Over half of Americans have $0 in stocks

http://money.cnn.com/2015/04/10/investing/investing-52-percent-americans-have-no-money-in-stocks/index.html?iid=Lead

According to the article more American adults drink coffee daily than have money invested in the stock market. Less than half, or 48%, of American adults have money in stocks. Compared to that, about 61% of adults have at least a cup of coffee daily. The low number is an alarming trend for America's financial future. Stock ownership peaked in 2007 just before the worst financial crisis and Great Recession. "Despite the market hitting record highs, real investors have dramatically increased their allocation to cash," says Suzanne Duncan, global head of research at State Street's Center for Applied Research. The stock market is only making the rich richer. The biggest problem is that people don't have enough money to invest. Median household income is much high than it was in 1995, but people do not feel comfortable investing their money because they are unsure of the market. Only over a quarter of adults under 30 reported having money in stocks or funds that invested in stocks. Also, people do not feel educated enough about the stock market to invest and they think it's to risky. So what does this say about the future of the stock market? How can we encourage more people to invest? 

The Limits of Outsmarting a Strong Dollar

The dollar rose 9 percent against a standard basket of currencies in the four quarters through March, making it a 12-year high. They talk about managing your portfolio and how to deal with changing currencies. Due to this increase it has caused investors to buy ETF's. International stock has increased by 26 percent because of this. Basically, this article is all about investing in ETF's according to how the dollar value is changing. 

http://www.nytimes.com/2015/04/12/business/mutfund/bracing-for-currency-fluctuations.html?ref=economy

Over half of Americans don't own stock

http://money.cnn.com/2015/04/10/investing/investing-52-percent-americans-have-no-money-in-stocks/index.html

This is a very troubling article showing that less than half of Americans are investing in the stock market whatsoever. Especially considering the rise of stocks, most people are missing out on excellent returns on their money, which could help their financial situations. Instead, they are increasingly turning to cash and lower return investments, which hurts the GDP as well as increasing the wealth inequality problem (wealthier people are more likely to have stocks, and those are increasing while the return on cash remains slim to none).

Euro zone officials shocked by Greece's stance: Germany's FAS paper

http://www.reuters.com/article/2015/04/11/us-eurozone-greece-germany-idUSKBN0N20JA20150411

At talks in Brussels, Greece failed to outline its plans for structural reform to help move itself back into the global economy.  In fact, to the Germans especially it seems like they are doing nothing to help get themselves out of their economic crisis. After Greece's demand for war reparations, which they recently put a number on (€279 billion!; see http://www.bbc.com/news/world-europe-32202768), this is just causing the world to take them even less seriously. (The amount they are asking for is, incidentally, greater than the IMF-EU bailout they received last year even.) All in all, as has been said many times, Greece is in need of some serious reform.

FED Takes Back Seat as Markets Shift Focus on Earnings

        The potential for the FED to cut its stimulus will come in to question next week as new numbers become available. Due out is past data from the holiday season that will be used to analyze the economy and market strength. This data will help to highlight the strength of the market and its correlation with the record highs by the S&P 500 or this could show some areas to be cautious of. This data will ultimately be used to help the FED make a decision about cutting back bond purchases.

http://finance.yahoo.com/news/wall-street-week-ahead-fed-224128416.html

Post-Grads maybe Finance isn't the route

With everyone seeking post graduate employment these days the question appears: what job will I take? Many students who look to begin their young ambitious careers look for where the money is and how promising their career can be and some look no further than finance. Finance offers excellent opportunity to build a career upon and has a name for making people extremely wealthy so naturally post-grads gravitate towards the industry.

Today many of the best students throughout the country are not going to research cancer or solve america's educational problems but rather take up jobs as traders and brokers in financial firms. Is this the best route for a student of this magnitude As an economist, the author, Sendhill Mellainathan says "As an economist, I look at it this way: Every profession produces both private returns — the fruits of labor that a person enjoys — and social returns — those that society enjoys." Sendhill argues that people from finance are not creating wealth but rather transferring wealth from one person's pockets to their own. A rent seeking individual betters themselves rather than society. I understand that these are vast conclusions but this is also where we find ourselves today. With our brightest minds taking the best paying jobs which typically benefit the individual more than society one can argue that Finance shouldn't be the route. But I strongly believe that taking a job is an extremely personal choice. Most people will be rent seekers.

Link: http://www.nytimes.com/2015/04/12/upshot/why-a-harvard-professor-has-mixed-feelings-when-students-take-jobs-in-finance.html?smid=fb-nytimes&smtyp=cur&bicmp=AD&bicmlukp=WT.mc_id&bicmst=1409232722000&bicmet=1419773522000&abt=0002&abg=1&_r=0

G.E. to Retreat From Finance in Post-Crisis Reorganization

http://www.nytimes.com/2015/04/11/business/dealbook/general-electric-to-sell-bulk-of-its-finance-unit.html?ref=todayspaper&_r=0

   As banking has become less profitable and more riskier, G.E. has started selling of it's Capital division and will sell of most of the division in the next two years.

G.E. Capital has been one of the biggest lender with its hundreds of billions of dollars' worth of assets. G.E. began selling its finance unit by first selling $26.5 billion worth of real estate assets and has shrunk G.E. Capital from 42% to 28% of G.E.'s overall revenue since 2008. G.E. wants to focus on becoming the mightiest global industrial company.

This move by G.E. reflects how the biggest players in the financial industry face greater regulatory scrutiny and are incentivized to invest in traditional, conservative wealth management division.

G.E. wants to relieve itself from being considered as too-big-to-fail lender, a status that brings stricter regulatory requirements and downsizing is a big matter for G.E. as it does not want to be the next Lehman Brothers.

Shifting Income from Rich to Poor May Prove Less Effective than Imagined

The article suggests that taxing the wealthy could do more harm than good. Based on Pigou’s argument, it is largely believed that redistribution can spur economic growth. It rests on the fact that poor families would spend more if they had the means, and the rich would be able to smooth consumption if they suddenly lost income.

However, in a series of studies which drew from huge macroeconomic datasets, Pigou’s arguments on redistribution and economic growth doesn’t hold true entirely. According to the study, there are people who live on payslip to payslip and don’t have backup assets, and there are those that have sizeable illiquid wealth but are cash strapped. So, when tax is decreased the cash strapped rich increase spending more than the ones living on monthly payslips. Therefore, tax increase doesn't have much benefit if targeted in terms of income. Instead, the article suggests, taxes on the wealthy should be phased in slowly so they can liquidate assets rather than cut spending.

So, the article basically confirms Pigou’s hunch that rich will cut spending when taxes rise, but the cut is more than previously expected. And the poor increase spending but not to the degree required for economic growth. Therefore, taxes should be raised slowly so that the illiquid assets of the rich which is their actual wealth can be taxed, and so that they don’t cut spending. Do you think this would be an effective approach to tackle income inequality and also achieve economic growth?

Link

The World Economy in 2030

http://www.bloomberg.com/news/articles/2015-04-10/the-world-s-20-largest-economies-in-2030


The US Department of Agriculture recently released its macroeconomic forecasts that go to the year 2030.  The US is still forecasted to be at the top, but the disparity between the US and countries like China is closing.  The US is forecasted to be at $24.8 trillion while China is forecasted at $22.2 trillion.  The six largest economies in the world in 2030, according to this forecast, are the United States, China, India, Japan, Germany, and Brazil.  The article noted that Jamaica took the largest fall from 123 to 126 in the world.  Additionally, many of the high-growth countries are in Africa and the Middle East.

While this is not the most popular forecast, the USDA does look out 15 years.  The article notes that the IMF's forecast for the next two years is due soon.  With increased globalization and less disparity, the world appears to be much smaller economically.  What do you think?

'There will be another crisis'

JP Morgan & Chase's CEO Jamie Dimon recently sent out his annual letter to his shareholders in which he states that another crisis is inevitable.  In his letter he states "Some things never change - there will be another crisis, and it's impact will be felt by financial markets".  According to this letter, Dimon predicts that investors will exhibit the following behaviors once the crisis breaks out:

1. Sell assets they believe are the problem
2. Invest their money in safe havens, such as bonds and deposits in strong banks
3. Can only sell less risky assets if they need cash, because there will be no market for the riskier assets

The most eye opening part of his letter, was the notation that no investor is safe in a crisis.  Whether that be an individual, corporation, hedge-fund, etc no one in the financial market can escape unaffected.  It will be interesting to see if investors react as Dimon predicted during the next crisis.

U.S. Economy Gained 126,000 Jobs in March, an Abrupt Slowdown in Hiring

In March, 12600 new jobs were added but now the hiring has slowed down. According the article, the economy seems to be slowing down as well. Hourly wages have risen but hours worked have declined. Some say this is only temporary and expect the economy to pick back up later in the year. Due to the slowdown the Federal Reserve wants to raise the interest rates soon.

Link to Article

Federal Reserve officials split over interest rate rise

http://www.bbc.com/news/business-32226855

It has been sometime since the fed declared that they will be raining interest rates as the economy has started to show signs of recovery, however the question is when to. Since 2008, interest rtes have been near 0% and it’s finally okay to raise them. The Fed however has ‘competing priorities’, keeping an eye on inflation and maximizing employment in the economy. The main variable is the labor market and the fed has vowed to increase inflation rates after there’s “further improvement.” Wage growth has been slow which is the primary concern. My prediction is early 2016. What do you think? 

It’s Hard to Lift Wages if the Fed Doesn’t Make It a Priority

The Federal Reserve’s main goals are to have full employment and stable prices. People feel that the problem is that the Reserve does not focus on a huge factor that effect their two goals and that is wages. Ms. Yellen of the Federal Reserve said the main reason why wages are not a bench mark is because it’s not reliable. Many factors can change wages like productivity, global competition and technological changes and these factors change the skill demand and the wages offered to the people.

http://www.nytimes.com/2015/04/08/upshot/its-hard-to-lift-wages-if-the-fed-doesnt-make-it-a-priority.html?ref=economy&_r=0&abt=0002&abg=0

Blue Cross (BCBS-BCN Michigan) incentives save $50M in health care costs

This article describes initiatives undertaken by Blue Cross Blue Shield of Michigan producing lowered healthcare costs for its subscribers since the phased implementation of the PPACA in the US. It describes how providers are moving away from fee-for-service payment models to fee-for-value, rewarding preventative care. Stipulations of the PPACA have made this transition a requirement for service providers, and new contracts are driving down insurance premiums.

These developments are important in the evolution of the U.S. healthcare markets. Insurance companies and the government are placing extensive pressure on providers to supply preventative care at affordable rates; insurers are now required to some extent to cover preventative care and to assume universal insurer of last resort capacity. Overall, these industry changes will likely increase the long-term health of the U.S. population and lower medical expenses on catastrophic procedures and hospitalizations, which will stabilize much of the healthcare situation with at-risks and previously-uninsured parties. However, the effects on premiums for comparable plans and on corporate provision of health services and hiring has yet to be determined, and will likely form a significant component of the political battleground in 2016.

http://www.detroitnews.com/story/business/2015/04/06/blue-cross-incentives/25392361/

When oil will hit bottom

http://www.cnbc.com/id/102554626




Analysts predicts that the price for crude oil might hit bottom sometime this quarter.

"There's 20 million barrels in floating storage at the moment off the coast of Iran ... which could hit the market pretty quickly," said Dominic Haywood, crude and product analyst at Energy Aspects. Haywood said it will take some time for Iran to make a full release of its oil. Sanctions have cut Iranian exports to about half the 2.5 million barrels it was exporting in 2012.




The big three oil producer -Saudi Arabia, Russia and the U.S - show no significant decrease in production. "This crude phenomena is going to continue for a few weeks. We don't have the refinery utilization over 90 percent. That has to get to 90-91 to stop this incessant building of crude inventories," said John Kilduff of Again Capital. Refineries are currently running at about 89 percent.




The drop in oil prices is burning major producers but OPEC shows no signs of blinking, and analysts say it is the shale producers that are cutting back first. The U.S. Energy Information Administration said on Wednesday that OPEC members, excluding Iran, earned $730 billion in net oil export revenues in 2014, an 11 percent decline from the year earlier. That was the lowest for the OPEC since 2010

Air Skirmish in War over Ex-Im Bank

The Exports-Imports Bank of the United States is a government agency that looks to extend credit to foreign corporations in order to allow for these foreign firms to purchase goods or services from American Firms. Currently there is a battle between Delta Airlines, Boeing and the Ex-Im bank. Delta states that it is suffering because foreign airlines are using the Ex-Im bank in order to reduce their borrowing and therefore lowering the price of tickets on routes that compete with Delta. On the other side of the story, Boeing relies on the Ex-Im bank to receive payment on numerous aircraft from foreign airliners. As a result both have engaged in serious lobbying which has raised many questions surrounding the Ex-Im bank. Delta recently had a lawsuit shot down on the subject.

With all of this commotion many have seen the Ex-Im bank as a form of crony capitalism as it seems many are favoring Boeing over Delta due to Boeing's exuberant spending on lobbying in comparison to Delta's. Congressmen Paul Ryan is calling for the bank to be allowed to expire on July 1st without a renewal as he also believes it is a form of crony capitalism which the United States should not engage in.

Source: http://www.nytimes.com/2015/04/07/business/boeing-delta-air-lines-export-import-bank.html

Kansas Cracks Down on Available Purchases With Welfare

The Governor of Kansas is expected to sign a bill that affects how recipients of the Temporary Assistance for Needy Families program can spend their publicly provided funds.  Although most of the recipients abide by the boundaries of expected purchases, such as for rent, food, and gas, there are some recipients who purchase things such as tattoos, gambling and psychic services among many examples.  A republican senator introduced the bill with the goal of making sure taxpayer money is being spent productively and for the purpose which it was meant.  There are also people who are frauds and find ways to receive TANF money even though they are not in financial trouble.  In 2013, Kansas estimated losing $7 million due to fraud.  The bill imposes a host of restrictions and requirements of how state benefits can be used.  A long list of banned products can be found with the link to the article.  I personally agree with the bill.  In my opinion, taxpaying families shouldn’t have to give up their income for someone who claims to need the money in order to survive but then turns around and buys tattoos or a vacation on a cruise ship.  Also, the bill will not affect or hurt the people who actually spend their funds on necessities. 

http://money.cnn.com/2015/04/07/news/kansas-welfare-limits/index.html?iid=HP_LN         

Economy's gasoline bonus finally being put to use

In just a three month span consumers are shifting their attitudes due to the cheaper gas prices. In December 61%  of the respondents said they were doing nothing with the saving compared to the 42% in March. A consistent three months of low gas prices, consumers are noticing the extra savings in their pockets and spending it quicker. The recent survey by CNBC All-America Economic conducted  March 26-29 showed 56% surveyed were aware of the savings and using them to pay off debt or spending on other things. Economists referring to the consumer shift as the "gasoline bonus" say it should continue through the end of the year. Analyst and founder at Oil Price Information Service, Tom Kloza, commented on the issue and stated, "I do think we'll trend a little bit higher, but personally I think the range of prices for the rest of the year is probably $2.70 on the high side and $1.90 on the lower side, and we're right ton the average." He also mentioned that this "translates to about $140 billion in more disposable income for this year, versus last year."


http://www.cnbc.com/id/102566097 

Ukraine agrees cheaper short-term gas deal with Russia

Despite Russian's threat to cutoff Ukraine energy supplies, Naftogaz - Ukraine's state gas company, did secure a short term deal with Gazprom - a Russian gas company. In this agreement, Ukraine will pay $248 thousands per thousand cubic metres for the next three month, which is a lot cheaper than the previous price at $329 thousands per thousand cubic metres that they paid for the first quarter of 2015. Long-term solution has still not been reached and Ukraine is still required to prepay the due to Russia.

Amidst the Ukraine crisis ongoing, this might be one of a small yet needed positive news that both countries want, especially Ukraine. However if anything it's not any indication of improvement over the overall situation in Ukraine, let alone the economics situation in both countries.


http://www.bbc.com/news/business-32157899

Greece and Bad Politics

http://www.bbc.com/news/business-32154876

The Syriza-led administration is making unrealistic promises while campaigning. Alexis Tsipras promised new jobs and a rise in minimum wage, while creditors are supporting bailout only if the country has reduced spending and increased revenues. Increase in wage will not do that. New forms address increased government revenues, but also extra spending. It is up to the creditors to decide if the reform proposals are satisfactory. Unsurprisingly, blame for Greece's inefficiency falls on poor politics.

There is consideration of departure from the eurozone, but it is still an ongoing debate.

Judo to Save Ukraine

Ladies and Gentlemen,

This is it. The world at its finest. Putin versus Poroshenko in a judo match to determine the final fate of Ukraine. Of course, this is just the proposal...no one has accepted it yet. Still, wouldn't it be better to think that nations could actually settle things one on one instead of via armies and the unnecessary deaths of civilians. Would this be the final solution? Would both Russia and Ukraine then agree to let things go as the saying goes, "to the victor goes the spoils?" Some morning news that is interesting to think on for global policy...even if it doesn't end up happening.

(Unfortunately, as this comes from my usual credible newssource, The Economist, I believe it. However, it could be an elaborate April Fools' Day Prank. I have no idea.)

Milk and economic development: No use crying

http://www.economist.com/news/finance-and-economics/21647352-ability-digest-milk-may-explain-how-europe-got-rich-no-use-crying

Humans can digest lactose with the help of an enzyme called lactase.  Two-thirds of people stop producing it after they have been weaned.  However, one-third of people have "lactase persistence" which allows them to continue to produce lactase into adulthood.  The article discusses a recent paper that argues that this genetic quirk helps to explain why some countries are rich and others are poor.

Justin Cook, the author of the paper, uses data on historical migration flows to estimate the ethnic composition of 108 countries in Africa, Asia, and Europe in 1500.  He then estimates what proportion of the population would have been able to digest milk based off data on the lactose tolerance of different ethnic groups.  Cook estimates that pre-colonial countries in western Europe tended to have the highest rates of lactase persistence.  The lowest levels were in Sub-Saharan Africa and South-East Asia.

One-standard-deviation increase in the incidence of lactase persistence was associated with a 40% rise in population density.  People who could digest milk used resources more efficiently than those who couldn't.  They could extract milk, or liquid energy, from livestock.  The nutritional value of milk also could have balanced the pre-colonial diet to reduce the incidence of disease.  If animal milk was used as a substitute for breast-feeding, it could reduce weaning time and thus, the time between mothers' pregnancies.  These ideas support the theory that societies with higher lactase persistence could support higher population densities.

As common theory goes, the higher the population density, the faster the growth.  Areas with higher population densities see an increase in infrastructure, an increase in the development of cities, and an increase in technological innovation.  The main point of the paper is that areas with higher population densities in pre-colonial times tend to be relatively rich today.

Do you think it is a coincidence that areas with higher population densities in pre-colonial times are relatively richer today than areas with lower population densities in pre-colonial times?  Do you think that Cook's theory makes sense?  Are there weaknesses in his theory?  What are the strengths of his theory?

Women in Silicon Valley: an employment trend?

http://www.bbc.co.uk/news/technology-32115446

An interesting article on a trend in business, most specifically in the world of high technology. As a female entering the business field, I am all too aware of this trend. People often expect women to step aside as their career life continues, trading a successful business career for a career as a successful homemaker instead. Does this mentality not discourage women from being employed or putting themselves out there in the first place? Does it not hurt the idea of the workforce overall if have of the population is subtly encouraged to go home or looked down upon? 

For the purpose of disclaimer: I would like this post to be a good discussion and it is not meant to be offensive against men but rather a look at some possible subtle discriminatory practices that are allegedly and anacdotally taking place in the workforce already.

French deficit figures mean economy is improving, minister says

France has managed to pick up some speed in showing signs of recovery from the European recession.  The signs that the french economy is getting better stems from the fact that the french government has decided to cut its budget deficit target for the year of 2015.  Finance Minister of France, Michel Sapin, commented on the data of the deficit from the previous year.  He mentioned that the figures of the budget deficit were projected to be 4.4% but ended the 2014 year at 4%.  There is a similar situation for the year of 2015; the budget deficit is forecasted to decrease again at 3.8%. Europe's second largest economy showed signs of growth in 2014 and has plans to continue to grow. Despite the increasing unemployment rate in the country, there are positive signs to the economy and business confidence continues to improve. It will be interesting to see if France can maintain this economic growth and maintain these cuts in budget deficits.

Article Link: http://www.bbc.com/news/business-32063448

Federal agency seeks to restrict payday loans

http://www.sanduskyregister.com/news/government/7799391

Pay-day loan companies have employed tactics like posing as a credit-repair organization, posing as a mortgage lender, using a bank as a front, using a Native American tribe as a front, offering cash for free to hook borrowers, lengthening loan terms when rules targeted short-term loans, and larding loans with useless insurance in order to make a large profit off of everyday consumers. These practices are usually used against the poorest citizens in the U.S. because they are the ones who often need cash on hand at quick notice. The Consumer Financial Protection Bureau (CFPB), created by the 2010 financial reform bill, has the authority to regulate high-cost loans on the federal level for the first time. And on Thursday morning, the agency unveiled a first draft of new rules that would sharply reduce the number of payday loans made in the country.

The U.S. economy is showing cracks

http://money.cnn.com/2015/03/29/investing/stocks-market-lookahead-us-economy-jobs/index.html?iid=Lead

The United States economy is starting to show cracks after finishing out a strong 2014. The U.S. job market had its best year of gains since 1999, and economic activity hit a whopping 5% in the third quarter the best quarter since 2003. Yes, the economy looks like it is moving along in the right direction, but it seems as though we are losing momentum. Federal Reserve chair Janet Yellen states, "If underlying conditions had truly returned to normal, the economy should be booming." We are currently facing two main problems according to economists: wages aren't growing much and many foreign economies are slowing down, which puts pressure on the U.S. The U.S. added over a half a million jobs in the first two months of this year alone. Thats a 50% increase from the same two-months stretch a year ago. Unemployment is down to 5.5%, its lowest mark in seven years. These are all positive signs, but wage growth is a major issue. It has barely grown over the year. With little wage growth over the year and recent months, will this lead to the consumer saving and slow the growth of our economy?

Can you measure GDP if ownership is over?

 The rapid growth of technology is allowing for younger generations to own less. With the ownership of assets becoming "less attractive" it is becoming harder to measure economic growth. Software company Tradeshift's chief executive of buisness-to-buisness, Christian Lanng, was quoted on the topic at the Credit Suisse Asian Investment Conference and said "American teenagers don't want cars. It's not on their top-10 list of things they want when they turn 18 for the first time in 30 years. Why  own a car when I have an Uber app and I can get a car in three minutes? It's a very silly thing to own,". Lanng recognizing that there has been no increase in productivity and believes only measuring productivity in economic output is not right. When measuring GDP we are only looking at final point sales but do not calculate all of the free stuff which allows us to do things more efficiently and with higher quality than before technology had such a big impact.

http://www.cnbc.com/id/102539984

Western banks axed 59,000 jobs last year

http://www.businessinsider.com/r-western-banks-axed-59000-jobs-last-year-more-cuts-to-come-in-europe--2015-3

Over the past year, western banks have been cutting employees like crazy.  Many lenders have decided to cut employees due to the rising concerns of regulators that these banks have become too big and complex.  Many analysts believe that banks in the euro-zone will continue this trend because they are continually the most unprofitable banks in the world.  Another factor that has lead to the amount of jobs being cut is the shift to an online and mobile banking system.  However, this shift to digital banking and more efficient processing is expected to add pressure for the banking employees in the upcoming years.  It will be interesting to see how this affects the financial jobs market in the next couple of years.

U.S consumer prices rebound

The U.S labor department reported a CPI increase of .2% last month after experiencing consecutive months of decline.  As the U.S begins to get back on track in terms of economic stability the market is showing signs of moving in the right direction.  With economic activity on the rise the Fed has talked about increasing interest rates, which has been near zero since 2008.  Janet Yellen has stated that she plans on increasing the interest rate back to its 2% target point by possibly this summer.  As long has the economy continues to show improvement expect interest rates to rise over the near future.


http://www.cnbc.com/id/102529569 

Powerful dollar = More International Travel

Now that the dollar is strengthening, it is a really good thing for Americans who want to buy things from abroad or for people, namely business people, who want to or have to travel. It makes it cheaper for them to buy plane tickets, goods, etc. I know for myself, as I am thinking of moving to Europe after graduation, I am very excited about the depreciation of the Euro.

Unfortunately, it may not be as much of a good thing for people who are coming from other countries to the US as the exchange rate is now higher. This means that for people who work in the tourist business in America, they may receive a very large decrease in their customer base for a while until the dollar weakens again.

2016 Hopefuls and Wealthy Are Aligned on Inequality

Appearing at a candidate forum in late January, three likely Republican presidential contenders — Senators Ted Cruz,Marco Rubio and Rand Paul — all made a striking confession: They considered “the increasing gap between rich and poor” to be a problem. However, when asked if the government should intervene, they answered differently. When “government takes over the economy,” Mr. Cruz said, “it freezes everything in place. And it exacerbates income inequality.” He proposed lowering taxes and loosening regulations instead. 

Mrs. Clinton sounded similar notes when discussing inequality at the Aspen Institute in June, during an interview at a conference in February and during a forum last week at the Center for American Progress, a liberal think tank. Before the well-heeled crowd at Aspen, she said, “We have to have a concerted effort to meet a consensus about how to deal with this.” She alluded only elliptically to “hard choices” that her husband’s administration had made, saying that “they’ve become harde than they were even 15, 18 years ago.”

Asked whether those hard choices she referred to were tax increases, a Clinton spokesman said he was not sure.None of this surprises Professor Page. “It seems clear that wealthy Americans play a big part in shaping policy discussions and policy itself, from taxes to regulation to social welfare policies,” he said. “Definitely, they affect what candidates can say.

What do you think? should the government intervene to help the society become more equal and how? 

Australia to Join Regional Development Bank Led by China

      Australia has announced that it is joining an Asian infrastructure bank started by China. This move is in reversal to its earlier decision of not becoming a member under US pressure. A lot of American allies, like Britain, France, Italy and now Australia have under Chinese pressure joined the bank, leaving the US vulnerable.

    The office of Prime Minister Tony Abbott said in a statement " Australia still had concerns about the management of the bank but recognizes the pressing needs for infrastructure in Asia". 

   The main concern of the US is that IMF and the World Bank might which are under US leadership might get undermined by the Chinese led Asian Bank.  The Chinese counter by mentioning the dismal bureaucracy at the World Bank and the Asian Development Bank, which hampers growth worldwide.

After Australia's joining the bank the US has been left with only Japan as its main Asia Pacific ally and this has resulted in some experts suggesting that the US might reconsider joining the bank. However its unlikely that President Obama would change his decision and Congress would reject such a move as well.

http://www.nytimes.com/2015/03/29/world/asia/australia-to-join-regional-development-bank-led-by-china.html?ref=international

Brazil's Economy Grows 0.01% in 2014

http://www.bbc.com/news/business-32082662

Even though Brazil is the world's 7th largest economy, they it just barely broke out of contracting in the last fiscal year. The last four years have shown a gradual slowing of the Brazilian economy although it has been growing rapidly for the last ten years overall. The slow is probably the result of low commodity prices and low investment and invest confidence. The government has been offering labor tax breaks, subsidizing gasoline, and lowering the price of electricity in order to stimulate the slowing economy. The current finance minister, Joaquim Levy, has been raising taxes and and implementing some austerity measures in order to balance the budget. Analysts say that 2015 might be an even tougher year for Brazil.

University of Phoenix Enrollment Numbers are Down

http://www.businessinsider.com/university-of-phoenix-enrollment-numbers-are-down-2015-3

Despite the growing demand for college education in the workforce, it appears people are going away from the for-profit model of higher education. Maybe it is because the for-profit education is seen as less valuable; maybe it really is less valuable. Whatever the case, it appears as if the industry of higher education is going to look different in 5 years, with non-profit education holding an even greater command over the economy than it already does.

Eurozone can't survive in current form, says PIMCO

http://www.telegraph.co.uk/finance/economics/11501280/Eurozone-cant-survive-in-current-form-says-PIMCO.html

The Pacific Investment Management Company (PIMCO) stated that they do not believe the Eurozone's current structure is sustainable in a long run. They believe that a monetary union without a fiscal union is not tenable in the long run. Persistently slow growth in the Eurozone has led to the rise of populist parties in many of the Euro countries. They also use the example of the Latin and Scandanavian unions of the 19th Century that lasted about 50 years. One of the few solutions they see to the problem is the potential need to establish some sort of fiscal union to complement the existing monetary union. The current system is also hurt by France and its inflexible labor market which has not had sufficient reforms. This has led to the growth of parties that are opposed to the Euro currency. The increased popularity of these parties may be indicative of a lack of faith of the people in the Eurozone.  

What the Fed’s 2009 Transcripts Reveal About Its Handling of the Recession by BINYAMIN APPELBAUM and NEIL IRWIN

http://www.nytimes.com/interactive/2015/03/04/business/economy/fed-2009-transcripts.html?ref=economy


This article from the New York Times discusses the policies of the Fed right after the 2008 crisis (The Great Recession) to arrest it in its early stages. The five year transcript talks about the steps that the Fed took and what called for those steps. The article is divided into periods.
January to March '09 was the period when quantitative easing was introduced. According to the article : Over the next six years, it will eventually amass more than $4 trillion in mortgage bonds and Treasury securities.
The article talks about the pros and cons of quantitative easing and what institutions were  affected by it.
A must read for anyone who wants to understand the recent economics of the USA.

Inequality and Housing: Through the Roof

http://www.economist.com/news/finance-and-economics/21647349-rising-house-prices-may-be-chiefly-responsible-rising-inequality-through

This article discusses Matthew Rognlie's criticism of Thomas Piketty's idea of increasing inequality in a rich world.  Piketty argues that, over the long run, rate of return on wealth will exceed economic growth.  He shows, through is argument, that the relationship between rate of return on wealth and economic growth will increase inequality, as the share of national income going to those who own capital will rise--it will increase for the rich, and the portion going to all other classes will decrease.  Rognile disagrees with Piketty's argument and shows this through three criticisms.  First, he argues that Piketty has an inflated idea of the current return due to various technological advancements and such, meaning that the returns for the wealthy may not be growing in real terms.    Second, Rognile argues that higher returns to wealth have not been distributed equally across all investments.  He explains that surging house prices are almost completely responsible for growth.  Third and finally, Rognile argues that the idea that workers' share of wealth can continue to decline depends on how easy it is to substitute capital.

Like Piketty, Rognile has critics as well, who argue that he underestimates the role that changing technology takes in inequality.

Black Unemployment

This article explains the struggle for black America in today's economy. Many people today mention how "anyone who's qualified and wants a job can find one", or "as long as you have the skills". This proves to be untrue. It is not a difference in skills for candidates. This article explains the situation of Sikiru Tijani who graduated from Illinois Wesleyan University, moved to Japan to teach English, worked in city hall, translated/interpreted, planned events with local officials and foreign dignitaries. Today, he has worked in a part time retail job for over a year with no luck of finding a career. This situation of constant rejections is putting him to wonder about the race factor, and how employers feel when they see his name on an application. A startling statistic that this article shows is that black college graduates suffer from an unemployment rate roughly double that of whites. A really interesting study was done that tested whether employers would hire a Dylan versus DeAndre. It found that job applicants with black-sounding names were 50% less likely to get a call back compared to a white-sounding name. It's hard to believe that to this day, there is this drastic difference employment and stereotyping.

http://www.ibtimes.com/black-unemployment-college-degree-offers-advantages-no-escape-racialized-job-markets-1861838

Wealth Grows To New Heights, Yet Unevenly

http://blogs.wsj.com/economics/2014/12/12/u-s-wealth-is-near-a-record-yet-racial-gap-has-widened-since-recession/

"U.S. Wealth Is Near a Record, Yet Racial Gap Has Widened Since Recession"

 Wealth inequality has grown at  a faster rate than the economy since the Recession. To be fair, the rich were not  heavily leveraged like the middle class with their mortgage  debt. Middle class  Americans were not investing but paying off their years of dis-saving. Of course, paring this growth with a cut in the estate tax is probably bot conducive to overall inequality.

Let me know what you  think. 

Fears of a new global crash as debts and dollar’s value rise

http://www.theguardian.com/business/2015/mar/28/rising-dollar-debt-fears-global-economic-crash

This article discusses the effect the rising value of the dollar is having on other countries worldwide. In particular, it notes that it's hurting a number of mid-sized economies that have recently begun/were projected to soon begin major development (South Africa, Brazil, etc.). It also discusses the longer term effects of quantitative easing, including a 40% increase in money borrowed by developing countries. Also stated is the debate/attempts of smaller countries to bring this problem to the floor of the UN, which were rebuffed under the claim that it was the wrong forum (and that that was what the IMF was for). All in all, it is interesting to see the repercussions he implementation of quantitative easing has had on the global economy and begs the question of whether or not it stopped or just delayed economic crises.