The New Way to Lobby

In a bid to shame him into dropping a bill, Tennessee Republican Senator Stacey Campfield was followed around the state Capitol by a child. 8-year-old homeschooled Aamira Fetuga follwed him and presented him with a petition signed by people opposing Campfield's new bill which suggests adjusting a needy family's TANF welfare benefits to their child's academic performance, measured by their school attendance and "satisfactory academic progress." Detractors suggest that this would put undue pressure on a child who is already faced with many disadvantages. A crowd of activists aided Fetuga's protests but singing hymns nearby. Campfield was visibly uncomfortable and disgruntled, and eventually withdrew his bill. He has plans to bring it back next year after tweaking it.

http://www.rawstory.com/rs/2013/04/12/8-year-old-follows-tenn-lawmaker-around-capitol-until-he-drops-welfare-bill/

How Did the World's Rich Get That Way? Luck

http://www.businessweek.com/articles/2013-04-22/how-did-the-worlds-rich-get-that-way-luck

This article addresses the commonly asked question, how did the rich become rich? As we have seen before, much of the commentary suggests that if your parents are wealthy, you are likely to also become wealthy. Economists Samuel Bowles and Herbert Gintis concluded that in the U.S., about 50 percent of variation of wealth and about 35 percent to 43 percent of variation in income of children could be explained by the relative wealth and income of their parents. The vast majority of the article supports this premise and did not interest me, but there is one sentence that caught my attention. Linda Loury a professor of economics at Tufts estimates that half of all jobs in the U.S. are found through family, friends, or acquaintances. Gone are the days of simply submitting your resume to employers. Now it seems you must know someone on the inside, “it’s not the grades you make, but the hands you shake.”

Potential Housing Bubble in China

This 60 minutes segment describes the surge in construction throughout China. There are cities being built with miles and miles of empty apartments, condos, malls, and office buildings. A really interesting look at the potential housing bubble.

Link: http://www.cbsnews.com/video/watch/?id=50142079n

Trouble In Venezuela

Hugo Chavez's hand picked successor, Nicolas Maduro, had a confident lead in the election pulls six months ago, however, that number dwindled down to a few percentage points on election day. His rival, Henrique Capriles, is demanding a recount. This reelection could split the country into two distant views. The article points out the trouble from Chavez's time as leader: stagnant growth, a large devaluation of the currency, and the scary sight of citizens facing food shortages, due to price controls and anti-business policies. Crime is skyrocketed and the murder rate is twice that of Mexico.

Link: http://www.economist.com/news/leaders/21576399-narrow-tainted-election-victory-fitting-epitaph-his-rotten-predecessor-venezuela?frsc=dg|a

Appraising Abenomics

View the article here.

Japan's new stimulus package which plans to double the monetary base over the next two years should help greatly to increase exports and decrease deflation, but Japan faces some other problems. While Japan hopes to end deflation there is large corporate reluctance to increase pay and bonuses, which could act against the reform.  Also fiscal stimulus and monetary easing might not be enough to pull Japan out of over a decade of deflation. A national growth strategy in the form of deregulation and government-led industrial policy would certainly help. Shinzo Abe also has to compromise with a less-liberal parliament. If his Liberal Democratic Party takes over parliament it might be interesting to see what policies they can approve.

How Japan's New Stimulus Will Affect the U.S. Economy

Aggressive economic stimulus recently in Japan is expected to boost the world economy and greatly affect US economy as well. It is true because in the long term, ending a long period of deflationary economy helps Japan more engage in trading relations with US. Low interest rates thanks to Open Market Operation helps attract investors who expect high return. Export industries absolutely gain edge over depreciated Yen. In the short term, as the global recession, especially European crisis is still ongoing, we should only expect modest growth from Japan but overall, this is certainly a good signal for the world economy.

Click here to read the article

The killing of Britain's economic salvation – an export-led recovery

 A very interesting question for British economy in particular and the world economy in the future: If the country is becoming very service-oriented, the currency down-base may offer little helps to boost exports to recover the economy or may offer no helps at all. Furthermore, in a global depression, when all countries are suffering from downturn demand, it's very hard for exports to have big gains as in normal time.

Click here to read more

Top-paying jobs are in engineering

http://money.cnn.com/2013/04/25/news/economy/engineering-best-paid-jobs/index.html?iid=SF_E_River

Basically, the point the article is trying to make is that we as liberal arts college students, are screwed. Engineering is the way to go if we want to seek a high paying job in the future which most of us do. According to a report out Thursday from the National Association of Colleges and Employers, seven of the top 10 highest-paid college degrees are in engineering.

Petroleum engineering majors are the highest paid, with starting salaries averaging $93,500, according to the association. That's at least $20,000 more than the average salary for computer engineers, who are the second-highest paid group on the list. Other highly-paid engineering degrees are in the fields of chemical, aerospace, mechanical, electrical/electronic, communications and technology, with starting pay ranging from $62,200 to $67,600 per year.

Computer science is the most lucrative non-engineering degree, with an average starting pay of $64,800. The only other non-engineering degrees placing in the top 10 for pay are managing information systems/business ($63,100) and finance ($57,400.)

God bless us all.

Espresso Tradition Is Taken Back Up

An old tradition of a customer paying for a future customer's coffee - also known as "suspended coffee" - is being brought back to Italy. The recipient of the free cup of coffee was supposed to be going through challenging and difficult times and could not afford the luxury of a coffee or espresso. With the turbulent times that Italy is facing currently, the tradition is being instituted by organizations not only in Italy but throughout Europe as well. This interesting practice allowed a person in need to receive a gift without having to greet and thank the donor; this also means the donor does not have to showoff that they can afford such a deed.

Link: http://www.npr.org/blogs/thesalt/2013/04/24/178829301/eu-embraces-suspended-coffee-pay-it-forward-with-a-cup-of-joe

Family Art Being Tracked Through Multiple Decades

Although this article does not pertain directly to economic systems, it does draw parallels to our discussions on Germany's economy and the changes it has undergone since World War I. A family that was rushed out of Germany due to the Nazi regime had to relocate an art collection that included some of the pioneers of Modern art. Because of the Nazi onslaught, the Rosenberg family lost many highly collectable, noteworthy, and priceless (but very expensive in the art world) pieces of art.The family has been searching museums, art catalogs for works that belonged to their family's collection, and they have gone to great lengths to redeem their art property.

Link: http://www.nytimes.com/2013/04/27/arts/design/rosenberg-familys-quest-to-regain-art-stolen-by-nazis.html?hp&_r=0

Down Payment Rules Are at Heart of Mortgage Debate

This article discusses the pros and cons of setting a down payment restriction for mortgages. I have mixed emotions on this subject. Yes, if we require a certain percentage down the default rate will decrease. However, the requirement will discourage or eliminate those people with low income looking for home ownership. Even though lending restrictions have grown more stringent, this would add a completely new level.




http://dealbook.nytimes.com/2013/04/24/down-payment-rules-are-at-heart-of-mortgage-debate/?ref=business

New $100 bill

The design of the new $100 bill was first unveiled in 2010 and was supposed to go into circulation in February, 2011. However, because of slower-than-expected production resulting in a three-year delay, an improved, high-tech $100 bill will finally make its debut on October 8th. The new bill is a culmination of a decade-long research and design process. The bill features a series of amped-up security measures aimed at combating counterfeiters, including a blue, 3-D security ribbon on the front of the bill that moves when the note is titled back and forth and side to side. The inkwell and bell on the front of the bill and the number 100 on the right-hand corner also change from copper to green when the note is tilted. It is interesting to see what kind of effects the new bill will have on the economy when it debuts.

Source: http://money.cnn.com/2013/04/24/news/economy/new-100-dollar-bill/index.html?iid=SF_E_River

Working with cancer: a brave new professional world

It hasn't been long since cancer meant the end of someone's career.  But now studies show that working after cancer diagnosis is becoming fairly common.  Two-thirds of the people surveyed said that they felt well enough to stay on the job.  Additionally, 45% of workers said that they took no time off at all after they were diagnosed.  Workers today are also more likely to share the details of their disease.  The employer usually falls into two categories during this process.  They either land in the category of following sick leave policy, or working with the employee on an individual basis.  Businesses that have more than 50 workers are required to give Family and Medical Leave to employees with cancer.  Luckily, Cancer and Careers has heard of more employers who are working with the employees to get them through the treatment.

http://management.fortune.cnn.com/2013/04/25/cancer-career-working/?iid=HP_LN

A Fake AP Tweet Sinks the Dow for an Instant

In a market economy like in the United States fake news of a bombing in the White House created a substantial fall in the Dow earlier this week.  The AP's twitter account was hacked by an international group apparently located in Syria.

http://www.businessweek.com/articles/2013-04-23/a-fake-ap-tweet-sinks-the-dow-for-an-instant#r=hpt-ls

German business optimism falls more than expected

A key measure of German business optimism fell in April, suggesting Europe's biggest economy might not be rebounding as expected and likely putting more pressure on the European Central Bank to cut interest rates. The Germany economy has shrank 0.6% in the last three months of 2012, and most growth expectations this year have been shaken this week by a weak survey of activity in the manufacturing sector. A slowdown in its economy, which accounts for 28% of the currency bloc's total output, would make it harder for the region to climb out of recession. It could make officials at the European Central Bank more inclined to cut interest rate to support growth. However, another cut from the record low of 0.75% would not accomplish much. Rates are already low but the cheap financing is not reaching many companies because troubled banks in some parts of the eurozone are reluctant to lend. Therefore, it is unlikely to see another reduce in interest rates from European Central Bank.

Source: http://www.miamiherald.com/2013/04/24/3361626/key-german-index-falls-more-than.html

The hottest frontier

http://www.economist.com/news/finance-and-economics/21575769-strategies-putting-money-work-fast-growing-continent-hottest

For some time now, Africa has been trailed as the ultimate long-term and speculative investment opportunity. As the troubled continent finally fixes its endemic economic problems of the past and starts to develop, profits should start to flow more readily with the expectation that stock markets will rise. Foreign direct investment has been on an upward trajectory in Africa. Most Internationally acclaimed multinationals have increasingly found Africa as the frontier of economic growth and this has been a motivation for their investment within the continent.

Recovery Benefitting the Wealthy

http://www.washingtonpost.com/business/economy/as-economy-recovers-the-richest-get-richer-study-shows/2013/04/23/fc2146ee-ab81-11e2-b6fd-ba6f5f26d70e_story.html

The majority of individuals are aware that the American economy is making a slow recovery from the 2008 recession but most do not know that the recovery has been mainly for the wealthiest 7 percent in the country. In the first two years of the recovery, we have seen the net worth of the wealthiest 7 percent increase by 28 percent, while the rest of the country's net worth declined. The top 7 percent also own 63 percent of the nation's household wealth. This difference in recovery is due to the fact that the most affluent people in the country have their assets in stocks, while the rest of the country's assets are in their homes. Stocks have greatly recovered since the recession, while home prices have remained around the same. President Obama has said he will work to reduce this income inequality, although the few policies that have been passed have not done much to reduce the gap.

Baltic ambition - Latvia and the euro

The prime minister of Latvia wants the country to join the euro on January 1, 2014, despite the current euro crisis.  If this happens, Latvia will become the euro zone's 18th member.  The country should get in easily, as they fit all of the criteria and have a robust economy.Much of its debt is already in euros and its currency has been pegged to the euro for ten years now, so the change will not be a drastic one.  Despite their recent growth, Latvia is currently the third-poorest member of the European Union. Another concern is that currently, about half of the deposits in Latvian banks come from outside of the country (mostly from countries of the former Soviet Union).  The main problem, however, is that recent polls show only one third of the population in favor of the switch because of fears of inflation.  These fears stemmed from the previous switch from the rouble to the lat during the collapse of the Soviet Union.  Despite concerns of citizens, economists seem to think that this change will greatly benefit the country.

http://www.economist.com/news/europe/21576416-latvia-looks-likely-become-euro-zones-18th-member-next-january-baltic-ambition

Apple Wins ITC Ruling in Google Patent Case

April 22, 2013, 7:32 p.m. ET

Apple Inc. AAPL +2.08% won a victory against Google Inc. GOOG +0.03% in a patent case before a U.S. trade agency, which upheld findings by one of the agency's judges.

A panel of judges at the International Trade Commission—which has the power to ban imports of products found to infringe a plaintiff's patents—said Apple had successfully argued that a patent held by Google's Motorola Mobility division was invalid.

The Google patent described sensors that, among other things, disable touch inputs when the product is positioned close to a person. The technology is designed to prevent inadvertent button presses when a phone is held up to a person's head.

A spokeswoman for Apple declined to comment.

"We're disappointed with this outcome and are evaluating our options," a Google spokesman said.

The ITC's 0372.HK 0.00% decision on Monday is the latest win for Apple, which has been locking horns with competitors in courtrooms around the world as they argue over whether their products infringe one another's patents.

Apple has had some success in its pursuits, including a $1 billion victory againstSamsung Electronics Co. 005930.SE -1.40% in a jury trial in August of last year. That amount, however, was recently reduced as Samsung argued that the jury improperly calculated Apple's awards.

The ITC said it chose to end its investigation related to Motorola MSI +0.10% and Apple because Apple had successfully argued that Google's patent was invalid because it wasn't different enough from previous inventions.

source:http://online.wsj.com/article/SB10001424127887323735604578439392390344304.html?mod=WSJ_business_whatsNews

Many Saw 'Normal' College Student

April 22, 2013, 8:21 p.m. ET

In the months before he was charged with carrying out the Boston Marathon bombings, Dzhokhar Tsarnaev appeared to be a young man pushed and pulled between normal life as an American college student, and the traditions and religion of his family and native country.

Just a few months ago, Mr. Tsarnaev gushed about a trip to New York City, where he went to a hookah bar and "loved it," said Britney Smith, 23 years old, of Miami, who is a close friend of Mr. Tsarnaev's sisters.

As a sophomore at University of Massachusetts Dartmouth, Mr. Tsarnaev, 19, smoked Marlboro Lights, drove a Honda Civic littered with junk and was frequently seen at parties, said college friend Ahmad Nassri, 20, who played indoor soccer with him.

But Mr. Tsarnaev's family loomed large in his life. His father, a Chechen, and mother, an Avar, who both now live in the republic of Dagestan in Russia, wanted him to come see them in May so they could help him find a wife, Ms. Smith said.

source:http://online.wsj.com/article/SB10001424127887323551004578439352051612188.html?mod=WSJ_hpp_LEFTTopStories

Market-Driven Morality in Sports

In recent years, corruption in the sports industry has skyrocketed (an obvious example is Lance Armstrong's recent public confession of doping). This corruption is threatening to shareholders in sports such as event-owners, team-owners, and sponsors because the scandal of a corrupt team or player can tarnish a sponsoring business's image and consumers may boycott related products. Even though some argue that the huge influx of money into the industry was the cause of the problem, the threat of pulling sponsorship money may make sporting bodies crack down more quickly on corruption. Overall, sporting events and players are now having to shift their "win at all costs" mentality to one with a clean enough image to maintain their sponsors.

http://www.economist.com/blogs/gametheory/2013/04/corruption-sport-0

More bad news for student loan borrowers

Before student loans were seen as the "good" loans to have and banks did not have a problem loaning money to individuals after school in order to buy a home or a car because they usually earn more over a lifetime.  However, recently it has been shown that 30-year-olds with no history of student loans are more likely to have a mortgage than those who have had student loans in the past.  Individuals with student loans have had a higher rate in the past, but that gap increased in 2008.  The Economic Policy Institute also said that students graduating now will earn less than if they had graduated when there were more jobs.  The average 30-year-old home owner with loans has a credit score 24 points below those without loans.  The Obama administration has tried to ease the burden by cutting commissions paid to private collection companies who chase overdue student loans.

http://finance.fortune.cnn.com/2013/04/22/student-loan-debt-borrowing/?iid=HP_LN

America's jobs are moving to the suburbs

http://money.cnn.com/2013/04/18/news/economy/suburbs-jobs/index.html?iid=SF_E_River

According to the article, suburbs now have twice the share of jobs as city centers. According to a report released Thursday from the Brookings Institution, jobs in the outer suburbs grew from 40.9% in 2000 to 43.1% in 2010 as jobs within 3 miles of a city center fell from 24.5% to 22.9% in the same time period. This is not entirely a good thing because for poorer people without access to a car, it can make it harder to physically get to a job. For those with a car, it can lead to longer commute times and more money spent on gas. It's also more expensive for taxpayers. Infrastructure costs can be 40% higher in low-density areas than higher ones, she said. Innovation can also be crimped, as fewer people from similar industries get to interact with one another.

The Fed's Bullard thinks inflation is dangerously low

http://economy.money.cnn.com/2013/04/17/the-feds-bullard-thinks-inflation-is-dangerously-low/?iid=SF_E_River

According to the Fed's preferred measure, which strips out gas and food prices., the current inflation rate is 1.3% as of February. The Federal Reserve usually aims to keep inflation around 2% a year. Bullard said "If it doesn't start to turn around soon, I think we'll have to rethink where we stand on our policy."

Low inflation has many bad effects on the economy. For one thing, it makes firms cut costs through different measures, for example: cut back in hiring. It also reduces spending as people are now less motivated to spend. Even worse is when deflation happens, which freezes spending completely since people rationally would not buy a product that is going to slide down the price ladder in a couple of months.

Bullard said he would push his Fed colleagues to ramp up their asset purchases if the inflation rate gets any lower. The Fed is currently buying $85 billion a month in Treasuries and mortgage-backed securities, in an attempt to lower long-term interest rates and stimulate more spending.

Virtual Currency

This article talks about the changing landscape in which virtual currency is beginning to make a dent. Primarily the article focuses on the BitCoin that is described as an online currency currently traded on an open market and is completely decentralized. The total value of all the BitCoins in circulation is about $2 billion. The currency was first developed by a hacker by the name of Nakamoto. With the currency being completely digital, it is conceived then to be able to "hack" yourself to digital gold. Monetary policy is then not dictated by decisions from a board but rather dictated by algorithms set up by the computers that govern the currency. However, despite the shady inception of the currency, several companies have begin accepting this currency such as Reddit and WordPress. The article summarizes by stating the emergence of less secretive currencies stemming from this trend to a digital currency. The competition of these currencies has caused recent and rapid growth in these money market bubbles that will surely collapse with the introduction of a more stable, digital currency that is in the works (OpenCoin). Either way, this is news for those interested in the rapidly shifting environment towards a potentially cashless society.

http://www.economist.com/news/finance-and-economics/21576149-even-if-it-crashes-bitcoin-may-make-dent-financial-world-mining-digital

Billionaire Steve Schwarzman Has Donated $100 Million To Start His Own Version Of The Rhodes Scholarship

http://www.businessinsider.com/schwarzman-scholars-in-china-2013-4

The famous billionaire investor and captain of private equity, Stephen Schwarzman, has just established a $300 million scholarship program for students to pursue a one-year Master's program in China. This huge investment in human capital seems geared toward the ever popular notion that China's rapid growth makes the country incredibly important to geopolitical and economic interests. The majority of the scholarship students will be chosen from the United States, with the rest coming from China and other countries around the world. The program will take place at Beijing's elite Tsinghua University and will begin in 2016 with its inaugural class of 200 scholars. Students will choose courses within the following four academic disciplines: Public Policy, International Relations, Economics & Business, and Engineering.

Russian PM says "stealing continues" in Cyprus

The European Union bailout of Cyprus made the Russian government angry because this will result in a heavy loss for foreign depositors, which includes many Russians.  This will also result in a loss of uninsured bank deposits in Cyprus over 100,000 euros, which is about $130,000.  However, this sends a good message for those who are thinking about moving their capital to Russian banks.  Russians are thought to have most of the 19 billion euros of non-EU, non-bank money in Cypriot banks.  

 

http://www.foxbusiness.com/news/2013/03/25/russian-pm-says-stealing-continues-in-cyprus/?intcmp=obinsite

A Make-or-Break Week Ahead for the Stock Market

Analysts are viewing the upcoming week as critical for the stock market.  This view comes from a variety of different factors all coming together in the next few days.  In addition to information on home sales, durable goods and Q1 GDP being released this week, around 170 S & P companies plus 10 Dow firms announce their earnings.  This information is particularly interesting to investors as earnings reports so far have been mixed.  While two thirds of companies have met their earnings estimates, 57% have missed revenue estimates, which is unusually high.  Add to this the fact that last week was the Dow's worst week of the year and it is clear that next week could determine whether a major pullback in the markets is coming.

http://www.cnbc.com/id/100656626

National Security Concerns Used to Gut the Stock Act

Last week President Obama signed a partial repeal of the Stop Trading on Congressional Knowledge(Stock) Act. The act, aimed at stopping insider trading within the government would require lawmakers, their staff, and some executive branch officials personal finances public and in searchable format online. However, members of Homeland Security and the CIA have raised concerns that such a database would allow enemies to single out certain people in the government that they could exploit. The partial repeal that Obama signed will halt the online database for the large majority of government officials previously required to register.
Some critics see this as a roundabout way to gut the legislation and protect overpaid government officials. Personally, I think the searchable database should exist for anyone who wants to keep an eye of lawmakers, however the security concerns should be reviewed first.

Italian lawmakers re-elect president

http://www.nytimes.com/2013/04/21/world/europe/italian-lawmakers-hoping-for-coalition-urge-napolitano-for-re-election.html?ref=business

Italy in their economic struggles decided to re-elect their president even though he has done less than a stellar job with the economy. He was the most neutral candidate that was offered left and even though he was not an ideal choice he didn't have any competition that the other members of the board were more comfortable in nominating. They believed that their stability in office would be the safest idea because the last thing they need in their economic state is uncertainty and someone who would rock the boat.