Latin Lessons- Restructuring Greece's debt

The Greek economy has been faltering for a couple of years now and the situation isn't improving. The European Union is has not dealing decisively with this issue, which according to this article (in the Economist) is causing the situation to get worse as time passes.

The political landscape in Europe is such that German leaders are refusing to allow any debt restructuring because German banks hold majority of Greek debt. Allowing to do so would burden German tax payers. As Germany bears considerable clout in the EU, they usually get their way.

Politicians use such issue to benefit of their constituencies. This creates anger and makes the situation more difficult to fix.

This Economist article argues that lessons should be learned from past experiences of US banks and US foreign policy towards Latin American countries. Uruguay and Mexico are 2 examples mentioned. Even though the situation isn't identical to the Latin American examples, it can be strongly argued that debt restructuring is necessary. Expecting Greece to pay back the loans at the original interest rates and at the current deadlines would be extremely misguided and unfair.

Fed, Bernanke on Investors' Radar Next Week

As earnings results for the first quarter are coming in for high net worth firms in technology and energy industries next week, eyes are on the Fed and their policy response to the new information. Some speculators think due to favorable first quarter numbers, interest rates will rises. But on the other hand, some speculators believe there will be no interest rate changes by the Fed, rather a continuation of the "quantitative easing" policy under a new name since speculators have a negative connotation for that phrase. Either way, investors and speculators alike will be watching and listening to what Bernanke has to say in the upcoming week.

Japan draws up $50 billion emergency budget

To deal with the cleanup and rehabilitation of its country, Japan's cabinet has approved a 4.02 trillion yen (about $50 billion) emergency budget. This temporary budget still needs to be approved by parliament, but analysts say it will likely be approved and put in place by early May.

The main point of contention around the $50 billion is how exactly the budget will be financed. Japan's debt already accounts for around 200 percent of its GDP. The Japanese government has said that among other small adjustments, it will cut back on overseas aid to pay for the budget, re-instate tolls on certain stretches of road, and increase the country's sales tax.

Those moves will fund this $50 billion emergency budget, but Japan estimates overall reconstruction cost estimates are closer to $300 billion. How will this huge project be financed? Due to a rising debt, issuing government bonds was ruled out as a way to finance the current emergency budget, but it is likely that the government will have to resort to issuing bonds to pay for the second budget.

Americans agree: The rich should pay higher taxes

NEW YORK (CNNMoney) -- Hey, rich folks! The American people are putting you on notice. They want you to pay higher taxes.

Two new polls suggest there is broad support for raising taxes on households making more than $250,000 a year, and all in the name of deficit reduction.

Heck, even a majority of Republicans want the rich to pay more.

A full 72% of adults approve of increasing federal taxes on households making more than $250,000 starting in 2013, according to the latest New York Times/CBS News poll.

Fifty-five percent of Republicans want the tax hike, along with 74% of independents and 83% of Democrats.

This article is interesting. I believe that the rich should be taxed, it is reported that a percent increase in taxes for the rich would give the government a revenue of nearly a trillion dollars over 10 years. This move would be useful if the taxes were to be increased for the rich because it wouldn't affect the rich's spending on goods.

Hans Rosling's 200 Countries, 200 Years, 4 Minutes - The Joy of Stats - BBC Four

This is a very interesting short video from a section of 'The Joy of Stats' that tells the story of the world in 200 countries over 200 years using 120,000 numbers - in just four minutes. Plotting life expectancy against income for every country since 1810, the video shows how the world we live in is radically different from the world most of us imagine.

"Green" Fad Diminishes

The trend of "going green" has been popular the past few years. Many household cleaning companies introduced new products to satisfy consumer tastes and preferences in this category and despite the higher price tag, consumers bought the products. Now, however, with the recession recovery going slowly, the willingness to spend more on "green" products have vanished. Consumers' current concentration is on cost, not the environment. Trends change quickly, and firms are waiting to see when incurring expenses for such products will be worth their while.

Why gas is so expensive, when oil isn't

Gasoline prices have been rising for months. By April 20th, oil price reached $111 per barrel, while gas price reached $3.84 per gallon. The interesting thing is that compare to the price records in 2008, when oil reached $147 per barrel and gas was $4.11 per gallon, the current gas price is catching up with the 2008 record faster than oil price is. Specifically, gas price was 7% off the all time record price in 2008, while oil price was 24% off its record. Also, gas price usually rise slower than oil price.
The article explained that the the oil price reported was for a particular type of oil: West Texas Intermediate storing at Cushing, OK. There has been an increase in the oil supply from North Dakota, Montana, and Canada, while little more pipes have been built, keeping the oil price low. Gas price, however, reflects prices of many other types of oil, and those oil types have had greater increase in price: London's Brent crude was closer to $124 a barrel on Wednesday.
Still, the number doesn't really add up. Gas price is still much closer to its peak than oil price. This might be that there were more subsidies on gas price in 2008, when the government wasn't as vigorously cutting spending as now.

'Uneven' housing recovery continues

Although home sales have increased from the previous months, they are still down from a year ago. In the housing market, supply still far outweighs demand. Foreclosures are evident and the credit score to get a conventional mortgage has risen. First-time buyers purchased 33% of homes in March, down from 44% in March 2010.

Where's the growth?

This is a good article on the outlook of many US banks. Talks about increasing regulations, fines, prosecutions, and less activity that are all pushing down profits for banks. The future doesnt look good for these banks either with even more of the above mentioned factors coming just around the corner.

Baseball Takes Over Control of Los Angeles Dodgers

Baseball Commissioner Bud Selig said Wednesday that he would appoint someone to oversee all operations of the Los Angeles Dodgers because of his “deep concerns” about the state of the marquee franchise.

The reason for Selig wanting to sell the franchise is because Frank McCourt, LA Dodgers owner, has recently damaged the once renowned franchise for his own benefit. It is reported that McCourt has put the team in well over $400 million in debt, and has had disputes with his wife who he recently divorced. If Selig can obtain 3/4 approval vote from all the owners, then he can sell the team on McCourt's behalf.

I believe that this is the end for McCourt as the team looks to be sold on his behalf very soon. He has damaged the franchise and it's time for a change. Selig, as well as the other owners, will put an end to this chaos.

Government Debt Ceiling raised

Disagreements between the Democrats who run the senate and Republicans who run the House of Representatives lead to a late decision of a budget for the rest of the fiscal year. The budget cut is very small when considering the estimated budget deficit for 2011. We can expect the American people to be very disappointed with the results of the negotiations between representatives of the democrats and the house of representatives.

" The Democrats brought events to this pass by neglecting to pass a budget last year, when they had control of both the House and the Senate. The Republicans, for their part, refused to accept a Democratic offer to cut the very amount their own leaders had originally proposed back in February, $75 billion, and instead held out for $100 billion"

The approach of both sides was inefficient considering the goal is to lower the government deficit given that the congress will have to raise the government debt ceiling it imposes.

Japan’s Exports Fall a More-Than-Expected 2.2% After Quake

Japan's exports fell more than economists expected in March as shipments of automobiles tumbled, declines analysts said may worsen as companies struggle to restore facilities and output in the wake of a record earthquake.Overseas shipments declined 2.2 percent from a year earlier, the first drop since November 2009. The median estimate of 19 economists surveyed by Bloomberg News was for a 1.1 percent drop.Car exports fell 28 percent from a year earlier and shipments for electronic devices also slid as the disaster prevented companies from transporting goods. Automakers including Toyota Motor Corp. and Honda Motor Co. were forced to reduce production after the March 11 disaster.

The Assembly Line Is Rolling Again, Tenuously, at Honda in Japan

This article discusses the triumph for Honda in Japan. It has recently began to resume domestic production after the recent earthquake and tsunami that had devastated the automobile industry’s supply chains in Japan. This is great for the Japanese economy, as well as the world economy, for Honda has been one of the leading car manufacturing companies in the world in the last decade. However there are some crucial losses in inventory, which means there is a chance that they may have to shutdown there factories again. But, ultimately this is a good sign for Honda, and furthermore for Japan.

45% don't owe U.S. income tax

The statistics show that nearly half of U.S. households end up owing no federal income tax for tax year 2010. However, the stats is often misunderstood and misinterpreted, like this one. It does not mean 45% households end up paying no taxes at all--they still need to pay other taxes such as state and local income taxes, payroll taxes, and property and sales taxes. Membership to the non-payer group is not restricted to the poor, nearly 5 million households in the group make somewhere between $50,000 and more than $1 million. Very high-income households can fall into the non-payer group if they get their income from tax-exempt bonds or overseas sources for which they get foreign tax credits.

The ranks of those whose federal income tax burden nets out to zero,or less,have grown in recent years due to two reasons: 1). temporary tax breaks to mitigate the economic downturn; 2). The tax code is filled with tax breaks to encourage economic activities the government favors.

U.S. Economy: Trade Deficit Narrows Less Than Forecast

U.S. trade deficit narrowed less than forecasted in February, which indicates how the rising commodity prices have affected the economy. Prices of imported goods, especially oil, rose the quickest this past month. The rapid increase in commodity prices over the past year is because of the rise in global demand and the decrease in global supply. Increases in prices in commodities, such as oil and food, have hurt consumer spending. This is unfortunate because food and fuel account for about 70 percent of the economy.

The recovery of our economy will not derail because of the increase in commodity prices. It is unlucky for consumers because everyday commodities like fuel and food have increasing prices. However, eventually the economy will stabilize.

G.O.P. Pushes to Deregulate Environment at State Level

Due to the recession, many states have decided to cut down environmental budgets and eliminate some environmental regulations, such as land conservation, in order to enable more businesses to grow and provide more jobs.

Republicans made clear that reducing all government was important, but that cutting environmental regulations was a particular priority. It is sad to think how environmental protection is always the last to be concerned about and the first to get abandoned in hard times. We should doubt our sustainability of growth in the long run if forests and reserved lands keep giving their way to new buildings and industries.

Fed’s Evans: Without Wage Hikes, Little Inflation Pressure

Federal Reserve braces for the end of the second quantitative easing and is expected to increase interest rates in the near future in order to move toward tighter monetary policy. On April 4, 2011 the interest rate on two-year Federal Reserve note rose to 0.901% which is the highest level since May 2010. This indicates that the Federal Reserve might have already started implementing a new policy. Furthermore, declining unemployment rate supports the believe that the Federal Reserve will slow down its expansionary policy, decrease money supply, and focus its effort on preventing the inflation.

Market Troubles

This article talks about how there has been a drastic decline in the popularity of the free market system. it mentions that since 2002 there has been a 21% decline in people that support the free market system. However one interesting thing about this article was the countries that it mentioned who still show strong favoritism toward free market economies. those countries include China, Germany, and Brazil who all have economies that are performing very well. it just shows that there data presented in this article might be slightly biased because of the recession in the U.S.

70 or bust!: Current plans to raise the retirement age are not bold enough

Countries around the world are beginning up the age of retirement, in order to attempt to hold down the cost of state pensions while encouraging workers to stay at work. Since 1971 the life expectancy of the average 65-year-old in the rich world has improved by four to five years. By 2050, it is estimated that they will add a further three years on top of that. The average retirement age in the OECD in 2010 was 63, almost one year lower than in 1970.

Living longer, and retiring early, might not be a problem if the supply of workers were increasing. But declining fertility rates imply that by 2050 there will be just 2.6 American workers supporting each pensioner and the figures for France, Germany and Italy will be 1.9, 1.6 and 1.5 respectively. The young will be shoring up pensions systems which are riddled with problems- the public-sector pension is a bigger issue in America with a deficit that amounts to $3 trillion.

China reports first quarterly trade deficit in six years

China first time in six years reported quarterly trade deficit of $1.02 billion. It looks like the Chinese government is introducing some reforms to its export oriented economy in order to boost domestic consumption in the next five years. Starting this year, China launched its 12th five year plan of its transition toward market economy. China is also planning to slow its economic growth down a bit from the present double digit growth rate to 7 percent.

Wanted: A Tax Code for the Digital Age

This article centers around a comparison of Amazon.com and Target as companies, and the differences in their effective tax rates. The main issue at hand is the fact that Amazon's effective tax rate is significantly lower than that of Target, almost 10% lower in fact. This difference means that Amazon has a significant advantage over many of their competitors (including Target). The cause for this differential is the make-up of the companies; Target is a U.S.-based company who does sales only stateside, and most of its retail comes from sales directly from the store. Amazon, on the other hand, is an international company that saw 46% of its revenue in the past year come from international sales.

This difference in the companies allow Amazon to take advantage of its lower tax rate and operate with a higher rate of profit. Part of what we've been discussing recently is the important role laws play in terms of protecting American companies and how complicated things can get, and this is a perfect example. Amazon is not doing anything illegal; rather they're just using a loophole in tax law to gain what appears to be an unfair advantage. Examples such as this exist everywhere in our economy.

Banks Are Off the Hook Again

This is an interesting article that looks at the abuses of banks in concern with filing false court documents which have affected many home owners who have already lost 6.7 million homes and it is predicted that another 3.3 million will be lost in 2012. A draft agreement that was published by the American Banker suggests the punishment will not be severe and they exclude efforts to try and hold the banks accountable in the future, meaning they are unlikely to help the foreclosure crisis. The banks must follow existing law and current contracts and must hire independent consultants to check a sample of recent foreclosures for evidence of improper eviction and impermissible fees. The catch is that the consultants will be chosen by the banks, allowing the bank to decide what is appropriate.

Banks "Too Big to Fail" Could Get Bigger

Even though the Dodd-Frank financial reform law signed in mid-2010 was supposed to help control huge financial firms, they might instead help make big banks bigger. The reform made sure that taxpayers would never have to rescue the largest banks in order to stop the entire financial system from collapsing again. It seems that the federal agencies enforcing these laws seem to strengthen the dominant position of the bigger banks. The Federal Reserve issued regulations meant to curb commission payments could just as easily give big banks the chance to dominate the mortgage market. These same big bank biases again resurface in a rule purposed by 6 big name banks that requires “issuers of mortgage-backed securities to keep 5 percent of bonds on their books”. Conservative mortgages (borrowers with good credit and at least 20 percent down) are exempt. Large banks can afford to keep the required risk on their books. In the end, the Dodd-Frank financial reform which was supposed to end “too big to fail” might in turn make big banks bigger.

The Hidden Job Crisis for American Men

Recently, the March Jobs report which was released April 1^st stated that there was a drop in the jobless rate from 9.8 percent to an 8.8 percent. However, it seems an even bigger problem looms over the horizon. It seems that men in particular have given up looking for jobs and are not marked as unemployed. They become stuck as jobless and have difficulty finding jobs. They draw from government benefits or rely on family friends for support. They hurt the economy by draining government benefits that should be used on the unemployed. Men’s absence from the labor market is bad for men, their families, the economy, and the government finances. They make it difficult for other workers whom are unemployed to reenter the job market. A tighter labor market forces employers to consider a wider range of candidates. The article ends by saying “The effect of the ‘mancession’ on the male American workforce will be felt well into the recovery as some men stay stuck in unemployment”.

Recession is over for CEOs

This article explains that while millions of Americans are trying not to lose their homes and jobs, the paychecks for the top American executives are increasing and some are increasing by a lot. The chief executive of Viacom, Philippe P. Daumen made $84.5 million in under a year. Unfortunately for the rest of us, these increases have not been trickling down. Despite the recent fortunes of the CEOs, they are not employing more workers. Although unemployment is down from its peak, economists say that the jobless rate will not significantly change anytime soon. There are new rules in place stating that shareholders should have a say in the paychecks of executives of company but it isn't clear how much of a say. So far this input has been minimal clearly.

Cote d'Ivoire: The forgotten war?

This article talks about the role of the media in the Ivorian war. About thousand of people have been killed and the country has been sliding slowly towards a civil war between the pro Ggabgo and the pro Alassan (who where both proclaim has president of Ivory Coast). The Banks are closed, there is an ongoing battle right in the middle of the economic capital, people are stranded in their home with no food, and final the borders are close therefore no one can go out nor come in. My family was almost attacked by armed rebels and prisoners that have escaped the prisons and a bomb recently killed one of my family members.

Yet the medias have forgotten about the Ivorian situation because of new up coming stories such has Libya. This makes me question the role of the media and their credibility, They are suppose to inform us about what is currently going on around the world and it seem to me that they are not doing so, instead they select what to information is more important to them or which is good for business.

The Budget- the real fight begins

This week Congress has been busy with three overlapping budgetary debates-about a “continuing resolution” to keep the government up and running for the rest of this fiscal year, about next year’s budget and about whether to raise the legal limit on the federal government’s debt. Next year's budget must be figured out by lawmakers in under 6 months and America's debt will reach the current ceiling in under 6 weeks. But without a new resolution, the government’s authority to spend will expire at midnight on April 8th

New Deal avoids government shutdown

Democrats and republicans have struck a deal regarding the government budget. Both parties gave compromises while the democrats agreed to cut nearly $80 billion from the proposed budget for the year, equalling nearly $38 billion less from current spending levels. Although this bill has passed, the next challenge will be the agreeing on raising the debt ceiling imposed on the federal government. The republicans say they will not pass the bill unless the democrats agree to even larger budget cuts, which had led this past bill to almost not pass. Only time will tell.

College Enrollment Fell Slightly in 2010

This article talks about the recent fall in the percentage of high school graduates that are going on to attend universities and colleges around the country. This stat can be expected with the loss of jobs and the continued rise in tuition costs. However, the government needs to find a way to get these kids into schools and ease the burden on their parents. The U.S. can no longer afford to fall behind in education to the rest of the world. The government needs to put in place a system that will get kids the adequate finances and financial aid to allow them to further their education. It will only benefit the system as a whole if a larger percentage of the people in the United States are educated past high school. It is the new standard of the world.

The Truth About China

This article describes a white paper released about China, which reveals political unrest kept quite by Beijing. It reveals how China has resorted to more informal detentions (which can only infer possible illegal action by the Chinese government), as well as an increased role of the military in staving off political unrest. This is troubling news for the international community because it signals a possible larger movement against the government in the long run. Political instability would hinder the efficiency of China's economy, greatly slowing their growth.

I think political unrest is possible in China, however much the military becomes involved. Over the short term we shouldn't see any serious attempts at regime change, but it is my opinion that a a slow movement for change will take place, and a change to a two-party political system could rattle their economy, allowing the US to regain or increase their GDP size lead.

Mango Farmers, Fisherman Fight India Nuclear Plant

Indian government's plan of building a nuclear plant in Jaitapur is facing stronger oppositions than ever. The nuclear plant is supposed to help solving India's power shortage problem: it is supposed to generate twice as much the power produced in Fukushima. As the second-fastest growing major economy, India has a very high power demand, which is increasing at a high rate.
The plan has been opposed by local people live near the site, and not just for the possibility of a crisis like in Japan. Local fishermen argue that hot water discharge pose a risk to fish stocks, while a security cordon would block access to the sea. The prawns, mackerels and king fish from the sea off Jaitapur are exported to markets from Europe to Thailand and Japan. Now, protesters say Jaitapur could suffer the same fate as Fukushima, where Tokyo Electric Power Co. is struggling to contain radiation leaks after a partial meltdown.
“Earlier, government officials used to say: ‘Look at Japan. It has so many nuclear plants in earthquake-prone areas and there have been no accidents,’” said Praveen Gavankar, a 57-year-old Alphonso mango grower who is also one of the leaders of the movement. “Now we are saying: See, we told you it was dangerous.”
Nuclear Power Corp. (NPCIL), argues that the site sits on average 24.5 meters above mean sea level, reducing the tsunami risk. The company also claims water discharged into the sea will be at most about 5 degrees Celsius warmer and confined to an area of 0.28 square kilometers. There have been no adverse effects on marine life at existing coastal nuclear power sites, according to NPCIL. Nevertheless, the company will “revisit” its plans after it gets more information from Japan, according to Chairman Shreyans Kumar Jain.
The delay of a new power plant will affect India's economy negatively. But with the current nuclear crisis in Japan, it is hard to predict the fate of this plan.

Rising oil prices beginning to hurt US economy, weakening the benefits of stronger job growth

Gas prices are rising again. "Just when companies have finally stepped up hiring, rising oil prices are threatening to halt the U.S. economy's gains". The higher gasoline prices were primarily caused by unrest in middle east and Africa. Plus strengthening US economy drives up demand for energy and oil in particular. From a consumer perspective, "more expensive energy siphons away money that would otherwise be used for household purchases, from cars and furniture to clothing and vacations". I don't see any reason why would oil prices go down in the near future, however according to the president of the Federal Reserve Bank of Cleveland, Sandra Pianalto, "large increases in food or energy prices tend to be temporary. History shows that they are often followed by sharp declines".

Japan, in wake of nuclear crisis, orders summer energy cutbacks

This article reports about the energy cutbacks ordered by the Japanese government as result of crisis at Fukushima Daiichi nuclear plant.  The large businesses are ordered to cut back energy consumption by at least 25 percent, smaller by 20 percent and households by 15 percent.  These cut backs in energy consumption will most likely result in decreased productivity that will "lead to a lessening in terms of international competition for Japan" according to a head of energy task force. The biggest problem of this energy cutback order will be to work around the changes in a way that can satisfy both business demand as well as the workers.  Companies will be required to use less energy to produce products of equal quality which some people see as a challenge to lead in green-energy technology revolution.  Another implication due to the earthquake/tsunami is Japan's pledge to cut greenhouse gas emission by 25 percent by 2020.  The lessening of nuclear power will push for a different energy source.  Japanese government is faced with tough questions that will effect the future of its citizens and its place in the world.

Budget Deal Avoids Shutdown

This article talks about the most recent news about the infamous "SHUTDOWN", there isn't going to be one! Now I know the news has been blown up with all the scare about this big bag shutdown, but all along did you really see this happening? NO WAY! These politicians utilize the shutdown as a negotiation tool. Time is one of the most important aspects of negotiation, so to set a time limit on the deal both sides are forced to think quickly. From what the democrats have said in this article they have really got the Sh** end of the stick on the deal, giving up more spending cuts than they wanted, and agreeing to tax cuts for the rich in December.

US corn reserves expected to fall to 15-year low

ST. LOUIS (AP) -- Rising demand for corn from ethanol producers is pushing U.S. reserves to the lowest point in 15 years, a trend that could lead to higher grain and food prices this year.

The Agriculture Department on Friday left its estimate for corn reserves unchanged from the previous month. The reserves are projected to fall to 675 million bushels in late August, when the harvest begins, or roughly 5 percent of all corn consumed in the United States. That would be the lowest surplus level since 1996.

The limited supply is chiefly because of increasing demand from ethanol makers, which rose 1 percent to 5 billion bushels. That's about 40 percent of the total crop.

This is an interesting article because the corn reserve is being reduced to the lowest point all-time in 15 years. This was caused by a rising demand for corn and other foods related to corn products such as high fructose corn syrup, which is a very common ingredient for all sugar products such as sodas, popcorns, some snacks etc. This would lead to a higher price of food. Corn is also used to feed on the animals as well, so meat products would be expected to increase as well. This may be good for the agriculture industry and may possibly increase its production of corn. Nevertheless, it would hurt most of the consumers with tight budgets who are already hit by the recession.

Who gets paid in a shutdown? Congress!

If lawmakers can't agree on a spending bill before midnight today, a couple million federal workers won't be getting paychecks on time. Troops fighting in Afghanistan won't be paid on time either. Some 800,000 workers likely to be furloughed aren't guaranteed back pay. BUT...someone is still getting paid--Members of Congress and President Obama. Rank-and-file members of the House get paid $174,000 a year. And Obama is paid $400,000 a year.

The salaries paid to lawmakers and the president are financed through mandatory appropriations. And that part of the budget won't be affected by the shutdown.

The failure of lawmakers to change the status quo has led some members of Congress to pledge their salaries to charity or give the money back to the Treasury. Now, more than twenty members have signed a letter circulated by Sen. Joe Manchin of West Virginia that asks members to forgo their pay. "I can't imagine that the president, vice president or any member of Congress -- Republican or Democrat -- thinks they should get paid when the government has shut down," Manchin writes in the letter.

At long last, Portugal pleads for EU bailout

The Portuguese government finally threw in the towel on Wednesday and petitioned the European Union for a bailout. Portugal follows suit behind Greece and Ireland, respectively, as the third EU member-state in dire need of economic assistance. Estimates suggest that the bailout would total approximately 75 billion euros, including an immediate influx of emergency aid totaling around 15 billion euros. The bailout comes after nearly a decade of economic hardship in Portugal, typified by annual growth rates of less than 1% and an unemployment rate that now stands at 11.1%. Hopefully, the EU bailout will pacify international markets that have been fearful about Portugal defaulting on its debts.

Could oil, housing, and spending cuts derail the economy

As the recovery is slowing, many economists are reducing their economic growth predictions. One economist, Bill Cheney, states that the slashing of his forecasts for economic growth is due to, "higher oil prices and higher odds of premature fiscal tightening". The steady rise in gasoline prices in recent months has acted like a tax on consumers and businesses, which has taken away from the amount of money that they can spend on other goods and services. In addition, many economists are worried about the weak housing market. Home prices are down 4.1% during the last 3 months of 2010. Robert Shiller claims that, "There's a substantial risk of home prices falling another 15%, 20% or 25% more".

Dish Network Wins Auction for Blockbuster

After a bankruptcy auction that extended into the early hours on Wednesday, Dish Network announced that it had emerged as the winner of Blockbuster’s assets, with a bid valued at $320 million.

The executive vice president believes that the purchase of Blockbuster provides a complement to their current video offerings as well as presenting cross-marketing and service extension opportunities.

Dish Network gains a large retail presence where they can potentially sell services. The highly recognizable brand and more than 1,700 stores locations provide great opportunities. I believe that this will help Dish Network compete in the satellite provider business more effectively as well as increase sales with more awareness in a very recognizable, and popular brand (Blockbuster).

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

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

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

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