Wen’s Inflation ‘Tiger’ May Find Cage Locked After Rate Rises

China's fourth interest-rate increase in less than six months signaled the government’s determination to “front-load” monetary tightening in an effort to defuse overheating risks. The People’s Bank of China yesterday boosted its benchmark one-year lending rate by a quarter point to 6.31 percent, making its announcement at the end of a three-day holiday.

Premier Wen Jiabao’s government acted ahead of a report forecast to show consumer prices climbed 5.2 percent last month from a year before, the fastest pace since 2008. He used stronger language at a meeting of lawmakers in Beijing last month, saying inflation is a “tiger” that once freed can be difficult to get back in its cage. He also said that “exorbitant” home-price increases in some cities were a top public concern and rising costs may undermine social stability.

Chinese officials may be on guard against increased inflows of “hot money,” or speculative capital, as yesterday’s move widens the differential with rates in developed economies. The nation may face “relatively large” risks from cross-border capital flows, according to Deng Xianhong, deputy director of the State Administration of Foreign Exchange

G.O.P. Budget Proposal Cuts $5.8 Trillion in Spending

House Republicans on Tuesday unveiled a far-reaching budget proposal that cuts $5.8 trillion from anticipated spending levels over the next decade and is likely to provide the framework for both the fiscal and political fights of the next two years.This proposal aims not only to limit federal spending and reconfigure major federal health programs, but also to rewrite the tax code, cutting the top tax rate for both individuals and corporations to 25 percent from 35 percent.

The introduction to the proposal said the spending blueprint disavowed what it called the “relentless government spending, borrowing and taxing that are leading America, right at this moment, toward a debt-fueled economic crisis and the demise of America’s exceptional promise.” 

Republicans say their proposal would reduce the size of the federal government to 20 percent of the overall economy by 2015 and 15 percent by 2050 while President Obama’s plan introduced this year would not hold the size of government below 23 percent of economic output.

Democrats, however, say the emerging proposal amounts to a conservative ideological manifesto showing that Republicans intend to cut benefits and programs for the nation’s retirees and neediest citizens while protecting corporate America and the wealthiest people from paying their share of taxes. They will be certain to challenge the budget plan and make its bold efforts to reshape the health care programs for older Americans and the poor — a theme of their political argument to regain control of the House and hold the White House in 2012.

Focus on Inflation

The article says that the Federal Reserve should focus on controlling inflation, not the high unemployment rate that has been plaguing the United States ever since the recession. By looking at the Fed's historical actions, one can see that the inflation rate has been the main focus until recently, when the issue of trying to get the country to full employment began to creep into the Fed's agenda. In fact, the actions needed to create new jobs may drive up the inflation rate. The article argues that by focusing on controlling inflation, job creation will follow as the economy and rates remain stable.

A Long, Slow Slog Back to Normal

This article discusses the data given that was last updated from March 2011, showing the added jobs each month in the US economy. The data showed that 216,000 jobs were added in March, which was good to see, however the author explained that this is not the pace of growth needed to get the country back to full employment soon. If the growth continues as it had in March, the US will not be back to full employment until January 2014, three years from now. However Rampell also displayed a graph that showed where the growth would be if the average growth per month was 472,000 jobs per month, and that if this was so, the country would be back to full employment by July 2012. This is unlikely, and it looks that it will be close to three years until we are back to full employment.

Google in fresh move against Facebook

Google has recently made an attempt to counter Facebook’s increasing popularity on the web. Google has veered away from creating a whole new social network type of addition on their own. Instead they have copied a few of Facebooks features in order to add a social element to its search service.

Googles latest addition to their search engine was based on the version of Facebook’s “like” button. This allows users to “vote” on web pages they like and personalize their preferences that would then appear in other search results seen by their friends.

Hopefully this new added feature will allow users to interact more directly with its search results. And maybe this will add a new dimension for networking and finding reliable information.

U.S. Jobless Claims Fall, Consumer Confidence Improves

Fewer Americans filed claims for jobless benefits last week and consumer confidence stabilized, a sign the world’s largest economy is weathering the jump in commodity prices heading into the second quarter. The Labor Department also issued its annual revisions to the seasonal-adjustment factors, which caused a “mild upward shift” in the number of jobless claims, an agency spokesman said as the figures were released to reporters. Applications were projected to fall to 380,000 from 382,000 initially reported for the prior week, according to the median forecast of 42 economists in a Bloomberg News survey. Estimates ranged from 370,000 to 390,000. The Labor Department revisions pushed the previous week’s figure up to 394,000.

Antitrust Cry From Microsoft

Microsoft is urging the European Union to go after Google for antitrust violations. This is not the first protest but this is the first from a large company and from one of Google's big rivals.
The reason is because "Google’s search engine unfairly promotes its own products".
Microsoft is still a huge firm and doing very well but their internet search is "trailing far behind Google".
Microsoft and others hope that the antitrust claim in Europe will lead the U.S. to also investigate.

Michigan Cuts Jobless Benefit by Six Weeks

Michigan has had an unemployment rate of over 10% for longer than any other state.

The new Republican governor , Rick Snyder, signed a law Monday that says Michigan will now pay fewer weeks of unemployment benefits than any other state.
This will come into action as early as next year.


All states currently pay 26 weeks of unemployment before 'extended benefits paid by the federal government kick in'.
Michigan's unemployment next year will be only 20 weeks.

This is especially important because the federal unemployment benefits will end next year as well - for all states.

Democrats are outraged and many more are upset - the law was 'slipped quietly' into a bill that was orginally designed to help the states unemployment benefits. The bill was originally supposed to help reduce unemployment fraud and raise the time period that people could get unemployment benefits from the federal government up to 99 weeks.

Bloomberg vs. Cuomo

Budget cuts proposed over the weekend by Governor Cuomo triggered a strong reaction from the Mayor of New York, Michael R. Bloomberg. “We are the jewel of the financial crown, if you will, in New York State,” Mr. Bloomberg said after a City Hall news conference. “We’re the one that’s generating the money,” said Bloomberg. Bloomberg doomed the proposed budget cuts for the city of New York as outrageous given that New York City is the economic power house of the United States. The budget proposed by Cuomo included declines in education which was one of the sectors which Bloomberg wanted to allocate more funds to. Defendants of Cuomos position said that the city's revenue has actually increased therefore the proposed cuts are reasonably. Bloomberg responded to this by saying that in order to remain solvent the city has to keep some money in reserve. “We have to have some money put aside for emergencies,” said Bloomberg. Even though the state of New York belongs to a market economy (the United States), this situation can be related to the planners headache concept that we've gone over in class. Allocating less funds to New York City and reallocating them elsewhere is one of the headache's that the Governor of New York has to take care of. Reallocating government funds frome education into perhaps another industry is another headache that the Governor has to take care of.

Stiglitz: Budget plan a 'near suicide pact'

Bold words, but maybe true. The famous Stiglitz voices his distaste for the recent budget plan released by Bowles-Simpson. One of his concerns is that there wont be any reinvestment in the public sector, how this would REDUCE our deficit is a big question of mine. I do agree that reinvestment in infrastructure is vital for any economic system to grow, but public spending is just that, an expenditure, not a savings. It is also contradictory, Stiglitz thinks the defense cuts are unwarranted but then he goes and says we should decrease spending on military programs/projects?

Entrepreneurship in China

In light of our Chinese lecture, here is an interesting overview of the dynamic between the Chinese state and entrepreneurship.

Still cutting

When is the right time for the government to cut back spending? Is now the right time or should the government still run on deficit? This article is a good example of what kind of dilemma government officials are currently faced with. The author talks about budget problems in the United Kingdom but the problems are no different from the ones in the United States. The British government is faced with higher than expected inflation and still low tax revenues. Hence, as author points out, British Chancellor George Osborne has a harder task ahead of him than he'd been envisioning.

China, Energy Stocks to Lead Asia, Poll Shows

This article discusses what has been forecast to be the driving forces behind advances in Asian equities in the following year. Surprisingly, the two Asian countries forecast to contribute the least are Japan and India. Also, concerns over volatility in countries rich in oil (Middle East, Northern Africa) have given rise to concern in many Asian countries over inflation, particularly because so many of them have recently increased interest rates. The Chinese growth was forecast to be around 9%, which is not as high as recently, but still quite good. On the other hand, Japan is still recovering from the earthquake and therefore its growth has suffered a setback.

Unpaid jobs: The new normal?

With nearly 14 million unemployed workers in America, many have gotten so desperate that they're willing to work for free, and companies that have used free workers say it can pay off when done right. "People who work for free are far hungrier than anybody who has a salary, so they're going to outperform, they're going to try to please, they're going to be creative," says Kelly Fallis, chief executive of Remote Stylist, a Toronto and New York-based startup that provides Web-based interior design services. In the last three years, Fallis has used about 50 unpaid interns for duties in marketing, editorial, advertising, sales, account management and public relations. Why do people work for free? The benefit unpaid labor offers to a business is pretty clear, but it can also give employees needed experience, a reference letter or even a self-esteem boost in a depressing economy. Sometimes, gratis work can lead directly to a paid opportunity. There are strict federal and state rules that workers must be paid the minimum wage and paid for overtime, and must abide by other provisions in the Fair Labor Standards Act, which applies to about 135 million people working for 7.3 million employers. Unless someone is an intern, trainee or independent contractor, he or she has entered into an employment relationship when starting to work for a company.The Labor Department has a strict six-point test to determine whether someone is an intern or trainee and separate guidelines for independent contractors. "If a person has entered into an employment relationship with a company, they need to be paid for their work," a U.S. Labor Department spokesperson says. Companies that are found violating the law will likely have to provide back pay, monetary penalties up to $1,100 per violation and damages that equal the amount of wages.

Why Lexus Doesn't Lead the Pack in China

Lexus has become one of the leaders in selling luxury model cars within the U.S. automobile market. The Toyota owned company cannot seem to find the same success in China. Lexus sold just a fifth of the percent competitors Audi sold last year. This is due to two different issues. For one, Lexus imports all its cars into the Chinese market. Within the Chinese automobile market, importers must pay a 25% custom duty and a 17% value-added tax. Another issue is the late start Lexus got off to introducing Lexus-model cars into the Chinese market. Lexus was introduced in 1995, whereas competitor Audi introduced itself in 1985, giving Audi more time to solidify itself within the market and understand consumer preferences. To combat its faulty sales, Lexus has tried to increase its customer service options within the Chinese market. Lexus has also introduced cars that have smaller engines, tapping into the Chinese preference of owning smaller cars. Lexus hopes that by adjusting its approach to the Chinese market, it can increase car sales within the Chinese automobile market within the near future.

Fear of Shortages Drives Panic Buying of Japanese Goods

In the aftermath of the Japan disaster, there are expected shortages of high quality technical goods produced almost exclusively by Japan.

For example Hollywood is a big consumer of video tape which is largely produced in Japan.

A specific example would of of Echelon, a San Francisco based company which sells 'smart meters' to monitor electricity consumption. Echelon's executive board recently held an emergency meeting to pre-order a stock of products to deal with the possibility of a disturbance in production.

As of right now, most Japanese firms have been un-phased by the disaster. However it doesn't take much to stagnate the production process of technical firms, as is the case with Japan. Firms such as Echelon are strategically dealing with worst case possibilities as they have to pay large compensations to their customers for delivering late on their contracts.

The nuclear scare may have been highly dramatized by the media, but the speculation has tangible results.

Vodafone is having trouble in India.

India's market for cell phone users is on the up rise but taxes seem to be making it difficult for Vodafone to maintain profits. Profit per user are very small due to the scarce use of minutes and trouble with a lawsuit relating to tax troubles. Vodafone claims that they did not make a profit off of their acquisition so they should not owe taxes but the Indian tax authorities seem to disagree.

California's Fate in Limbo

This article from The Economist explains the dire situation in California, a 25 Billion dollar deficit that must be solved quickly or the state will have to default on many loans it has taken out. If this were to happen, the US Government would have to bail them out to avoid an enormous depression. Yet we cannot afford to bail out a state like California completely.
Even with all this on the line, republicans in California are moving to block measures proposed by Governor Brown, a democrat. The bill he has proposed even includes massive cuts--something the republican party has been calling for--that only spare the schools and a select few public services. The other half of the bill calls for increases in sales, income, and car taxes. This is the part Republicans obstinately object to, and have now banded together to block any and all budgetary legislation Gov. Jerry Brown proposes.
This could have devastating economic effects if a stalemate continues for too long. With the US federal government facing the prospect of hitting the national debt ceiling, bailing out California, whose debt is larger than many states entire budgets, would be a disaster. The question remains: will politicians realize the need for action in time, or will the tradition of reactionary politics doom the Californian and US economy?

N.Y. Budget Deal Cuts Aid to Schools and Health Care

Gov. Andrew M. Cuomo and leaders of the Legislature imposed a $132.5 billion budget agreement that would cut spending, impose no major new taxes and begin a long-term overhaul of New York State’s bloated Medicaid programs. The budget agreement is Albany's first on-time budget in five years which legislative leaders hopes to be a new road of responsible budgeting and effective government. It also fulfills one of Mr. Cuomo’s main campaign promises to avoid new taxes in addressing the state’s financial problems.

Mr. Cuomo persuaded legislative leaders to agree to a year-to-year cut of more than $2 billion in spending on health care and education- the two largest themes of New York’s ever-growing budget. Over all, officials said, the budget deal would reduce year-to-year spending by about 2 percent, the 1st time spending would decrease in more than a decade.

Mr. Cuomo and the Legislature agreed upon a merger among the Department of Financial Services, combining the existing state banking and insurance agencies. Cuomo is looking for other consolidations as well.

Cuomo agreed to add $250 million to his executive budget proposal- more money for schools; the blind and the deaf; human services; higher education; and prescription drugs for the elderly.

Two negative aspects is that the budget does not state what it will do for teacher layoffs as well as what prisons will be affected by the decrease in 3,700 prison beds.

Payrolls May Not Be Growing Much, but Profits Are

The economy is slowly recovery from the recession that has effected it for several years. The recovery process has been slow. An encouraging sign is that firms are beginning grow profits. However, at the same time they are refusing to hire new workers, which is keeping unemployment high. This is also contributing to the higher profits because firms are not incurring the costs associated with hiring more workers.

Sales of luxe doomsday bunkers up 1,000%

NEW YORK (CNNMoney) -- A devastating earthquake strikes Japan. A massive tsunami kills thousands. Fears of a nuclear meltdown run rampant. Bloodshed and violence escalate in Libya.

And U.S. companies selling doomsday bunkers are seeing sales skyrocket anywhere from 20% to 1,000%.

Northwest Shelter Systems, which offers shelters ranging in price from $200,000 to $20 million, has seen sales surge 70% since the uprisings in the Middle East, with the Japanese earthquake only spurring further interest. In hard numbers, that's 12 shelters already booked when the company normally sells four shelters per year.

"Sales have gone through the roof, to the point where we are having trouble keeping up," said Northwest Shelter Systems owner Kevin Thompson.

UndergroundBombShelter.com, which sells portable shelters, bomb shelters and underground bunkers, has seen inquiries soar 400% since the Japanese earthquake. So far sales of its $9,500 nuclear biological chemical shelter tents are at an all-time high -- with four sold in California last week, compared to about one a month normally.


I find this article to be very interesting because this is good news for the U.S. consumer confidence and particularly attractive as well for that sector. The question is though, is the consumer confidence going to decrease in the U.S. economy as a whole due to series of crises around the globe? And the world as well?

The Evolving Mission of Google By DAVID CARR

I'm not sure what evolution there will be, considering Google's business model and source of profit can't just be changed or even evolved to a different model. Google already gains 96% of its revenue from advertising. This leads Google to sell, and often gives away, their products because our eyeballs are the product they're truly selling. If those free services direct more of our eyeballs to their ads , then they get to make money. I think whatever Google does now or in the future will imply how to increase revenue. The competing ideas of these search engines exemplifies that we live in a form of capitalism and those with the best ideas and products should win.

U.S. inflation spike won’t last, Lockhart says

This article touches on the current inflation rate and DR, and the expectations for these rates in the near future. In the month of February we have seen some of the highest inflation in years. Most notably, this inflation has arisen as a result of the shock on the global markets as a result of the turmoil over seas. But Lockhart believes that this sudden spike in inflation wont last, as energy prices will begin to slow down shortly. Additionally, in his current proposal for the Fed Lockhart has stated that the Fed should raise the DR to 2.5% and within the next two years the American deficit will be reduced by $1.45 Million. With these encouraging numbers, the future for the US economy seems to be on the right track.

Let Them Eat Cutbacks

This article criticize the cuts in food stamp, part of welfare reform attempt proposed by Republican Study Committee.   The author  describes food stamps as the "ultimate ground-level crutch for Americans staggering against poverty" and an  important factor for keeping about 4.5 million  American people stay off the official poverty level.  The proposal by the Republicans state that they could save $1.4 trillion across a decade through cutting down welfare programs and yet still help "down-and-out families".  The author emphasize the need to protect the needy people first and protecting programs vital to society.

Another Year of living dangerously

This article is about how the year of 2011 was supposed to be a stress free year in terms of economic disasters. Unfortunately, the disaster in Japan, and the ongoing issues in the middle east leaves us living yet again on the edge. Before the disasters, the stock market was starting to show signs of growth. With the growth, investors began to sell back bonds that they had purchases in case of troubled times.

It seems impossible for there to be a year without disasters that have a large influence on the economy. Japan is the third largest economy in the world behind the US and China. The disaster has created many problems for car manufacturers since many of the companies have moved production either to china or Japan. Japanese car companies have seen a lot of trouble in terms of imports and exports of cars, car parts, and many others. Also, oil prices are expected to rise in result of the disaster. All of this is going to have a long term effect on the US and economies world wide.

The global economy: Another year of living dangerously

Economists' worries at the beginning of this year were that emerging markets were going to grow too fast. We can clearly see that this hasn't been the case.

In this article, the author talks of the lack of economic boost that we have seen this past year. The last few years have been plagued by the world recession, but economists saw that many of the steps governments took to alleviate the downturn worked, and that this would be the year for growth. There thinking was that everything would now be uphill. But unrest in the middle east, and the Japanese disasters have shocked the recovering economies and their consequences may be seen for some time to come.

Oil prices have risen sharply, limiting economic growth by about .2 percent for each 10 percent increase in price. If markets are not able to quickly adapt to these shocks, the world economic recovery may be delayed even further.

China's Economy: Decelerating

This article explains the pressures China is facing regarding its high inflation rate. Finally after months of inflation, it appears that there may be hope for a slow down of rising prices.

Firstly, due to droughts and other weather conditions, food prices rose 11% in the past year. By chance, the northern region finally got some rain, and so the crop is probably going to be much larger and healthier, which will decrease food prices.

Secondly, the money supply has been growing much faster than the Chinese government's targeted rates. In February, there was some evidence of a slowdown that much more accurately reflected the government's expectations.

Lastly, the huge amount of credit being given out has seemed to decrease. The problem appears to be that while it seems that the amount of credit is decreasing, the truth may be that banks are just finding ways to hide it in other accounts. This is a definite problem and could effect the government's prediction making abilities because they do not have full and perfect information.

China's Central Bank recommends gold for "value preservation"

The banks in China recommend buying gold to preserve their currency and hedge inflation. The Financial Markets Review has come out and stated that many currencies are declining against the value of gold.

12 states in the United States have proposed letting citizens use gold and silver as legal tender, meaning if you just so happen to live in these states, buying gold may not be a bad idea. After all gold is self stabilizing.

Thoughts?

Less Appetite for Luxury

Japan, with one of the largest economies in the world accounts for an outsize portion of all luxury goods sales- last year about a quarter of luxury products were bought by the Japanese. Following the disasters, the Japanese priorities have changed routes and now have a different outlook.

Japan counts for an average of 13% of total profit for companies in the luxury industry like- Louis Vuitton, Hermes, Coach and Tiffany. In 2010, Japanese consumers at home and abroad accounted for 24 percent of all luxury goods sales.

Though luxury products are viewed as products for the upper class in other countries, in Japan, they have long been seen as an integral part of middle-class life. Middle-class consumers often cut back on vacations and expensive meals so they are able to buy luxury clothes or handbags. Now the Japanese are in a new reality- ending the materialist wants and focusing on helping others and bringing Japan back to basics.

Less Appetite for Luxury

Japan, with one of the largest economies in the world accounts for an outsize portion of all luxury goods sales- last year about a quarter of luxury products were bought by the Japanese. Following the disasters, the Japanese priorities have changed routes and now have a different outlook.

Japan counts for an average of 13% of total profit for companies in the luxury industry like- Louis Vuitton, Hermes, Coach and Tiffany. In 2010, Japanese consumers at home and abroad accounted for 24 percent of all luxury goods sales.

Though luxury products are viewed as products for the upper class in other countries, in Japan, they have long been seen as an integral part of middle-class life. Middle-class consumers often cut back on vacations and expensive meals so they are able to buy luxury clothes or handbags. Now the Japanese are in a new reality- ending the materialist wants and focusing on helping others and bringing Japan back to basics.

Less Appetite for Luxury

Japan, with one of the largest economies in the world accounts for an outsize portion of all luxury goods sales- last year about a quarter of luxury products were bought by the Japanese. Following the disasters, the Japanese priorities have changed routes and now have a different outlook.

Japan counts for an average of 13% of total profit for companies in the luxury industry like- Louis Vuitton, Hermes, Coach and Tiffany. In 2010, Japanese consumers at home and abroad accounted for 24 percent of all luxury goods sales.

Though luxury products are viewed as products for the upper class in other countries, in Japan, they have long been seen as an integral part of middle-class life. Middle-class consumers often cut back on vacations and expensive meals so they are able to buy luxury clothes or handbags. Now the Japanese are in a new reality- ending the materialist wants and focusing on helping others and bringing Japan back to basics.

Less Appetite for Luxury

Japan, with one of the largest economies in the world accounts for an outsize portion of all luxury goods sales- last year about a quarter of luxury products were bought by the Japanese. Following the disasters, the Japanese priorities have changed routes and now have a different outlook.

Japan counts for an average of 13% of total profit for companies in the luxury industry like- Louis Vuitton, Hermes, Coach and Tiffany. In 2010, Japanese consumers at home and abroad accounted for 24 percent of all luxury goods sales.

Though luxury products are viewed as products for the upper class in other countries, in Japan, they have long been seen as an integral part of middle-class life. Middle-class consumers often cut back on vacations and expensive meals so they are able to buy luxury clothes or handbags. Now the Japanese are in a new reality- ending the materialist wants and focusing on helping others and bringing Japan back to basics.

The World Economy Shifts Eastward

This article discusses the new paper by Danny Quah on how the center of world economy is shifting to the eastern part of the globe. Quah has been calculating the economic activity and movement across the world for the last few decades and has seen that there has been a clear movement eastward.

"In 1980 the global economy’s centre of gravity was mid-Atlantic. By 2008, from the continuing rise of China and the rest of East Asia, that centre of gravity had drifted to a location east of Helsinki and Bucharest." (Quah) He goes on to explain that this does not mean the US will have a huge fall in its economic activity, it may just mean the overall pie is getting bigger. Yet, he remained confident that the center of this world economy is shifting towards the economies of China and India.

Mets Are Said to Be Suffering Sizable Losses

The Mets, long one of baseball’s most highly valued franchises, have lost millions of dollars in recent years, including nearly $50 million in 2010, according to two people briefed on the team’s finances.

Attendance and revenue has experienced a gradual decline over the years and expect the same for the upcoming 2011 season. The organization as a whole is facing many challenges currently. The owners are being sued for $1 billion by the trustee representing Bernie Madoff's Ponzi scheme.

Apparently, the owners are trying to sell a part of the team to stay afloat. The commissioner, Bud Selig, has already given the Mets a loan worth $25 million.

The problem with this whole ordeal is that according to the trustees, the owners have been using their profits from the Madoff investments to sustain and promote business. This accusation does not bode well for the Mets organization as they try to rebound from their recent losses on and off the field.

Toyota, Struggling With Part Shortages, to Restart Car Lines

Due to the recent events in Japan, it is projected that roughly 5 million cars worldwide will not be built this year, out of the 72 million that were expected to be sold. Many automakers are shutting down plants in Japan including Toyota and Honda. Even G.M. is affected by this as they are shutting down a plant in Louisiana. Currently, 13% of the world's automotive production is out of commission. The automakers do not see this as an "all clear" situation anytime soon.

I believe that this will eventually turnaround. Japan took a devastating hit, but there is constant effort currently in rebuilding. Automakers will have to operate under full capacity for a while strictly because that is all they can do. Many Japanese automakers are affected by this, but even U.S. makers are taking a hit in production because of parts made in Japan are in the radiation zone. These automakers have no choice but to wait it out and hope for the best.

Next time you listen to a politician throwing statistics left and right, remember this....

Portugal turmoil intensifies bailout talk

This article talks about how Portugal's national debt crisis has gotten so out of control that there are rumors that they might ask for an international bailout. With recent worries about the looming national debt Portugal's prime minister has turned in his resignation, because many different political groups within the country are partially blaming him. The country is expected to ask for a bailout sometime soon during the european summit taking place toady and tomorrow. if they do receive a bailout they will become the third country to do so in the past two years.

Rustbelt recovery

This article talks about how many of the industries that rely on manufacturing are seeing much greater growth than other sectors. The article points out that in manufacturing intensive states like Ohio, Michigan, and Illinois unemployment rates have fallen quicker than in other states due to the rising demand for manufactured goods. It's not just the big companies who are recovering, either. The article discusses how many smaller manufacturing companies have benefitted due to the trickle down of parts needed. Many of these companies who make machinery or the primary parts have re-hired at least as many as they had to lay off during the recession. These rising manufacturing numbers are also contributed to the fact that foreign countries have been opening some manufacturing facilities in the U.S.

Obama in Brazil: "We want to be your best customer"

President Obama wrapped up his official visit to Brazil yesterday by signing 10 new trade agreements, cementing America's commitment to Latin America's largest economy. The agreements covered a wide-range of policy issues, ranging from the removal of non-tariff trade barriers, to expansions in educational exchanges, to the joint development of aviation biofuels. These new agreements aim to further bolster economic relations between two nations that have already benefitted from a strengthening of ties within the last decade. For example, American exports to Brazil have more than doubled in the past five years. And, inversely, Brazil has become the fourth-biggest U.S. creditor as it now holds $198 billion in Treasuries. I personally believe that the United States should work to establish Brazil as their biggest ally in Latin America. Brazil's $2.2 trillion economy grew by 7.5% last year, propelling a neighbor from America's own backyard to the forefront of the world's upcoming economic powers. As such, the United States should jump on every occasion to build their relationship with Brazil and harness their growing economic clout.

Gulf Shares Rised as Saudi King Increased Spending

King Abdulla of Saudi Arabia announced the construction of 500,000 houses at a cost of 250 billion riyals ($66.7 billion) and raised the value of mortgages provided to nationals to 500,000 riyals from 300,000 riyals on March 18. This was part of the effort to prevent protests from escalating.The new package comes after $36 billion in spending was announced Feb. 23. Saudi companies listed on the Tadawul, including Saudi Basic Industries Corp. (SABIC), will pay their staff two months pay in bonus in line with a royal decree covering Saudi civil servants.

The package had positive effects on the Gulf shares. Sabic, the world’s biggest petrochemical maker, rallied 4.6 percent. Emaar Properties PJSC, builder of the world’s tallest skyscraper, advanced to the highest in almost a month. Saudi’s Tadawul All Share Index (SASEIDX) rose 4.5 percent to 6,343.79 at the 3:30 p.m. close in Riyadh, the highest since Feb. 19. The market was closed yesterday for a holiday.

On the other hand, demonstrators across the Middle East, including Yemen, Libya, Bahrain and Syria are still demanding civil rights, higher living standards and the removal of entrenched regimes. Egypt's stock exchange was still closed, but was said to possibly be opened "within days", said Prime Minister Essam Sharaf in an interview yesterday. Comparing to other countries in the region, Saudi Arabia seemed to be doing pretty well.