Global Economy Headed for Worst Year Since Financial Crisis

Economists predict that certain factors such as the coronavirus will lead the global economy to have its lowest level of growth since the Great Recession. GDP growth is currently predicted to be around 2.8%, which would be the first year to come in under 3% since the financial crisis in 2009. GDP growth in China alone is expected to drop .7% due to the impacts of the virus such as decrease in trade and tourism. Other Asian countries are also expected to see a decline because of the dramatic drop in tourism that is currently being seen. Some of the key factors that are predicted to decrease GDP and growth besides the coronavirus include the U.S.-China trade war, political uncertainty, and weakness in Japan and certain South American countries. The upcoming U.S. presidential election also casts uncertainty for the end of 2020, as their trade war with China could greatly change under democratic leadership. Despite the hit to global economic growth, economist do not see a recession occurring as a result of this.

Do you agree with the prediction that a recession is unlikely in the upcoming future or do you believe that it is still possible due to the current and future struggles of the global economy?

https://www.cnbc.com/2020/02/27/worlds-economic-growth-could-be-worst-since-financial-crisis-bank-of-america-says.html

Coronavirus Fears Are Driving Interest Rates Down, a Bad Omen for the Economy

The emergence of the coronavirus has had a severe detrimental effect on the global and the American economy, and this has correspondingly led to a drop in global interest rates. The drop in global interest rates specifically “reflects expectations that the Federal Reserve and other central banks will cut interest rates or take other actions to try to contain the economic damage” of the coronavirus. As the article notes, continually decreasing the rate of interest also leaves the global and the American economy “vulnerable if things were to really take a turn for the worse,” and it will also limit the ability of the Federal Reserve to pursue effective monetary policy. Overall, economists and investors are expecting two to three more interest rates cuts, and this leaves little room for further economic stimulus.

https://www.nytimes.com/2020/02/28/upshot/coronavirus-interest-rates-economy.html

The World's Most Famous Economist Sets Out the Case for Socialism

Thomas Piketty, author of Capital in the 21st Century, has a new book coming out; Capital and Ideology. This work is largely a sequel to his last entry, but with a different twist; his earlier novel was focused more on the logic of the economic mode of capitalism that Karl Marx's Das Kapital focused on.

The newer entry is a sociological analysis of how the capitalists maintain power over the lower and middle classes. It is essentially a social study of the wealthy and their influence on the economy, and by extension, the world as a whole.

Why is this relevant? For one, Piketty has one of the economically-soundest arguments for socialism in the 21st Century; he has been commonly referred to as the "21st Century Marx". Therefore, his books are typically highly commended and criticized by those on the opposing ends of the economic ideological spectrum. His book overall is highly critical of exorbitant personal wealth (who does that sound like), but he uses historical data to back his claims, which is accurate and yet dated all at once.

 In a world where redistributive populism looks to take from the uber-wealthy and give to the less fortunate, a study focusing on the critical aspects of the wealthy and their power could certainly spark a debate in any country currently in the midst of an election year. Bernie Sanders. anyone?

https://www.economist.com/books-and-arts/2020/02/29/the-worlds-most-famous-economist-sets-out-the-case-for-socialism

Companies Gauge the Coronavirus Impact

The Coronavirus outbreak has negatively affected many companies in the US. Broken supply chains and disrupted manufacturing has decreased demand for all products. The S&P lost 11.5% of its value this week. The worst week since the 2008 financial crisis. Microsoft announced that the virus has hindered computer and tablet sales, cutting their future forecasts. Apple said their sales in China dropped due to closing of stores. MasterCard also cut their forecasts because people are taking less international trips due to the fear of the virus. Investors are also less reluctant to lend them money. Jerome Powell of the Federal Reserve stated they would cut interest rates to incentivize spending and investing. He issued a statement saying these cuts would "act as an appropriate support for the economy" and "as a way to stem panic." Do you believe another economic recession is imminent?

https://www.nytimes.com/2020/02/28/business/economy/companies-coronavirus-economy.html

U.S. markets drop into correction territory, extending brutal week of losses

Recently, the Dow Jones has been on a constant decline. This past Thursday, it decreased by 4.4%. It has not seen a decline like this since the financial crisis in 2008. The Standard & Poor's 500 and the Nasdaq also fell. The Dow Jones is down nearly 13% from its recent high. It has been decreasing for 10 days, and it has not decreased this quickly since 2011. This only adds to the fears investors are already having because of the coronavirus. This fall has erased one third of stocks' gains since Trump's 2016 election.

Investors fears are only increasing since the first US case of coronavirus that could not be linked to travel or contact has just recently occurred in California. With this, companies and musicians have began canceling conferences and concerts due to fear of the virus. These companies stocks are being affected by this. This Thursday, Tesla's stock price fell 13%. Some Wall Street veterans believe that the coronavirus was an external shock that scared investors.

The US will average 1.25% growth for the first half of the year. While this epidemic has negatively affected the US economy, Europe is in worse shape. Germany and Italy run close to being in a recession, and they do not have the tools to fix it because of there previous weak growth and financial crises.

How much longer do you believe the coronavirus will continue to affect the US economy? Since many different countries are being affected by the virus, what do you think this means for our future?

https://www.washingtonpost.com/business/2020/02/27/stock-market-dow-coronavirus/

Goldman sees zero earnings growth for US companies this year because of coronavirus

According to Goldman Sachs, the earnings growth for the companies in the US will stagnant in this year because of the coronavirus. Goldman' s chief US equity strategist David Kostin said that " US companies will generate no earnings growth in 2020." This rapid spreading of the virus had cause the historic decline in the Dow Jones in which they dropped more than 8% since Feb 24. The S&P 500 fell about 8.6% and Nasdaq fell about 2.9%. Investors are still optimistic that market will bring it back up after the virus. but Goldman didn't think so, because the virus's impact on the supply chain had caused most of the big companies like Apple or Nike. So, with this virus going around the world, and stock markets declining in the past week, is this the start of another recession? Should people be worried?

https://www.cnbc.com/2020/02/27/goldman-sees-zero-earnings-growth-for-us-companies-this-year-because-of-coronavirus.html

Brexit to Boost Public, Private UK Investments

After having left the European Union to end the month of January, it appears that new certainty in the future of Britain will help boost re-investing, per Bloomberg. With the leave officially completed and new agreements begin to be worked out, confidence in the British economy has boomed. Boris Johnson wishes to do the same as private corporations, and also invest more into the country, with money that may have been used to help support the EU in the past. With British companies soon to reinvest profits into growing both in the UK and the EU, this will only help further demonstrate the positive aspects of why the UK has decided to leave.

Do you believe that company and consumer confidence will be enough to maintain a positive post-Brexit UK, or will the full ramifications of Brexit hurt these investments in the long run without EU membership?

The Country is Desperate for More Immigrants Under the Trump Administration

This article depicts and goes over the main concerns economists have when it comes to the future economic growth. The issue being that the United States needs more immigrants. Over hundred's of years, the country was built by immigrants and growth has been great because of immigrants but the net flow of immigration in the U.S. has been slowing down since 2007 and continues to drop rapidly since the Trump administration. On the opposite side of that, the baby boomer population is slowly hitting the retirement age and are drifting out of the work force. The combination of this fact, mixed with the statistics of severe drops in birth rates since, has economists concerned about the slowing labor force which will lead to significant drops in economic growth, production, and productivity. The National Foundation of American Policy predicts a 30% drop in immigration by 2021 and as a result, a 35% drop in the average annual growth of the labor force in the U.S.

Previous annual immigration numbers were at 1 million a year, whereas now, they have been cut by half (500,000). If this continues, it is predicted that the national GDP (gross domestic product) will drop by 700 million by 2030. The number one argument against immigration is that domestic wages suffer because of immigrants taking jobs, but the evidence behind that is limited. This is seen to only happen with a small population of the labor force that ended up dropping out of high school. Even with this being an issue, economists have proposed a simple different design can solve the problem.  The United States has a high supply of high-skilled workers and because of that, there are less and less low-skilled workers to do the lower level jobs. Over the years, the people that have been doing these jobs have been poor immigrants that came to the U.S. in search of a better life. With the slow-down of immigration, these jobs will be in more and more demand, without the supporting labor force to take these jobs, there may be an economic crisis. The article argues that with a continued immigration constrain, and a lowering fertility rate, the economy will suffer in the long-run and the nation's debt burden will increase. 

Based on this, what do you think would be the best way to go about avoiding the consequences of cutting immigration?

https://www.nytimes.com/2020/02/27/business/economy/immigration-economy-mulvaney-trump.html

Stocks trim earlier gains as coronavirus fears linger

The coronavirus continues to cause a plethora of problems for consumers and producers all around the world. As the stock markets and the indexes that represent them continue to fall, the market will begin to show many signs of adding to the global recession. As signals that show that a recession is coming have continued to go off, there is also little progress with containing the coronavirus. As the article describes it, the global supply chains have been hit incredibly hard as some of the largest exporters of goods have been hit hard, and no other countries are wanting those goods as the fear that they may bring over contamination. Which other signs outside of the stock market should we be looking at more closely now that stocks have in fact showed signs? Also, how can stocks recover from this shock?

Link to article- https://www.msn.com/en-us/money/markets/stocks-trim-earlier-gains-as-coronavirus-fears-linger/ar-BB10ocnq

Huawei Is Winning the Argument in Europe, as the U.S. Fumbles to Develop Alternatives

Huawei, the large telecom giant has been a topic of contention for most international governments. Whether they should side with the United States and reject Huawei from their networks or forgo U.S. warnings and decide to build new 5G networks with Huawei.

Both sides have received wins and losses. The U.S. has some success in getting Huawei banned from
Australia and Japan while Huawei has some success in getting permission to build 5G networks in the UK and possibly Germany with strict monitoring and other conditions. This is a problem for the U.S because the two European countries are close allies when it comes to intelligence-sharing and the worry that China will be given a back door to spy.The problem with this is that despite U.S. warnings, the U.S. has not come up with a cheaper alternative to Huawei. Nokia and Ericsson are alterantives but are more expensive and there are no American firm that have developed an alternative for 5G.

But a huge reason for the inclusion of Huawei in the UK and Germany is due to China being a critical trading partner and fear of retaliation from China. With the UK leaving the EU, their trading relationship with China will be a top priority along with the U.S. The UK will need to balance their relationship with both superpowers without alienating the other which will be harder to do. Germany's economy is mostly export dependent (ie. Daimler, BMW, Mercedes-Benz,etc) with a large portion of those exports going to China. This is a problem that many countries are facing: choose the U.S. and potentially be locked out of 5G advancement or Chinese retaliation on goods or choose to include Huawei and have 5G networks and Chinese goodwill or possible Chinese espionage.

https://www.nytimes.com/2020/02/17/us/politics/us-huawei-5g.html?auth=login-google1tap&login=google1tap

Post-Brexit Immigration Havoc

As post-Brexit immigration plans begin to be unveiled by the government, there are five new immigration laws that will affect workers. Low-skilled workers will not get visas under these plans, because the government is urging employers to move away from cheap labor and invest in staff retention and automation technology. Home Secretary Priti Patel said that the government wanted to "encourage people with the right talent" and "reduce the levels of people coming to the UK with low skills". The UK is suggesting the introduction of a points based system that would value immigrants with higher education and job skills over those who are low-skilled. According to the Scottish First Minister, Nicola Sturgeon, the impacts of the new immigration legislation would be "devastating" for Scotland.

 The population growth stalling in Scotland is one main argument for needing more immigration, as it would boost the working-age population and keep the economy going. The new immigration laws being imposed by Westminster will disproportionately affect Scotland because of their demographics. That is why the Scottish Parliament is proposing a different immigration policy as their situation is sufficiently different from that of the rest of the UK. Currently, migration policy is controlled by Westminster but Scottish ministers are advocating for extra powers to set up their own system. The proposed system would add a Scottish-specific visa to the immigration system. The requirements for the visa would be decided by the Scottish government and would assess applications before sending them to the UK government for security checks. Do you think the UK government will accept this proposal?

https://www.bbc.com/news/uk-scotland-scotland-politics-51558830

The State of New York Won’t Appeal T-Mobile Merger Verdict

New York Attorney General Letitia James said the state won’t obstruct the merge of T-mobile and Sprint.  This legal decision removes barriers between the cellphone carriers and their long-planned combination.

“After a thorough analysis, New York has decided not to move forward with an appeal in this case,” Ms. James said in a statement released on Feb 16th. “Instead, we hope to work with all the parties to ensure that consumers get the best pricing and service possible, that networks are built out throughout our state, and that good-paying jobs are created here in New York.”

In the Obama era, T-Mobile and Sprint talked about mergers but these negotiations ended in failure, in order to avoid monopoly advantages and the formation of a bastion of industrial interests. For mergers of large telecommunications operators, the competent authority will usually evaluate them carefully. Such telecommunications mergers are most often opposed. For example, AT&T failed to acquire Time Warner. In 2011, AT&T tried to acquire T-Mobile, but it failed to get approval to do so. In 2014, T-Mobile tried to sell to Sprint, but in the end, it was also blocked, due to a threat from the Federal Communications Commission (FCC).  In 2016, T-Mobile and Sprint started to negotiate again, but the two sides did not reach a consensus. With T-Mobile and Sprint now ranked as the No. 3 and No. 4 corporations in telecommunications, the merger would inevitably affect the overall telecommunications industry in the United States. The merger would attract great attention from US antitrust agencies, which have not ruled out examining it in more aspects.

However, T-Mobile and Sprint will have a set of persuasive legal arguments to convince the authorities. After the merger, New T-Mobile will have more network spectrum. In addition to the past 600 MHz and 700 MHz, Sprint's 800 MHz and an increase in speed will also be added. The speed of GHz is helpful to the development of 5G networks and access to business opportunities in the fixed-line broadband market. New T-Mobile promises to invest 30 billion U.S. dollars in building new networks and deploying new services in the next three years. It plans to increase the average national network speed by 15 times by 2024.

In addition, New T-Mobile emphasizes that its coverage network will help improve rural Internet access and reduce the digital gap between urban and rural areas. It is expected to open hundreds of new stores in rural communities, thereby creating more job opportunities, including network engineers, network installations employees, call center specialists, and new store staff, etc., by establishing in-state call centers to increase various customer needs.

On the other hand, gathering silver bullets to build a 5G network at a lower cost and scale will further promote competition in the telecommunications industry and reduce tariffs, ultimately increasing transmission speed and expanding services.  At the same time, fortunately, prices will decline. After all, China has a positive attitude towards the development of 5G mobile networks, even ahead of the United States. Whether the merger can change this pattern and reverse the backward situation will be a topic of concern to the US government.

The U.S. telecommunications industry as a whole will continue to witness intense competition among the three leading corporations (Verizon, AT & T and New T-Mobile). New T-Mobile subscribers will exceed 100 million consumers, and the total number of subscribers can compete with those of Verizon and AT & T. After the merger, the United States will deploy its widest-ever coverage, and its highest-capacity mobile network. 

What do you think is the impact of the merger of t-mobile and Sprint on the telecommunication industry in the United States? Is that good or bad?

https://www.wsj.com/articles/new-york-wont-appeal-t-mobile-merger-verdict-11581884506?mod=searchresults&page=1&pos=1

Japan's economy is shrinking and a recession looks 'all but inevitable'

Japan's economy is on the edge of entering a recession. This global power is the world's third largest economy. However, it has been consistently declining in growth without a current end in sight. Japan has been heavily impacted by the outbreak of the coronavirus in China. The Chinese and Japanese economies are closely tied to one another. With the slow down of China's economy, Japan has struggled to improve their already poor economic situation.
Japan's tourism industry has been greatly effected by the spread of the virus. Last year Japan welcomed 8.1 million Chinese tourist into their country. Japan sees more visitors from China than any other country in the world. With the effort to contain the disease a top priority, tourism has declined.
Do you believe Japan will enter a recession? Is there anyway to prevent the 'inevitable'?

https://www.cnn.com/2020/02/17/economy/japan-gdp-economy/index.html

Energy Companies Are Facing Looming Amounts of Debt

U.S. oil and gas companies are in need of cash, but it won't come cheap. As of now, explorers and producers have more than $85 billion in debt maturing over the next four years. Companies with poorly rated debt will have a difficult time engaging in capital markets in 2020, which increase the risk of waves of defaults. According to Moody's analyst, Sajjad Alam, "Despite our expectation of a generally low interest rate environment globally, such companies face greater risk because of continuing overproduction, depressed natural gas prices and widespread investor risk aversion toward the exploration and production sector". The difference in pricing of interest rates based upon the borrowing of certain natural gas producing companies emphasizes how investors have become increasingly selective in a sector where they have lost massive amounts of money through bankruptcies due to the crash in oil prices back in 2015. It is still a credit picker's market.

If more of these companies default, is there an expectation that we will see a surge in the price of oil? If so, will that persuade interest rates to rise significantly? What impact will this have on the economy?

HSBC plans to cut 35,000 jobs as profit drops 33%

Hong Kong and Shanghai Banking Corporation (HSBC) is one of the largest players in the Asian banking industry, and has placed itself across the United States, the United Kingdom and Canada alongside. Due to the growing impact of the Corona Virus, the company's profits went down by over one third since 2019, resulting in a reduced global headcount by laying off 15% of their workers. The bank requires a large restructuring plan, and since it has underperformed in U.S markets, they plan to close over a third of their branches and shift them to the Middle East instead. Furthermore, they are shrining their assets by $100 billion, and this restructuring is costing them an added $7.2 billion by 2022. Additionally, the falling interests rates in China have been severely damaging to the financial sector, resulting in several banks rethinking their development strategies. If the virus continues to grow, the bank will face $600 million in further credit losses. Mainland China was a core engine of growth for the country, but now faces deteriorating impacts with many multinational corporations and banks such as Apple facing a decline in their production and performance. Do you believe other banks and corporations will restructure their production plans and geographical placements if the virus continues to grow? If that is the case then how would China's economy recover from this economic downturn without the help of foreign invesmtnets?


https://www.cnn.com/2020/02/18/business/hsbc-results-2019-announcement/index.html

US producer prices post biggest gain in more than a year

In the United States, producer prices were the Highest in January than they have been in over a year. This is due to health care costs and hotel accommodation along with machine and vehicle production. The producer price index increased .5% last month. There was also an increase in consumer prices in January. These rises have economists worried about our inflation rate as the US is trying to reach their desired 2% inflation. The Fed decided to leave interest rates alone in January and delay monetary policy measures another year. What do you think there is to worry about as producer and consumer prices rise?

https://www.cnbc.com/2020/02/19/us-producer-price-index-january-2020.html

Silicon Valley Heads to Europe, Nervous About New Rules

https://www.nytimes.com/2020/02/16/technology/europe-new-AI-tech-regulations.html

European Union lawmakers are currently debating on passing a new digital policy which enhances regulation on companies, which use, Artificial Intelligence. This includes Google, Facebook, and Apple among others. These three gigantic companies have made big investments in Artificial Intelligence and U.S. government has been funding greatly to help grow this new technology. In the US and Canada, the number of international PhD students graduating in AI continues to grow, and currently exceeds 60% of the PhDs produced from these programs. AI labor demand is growing especially in high-tech services and the manufacturing sectors. However, in the case of Europe, the debate is to draw attention towards potential risks by adopting Artificial Intelligence; privacy concerns, trusting complex algorithms to diagnose diseases, and the use of self-driving cars. To what extent, digital economy will be impacted by these regulations? In your point of view, what are the ethical challenges which government should be concerned of, in regard to, AL use?

Companies warn of economic crisis as China fights the coronavirus

The coronavirus and the panic surrounding it have put China into difficult place economically. Leaders in China predicted GDP growth of 7.5% at the beginning of the year, but those predictions have sharply decreased. Share prices in mainland China have fallen by 10% since January 20th. The quarantine of the Hubei province promises to have large-scale consequences on its own. Because of roadblocks, chicken farmers do not have enough feed and have suggested that their chickens might starve, which would likely cause a food shortage. Others think that if the lockdown continues, many could lose their jobs. Economic activity is stagnating because of the virus as few people want to leave their houses. Predictions for China's economic growth have been revised to be much lower than they were initially.

What do you think the future holds for China's economy if the virus and quarantine continue? What can the Chinese government do to manage the impacts of this?

https://www.economist.com/finance-and-economics/2020/02/04/companies-warn-of-economic-crisis-as-china-fights-the-coronavirus

Here Are Vulnerable Parts of the U.S. Economy That the Corona Virus May Infect

China's economy is taking a big blow due to the new corona virus. But the U.S. economy will also suffer from the virus. Goldman and Sachs predict the virus will slow our economy by 0.6% which is a fairly large hit to an economy that grows at 2% annually. The virus is mostly affecting industrial progress and imports from China. This will likely last for a large chunk of 2020. On the upside, household spending is staying strong in the U.S. and our economic growth will be driven by the consumers.

https://www.marketwatch.com/story/here-are-vulnerable-parts-of-the-us-economy-that-coronavirus-may-infect-2020-02-15

Why is the Labor Force Participation Rate Not Recovering?

https://www.washingtonpost.com/business/2020/02/15/powell-labor-force/

Many people are quick to point fingers at welfare programs for people choosing not to work and dropping out of the labor force. Federal Reserve Chair Jerome Powell seems to think that that's not the issue. For one, many of the U.S.'s programs that help those in poverty require that those who receive aid must be working or actively seeking a job. Secondly, in real terms, the amount of aid that people have been receiving has pretty steadily declined. Presumably, if these accusations were to hold true, people would be more likely to seek work if their benefits were going down. Instead, the opposite is happening and benefits are going down at the same time as the labor force participation rate slacking. The real problem, according to Powell, are education and the opioid crisis.

As education becomes harder for many people to attain, whether they are getting priced out of higher education or not receiving proper help in under-funded public schools, they are less likely to find work. Since jobs are increasingly likely to require some sort of college degree, those who don't make it past high school are out of luck and may become discouraged enough to stop seeking work. The raging opioid crisis doesn't help as more people become dependent on drugs and find it harder to maintain a career. Powell claims that boosting the labor force participation rate is a top national priority.

Everyone Loses on Huawei

Everyone Loses on Huawei 

The Uk government has introduced a new policy on Huawei equipment in its telecom network on January 28, 2020. And everyone was lost on it. Prime Minister Boris Johnson has given his own administration a black eye because they are against lots of Chinese companies. 

President Trump and US officials want Britain and other allies to ban Huawei equipment on security grounds because the US believes that Huawei’s poorly understood relationship to China’s Communist Party government is something that may threaten their countries’ security.  

Under the influence of the US, Britain’s National Cyber Security Center starts to question whether Huawei equipment threat to security. The UK allowed HUAWEI’s components in noncore functions but they set restrictions around sensitive sites and also a cap of 35% on Chinese equipment in the network.  

The Uk thinks a comprehensive trade agreement with the US and continued deep security cooperation are more important to the UK. However, Mr. John­son maybe worry about offending Bei­jing since Britain’s trade with China is still very important to the UK after Brexit. There is a doubt about the UK's action. If the UK's government really thinks Huawei threatens national security why they still allow Chinese equipment used in telecom networks. 

The most important reason why the UK worries about it is that they are afraid that excluding Huawei will slow the development of the UK's internet. This is a common concern in Europe. Because of the very high cost, Europe did not develop its internet technology, which the internet is very slow than China and the US.  Huawei's 5G technology is the best hope to achieve connection speeds and service other countries' internet technologies. 

The reason that the US has tried to ally forces against Chinese overseas companies is because of the Us-china trade war. The US considers China to be the leading cause of its trade deficit. However, the US trade deficit is a perennial, not a year or two, and America's trade deficit is not just with China but with everyone. Therefore, the trade war is caused by trade imbalance, not by China alone. A strategy that slows the growth of the global Internet is not a good solution to a trade war between China and the United States. How do you think the trade war heats for global economy and technology development？

https://www.wsj.com/articles/everyone-loses-on-huawei-11580255468

American, United pull Boeing 737 Max from summer schedules until past mid-August

United Airlines on Friday pulled the Boeing 737 Max from its schedule until Sep. 4 and expects to cancel more than 7,700 flights from June through September, after the manufacturer warned last month that it doesn't expect regulator approval for the planes until mid year.

American Airlines followed suit with a schedule adjustment on Friday, removing the planes from its summer flying plans until Aug. 18 “based on the latest guidance.” The move comes after Southwest Airlines said Thursday, removed the 737 Max from its schedules until mid-August, as carriers prepare for another peak summer travel season without the fuel-efficient planes. Boeing told airlines and suppliers that it didn’t expect regulators to sign off on the 737 Max until the middle of 2020, much later than the manufacturer’s previous predictions. The 737 Max has been grounded since March after two fatal crashes — in Indonesia in October 2018 and in Ethiopia less than five months later — killed all 346 people on the two flights. A flight-control system aboard the planes was implicated in both crashes. Even if the 737 Max did return before Sep. 4, United does not plan to swap it for any of its summer flights, according to Scott. The airline continues to take measures to ease disruptions from the 737 Max grounding, including automatically rebooking affected customers. 

What will be the share prices of these airlines after this decision ? 

Global oil demand outlook from the IEA

Global oil demand is now expected to see its first quarterly contraction in over a decade, according to the International Energy Agency (IEA), as the new coronavirus and widespread shutdown of China’s economy hits demand for crude.

Demand is now expected to fall by 435,000 barrels a day (b/d) in the first quarter of 2020, down from the same period a year ago, and marking the first quarterly contraction in more than 10 years, the IEA said in its monthly oil market report Thursday.The expected decline in demand prompted the agency to cut its 2020 growth forecast by 365,000 b/d to 825,000 barrels a day, the lowest since 2011. Lower-than-expected consumption in the OECD countries trimmed 2019 growth to 885,000 b/d, it also said.

The forecast downgrade comes as the coronavirus, which has infected over 59,000 worldwide and killed over 1,300 people, continues to weigh on global market sentiment and China's economic activity with factories and businesses closing and travel restricted both to and from China and within the country. The negative impact on oil demand hit oil prices hard as the virus took hold in January with a barrel of Brent crude falling by around $10 to fetch below $55 a barrel.

Will the coronavirus have a further affect on the world oil prices? 

https://www.cnbc.com/2020/02/13/global-oil-demand-outlook-from-the-iea.html

China struggles to balance coronavirus with economic cost as millions return to work

China is facing new problems as many Chinese employees return to work after the outbreak of the coronavirus. The Chinese government is having to find middle ground between keeping the virus contained and not allowing the economy to be damaged any further. This week many companies will be opening their doors again and resuming production. With foreign buyers seeing a shortage of Chinese imports, this is creating more stress on firms.
A solution many people are coming up with is working from home. Many workers in the software industry have been given the ability to continue work from their homes in order to lessen the potential exposure of the disease. This would also fix the problem of the growing transportation shortage that people are facing. Workers are having trouble even finding a way to get to work.
The government has assured its people that the containing of the virus is their top priority. However, they are aware production can not be at a stand still for much longer. Encouragement of workers returning to they jobs has increased. Firms must file permission to reopen their doors from the government, which has slowed down production that much more. Returning workers are required to wear masks and have their temperatures checked twice a day as a precaution.
Do you believe containing the virus or unfreezing the economy should take priority? Is there a way to balance both?

https://www.scmp.com/economy/china-economy/article/3050210/china-struggles-balance-coronavirus-containment-economic-cost

A Growing Presence on the Farm: Robots

As the world population continues to grow the need for food climbs with it. The world is in need of solutions to help increase food production without using more land then what is already in use. In the article by Knvul Sheikh posted in the NY Times, we are introduced to the TerraSentia and many other devices like it. The TerraSentia is a robot that goes across rows of crops and measure various parts of the crops which is called Phenotyping. The process has been used for hundreds of years in order to help farmers grow better crops that help produce more output.

The world is going to be put in a situation where innovations to agriculture will need to be made in order to keep up with the ever growing population but will tech ideas like the TerraSentia be a piece to solving the puzzle or just another failed idea? Revolutionary ideas and products like the TerraSentia would not only help farmers, but would also push the robotics/tech industry forward in more sectors of the market. How do you see it? Will ideas like this be the change needed to push the agricultural sector forward? or is this just another false hope that will likely fail?
https://www.nytimes.com/2020/02/13/science/farm-agriculture-robots.html

US to Start Trade With Kenya to Counter China's Influence

Trump's administration announced that they would begin talking about a free trade deal with the purpose of countering China's influence in Africa. The deal would be the second pact with an African country since 2004 behind Morocco. The agreement won't have an major impact on the US economy overall since Kenya's is the US' 98th largest trading partner in goods. Kenya's major American imports include aircraft, machinery, and agricultural goods. The US buys apparel, tree nuts, and coffee. Trump and his administration believes that this would be a blueprint for other trade deals in Africa and a way to counter China's influence on the continent. Do you agree with this deal?

https://www.nytimes.com/2020/02/06/business/economy/trump-kenya-trade-talks.html

Europe's Economy Vulnerable to China Shock

An article published by CNN Business discusses the negative impact that the decline in China's economy due to the coronavirus could have on Europe's economy. At the end of 2019, Germany's economic growth came in at a worryingly low 0.6% due to struggles in the auto industry, a huge player in German GDP. This concern now widens as China is one of Germany's largest partners in this industry. There is also added stress because of the U.S.-China trade war and Brexit, that could also impact auto sales. Before the outbreak of the coronavirus, Germany was set to increase its economic growth in 2020. However, now that the extent of the virus is still unclear, it is unlikely for the economy to improve. Experts argue that a recession is possible in the coming years.

Do you believe that the impact of the coronavirus could influence recession in Germany or other countries as the article states?

https://www.cnn.com/2020/02/14/business/europe-gdp-germany/index.html

Fed Chief Issues Stark Warning to Congress on Deficits

Recently, the chairman of the Federal Reserve, Jerome Powell, testified to Congress that the federal budget deficit is reaching a point where it may become difficult for the central bank “to adequately respond to a financial crisis or recession.” During his testimony, Powell also argued for curbing federal spending (due to the current high levels of economic growth). Without this measure, as noted in the article, it will become more difficult for the government to use fiscal policies to stabilize the economy, but contractionary policies designed to combat the deficit could “support the economy’s growth over the long term.” Finally, even with the federal deficit concerns, Powell is confident in a sturdy America “that is likely to hold steady amid a series of global threats.”

https://thehill.com/policy/finance/482617-fed-chief-issues-stark-warning-to-congress-on-deficits

Wage gains for low earners have helped sustain America’s economic expansion

The US's economic expansion has been going on for 128 months, which is the longest on record. This has not come easily though. Last year, personal consumption kept us in economic expansion, while business and residential-construction investment decreased. Spending has been on the rise because low earners have been seeing an increase in wages. High earners are not seeing as significant of a wage increase as low earners. That being said, inflation has slowed down recently, which suggests demand is low. Economists are trying to figure out the reason for the weak demand, but it is hard to pinpoint the exact reasoning. One thought is that income inequality has played a role.

With the way the economy is expanded, do you believe the income equality will begin to decrease? How much longer do you think we will stay in an economic expansion?

https://www.economist.com/finance-and-economics/2020/02/13/wage-gains-for-low-earners-have-helped-sustain-americas-economic-expansion

Can Technology Solve Economic Disparity? 

There has been debate about how the technology could solve economic inequality. In Latin America, new technology tools are being used to improve economic mobility. A 22 year olds named Ignacio Martinez saw how recruiting process in Latin American is inefficient. He and two other associates created Alana, a Tinder-like app for job market in Mexico, where recruiters get access to filtered qualified workers who matched the required skills. Workers can also obtain what skills they need to develop and guidance through the app. There are already more than 60,000 users in Mexico. While this app was being used more in Mexico City, other experts has concerned that technology alone can't boost economies. Because technology also threaten job security and increasing the inequality worldwide. So, do you think technology could replace all jobs in the future or how could technology affect the job market in the future?

https://www.usnews.com/news/best-countries/articles/2020-02-14/technology-is-being-used-to-fight-economic-inequality-in-latin-america

Rents lift U.S. inflation; Slight rise in unemployment

Consumer prices in the U.S. picked up this past month. At the same time, the number of U.S. citizens filing for unemployment rose within the past week. According to the article, these two factors suggest that the economy is in stable condition. A condition so stable that the Federal Reserve could keep interest rates on hold this year. Jerome Powell had recently stated, "the economy is in a very good place, performing well. Over the next few months we expect inflation to move closer to 2%." Last week the government reported that 225,000 jobs were created last month. The unemployment rate rose to 3.6% as more people decided to enter the labor force. Despite the slight increase, the labor market has been on an 11 year expansion and consumer spending has been inclining right along with it. It was reported that rent had been rising about one-tenth of a percentage for the past few months which has had an impact on core inflation.https://www.reuters.com/article/us-usa-economy/rents-lift-us-core-inflation-weekly-jobless-claims-rise-slightly-idUSKBN2071XI

Alphabet's Google fights against EU Anti-trust fines

In a recent article from Deutsche Welle (DW), they describe how the European Union has come with an antitrust case against Google to the amount of fines of $2.6 billion (USD conversion). The European Union General Court in Brussels alleges that Google is unfairly using their Google Adsense advertisements across the internet to promote buying from Google's own price comparison marketplace, while giving a disadvantage to other smaller producers advertising on the same platform.

This is not the first time Google has been scrutinized in terms of violating other European Union antitrust laws. In 2018 the company was forced to pay €4.3 billion for abusing their market dominance in the mobile services industry.

Recently, Google has been able to convince the General Court to overturn one of the three fines, and is still battling on the other two. This has started a conversation regarding what types of changes must be made in a modern marketplace which has become dominated by tech giants. Is it up to Google to portray all advertisements and products in a fair and just manner, or could they continue to control their own service as they see fit, forcing others to adapt in their own ways to market their products effectively?

A Weak Health-Care System Complicates China's Coronavirus Battle

While the Wuhan virus has spread across China in the past few months, one of the main facets of the economy that has been tested the most is the healthcare system. After the SARS outbreak in 2003, the Chinese government has begun issuing expanded state-funded insurance schemes. Now, more than 95% of Chinese are covered. Out-of-pocket payments have fallen around 60%, and general medical expenses have fallen 30%.

However, the issue remains with those at the lower ends of the socioeconomic class; the costs are crippling for the poorest of Chinese people. This was highlighted by a pregnant woman dying from the virus after her husband decided that her bill was no longer affordable.

On paper, the country's 2.6 doctors per 1,000 people is right in line with similar nations. Unfortunately, in between the numbers lies the problem; half of the country's doctors do not have a bachelor's degree. This issue hits smaller towns the worst, compounding the problem of not being close to major medical centers. The coronavirus is pushing Chinese healthcare to its limits, with some people avoiding hospitals because of all the sick patients and some clinics canceling appointments to treat lesser injuries.

The question remains, if this happened somewhere else, would it have been handled better? Is the system the problem, or is no developed or developing nation capable of containing this kind of threat?

https://www.economist.com/china/2020/02/06/a-weak-health-care-system-complicates-chinas-coronavirus-battle

‘Like Europe in Medieval Times’: Virus Slows China’s Economy

The title of this article serves as a perfect analogy for what is going on in China due to the corona virus outbreak. People are staying inside and not going out into the cities that drive the Chinese economy. It has been over two weeks now since China has shut down cities due to the deadly virus that is ravishing through China. As health officials suggest that this will continue to get worse is scary to think about when you take into account how terrible is has been. As everyone is still staying out of work for extra time as they were ordered to by the government, the economy is losing time they won't be able to just get back. Time will tell what the outcome of all this will be. But how do you think China would best recover from this and what could they be doing now to cushion the blow if anything? Also, what numbers should we be paying the most attention to as this outbreak continues to spread?

Stumped Growth in China

In the last few years, China's economic growth and growth expectations reached 6%. Due to the recent outbreak of the Coronavirus, China was afraid that the growth will fall and workers in China will suffer, along with even cities that do not have many cases of the outbreak. The article states that the cities that have been impacted the least by the virus should allow for migrant workers to come to those cities and resume operations. Despite the Coronavirus, economists in China predict that China will still be able to reach its long-term goals of doubling their GDP.

Economists predict that China will have a slow-down in growth by about 1%, some say it may hit 2%, but the outlook is positive in the long-run. With this being said, they are estimating this based on the hope that the Coronavirus will slow down and fade just like the SARS epidemic in 2003. Overall, it is difficult to say, for anyone, based on the current situation. It is impossible to predict a virus spread and if it will be contained or not.

Based on what the economists have stated, do you think the predictions are accurate in predicting the long-term effects? Why or why not?

https://www.aljazeera.com/ajimpact/china-meet-growth-targets-coronavirus-economist-200212080619230.html

Chairman Powell Extremely Confident in US Economy

In his latest testimony to the House Financial Services Committee, Federal Reserve Chairman Jerome Powell asserted his confidence in the US Economy stating that he doesn't have any reason to believe that markets are at any risk of a nearby recession. He went on to state that nothing about this continued expansion and growth seems unstable or unsustainable. He even believes that concerns over the trade war with China have "diminished".

However, Powell stated he is watching the potential risks of the coronavirus outbreak to the US Economy carefully and believes that it is very likely that the slowdown caused by the virus on the Chinese economy could have some carryover to the US. With that being said, Powell still wants to hold back from taking any action until the coronavirus impact is persistent.

Do you think Powell and the Fed are right being so confident in the economy right now? Should he be proactive in fighting the impact of the coronavirus on the US economy?

https://finance.yahoo.com/news/powell-testimony-february-2020-us-economic-expansion-not-unstable-or-unsustainable-165916522.html

U.S. Farmers Need to Wait a While for China’s Buying Spree

Even though China signed Phase 1 of the trade deal between them and the United States, there is skepticism about China's ability to buy as much as $50 billion in U.S. goods. And while China promises to stick their vows of buying $200 billion U.S. goods in 2020-21, many expect for a part of those purchases to be bought in the later half of the year. Not surprising that China is expecting that the U.S. will agree to some flexibility on their promises in the face of the spreading coronavirus that threatens to slow down domestic growth.

The virus and loss of domestic growth will delay any purchases that could've boosted the U.S. agriculture sector from the decline of Chinese demand for U.S. agriculture in recent years.
But until actual purchases begin, there will not be enough confidence in the marketplace to see any significant value improvement. The delay in purchases may even affect the next elections due to the agriculture sector being a huge voting bloc for the current administration. It is probably unlikely that the delay would change voting decisions much, but it is a small possibility that it may occur. 

https://www.bloomberg.com/news/articles/2020-02-03/it-ll-be-a-while-before-china-spends-billions-on-u-s-farm-goods

Fed Chairman To Talk About The Economic Uncertainties Eminating From China

On Tuesday, Feb. 11th, chairman Jerome Powell is going to Chapel Hill to face questions from the House Financial Services Committee regarding how the central bank will respond to new economic uncertainties resulting from the recent coronavirus outbreak in China. This has rekindled doubts about the global economy's prospects in 2020 as stock markets have paused after racing to records last month, and bond yields have slid, reflecting uncertainty about whether the Fed might adjust rates if the epidemic isn’t quickly contained. This will also give Powell the opportunity to update lawmakers on why the Fed is now considering changes to its inflation targeting framework. The target rate was set eight years ago at 2%, but recently, inflation has mostly undershot that goal.

Do you believe this virus outbreak will intensify the problems of the trade war with China? What industry is suffering the most from this epidemic? 

The Economic Impact of The Coronavirus

As the Coronavirus continues to spread, we are not only seeing an increase in the loss of life but also an increase in the economic impacts of the virus. The lock down of Wuhan, which has now extended to the Hubei province prevents movement of any kind. From transportation of goods and workers to business and other kinds of travel. Due to a fear of the virus many people in these areas have stopped travelling to places where they may get easily infected like: movie theaters, restaurants, shops, and restaurants. The lack of activity has impacted the owners of these businesses heavily, especially since they have to continue to pay bills and employee's salaries. The fact that the health crisis hit during the Lunar New Year break has also negatively impacted the economy due to commercial losses, since people on a break usually go out more and spend.

Some big companies like Starbucks and IKEA have already closed their operations in China.
Several international airlines have stopped offering flights to China and international hotels have been offering people refunds. In essence, there is a growing concern of the devastation that the Coronavirus might continue to have in China. Further, the stock market has dropped about 15% for the past few weeks. It is still early to be able to accurately discern whether the Coronavirus will have devastating effects on the international community. What type economic effects do you think the Coronavirus will continue to have?

https://www.bbc.com/news/business-51386575

Limited Liability Is Causing Unlimited Harm

Here is an interesting article that addresses a feature of the market economy that may be causing more harm than good for the economy overall. The idea that the author presents is that limited liability is an institution of the market economy that was created to: "encourage investment in – and risk-taking by – corporations, whose resulting innovations would benefit society." The issue with limited liability is that it creates a market failure by distorting the complete feature of the market economy.
Recognize that there is a tradeoff here: limited liability laws encourage investment and risk taking and thereby resulting in increased level of innovation (than it would be otherwise), but it comes at the expense of externalities not being internalized by corporations that are shielded by limited liability. Capitalism as an economic system has been remarkable in its ability to evolve and reform or change policies that ultimately make the system serve its citizens. This is perhaps a starting point for a discussion about the institution of limited liability and how it could potentially change and improve the economic system overall.