’s current meetings with lawmakers is due to his previous unsatisfactory responses to address this issue last year, as the company is still struggling to eliminate fake news and fake accounts on its platform.  For a long time Facebook has struggled with privacy issues, and Zuckerberg has admitted he is unsure how much of Facebook user’s data has been hacked into. Even though Facebook has now announced new actions to protect its users, Zuckerberg is still expected to receive some hard-hitting questions when he appears in Congress this week. For example, the government is interested in knowing how they can trust Facebook in the future, why shouldn’t the company face stiffer regulations, why didn’t the company act quicker when the Russian hacking was taking place and why hasn’t Facebook notified its users of these issues more aggressively.  I personally completely agree with these interrogation questions of Zuckerberg and I believe if his answers are not deemed satisfactory his company should face larger repercussions for this Russian scandal, as the safety of user’s information is a very serious matter. I believe if these privacy issues are not seriously addressed the government should consider shutting down Facebook or implementing higher regulations. 

https://www.bloomberg.com/news/articles/2018-04-09/tough-questions-facebook-s-zuckerberg-can-expect-from-congress

The Future of America’s Economy Looks a Lot Like Elkhart, Indiana

High laborforce participation rate, low unemployment, and the economy is operating a full tilt with competitive wages for workers with low human capital. This is the status quo for Elkhart, Indiana.

Enrico Moretti, a University of California, Berkeley, economist, is quoted in the article referring to "The Elkhart metro region operates like an oil economy—a Kuwait in the cornfields. The RV industry sets wages and standards to a level few competitors can match, making diversification difficult." This article is an interesting case and gives good insight to the role rural america can play within an economy working at full tilt. With all of that said, the article also sites the stark contrast of how much hurt the Elkhart economy felt in 2008 during the recession. Will other areas of the country persist in their economic growth despite more automation in sight?

https://www.wsj.com/articles/the-future-of-americas-economy-looks-a-lot-like-elkhart-indiana-1522942393?mod=e2fb

China’s shift

As China’s economy’s growth slows, they look to lower debt and increase long term stability. The key is to be able to deleverage and still grow, and the way China can do this is by continuing to develop their service economy. Over the past two years credit growth has dropped from 16% to 12%  mainly a result of deceased borrowing in the industrial manufacturing sector. This is good news for China who has been attempting to deleverage and shake up state owned enterprises for a while, but it will be interesting to see if this is successful or if they enter a banking crisis with the impending trade war.

https://www.google.com/amp/s/www.bloomberg.com/amp/view/articles/2018-04-05/china-cuts-debt-while-sustaining-economic-growth

The overheating economy could crash in 2019, this top forecaster says

A senior economist of the Raiffeisen Bank International Joerg Angele mentioned that the US economy is leaning towards a downfall, adding that he is extremely optimistic of the US economy in the medium term, but he fears that the growth is not sustainable, pointing to an overheating economy. The economy is growing much faster than its long-term potential rate of around 1.5%, with the rate of unemployment rate “way below” its long-term natural rate of around 5%, this being before the impact of tax cuts and budget stimulus hits. He mentions that the economy has “absolutely no need” for the additional stimulus of decrease in taxes and budget stimulus hits. He predicts the economy to grow at about 3% and the unemployment rate to drop from 4.1% to 3.5%. Angele claims that by the middle of 2019, the US economy will be at a sharp slowdown and perhaps even a recession. He compared this this to the scenario of 2000, when the economy grew 2%-3% above its natural rate, having a positive output gap and falling into a recession the following year.

Because of the overheating economy, he predicts that the Fed increase interest rates to cool the economy by increasing the opportunity cost to spend money rather save, thereby decreasing marginal propensity to consume. Angele mentions that he does not expect protectionism to have much of an impact on economic growth or inflation but a trade war with China would be harmful to the US economy.

https://www.marketwatch.com/story/the-overheating-economy-could-crash-in-2019-this-top-forecaster-says-2018-03-10

How to Clean Up the Student Loan Mess

Student loans are crucial to financing college educations, yet millions of borrows are in default.  There is signs that the system is in dire need of improvement.  New research on student loans is reinforcing the crucial lesson of behavior economics.  What seems like minor details matter in a major way.  Who answers the phone at the loan company, what choices you are offered and how they are framed can have a major effect on your financial well-being.  Federal policy ignores these facts as the federal government owns the loans, private companies collect payments, keep record and communicate with borrowers.  Seemingly small missteps can send a borrower spiraling into default.  The loan companies have misdirected payments, lost paperwork and charged the wrong interest rate.  Currently, we have a punishing system of garnishment in place for student loans.  It makes little sense to have the feral government seize money from these most vulnerable people while shying away from a sensible system.

https://www.nytimes.com/2018/04/06/business/how-to-clean-up-the-student-loan-mess.html?rref=collection%2Fsectioncollection%2Fbusiness

Trump wants look at $100B more in tariffs on China

President Trump, Thursday, said he had instructed the United States Trade Representative to consider $100 billion in additional tariffs against China. Shortly after Trump's announcement, U.S. Trade Representative Robert Lighthizer expressed support for the move, calling Trump's response "appropriate." Dow futures tanked following the news, with the index's implied open down more than 450 points at one point. This is such a big factor in the current US stock markets. Speculation has caused the tank but a recovery is inevitable its just a matter of how quickly occurs.

https://www.cnbc.com/2018/04/05/trump-asks-us-trade-representative-to-consider-100-billion-in-additional-tariffs-on-chinese-products.html

Tariffs would hurt US consumers and companies

This article raises the concern that American economy would suffer due to Donald Trump's decision imposing tariffs on China. Both the countries are heavily dependent on trade for economic growth and benefit. Restricting trade would be a huge blow to the US economy as China invested around 600 billions dollars in the US economy last year. Moreover, this can also harm the political reputation of the US in the world while China would benefit politically.

The article suggests that the best solution would be promoting export and foreign investments but Trump is willing to take the negative impact on the economy to prevent the theft of intellectual properties of American companies.


https://www.cnbc.com/2018/04/05/american-chamber-of-commerce-in-china-warns-on-impact-of-tariffs.html

Bavaria’s conservatives are embracing identity politics

This is an interesting article that discusses Bavaria's current political climate. Many people are calling for a "conservative revolution" based in aggressive politics surrounding identity and belonging. The article mentions a term "heimat" which translates to home. This conservative political experiment is rooted in Bavaria's close-knit culture.

https://www.economist.com/news/europe/21739965-new-favourite-word-germanys-csu-heimat-bavarias-conservatives-are-embracing-identity

Chairman Powell addresses for the domestic economy in relation to possible trade war

Powell said that there is no immediate threat to the economies health at this point. The FED will continue to gradually raise interest rates and that the labor market will remain strong. He then said it is too early to tell how the economy will react to the tariff. This is mainly because no one is completely sure the extent the tariffs will come into effect. He then moved to discuss the current economic strength saying the it is growing well with rises in income and high consumer confidence. It will be interesting to see just how the tariffs and impending trade war and varying economic policies will affect the economy in the near future.

Link to article:
https://www.nytimes.com/2018/04/06/business/economy/powell-federal-reserve-economy.html?rref=collection%2Fsectioncollection%2Fbusiness-economy&action=click&contentCollection=economy&region=stream&module=stream_unit&version=latest&contentPlacement=4&pgtype=sectionfront

Trump Officials Soften Tone on Trade Dispute With China

The trade war with China has continued to be threatened by the Trump administration as they look to facilitate discussion about “free and fair reciprocal trade.” It is common knowledge that foreign companies trying to enter Chinese markets must enter into unfavorable joint ventures which compromise proprietary information. The administration has already stated that it will be imposing $50 billion worth of tarrifs on chinese goods, and has threatened $100 billion more. Treasury Secretary Steven Mnuchin has publically said he does not expect a trade war with China to happen, and that the United States is open to discussion with China moving forward. Frequently, when Trump makes claims about increasing tariffs, the stock market tumbles 2+ percentage points. Remarks made supporting increased discussion between the US and China have helped stabilize the stock markets. We should expect to see more stable markets over the coming weeks until a final decision can be made about the next round of tariffs.

https://www.wsj.com/articles/trump-officials-soften-tone-on-trade-dispute-with-china-1523207017

How offices are beginning to go Green

Many companies are beginning to add more outdoor areas for their employees to enjoy while on break at work.  They are adding different items including walls of plants, Zen gardens, and greenhouses.  The companies believe that it will increase the flow of air and that wall of plants will be used as a natural air filter.  This could safe the business a lot of money and could increase the productivity of the workers because it may increase the satisfactory levels in the work environment.  The Bullitt Center in Seattle is an example of the changes that could happen in the future with the presence of solar panels and waterless toilets.  These green movements are what could thrive in the future because many people are getting on board with the green movement and usually if people see a company going green they will think highly of the certain company for having a plan to safe the environment.


http://money.cnn.com/2018/04/02/technology/office-buildings-carbon-footprint/index.html

Tesla is heading for a cash crunch

On April 1st, Elon Musk tweeted that Tesla has gone completely bankrupt as an April Fool's day joke. Unfortunately, this is close to being true. At the end of February, their shares decreased by approximately 16% due to a death using the autopilot feature, which then raised questions about the safety of the system. Things also got worse at the end of March. About 123,000 older vehicles were recalled due to corrosion of a bolt that have an effect on the steering and parking. It is not helping that Musk is only releasing expensive cars. Although Musk did make it known that he will mass produce cheaper cars. On the topic of releasing cars, Musk had a goal of producing 20,000 Model 3S cars per month, but ended up only producing 2,500 in the final quarter. High expectations of the Tesla brand transformed to low expectations from analysts and investors. In conclusion, Tesla's shares are well below where they were last year. "Car Biz is hell."

https://www.economist.com/news/business/21739981-road-ahead-elon-musks-car-company-looking-more-perilous-tesla-heading-cash

Trump tweets about Amazon.

President Trump has made many false claims about Amazon and the Washington Post which are both owned by CEO Jeff Bezos. He constantly claims the Washington Post creates “fake news,” and is also claimed it to be a “lobbying group for Amazon.” Trump has also claimed the company does not pay state or local taxes and false claims are dangerous for the market. Trump’s attack on the private company should not be taken lightly by anyone who is pro-business because a lack of good information puts the economy at risk because people cannot make decisions.

http://money.cnn.com/2018/04/05/news/trump-amazon-jeff-bezos-larry-summers/index.html?iid=SF_LN

Facebook announces changes to combat election meddling

The social media company will now begin labeling all political and issue ads, and showing who paid for them, and it will require anyone who wants to run a political or issue ad to verify their identity and location. This marks an expansion of Facebook's previous plans on this front, when these measures would have applied only to political ads -- typically defined as mentioning a specific candidate -- but not to ads that only talk about hot-button issues without mentioning candidates. Facebook says the new labeling will appear on ads later this Spring. The ads will be put into a searchable database, which will be released in June. The database will include details on how much the ads cost and what kinds of people the advertisers were targeting. Ads will stay in the database for four years. Facebook is also going to start verifying the people behind large Pages. To get verified by Facebook, ad-buyers and Page administrators will have to provide the company with a government issued ID and a physical mailing address. Facebook will mail them a letter with a special code to confirm the address. Advertisers will have to tell Facebook which candidate, organization or business they're representing as well.

http://money.cnn.com/2018/04/06/technology/facebook-election-meddling-political-ads-pages/index.html

Bitcoin holds steady above $7,000 as 2 Wall Street legends reportedly eye the crypto market

In the article Bitcoin holds steady above $7,000 as 2 Wall Street legends reportedly eye the crypto market by Frank Chaparro it talks about the price fluctuations of Bitcoin and how it is now up 2.1%. More importantly the article talks about how two of the big Wall Street investment firms are going to get their hands in crypto-curreny. This being Soros Fund Management and Venrock. This is said to be encouraging for crypto-currency because firms with good historical track records are now getting behind it. 

http://www.businessinsider.com/soros-fund-venrock-embracing-bitcoin-2018-4 

Teacher Strikes Show That Workers Have Newfound Power

https://www.bloomberg.com/view/articles/2018-04-06/teacher-strikes-show-that-workers-have-newfound-power

This article explores the recent growth in wages.  Recently, teacher strikes in West Virginia, Kentucky, Oklahoma, and Arizona have resulted in an increased negotiated pay.  Teachers have a long history of being noted as underpaid and these recent successes show a change in labor psychology. Although, there have always been labor unions this is the first time in a while where teachers have really put up a fight.  Additionally, Walmart has set a bar for the retail sector by raising low-end wages. Previously, it was thought that firm concentration held down wage growth, but now it appears with tight labor markets there is a different mindset for employers and employees about wages.  I am curious to see if there will be more teacher strikes or what other sectors might potentially strike in hopes of increasing their wage.

Trump, allies play down concerns about effect of trade war with China on economy

For years, countries around the world have been frustrated with China's unfair trade practices, including the United States.  When President Trump took office, he had a goal to push back against China to get them to correct their practices, and him and his advisers have stated that is exactly what they want, nothing more.

One concern that arises from the imposition of tariffs is that China will impose even stricter tariffs, resulting in a trade war that could harm farmers all across the US, but specifically those who harvest soybeans, as the US is the second-highest exporter of soybeans in the world.  Trump's advisers have re-stated to the American people that we are not the problem, yet it is China who does not want to correct their unfair practices.

While there is concern for a trade war, it is highly unlikely.  President Trump kept his word on addressing this issue, and I believe he will be successful in helping to correct China's unfair practices.


https://www.washingtonpost.com/politics/trump-allies-play-down-concerns-about-effect-of-trade-war-with-china-on-economy/2018/04/08/47796dd0-3b31-11e8-974f-aacd97698cef_story.html?utm_term=.3f909517d43f

An Economic Miracle in Hungary, or Just a Mirage?

The main point of this article is debating whether Hungry's economy is doing significantly better under prime minister Orban or not. On the surface, the economy looks like its doing much better than in previous years. Kingsley writes, "Government debt, as a proportion of Hungary’s gross domestic product, has fallen more than 6 percentage points since 2010. The country’s credit ratings have improved. The budget deficit has roughly halved. Growth has almost quadrupled. Wages have risen by more than 10 percent. Though still high, deprivation has fallen by nearly half — not least in places like Siklosnagyfalu, where villagers benefit from their workfare wages. Officially, unemployment has dropped by nearly two-thirds." This all seems very positive, but on the other hand, it seems as if government corruption is rising and many people are doing work that doesn't not really need to be done which is the reason why the unemployment rate seems so small.

https://www.nytimes.com/2018/04/03/world/europe/viktor-orban-hungary-economy-election.html