Rescuing Cyprus's Economy

In this video talk by The Economist, a correspondent explains the deal to bail out Cyprus's economy. He outlines the restructuring that will occur in the banking sector, in which many uninsured large deposits will be lost. This will have a strong effect on businesses, who now do not know how much money they still have in the bank. Depositors in the eurozone as a whole will likely respond strongly because of these loses and uncertainty. Questions are raised about the idea of the euro, because with the instability of the economies of some countries means that a euro in countries such as Cyprus are not worth the same as a euro in places like Germany. It will be interesting to see how another bailout affects the reactions of eurozone countries that are bailing out countries, and how they will vote to change the economic rules and regulations of the region.

http://www.economist.com/multimedia?bclid=1242934274001&bctid=2252701826001

Solar power has record year despite bankruptcies

http://money.cnn.com/2013/03/14/news/economy/solar-power/index.html?iid=SF_E_Highlight

Last year there were 3.3 gigawatts of solar power installed, which can power about 500,000 homes.    This is an 76% increase from 2011.  This has been credited to the decrease in price of solar panels, stable tax incentive, and better financing options.  This industry currently employs 119,000 people which is a 13% increase from last year and the industry expects even more growth next year.  One of the main reasons for this decrease is that there have been major investments in manufacturing capacity, particularly by the Chinese.  As prices continue to fall, smaller and less efficient companies are being kicked out.  This is being compared to the beginning of the auto industry when there were dozens of companies and it was then narrowed to the Big Three.

Well Before Summer, Hamptons Luxury Real Estate Is Scorching

This article published in the New York Times discusses the revamped demand and increasing pricing of homes in the Hamptons. The author discusses the opportunities that real estate companies are facing in this area. Although home buyers/ renters are not as quick to jump on deals they are still wiling to shell out a large sum of money for their summer homes. Also, there are options available for those who are not multimillionaires and billionaires. In my opinion, I feel like this spending on summer homes is a good indicator that the wealthy are ready to come out of their cautious spending that the recession has laid on them.

http://www.nytimes.com/2013/03/24/realestate/another-pricey-summer-season-in-the-hamptons.html?_r=0&adxnnl=1&pagewanted=all&adxnnlx=1364255032-zyZHZfSwTh2gCgeYZFXarQ

Dell going private?

http://www.economist.com/blogs/schumpeter/2013/03/dell

In a recent turn of event Michael Dell has decided he is going to try and take the company Dell, for which his namesake states, is going to try and go private. They would be helped by a company named Silver Lake and also Microsoft to try and make the company private. This has come to the disgruntlement of shareholders and other firms trying to buy up the company such as Blackstone, and Carl Ichann. These groups are trying to keep the company public to try and appease the shareholders. It will be interesting to see what ends up happening in this situationand who gives in first.

Banking in Africa: Continent of dreams - Across Africa, banks are expanding. Their returns aren’t

Banks in Africa are expanding with the promise of increased interest rates, but the cost of building branches and investing in growth are keeping interest rates low.  The banking market in Africa is potentially vast, as almost half of the countries in Africa have less than 20% of the population holding an account at a formal financial institution.  Access to banks also varies vastly within countries.  Now there is a chance to reach out to poorer countries with banking opportunities due to technology such as prepaid cards and mobile banking which lower the level of GDP needed to make a profit.  African retail banks may be able to achieve a cost-to-income ratio of 30% whereas rich-country banks are usually happy to get a ratio of 50%.  The global financial crisis also contributed to the expansion of retail banking within Africa as opposed to international expansion.  As domestic and regional banks gain access to capital markets, will international banks like Goldman Sachs and Morgan Stanley who hold very little local presence be able to compete?  Some banks are now attempting to be an international presence while also offering retail- and corporate-banking services.  Do you guys think that this approach will work?

http://www.economist.com/news/finance-and-economics/21572768-across-africa-banks-are-expanding-their-returns-arent-continent-dreams

Health Care Report Card

This article the discusses the performance of the health care reform since its institution in 2010. The Republican party leaders have "vowed" to block money to carry it out or appeal it, however this is prior  to the institution of the largest part which will begin in January 1, 2014. The reform has expanded coverage, reined in healthcare costs, saved consumers money, and produced a better quality of care according to the article. I think that these signs are great for healthcare, but I hope they are sustainable through the implementation of the healthcare reform. I can only imagine that with the increase in patient care, standards will have to decrease to accommodate the sheer number of people that will begin receiving coverage. What do you think?

http://www.nytimes.com/2013/03/24/opinion/sunday/report-card-on-health-care-reform.html?src=me&ref=general

How Russia's Billionaire Oligarchs Got So Very Rich

http://www.businessinsider.com/what-is-a-russian-oligarch-2013-3

Modern Russia is infamous for being home to a slew of billionaire oligarchs, the majority of whom earned their wealth in the 1990s after the fall of the Soviet Union. This article details some of the recent history behind this small group of Russian businessmen. In the 1990s, the government implemented a program called 'loans for shares.' Companies provided loans to the Russian government in exchange for shares in state-owned firms. When the government defaulted on its debts, these companies kept their shares and were able to acquire many state-owned enterprises for incredibly cheap prices as the nation underwent massive privatization. One of Russia's most high-profile oligarchs, Boris Berezovsky, committed suicide this past week and much of his death has been centered around his dealings with fellow oligarchs.

It's pretty intriguing as to how certain people were able to take advantage of the swift and turbulent transition from a communist economy to market economy. In the ensuing chaos of the 1990s, traditional economic forces were replaced by sneaky financial transactions. Such a situation is unlikely to happen again in the near future. The Russian oligarchs were really in the right place at the right time.

Former Dictator returns to Pakistan

http://www.nydailynews.com/news/world/musharraf-returns-pakistan-elections-four-year-exile-article-1.1297757?localLinksEnabled=false

The former President of Pakistan, General Pervez Musharraf has returned to Pakistan to contest the upcoming Presidential elections. He came back to Pakistan after a period of 4 years. He left Pakistan in 2009 after losing the Presidential elections to the current President, Asif Ali Zardari.

Some background information: In 1999, the then General of the Pakistan Army, Pervez Musharraf, overthrew the democratically elected Government in a non-violent military coup. He declared himself the President and controlled the country till 2008. In 2008, Musharraf came under tremendous pressure to restore democracy and therefore, fair elections were supposed to take place. To contest the elections, Benazir Bhutto, the daughter of a former President, Zulfikar Bhutto, returned to Pakistan. However, she died during a bomb attack in one of her campaign rallies. Musharraf was accused of not providing her adequate security cover. Meanwhile, Benazir's husband, Asif Ali Zardari won the elections thanks to the sympathy factor.
Musharraf had several judicial probes, trials, etc.  pending against him in the courts of Pakistan. Surprisingly, the newly elected President Asif Zardari did not make Musharraf stand for trial but instead exiled him off to London. Some see this as a deal between the two but many disagree citing that Zardari did not want any internal conflicts to weaken the nation. Now that the Zardari government has become the first ever democratically elected government to complete a full term in office in the history of Pakistan, it is time for new elections.

Zardari still has the highest chances of winning, not because the people love him, but because the political opposition to the Government is very weak. Zardari has been accused of unfathomable amounts of corruption and is also accused of bad policies when it comes to the economy, national security, foreign relations, etc.  Despite this, the weak opposition may not manage to secure enough seats to win the election.

Musharraf's arrival may manage to change that setting, but not by a large extent. Though he may be looking at another stint at the President's office, his support has very visibly diminished over time.
Musharraf also faces extremely dangerous and high number of death threats from the Pakistani Taliban.

It would be interesting to see how the former Dictator's arrival changes the political landscape in the troubled nation of Pakistan.

OECD urges China to free markets, ease immigartion

The Organization for Economic Cooperation and Development urged China to make good on pledges to force state companies to compete in more open markets and ease movement of migrants into cities to keep its economic growth strong. Forecast growth is at 8.5 percent this year, while risks from inflation and government debt are low. However, because of Chinese government's intervention in subsidizing state companies, it creates an unfair market for foreign companies, especially in energy and finance. There were some reforms, but they have yet to decide whether or not they will address the monopoly problem and the issue of making it hard for workers to move into the city for higher-paid jobs. Failing to solve this problem can have serious political and economic consequences on China.

Source: http://news.yahoo.com/oecd-urges-china-free-markets-ease-migration-074335429--finance.html

Cyprus Battling to Meet EU Bailout Terms

Cyprus lawmakers met yesterday to try and work out the terms of a European bailout, which may include tapping bank accounts with deposits above 100,000 euros. Lawmakers rejected a initial levy to tax all bank accounts a few days ago. This article details a few potential plans, including tapping accounts at the biggest bank lender, the Bank of Cyprus. Yesterday lawmakers agreed to "wind down" Cyprus Popular Bank and put the losses on its depositors. Cyprus is the fifth euro-area nation to request a rescue; the problems in Cyprus stem from Greece's debt restructuring, which was a big area that Cyprus's banks invested in.

Link: http://www.bloomberg.com/news/2013-03-22/cyprus-approves-capital-controls-as-ministers-prepare-to-meet.html

Brother of Hedge Fund Executive Indicted

Rengan Rajaratnam, the brother of Raj Rajaratnam, who is in jail for insider trading, has been indicted for the similar allegations. He is accused of helping his brother use non-public material when trading two stocks in 2008. These insider tips and information helped Rengan make around $1.2 million, within a two day span. Raj is serving an 11-year prison term for conspiracy and securities fraud. This was a huge indictment for the US, the SEC, and the FBI - it is the biggest hedge fund executive to go to jail. Many people are angry that those accused for insider trading are only paying a (huge) fine and not usually sent to jail; this is a step in the right direction by having white collar criminals serve jail time. 

Link: http://www.bloomberg.com/news/2013-03-21/raj-rajaratnam-s-brother-charged-with-insider-trading.html

Russia-China gas deal is stuck

http://www.reuters.com/article/2013/03/22/us-russia-china-gas-idUSBRE92L10P20130322

In the article, the author talks about a deal between China and Russia for conventional gas, has been stuck at the talks level. The deal would possibly involve Russia selling gas from its new Eastern Siberian gas fields to China. The problem is that both sides are not agreeing on the price of the gas. Russia wants to get the same price that it does from its European buyers ($300 per 1000 cu. m.) but China is only willing to pay $250. China argues that $250 is the maximum price that it can offer without forcing its petroleum companies into losses. Also, above this price, China maintains, that its producers would lose their competitive advantage in the global markets.

The deal is important for Russia as it is looking for ways to finance more oil and gas projects, construct pipelines, etc. China, on the other hand, is expecting a shortfall in meeting its energy needs. China is the fastest growing energy consumer and therefore needs the deal to meet the demand for gas.

The deal needs to be finalized fast if Russia wants to enter the Asian markets. This is because there are many other suppliers such as Myanmar that are also willing to supply gas to China.

Obama Urges Israeli Public to Pursue Peace

President Barack Obama exhorted Israelis to come to terms with the Palestinians, following a visit to the West Bank on Thursday, in a public appeal for sacrifice in the name of peace.

"Given the march of technology, the only way to truly protect the Israeli people is through the absence of war," Mr. Obama told a large crowd of mostly young Israelis at the Jerusalem Convention Center. "Because no wall is high enough, and no Iron Dome is strong enough, to stop every enemy from inflicting harm."

The crowd repeatedly cheered Mr. Obama's calls for a Palestinian state and his observations that Palestinian and Israeli youth have the same dreams.

He described a meeting earlier in the day with a group of Palestinians between the ages of 15 and 22. "Talking to them, they weren't that different from my daughters," he said. "They weren't that different from your daughters or sons."

The purpose of his public address to Israelis became clear when he said that politicians must be pushed by constituents to seek peace.

March 21, 2013, 11:53 a.m. ET

Source: http://online.wsj.com/article/SB10001424127887324103504578373924113848596.html?mod=WSJ_hps_MIDDLENexttoWhatsNewsThird

Americans Guessing at Amount Needed for Retirement

http://www.washingtonpost.com/business/retirement-is-a-numbers-game/2013/03/19/b36ed882-90e0-11e2-9cfd-36d6c9b5d7ad_story.html

This article discusses the fact that most Americans are simply guessing at the amount of annual income they need to be saving in order to retire comfortably. When they calculate the actual amount that they should be saving, the gap is often large between what is necessary and what is actually being saved. Most Americans are solving this problem by planning on retiring at a much later age than intended. The EBRI says that this plan isn't always a good idea, just in case individuals aren't physically able to work as long as they want to. They advise trying to save a substantial amount by age 60. The key for many Americans to be able to retire comfortably is simply to stop consuming at an excessive rate and save rather than try to keep up with the Jones'. Americans also need to become informed of the percentages they will need to save at a younger age in order to reduce the need of having to save excessive amounts in their 40s and 50s. If Americans start saving responsibly they will be able to retire earlier, therefore opening up more jobs to younger individuals in need of work.

A Bear Market To Come?

In his latest post on Marketwatch entitled "10 signs your stocks are about to tumble", author and columnist Jeff Reeves paints grim picture on what he believes is to come in the market.
Lately in the news, all the problems seem to be brewing abroad while the domestic signs of a impending bear market and potential recession are staring us in the face.

To summarize a few of his points:

The market is over-bought. Cash in investors accounts is hitting dangerous lows,  and the current rally in the market is thought by many to be unsustainable. He goes into interesting detail about the "wedge" that prices have been showing. What this means is that momentum is slowing, and there looks to be no catalysts to propel it further. In fact, foreign troubles alone are causing a great amount of skepticism in the market.

He goes further to describe some more macroeconomic issues that we are all too familiar with such as high gas prices and unemployment. Overall a very interesting read and has lead me again to recommend getting out of equities.

If there are any who disagree with his prognosis, I would be very interested to hear about your views and maybe even why you think the market can still rise.


10 signs your stocks are about to tumble

Microfinance in India: Road to redemption

This is an article from the economist back in January discussing the problems with microfinance in India. Indian micro-lending banks were effective until they started making reckless loans and using "strong arm-collection tactics" which ruined the lives of many of the Indian poor. These tactics and loans are against Grameen principles where micro-lenders would often discuss the business plans with the poor as to avoid making bad loans. Also, they should not force loan collection as the purpose of microfinance apart from monetary profits are also social profits. Other successful microfinance banks have extend the repayment period or extended new loans in order for the poor to get back on their feet should they be unable to pay the old loan.

The Micro-lending in India has new national guidelines to draw a line between profit and profiteering such as creating a cap on interest rates and barring micro-lenders to lend to customers with more than one loan, which will hopefully improve microfinance in India.

Source: http://www.economist.com/news/finance-and-economics/21569447-industry-starting-revive-road-redemption

British inflation hits nine-month high, further rises likely

In February, consumer price inflation rose to 2.8 percent, after holding steady at 2.7 percent since October, and looks set to rise further. The number, however, would probably not reduce the chances that the Bank of England will sooner or later pump more money into the economy to stimulate the stagnant economy because they are more interested in growth than in inflation at the moment. High inflation has reduce British households' disposable income, and a further rise will be a concern to the government regarding the decreasing consumption. The Bank forecasts inflation will exceed 3 percent later this year due to upward pressure on the cost of imported goods and raw materials caused by sterling's near 7 percent slide against the dollar since the beginning of 2013 and higher utility bills. What could be expected from the Bank of England to help better the situation? The arrival of new Bank governor Mark Carney in July may bring some changes, but more importantly, stopping any further sterling fall would be necessary because of its damaging consequences on inflation.

Source: http://uk.reuters.com/article/2013/03/19/uk-britain-inflation-idUKBRE92I0AI20130319

British economies struggling to maintain spending

http://www.economist.com/news/britain/21573132-britains-squeezed-households-largely-explain-countrys-flatlining-economy-dropping-shopping

This article states that the British economy is starting to see less and less people care about spending due to low growth rates and high price fluctuation. With the average growth rate being 2 percent right now and the average price increase on goods is at 3 percent. Also with the average person having only about 15000 dollars in spending money per household after taxes and mortgage payments, leaving very little income. This is tough on the European economies and the recession has hit everyone including overseas.

Venezuelan opposition leader promises to cut subsidized oil to Cuba

http://www.reuters.com/article/2013/03/18/venezuela-election-idUSL1N0CA8MN20130318

Venezuela has elections on April 14 to decide the President after the death of Hugo Chavez. The two candidates are the current acting President Nicolas Maduro and the opposition candidate Henrique Capriles. Nicolas Maduro is seen as Chavez's successor.

Henrique Capriles has stated that he would end the export of highly subsidized oil to Cuba if he comes to power. Under Chavez, Venezuela was exporting large quantities of oil at extremely cheap prices to Cuba, a communist nation and a Venezuelan ally. This is a major burden on the Venezuelan economy, which is already suffering from low growth and high inflation. Stopping the export of a 100,000 barrels daily to Cuba would provide more resources for the domestic economy and would help reduce inflation. This would also allow foreign companies to access some oil reserves in Venezuela and sell them at a near market-price rate and not the state-decided price.

Maduro is expected to maintain Chavez's style of governance which would focus on nationalization and socialism. It would be interesting to see how Henrique Capriles would change Venezuelan economic policies if he comes to power

Federal worker pay freeze likely to be extended

http://money.cnn.com/2013/03/15/news/economy/federal-worker-pay-freeze/index.html?iid=SF_E_River

Many federal workers will suffer from a continuation of the two year pay freeze. This will extend the pay freeze to December 31st. This lack in pay raises will hurt many federal workers as they were expecting to see a .5% raise in pay by next month. On top of this, the budget cuts that were recently implemented are forcing many federal workers to take a 20% pay cut for five months. Plus many agencies have started hiring freezes, so this begs the question of is too much of the federal budget deficit problems being put on the backs of the federal employees?

What Does Cyprus Mean?

After reading about what is happening in Cyprus over the weekend, the question naturally arises: are they handling this the right way? Why the Bank of Cyprus? Will this be a trend across Europe? Will the run on The Bank of Cyprus be a damning blow to a recession recovery already stunted by a slightly strengthening Euro?

Over the weekend it was announced that a percentage of all deposits in The Bank of Cyprus will be taxed. This so far has caused an uproar, and a run on the bank. People were given the incentive to pull their money and find a new safe haven, however many were unable to get their money when they needed it. Michael Gayed recommends rotating out of equities at this point, and migrating to precious metals or bonds to weather this storm. If your investment strategy is aimed more towards "timing" the market, then this strategy is for you.

Is this the start of a long depressing trend in Europe?

http://www.marketwatch.com/story/if-cyprus-is-the-butterfly-is-gold-the-pesticide-2013-03-18

China Showing Symptoms of Financial Crisis: Report

This article suggests China may be headed for a financial crisis similar to the one experienced by the United States in 2007.  The article notes that China is currently experiencing similar symptoms to the ones the U.S. observed prior to the crisis as the country has been experiencing skyrocketing property prices, slowing growth and a large increase in leverage.  The article notes that property prices have swelled some 113% from 2004 to 2012, yet China's rate of growth in 2012, 7.8%, was its slowest in 13 years.  Also, leverage, as measured by domestic credit per gross domestic product, has increased 34% since 2007.  The more highly the country leverages itself, the more painful a deleveraging period could be.  Do you guys believe China is in for difficult times ahead?


http://www.cnbc.com/id/100562024

Europe financial sector is fragile, says IMF

The IMF feels like Europe has to support its banks more and try to create a banking union, which would protect the EU from future shocks. The IMF assessed the European banking and insurance sector and could see that a lot has been done in response to financial crisis, however a lot more was still needed, because the EU is still vulnerable since the growth could be lower than expected or the market could lose its confidence. The Eurozone is still highly affected by the financial crisis, its GDP is still not where it used to be, banks still have high debts and government are not able to create stability. However many measures have been taking in order to reestablish confidents European assets.  For example banks have been trying to raise new capital and the EU a single Eurozone regulator was created (controlled by the European Central Bank). But at the moment the banking sector is restricted and its bad debts negatively affect Europe’s economy.

 http://money.cnn.com/2013/03/15/news/economy/europe-banks-imf/index.html?iid=SF_E_Lead

Pound Sterling Sees a 3-Year Low

Following a 1.5% contraction in the United Kingdom's manufacturing sector in January, the pound sterling has fallen to $1.48. This is the lowest it has been since 2010. The slump has mainly been credited to a reduction in the production of pharmaceuticals and building materials, as well as North Sea oil and gas investments. Coupled with a contraction in growth, exports, and in national income, this has led to fears of a triple-dip recession– a common concern from the last two years. The hope is that the chancellor will implement varied and strong policies to boost growth post a budget debate, but the economy still faces many adversities. But given that the US, Japan, and Germany are slowly pulling out of the recession, and are supplemented by the growth of demand for UK goods in countries like Brazil, China, and India, there is some hope for a recovery.

http://www.guardian.co.uk/business/2013/mar/12/recession-manufacturing-slump

Booming Business of Border Control

This article talks about the growth in the homeland security market due to innovative technologies. This growth continues despite the sequester cuts that included the Department of Homeland Security which dominates 60 percent of the 31 billion dollar market. Some of the things that the technologies are doing are quite fascinating, but more importantly keeping those who work border control safe. However, because of the heavier reliance on technologies, it is quite directly removing jobs from the market. While the value of keeping hard-working individuals out of harm's way might exceed the utility for jobs, this is a prime example Marx's demise of capitalism. For those who may lose frontline jobs in this market due to being replaced by technology, where are they to seek future employment? We see similar similar trends in other industries as well with class sizes growing in education with the MOOCs and technological industrialization of manufacturing. These innovations give rise to new markets all the time, but what about the labor force that is not educated enough to pivot into these markets?

http://www.thefiscaltimes.com/Articles/2013/03/15/The-Booming-Business-of-High-Tech-Border-Security.aspx#page1

African Banking Profits A Distant Reality

Banks across Africa are finding it hard to produce significant profit despite the coutnry's largely untapped market. This article from the economist tells us that access to a financial institution varies greatly by country, and even intra-country access to banks is highly variable. Banks need to continue to build bank branches, which are very  costly to do. Until this need is met, many Africans will have relatively little access to a bank account, and banks will also not see profits, a lose- lose situation in the short term.

GOP Senator, in Reversal, Backs Gay Marriage

http://online.wsj.com/article/SB10001424127887324532004578361971252212296.html?mod=googlenews_wsj

Yesterday, Ohio Senator Rob Portman became the first among current Republican senators to support same-sex marriage. Portman disclosed in an opinion article he wrote in the Columbus dispatch that he has reversed his position on same-sex marriage, “I have come to believe that if two people are prepared to make a lifetime commitment to love and care for each other in good times and in bad, the government shouldn't deny them the opportunity to get married.” Portman said he changed his mind after his son Will, now 21 years old, told him two years ago he was gay. His announcement comes at an interesting time, when acceptance of same-sex marriage is growing incredibly quickly. Do any of you think this could be an opportunity for the Republican Party to move more toward the middle on same-sex marriage? 

British Learning From Sweden

Middle-Income Claptrap

View the article here.

The middle-income trap is the idea that a middle-income country could end up stuck between poor countries with lower wages and rich countries with better technologies, leaving them to compete with both countries above and below them. Adding to this, poor countries have the benefit of being able to move workers from surplus-labor industries into more productive ones. In fact, the Lewis two-sector model can help to explain why this trap may be a very real thing. As workers move from unproductive sectors into more productive ones, such as from agriculture to industry, a country experiences large growth. However, once labor is being used efficiently a country must instead rely on improving productivity within their factories.

The author of this article argues that this may not be the case. He cites a study done by the Royal Bank of Scotland which found that movement between agriculture and industry and service sectors contributed only 1.4 percentage points of China's annual growth between 1995 and 2012. Furthermore, countries can remain competitive at all wage levels since wages and productivity exist along a continuum. Finally, growth models are continuous, and while the Lewis two-sector model explains a large part of growth, it is not exclusive. Factories are constantly improving their productivity while their workforce arrives. The author concludes by saying there are numerous traps that countries of any income level can fall in to, and that there is no reason to single out the middle levels.

Brazil Expands Mines to Drive Future, but Cost Is a Treasured Link to Its Past

As part of the Brazilian economy's attempt to move forwards its slow-moving growth, one of the large mining companies plans to extend its work in the Amazon. The company claims that this expansion would create 30,000 for rural workers in an area where jobs are badly needed. However, the expansion would involve the Carajás caves, an important archeological site. Archeologists have been studying the site since the 1980s and have found signs of life from 8,000 years ago. With several important archeological finds in Brazil in the past decades (some complicating the upcoming Río olympics), there has been increasing focus on the country's ancient history. This mining company has offered to preserve several of the cave areas, but plans to mine the majority of them even while admitting their archeological importance and hiring several archeologists to investigate the site. The government has become involved because the company was once nationalized and the government now holds a large part of its shares. The issue is, therefore, how to find a ground between development and preservation.

http://www.nytimes.com/2012/12/16/world/americas/in-brazil-caves-would-be-lost-in-mining-project.html?pagewanted=1&ref=americas

Workweek Tying Longest Since WWII Spurs Hiring at U.S. Factories

Extremely long factory work weeks seen recently caused the creation of 52,000 new jobs in manufacturing.  Instead of paying so many workers time and a half, it has made more sense to hire additional workers.  Right now, we are seeing the strongest U.S. auto industry since 2007.  New home sales have also jumped to their highest level since the summer of 2008.  In February, production workers averaged 41.9 hours a week, with the record being 45.4 hours a week in the winter of 1944.  This necessity for new workers was a major factor in bringing the Unemployment Rate to the four-year low of 7.7%.  If demand stays steady, this increase in demand for workers may continue as they are forced to hire for future needs.  Along with additional job openings, the Labor Department also reported that employers in January fired the fewest workers since tracking of this data began twelve years ago.  Also as a result of higher demand, auto suppliers are also seeing a need for more employees.
This article implies that consumer confidence is on the rise and that the unemployment rate will continue to fall.  However, while Ohio's unemployment rate is below the national average, it saw an increase in January.

http://www.bloomberg.com/news/2013-03-13/workweek-tying-longest-since-wwii-spurs-hiring-at-u-s-factories.html

Should the US continue to make huge foreign aid payments while domestic programs face drastic budget cutbacks?

http://www.foxnews.com/us/2013/03/06/should-us-make-huge-foreign-aid-payments/

The Obama administration gave $250 million to Egypt, and has received criticism for this because of the cutbacks in other parts of the budget.  One cutback that especially received criticism was the release of "low-priority" illegal immigrants from jail.  However, Secretary of State John Kerry described Egypt as an extreme need.  Should the United States drastically cut foreign aid because of the cuts in our budget?  And if foreign aid is reduced, what is the most important criteria to determine what countries receive aid?  

America's fastest growing job pays poorly

http://money.cnn.com/2013/03/11/news/economy/fastest-growing-job/index.html?iid=H_E_News

Home health care aides are the fasting growing job in America due to the aging population of the Baby Boomers.  About ever eight seconds a Baby Boomer turns 65.  It is predicted that this job will grow 70% between 2010 and 2020.  However, the average hourly wage for health care aides is only $9.70, and they are exempt from federal minimum wage and overtime laws.  Even though some states have passed protections for these workers, a quarter of home health aides make less than federal minimum wage.  Most of these workers are women and minorities, and then majority are not very educated.  These factors make it harder for them to have bargaining power against companies.  However, an increase in wages means that there is a higher cost for the elderly who need care.  

Professor Perks

Faculty perks are of huge importance to distinguished alumni at the top universities in the United States.  Although college costs keep increasing and students keep applying for more loans, universities are offering fabulous incentives, perks, and benefits to faculty. This article outlines the huge pay out that many faculty are getting when stepping down from a top position. For example, James Madara - the medical dean and hospital chief at the University of Chicago - received $2.5 million in severance when he stepped down in 2009. Unlike students, Harvard's faculty can apply for no-interest educational loans. The universities are pointing to getting and retaining the top professors for these special loans and off the charts perks and pay outs. What are your thoughts on professors getting these incentives, while us (students) are paying a fortune for an education?

Link: http://www.bloomberg.com/news/2013-03-12/universities-pile-on-faculty-perks-as-student-costs-grow.html

Public to Private

Mary Schapiro, the recently retired head of the SEC, has been nominated to GE's board of directors. If voted in, Schapiro will make a very nice buck. All board members make around $250,000. As chairwoman of the SEC, Schapiro was paid around $165,000. Schapiro has experience on boards, she served on the board for Kraft Foods and Duke Energy prior to joining the SEC.

Link: http://dealbook.nytimes.com/2013/03/11/mary-schapiro-is-nominated-to-g-e-board/

Italy is facing more than one problem

Italy is in limbo. Currently they have no active government and the Vatican is in a search for a new Pope. This article outlines the frustrations, emotions, and challenges Italian citizens are feeling due to this unique situation. Interestingly, the article points out that since 1948, Italy has had 58 governments. As we have learned in class, Italy is in the middle of a deep recession and the Vatican is fighting a sexual abuse scandal. This Tuesday will be the when the Cardinals meet and start discussing the next Pope. Unfortunately, the EU and Italian citizens will be in a state of nervousness, frustration, and, for some, concern until the next election. The election is VITAL for Italian citizens, Italian companies, and the entire EU.

Link: http://www.nytimes.com/2013/03/09/world/europe/italy-uneasy-over-vacuum-in-vatican-and-government.html?_r=0

Chavez's death could hit Florida real estate

http://money.cnn.com/2013/03/07/smallbusiness/chavez-real-estate/index.html?iid=SF_SB_Lead

The recent death of Hugo Chavez will have affects that extend much farther than the borders of Venezuela. When the housing market crashed back in 2007, there were many expensive and high-end condos and homes left vacant in Florida. Many of the rich Venezuelans looking to escape Hugo Chavez's socialist economy went and bought up many of the vacant properties. With his recent death many of the people known for buying up properties will be sitting idle waiting to make decisions on whether to make purchases or not in Florida or back in Venezuela.  

The Iran-North Korea Axis of Proliferation

Article HERE

This Forbes article discusses the consequences of economic collaboration between Iran and North Korea, two states the United States considers "rogue" and highly dangerous. The two states have been doing business together for quite some time in an effort to skirt crippling sanctions placed on them by the United Nations and recently signed an agreement to kick off scientific and technological collaboration as well.

Many (especially in the United States) are extremely concerned about this development - it is suspected that the nations are using the agreement as a front for exchanging information regarding the development of nuclear weapons. Deeply impoverished North Korea has already demonstrated willingness to sell sensitive information to the highest bidder, and Iran (according to the article) is flush with oil money that it is eager to put to good use pursuing nuclear technology.

Perhaps it is time to begin intense investigations designed to freeze illicit North Korean assets worldwide to cripple the regime.

Workers don't share in companies' productivity gains

http://money.cnn.com/2013/03/07/news/economy/compensation-productivity/index.html?iid=SF_E_River

The gap between productivity and hourly compensation for workers is the lowest it has been since WWII, which has been one of the major dividers in income inequality.  Productivity has grown 80.4% between 1973 and 2001, while there has only been a 10.7% growth in median hourly compensation.  The decline in union power and the national deregulation has led to this income gap.  Additionally, because unemployment is around 8%, workers feel lucky to have a job and do not want to ask for a raise.  However, hourly compensation does not include worker benefits and some believe that as the economy recovers this gap will decrease.  I think this article relates to what we talked about in class with the shareholder and stakeholder interests.  

Hong Kong clamps down on quirky property buys

http://money.cnn.com/2013/03/07/news/economy/hong-kong-property/index.html?iid=SF_E_River

It's interesting to learn about the one of the oddest trends in the real estate market in Hong Kong. People there are paying hundreds of thousands dollars for a parking space or a roof. As weird as it sounds, almost every piece of privately-owned concrete is up for grabs in Hong Kong as the city's overheated property market continues to swell, driven by low interest rates, limited supply and waves of cash from mainland China. This somewhat bizarre trend was apparently started when the government tried to cool the market in October which may also have unnerved some investors and lead them into less regulated alternative property investments like parking spaces and roof decks. If you have been to Hong Kong, you know that it is an extremely dense region. There is very little buildable land and because of that, new construction is carefully controlled. The population is growing rapidly, people are well educated and they have a lot of disposable income. These are the perfect ingredients for a "frothy" real estate market.