Japan's Leader Defends Handling of Crisis

"Japan’s embattled prime minister, Naoto Kan, defended his government’s handling of the nation’s nuclear crisis on Saturday, a day after an adviser resigned during a tearful news conference in which he charged that the government was not adequately protecting the population from radiation." As the opening paragraph for this article, one can see the importance it poses on the accountability the people are holding the Japanese government in dealing with the crisis responsibly and transparently.

As of now the Japanese Government is trying to deal with criticisms, as it figures out how to also deal with damaged soil and land and treating radioactive cases in the surrounding regions. One can understand how this is hard to do as they continue to push up the costs of repairs and damages. An increasing $300 Billion.

High Energy Costs Push Up Producer Prices

The article begins by stating how producer prices have risen .7 percent since March, as a result of high energy costs. The article then goes on by pointing out how consumers may see a price increase as well. Hauser finishes the article by mentioning the Federal Reserve and how its tactics to stimulate growth will not change because “there is sufficient room to allow prices to run." The most important sentence in the article comes at the end and states: “The economy can add a zillion jobs, but if wage growth is not coincident, aggregate purchasing power is likely to be constrained." Furthermore, it is safe to assume that as long producer prices continue to rise, as a result of high energy costs, then we are likely to see a rise in consumer prices over time.

Starbucks Targets Folks Who Shun Starbucks

Seattle’s Best coffee was acquired by Starbuck’s Coffee giant in 2001. Since then, Seattle’s Best hasn’t really been the best at anything. The small coffee company hasn’t really progressed in sales or market position since its acquisition by Starbucks. However, that’s all changing. Starbuck’s Chief Executive Officer Howard Schultz has charged brand manager and global strategy chief Michelle Gass to remake Seattle’s Best coffee and reach a billion dollars sales target. While that goal remains far away, Gass has made major progress in repositioning Seattle’s Best in the market. As the new President of Seattle’s Best, Gass markets her coffee to customers who hate Starbucks big corporate feel and would rather settle for a no name type of coffee. It seems to be working. Gass has put her coffee in 300 AMC cinemas, aboard Delta Air Lines planes, and in Subway, Burger King, and Royal Caribbean Cruises. It’s also being distributed in vending machines at offices, hospitals and college campuses worldwide. Gass’s prime targets to sell Seattle’s Best coffee to are mass retailers and convenience, drug, and grocery stores, as well as mom-and-pop businesses. Gass has also recreated the Seattle’s Best packaging scheme. The packaging design is now color-coded and numbered 1 through 5. 1 is the mildest coffee for casual drinkers while number 5 is a dark roast for more hardcore coffee drinkers. In order for Seattle’s Best to compete with their big sister Starbucks, Gass feels that she must scale up production and marketing. Gass says that “With our big sister upstairs who owns coffee, the only way we have a chance to get a piece of that is to be disruptive”. While Schultz’s 1 billion dollar revenue goal is still far away, Gass’s disruptive Seattle’s Best is starting to truly attract customers of the coffee industry

US Growth Takes a Hit

US growth is taking a small turn downwards. It is not entirely the US' fault, says the Economist. They claim that both weather and outside influences have slowed US growth from initial rates of 4% to as low as 1.0% or below. Harsh winter weather decreased consumer spending, and rising oil prices because of unrest in the Middle East and North Africa contributed as well. With the advent of the Saudi's 10% production cut, this is bad news for the United States, who was predicted to have a durable recovery in 2011 after a rocky but successful 2010. I think this has the potential to be motivation for real efforts to make alternative energy viable as a replacement for oil and/or coal. It could also simply result in a prolonged slowing of growth, decreasing America's economic influence in the world even more.

Rising Oil Prices Cause Inflation Concerns in China

This article deals with the rising inflation concerns China is currently attempting to fight. Oil prices worldwide have been consistently rising over the past few months, and this has led to speculation that inflation in China may accelerate. The concern over inflation has caused the Shanghai Composite Index to drop, and investors worry that the government will continue its tightening policy. Consumer prices are projected to rise as much as 5% in April, and the yearlong inflation has a goal of 4%, so this is a major concern. The central bank has increased interest rates four times to attempt to fight inflation, because prices have been increasing at their highest level since early 2008.

Dollar's Decline Speeds Up, With Risks for U.S.

The U.S. dollar continues to slide downward at an accelerating pace due to low interest rates that creates inflation concerns and the large federal budge deficit. The downward pressure on the dollar is expected to continue with no relief in sight for the dollar. For the second week in a row, the dollar has fell nearly 1% against a broad basket of currencies this week.The ICE U.S. Dollar Index closed at its lowest level since August 2008, right before the financial crisis worsened.

Additionally, Chinese government officials have hinted that they may diversify their $3 trillion of currency reserves away from U.S. dollars. Consequently it would chip away at what has been the important source of dollar-buying in recent years. Washington has been pushing Beijing to allow the yuan to continue to appreciate, to help reduce the U.S. trade deficit. But a continued decline in the value of the dollar is a double-edged sword for the U.S. economy.

China, Japan, South Korea seek trilateral trade pact

This article reports the news of China, Japan and South Korea seeking a trilateral trade pact between the three countries.  The minister of trade met in Tokyo and agreed to increase efforts in free trade agreement in order to promote free flow of trade and investment which is vital to sustaining economic growth. 
The recent financial crisis from key markets such as U.S. and Europe has decreased the demand as well as the disaster in Japan. The tsunami and the earthquake in Japan has disrupted the various supply chains that had big effects in both China and Korea's economies.  The trade ministers of China and Korea urged Japan to restore the supply lines as soon as possible and also emphasized the positive role of increased trade will have in Japan's recovery. 
 A Joint Study Committed between the three countries were set up in order to develop a trilateral free trade agreement.

Saudis Cut Oil Production

Saudis recently announced they would reduce oil production/extraction by 800,000 barrels a day. With the demand for oil on the rise, this move is interpreted by some to bolster prices, which is speculated to be used for funding promised social programs to protect themselves from political turmoil.

Saudi Arabia averaged 8.2 million barrels a day last year and claim to be able to produce as much as 15 million. Cutting 800,000 barrels from 8.2 million is an extremely large cutback, nearly 10%.

Colombia's rising fortune

Without a doubt, Colombia has come a long way over the past ten years. In the late 1990s and early 2000s, the country was suffering from widespread violence, a mortgage bust, and a budget crunch. Today, the security situation is much improved, foreign investment has increased, and commodity prices and oil output have risen. This recent good news does not, however, put them in the clear. For instance, they must take measures to deter a flood of foreign capital that could send the peso increasing at a rapid rate. Colombia's government is also under pressure to spend more money. Despite the military gains against the FARC guerrillas, many feel that more money still needs to be spent on security. Additionally, parts of the country desparately need better infrastructure. Finally, the country is suffering from high income inequality leading to pressure for social spending. Colombia is facing the demands of conflict and post conflict spending and it will be interesting to see how they respond in the years to come. So far they have slashed tax breaks and are presently trying to pass a Chilean-style fiscal rule to limit the deficit. Juan Carlos Echeverry, the finance minister, is confident that the government's economic plan will be able to handle their current situation.

Apple's Reliance on Japan for Components Put Sales at Risk

The Japanese earthquake that occurred this past March has affected not only Japan, but the entire world. The effects are especially felt in the business sector, as any companies who relied on Japan for goods and services have abruptly been caught off from Japanese suppliers. One such company is Apple. Apple's third quarter forecasts for sales, profit and gross margin will be affected significantly due to disrupted manufacturing and higher component prices. For example, flash memory is a key component in making up the memory databases in Apple's Iphone, Ipad and Macbook Air products. Higher flash drive prices mean higher production costs for Apple. Flash memory is not the only components Apple relies on Japan for. Batteries, touch-screen glass, and resin used to attach chips are all key components imported to Apple from Japan. Increasing demand for Apple products last quarter means that Apple must secure access to these parts quickly in order to fulfill the rising demand for Apple products. Even though the catastrophic earthquake in Japan has crippled many businesses, Apple is in far better position than most other companies. This fact is solidified by Apples 59.7 billion dollars in cash and investments. Apple should be able to handle the manufacturing disruptions and still meet the market's demands.

Gulf Tourism as Gauged by Flying Fish

The speed of the Gulf Coast tourist economy's recovery will face its next test this friday when fish fly at a state-straddling roadhouse. The Interstate Mullet Toss on the last weekend of April typically attracts huge crowds to the Flora-Bama bar in Pensacola, Florida, where participants try to throw a dead mullet fish as far as they can, from Florida across the sandy state border into Alabama.

Last year, thousands took part in the annual ritual with large parties and festivities while millions of barrels of oil were pouring into the Gulf. and large celebrations and partying—as millions of barrels of oil were leaking from the BP PLC's Macondo well miles away in Gulf waters. The mullet tossers paid it no mind. Following the event, gooey tar balls began to wash ashore leading to a terrible summer season all along the Gulf Coast.

Reservations for vacation rentals have been down in most beach towns and other Gulf communities and is uncertain if the typical number of summer tourists will return. There are signs of progress with the cleanup efforts and the increase tourism.

Area officials and locals believe this event will be a great beginning to the summer season and expect the return of thousands crowded along the beach watching the fish activities.

U.S. Growth Probably Slowed as Fuel Costs Rose

According to the article, our economy probably grew at a slower pace in the first quarter. The main reason is the jump in gasoline prices caused consumers to cut back.

Gross domestic product rose at a 1.9 percent annual pace after increasing at a 3.1 percent rate in the previous three months, according to the median estimate of 66 economists surveyed by Bloomberg News before an April 28 Commerce Department report. At the same time, other data show business investment remained a pillar of the economic rebound, while home prices fell.

Federal Reserve policy makers, when they meet this week, will likely say they’ll complete the second round of stimulus worth $600 billion, as scheduled, through the end of June to help sustain the recovery. Big corporations like GEs or Apple Inc are among those benefiting from gains in spending on equipment and software, while households are feeling the pinch of higher food and fuel prices.

The GDP estimate is the first of three for the quarter, with the other releases scheduled for May and June when more information becomes available

Beer Drinking and What It Says About China’s Economy

China has increased the amount of beer they drink each year, making it the largest market for beer. The article looks at research that says people will drink more beer until their income rises to about $22,000 a year.  After this they start drinking less beer and more wine, with an increase in income. This trend holds true for other emerging markets like Russia and Brazil.

It's an interesting article, because in the article it makes the comparison to what American's experience in their 20's. In college you aren't making much money so you don't have that many responsibilities and many opportunities. But as your income increases, so do your responsibilities and you have less opportunities to drink, and there are more potential costs. 

You've had a pleasant run

A year after the BP oil spill in the gulf the negative effects it had on the fishing industry are beginning to wear off. Consumers' concern over the the safety of the fish has fallen 15% to around 75% since last year. The amount of people avoiding gulf seafood has also fallen to 25% from around 60%.  Despite these upturns, the fisherman are still having a tough time competing with foreign imports due to high fuel costs, stricter regulations and catch limits.