Wall St. sharply higher on upbeat jobs data

   All three major U.S. indexes were up more than a percent on Friday after stronger-than-expected U.S. jobs data built the case for the Federal Reserve to raise interest rates this month for the first time in nearly a decade. All but one of the 10 major S&P 500 sectors were higher. The energy index fell after sources told Reuters that OPEC would maintain its production in an oversupplied market. Nonfarm payrolls increased 211,000 in November, the Labor Department reported, while September and October data was revised to show 35,000 more jobs than previously reported.

The unemployment rate held at a 7-1/2-year low of 5 percent, even as people returned to the labor force in a sign of confidence in the jobs market.

   This news mirrors the analysis Ben Ayers, George Mokrzan and Mark Shweitzer  delivered at the economic outlook conference, several weeks ago. From a regional perspective, the perennial losers in terms of overall economic growth had included states in the midwest including Michigan, Ohio, Indiana, actually have above average growth as well as decreased unemployment. Although the current climate can be seen from a glass-half-full perspective, it is important to note like several audience members at the conference explained, that economic conditions in the midwest haven't return to what they were in the beginning  part of the decade. Additionally, job growth in the midwest had been driven by manufacturing job opportunities, many of which have been eliminated as the midwest moves out of the manufacturing sector.

http://www.reuters.com/article/us-markets-stocks idUSKBN0TN19520151204#peRxyqsoVxlEMyrv.97

Terrorism and Fear May Spur Economic and Social Change

Yesterday in San Bernardino, California, tragedy struck at the Inland Regional Center, who provides services for people with developmental disabilities. Fourteen people were killed, and others injured. The attacks were taken out by two sick and stupid terrorists, who are deranged and do not deserve for their names to be put into this article.

Mass shootings come a dime a dozen nowadays in America. Nothing is happening. Gun control isn't as simple as taking away guns from people who have them, or preventing mentally unstable people from getting them. People are still able to get guns illegally, as well as create terror with other weapons, like knives, baseball bats, etc.

But this senseless terrorism has touched a nerve this time. It's bad enough to do it to any group of people, but to people with autism and disabilities? That's when you cross the line. The fact that this couple had been in touch with radical Islamic views too is disturbing.

What does America do? Where do they go from here? Legislators have yet to put into place anything rationale that can stop these mass shootings from occurring. Both parties can't agree on any issue, let alone this. It's time to make a change and crack down on psychopaths and moronic terrorist wannabes who want to do nothing but get on a few newspapers at the cost of American lives.

Security in America will spike up in response to fear and worry of future attacks, anywhere. I just pray that it stops, because it is truly sickening to read about, and I feel for the families that were involved in that situation.

The problem with American society is that news stations like CNN and Fox News glorify the shooter's name, when the focus should be on the victims. Forget the shooter's name, that's only giving psychopaths more reason to try and commit mass shootings and destruction themselves. Reporting is also done to ensue fear in American lives: make them buy things, make them watch the news more so that ratings spike, and make people talk poorly about what America is or isn't doing.

The fact of the matter is, Donald Trump may be saying crazy things to get the attention of people, but if you look closely, that's what news stations have been doing their entire duration: saying crazy headlines and portraying certain aspects of stories to get higher ratings. Pardon my French, but that is f***** up.

American society can connect with each other so much quicker now thanks to social media, which is a blessing and a curse. With the internet increasing in information and globalization increasing exponentially, it is easier for terrorist groups and those of bad influence to get their two cents to people who will feed off of their senseless terror. Something has to be done to prevent this from constantly occurring, because honestly, I'm fearful of it happening in my own neighborhood, and I'm tired of seeing it the greatest country in the world, which is exactly the goal of these terrorist groups and crazy people.

http://www.nytimes.com/2015/12/04/us/san-bernardino-shooting.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=a-lede-package-region&region=top-news&WT.nav=top-news

ECB’s Stimulus Moves Fall Short of Market Expectations, Hammering Stocks

The European Central Bank's stimulus package, including expanding their bond purchasing program and lowering their already negative deposit rate, proved to be insufficient. Even with these actions in place the euro appreciated in value from $1.05 to $1.09. The moves the ECB made moved the stocks, the euro, and bond yield in the opposite direction that the ECB wanted them to go, as they seek inflation and lending. Paul Lambert, head of currency at London-based asset managers Insight Investment said, "The ECB had earned itself a reputation of late as an institution that understood markets and how to beat expectations." The euro surged more than 3% against the dollar, which is the biggest daily surge in six years. The Dow Jones and S&P 500 closed 1.4% lower than when they opened. Mario Draghi, president of the ECB, stated that their bond buying program will be extended by six months. One of the reasons he has for the lack of results they have been getting is that the plans have not had the correct amount of time to show results yet. They project increasing inflation rates in each of the next three years. With the ECB's current policies not meeting their Target's, do you guys believe that their targets will be met in the next couple of years?
http://www.wsj.com/articles/ecb-cuts-deposit-rate-draghi-to-announce-further-measures-1449147451

Russia punishing Turkey economically

Recently Turkey shot down a Russian warplane over Syria, and since then Russia is looking to punish Turkey. One of the first things it's doing is imposing trade sanctions on Turkey, and now it has resorted to suspending a pipeline project that would go through the Black Sea. This leaves gas pipes stranded on the shore with a value of almost $2 billion. The pipeline would come from Russia through Turkey, bypassing Ukraine, to bring gas to Europe. The pipes can only be used in the Black Sea so for now, the Russian Energy company Gazprom is forced to put the pipes in storage.

This will severely hurt Gazprom, who previously has spent millions of dollars ($10-14) Turkish Stream. Russian does not plan on moving forward with project until tensions have subsided, which they're not sure will happen in two years or in fifty years. Russia is one of the biggest steel pipe producers in the world.

http://www.businessinsider.com/spat-with-turkey-leaves-russia-stuck-with-abandoned-gas-pipes-worth-billions-2015-12

Tax on Sugar?

Earlier this year we discussed the state's role in externality management. Akin to a carbon tax, a tax on sugar seeks to make the private costs more equal to the social costs. Places in England, Mexico, and California have already implemented these taxes in response to obesity/diabetes. People who consume excessive amounts of sugary soda drinks often end up being diabetic or obese which warrants tremendous increases in healthcare costs.

Do you see this and other disincentivising taxes as a valid way to curb externalities or do they represent an overly controlling "nanny state"? What about offering incentives for proper behavior rather than disincentivising undesirable behavior?

http://www.economist.com/blogs/freeexchange/2015/12/money-talks

China yuan steps up to global stage

http://www.afr.com/news/world/china-yuan-steps-up-to-global-stage-20151201-glc7c8

IMF agrees to include China's RMB in benchmark SDR currency basket. This is really a big time for China's RMB. It makes Chinese assets become a bit more attractive. One analysis pointed out that China's RMB getting into SDR means China's RMB will depreciate to almost 7:1 USD. In the international business market, the depreciation would definitely bring benefits to Chinese export. And China's RMB may be more important in international trades.

The CEO Paying Everyone $70,000 Salaries Has Something to Hide

http://www.bloomberg.com/features/2015-gravity-ceo-dan-price/

Gravity Payments CEO, Dan Price told the company he was raising the minimum salary of all workers in the company to $70,000. It is said that this would double the wages of some of the employees. He planned to do this by cutting his own salary of $1.1 million.

He was criticized by some of the hgher paid workers saying that some of their wages are being taken away and some commentators have called him a socialist. He was praised many for the move and has been offered to go to many conferences to speak, write a book, and appear on TV shows. Now his brother who owns 30% of the company is suing him, claiming that he had paid himself too much from the beginning. Allegedly this lawsuit was brought about from his actions to raise the minimum wages. A move that was so praised has now caused a huge rift between him and his brother.

For company's of similar size, the CEO's have been paid significantly less. He refutes the claims that he was paid to much as the board, including his brother, have approved his pay raises.

UK interest Rates

UK Interest Rates Expected to Stay Constant

            Mark Carny, the Bank of England governor stated that United Kingdom interest rates are likely to remain low for the near future. The Bank of England expects interest rates to be held at 0.5% until 2016. Carny believes that if interest rates are gradually increased it will still result in a relatively low interest rate environment. Carny stated that interest rates is strongly related with the strength of the domestic economy. The Bank of England is closely monitoring study groups of households that aim to find the impacts of an interest rate increase. Productivity of the UK economy is expected to exceed expectations, eliminating the pressure of inflation on prices.

            Andy Haldane the chief economist of the Bank of England expects more downside risks to growth and inflation than indicated by Carny. He believes that an interest rate decrease may be the most effective move. Haldane stated, “I see the balance of risks around UK GDP growth and inflation as skewed materially to the downside, more so than embodied in the November 2015 Inflation Report.”

            The UK Pound continues to devalue relative to the U.S. dollar and the Euro. This is concerning as the Bank of England continues to hold off on an interest rate change. I believe the UK needs to make interest rate changes sooner than later so the implications are made fully aware. Adjustments then can be made so that the economy can fully recover from its current downfall.

http://www.bbc.com/news/business-34910401

Kohl's Ivests in The Beatles for the Holidays

Kohl's approaches the holiday season with a new tactic this year: incorporating The Beatles' iconic song "All Together Now" into 15-30 second commercials. These commercials will feature the idea of members of a diverse extended family gathering for the holidays. Kohl's will have short clips of cover artists singing the infectious tune throughout the commercial. This way, the company saves some money on featuring cover artists rather than using the original song which would double the cost. However, considering the popularity of this song, the process took five months to finalize production. The article also discusses that there will be online components of the idea including heart warming stories of families reunited. Customers will also be encouraged to share their own personal holiday traditions, which will be translated into animated clips. There will also be two pop- up events in New York City featuring a story booth where customers can share their holiday traditions.

Kohl's idea for the holidays is strategic because they will be tugging at the heart strings of their customers, making the individual customer feel important in sharing their personal stories. This will make customers feel apart of the Kohl's family. Also, the idea of showcasing a diverse extended family in commercials will appeal to every type of person - an identity for each age, race, and sexual orientation. Moreover, Kohl's has pretty much incorporated family, diversity, holiday traditions, and a super catchy tune into one big campaign for the holiday season.

If there are no hiccups in the plan, it seems as if Kohl's will have a great profitability turnout for the season. What do you think? Will their marketing tactics work?

http://mobile.nytimes.com/2015/11/30/business/media/kohls-invests-in-beatles-tune-for-holiday-campaign.html?referer=https://www.google.com/

When will UK's interest rate rise?

'Mild' deflation has continued with the cost of living falling again for British households, the latest ONS figures show.

CPI came in at -0.1 per cent for October, the same as September. This was spot on expectations and is unlikely to shift the outlook for rates.

Bank of England deputy governor Ben Broadbent warned at a Reuters event this week that investors should not rely on the money market's expectations for when and how rates will rise, with the outlook drifting further out once more. 

Interest rates will not move until mid-2016 and may not even rise for the whole of next year, economists have suggested following the latest Bank of England inflation report.

A big shift back in the markets outlook for rates had preceded the second Super Thursday combination of an MPC verdict, minutes and Inflation Report.

The Bank's report suggested once more that this most likely path for rates should see inflation return to target without risking the economy's recovery.

That has widely been taken as meaning that there will be no shift in Bank Rate until well into 2016 - even if the US Federal Reserve raises rates next month.

 

http://www.thisismoney.co.uk/money/news/article-1607881/When-UK-rates-rise.html

A longer paternity leave: is it good for the U.S. economy?

Facebook CEO Mark Zuckerberg is changing the face of social media once again. Beginning in January, 2016, Facebook will offer up to four months paid paternity leave to its full-time male employees around the world. This coupled with a $4,000 “new child benefit” option will affect 34 international offices and nearly 12,000 employees – making Facebook’s parental benefits among the best in the U.S.

Facebook is not the only company looking to offer better paternal benefits. Spotify, Netflix, and Amazon have also begun to strengthen their paternal benefits. For example, Netflix has begun to offer unlimited paid time off until a child’s first birthday to all male and female employees. While this phenomenon is not uncommon to countries outside of the U.S., it is a very drastic change for U.S. companies who in the past have not offered paternal benefits and only offered a maximum of 8 weeks’ maternity leave for new mothers.

With this new benefit being offered to new fathers in companies across the U.S., what do you think will happen to the current work force? Since this new benefit is only offered to full-time employees, do you think a hike in part-time employment will occur in the coming future?

Link: http://money.cnn.com/2015/11/25/pf/jobs/facebook-international-paternity-leave/index.html

For a Growing Africa, Hope Mingles with Fear of the Future

A century ago there was only one city in Africa with a million people or more and now there are 50 housing more residents than most European nations.  It is projected that in the next 10 years, cities in Africa such as Lokoja are projected to increase their populations by 78% which is quicker than any other sizable town in the world.  The biggest human population increase is happening right now in Africa, where everywhere else populations are beginning to level out.  With these predictions, four out of ten people will be African, 2.5 billion in the world, and 25% percent of the world's population by 2050.

By 2050 a fourth of the population will exceed 60 years old, while the average African will only be 28.  With this increasing baby boom it will lift one of the poorest countries in the world and make them a global powerhouse.  However, this will not be an easy feat.  Currently only 9% of the available workforce in Africa are employed.  This high unemployment has proven to be a very trying part of the African Economy for quite some time.  In addition, the African population is growing too quickly for infrastructure such as roads, electricity, schools and businesses to be developed in order to support them.

While over the past twenty years have declined from 6.8% to 6% it is evident that it will take a much longer time to see this decrease even further.

What do you think needs to happen in order for Africa to reach its potential and use its youthful society to become the dominant country it is capable of becoming?


http://www.wsj.com/articles/for-a-growing-africa-hope-mingles-with-fear-of-the-future-1448632865

Chinese Cash Floods U.S. Real Estate Market

http://www.nytimes.com/2015/11/29/business/international/chinese-cash-floods-us-real-estate-market.html?hpw&rref&action=click&pgtype=Homepage&module=well-region&region=bottom-well&WT.nav=bottom-well

In London, Chinese investors are purchasing high-end apartments in wealthy neighborhoods and big skyscrapers in the financial district. In Canada, they are paying $1 million for modest Vancouver bungalows. In Australia, a Chinese sovereign wealth fund bought nine office towers, one of the biggest real estate transactions in that nation’s history.
In the United States, the home-buying spree began on the coasts, where Chinese buyers snapped up luxury condos in Manhattan and McMansions in Silicon Valley, pushing up home values in big cities. It is now spreading to the middle of the country, where prices are more modest and have room to run.
The great property rush is part of the tidal wave of Chinese money that is pouring into the global economy and reshaping financial markets. In residential and commercial real estate, the new flow of cash is upending the traditional dynamics of buying and selling.
“The price of property in Beijing is very high, the stock market is crashing, and the real economy is not stable,” Mr. Du said of the environment in China. “The people here have some money, but they don’t have enough good ways to invest their money.”

Black Friday Shopping Shifts Online as Stores See Less Foot Traffic

It seems that this Thanksgiving, many consumers chose to enjoy more family time while still capitalizing on some of those great Black Friday deals from the comfort of their home. All over the country, malls, for once, weren't crawling with crazed shoppers. Adobe stated that "shoppers spent $1.73 billion online on Thursday, 22% more than in 2014" a statement made after having tracked 180 million visits to more than 4,500 US retail websites. 60% of the shopping traffic this season came from mobile devices. Between midnight an 11am Friday morning, online sales grew by 15% than that of last year. Adobe projected that online sales for Black Friday will generate $2.6 billion in sales, that's a 14% increase compared to last year. Some of the top selling, hot-ticket online items included the Samsung 4K TV, Sony PlayStation 4, iPad Air 2, and Xbox One.

This year, discounts averaged out to be 26% off, increasing both brick and mortar and online sales, of which rose by 5% from last year to an average of $126. Doorbusters made up the other 40% of sales this shopping season.

For the last few seasons, it had been a trend to only brows on ones phone then make the purchase in person, but this season more purchases were made with mobile devices, instead of just browsing. About $0.37 of every dollar spend on Black Friday was spent online. The influx of purchases made on phones is due to the fact that in previous years consumers didn't have their credit card information in their phone, or didn't trust to put it there. Seeing as how the technology that enables the purchase of goods from a mobile device has now been around for a few seasons, consumers now readily have their credit card information ready to make a buy.

Something I wonder about, is as the years go on, following this increasing online shopping trend, could this provide stores incentives to lay off and hire less workers, especially around the holidays? In some stores I visited there appeared to be more workers than customers during the "frenzy shopping period".
Link: http://www.nytimes.com/2015/11/28/business/black-friday-shopping-shifts-online-as-stores-see-less-foot-traffic.html?ref=business

Black Friday shoppers likely helping toy industry deliver its best year in over a decade

This holiday season is projected to be an epic coda for what is shaping up to be the toy industry’s best year in over a decade, one in which a crop of new movies and a spate of technological innovations have already had toys flying off shelves. And on Black Friday, customers were out in droves to make sure they pounced early on the must-have toys on their shopping lists as they worried that in-demand items might sell out if they waited to buy them.
Also online shopping has become a must for all the idle shoppers who do not want to deal with the hustle and bustle of a busy shopping center.
Toy sales are projected to surge between 6.2 and 7.3 percent this year, according to researchers at NPD Group, after swinging between modest sales increases and declines for a decade and improving somewhat to 4 percent in 2014.
Link:
https://www.washingtonpost.com/news/business/wp/2015/11/27/black-friday-shoppers-likely-helping-toy-industry-deliver-its-best-year-in-over-a-decade/

Volkswagen Reveals Emissions Fix for Diesel Cars in Europe

In the continuing Volkswagen saga, VW just announced they are able to update the software to bring their diesel vehicles up to the European clean air standards.

However, this update will only be available in Europe, where it will be installed in early 2016. VW said it would be harder to update US cars because of the stricter rules on emissions of nitrogen oxides.

Because of the big scandal, 8.5 million of the vehicles are in Europe and about 500,000 are in the US. VW also announced eight employees have been suspended in an investigation behind the faulty software.

Is this too little, too late? How do we know that VW is telling the truth this time? I feel like VW is not reliable, so how are we supposed to be able to trust them in telling the truth about the new software?

http://www.nytimes.com/2015/11/26/business/international/vw-diesel-emissions-fix.html?ref=business&_r=0

9 regional Fed banks voted for a discount rate hike in October

9 regional Fed banks voted for increasing the discount rate from 0.75% to 1% in the last discount rate meeting. Last month, there were 8 banks who wanted a rate hike. The nine regional banks that requested a rate hike want to normalize the spread between the discount rate governing the Fed lending to banks and overnight federal funds rate, which is its primary economic lever. According to CME Group's FedWatch, that there is a 74% chance that the Fed will increase the interest rates next month for the first time in almost a decade.
On the contrary, the Minneapolis Fed again voted to cut the discount rate to 0.50% from 0.75%. Those who wanted an increase in the rates said that it is the perfect time to do so since there is improvement in the labor market and also there is a gradual increase in the inflation rate toward's Fed's target of 2%. Some of them also figured that this early increase would help pace the policy normalization adjustments more efficiently.

http://www.businessinsider.com/r-nine-fed-banks-called-for-discount-rate-hike-minutes-2015-11

Ireland is Getting Bigger

As of today, pharmaceutical giants Allergan Plc and Pfizer have agreed to a record setting $160 billion deal. This deal will allow the Dublin-based pharma company, Allergan, to buy Pfizer. Thus, like many pharma companies have been doing, Allergan will be moving its HQ to Ireland for tax reduction purposes. One might wonder how long the corporate tax rate is there, and it is a minute 12.5%. This will allow for increased profit because they are currently paying a 35% corporate tax. What is ironic is that the size of this deal is close to Ireland's GDP last year, which was only $200 billion. The Irish government has no problem with these two companies clearly merging for taxation purposes because both of the companies had previously done business in Ireland. This leniency will most likely encourage more corporations to move their HQ's to Ireland. Not only does this benefit the firms that are located in Ireland, but it should benefit the Irish economy as well: potentially creating more jobs. Do you think that more corporations should be moving to Ireland? Currently, over 140,000 people are directly employed by over 700 U.S. companies in Ireland. Interestingly, Ireland is the biggest foreign economy for U.S. FDI in the chemical sector, which includes drugs.

Is Black Friday Worth It?

The biggest consumer driven time of year is upon us. US citizens are maxing out their credit cards and spending way too much time at the mall. The start of all this madness is known as Black Friday, when retail store have the best sales available for the entire season. A ploy to swarm stores with saving driven shoppers is getting to be a little too much. According to Forbes, one out of three shoppers have seen it get "ugly" on Black Friday. From stampedes to fights over the last product, shoppers are starting to say enough is enough. With the decline in shoppers on Black Friday, stores are starting to make their sales available a few days before the big charge for those consumers who desire to skip the madness. Thus leading us to wonder if Black Friday is really worth it? I know I won't be risking my life to save a few bucks. http://www.forbes.com/sites/kathleenkusek/2015/11/22/is-black-friday-worth-fighting-about-nearly-a-third-of-shoppers-have-seen-it-get-ugly/

Many unhappy returns

Many unhappy returns

Investments returns being lower in the coming decades will be a defining factor in terms of pension funds and college endowments. When final-salary pension schemes ( which are very significant in America’s public sector employees) the decision needs to be made as to how much is put aside to pay pensions. They have to make an assumption about what returns they will earn in the future. Essentially the higher they assume the return will be the less the employers have to contribute today. Similarly endowments have to determine how much to spend every year in accordance with future predictions.

College endowments also have to make similar decisions regarding their funds for future leverage. They have to be very skeptical regarding investment assumptions.

The only good news there is from this is that it a long term issue. However; this is also a drawback since decision makers will eventually leave this problem for their successors, which will eventually make the funding crisis even larger to deal with.

Link:

http://www.economist.com/news/finance-and-economics/21678812-pension-funds-and-endowments-are-too-optimistic-many-unhappy-returns

Fed signals rate hike

The Fed's Vice Chair has suggested that central banks are moving off of the zero interest rate policy. This is because the Fed has met their employment rate quotas. This is expected to keep Asian imported commodities low because of the struggling Asian economies.

There is, however, concern about inflation and global economic risks and what raising the rates would do to world economies. The Vice Chair Fischer says he is not concerned about these issues and raising the rates in the next month or so should be expected.

What do you think, will this harm world economy lenders like the Asian countries or is this a move that will help drive our economy to the 3% expected growth?

These indicators show no threat of recession

http://finance.yahoo.com/news/rbc-s-jonathan-golub--positive-on-markets-121152467.html

I think we should be optimistic about the economy now. Not only because the point the news mentioned such as no inflation, no business excess but also because the low unemployment rate, the increasing number of jobs and the wage growth in US. The federal reserve forecasts that the GDP growth rate would be 3% next year which is higher than this year.

"Draghi Keeps Options Open to Fight Low Inflation"

Mario Draghi, President of the European Central Bank, suggested that easy money policies are a strong possibility at the ECB's next meeting in December. This statement was rebutted by Jens Weidmann, the head of Germany's central bank. He said that they should give their current policies more time to work. One of the stimulus policies he is keeping open is an increase in quantitative easing. The reason for doing this is their medium-term price stability goal of 2%. With the low inflation they already have, Draghi wants to increase quantitative easing to reach their price goals. Currently in the EU, the deposit rate is at -.2%. This means that banks have to pay to hold money in the central bank. Because of this, banks are more incentivized to lend to the private sector. This could weaken the exchange rate, boost exports, and boost inflation. In addition, the ECB is currently in the middle of a bond buying program of 60 million euros per month, but they are think up increasing the amount to 80 million euros per month to help increase inflation. Do you guys think that easy money policies are a good idea for the ECB to undergo?
http://www.wsj.com/articles/draghi-vows-to-use-all-instruments-if-price-stability-goal-at-risk-1448009389

China finds new way of generating electricity by cremating truckloads of banknotes worth billions

A city in east China is keeping its lights on at night using the power generated through burning truckloads of damaged banknotes.

This year alone over 1,800 tonnes of money with a value of almost 180 billion yuan ($28.2 billion) has been incinerated to generate electricity in Yancheng City, Jiangsu Province, according to The People's Daily online.

The money burnt is the old 100 Yuan ($15.66) red banknotes that are now being replaced nationwide with a new design.

According to the report, one truck of burnt currency can generate 30,000 kilowatt hours. 

Considering the average household in the city uses 100-kilowatt hours per month, this means the output of one truckload can supply one home with power for 25 years.

Compared to other biomass fuels like sawdust, these banknotes have a high caloric value (a weightless gas that passes in and out of pores in solids and liquids) and a low water content, which is suitable for biomass power generation.

Not only is the money turned into power, the remaining ash is made into bricks which ensures sustainable and harmless disposal.

 

China's middle class isn't what we thought it was

A lot of multinational companies have been anticipating the growth of the Chinese middle class for many years. With the slowdown of the Chinese economy, the growth of this middle class has been hindered. A study was done to examine the growth of the Chinese middle class by considering how much purchasing power they really have and how much access they have to the products companies want to sell.

Chinese consumers’ buying power does not compare well with that of the US consumers. Between 2010 and 2014, only 12% of the Chinese people reported a household income of more than $3200 a year. Their spending power is expected to rise from 44% of consumer spending to 60% by 2025 compared to $32000 in the US today. This spectacular growth, however, is coming from a relatively small per capita base and will arguably remain modest compared with most mature markets even by 2025. This projections mean only a very gradual movement toward consumption led-growth in China. It will be interesting to see how this group of consumers grow in the next few years owing to the economic slowdown in the country.

http://www.businessinsider.com/demand-report-on-chinas-middle-class-2015-11

Qualcomm’s China Struggles Continue as It Fails to Reach Patent Deals.

http://www.wsj.com/articles/qualcomms-china-struggles-continue-1446852072


The article discusses the problems with holding onto a Patent. Qualcomm Inc. is trying to make deals with two companies, and the large drop in shares shows the struggles that they are having. The company has shown large decreases in revenue and this is due to a decrease in sales and manufactures stopped making royalty payments due to the cease in the patent. The loss of the patent has caused significant losses for Qualcomm Inc. To try and make a comeback, Qualcomm made a large payment of 975 million dollars for antitrust problems, but it did not help due to the fact they weren’t able to collect licensing revenues. The company is now beginning to enforce stricter agreements in order to obtain their correct amount of royalty payments, as well as having better negotiations. They need to do this because the majority of their income comes from royalties, which exceeds over 6 billion dollars. The two manufactures that Qualcomm is having issues with are Lenovo and Xiaomi. If the patents were still in place, the royalty money these companies both owe are very large. Once an agreement is done by Qualcomm to fix the patents, the companies holding out will have to pay them. 

Mortgage Lending Gaining Strength in England

            Mortgage lending rates are at highest levels since before the 2008 financial crisis. Mortgage lending rose to 21.8 billion pounds in October, up nearly 20% from the year prior. Growth in mortgage lending is currently at its seven-year high according to the Council of Mortgage Lenders. It is expected that mortgage lending will beat forecasts and continue to increases. According to the Bank of England mortgage approval ratings showed mixed signals about the future of the housing market. House purchase approvals fell well below 70,000 in September while in the same month remortgages rose to 41,000. The CML believes that the weak level of housing transactions in recent months is troubling because the level of properties being offered for sale are extremely low.

            The UK economist from HIS Global Insight, Howard Archer, stated that mortgage lending was mainly utilized by people attempting to remortgage by locking in a low interest rate before they are expected to rise in 2017. He believes that house prices will see a steady increase because of lack of buyers and a shortage of properties to sell.

http://www.bbc.com/news/business-34865579

Adele Refuses to Stream New Album "25"

Famous pop artist Adele hasn't released an album since 2011, and a song since 2012, but she will be releasing her 3rd album "25" in a few days. A lot has changed in 4 years. For example, Spotify and other sites have emerged in the services of streaming music. In a very complicated and controversial contract, apps like Spotify are able to stream songs, which listeners can either listen to on their computers for free (with ads), or they can pay $5 (college student) or $10 a month to get no advertisements, as well as get songs on their phone. Essentially, this gives listeners the rights to owning songs without artists getting money for them. Taylor Swift is an artist that has also not allowed for streaming of her songs, since she believes musicians should make money off their hard work in their music. Adele doing this comes at no surprise, since she is one of the more popular artists alongside Swift in the modern era. With the demand of streaming exponentially increasing, less people are willing to buy songs off of iTunes and Google Play, since they can save a lot of money by just using and accessing Spotify. This, in turn, has caused companies like Apple to lose revenue in this sense, which caused them to create Apple Music, their own streaming site, to compete with Spotify and other sites like Pandora and Rhapsody. This also comes as no surprise, seeing that iTunes made CDs pretty much extinct, and streaming might be doing the same to electronically selling music. Alternatively, concert tickets are increasing so that artists can make back the money they lost in record sales. http://www.nytimes.com/2015/11/20/business/media/adele-music-album-25.html?ref=business&_r=0

Mac vs. PC cybersecurity

Microsoft has begun a $1 billion investment into their cybersecurity software to hopefully end some of the debate over whether Apple has better cybersecurity. Cybersecurity is only becoming increasingly more relevant as more and more high-profile attacks are occurring. Sony and J.P. Morgan Chase are two very relevant attacks that have put Microsoft in the spotlight for stepping up their cybersecurity software. They will be putting in more money to respond to threats faster and make sure customers feel as though their data is safe.

Apple has often advertised that their cybersecurity is much better, but many claim this is only because the majority of the computers in the world are PCs or run on Microsoft software. Windows 10 is the most recent operating system and their hoping that it is the most secure. One of the key features that it is had is providing cloud space for data, which is space that is much harder to get access to. Microsoft stresses that is important to work with the best technology of the industry and uses third-party companies to help with extra security.

http://www.bloomberg.com/news/articles/2015-11-17/microsoft-revamps-security-plan-as-part-of-1-billion-investment