Inclusive Capitalism

http://www.nytimes.com/2015/01/21/opinion/can-capitalists-save-capitalism.html?_r=0

Despite the decisive victory of free-market capitalism over a planned economy, income inequality is a persistent problem in a capitalist economy. According to the article, income inequality may result in insufficient aggregate demand. Moreover, insufficient purchasing power of people in the bottom tier of income distribution may threaten the survival of corporations and the top 1 percent as they lose profit making opportunities. To overcome the problem, economists and politicians alike are proposing a modification of the current economic system of market capitalism to “Inclusive Capitalism.” Inclusive capitalism is intended to counter income inequality by restraining the accrual of wealth at the top and providing the ones at the bottom with equal economic opportunities to make the economic system sustainable. The article further details the ways in which inclusive capitalism could be implemented. The article also informs us of the constant need for economic systems to evolve and adapt in order to address new and arising economic and social problems. 

ECB unveils massive QE boost for eurozone

article link : http://www.bbc.com/news/business-30933515


President Mario Draghi of the European Central Bank has declared that the ECB plans to implement quantitative easing in the Eurozone economy.  The ECB will pump approximately 1.1 trillion Euros into the hurting European economy.  The ECB will spend 60 billion euros on bank bonds each month until September of 2016.  Quantitative easing in theory will increase the supply of money which will keep interest rates low and encourage people to borrow money.  The borrowing of money will hopefully enable people to spend more money which will allow the economy to grow.  The ECB states that the interest rates will be maintained at 0.05%.  This low interest rate will encourage people and businesses to borrow from financial institutions, meaning that these people have more money to spend and pump into the economy.  Many economists in Europe believe that the quantitative easing plan has be prolonged far too long and that finally implementing this plan will help bring the European economy out of an economic slump.  Despite the amount of economic issues in Europe, it will be interesting to see how this plan will affect the European economy and its financial sectors in the future.

US jobless claims fall from 7-month high

http://www.cnbc.com/id/102356246

The number of Americans filing new claims for unemployment benefits fell last week from a seven-month high, pointing to continued improvement in labor market conditions.

Initial claims for state unemployment benefits slipped 10,000 to aseasonally adjusted 307,000 for the week ended Jan. 17, the LaborDepartment said on Thursday.

That reversed the bulk of the prior week's increase which had pushedclaims to their highest level since early June. The rise was dismissed by economists as "noise" given that claims data is difficult to adjust for seasonal variations around the Christmas and New Year holidays.

Economists polled by Reuters had forecast claims falling to 300,000last week. The prior week's data was revised to show 1,000 more claims received than previously reported.

The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, increased 6,500 last week to 306,500, taking it above the 300,000 mark for the first time since September.

The claims data covered the week during which the government surveyed employers for January's nonfarm payrolls.

Despite the gyrations in claims and the four-week average rising 7,750 between the December and January payroll survey periods, there is little doubt that the labor market is tightening.

Employment gains have exceeded 200,000 in each of the last 11 months, the longest stretch since 1994, and job openings are near 14-year highs. In addition, the ratio of unemployed people for every job opening is the lowest since early 2008.

The claims report showed the number of people still receiving benefits after an initial week of aid increased 15,000 to 2.44 million in the week ended Jan. 10.

Our economic system enriches the most powerful at the expense of the 99%

http://www.theguardian.com/public-leaders-network/2015/jan/20/economic-system-enriches-most-powerful-oxfam

Oxfam calculates that by next year, for the first time, the wealth of the richest 1% of the world’s population will overtake that of the remaining 99%. This is shocking proof, if more were needed, that away from all the theory and hot air about inclusive growth, our current system is wired to do exactly the opposite: to enrich the most powerful. Either we fix this now in a controlled way or it will fail later, with unknowable but probably chaotic consequences. Political instability and violence should give us greater reason now to tackle inequality, poverty and exclusion, rather than fresh excuses not to. [....]Inclusive growth should allow the poorest people in our societies to gain a greater share of the pie at the expense of the richest. Inclusive growth should result in more and better paid jobs, and good quality services for everyone, particularly in health and education. [...] To reach the most marginalised people in our societies it is crucial to have effective welfare systems. [...] “Extreme inequality isn’t just a moral wrong. It undermines economic growth and threatens the private sector’s bottom line. All those gathering at Davos who want a stable and prosperous world should make tackling inequality a top priority.”

Eyes on Fed after ECB, other bank stimulus moves

http://finance.yahoo.com/news/eyes-fed-ecb-other-bank-230353763.html



              The European Central Bank (ECB) recently released a rather larger stimulus package this past week to help boost their own economy. This stimulus however has begun to effect potential policies here in the US. This stimulus effects the Feds plan to raise interest rates by the middle of this year. A policy that is out of sink with what is going on in the rest of the world. Even though the US seems to becoming out of economic turmoil there is still a stong sense of Global Central Policies. The raising of interest rates in the US could effect foreign economies who are putting in to place expansionary policies. This would make commodity prices even higher and add to the threat of global deflation. I think the Fed needs to take into account GCP and how changes will effect other countries  before making any new policies.

ECB Executive Gives Warning Over Weakened European Union

On Thursday, the European Central Bank launched its 1.1. trillion economic stimulus plan but a top official, Benoit Coeure, warned that unemployment and low growth have threatened the structure of the European Union.  Futhermore, Coeure has encouraged governments in the EU to speed up economic reform since the bank itself cannot generate lasting growth.  The ECB will reiterate this point when they hold talks with the finance ministers on Monday.  Even with record low interest rates, the EU economy has not seen much improvement.  In the stimulus plan, the ECB will buy about 60 billion in bonds each month from EU banks until September 2016, in what is called quantitative easing.  Lowering the cost of borrowing should hopefully stimulate banks to lend and encourage EU businesses and consumers to spend more.  This strategy has been used in the US and Japan and appears to have worked.

http://www.bbc.com/news/business-30966499

The Moral Heart of Economics

http://economix.blogs.nytimes.com/2011/01/25/the-moral-heart-of-economics/?_r=1

Most of this article discusses the morals behind/associated with economics. It also discusses the freedom associated with various economic systems and the private rights of individuals/amount of decisions they have. "Improvements in welfare occur when there are improvements in utility, and those occur only when an individual gets an option that wasn’t previously available. We typically prove that someone’s welfare has increased when the person has an increased set of choices." Overall, the article argues that any system of economics should be able to provide more choices for individuals; because of this, it increases not only the individual's quality of life but also is a moral science.

UK car production increasing again

http://www.bbc.co.uk/news/business-30945288

Investment in car production facilities in the UK of over £7 billion and the added popularity of premium cars abroad over the past two years helped sales boost to 1.2% in 2014.The British Society of Motor Manufacturers and Traders (SMMT) states that “demand for premium brands, such as Jaguar Land Rover, had helped boost annual sales […]”. However, overall number of vehicles exported fell.  In the article, Mike Hawes, SMMT´s chief executive, states that "[…] the industry has overcome various challenges, including slower than expected EU recovery and weakness in some global markets.", which makes a 1.2% growth in UK car manufacturing, although a relatively small figure, representing a successful year when placed in context.

National Governments Battle the Europe Union Over Energy

http://www.economist.com/news/europe/21639577-european-union-heads-battle-national-governments-energy-only-connect

The EU has made it clear once again that the free flow of energy between member nations is a top priority, but the energy commissioner, Maros Sefcovic, has run into several hurdles from national governments and Russia. The flow of gas has currently been reduced in Eastern Europe due to the continuing conflict between Russia and Ukraine. Flow from Ukraine to Slovakia has been reversed to meet demand in Ukraine. Several smaller EU-members have also been hurt as supply lessens across Europe because of their limited access to pipelines. Last year Russia proposed a pipeline (South Stream), but it was ruled illegal because the same Russian company would both run the pipeline and own the gas going through it. Now the EU is scrambling to build legal ones with connecting electricity cables in the same area, but it is running into resistance because of internal corruption (including Russian influence that often halts infrastructure) and obstinate behavior from national governments. Many provide energy through state-owned companies and do not want possibly cheaper energy coming in from their neighbors. In the mean time the commission is also battling Gazprom (Russian gas company) over abusing single market rules in vulnerable states.

I believe that the situation will work out in favor of the EU as far as Russia goes because of their currently weakened state from falling gas prices. Now is the time to prosecute the companies that have obviously been manipulating the market in Eastern Europe. As far as making EU members play nice on inter-connectors, those who are currently obstinate will stay obstinate because they know its risky for nationalized industries. There would have to be a EU set price index for the inter-connectors to work like they should.

South Korea growth hits six year low in fourth quarter

According to the article, in Q4 of 2014, the fourth largest economy in Asia and critical U.S. trading partner, South Korea, experienced a significant drop in GDP growth rates, to 0.4% from Q3's 0.9%. This fell well short of projected Q4 growth of 2.7% due to falling infrastructure spending and a drop in the quantity of South Korean exports. This drop in spending was due to weakening tax revenues cutting the tax base available for investment. This below-projection data may force the South Korean central bank, the Bank of Korea, to continue cutting interest rates, when it next meets in February. (http://www.bbc.com/news/business-30945571)

This could have wider implications for the economies of southeast Asia and be an indicator of economic problems to hit the region. The region has grown rapidly in terms of GDP since about 1985, and only recently appears to be slowing in terms of economic growth: China and Japan have both posted less-positive economic indicators, and economists have indicated concerns over the stability of the tax base in southeast Asia, in addition to various economic bubbles, which could lead to collapsing confidence in the regional economy, stunting continuing growth and leading to longer-term economic headaches for economic planners in the region.

Eurozone Nations Face Stronger Pressures to Lift Economies

http://www.nytimes.com/2015/01/23/business/international/ecb-unleashes-aggressive-stimulus-plan.html?action=click&contentCollection=International%20Business&region=Footer&module=MoreInSection&pgtype=article

European Central Bank plans to buy about $69 billion, of government bonds and other debt each month to stimulus the economy. They also plan to cut the interest rate it changes on loan to commercial banks from 0.15 percent down to 0.05 percent. The expected result is that there would be an increase in inflation and growth in individual countries.  Moreover, governments would also be given a share of any profit the Europe Central  Bank might make.  "Mario Moretti Polegato, president of the Italian shoemaker Geox, said quantitative easing could help restore a sense of optimism." Although, this is a great step the European  Central bank has taken to restore the economy, this alone, in absence of the government's stimulus policy, would no be able to change much of the situation i am afraid.

The Economics of Optimism

http://www.economist.com/news/finance-and-economics/21640361-debate-heats-up-about-what-goals-world-should-set-itself-2030

The article primarily focuses on which goals the world should set and achieve by 2030.  Bill and Melinda Gates proposed in their annual letter that "the lives of people in poor countries will improve faster in the next 15 years than any other time in history" and that the lives of people in poor countries "will improve more than anyone else's."  Sustainable Development Goals, or SDGs, is a United Nations initiative that is intended to be agreed upon by world leaders at the UN General Assembly in September.

SDGs are being directly contrasted with Millennium Development Goals, or MDGs, which the Gates' family strongly supported.  SDGs will replace MDGs as several of the eight MDGs have been achieved.  MDGs consisted of eight goals with 18 targets while SDGs are proposed to consist of 17 goals with 169 targets.

Many economists are arguing over whether the SDGs have too many goals and targets.  Some believe that "having 169 targets is like having no targets at all".  I feel that the number of goals should be reduced from 17 to 10.  I feel that this makes the SDGs more focusable and marketable.  Do you feel that the number of SDGs should be reduced or do you feel that the broader the set of goals and targets, the better?

Google is Becoming a Wireless Carrier

For years, Google has been preparing to offer wireless mobile service.  They currently design and sell phones online, make the most used mobile software in the world, and are capable of providing internet service with Google Fiber.  However, instead of paying for and putting up their own cell towers, they will use the networks of Sprint and T-Mobile to provide their service.  In return, Google is expected to pay $2 per gigabyte to those carriers, which will still allow them to provide very cheap service.  That being said, what would happen to AT&T and Verizon, who would lose market share and not benefit at all from Google customers?  Another interesting point in the article: if this happens, will Apple look into providing their own service with their iPhones?

http://money.cnn.com/2015/01/23/technology/mobile/google-wireless/index.html?iid=HP_River

Quantitative Easing in the Euro Zone

http://www.economist.com/news/finance-and-economics/21640371-policy-will-help-less-so-other-big-economies-better-late

Recently, there has been relatively low demand and falling prices in Europe causing "lowflation". The European Central Bank has tried many things to combat this deflation and low demand, including offering negative interests rates which also did not work. Months had gone by, and the ECB had decided to engage in quantitative easing. They plan on spending roughly 60 billions pounds, or $70 billion, for over two years to flood the money supply. The ECB has hopes that quantitative easing will help their recovery from the double-dip recession they have recently experienced. Their two channels in which QE will work is by the "signalling effect" (signalling to markets and firms to bring inflation closer to 2%) and the exchange rate (their hopes to strengthen the exchange rate since the serious weakening of it last spring). I think that by engaging in QE, the Euro zone could gain a little more strength in their economy and get them back on the upside of their current cycle.

Japan to be year late in hitting inflation target

http://www.bbc.com/news/business-30939747

According to the article, Bank of Japan's Governor expressed his opinion on Japan's goal of reaching 2% inflation would not be able to achived this year. Governor Kuroda thinks one more year is what Japan needs before reaching that level of inflation. One of the reasons for his deduction is the current low oil price that is affecting Japan heavily as the country does not produce any oil by itself but mostly importing. However he believes growth will soon to kick in and discussion about raising wages to match the expected level of price rise should be considered soon.

Japan's trouble in recent years has always been deflation, thus explaining why Shinzo Abe has been continuously trying to weaken the Yen to increase price level. I think the economic depression that happened last year was a surprising big hit to their economy, although I agreed with Shinzo Abe's approach and believe that Japan will soon reach their target of 2% inflation, although it might take longer than what Kuroda has anticipated.

Obama for equity

http://www.economist.com/news/united-states/21640351-barack-obama-tries-set-tone-2016-middle-class-economics

          The link above takes you to the article in Economist about Obama's recent exhibition of the intent to bring equity in the American economy. The most striking part of the article discussed what plans President Obama has for the taxation policies. Obama expressed enthusiasm regarding hiking capital gains tax on the top earners and closing a loop-hole which allowed capital gains tax to be avoided when the owner of an asset dies. The tax proceeds from the increased taxation are aimed at tax cuts for people with lesser incomes. Yet, interestingly, Republicans were more concerned about the impact this could have on investment and jobs. I personally think that the tax cut is a great idea and will not impact jobs as significantly as the Republics propose.

Brazil Raises Interest Rates to Help Curb Inflation

Brazil has increased their interest with the intention of having an aggressive rate of monetary tightening to stop high inflation. Bringing down the inflation will allow for more investment to take place in the country. Brazil’s central bank voted unanimously to increase the benchmark Selic rate to 12.25%.  They want to bring the 12-month inflation to 4.5% midpoint of the official inflation range by 2016. However the president administration plans on having many spending cuts and increases the price of electricity and bus transportation, which could counteract what the central banks plan is. 

http://www.nytimes.com/2015/01/22/business/international/brazil-raises-interest-rates-to-help-curb-inflation.html?src=busln&_r=0

What the Frack? The Importance of U.S. Institutions

http://www.foreignaffairs.com/articles/141203/robert-a-hefner-iii/the-united-states-of-gas

The author explains that those countries hoping to replicate the US's "fracking" revolution might be unsuccessful. Not because of the difficulty of developing the technology but, instead, because of certain institutions that are integral to the development of natural resources. The author makes the case that only the US's unique understanding of property rights--in addition to other important institutions-- made the fracking revolution an uniquely American experience.

I think that the author is correct, but what do you think?

Venezuela Poor Keep Faith in Maduro's Subsidies as Oil Plunges

Venezuela continues to feel the negative effects of low oil prices around the World. During the term of Hugh Chavez, oil companies were turned into state owned entities. During this time, Venezuela flourished with the then high prices of oil. The country also spent most of this money leaving little savings. After the death of Chavez, Nicolas Maduro took over and has his hands full with a horrific economic situation. This economic situation has been defined by superinflation, scarcity and uncertainty. Oil currently makes up 97% of Venezuela's hard currency earnings, so it is no surprise the country is suffering the way it is.
In the midst of all of this many have and would blame Maduro, however the poorest citizens of Venezuela are sticking with the president. One reason for their loyalty is Maduro's avoidance of cutting social programs. The country must do something soon to turn it around as they are predicted to default within the next year.

Source: http://www.bloomberg.com/news/2015-01-19/venezuela-poor-keep-faith-in-maduro-s-subsidies-as-oil-plunges.html

New Oxfam report says half of global wealth held by the 1%

http://www.theguardian.com/business/2015/jan/19/global-wealth-oxfam-inequality-davos-economic-summit-switzerland

A new report from Oxfam says that by 2016, 1 percent of the world's population will own more than the other 99 percent. We have noted the importance of income inequality several times in class and this article shows how bad it has become. Income inequality is bad for growth, crime, and governance and it has grown exponentially over the past 20+ years. It is important that world leaders take steps to lessen this inequality or there will be consequences. Oxfam has several suggestions for how to carry this out, including a heavier investment in health and education and higher taxes on corporations and the rich.

Brazil Relying on Taxes to Preserve Credit

http://www.bloomberg.com/news/2015-01-19/brazil-raises-taxes-by-7-5-billion-to-improve-confidence.html

Brazil is implementing a new tax package in hopes of staving off another downgrade in its credit rating.  Brazil, the largest economy in Latin America, is currently one level above junk bond rating, per Standard and Poor's.  This tax package is an attempt by Levy, the new finance minister, to increase global confidence in the Brazilian government. This tax package is going to impact an already distressed economy.  Growth has been relatively slow compared to Latin America, and this trend is forecasted to continue in 2015.  Additionally, inflation is a major concern for the country.  It is estimated to be at 6.67% in 2015 while growth is forecasted at a meager 0.38%.  The bleak economic conditions, paired with the deteriorating credit of the country is a major concern.

Brazil is an interesting case.  Its GINI coefficient is 52.7 according to the World Bank in 2012.  This is high compared to most other Latin American countries.  Will these taxes be at the expense of the poor due to the focus on specific products?  Also, the taxes could increase inflation in the short run.  The government is not able to focus on price stability due to the lack of credibility it holds in the bond market.  Furthermore, will Brazil be able to effectively implement taxes due to high levels of corruption?  In Dream Big, Jorge Lemann, a Brazilian investment banker responsible for the acquisition of Burger King and Anheuser-Busch, noted the corruption and uncertainty that permeates the Brazilian economy.  Brazil is forced to take strong action during this time of duress.

Swiss abandons Euro cap, franc soars

Click Here for article. 

The Swiss National Bank made a an erratic move to remove it's price cap for the Euro, which saw the franc go up as high 30% with respect to the Euro since the removal of the cap. This article very well explains the economics of such a removal and the parties affected. As the franc grew strong, foreign products are much cheaper for holders of Swiss francs however this situation is complicated for swiss exporters since their products will be too expensive for foreigners. Importing Swiss products will be very expensive now. Swiss watchmaker Swatch's share has fallen 15% since the removal of the cap, and money other swiss companies will also suffer. Currency broker Alpari also suffered losses after the remover of the cap. But, having said that, the Euro did recover a bit as it went from buying 1.20 francs to 0.8052 francs, and then went up to buy 1.04 francs.

Russia's Struggling Economy

http://www.economist.com/news/europe/21639557-russian-economy-will-take-long-time-recover-it-badly-needs-structural-reforms-it

Within the first two weeks of the New Year Russia struggled as “the rouble fell by 17.5% against the dollar” and oil, their main export, prices dropped. This drop in oil will potentially cause the real income to decline due and take over 10% off of the budget. Russian money reserves may only last a year in a half if this situation persist; Russians have also began to loose hope in the rouble and withdrew deposits. There is a lot of pressure for the rouble because of foreign currency markets and liquidity within banks. Recovery from the failing rouble will be slow because of the lack of resources and weak institutions within the country.  In the past, there has been growth within the county but now to move forward Russia must restructure and the economy.

Deflation in the US?

http://econ.st/1DIqLOT

An article in Espresso by the Economist commented on possible deflation occurring in the American economy with the now lower prices of fuel. I believe that some deflation is necessary and will give the overall economy more of a boost to grow growth and stabilize prices, possibly allowing more production to happen with less cost and increasing demand.

However, the article is right to point out that extended periods of deflation are bad because they cause consumers to hold off spending, anticipating lower prices. I think that lower prices in the short run is what is needed in order to keep things affordable in the marketplace, but that's just me.

Brazilian Central Banker Escapes Justice

http://www.bloomberg.com/news/2015-01-14/the-talented-mr-youssef-brazil-s-black-market-central-banker.html

Known as the “black-market central banker,” Alberto Youssef has been accused to be a part of the Petróleo scandal. This man lives a luxurious life thanks to Brazil's “slow” justice system, representing Brazil's economic potential being stunted by corruption and crime. He has been a player in Brazil's greatest scandals for the past 20 years. The article describes some of these scandals, including his career as a doleiro.  However large his impact, Youssef still claims he is just a small piece of the larger system of corruption. His lawyer describes him as “the link between all involved.”
Corruption has allowed many politicians, CEOs and more get away with breaking the law.

On a different note, Brazil suffers environmentally and cruelly mistreats their natives for the sake of economic growth.

Indonesia might become the largest economy of Southeast Asia

http://www.bloomberg.com/news/2015-01-13/indonesia-tops-southeast-asia-luring-new-factories-survey-shows.html

By 2019,  Indonesia will have 59 manufacturing plants set up, a 68% increase and this will lead Indonesia to surpass Malaysia and Thailand.

Indonesia is a mixed economy and revitalizing the economy has been one of the goals of the new Indonesian President Joko Widodo.

The President has been restructuring the fuel subsidies to increase budget for infrastructure, which should boost the economy. The government is also planning on starting a land bank to accelerate infrastructure projects.The Jakarta Composite Index (JCI) has also increased by 3% since the inauguration of the new President.

The British Chamber of Commerce predicts that investments in Indonesia will rise by 15% and the government will also cut permit procedures to make global trade easier.

China's Transition

http://www.economist.com/news/china/21601564-leaders-discover-some-transparency-can-help-make-society-more-stable-right-know

This is the best example of a change in the Chinese economic system. An opening up of the system will help economists better judge and make predictions for the economy. People can study the real story of China better and understand the economic system of China.

Age Invaders

http://www.economist.com/news/briefing/21601248-generation-old-people-about-change-global-economy-they-will-not-all-do-so

The article by the economist talks about the shift in the demographics that will happened around the world in 25 years. This is a widely discussed topic today and economists say that the entire global politics will have to change in order to adjust for these changes. The authors talks about three channels through which the demography influences the economy: changes in the size of the workforce, changes in the rate of productivity growth, and changes in the pattern of saving. By examining those three channels we can estimate how the economy will shape up in the future. The trend shows that there are more workers in the labor force past the age of 65 today. This means that the new policies either extended retirement age or cut back on the supply of pensions. There is also a discussion of privatizing Social Security, which posses both opportunities and threats.

I would be interested to see what solutions do you have to resolve a problem that we will all face in not so distant future.

Twitter Offers Investors Silver Lining but No Rainbow

http://www.forbes.com/sites/jeffbercovici/2014/04/29/twitter-offers-investors-silver-linings-but-no-rainbow/

Twitter has been struggling in the 6 months since it became a public company, not because it is not doing well but because there has not been enough user growth.  More and more advertisers are signing on, but user growth is relatively stagnant.  Instagram and Whatsapp have both surpassed Twitter in the amount of users.  However, the company and investors are still holding out hope that growth will increase and the company will continue to do well based on its business model.  

A Billion Shades of Grey

Focusing on the increasing aged population, this article looks at the old population as they continue to participate within the work force well into retirement years. 65% of well-educated older american workers are working significantly longer period than their only high-school degree counterparts 32%. By working into their retirement, older educated workers are able to reap the rewards from their skill for much longer, increasing their savings for a future period or to give through inheritance. This will contribute to inequality as that inheritance gets passed down. Over the next 20 years the population of 60 year olds will double and will mean many more people collecting pensions, while the higher educated work force will be able to increase the productivity, this will hurt other countries with high population of uneducated workforce like China. Technological advance will allow for more skill from the older population, requiring less physical work to be done and more mentally based. This differs from manual labor which become more difficult as the body ages.

A Billion Shades of Grey

Comcast to shed 3.9 Million Subscribers

As most people know, for the past several months, the cable company Comcast has been attempting to purchase Time Warner Cable.  Doing so would increase Comcast subscription numbers by 50%, and also narrow down what few cable options you have.  Comcast has argued that its purchase would not limit cable options since Comcast and TWC provide services in different places.  However, it does not seem so with this latest move.  It sounds horrific that Comcast is going to simply trade consumers with another firm.  I think this really shows the signs that Comcast has obtained or already had a monopoly over digital cable.

http://www.reuters.com/article/2014/04/28/us-charter-communi-comcast-idUSBREA3R0N620140428

The New Censors of Hanoi

The article mentioned how the artists, authors in the north of Vietnam has been giving up on their ideas for a 'compensation' of material stuffs.
This is a common way to deal with defiant minds in socialism, when the government either make a 'buy out' incentive or punishment incentive. However, the fact that artists can make a deal with the government may mean that the condition is still 'live-able'. Even the media is controlled by the government, people are still aware of what is going on, the corruption in the parties' member, the political fight, or the nepotism.
And interestingly, to the author, it seems to happen only in Hanoi, instead of the whole nation.
http://www.nytimes.com/2014/04/28/opinion/the-new-censors-of-hanoi.html?ref=opinion

U.S. - Japan Trade Talks

U.S. - Japan trade talks yielded no major breakthroughs this past Thursday,spelling trouble for the Trans-Pacific Free Trade Agreement.  The latest hangups are Japan wanting to protect its agricultural sector, and the U.S. wants to protect U.S. automakers from Japanese competition. While several rounds of negotiations over a couple of years have ensued with no major gains, these talks have the potential to import quotas and lower tariffs and open Pacific Industries in the U.S.

http://money.cnn.com/2014/04/24/news/economy/obama-tpp-trade/index.html?iid=SF_E_River

Recovery in the Job Market

This article points to research done by the National Employment Law Project that indicates that a greater number of jobs in middle- and high-paying industries were lost than low-wage jobs during the recession, but the greatest job growth in the economic recovery has happened in low-wage industries. In particular, fast food restaurants and strip malls have been hiring at a much higher rate than law firms and health care industries.

With a shrinking middle class that has lost its traditional manufacturing base, economists are worried about a greater stratification of classes and higher income inequality. Some recommend raising the minimum wage, a policy that has been opposed by many Republicans and business owners. Others suggest a need to vamp other social safety programs in order to support low-wage workers and reduce income inequality. Others are wondering what the middle class will look like if jobs continue to be created in low-wage industries and if high-wage industries catch up in job creation. 

http://www.nytimes.com/2014/04/28/business/economy/recovery-has-created-far-more-low-wage-jobs-than-better-paid-ones.html?hp&_r=0

Ambitious New PM Forges Ahead Against Corruption, Towards Bridge Building

The Serbian National Assembly has just approved former First Deputy PM Aleksandar Vučić as the country's new Prime Minister. Vučić has a storied political history, particularly with respect to tabling his nationalism in favor of stronger ties with the European Union. As with many aspiring new members, the EU imposes requirements on potential new member nations to improve their stability, especially prior to joining the monetary union. Vučić's approach to this seems sufficiently fresh: in a bombastic speech to the assembly, the new Prime Minister declared that they shall sleep and eat in the parliament building until market-oriented reforms are passed by a July deadline. Since Vučić seems to still enjoy majority support, his term may yield a new approach for how war-torn transition economies fare.

Warren Buffett Calls Out Coke's 'Excessive' Executive Pay Plan

The renowned investor, Warren Buffett, the owner of Berkshire Hathaway is the largest share owner in Coca Cola's stock (KO). Recently, Coke's Chairman and CEO Muhtar Kent presented an equity plan at the company's annual shareholder meeting this past Wednesday. This has been a very controversial plan, but Muhtar Kent maintains the pay-for-performance plan is in line with the company's goals. Warren Buffett was not convinced by Coke's CEO and abstained from voting at the annual shareholder meeting. Hedge fund manager David Winters argued the plan will dilute Coke's existing shareholder value by 14.2%. The plan based on one equity investment will award executives with $13 billion over four years, which Winters claims will be taken from shareholders. The fundamental purpose for firms in capitalism is to maximize shareholder wealth, but it appears this plan might not accomplish this goal. On April 23, 2014 Coke's equity plan passed without Buffett's vote. There was much discussion about Buffett's decision to abstain from voting. He did not agree with the plan, but instead of voting against it he abstained. I believe that he assumed the plan would pass even if he voted against the equity plan. However, if he did vote against the plan, Coke investors would likely overreact and possible sell the stock which would drive down share price, thus decreasing Mr. Buffett's profitability. By abstaining, he made it clear to Coke's executives that he did not agree with the equity plan, but did not cause a panicked sell-off of shares. A great tactical move by Mr. Buffett, but the fact remains for Coke its largest share owner does not exactly see "eye-to-eye" with the executive team and could create potential problems considering how significant Mr. Buffett's actions have on the market.

http://www.insidecounsel.com/2014/04/25/warren-buffett-calls-out-cokes-excessive-executive

Another BRIC out of the wall?

http://www.economist.com/blogs/buttonwood/2014/03/emerging-markets?zid=295&ah=0bca374e65f2354d553956ea65f756e0

This article discusses the potential future of Russian economy. In 2001 Russia has been included to the list of BRIC countries (Brazil, Russia, India and China) as he emerging markets with a lot of importance for the global economic community. Russia has shown the best performance out of the four countries, primarily due to the commodity boom.

The chain of recent events with Ukraine have significantly damaged Russia's position in the world and its future forecast. Foreign investors, who were very enthusiastic about Russia's growth, have voiced their concerns with sanctions having negative effect on Russia's economy. Foreign investment is declining and will continue to until the situation is resolved. Forecast predict Russian economy to grow 1% in 2014 and 2% in 2015.

Rebirth of America's dead factories

http://money.cnn.com/gallery/smallbusiness/2014/04/21/factories-plant-manufacturing/index.html?iid=HP_LN

There is a resurgence for manufacturing factories in the U.S. The article quotes the president of Industrial Reality Group Stuart Lichter, “Demand for closed factories has picked up since the recession”. International firms have also dramatically shifted their production to the U.S. as a way to grow their business and cut costs. This is interesting since the norm for the past decade or so for international business has been to use Chinese factories as a hub for manufacturing, not the other way around. This may be positive for the U.S. overall by creating new jobs and rejuvenating idle assets, as there are thousands of closed factories, industrial plants and military bases that have been idle for many years. If manufacturing begins to boom in the U.S. this may change details of our economic situation in many ways. 

Many low-wage workers not protected by minimum wage

http://money.cnn.com/2014/04/23/smallbusiness/minimum-wage-exemptions/index.html?iid=SF_E_River


Recently, President Obama has proposed raising the country's minimum wage rate. The writer looks at the unfortunante group who will not recieve any benifit from the wage increase because certain rules make them exempt from receiving minimum wage.

Here are some examples of people who do not have to receive minimum wage:

• Disabled workers 
• People who work for very small businesses 
• Teenage trainees 
• Tipped workers
• Home care aids 
• delivery people 

China's Enticing Attempt

It seems very converse to think that Chinese population hardly contributes to their own economy, but this is the truth. Except for in major cities like Beijing, Shanghai, Guangzhour and Shenzhen, Deng Hong is beginning to implement infrastructure that promotes further spending. He aims to slightly reverse the trend of saving in China to incorporate slightly more spending. They recently build the Global Centre which is a meant to symbolize consumption - an increasingly essential ingredient of China's economic development, according to the article. But this article suggests that these are only small steps that China is going to. They prescribe further measures that China should be taking for the country to really take off economically. While these policy prescriptions could easily aid the country, what does this mean for the United States in term of economic power? How will this effect the international system?


http://www.economist.com/news/special-report/21600801-chinese-consumers-are-spending-plenty-they-could-do-even-better-billion-shoppers