Oil prices gain 3.6% for the week

This article reports the recent price of crude Oil, and gives an analysis about the fluctuation of Oil prices. It talks what information could be reflected from the changes of Oil price. Also, it explains what factors influence the price of crude oil. For example, it points out that the price of crude oil is influenced by the stronger dollar early Friday, a day after the discount rate increased to 0.75%. At the end of this article, this report also mentions that the gas price is influenced by the price of crude oil.

Banks nervously await new credit card law

By David Ellis, February 19, 2010

The new credit card law that was recently issued is set to take effect Monday. The CARD act is estimated to cost banks and credit card issuers quite a lot in revenue. Current estimated losses are at more than 5.5 billion in 2010 and a total of 50 billion in the years through 2015. The estimated loss in revenue is due to the restrictions on when banks can increase annual percentage rate for cardholders. Under these new laws banks are restricted from increasing APR on current cardholders, and will now be required to wait 60 days before raising the APR of delinquent customers.

In order to counteract the effects of the CARD act on many institutions have raised the cost of existing fees and created new fees. According to this article the early-stage delinquency rates have dropped, a positive sign since loan losses are on the rise more than ever. National unemployment has finally dropped below 10% last month, another positive sign for the U.S market. Institutions must now find ways to increase profit without decreasing the amount of credit card customers, by making the credit cards along with all the fees somehow more appealing to customers.

Greek Crisis Fallout: Could the Euro's Days Be Numbered?

This article talks about how Greece's financial woes could eventually lead to the downfall of the Euro. It says that the European Union is more of a monetary union with little coordination among member countries in terms of taxation and budget. It also talks about how Greece needs to drastically cut government spending and increase taxes to reduce the budget deficit even if it is unpopular among taxpayers.

Let the Greeks ruin themselves

Germany is known to have the biggest economy in Europe. That is why all eyes are focused on Germany to bail Greece out. Greece is having an immense amount of trouble right now and it all started because they have been concealing their bad financial situation. If Germany helps Greece out the currency will suffer.

Obama defends economic stimulus

this article talks about how the stimulus plan is expected to save or create 1.5 million jobs in 2010, and how it has already saved or created at least 2 million. this is will help increase the rate of job finding but the problem in our current economy is the fact that the job separation rate is still very high as businesses are making a lot of job cuts. the article also talks about how the stimulus really needs to show results in this import election year to make the democrats look good.

Credit-Card Fees: the New Traps

This article discusses the new policies the Federal Government is placing on credit card companies. Basically the government has told the credit card companies that they have to be more responsible in letting their customer know where they are with their credit, and can only over spend on their cards if they agree ahead of time to pay huge interest on what they over spend. This has left the card companies out of an estimates 12 billion dollars a year, so know the card companies are looking for ways to make that back. With drawing money out of country will come at a big expense, and paying the monthly minimum will also wind up giving you much higher interest rates.

This Federal policy has good intensions it sounds like but the card companies will find a way to make this lost money back in a different way, so overall it probably won't be that effective.

Fed’s Bernanke to Assure Congress Higher Rates Not Imminent

After the Fed's decision of raising the cost of direct loans to commercial banks, there has been several expectations that the economy may sooner or later suffer from inflationary pressure, which could lead the Fed to increasing the benchmark interest rate. In order to rule out this possibility, the Fed chairman will probably assure the Congress and the public that an increase in the federal fund rate is not imminent.

Many Fed's officials state that tightening monetary policy is not going to happen unless there is a significant improvement in the prospect of the job market. They also emphasize that maintaining growth, rather than combating inflation, should be the main goal of policy makers. This is especially true after the recent report about Consumer Prices has been released. Core prices, which exclude highly volatile items such as food and energy, unexpectedly fell by 0.1 percent.

Germany Doesn’t Have Plan to Aid Greece, Finance Ministry Says

We all know that Greece is in a big trouble. The only way Greece can handle the deficit crisis is to get some help from EU countries in some form of financial aid. Lately, there has been a lot rumors/speculation going about what are the next steps in helping Greece to get out of default on its debt. For example, one of the articles appeared in a recent edition of the respectable German magazine reported that Germany is asking euro-area governments to provide $35 billion worth of loan to help Greece. Magazine also said that Germany would finance 20% of the aid, without saying how it got the information. Once the article was reported, there was an instant message from the German ministry of finances that there is no such decision in this regard, and Germany is not considering a "concrete plan". Overall, it would be very interesting to witness how European Union is going to solve this economic problem, and hopefully, too big too fail policy would apply to Greece.

Consumer prices rise marginally

In January, consumer prices rose less than expected. The prices without food and energy fell for the first time since 1982 with the fed keeping the interest rate low for an "extended period". CPI rose last month in January by .2 percent which was influenced by a rise in energy cost which also increased by .2 percent. Reuter analysts predicted an increase of .3 percent in january. In 2009, there was an increase of 2.6 percent which was also below market expectations (2.8). Quarterly reports say that the inflation rate will stay where it is now until 2012. This may be due to a change in the White House.

Unemployment? Not for the Rich.

I keep the old title of this article because it is interesting.
We all agree that unemployment rate is currently high. But the article showed an insight view that we are at "full employment" somehow because unemployment for the top income people are only 3%. The article comments that the rich are not really in unemployment stituation or recession.
The high inequality is expanding, it happens not only in income distribution but also in unemployment situation.

Fed raises emergency funding rate

While this rate really has little importance, it does have an affect on expected rates, which we know from the fisher equation affects the nominal interest rate. The Feds motivation behind raising this rate is to raise confidence in the economy so that eventually rates can rise to a desirable level to head off a tidal wave of inflation.

Domino theory- Assessing the risk that Greece’s woes herald something far worse

I thought this was an interesting read given our talk on hyperinflation and the relation to Greece. Investors' concerns are growing more and more as Greece seems to fall further into debt by the second. The concern is not only for Greek industries but also, speculators are worried that the severe recession in Greece could spread through the rest of Europe and eventually make its way to the US. The article goes on to explain the various ways this could occur and also the problems that are associated with Greece's economic problems.

CME buys 90% of Dow Jones Indexes

This article provides specifics about the Chicago Mercantile Exchange business deal to buy 90% of the Dow Jones index. The article gives some history of the index such as its creation in 1896 by Charles Dow. the article then describes how the deal will give the CME increased prominence in the world financial exchanges.

TSX winning streak longest since July

This article follows what Leo De Bever's comments about rising prices in the commodities markets. The Toronto Stock Exchange has been benefiting from the gains seen in these markets.

Hoenig Says Fed’s Objectives Threatened by U.S. Debt

The president of the Kansas City Fed, Thomas Hoenig, is a member of the FOMC this year. The article states some of his recent comments on the role of the Fed and the federal government increasing deficits.

The government is spending so much money recently, deficits get bigger every year. Hoenig is worried that they will look to the Fed to print money to cover the deficit. If this happens, the Fed will lose its independence and not be able to both sustain growth and stable prices.

Some conflict may arise in the future between the Federal Reserve and the government over these issues.

~Cassie

U.K. Unemployment Jumps, While BOE Minutes Show Stability

BY ILONA BILLINGTON AND NATASHA BRERETON

LONDON—British unemployment rose sharply in January after two months of declines, highlighting the fragility of the economic recovery, while average earnings rose at a record-low pace for a third straight month, data showed Wednesday.

Minutes from the Bank of England's February Monetary Policy Committee meeting also showed policy makers were unanimous in their decision to suspend the bond-buying program in February, but that for some members it was a close call.

The releases keep the possibility of further BOE easing alive, and signal that the central bank will maintain loose policy for some time.

The Office for National Statistics said ...

The Onion

While not necessarily as academically robust as some of the other articles on the blog, I feel that the satirical newspaper "The Onion" still brings an interesting and humorous aspect to any debate on economics. This article discusses the arbitrary nature of money, and talks about an alternate reality in which everyone simultaneously realizes that money is not worth anything.

Penalized for Working

Why attempt part time jobs with faulty systems in place such as the one explained in this article. The unemployment system is set up in such a way it does not make sense for many to look for part-time work because of the damage it will do to their current benefits. People around the United States are finding that if they take a seasonal part time job with minimum income it will cost them more money then staying unemployed. These types of kinks result in much higher unemployment rates because it simply does not make financial sense to go back to work unless it is an established full-time job on salary pay.

Why China Probably Won't Revalue the Yuan Soon

Posted by: Bruce Einhorn on February 16, 2010

As China shows more signs of overheating, Goldman chief economist Jim O’Neil says Beijing is poised to allow an appreciation of its currency, the yuan, to slow the economy. As my Bloomberg colleagues reported on Monday, O’Neil thinks the Chinese could allow the yuan to strengthen by as much as 5%. “I have a strong opinion that they’re close to moving the exchange rate,” O’Neill said in a telephone interview from London after China’s central bank told lenders on Feb. 12 to set aside larger reserves. “Something’s brewing. It could happen anytime.”

While there are solid economic reasons to move quickly, there are also some solid political reasons to stay put. The U.S. has been loudly calling for the Chinese to let the yuan appreciate. For instance, President Obama said in an interview with Bloomberg BusinessWeek, “China and its currency policies are impeding the rebalancing [of the global economy] that’s necessary. My goal over the course of the next year is for China to recognize that it is also in their interest to allow their currency to appreciate because, frankly, they have got a potentially overheating economy.” (You can read the whole interview in the current issue of Bloomberg BusinessWeek.) The president is right, but China’s leaders are probably in no mood to give an inch to the U.S. right now. They’re still fuming over the arms sales to Taiwan, U.S. criticism of China’s Internet censorship and a meeting between Obama and the Dalai Lama that’s scheduled for Thursday. A change in currency policy now would be a big win for Obama – and might lead people in China and overseas to conclude that putting pressure on Beijing works. So even if a revaluation of the yuan is in China’s interest, it probably isn’t going to happen for a while.

Snowmageddon could cost up to 150,000 jobs in February

This very interesting article concerns the back to back snow storms that have pummeled various regions of the country and their effect on the economy. It is estimated that between 90,000 to 150,000 jobs could be lost this month due to the snow trapping people at home and halting the hiring process. People notable to get to their new jobs will file for unemployment benefits. Businesses in the retail, construction, manufacturing, and transportation industries will be particularly hit hard, driving up job loss estimates. However, on a more positive note, economists are saying the storms impact is only temporary and growth will continue shortly.

Barclays Reports Profit Doubled in 2009

The article mainly talks about the reality that Barclays’ profit doubled in 2009, but their top executives gave up their bonus due to the pressure on the whole industry. To be specific, Barclays’ profit rose to 9.39 billion in 2009 from 4.38 billion in 2008, helped by its investment banking sector and the sale of money management business to BlackRock. However, its chief executives decided to give up their bonus, because they know the public’s anger over bank executive taking large payout while the country is barely out of recession still exists. According to Chairman of Barclays, giving up huge bonus is a way of acknowledging the mistakes that they have made and it will rebuild the trust between banks and their stakeholders.

The Greek Tragedy That Changed Europe

Currently, interests rate continue to fall leading into further deficits and a very dangerous buildup of government debt. The country is working towards recovery, but this large amount of government debt could collapse its recent recovery. The Europeans have taken on the challenge to manage their economy, but are not being careful in doing so. The European Central Bank has responded by buy government bonds, but are moving towards cutting Greece off. Greece will not be the only country to experience this cut in aid from The European Central Bank. Since these struggling countries all share the euro, their currencies cannot fall and each country will have make adjustments by lowering wages and reducing the public workforce. The last time this was seen was in the Great Depression.

Greece Pressed to Take Action on Economic Woes

Since we recently discussed the economic situation in Greece in class, I found this article very interesting. The article discusses how Greece manipulated their statistics to conceal from the European Union the extent of their debt. Apparently, this practice is not too uncommon. Both France and Germany have falsely represented the amount of their debt in the past. In order to restore faith in the statistics, Eurostat plans to audit member countries.

Japan stays ahead of China - for now

This article is written in comparison of the quaterly GDP of Japan and China. Many economists predicted that China will go ahead of Japan in 2009; but the recently published GDP results explains that Japan is still ahead of China. Being 10th times the size of Japan and having a GDP growth of nearly 10% China will undoubtedly over take Japan some time near future. But since Japan bailed out some cash in the recent recession through government spending and since Japan had a high net export figures in 2009, it is still the reigning second largest economy.

A Balance Between the Factory and the Local Farm

I found this article very interesting as I have recently read the book "Skinny Bitch" and watched the documentary "Food, Inc." If you are interested in this topic, these two items are very eye opening as well as controversial.

I agree with the following statement: " It may be a case of a manufacturing system that has grown too fast or too large to be managed well.

Somewhere, there is a happy medium."

What's Sustainable About This Budget?

Obama's 2011 budget bears the title A New Era of Responsibility.  His overall goal in the new budget is to invest in our people without leaving them a mountain of debt.  He addressed his politicians by saying Let’s meet our responsibility to the citizens who sent us here.  The real question is if this strategy is realistic.  War is a huge issue as far as the national budget is concerned.  Wars lead to temporary surges in government spending, and recessions lead to temporary declines in government revenue. It makes sense for the government to borrow to make it through these tough times.  Obama is dealing with both of these issues, war and recession.  It is natural to see our country in a deficit because the war is expensive and with the current circumstances there will evidently be a deficit.  As a result, the governments budget will grow faster than the economy.