Japan's economy is on the edge of entering a recession. This global power is the world's third largest economy. However, it has been consistently declining in growth without a current end in sight. Japan has been heavily impacted by the outbreak of the coronavirus in China. The Chinese and Japanese economies are closely tied to one another. With the slow down of China's economy, Japan has struggled to improve their already poor economic situation.
Japan's tourism industry has been greatly effected by the spread of the virus. Last year Japan welcomed 8.1 million Chinese tourist into their country. Japan sees more visitors from China than any other country in the world. With the effort to contain the disease a top priority, tourism has declined.
Do you believe Japan will enter a recession? Is there anyway to prevent the 'inevitable'?
https://www.cnn.com/2020/02/17/economy/japan-gdp-economy/index.html
Thursday, February 20, 2020
Wednesday, February 19, 2020
Energy Companies Are Facing Looming Amounts of Debt
U.S. oil and gas companies are in need of cash, but it won't come cheap. As of now, explorers and producers have more than $85 billion in debt maturing over the next four years. Companies with poorly rated debt will have a difficult time engaging in capital markets in 2020, which increase the risk of waves of defaults. According to Moody's analyst, Sajjad Alam, "Despite our expectation of a generally low interest rate environment
globally, such companies face greater risk because of continuing
overproduction, depressed natural gas prices and widespread investor
risk aversion toward the exploration and production sector". The difference in pricing of interest rates based upon the borrowing of certain natural gas producing companies emphasizes how investors have become increasingly selective in a sector where they have lost massive amounts of money through bankruptcies due to the crash in oil prices back in 2015. It is still a credit picker's market.
If more of these companies default, is there an expectation that we will see a surge in the price of oil? If so, will that persuade interest rates to rise significantly? What impact will this have on the economy?
If more of these companies default, is there an expectation that we will see a surge in the price of oil? If so, will that persuade interest rates to rise significantly? What impact will this have on the economy?
HSBC plans to cut 35,000 jobs as profit drops 33%
Hong Kong and Shanghai Banking Corporation (HSBC) is one of the largest players in the Asian banking industry, and has placed itself across the United States, the United Kingdom and Canada alongside. Due to the growing impact of the Corona Virus, the company's profits went down by over one third since 2019, resulting in a reduced global headcount by laying off 15% of their workers. The bank requires a large restructuring plan, and since it has underperformed in U.S markets, they plan to close over a third of their branches and shift them to the Middle East instead. Furthermore, they are shrining their assets by $100 billion, and this restructuring is costing them an added $7.2 billion by 2022. Additionally, the falling interests rates in China have been severely damaging to the financial sector, resulting in several banks rethinking their development strategies. If the virus continues to grow, the bank will face $600 million in further credit losses. Mainland China was a core engine of growth for the country, but now faces deteriorating impacts with many multinational corporations and banks such as Apple facing a decline in their production and performance. Do you believe other banks and corporations will restructure their production plans and geographical placements if the virus continues to grow? If that is the case then how would China's economy recover from this economic downturn without the help of foreign invesmtnets?
https://www.cnn.com/2020/02/18/business/hsbc-results-2019-announcement/index.html
https://www.cnn.com/2020/02/18/business/hsbc-results-2019-announcement/index.html
US producer prices post biggest gain in more than a year
In the United States, producer prices were the Highest in January than they have been in over a year. This is due to health care costs and hotel accommodation along with machine and vehicle production. The producer price index increased .5% last month. There was also an increase in consumer prices in January. These rises have economists worried about our inflation rate as the US is trying to reach their desired 2% inflation. The Fed decided to leave interest rates alone in January and delay monetary policy measures another year. What do you think there is to worry about as producer and consumer prices rise?
Monday, February 17, 2020
Silicon Valley Heads to Europe, Nervous About New Rules
https://www.nytimes.com/2020/02/16/technology/europe-new-AI-tech-regulations.html
European Union lawmakers are currently debating on passing a new digital policy which enhances regulation on companies, which use, Artificial Intelligence. This includes Google, Facebook, and Apple among others. These three gigantic companies have made big investments in Artificial Intelligence and U.S. government has been funding greatly to help grow this new technology. In the US and Canada, the number of international PhD students graduating in AI continues to grow, and currently exceeds 60% of the PhDs produced from these programs. AI labor demand is growing especially in high-tech services and the manufacturing sectors. However, in the case of Europe, the debate is to draw attention towards potential risks by adopting Artificial Intelligence; privacy concerns, trusting complex algorithms to diagnose diseases, and the use of self-driving cars. To what extent, digital economy will be impacted by these regulations? In your point of view, what are the ethical challenges which government should be concerned of, in regard to, AL use?
European Union lawmakers are currently debating on passing a new digital policy which enhances regulation on companies, which use, Artificial Intelligence. This includes Google, Facebook, and Apple among others. These three gigantic companies have made big investments in Artificial Intelligence and U.S. government has been funding greatly to help grow this new technology. In the US and Canada, the number of international PhD students graduating in AI continues to grow, and currently exceeds 60% of the PhDs produced from these programs. AI labor demand is growing especially in high-tech services and the manufacturing sectors. However, in the case of Europe, the debate is to draw attention towards potential risks by adopting Artificial Intelligence; privacy concerns, trusting complex algorithms to diagnose diseases, and the use of self-driving cars. To what extent, digital economy will be impacted by these regulations? In your point of view, what are the ethical challenges which government should be concerned of, in regard to, AL use?
Companies warn of economic crisis as China fights the coronavirus
The coronavirus and the panic surrounding it have put China into difficult place economically. Leaders in China predicted GDP growth of 7.5% at the beginning of the year, but those predictions have sharply decreased. Share prices in mainland China have fallen by 10% since January 20th. The quarantine of the Hubei province promises to have large-scale consequences on its own. Because of roadblocks, chicken farmers do not have enough feed and have suggested that their chickens might starve, which would likely cause a food shortage. Others think that if the lockdown continues, many could lose their jobs. Economic activity is stagnating because of the virus as few people want to leave their houses. Predictions for China's economic growth have been revised to be much lower than they were initially.
What do you think the future holds for China's economy if the virus and quarantine continue? What can the Chinese government do to manage the impacts of this?
https://www.economist.com/finance-and-economics/2020/02/04/companies-warn-of-economic-crisis-as-china-fights-the-coronavirus
What do you think the future holds for China's economy if the virus and quarantine continue? What can the Chinese government do to manage the impacts of this?
https://www.economist.com/finance-and-economics/2020/02/04/companies-warn-of-economic-crisis-as-china-fights-the-coronavirus
Here Are Vulnerable Parts of the U.S. Economy That the Corona Virus May Infect
China's economy is taking a big blow due to the new corona virus. But the U.S. economy will also suffer from the virus. Goldman and Sachs predict the virus will slow our economy by 0.6% which is a fairly large hit to an economy that grows at 2% annually. The virus is mostly affecting industrial progress and imports from China. This will likely last for a large chunk of 2020. On the upside, household spending is staying strong in the U.S. and our economic growth will be driven by the consumers.
https://www.marketwatch.com/story/here-are-vulnerable-parts-of-the-us-economy-that-coronavirus-may-infect-2020-02-15
https://www.marketwatch.com/story/here-are-vulnerable-parts-of-the-us-economy-that-coronavirus-may-infect-2020-02-15
Sunday, February 16, 2020
Why is the Labor Force Participation Rate Not Recovering?
https://www.washingtonpost.com/business/2020/02/15/powell-labor-force/
Many people are quick to point fingers at welfare programs for people choosing not to work and dropping out of the labor force. Federal Reserve Chair Jerome Powell seems to think that that's not the issue. For one, many of the U.S.'s programs that help those in poverty require that those who receive aid must be working or actively seeking a job. Secondly, in real terms, the amount of aid that people have been receiving has pretty steadily declined. Presumably, if these accusations were to hold true, people would be more likely to seek work if their benefits were going down. Instead, the opposite is happening and benefits are going down at the same time as the labor force participation rate slacking. The real problem, according to Powell, are education and the opioid crisis.
As education becomes harder for many people to attain, whether they are getting priced out of higher education or not receiving proper help in under-funded public schools, they are less likely to find work. Since jobs are increasingly likely to require some sort of college degree, those who don't make it past high school are out of luck and may become discouraged enough to stop seeking work. The raging opioid crisis doesn't help as more people become dependent on drugs and find it harder to maintain a career. Powell claims that boosting the labor force participation rate is a top national priority.
Many people are quick to point fingers at welfare programs for people choosing not to work and dropping out of the labor force. Federal Reserve Chair Jerome Powell seems to think that that's not the issue. For one, many of the U.S.'s programs that help those in poverty require that those who receive aid must be working or actively seeking a job. Secondly, in real terms, the amount of aid that people have been receiving has pretty steadily declined. Presumably, if these accusations were to hold true, people would be more likely to seek work if their benefits were going down. Instead, the opposite is happening and benefits are going down at the same time as the labor force participation rate slacking. The real problem, according to Powell, are education and the opioid crisis.
As education becomes harder for many people to attain, whether they are getting priced out of higher education or not receiving proper help in under-funded public schools, they are less likely to find work. Since jobs are increasingly likely to require some sort of college degree, those who don't make it past high school are out of luck and may become discouraged enough to stop seeking work. The raging opioid crisis doesn't help as more people become dependent on drugs and find it harder to maintain a career. Powell claims that boosting the labor force participation rate is a top national priority.
Everyone Loses on Huawei
Everyone Loses on Huawei
The Uk government has introduced a new policy on Huawei equipment in its telecom network on January 28, 2020. And everyone was lost on it. Prime Minister Boris Johnson has given his own administration a black eye because they are against lots of Chinese companies.
President Trump and US officials want Britain and other allies to ban Huawei equipment on security grounds because the US believes that Huawei’s poorly understood relationship to China’s Communist Party government is something that may threaten their countries’ security.
Under the influence of the US, Britain’s National Cyber Security Center starts to question whether Huawei equipment threat to security. The UK allowed HUAWEI’s components in noncore functions but they set restrictions around sensitive sites and also a cap of 35% on Chinese equipment in the network.
The Uk thinks a comprehensive trade agreement with the US and continued deep security cooperation are more important to the UK. However, Mr. Johnson maybe worry about offending Beijing since Britain’s trade with China is still very important to the UK after Brexit. There is a doubt about the UK's action. If the UK's government really thinks Huawei threatens national security why they still allow Chinese equipment used in telecom networks.
The most important reason why the UK worries about it is that they are afraid that excluding Huawei will slow the development of the UK's internet. This is a common concern in Europe. Because of the very high cost, Europe did not develop its internet technology, which the internet is very slow than China and the US. Huawei's 5G technology is the best hope to achieve connection speeds and service other countries' internet technologies.
The reason that the US has tried to ally forces against Chinese overseas companies is because of the Us-china trade war. The US considers China to be the leading cause of its trade deficit. However, the US trade deficit is a perennial, not a year or two, and America's trade deficit is not just with China but with everyone. Therefore, the trade war is caused by trade imbalance, not by China alone. A strategy that slows the growth of the global Internet is not a good solution to a trade war between China and the United States. How do you think the trade war heats for global economy and technology development？
American, United pull Boeing 737 Max from summer schedules until past mid-August
United Airlines on Friday pulled the Boeing 737 Max from its schedule until Sep. 4 and expects to cancel more than 7,700 flights from June through September, after the manufacturer warned last month that it doesn't expect regulator approval for the planes until mid year.
American Airlines followed suit with a schedule adjustment on Friday, removing the planes from its summer flying plans until Aug. 18 “based on the latest guidance.” The move comes after Southwest Airlines said Thursday, removed the 737 Max from its schedules until mid-August, as carriers prepare for another peak summer travel season without the fuel-efficient planes. Boeing told airlines and suppliers that it didn’t expect regulators to sign off on the 737 Max until the middle of 2020, much later than the manufacturer’s previous predictions. The 737 Max has been grounded since March after two fatal crashes — in Indonesia in October 2018 and in Ethiopia less than five months later — killed all 346 people on the two flights. A flight-control system aboard the planes was implicated in both crashes. Even if the 737 Max did return before Sep. 4, United does not plan to swap it for any of its summer flights, according to Scott. The airline continues to take measures to ease disruptions from the 737 Max grounding, including automatically rebooking affected customers.
What will be the share prices of these airlines after this decision ?
Global oil demand outlook from the IEA
Global oil demand is now expected to see its first quarterly contraction in over a decade, according to the International Energy Agency (IEA), as the new coronavirus and widespread shutdown of China’s economy hits demand for crude.
Demand is now expected to fall by 435,000 barrels a day (b/d) in the first quarter of 2020, down from the same period a year ago, and marking the first quarterly contraction in more than 10 years, the IEA said in its monthly oil market report Thursday.The expected decline in demand prompted the agency to cut its 2020 growth forecast by 365,000 b/d to 825,000 barrels a day, the lowest since 2011. Lower-than-expected consumption in the OECD countries trimmed 2019 growth to 885,000 b/d, it also said.
The forecast downgrade comes as the coronavirus, which has infected over 59,000 worldwide and killed over 1,300 people, continues to weigh on global market sentiment and China's economic activity with factories and businesses closing and travel restricted both to and from China and within the country. The negative impact on oil demand hit oil prices hard as the virus took hold in January with a barrel of Brent crude falling by around $10 to fetch below $55 a barrel.
Will the coronavirus have a further affect on the world oil prices?
https://www.cnbc.com/2020/02/13/global-oil-demand-outlook-from-the-iea.html
China struggles to balance coronavirus with economic cost as millions return to work
China is facing new problems as many Chinese employees return to work after the outbreak of the coronavirus. The Chinese government is having to find middle ground between keeping the virus contained and not allowing the economy to be damaged any further. This week many companies will be opening their doors again and resuming production. With foreign buyers seeing a shortage of Chinese imports, this is creating more stress on firms.
A solution many people are coming up with is working from home. Many workers in the software industry have been given the ability to continue work from their homes in order to lessen the potential exposure of the disease. This would also fix the problem of the growing transportation shortage that people are facing. Workers are having trouble even finding a way to get to work.
The government has assured its people that the containing of the virus is their top priority. However, they are aware production can not be at a stand still for much longer. Encouragement of workers returning to they jobs has increased. Firms must file permission to reopen their doors from the government, which has slowed down production that much more. Returning workers are required to wear masks and have their temperatures checked twice a day as a precaution.
Do you believe containing the virus or unfreezing the economy should take priority? Is there a way to balance both?
https://www.scmp.com/economy/china-economy/article/3050210/china-struggles-balance-coronavirus-containment-economic-cost
A solution many people are coming up with is working from home. Many workers in the software industry have been given the ability to continue work from their homes in order to lessen the potential exposure of the disease. This would also fix the problem of the growing transportation shortage that people are facing. Workers are having trouble even finding a way to get to work.
The government has assured its people that the containing of the virus is their top priority. However, they are aware production can not be at a stand still for much longer. Encouragement of workers returning to they jobs has increased. Firms must file permission to reopen their doors from the government, which has slowed down production that much more. Returning workers are required to wear masks and have their temperatures checked twice a day as a precaution.
Do you believe containing the virus or unfreezing the economy should take priority? Is there a way to balance both?
https://www.scmp.com/economy/china-economy/article/3050210/china-struggles-balance-coronavirus-containment-economic-cost
A Growing Presence on the Farm: Robots
As the world population continues to grow the need for food climbs with it. The world is in need of solutions to help increase food production without using more land then what is already in use. In the article by Knvul Sheikh posted in the NY Times, we are introduced to the TerraSentia and many other devices like it. The TerraSentia is a robot that goes across rows of crops and measure various parts of the crops which is called Phenotyping. The process has been used for hundreds of years in order to help farmers grow better crops that help produce more output.
The world is going to be put in a situation where innovations to agriculture will need to be made in order to keep up with the ever growing population but will tech ideas like the TerraSentia be a piece to solving the puzzle or just another failed idea? Revolutionary ideas and products like the TerraSentia would not only help farmers, but would also push the robotics/tech industry forward in more sectors of the market. How do you see it? Will ideas like this be the change needed to push the agricultural sector forward? or is this just another false hope that will likely fail?
https://www.nytimes.com/2020/02/13/science/farm-agriculture-robots.html
The world is going to be put in a situation where innovations to agriculture will need to be made in order to keep up with the ever growing population but will tech ideas like the TerraSentia be a piece to solving the puzzle or just another failed idea? Revolutionary ideas and products like the TerraSentia would not only help farmers, but would also push the robotics/tech industry forward in more sectors of the market. How do you see it? Will ideas like this be the change needed to push the agricultural sector forward? or is this just another false hope that will likely fail?
https://www.nytimes.com/2020/02/13/science/farm-agriculture-robots.html
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