China’s cyber-hacking is getting ugly

      Chinese hackers have been suspected by foreign companies and governments for besieging their networks and have links to country's armed forces. A report by an American security, Mandiant, proves this fact with evidences after six years of investigation. Mandiant claims that hackers have stolen technology blueprints, negotiating strategies and manufacturing processes from many American companies in a score of industries.
        American is trying to promote the idea that everyone would gain from "cyberarms control" to set the rules of engagement. One lesson is that all companies need urgently to upgrade their defenses. I think American government needs to make sure Chinese government understand their losses because of cyber crimes. There are also lessons for China's leaders, too. If the new leader, Xi Jinping, does not acknowledge the seriousness of cybercrime, China will be taken less seriously and Chinese companies will continue to be treated with suspicion when they do business abroad. In my opinion, Chinese government needs to make more severe punishments for cyber crimes. Chinese people in general need to show more respect to the rule of law.

http://www.economist.com/news/leaders/21572200-if-china-wants-respect-abroad-it-must-rein-its-hackers-getting-ugly?fb_ref=activity

Good news from U.S Labor market

At the time when recovery hasn't get its pace yet, the bright news from the Bureau of Labor Statistic is truly motivating. According to its February data, about 236,000 jobs have been added, reducing the unemployment rate to a nearly 7.7%. However, the question lies in whether or not this momentum continues, as the economy seems not to operate at its best at the moment, which in the long run might slow down the growth. In my opinion, I totally agree that it will all come to how the Fed would do to handle the situation. So far the decision to leave the interest rate at 0% until unemployment rate is down to at least 6.5% seems promising, however the potential inflation and the number of increasing long-term unemployment might prove to be troublematic if the Fed are not flexible enough to adapt to changes.

http://www.economist.com/node/21573242

No recovery for U.S. government workers

http://money.cnn.com/2013/03/08/news/economy/federal-worker-jobs/index.html

According to the article, 4,200 federal workers lost jobs in February, as the federal workforce continues to thin, with more job losses to come due to the automatic budget cuts. As opposed to recent gains in the private sector, a total of 33,000 federal worker jobs have been lost since January 2012 -- and that does not include jobs at the Postal Service, which is in the midst of a crisis of its own. This is kind of ironic to Dan Stohr, spokesman for the Aerospace Industries Association who said: "It's incredibly ironic that just as the private sector seems poised to take off, cutbacks in federal spending are slamming the brakes on growth,". Worst thing is with the budget cuts, it is going to get grimmer.

Hooray for Hollywood! Movie biz lifts job growth

This past month has shown some great signs of recovery in the economy.  Approximately 236,000 jobs were created this past month.  Of those 236,000  jobs created, 21,000 are credited to Hollywood.  The film industry had a five percent economic increase in sound jobs and motion pictures.  The film industry always increases around every February but this year the industry has grown more than the usual.  This shows a sign that the economy is continuing to recover.  The service industry has hired 24,000 workers this past February which includes jobs in restaurants, bars, arts and entertainment.  It is great to see that more jobs are being created in other industries besides construction.  It will be interesting to see how the industry does as it approaches summer time and it will be interesting to see how the film industry is doing a year from now.

http://economy.money.cnn.com/2013/03/08/jobs-report-movies/?iid=H_E_News

In turbulent Venezuela, gasoline will likely stay at pennies a gallon

http://money.cnn.com/2013/03/06/news/economy/venezuela-gas/index.html?iid=SF_E_River

Four US cents a gallon, it is absurd. Venezuela government has to give humongous subsidies in order to make this happen. However, this does encourage wasteful gas consumption because it is just simply too cheap. As a matter of fact, Venezuela must now import a quarter of the gas it uses and most of these imports come from the United States. They import gasoline at $100/barrel and sell it for just $5/barrel. This creates a huge loss which has to be absorbed by the state oil company. The question is why it is still so cheap? There is a common belief in Venezuela that oil is a national resource that every citizen has the right to use. However, it is not the main reason. The last time the government tried to cut subsidies on gas, there were riots and the president at the time was eventually forced from office before he finished his term. Some say it's a political killer and it explains why subsidies won't go away, at least not any time soon.

Construction jobs soar on housing recovery

http://money.cnn.com/2013/03/08/news/economy/construction-jobs/index.html?iid=SF_E_Lead

As the title suggests, there has been a growing demand for construction workers especially when the housing market is starting to get back on its feet. 151,000 jobs have been added over the last five months in the construction industry, 48,000 of those in February alone. In fact, they have been hiring so much that they are afraid the market might run out of workers. The problem is during the downturn, way too many workers left the field so there is a shortage of skilled construction workers in the market. It is also important to note that employment levels in construction are still very low compared to not just the housing boom years but also to employment even before the bubble started to inflate. The industry would have to add about 1 million workers overall to return to levels seen in early 2003.

The Economy is Finally Showing Signs of Life: Don't Sabotage it!

http://www.forbes.com/sites/leonardburman/2013/03/08/the-economy-is-finally-showing-signs-of-life-dont-sabotage-it/

The article talks about how our economy is recovering and is showing signs of life.  In February over 236,000 found work which is far more than what economists had anticipated.  Another positive for our economy is the unemployment rate has lowered down to 7.7% which is the lowest unemployment rate in the past four years during this economic recession.  Some of the key factors that have contributed to the economic growth/recovery are the rising house prices and the growth of the stock market.  Hopefully the economy continues to recover and it will be interesting to see what happens in the future years.  This could potentially lead to better job placement for college graduates.

Dollar Rises Against Euro

http://www.washingtonpost.com/business/dollar-rises-against-euro-pound-yen-on-positive-us-jobs-data/2013/03/08/64fb9300-881d-11e2-b412-2e8596e7c927_story.html

This article talks about how the strong job report in the United States pushed the dollar higher against many other currencies. The euro is now $1.3005 changing from $1.3104. The lowest the euro has been is $1.2954 which was in December 2012. In other currencies, the British pound fell to $1.4936 from $1.5018. And also the dollar rose to $0.9511 Swiss franc from $0.9427. The dollar also fell to 95.82 from 94.85 Japanese yen, as well as the Canadian dollar falling from 1.0289 to 1.0287.
The Labor Department said that 236,000 jobs were added in February and the unemployment rate fell from 7.9% to 7.7% in January, which leads some economists to expect an addition 152,000 jobs.

The Billionaire's Race

http://www.businessweek.com/articles/2013-03-07/mexicos-carlos-slim-is-still-the-richest-but-bill-gates-is-gaining#r=tec-s

As you probably already know, Mexico's Carlos Slim is the wealthiest person on the plant; you're probably a bit more familiar with Bill Gates, who currently sits in second place. This article discusses how the combination of a loss in net worth of Mexico's phone monopoly, as well as a few other expansionary investments that haven't started yielding paying off, have slowed Slim's net worth growth. On the other hand, Bill Gates net worth growth grew 6% in the past 6 months due to Microsoft's stock rise. So it seems that Gates will give Slim a run for the money (no pun intended) for the number one spot if his net worth continues to grow at a faster rate than Slim's falls.

Profiting from Global Warming

http://www.businessweek.com/articles/2013-03-07/investors-seek-ways-to-profit-from-global-warming#r=tec-s

In the past, investors turned to investments that were geared towards efforts to stop global warming. This is now slowly starting to change. Investors are now putting their money into efforts that will take greater advantage of increasing global warming. The articles discusses the investment in dengue (due to hotter temperatures) fighting mosquitos, weather derivatives, property rights, commodities like gold, and flood protection services. Hedging one's money with the hope that our climate worsens seems a bit insensible, but it seems making money off good ventures is becoming less profitable.

China exports beat forecasts on strong US demand

This article talks about the rise in Chinese exports to 21.8% from a year earlier because of an increase in demand by the US and South East Asia , while most analysts had expected to be at 15%. The level of imports fell to 15.2% from a year earlier. This could be because factories are shut for a number of days because of the lunar new year and therefore less raw material is imported.

 Exports are a key factor in china's growth, The increase in level of exports in January and February certainly show signs of a recovery. These increase exports could also be because of lunar new year which makes the data skewed. To get a clear picture we need to combine the data of both years which show that exports could have been much more if factories were open for more days and that imports jumped to 5.1% compared to last year


http://www.bbc.co.uk/news/business-21710581

Unemployment Rating Dropped

The latest report on the current unemployment rate shows a decrease in unemployment in February as compared to January. The rate dropped with the addition of 236,000 jobs in the market and a high wage rate to employees. While this comes across as wonderful news, when reading between the lines, the decrease is also due to a decline in the labor force and those searching for work. Despite the labor force shrinking, this is overall great news that our economy may finally be back on track after a few slow years following the recession of 2008. Reports also indicate that the stock market was up this week and jobs are continuously being added in efforts to keep the economy on the upside of the downturn. This is also good news in light of the sequester that has taken effect. Over 14,000 Federal, State, and local government jobs were cut in the last period, but various other industries are picking up the pieces to see the economy stay afloat. 

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/03/08/great-news-on-jobs-unemployment-rate-falls-to-7-7-236k-added-to-payrolls/

  

U.S. net worth back to pre-recession level

With surging stock prices and steady home-price increases, Americans have finally regained the $16 trillion lost in the Great Recession. Unfortunately, most of this wealth has probably been credited to Americans who already enjoy a great amount of wealth. Many of the poor-middle class Americans sold their stocks when they were plummeting back in 2008. The smart investors, or atleast those who could afford to keep their money in the stock market, benefited greatly from this by buying stocks when they were down a few years ago. Nevertheless, this increase in wealth could lead to more consumption.

Greece; A Slippery Slope

Greece cannot seem to fight its way out of the pit of depression. In an article posted to the Washington Post, contributed by the Associated Press, states that Greek unemployment saw a slight relief. The figures fell from historic highs of 27% in November of 2012, to 26.6% in December 2012. While many hoped this was a sign of good things to come, the economy is predicted to dip again. Experts say that unemployment could go as high as 30% in the coming months. In today's globalized world, this is not only a Greek problem, but troubling for entire economy of the European Union and transversely, the entire world. In the end, foreign aid can only accomplish so much. It will be up to the Greek government to solve the problem, until then, the European Union is forced to cross its fingers.

http://www.washingtonpost.com/business/greek-unemployment-dips-to-264-percent-but-experts-say-bigger-improvements-not-imminent/2013/03/07/561d217e-8718-11e2-a80b-3edc779b676f_story.html

The Fall of China's Solar Power King

Link: http://www.businessweek.com/articles/2013-03-06/the-fall-of-chinas-solar-power-king#r=nav-f-story

This article tells the tale of Zhengrong Shi, the ex-founder and chairman of the China-based Suntech Power. Shi's career until now was that of a success story. He grew up in China, received an education abroad, came back home and used his knowledge to create a company and rise to the top. However, Suntech Power has started falling off. In 2010 the company expanded to the US. Without same subsidies from the government though, the limited demand (which was less than expected) caused lower than expected sales figures. Due to these shortcomings, the company has since demoted Shi twice.

As this article shows, even if you are on top, a company needs to stay on the lookout to remain relevant and prosperous. Although Suntech Power probably did get predictions on sales for their expansion, they did not seem to take into fully account for their support from the government so that they would make a profit.

Africa Progressing Rapidly

http://www.economist.com/news/leaders/21572773-pride-africas-achievements-should-be-coupled-determination-make-even-faster

The poorest continent in the world, Africa, is quickly growing and is now the fastest growing continent. Life expectancy is on the rise, HIV infections are down, and foreign direct investment has tripled. Their GDP is currently growing at about 6%, which is great, but may not tell the whole story. Although there is much more wealth in Africa recently, it is not widespread and many individuals are still suffering with hunger. While it looks as if the close future is promising for Africa, they will need to focus on breaking down their boarders for more productive trading and building infrastructure if they wish to continue progressing.

Will Robots Take Over The Labor Market?

Many people will argue that in the future technological advances such as robots will take over simple human tasks and have many people looking for a job. In an article published in 2011 titled "Rise against the Machine" argues that workers will not be able to keep up with technological change. The article says that soon companies will able to eliminate millions of jobs. The jobs eliminated would be one where workers do mundane tasks such as cashiers. There have been studies shown that it is not as bad as we think. One researcher, David Autor, argues against this theory. He says that economists look at simple production functions that say that capital and labor are two different components and together they make GDP. He argues that in the real world capital and labor actually come together. He believes that technology will complement labor. This means that technology will replace mundane tasks that can easily be automated and allow workers to handle more complex issues. An example is a worker that prints airline tickets. He says that now a robot will print the ticket so the worker can handle issues such as cancelled flights or people changing flights. In the end robots will actually help workers become more productive by allowing them to focus on more complex issues without dealing with mundane tasks. Also, humans will always have a cognitive advantage over robots and firms will not be willing to allow robots to take over these jobs.

Wall Street ends flat after late fade; S&P up for fourth month

http://finance.yahoo.com/news/stock-index-futures-point-slightly-090532570.html

In recent times the Dow has been getting closer and closer to breaking all-time high records even with the stock market closing relatively flat. The S&P 500 has also been on a role with a 1.1% gain this month (February), it also ended February with four straight months of gains. The Dow was recorded to have ended the month with a 1.6% gain followed by the Nasdaq with an advance of 0.6%. 14,1980.10 is the highest point the Dow has ever been and that had been obtained back on October 11, 2007, now its just inching back towards that and it could very well break that record. Although there have been many gains in the stock market recently, some companies seem to still be struggling, for example JC Penny Co. Inc. was hit hard decreasing by 17% this past month. If there aren't too many more changes in the stock exchange and they continue to have gains, other companies may start to see gains as well in this slowly recovering economy.

China pledges to tackle pollution crisis

http://money.cnn.com/2013/03/05/news/economy/china-environment-pollution/index.html?iid=SF_E_River

This article talks briefly about the recent national congress in China, in which the Chinese Premier Wen Jiabao pledged to start taking effective measures against the pollution engulfing China. China has been in a period of rapid growth and industrialization, but with rapid growth comes the problem of pollution. IT was interesting to learn that China burns 3.8 billion tons of coal per year or nearly as much as the rest of the world combined. And the pollution has only been increasing while the pollution and dust have been known to settle as far as California. Some measures that they may implement to reduce pollution are alternative energy sources and carbon taxes. The only question now is if the talk at the congress will be translated into action.

Service sector expands in February

http://www.usatoday.com/story/money/business/2013/03/05/ism-services-index-february/1964369/

"The service sector if the economy grew in February at the fastest pace in a year, buoyed by higher sales and orders."  The service sector increasing is very good for the economy because the service sector is the largest part of the consumption portion of our GDP.  When more people are consuming goods and services in the largest portion, then there is going to be an influx of money and jobs into the economy.  The government will not release the February employment report until Friday, but when they do, I believe that the unemployment rate will have decreased from the previous month because of this increase in the service sector.

Billionaires Dumping Stocks

http://www.moneynews.com/Outbrain/billionaires-dump-economist-stock/2012/08/29/id/450265?PROMO_CODE=FE8A-1

Very well respected investors, not to mention billionaires, have been selling off large percentages of their stock holdings despite all of the recent news of the DOW closing at record highs. Warren Buffett, John Paulson, and George Soros have been dumping most of their stock in companies that rely on consumer spending patterns. As we all know, 70% of the U.S. economy depends on consumption. If these billionaires are losing faith in our consumer spending habits and that they will fall dramatically, our economy is going to be in big trouble. Many people think the economy is just getting back to normal with real estate values actually growing in some regions, unemployment seems to have stabilized, etc. However, new research shows that the recklessness of the FED regarding their strategies for excessive money printing will eventually reach the stock market, and when it does, inflation will sore to heights most people living today have never seen. Treasury bonds will lose all value, interest rates will increase dramatically, and real estate values will collapse. In response, the U.S. stock market will completely breakdown. Although this is a worst-case scenario, it should not be ignored. In return, U.S. companies will start to spend more money on borrowing than on expansion, which means more layoffs and less profit. No one wants to hold stock in a company like that, which is why respected investors are dumping stock.

Dow Jones and FTSE climb to new highs

http://www.bbc.co.uk/news/business-21621048

The Dow Jones industrial average reached record highs today, achieving a key level in its recovery from the 2008 financial meltdown. Since the last record of 14,164 in October, 2007, the housing market collapsed, the economy has stumbled through years of slow growth and high unemployment, and the country has experienced the worst financial crisis since the Great Depression. The national debt has also increased dramatically from that point on, from $9.4 trillion to $16.6 trillion.

As of now, the housing market is improving and vehicle sales are generally increasing too. However, having a soft global economy and a substantial level of government austerity will not help, so the strong recovery that was once foreseen is hardly likely to happen, at least in the short run. 

The Business of the Minimum Wage

http://www.nytimes.com/2013/03/03/business/the-minimum-wage-employment-and-income-distribution.html?smid=re-share&_r=0

Obama has recently proposed a raise in the minimum wage to $9 an hour.  While this was very popular among the general public, many economists thought otherwise.  The reason why a raise in the minimum wage is not a good idea is because this will only increase unemployment, which is one of the fights we are fighting right now as an economy.  If companies have to increase their wages, then they are going to higher fewer people and possibly let go of some employees to contemplate the higher expenses.  Statistics have also shown that over half of all employees working the minimum wage are people coming from a family with an income of $40,000 or more.  So this increasing of the minimum wage would not make as large of an impact on the people below the poverty line as the general public may have thought.

Joe Flacco's New Contract

This article might be a bit stretched for economics, but it deals with money at the very least. Last week, Baltimore Ravens QB Joe Flacco signed a deal which made him the NFL's all-time highest-paid player. The new contract--worth $120.6 million with $52 million guaranteed--is the largest in NFL history.

With the deal, Flacco will earn more than the likes of Lionel Messi and LeBron James; only Alex Rodriguez of the New York Yankees will make more money. When asked about the contract, Flacco said, “It was never about earning the money and all that. It was about earning the respect."

Sports are an interesting industry because they are, in essence, funded by fans. Really, its the several-thousand fans who fill up Baltimore's stadium each Sunday who are footing the bill for Flacco. So I wonder: while playing in Baltimore, a city loved by Flacco, where he is respected, is it really not about the money?

http://www.washingtonpost.com/blogs/early-lead/wp/2013/03/04/joe-flacco-says-new-contract-was-about-respect-not-money/

Latvia applies to enter eurozone

This article talks about Latvia possibly becoming the 18th member of the European union after they formally applied to join the euro in 2014. This move had been anticipated and it came after Latvia met the required financial criteria. The country also states that it has met the five requirements to gain entry into the euro zone , which include levels of debt, deficit, inflation, long-term interest rates and having a stable peg to the euro. The decision on whether or not their request would be accepted would be decided in June by the European Commission and the European Central Bank

The country did suffer a deep recession in the financial crisis but recovered from it as it received an international bailout and also the huge spending cuts which were put in place by the Prime Minister Valdis Dombrovskis.Now Latvia is one of the fast growing economies in the EU. This move is met with a lot of opposition as many don't want a single currency.

http://www.bbc.co.uk/news/business-21656254 

Groupon boss leaves abruptly

http://www.economist.com/blogs/schumpeter/2013/03/groupon-fires-its-boss

Groupon, a coupon company where people can claim amazing offers just fired its CEO the other day. For the past few quarters they have fell short of expectations leading for stock prices to drop to a quarter of what they should be listed for. The surprising part for the company was the bluntness that the former CEO had he was a person who just flat out said he was fired for not doing his job correctly. Its refreshing to see a person take responsibility for his actions and be reprimanded for it.