Buying a home now is a no-brainer

This article explains why this is the ideal time to buy a new home if you can afford one. Back in January home prices had dropped 28% from their peak. More important, interest rates were at historical lows. By locking in a mortgage for 15 or 30 years on a value-priced home, you were getting an incredible deal, even if home prices decreased.

Even Dem foes of tax cut plan see it passing soon

Income tax increases are going to increase for everyone january 1st if the bill does not pass. Even with a test vote in the senate, democrats who control the house will not let obamas proposal even be discussed with out it being scaled back.

"We believe that when it comes back to the House, that we will get a vote, and that we'll prevail there, because at the end of the day, no one wants to see taxes go up on 150 million Americans" on New Year's Day, Axelrod said. "No one wants to see 2 million people lose their unemployment insurance and everybody understands what it would mean for the economy if we don't get this done."

What does this mean for the US economic system?

Collapse of Minnesota metrodome

In Minnesota 17.1 inches of snowfall caused the Vikings stadium to collapse under the weight of snow. Workers were unable to clear snow off of the dome because of the longevity of the blizzard. The collapse has forced this Sundays game against the Giants to be changed to Monday and played in Detroit. The game will only be played to New York and Minnesota markets as well as Direct Tv and NFL subscribers. The metrodome cost $68 million dollars to built and is estimated to cost a couple million to repair.

Proposal for tax cuts in the public sector

When elected, Obama spoke of letting tax cuts for the wealthy expire while increasing tax cuts for those in the middle and lower class. However, in his new proposal taxes will increase for those working in the public sector. Instead of paying social security, many workers in the public sector pay into a public pension and this plan will change this. At the same time it keep a $900 million dollar tax cut package to those in the top 1 %. Therefore, taxes will increase for mainly middle class workers, but not for the most wealthy.

More Protests Against U.K Austerity Measures

As the British government continues announcing cuts in government spending, social strife continues to rise. In protests similar to those against Thatcherism, students have already been protesting massive cuts in education spending which will result in a tripling of tuition. Now the government has announced it will end "education maintenance allowances" which were paid to encourage low-income students to stay in college. In response to this latest announcement, protests are expected at about 100 British colleges.

As China Rolls Ahead, Fear Follows

For the last two years China's economy has been growing at a substantial rate. This is somewhat due to the government issued stimulus program and aggressive lending by state-run banks. However now economists are arguing that China may be headed in the wrong direction. Some reasons include high inflation, large amounts of government debt, and asset bubbles. The problem with this is that if China experiences an economic slowdown, this will then greatly affect the U.S.'s economy as China is a major holder of United States Treasury debt and a major destination for American investment in recent years. So if China does in fact begin to slowdown in their economic growth it could have large impacts on many other countries including ours... Any Opinions?

Ireland's financial crisis

The 85 billion euro bailout of the Anglo Irish Bank has increased taxes, reduced incomes, and overall decreased living standards of the Irish people. This is a result of a tightened government budget aimed to increase foreign investment and recover the economy. It is still unclear if the 85 billion dollars will be enough to tie the countries banks over until they recover, but government officials and economist are hopeful that it will be. To fix their crisis there have been ideas to either sell troubled loans to foreign banks and investors or sell Irish banks to foreign bidders. The government, however, is still unsure of what method it will employ.

Decrease in Trade Deficit

In October, the US trade deficit was lower than it has been since January, which leads economists to be hopeful that our economy will show growth in the fourth quarter. There are now estimates of a 2.5 % annual growth rate in the fourth quarter. The trade deficit is at 38.7 billion which is down from 44.6 billion in September. US exports increased mainly increased to Asia, in particular China, and also to Mexico. US recovery in this recession is built around export growth and capital investment so this lower than expected trade deficit makes economists very hopeful that the economy is on the right path to recovery.

Be afraid

As everyone has heard, the new establishment of Wikileaks has governments worried. Yet they are not the only ones who are becoming nervous with the new development of the whistle-blowing website. As the Economist article goes into detail about how, "businesses were struck by an alarming thought: even if this threat proves empty, commercial secrets are no longer safe." Coorperate transactions have already been listed on the site including the post which was, a " leaked internal report from Trafigura, a commodities giant, discussing a hazardous waste spill in Côte d’Ivoire." Another instance which effected companies was, "In January 2008 the site released stolen documents from Julius Baer, a Swiss bank, including bank records of about 1,600 clients with accounts at a subsidiary in the Cayman Islands. The bank sued to stop WikiLeaks publishing the documents, but then dropped the suit."

With companies now having their secrets brought forth, how will they be able to operate when their main operations are now open for public display.

PIIGS to become less-developed is a threat

This article from Forbes is interesting and ties into many of the things we have talked about in class, especially recently. It suggests that the PIIGS must be especially careful, as well as S Korea, because although they are developed markets, there are threats that could ultimately shrink their economy, including war in S Korea. Moving from a developed market to an emerging/developing market is not very common, but has been seen and is possible. Again tying into class, the article uses Argentina as an example of moving backward in the development process, saying that they had a top-five economy 100 years ago, and have since fallen.

Home sales to increase?

This article from Fortune shows that mortgage rates have hit the highest level in 6 months. Though this doesn't sound like it would increase buying of homes because people will be more able to be financed, it gives the argument that home-buyers are assuming that the housing market has hit it's lowest point already, and are on the way back up. This means that housing prices are (on average) at the lowest point and that the time is now to buy. This, in turn, would increase the number of houses bought, and also the prices.

We all want to be liked: Facebook's narcissist effect

Almost all college students have and use Facebook daily. It is the easiest way to update what the person has been doing or to check out other people's status. However, Facebook has become more than a mere individual updates! It also has a psychological narcissistic effect in which people want others to comment or "like" their status. Facebook, therefore, is just the latest product to recognize that basic human desire and successfully exploit it.

Socrates Says Portugal Does Not Need IMF Aid

The Prime Minister of Portugal, Jose Socrates, said that Portugal's government has the ability to deal with its budgetary problems and they do not need help from the IMF. Furthermore, the IMF has not pressured Portugal to request aid. In my opinion, this is because Portugal doesn't have anything of value capable of being exported cheaply through premature privatization (like mineral extraction in Latin American countries).

Microfinance - Leave Well Alone

As we heard from Scott Bellows, the use of microfinance as a poverty-alleviating tool has grown rapidly in many countries, but many criticize some of the for-profit microlenders, saying they exploit the borrowers through high interest rates. The Economist explains that microfinance institutions (even the for-profit ones) have small margins due to the high costs of dealing with many small borrowers; the high interest rates account for this added cost. When interest rates are capped (like in Bangladesh), the ability of microfinance institutions to attract capital and grow is diminished. Also, interest rate caps would cause impoverished people to take out more loans with informal loan-sharks, whose loans are usually more expensive.

The last idealists

The integration of currencies in Europe, aka the Euro has been having many positive impact on overall economy of the continent. However, with some countries in Europe being in crisis, questions have been raised about what would happen if there were default. In this article, the author mentions the fact that European banks are built on a single currency zone, and put forth answers about the consequences if parts of it default or leave.

Chinese inflation spikes on food costs

High food costs are likely the cause of high inflation in China. In one year, the consumer prices have increased 5.1% and food prices have increased 11.7%. To make matters worse, China's trade surplus has decreased 16% over a month. In order to prevent run-away inflation the People's Bank of China may move to increase interest rates.

Obama Tax Cut Deal More Expensive Than Stimulus: CBO

In an interview of Barack Obama last Friday, he stated that despite a rebellion by many Democrats against his tax deal, it will pass because "nobody – Democrat or Republican – wants to see people's paychecks smaller on Jan. 1 because Congress didn't act." The deal is supposed to extend cuts to income tax rates for all earners that would otherwise expire in January. "The Wall Street Journal" reports that an estimate from the nonpartisan Congressional Budget Office pegs the cost of the tax cut deal at $858 billion, a figure that would make the deal more expensive than the 2009 stimulus, which cost $787 billion. Any opinions?

A Gentle Nudge About the Deficit

Looking at the recent deal to extend tax cuts, cut payroll taxes and extend unemployment benefits, it may seem like Washington does not care about the nation's deficit. Higher taxes and and fewer government services are unpopular however this may be a way to reduce the deficit in which the economy's is facing. The Congressional Budget Office, whose mission is to keep tabs on the long-term fiscal picture, sent out a gentle nudge today though and stated that by waiting to put fiscal policy on a sustainable course will be costly in multiple ways such as: higher debt would make it harder for policymakers to respond to unexpected problems, such as financial crises, recessions, and wars, and it would reduce the amount of U.S. savings devoted to productive capital and therefore would result in lower incomes than would otherwise occur, making future generations worse off. Any opinions?

November federal budget deficit highest on record

The federal budged deficit has reached an all time high! The budget rose 150 billion dollars this past month marking the highest monthly increase. This is only going to get higher especially if congress passes a tax cut plan that will cost 855 billion over the next two years. However it is poised to raise growth as well.

How do you think that this will impact the US economy?

November federal budget deficit highest on record

This article is talking about how the United States deficit had largest gap increase ever in the month of November. It is going to raise even higher with Obama's tax breaks for the next two years. The deficit ended up raising $150.4 billion in November and the two year tax cut plan is said to be worth $855 billion. This article makes you wonder if the tax breaks are a good idea at this time where the U.S. is in such a hole and we are just digging ourselves deeper and deeper. It is something that really needs to be looked at and we need to get out of this deficit and stop spending money that we do not have.

The state of Russia: Frost at the core

This article coincides with the video we watched in class on the Russian oligarchs, picking up where the video left off. Russian oligarch Mikhail Khodorkovsky's jail sentence expires next year and the Russian government has now charged him with stealing money in order to keep him in jail. Once the symbol of the "injustice and inequality of the 1990's" he is now the "symbol of the injustices perpetrated by corrupt bureaucracies and members of the security service." The article talks about how under Putin, and now Medevdev, a new breed of "bureaucrat-entreprenurs" came to power. They have privatized the Russian state, a "asset that was under-capitalised and weak." State corruption in Russia is now estimated at $300 billion, 20% of GDP, mostly in the form of contracts awarded to bureaucrats and their companies. This comes in a time of decreased economic growth causing an increasing feeling of injustice, even among oligarchs. The system no longer works and the economy is starting stagnate. According to the article, much of the elite have come to realize the system is ineffective and are no longer willing to support it and when "the ordinary people come to share this view, the system is in grave danger." The article brings about the question: what will the future of the Russian state be? Will corruption and economic stagnation become too much for the people to bear and eventually cause a regime change?

Cuba to be insolvent within 2-3 years

I found this article to be very interesting and relevant to our discussions in class. Cuba, one of only two communist nations left, is predicted to be insolvent as early as late 2011. This provides further evidence that communism in practice is not a viable economic system and Cuba will be going through a transition economy in the near future. What are you thoughts regarding the Cuba's solvency issues?

Politics gets in the way of progress

President Obama has worked with Republicans to pass a new tax deal that will set tax rates on the wealthiest, something that Democrats are not happy with. This is playing into the thought that there are things going wrong and unsmoothly between the Democratic party. Republicans seem to be in favor of the new deal, and Obama, working on progress through bipartisanship seems to be less productive than before- and its within his own party that he is getting stuck.

Push for tax reform grows, but politics will still be tough - Dec. 10, 2010

Push for tax reform grows, but politics will still be tough - Dec. 10, 2010

Sparked by comments from Chairman Bernanke on "60 Minutes" this week, CNNMoney explores tax reform. Although much talk about closing loopholes and therefore lowering overall rates has occurred in the recent months, Bernanke's comments sparked a new debate on the topic.

President Obama seemed to also support some sort of tax reform, although he was less clear about the specifics of a plan. He simply maintains that he is in favor of tax reform sometime before the expiration of current tax cuts in two years.

CNNMoney maintains that tax reform has significant support from both sides of the political aisle. Although the odds of tax reformation occurring within the next few years are improving, it's "still a long shot."

Trade gap in U.S. narrows. So does China's trade surplus - Dec. 10, 2010

Trade gap in U.S. narrows. So does China's trade surplus - Dec. 10, 2010

The U.S. trade balance now stands at $38.7 billion, representing a decrease of approximately 13% from September's level of $44.6 billion. This decline was fueled by a 3.2% increase in exports and a slight decrease in imports.

Additionally, China's trade surplus decreased from $27.2bn to $22.9bn.

What implications will this have on the U.S.-China Joint Commission on Commerce and Trade meeting next week?

Censors’ sensibilities

India has enjoyed the freedom to speak and criticize, much like many western countries. However, in this pretty interesting article, the author suggests that the freedom is not as good as it is cracked up to be. Many scandals are unfolding in the country; however journalists there seem still pretty hesitant in challenging the authority and in some cases can be easily bribed. Also, censors are getting increasingly intense as well. What do you think are some reasons for this unwanted change?

We Have Lift-Off

For the first time ever, a space shuttle capsule has been launched into outer space and orbited by a privately run firm. Without anyone actually in the ship, SpaceX wanted to prove that it's product, the Dragon, could make trips to the International Space Station and back. Earlier this year there was a battle amongst Congress arguing over a private firms right to launch something into outer space. Ironically, it was the Democrats who called for private firms and Republicans who wanted government only launches. Is this an area where the U.S. government should be allowed to make decisions? What is the future of private and government run space launches? And there's a video..

Would you pay a bribe to get something done?

An interesting report on corruption both in developing and developed world and when businesses pay bribes to be able to conduct business. An interesting point is raised toward the end of the report when corruption in India and China is compared and the one of the reporter claims that corruption in China is more efficient.

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In this article written by former UK prime minister, Gordon Brown, he discusses the upcoming challanges to getting western European and the American economy back on track. He believes the key to future growth is accommodating the inevitably high demand of an emerging Eastern Asian middle class for high tech and luxury goods. I believe Mr. Brown has hit the nail right on the head with his assessment. It is very hard to deny that economic globalization is constantly growing. With that being said, it is very prudent for the aforementioned nations to start looking globally instead of domestically for a solution to the current economic slump

Fewer Americans file for unemployment insurance

According to the Labor Department, the number of Americans filing for unemployment benefits fell last week indicating a minuscule improvement in the employment sector. Claims fell from 438,000 from the week before to 421,000 (a 17,000 drop). While the numbers indicate that there is SOME improvement, it is not sufficient enough to illustrate a change in the economy. According to certain economists, in order for there to be a positive trend in the economy, unemployment claims need to go below 400,000 per week. Moreover, employers are still hesitant to hire more employees as consumer forecasts for the next year are still hazy at best.

Happy International Anti-Corruption Day

December 9 is the International Anti-Corruption Day. It's role is to raise awareness of corruption and of the role the UN Convention against Corruption.

Can you think of a more appropriate day than today to issue an arrest warrant for a former PM of Croatia for corruption? (Croatian Lawmakers Strip Immunity of Sanader, Who Left Country)

Number of Journalists in Jail Is Highest Since 1996, Group Says

The number of journalists in jail (145) is at its highest since 1996. This has been fueled by a small group of countries, including predominantly Iran and China. In China, for instance, the rate rise has been from detaining Tibetan journalists who try to voice out their opinions. Is there anyway we can help out?

No Signs OPEC Must Adjust Quotas, Qatar Minister Says

Oil futures are at a 2-year high ($90 a barrel), but Qatar's oil minister, Al-Attiyah, says the price spike has nothing to do with supply and demand. Oil inventories (supply) are actually the highest they have ever been, according to Al-Attiyah. OPEC has not adjusted oil production quotas in 2 years. Al-Attiyah says that oil is currently oversupplied and that demand for oil is not increasing that much - this should cause a price decrease but prices are at a 2-year high. Al-Attiyah offers no insight into why this has happened. Any ideas?

Security in Brazil

Brazil has for a longtime been a city of poverty and crime. In the past two(ish) decades Brazil has been able to stabilize its economy. The benefits of that now are being put towards many social programs (Brazil is recognized for its Bolsa Familia program). Winning the Olympic bid made it that much more important for Brazil to make headway on fixing its social problems and increasing infrastructure. Despite leftist presidents, Brazil has undertaken conservative macroeconomic policies in hopes of attracting foreign investment, especially into the port area. With the recent discovery of offshore oil the future for Brazil looks only brighter. However, the areas known as favelas, especially those in Rio de Janeiro where the olympics will be held pose a big security problem. Drug trafficking gangs control the slums with violence, where most people survive on an informal economy and pirate their electricity, "living life outside the law." The city government is trying to reduce this violence so that the state can regulate this economy. They have only had some success as they still need to win over the faith of the poor.

India's Economy Expands

During this time of global financial crisis, India's economy recently expanded by 8.9% due to the impacting output from farming and manufacturing. The farming sector grew by 4.4% while the manufacturing sector rose by 9.8% due to the heavy emphasis for domestic demand in manufacturing within India. Private spending and investments also increased during the last fiscal quarter which all contributed to an increase in GDP. This growth in overall GDP comes at a peculiar time due to increasing interest rates set by the Central bank of India. Governor Subbarao believes that there will be a decrease in policy rates as a way to ease inflation within the country as the world economy is still very fragile and unstable. In fact unless the growth in the nation increases again, the central bank is very unlikely to increase policy rates during this fiscal year to ease the growing inflation.

Enterprise to Blame for Bad U.S. Economy?

Henry Mintzberg, a professor at McGill University believes that the United States declining economic performance should not be blamed on faulty macroeconomic policies, but on the big business corporations and enterprises that place their own self-interest ahead of the market. Many CEO's of big corporations have been exploiting the system as a way to increase prices of stocks. They do so by depreciating their brand, cut investments in research and development, and altering prices by raising prices of stocks at a high enough level for the high-end executives can cash in on bonuses. Along with this, the massive lay-offs by these corporations were seen as a way to increase productivity, but according to Mintzberg it actually decreases productivity because of the lack of middle-management within these corporations and enterprises. Mintzberg also compares America's productivity to that of Canada's which in his eyes has been performing better over the last few years. He ends his piece by stating that it is not the individual, or the economy, but the economic analyst and corporate executives that are at the core of the problem. Should the United States try to reform the economy in a way that sees less power going to the big Wall Street CEO's and elites?

The Economic Incompetence Of The Political Class

This article makes a compelling point about the greed and irresponsibility of unchecked government spending. From cities to states to federal government, politicians are borrowing money and leveraging debt at unhealthy levels, which can be seen with the current debt crisis in Europe. With nations spending more than 100 percent of their GDP, it seems it is time for more scrutiny and accountability for the way politicians spend money.

In Entrepreneurship We Trust

In this article, the author stresses the importance of entrepreneurship in creating growth in the U.S. and other world economies. He sites statistics that state small businesses accounted for nearly one trillion dollars of earnings in 2009. Also small business start-ups grew steadily during the recession. It seems that the small businesses are going to play a large part in bringing the world out of the current economic sluggishness.

New $100 bill flaw, $110 billion Fed headache

More than 1.1 billion new $100 bills recently printed by the Federal Reserve are now in quarantine due to a flaw in the printing. These bills were designed to combat counterfeiting by including a new 3D ribbon, however creasing during the printing process has rendered the majority of these bills unusable. These quarantined notes represent $110 billion in US currency, however the Fed has already ordered the printing of the current design to compensate for their loss. Fortunately the flawed bills were not yet in circulation but this mistake still comes at a tough time for the Fed with the current recession since, as a similar article pointed out, "You can't stimulate the economy via the money supply...if you can't print the money correctly."

How Long Will Google's Magic Last?

In just 12 years, Google has grown from a start up to a business worth $180 billion. But Google faces some problems. First, Google faces charges of abusing market power by manipulating search results to give an unfair advantage to its own services. Second, Google is having trouble finding a new source of growth - beyond search-based advertising. Investors fear Google will become like Microsoft and fail to find a new source of funding for aging growth sources. Also, Facebook (which now has more online traffic in the US than Google) offers a new way to search for information. Will Google be able to adequately respond to its new competition and problems?

Bernanke goes on 60 minutes

On Sunday, a 60 minutes special aired with Fed Chairman Ben Bernanke. On the special, he discussed current economic issues such as unemployment, the increasing deficit, and the latest $600 billion purchase of the U.S. Treasury Bill.

Below is the link for on CBS for the video..

http://www.cbsnews.com/video/watch/?id=7120553n

A Bottled-Water Drama In Fiji

Surprisingly, Fiji water does come from Fiji! It is also Fiji's number one export in dollar value. However, recently the military government has demanded the company pay a 15 cent per liter tax, compared to the 1/3 of a cent tax in previous years. The Government even threatened to take Fiji's water wells and their rights to sell the water. Fiji's holdout did not last long as they agreed to pay the tax and maintain ownership. The Fijian government will defiantly benefit from this tax increase and hopefully the 50% of Fijians that do not have access to healthy water will also benefit.

Kia Motors' Hires Boost Economy, Spirits In Georgia

Being from the state of Georgia it is nice to see foreign investments boosting the local economy. It is vital for companies such as Kia to build manufacturing plants in towns such as LaGrange, in order to lower the high unemployment these "small towns" tend to experience. Since unemployment is major concern within the US economy we should be more open to foreign investments as it seems it can help desolate towns become productive again.

Euro don't go

This article discusses the blow out to countries in the euro zone if they moved the Euro. Besides the tremendous costs involved in a country reprogramming its entire economy to be represented in a different currency, the devaluation for the weak countries or appreciation of currency for the strong currency would cause chaotic capital flows that would hampered business process in Europe and the worldwide. Agreed Neither Germany and Netherlands do not what to be held responsible for Greece and Ireland's failure, nor do Greece and Ireland wish to suffer under the Euro but even though the economic bail outs are not as effective a change in currency would only harm their respective economies

Nuclear Talks Start Between Iran and 6 Nations

This article explains the latest development in nuclear peace talks between Iran and 6 other nations like the US, Great Britain, China, Russia, France and Germany. The pressure on the other countries to indulge Iran in peace talks, arose after Iran claimed to have used domestically mined uranium ore to make the material needed for uranium enrichment. Iran’s successful processing of uranium ore from a domestically mined source suggested the Iranians had found a way to bypass United Nations sanctions that ban them from importing raw uranium. It also reflected Iran’s intention to show that it remains unfazed in its pursuit of nuclear capabilities, despite significant setbacks.

Inflation Risk Is Low

In an attempt to support the the bond-buying program, Fed Chairman Ben Bernake, said that the economic recovery is not self-sustaining and the high level of unemployment may lead to another crash. He has given his 100% confidence that there will be no runaway inflation due to the bail-out. This is another piece of news in the constant high inflation vs low inflation argument that has been doing the rounds after the second bailout announcement.

Tentative deal between US and S. Korea reached

A tentative trade deal between the United States and South Korea has been reached, according to a White House official. The deal, originally negotiated by the Bush Administration in 2007, eliminates tariffs on 95 percent of all traded goods and will increase US exports from 10 billion to 11 billion dollars, according to the White House official. The trade deal originally struggled in Congress because of disagreements over US access to Korean automobile and beef markets. The White House is touting the potential of this deal to increase job opportunities in the US, while others in Congress are happy with the stronger diplomatic ties that it fosters with the democratic ally.

Year-end harvesting

The article talks about the fact that many investors have been selling their long term investments which have resulted in the long term capital gains. This is due to the fact that in 2001, President Bush has passed the Economic Growth and Tax Relief Reconciliation Act that pose a maximum tax of 15% upon the long-term capital gain. However, this tax benefit is going to expire on December 31, 2010. Starting on Jan. 1, 2011, the maximum long term rate may jump up to 20% rate. Therefore, the stock market may have some unpredictable volatility that is totally unrelated to current economic situations.

Obama Signals Openness To a Tax-Cut Deal

The topic of tax cuts has been a heated one. After the U.S. Senate recently denied the proposals of the Democrats to extend the Bush-era tax cuts for the middle class permanently, Obama said he would be open to the extension of tax cut for the affluent. Politicians have to tread very carefully here because the U.S economy hasn't been really out of the woods yet, so any tax increase might have a negative impact.

Employment growing less than expected

After so many of the things the government has done to stimulate the economy and regain job growth. Many economists expected this report to come back with unemployment lower, although it actually rose to 9.8% Employers are reluctant to hire new workers, especially full-time because of the uncertainty in tax rates, health care costs (benefits), and new governmental regulations.

Future of the euro

The European Union has tried numerous attempts at salvaging bad economies (Ireland and Greece most recently) and they seem to be ineffective for the EU as a whole. This article gives a very detailed run-down on some of the possibilities of the future of the euro currency. Many countries are done with paying for other countries failures, and who can blame them? They are calling for the split of the euro and going back to individual currencies again. Some reasons to stay together in the European Central Bank are also given.

Philippine Call Centers Overtake India

Call centers are now moving to the Philippines due to the availability of India speaking college graduates and government help.

The Philippines this year will pocket $5.7 billion for call center work from the U.S., Europe, and Australia, vs. the $5.5 billion that India's call centers will take in. India, though, continues to lead in overall outsourcing revenues at $70 billion vs. $9 billion for the Philippines. The outsourcing industry now employs 530,000 people in the Philippines and makes up about 6 percent of gross domestic product.

The Filipino government began to help the call centers because of their frustration of educated Filipinos leaving the country to work as nurses and lawyers in other countries even though it earned them a lot of foreign exchange.

This will definitely affect India's growth but by how much we do not know. Also, will labor be as cheap in the Philippines.

Retail Sales Gain Most Since March on Black Friday Boost

Retail sales rose the most in eight months, beating analysts' expectations as customers are driven by the heavy discounts on Black Friday. Although there are many gainers, including Abercrombie, J.C. Penny, and Gap Inc., stores that have previously been considered an all year "discount" like Aeropostale suffer. Contrary to others' sales jump, Aeropostale's sales dropped 1 percent last month. This is probably due to consumers hoping to purchase brand name products that are never go on sales any other time of the year.

Tata Nano on fire in a bad way

There has been an 85% decrease in the sales of the world's cheapest car due to fire outbreaks in the engine as well as an increase in the price. It is an interesting example of a less developed country trying to enter a high-end product market and a sure sign of India's transition to more technologically advanced products. If they are successful in implementing the safety upgrades I think they should market to African countries.

another russia

With the global recession the IMF has been put in the spotlight again, and no one can be sure exactly what the outcomes of it's policies will be. In 1998 the IMF was unsuccessful in helping Russia ease the burden that resulted of misguided policies of transition. Ten years later Russia is recovering due to an increase in energy prices but also due to stable macroeconomic policies. However, the IMF's role in creating these stable policies is uncertain. This is something to think about as the IMF tries to bail out other European economies that are struggling to recover...what kids of loan concessions are appropriate for the IMF to demand?

Google Is Said to Be Poised to Buy Groupon

Google has undoubtedly been the leader of the internet industry. And it seems like it is doing everything it can to cement this status. Case in point, Google is nearing a deal to acquire Groupon, the online discounter, for a whooping $6 billion. The rationale for this purchase is that it will allow Google to make a foray into local business online advertising. Since the beginning of the year, we have seen a lot of technology titans going on a buying spree, but if this deal came through, it would be the largest of the year.

Wall Street Bailout to Cost Taxpayers $25 Billion, CBO Says

According to the Congressional Budget Office, The Troubled Asset Relief Program a.k.a the financial bailout will cost taxpayers far less than initially feared which was estimated about $700 billion. This is an incredibly good news since the bailout has received so many criticism. Now the tax payers can be relieved that they will get their money back.

Unemployment Rises in Europe, Weighing on Euro

In October unemployment in the Euro zone rose to its highest amount in the past 12 years. The unemployment rate in the Euro zone was 10.1 percent in October while unemployment for the full European Union remained unchanged at 9.6 percent. However, this unemployment rate conceals large differences among countries as some, such as the Netherlands at 4.4 percent, have very low unemployment rates while others, such as Spain at 20.7 percent, have very high ones. This increase in unemployment threatens to undermine efforts to revive stagnating economies in a time of tight budgets, especially in countries such as Spain, Portugal, Italy, Greece and Ireland. This news comes as the Euro continues to remain under pressure as it has declined in value 8 percent since its most recent peak on November 4.

Optimism for '11 pushes consumer confidence higher

This article talks about how consumers are more confident in the economy then in the previous 5 months. These reports come out despite the weakening in home prices, and also the high unemployment within the economy. The consumer confidence board said that consumer confidence has gone up 5% according to their polls, I wonder if this is more of a holiday thing and that the resurgent in the market is from the holiday season.

Unemployment Benefits Set to Expire

This week Congress must decide whether to let unemployment benefits expire for millions of people jobless for over six months. Analysts predict that if they do not extend the aid offered, it will have severe economic impacts in terms of consumption and growth from this sector. Predictions include a decrease in annual economic growth of .5%-1% and a loss of up to 1 million more jobs. The average weekly payment for the roughly 8.5 million people receiving unemployment benefits is $302.90.The CBO estimates that every $1 spent on unemployment benefits generates $1.90 in economic growth (a beautiful example of the government multiplier). Those who have been jobless for more than six months generally have very little savings remaining, so all of the money spent gets put directly back into the economy in the form of consumption. What do you think? Is the money the government will save more impactful than the money the unemployed will lose? Which will benefit the US economy more - focusing on lowering the debt or increasing consumption?

Stock futures rise after strong retail sales

This article basically talks about how more shoppers were spending this holiday season then last season. Basically its talks about how the sudden spending is helping to stimulate the economy, and that there is a small improvement from last year. I think the improvements in the economy are to blame, and people are a little more confident in the US markets, hopefully we can sustain this temporary growth to some extent after the holiday season.

Fed under fire

This is an interesting article that the author presents his point of view of quantitative easing. He claims that the recent political attacks from the Republican on the Fed are misguided. He says the recent stimulus bill's focus is to  push down longer-term rates by buying longer-term government bonds rather than targeting a specific interest rate and thus the accusation of the U.S as currency manipulator is false. He emphasizes that China is the one who is manipulating the currency by amassing $2.65 trillion of reserves and is hypocritical for criticizing the Fed. However, in my opinion, this does not make it any less true. Even if manipulation of currency rates is not the "stated goal" of the Fed, this does not mean that devaluation is not a direct consequence of its actions.In addition,this inflation induced boom similar to the "boost" received in 2002-2004 that resulted in the unsustainable boom that directly led to the crash and recession we are experiencing now. While temporarily reducing unemployment is beneficial politically in the short term, inflating asset bubbles is devastating to the economy's long-term development.

Starbucks-Kraft battle gets bitter

Companies form mergers and partnerships to achieve economies of scale and these relationships usually result in a win-win situation for both parties. This article focus on the collapse of the relationship between Starbucks and Kraft. Starbucks is trying to end their packaging contract with Kraft and craft says it goes against their contract which has been in place for the past 12 years. In addition to that Kraft is demanding a lot from Starbucks as the article states, "Kraft also said that the contract calls for Starbucks to compensate Kraft for the fair market value of the business, plus a premium of up to 35% of that value. The packaged foods company claimed its resources and expertise helped build Starbucks' retail grocery coffee business from generating less than $50 million in annual revenue to about $500 million in sales each year." Although Kraft holds their ground, Starbucks has said that Kraft is also violating the contract so they do not want them to package their goods anymore. This dispute has lead to both companies falling in stock value, thus, hurting each other over their previously profitable partnership.

Obama to freeze federal wages for 2 years

Obama has planned to place a wage freeze on all federal employees. This strategy has been projected to save 28 Billion USD in the budget over the next five years. Although Obama has said it has been in place to help the economy, many people who work for the federal government may feel they are being targeted by this. The wage freeze does not extend to military personal though. If this is the first step the White House is taking, how much further are they planning to use their power to save their budget?

Down the slipway

"Quantitative Easing" is unloved and unappreciated-but it is working, announced the FED.

Even thought this method have received criticisms from many, it has been proven that quantitative easing is working and has resulted in lower yields and higher share prices. The dollar also devaluates.

"These easier financial conditions are supposed to boost growth through three channels. First, lower real yields spur borrowing and investment. This channel is bunged up: many households cannot borrow because their homes have fallen in value and because banks are less willing to lend. But the remaining two channels remain open. Higher share prices have raised household wealth by some $1.4 trillion, which will spur some spending. And the lower dollar should help trade. American factory purchasing managers reported a sharp jump in export orders in October and a drop in imports."

Japan Passes $61 Billion Stimulus Package

Japan just passed a $61 billion stimulus package to help its struggling economy recover. With falling prices and weak exports, the hope is that the stimulus will help small businesses and increase consumer spending.

The joyless or the jobless

In 2006 British economist Robert Layard argued that unhappiness is a bigger social problem in Britain than unemployment. Due to the current recession there are now more jobless than joyless in Britain. However economists and policymakers continue to take interest in happiness, as British Prime Minister David Cameron recently requested that the country's "general well-being" be measured. Many economists doubt the claim that at a certain point economic growth ceases to increase happiness. The article points out that although many people claim they would prefer happiness over increased wealth, many would still choose increased money over increased happiness. As new policies are formulated should governments give more weight to increased wealth or increased happiness since, as the article states, "Money may not buy happiness. But why take the chance?"

America's wealthiest (and poorest) states

The articles explores the wealthiest and poorest states according to the latest US Census Bureau Report. Topping the list was New Hampshire with a median family income of $65,028, and Louisiana was at the bottom with a medium family income of $42,423. I found the article to be very interesting and somewhat surprising.

Dropping Jobless Claims Give U.S. Stocks Fast Start

Jobless claims fell to 407,000, the lowest since July of 2008, and has been reflected in increases in stocks. Do you think most of this is due to the holiday season or do you believe the economy is really turning around?

BP to sell stake in Pan American Energy for $7.06B

BP is selling its Argentina-based Oil and gas producer, Pan American Energy for $7.06 Billion along with other assets they are selling off in an effort to pay off the debt that they owe for the oil spill in the Gulf of Mexico. They are selling the asset to Bridas Corp. which is also located in Argentina. The deal is suppost to be completed in the beginning of 2011. BP announced this summer that it will be selling around $30 billion of their assets for the overall clean up and response costs. This will really hurt BP and it will be safe to say that they will no longer be a leader in the oil industry. Consumers are choosing other gas stations to purchase fuel at because of the way that BP handled the spill in the Gulf.

Investors hope for a Black Friday bounce

Stock investors will use the sales on Black Friday for projections on consumer spending. About 35% of a companies revenue will come from holiday spending and about 10% of revenue comes from Black Friday alone. Last year, the major indexes gained 5% between November and December. There are other factors driving the market such as Bailouts in Ireland and Greece as well as potential bailouts in Portugal and Spain. This will turn investors back to the U.S.

Political chaos engulfs Ireland, threatens bailout

Political chaos threatened to delay the bailout Ireland expected from the IMF and EU last Tuesday. Current Prime Minister Brian Cowen is feeling the pressure from his own party, Fianna Fail, as well as the opposition. There have even been demands to hold new elections before Christmas. The only potential for an election would be in March, which is too long to wait while the economy quickly spirals downward. The EU and IMF have promised 85 billion euros to the bankrupt nation due to failure of the state-backed banking system. This bailout could be on the line if the political waters in Ireland do not calm.

Online sales see 16 percent spike on Black Friday

This article is a response to a pervious article saying Black friday sales were not as high as expected. This article points out that there was a 16% increase in sales on online websites, this might account for the weaker sales figures that they expected in stores. Obviously people would rather be shopping fro their own home then running out to crowded malls, and get stuck in lines. Im not sure what the normal annual rate for internet sales is on black friday but 16% sounds like a good increase.

Black Friday: More shoppers, modest sales

Even though the report showed that there were more shoppers yet modest sales on Black Friday, there are some supposition that it's not the result of slumping consumer confidence. ShopperTrak founder Bill Martin said, supported with data, that stores may have cannibalized some Black Friday sales by prodding shoppers with doorbuster-like deals weeks in advance. In fact, a separate survey found that shoppers bought more goods. The number of purchases were 4% higher than last year, according to a survey of shoppers by market research firm NPD Group. Hopefully, this can be a reliable sign for consumer optimism and that the actual recession is almost over.

Shoppers back in Black Friday binge

In contrast the the past two years, shoppers say they are buying more for themselves and are less focused on prices. Further, the black friday discounts are reportedly smaller than years past. Do you think this is a good sign for the future economy, or do you believe these statistics are being overblown?

Market Failure: Secondhand Smoke Kills 600,000

A new study released by scientists at the World Health Organization concludes that approximately 603,000 people are killed annually by involuntary exposure to secondhand smoke. This means that about 1% of deaths globally result from markets' failure to account for the negative externalities of tobacco companies on non-smokers. This doesn't include the 5.1 million deaths caused by smoking itself.

Tobacco companies benefit from failure of information - most people are unaware of the devastating effects of secondhand smoke, to which scientific consensus concludes there is no safe level of exposure.

Portugal 'tightens its belt'

With the possibility of a bailout looming, Portugal has approved a budget for 2011 that aims to reassure its lenders that it can reduce its deficit. The recent request for aid from Ireland has affected the markets in every European market, and it has spiked speculation that other countries - like Portugal - might follow suit. The EU, though, has denied any meddling with Portugal's decision to adopt more fiscally austere measures. This articles underscores the links and influences that each European Union economy has on the EU as whole.

NATO summit

The NATO summit ended up this weekend in Lisbon, and it seems that a lot of compromise has been made. On many issues, including Afghanistan, cyberwarfare, nuclear weaponry, transition in Afghanistan, and more NATO seemed to be on the same page, hopefully meaning progress will be made in these areas. One thing that needs to be made sure of, however, is that these aren't simply "fluf" promises, and that the appropriate measures will be taken.

Ireland gets bail money

Ireland, days after saying that it needs help, but is reluctant to take strings-attached aid has been granted loans by the EU and IMF. One source said that Ireland has suggested it needs 60B euros, but have reportedly received 80-90B euros, a large number, but still not as large as Greece's 110B euro bailout a few months back.

Despite Recession, Geen Building Soars in US

It is good to see innovation at work inside the United States. The government is helping to spur this innovation with subsidies and grants for renewable energy buildings. As a nation, and a globe, we cannot remain dependent on the historical ways of providing energy to our earth. The days of burning coal or processing oil are coming to a end and other sources of energy need to be mass produced. This also opens the economy to new markets that will benefit a new group of entrepreneurs and hopefully continue the relatively high rate of economic development our earth has seen over the last 120 years.

Quantitative Easing Explained

here is a funny video explaining the FED stimulus and Quantitative easing.

Enjoy !

http://www.youtube.com/watch?v=PTUY16CkS-k

In Spain, Homes Are Taken but Debt Stays

This is an interesting article regarding debt and foreclosures in Spain. When properties are foreclosed in the United States the bank owns the property but that is it. However, in Spain when properties are foreclosed, you loose the property but you also still owe the bank what ever debt is incurred. Spain's unemployment rate reached the 20% and heavily in debt. Many people cannot afford houses anymore, and people are loosing the houses left and right approx 1.4 million people. Many people are have lost their houses and jobs and essentially in debt to banks for life.

What do you purpose the Spanish government do ?

"They say he now owes nearly 260,000 euros, almost $360,000, which includes about 77,000 euros to cover all court costs, including the bank’s, his lawyer said. He bought the apartment for less than that — about 220,000 euros"

Fed sticks with stimulus

The story here is twofold. Ben Bernanke, chairman of the Fed stands by the $600B stimulus package that has received a lot of heat recently. He uses fundamental economic theory to justify his actions, at least Keynesian economics. Someone like Friedman, however, would say that this money would be going to waste and would be unnecessary.

The story also talks about how Bernanke is frustrated with China not allowing their currency to appreciate is it likely should, without the regulation. This is one of the things that is bringing down the value of the dollar, which is a tough thing to handle in a somewhat down economy.

Irish officials acknowledge need for aid

Thursday, Irish official announced that they would be seeking aid from international sources.Ireland is reluctant to accept aid with strings attached. There would be substantial loans of up to tens of billions of euros. The books of Irish banks need to be checked before an exact amount. $60 billion euros might be sufficient to cover for financing needs for the next few years. Meanwhile, Greece is increasing deep cuts and increasing taxes in order to decrease the deficit.

Stocks Drop Amid Global Worries

The Fed's announcement of its $600B purchase of bonds a couple of weeks ago sent the stock market to the level before the Lehman Brothers debacle two years ago. Since then, the market has been relatively consistent. But today it plunged 178.47 points, below 11,000 which hadn't happened since mid-October. Investors are getting more sensitive to the debt crisis in Europe and potential actions in governments in developing countries to avert inflation. This goes on to show that many investors are still pretty skeptical of the recovery.

Greece's budget deficit worsens

After being re-calculated, Greece is unfortunately seeing a higher budget deficit from 13.6% to 15.4%. Due to this, the deficit cut has also been changed to 9.7% instead of the intended 7.8%.

Against worker's wishes, Athens is reducing the deficit through austerity measures.

"The Greek government is also being visited by EU and International Monetary Fund officials on Monday, who will decide whether to release more funds."

Their situation is so bad that they might have to request for more time before they start paying back aid money said the Prime Minister. The deficit was revised because there was a decrease in the calculated growth rate that year, an adjustment of social security funds, and by adding data from certain public sector bodies into the general government figures.

The only positive sign right now for Greece is that the contraction rate of the economy has declined.

Barnier Seeks to Protect Europe from Future Financial Crisis

Internal market commissioner Michel Barnier added three more steps in his plan to protect consumers in Europe from a future financial crisis, aimed at the investment and banking sectors, the main areas in which the United States has struggled. The steps include; an investor compensation schemes, an insurance compensation scheme, and a deposit guarantee scheme. The main goal is to provide confidence in the financial system in Europe. This would provide automatic payment in the case a financial institution cannot guarantee deposits up to 100,000 euro, amongst other things. The goal is not to protect consumers against free market take-overs by corporations, but rather to protect against fraud, neglegence, and incompetence.

How would you compare the effectiveness of this method to the current system that we have in the United States (or other countries)? With situations such as Bernie Madoff's Ponsi scheme in America, many of those investors were left with nothing, but regulations such as these in Europe protect consumers. The article gives little details that will be released later, but are these the right steps for Europe in reacting to the financial crisis in the U.S.?

Eurozone talks keep Irish crisis in focus

According to BBC News, Irish leaders continue to insist they do not need help from the European Union during their current financial crisis. Irish Prime Minister Brian Cowan insists that the government has "firm plans for sorting out the country's problems." However, there is still much speculation that the country will be forced to use EU bail-out funds and the head of European finance ministers claims the EU is ready should Ireland seek assistance. Recently market anxiety has spread to Spain and Portugal, which are also heavily indebted, and their is a high risk they will need to seek foreign aid. Ireland has promised the EU it will bring its deficit down from 12% to 3% of economic output by 2014. The new budget is likely to impose heavy cuts in spending or tax raises totaling 6 billion euros next year, however experts worry that budget cuts are likely to worsen Ireland's already deep recession.

Chinese Companies function a little differently

This article talks about how Chinese privatized companies are given monetary backing, support, and help to succeed for political reasons from the Chinese government, and it is in the best interest of the politicians to do so. To me, this sounds like soft budget constraints that we have studied this semester in class, that seem to be typically unsustainable. However, this article is saying that this government money is being used by the firms to help them grow and expand into the more global markets, owning 1/5 of the global stock-market, and soon expected to be the most large economy in the world.

When will voters care about the deficit?

We talk a lot on here about government's deficit, but recent research and polls have shown that the public in general don't pay that much attention. The author of the article argues this really is one of the issues that deserves a lot more attention and needs to be addressed properly. According to the article, "as the economy recovers over the next couple of years, the deficit will decline. It will only decline, however (and depending on what Congress does), to the nearly but maybe not quite sustainable range of 3% to 5% of GDP, and it will then begin rising again around mid-decade, thanks mostly to increasing entitlement spending. By the end of the decade, America's debt-to-GDP ratio will be at troublingly high levels. And at some point between now and then, probably in a couple of years when America's economic slack has largely tightened up, interest rates will rise. Depending on how high and how fast they rise, America's economy will experience something between a slight drag on growth and a serious crisis."
Americans are very concerned about the economy as a whole, which is a good thing. But the economy and the deficit, I think, are just two sides of the same coin. So, more attention is obviously warranted.

Caterpillar agrees to buy Bucyrus

This past week, Caterpillar Inc. agreed to buyout Bucyrus International for $7.6 billion. Caterpillar is the world's largest construction and mining equipment maker and is making a strong push to expand deep into foreign markets that are looking to develop. Since the economic crisis, Caterpillar has made drastic changes to improve profitability by cutting almost 30,000 workers. This aquisitition further widens the gap between Caterpillar and other competitors in the construction equipment making industry. Do you think Caterpillar's underlying goal is to monopolize the industry by continuing to acquire companies and further expand into developing foreign markets??

The Demographics of Globalisation

This article explores global interdependence and savings as it relates to the demographics of key economies. The author focuses specifically on China as the current source for global savings. As a middle-aged economy, China is a natural for high savings (which the US as a middle aged economy should also be, by the way). Young and aging economies traditionally tend to deficit spend. The concern is that China is slowly becoming an aging economy as its policies limit the number of new workers introduced. China's extensive growth strategy is already showing its limits. The author uses this to explain in part China's "seemingly selfish" currency manipulations as a self protection strategy as they face the limits of their demographics.

Bush tax cuts: What nobody is talking about

The debate on whether or not to let the Bush tax cut expire is still up in the air. One question that pops up in everyone mind is that how can we have tax rates and deficit to be lower at the same time? We need tax rates to be higher so we can pay up the debt and at the same time, remains enough government funding for entitlement (social security, medicare, medicaid) and domestic discretionary programs (health research, education, national parks). Some argue that people can't afford higher tax rate at the moment but the fact is that since the Bush tax cut was implemented it did not prevent American corporation from shipping millions of American jobs to China. So what is the solution?

Fed May Need to Increase Rates Even with Elevated Unemployment

Federal Reserve Bank of Richmond President Jeffrey Lacker believes that the Fed may need to tighten monetary policy, even with unemployment levels as high as they are. He fears high inflation rates similar to those in the 1970s. In the late 1960s, the Fed fought high unemployment rates with looser monetary policy. The result was inflation rates in the 1970s topping at 14%. Lacker doesn't see deflation as a major risk and suggests that the Fed may do more harm than help by keeping interest rates so low.

Japan's Economy Shows Strong Growth

Japan's economy has shown strong growth and has been growing at annual rate of 3.9% in the third quarter. Just recently Japan has been in a recession which is said to be as worse as the recession after World War II. Much of this growth is due to heavy consumer spending due to government incentives which are currently coming to end. So people are trying to benefit as much as the can before its to late. Deflation has also helped in the growth as prices have decreased. Private consumption which accounts for 60% of the economy increased 1.1% which was helped by government incentives to fuel effiecient cars and energy. This growth however is suggested to slow down over the next three months as these goverment incentives will come to an end. Although there is growth in the overall economy, Japan's labor market still is rather stagnant with jobs not being created as quickly as expected. Do you think Japan will be able to keep growing at this pace or will they slump back into a possible double dip recession?

French Cabinet reshuffle puts conservatives at top

After major reassignments last week, French President Nicolas Sarkozy has had to reshuffle his cabinet. The reshuffle aims at pleasing more conservative followers in leu of the 2010 elections. Sarkozy goal is to bring leftist, centrists and others to make a unique governing body.

"Sarkozy had been expected for months to make changes to his government before 2012 presidential elections. But the reshuffle turned into a highly unusual 24-hour marathon marked by clearly tough negotiations."

There have been many criticisms about the shuffle is that people believe he is just doing it so he can have a favorable outlook for the upcoming elections. Overall there 16 ministers lost their jobs.

Opinions?

Why is America so rich?

This article presents some possible factors that explain why America remains the world richest large country.

However, it is American Exceptionalism bias.First we need to point out that US GDP per capita is only 8th in the world and 6 of the top 7 are European countries. UK, France and Germany are BIG economies but they ARE NOT the richest. We can't dismiss countries such as Norway because it's filled with oil. That's nonsense. Also, for the top 10 countries from the HDI list, the US is the only large country with a big population.

common law: this only is applicable to half of the top 10 nations in the HDI list and therefor not a desisive factor

massive immigration: only applicable to 3 nations of the top 10 in that list

scientific exodus: for no other country more applicable then Germany (that LOST most of it's scientists!) and look where that country is now? Arguably the best nation for machinery and tools in the world.

What makes a nation rich compared with others:
1 having a cultural heritage from north-west europe (social structures and work ethics etc)
2 be small (US being the odd one out)
3 having an open economy
4 having rule of law and a system where contracts can be enforced

America is certainly a country that is doing well economically but this continuous chest beating how great and SPECIAL it is, is becoming a nuisance.

Post Office posts $8.5 billion loss for last year

The United States postal service posted on Friday that it has an $8.5 Billion lost from last year, even though it cut almost 100,00 jobs. They only estimated that they would end up loosing about $6 billion. The sharp decline in mail use is really hurting the postal service. Most of the people are taking advantage of the internet and alternate ways of getting stuff to other places. Mail volume totaled 170.6 billion pieces, compared with 176.7 billion in 2009, a decline of 3.5 percent. This is not good for the post office and the management teams are trying there best to innovate the mail system and make it more attractive, I just do not seeing that happen though. The next option is to reduce the mailing system to only five days a week and to eliminate the annual health payments for future retiree health benefits. So, it sounds like things are not going well for the postal services, and most of the mail will be sent using the web. This is good in a way, because it will cut down on paper usage at least.

Taxpayers Provide More Than 25 Percent of NPR's Funding, Analyst Says

This article doesn't have the importance of other articles but is still interesting never the less. This talks about how NPR(National Public Radio) get 25% of its 165 million dollar budget from us the Tax Payers. I don't know about you but I feel like roughly 43 million could be spent elsewhere in the economy other then on a radio station, I'm not saying cut them all together but in these tough times do you really think spending that much for a radio station is a good allocation of tax payers money?

QE2 Just Won't Do

It has been a few weeks since the Fed announced its $600B purchase of government bonds. However, a lot of people are still skeptical of how this will work out. The interviewee in this article, who is successful currency trader, believes that the real culprit is the undervaluation of Chinese currency, and fixing that would be more beneficial than pouring such an amount of money in the economy. China's efforts to prevent its currency from appreciating tip the scale in its favor, leading to millions of job losses in the U.S. He does make a point, but we need to take into account the fact that he is a currency trader.

Top Earners May Face Big Hit

Citizens who itemize their deductions need to worry. A new tax plan will eliminate certain tax deductions and investment breaks in order to generate moretax revenue. Mortgage interest rates and capital gains rate may be altered for higher tax revenue. If this plan becomes a reality, the overall tax revenue will increase by $751 Billion by 2020. The plan's most basic purpose is to eliminate tax expenditures, the accumulation of deductions, credits and other tax benefits that Congress had adopted over the years for individuals as well as companies. Maybe this plan is not the best plan to introduce especially before elections.

U.S. Hit by Trade Setback

This article talks about the failed talks between the US President and the South Korea President at the G20 Summit. There were many issues which were unresolved and critics fear that this will severely imapct the export industry of US . However, a lot of exporters in US are backing Obama's decision as they believe that the deal would have been bad for the US workers. But how well will this go down with the rest of the country is hard to tell.

China selloff leaves stocks reeling

After the G-20 meeting, the trade war between the U.S. and China continues to heat up as China refuses to revalue its currency. To make it worse though, according to this article, China is starting to sell off the U.S. currency futures. This has resulted in the Shanghai composite to slump down by 5%. The effect is anticipated to be similar in the US market as the war between the US and China leads to an increasing economic uncertainty. Do you think that the US vs. China trade war will also trigger the currency war?

Double tax amount on gasoline

A committee organized to bring in the US debt has made a proposal to increase the tax on a gallon of gas by nearly double. Currently, regular gasoline tax is 18.4 cents per gallon, and 24.4 cents per gallon for diesel fuel. The tax would add 15 cents more to each of those. It seems like an awful idea for consumers, but does have some merit I think. It would bring in extra revenue, decrease unnecessary driving more, and increase incentives to innovate new ways of transportation, and/or new ways to bring in revenue for the government.

The laboratory of the world

In this interesting article, the author is suggesting that Britain's fiscal policies could play a part in determining who would be the next occupant of White House. To reduce trade deficits, Britain is considering cutting government's spending. According to the analysis, reductions in the bloated levels of government spending and fiscal deficits will do much more to stimulate the longer-term growth of the British economy, mainly by encouraging private investment and innovation. And based on the results of actions from Britain, Republicans will have a powerful case for themselves.

China buys up the world

The article illustrates an already standing issue of China's economy coming to gain power in the global economy. "Chinese firms own just 6% of global investment in international business. Historically, top dogs have had a far bigger share than that. Both Britain and America peaked with a share of about 50%, in 1914 and 1967 respectively." For every economy it is necessary for them to engage in international trade and production. Therefore China has started to depend on other countries for two sectors which they still craved for bettering their production "to acquire raw materials, get technical know-how and gain access to foreign markets." China has great potential in foreign markets, however they will have to adapt to foreign consumers to deal with the changes. Will China be able to over take the already developed marketing systems in the West?

Mortgage rates fall to fresh lows this week

This week fixed mortgage rates dropped to the lowest they've been in decades. Just recently the FED revealing a economic stimulus bond-buying program and it helped instantly seeing the rates drop from 4.24% to 4.17%, the lowest its been since 1971. Mortgage rates tend to follow lower yields for investors and they will occur when the FED purchases the $105 billion in Treasurys over the next month. Do you think there is any other reasons why the mortgage rates dropped to this all time low?

Seoul summit

A major issue confronting the G-20 is how to craft a new global economic order to replace one centered on the U.S. running huge trade deficits while countries such as China, Germany and Japan accumulate vast surpluses. The U.S. runs a trade deficit because it consumes more foreign products than it sells to others.

Government Debt: In The Red

Governments have been indebted for centuries, running ongoing Ponzi schemes involving tax-payers, investors and future generations. But data sets on debt levels over time are rare (the most comprehensive ones only begin in the 1970s). A new paper from the IMF seeks to resolve this. Data gathered from a number of different sources allow the fund to give a historical perspective on today's mounting debt. The maps in this article compare debt levels in 1932 and 2009. Most countries have become more indebted in the intervening years. In 1932 US debt amounted to 33% of GDP, compared with 84% in 2009. What has been the cause of this?

Street life, street death

"Forcing prostitution underground is hampering the fight to curb the spread of AIDS" This Economist article outlines the new program which the United Nations is establishing to spread sexual awareness to predominately South-east Asia countries in an effort to prevent the spread of HIV and other STDs. As over 350,000 new infections of HIV are reported in Asia alone it is a critical area which the UN is basing their efforts in the help to prevent this disease. The best strategy in dealing with prevention of STDs is to, "involve sex workers themselves. As a Chinese delegate put it, given the chance they do a far better job of educating and helping peers than do the UN or government. Myanmar, not normally cited as an outpost of progressive policy, has an HIV-prevention scheme seen as a model. Population Services International, an international NGO, has set up a “peer-to-peer” network with 18 drop-in centres around the country. There, 350 staff, mostly former or present sex workers themselves, dispense advice, discounted condoms and treatment for sexually transmitted infections. HIV prevalence among sex workers dropped from over 30% in 2000-06 to 18% in 2008." Hopefully, a lasting cure will be found for the disease or a way to eliminate HIV will be found as the demand for paying for sexual activities does not seem to have diminished since the dawn of man. I know this is not the usual economic article, but since prostitution was the second profession known to man I thought it might be something to consider.

Venezuela Nationalizing

This article isn't totally economics related but since we have been talking about socialist economies I thought it was interesting... The article says that at the end of October Hugo Chavez announced the nationalization of the American owned bottle manufacturing company Owens Illinois without following the required procedures. Chavez is quoted enforcing his declaration of "the elimination of capitalism" but the article also says that the public is against his nationalist reforms. I wonder how long Chavez will be able to maintain power if his constituents disagree with him, as well as the international community...

Business in the developing world

In this Economist article Mexico is said to be one of the easiest places to do business in Latin America, even above Brazil. These results are based on a World Bank survey that pointed out factors of decreasing bureaucracy that should make Mexico an attractive place to start a business, especially as the only Latin American country where you can pay your taxes online. However, the World Bank survey neglects to take into account corruption which the article points out by citing a business owner who recommends paying in cash unless you want to pay twice. This just proves some of the problems of starting/running a business in a country without firmly established institutions, you never really know what you're gonna get.

Singh of India endorses 'Quantitative Easing'

During President Obama's trip to India, he unsurprisingly offered support to the FED's recent decision to engage in quantitative easing to help the still ailing US economy. But, to many people and many countries' surprise, Manmohan Singh - the Prime Minister of India - also offered support for the move. Singh said that it is in the best interest of the world to have an American economy that is robust and growing, and that quantitative easing is a move towards that goal. This comes at a time when other countries, like China and Brazil, have criticized the move as a way of 'artificially' devaluing the dollar in an unfair trade practice. Both the President's and the Prime Minister's comments came at an economic meeting in which the Obama Administration aims to open up more trade opportunities between the two countries.

Daily Show: President Obama Interview

President Obama explains that he understands voter frustrations with unemployment, but that 18 months in office hasn't been enough time for the 8 million jobs that were lost to catch up with the economic recovery that businesses are experiencing. Obama points out that he has saved the country from a second Great Depression, stabilized the economy, and overseen 9 months of consecutive private sector job growth (though not fast enough). The economy is recovering, it's just that Obama is suffering politically from the natural tendency for unemployment to be a lagging indicator of recovery.

Geithner Says India Sets Example With Flexible Exchange Rate

U.S. Treasury Secretary Timothy Geithner said India is demonstrating economic “dynamism” that comes from promoting internal growth while allowing currency flexibility, even as he reiterated the need for “key emerging economies” to move to market-determined exchange rates. According to Geithner, fast-growing developing nations need to reduce their dependence on exports to help the world economy strengthen. According to Geithner, growth is the #1 priority of the United States currently - “The most significant risk to the global economy today is that the world’s largest economies underachieve on growth." Should growth be the main goal of world economies right now?

Is there a better way to organise the world’s currencies?

There have been a lot of complaints about the dollar being the main reserve currency because it makes all other countries dependent on America's monetary policies. So, there have been proposals about how to change the world's monetary system. In this article, the author examines the lessons from history about the attempts to alter the world's currencies and their impact.

Australia Faces Lower Tax Revenue After Currency Surge

Australia's currency is surging and is one of the best performing currencies against the green back. The government will announce their economic report today, and investors are looking for an increase in interest rates. Since commodities are sold in USD in Australia, the strong aussie dollar means less revenue. The government is expected to reveal a surplus even though, they face lower tax revenues.

Obama surprised by political cost of health law

This article talks about a recent press conference with President Barack Obama in which he says the political cost of overhauling the health care system turned out to be higher than he had expected. And he admits that he gets discouraged at times when dealing with the economy. Further he says in reference to the health care plan, "I think that there are times where we said let's just get it done instead of worrying about how we're getting it done, and I think that's a problem. Do you think "forcing" the bill through was a good idea considering the current condition of our economy?

Just in time for holidays: Bigger paychecks

Nov 5: Longer hours and a pick-up in hiring is pumping more income into economy at just the right time. There was a gain of 151,000 jobs in the October report, which was the best hiring by businesses in six months. A bigger economic impact, than the addition of jobs may come from the extra wages spread across the 90% of workers who already had jobs. "Average weekly wages improved by the biggest percentage in October than at any time since the start of the Great Recession -- up 3.5% compared to a year ago." Do you think the actions explained in the article are a result of Christmas coming up or do you think the effects will be permanent and last past the Holidays?

US President Barack Obama announces $10bn India deals

President Obama is currently in the process of a 10 day tour around Asia in the hopes of promoting exports and job growth. Some of the deals that are currently in progress include the sale of 30 Boeing airplanes, 10 military planes and sales of GE gas and steam turbines. President Obama also mentioned that other companies like GE Transportation, Electro-Motive Diesel and Caterpillar Inc. were vying for a deal to build railways in India. According to President Obama, these deals, if successful will bring in around $10Bn and over 54,000 jobs.
While these projects sound great on paper some might speculate how quickly these programs can be activated in order to meet the current unemployment problems. Many of these projects are still in the negotiation phase and as a result may take time to develop into fruition.

Bernanke defends new Fed plan to boost economy

Ben Bernake defended the FED's move for its new 600 billion dollar program to help boost the economy. The market response however, was not particularly positive as markets remained relatively unchanged as they closed on Friday. Worries of inflation are particularly high and investors fear that more injected money into the system will cause artificial prices in the markets especially in commodities. The FED is buying 600 billion dollars in government funds in order to help encourage lending and spending by consumers.

"The economy hasn't been growing fast enough to reduce unemployment, which has been stuck at a high of 9.6 percent for three straight months. The Fed worries that high unemployment, lackluster wage gains and still-weak home values will weigh on consumer spending, a major drive of overall economic activity"

Do you think the FED's reasons are just? Would you expect inflation to increase to higher than ever levels?

In India, Obama Pushes US Jobs

President Obama has unveiled a $10 billion plan to create new contacts for US exports to India. Obama claimed that India was the market of the future and this move was a "job strategy". This is an especially difficult move with the hug number of unemployed in the US. Obama ensure that this is the best move for the American and Indian people. The new contracts will create jobs and increase the standard of living for both nations. Republicans are in support but are skeptical of the Presidents actions due to failed plans to increase trade with South Korea, Columbia, and Panama.Can we really "Export Our Way to Stability" as Obama suggests in his New York Times Op-Ed?

I spent a gazillion dollars and still lost the race

This article talks about how former CEO and California governor nominee, Meg Whitman, spent more in her campaign than any other governor candidate in history. Her total spending amounted to nearly $50 per vote, and yet she still did not win. I found this article to be eye opening as to how much candidates are spending in their campaigns. It seems today that the more you spend on your campaign, the better chance you have of winning, which should not be the case. Hopefully the example in this article will help show others that nominees need more than just money to get elected.

China’s exchange rate has risen faster than you think

China has been the subject of criticism from many countries, especially the U.S because of the country's attempt to peg the yuan so it could gain some competitive edges. This year, the Fed has persistently demanded China to let its currency float freely, but the result hasn't been what they expect. However, in this article the author argues that the real yuan-dollar exchange rate has risen more than we think. "A real exchange rate takes account of price movements in each country. If prices rise faster in China than in America, China’s real exchange rate goes up, even if its nominal exchange rate stays the same. That’s because higher prices at home make China’s firms less competitive abroad, just as if their currency had gone up."
So it is probably not too bad after all?

October jobs report: Hiring picks up

The United States still is struggling to get back on its feet as unemployment is still high. However, there might be a turn around for those who have been recently laid off as the CNN article mentions how the labor market had just added jobs this past month (October, 2010). This is great news for many as, "The economy added 151,000 jobs in October, the Labor Department reported Friday, an improvement over September, when the economy lost 41,000 jobs. That was much better than the 68,000 gain that economistssurveyed by CNNMoney.com were expecting, and the best overall number since May." Some people are not getting their hopes up as this gain of jobs seems rather insignificant when the unemployment when the national unemployment rate remained at 9.6%. there are still 1.2 million workers who have been unemployed and have been discouraged from finding a job. So even in this small light showing at the end of the tunnel, can some of the people who have been unemployed over six or more months survive until then, and when is then exactly?

UNDP releases 2010 Human Development Report

Today the United Nations Development Programme launched the 2010 Human Development Report including the 2010 Human Development Index. This report, and those before it, are meant to emphasize that "development is primarily and fundamentally about people". The 2010 report states that many people today are healthier, live longer, are better educated and have better access to goods and services, even in countries facing adverse economic conditions. However, there is still growing inequality and unsustainable patterns of production and consumption and several regions of the world have regressed in areas such as health. This report issues three new measures to the Human Development Index: the Inequality-adjusted HDI; the Gender Inequality Index; and the Multidimensional Poverty Index. These are designed to stimulate public debate beyond the traditional discussions of aggregates. Once again countries such as Norway, Australia and the US top the list while African countries such as Zimbabwe, Congo and Niger are at the bottom. How much do these rankings reflect the economic systems and policies of each country? Do you feel that these factors play a large role in something such as human development?

Oil slicks and slick lawyers

The article lists the aftermath, but yet still going on, of the BP oil spill in the gulf. The list of costs BP has to face seems to pile up endlessly as, BP had taken a charge of $32.2 billion to cover the $20 billion it was paying into an escrow account to deal with claims against it, and to account for costs associated with shutting down the well, cleaning up after it and making some forms of recompense. This quarter the company took another $7.7 billion charge, bringing the total to about $40 billion." In addition to that BP as also violated the Clean Water Act which will lead to even more fines for BP in the future. Of course, BP is trying to only take some of the responsibility of the accident as they, "[believe] that they are liable for 35% of the costs of the accident."

BP is paying now for cutting corners and getting caught doing so. It is a lesson which should have been learned earlier as there were protocols in place that they did not follow which got them into this mess in the first place. The negative externalities are spread across the board as BP now has to pay, the environment has to pay as well as the people leaving in the areas affected. The question remains, how will BP hold up after more fines and restrictions are placed upon them until they can no longer keep up with the payments due?

QE2: Fed pulls the trigger

The Fed will be buying $600 billion, instead of the expected $500 billion, in LT Treasuries over the next 8 months through the quantitative easing policy. This will cause a higher than expected inflation which the market will rapidly adjust.
Ever since the Fed has signaled the second coming of the QE policy, the market has been under great speculation. The speculation, however, is about to come to an end, it would be interesting to see how the stock market would fair under the normal market conditions.