Still Racing Ahead

http://www.economist.com/news/business/21573141-chinas-luxury-car-market-prizebut-not-local-firms-still-racing-ahead

This article discusses China's luxury car market and how it is not helping out local firms. This article shows that the market for such cars has grown 36% a year over the past decade. A new report from McKinsey, a consultancy, calculates that China is now the world’s second-largest market for “premium” cars. Also, it estimates that China will surpass America by 2020 to become the world’s biggest consumer. They believe the surge is due to private demand which will not benefit local firms.

Better colleges failing to lure poorer strivers.

This article states that many top colleges are not being sought after by lower income students.  Top students with higher incomes are far more likely to apply and attend selective colleges than top students with lower incomes.  There are many reasons for this occurrence but a main reason is that fact that lower income students believe that top selective schools are too expensive.  Many students are not aware of the financial aid available in selective collages.  Students take the more simple route and attend community colleges or universities that are close to home.  What is interesting is that top schools can actually be less costly with financial aid and scholarships than a state community college.  New court rulings may even cause colleges to take into account various socioeconomic measures.  Top low income students who attend a top college are far more likely to graduate then those who attend a community college.  Schools need to get out to a more wide range of students.  Students need to be informed that many schools offer aid and can be very beneficial toward them.


http://www.nytimes.com/2013/03/17/education/scholarly-poor-often-overlook-better-colleges.html?ref=economy

Gluten Free the Way to Be?

The article discusses why gluten free eating may be a fad and how much it is costing people to follow. At one point, the article said that there is a 242% difference in price between gluten free and regular foods and that 29% of Americans are trying to follow a gluten free way of life, when most of them have no reason to do so.

I actually had a personal connection to this article because last year, I went gluten free for Lent. It was a very hard thing to do because it required a lot of discipline and concentration on what I ate. I was doing it to test if I had a gluten allergy but at the same time I felt better and lighter on that diet. So I can understand why non-gluten allergic people follow a gluten diet. But I am interested in perhaps researching more on why the costs are what they are.

Billionaires Dumping Stocks and What is to Come

The article states that many billionaires who often work the stock market are now "cashing out" and leaving in preparation for either a huge correction in the stock market or in preparation for contractionary policies in businesses as there will be few dividends being issued. What may happen to the rest of the market as these expectations come into play remains to be seen. As we all know, expectations shape the market a lot. So it is possible that the lack of confidence may hurt more than help in the long run, but that's one girl's opinion.

Economy Rolls Along, Despite Cuts and Taxes

http://www.nytimes.com/2013/03/16/business/economy/consumer-inflation-jumps.html?ref=economy&_r=0

Even as Government spending has decreased and taxes have increased in the recent months, our economy is still experiencing healthy growth. The most surprising growth is the growth we are experiencing in the industrial sector as there was a 0.7 percent increase in the month of February. This is much more than the forecasted 0.4 percent increase. Such has surprised some economists enough to increase their first quarter growth predictions to around 3 percent.

            Although we have been experiencing healthy economic growth consumer confidence is very insecure. Because of this things such as eating out by Americans is not occurring often, and sales in the restaurant sector have decreased. This reduction is being made up for however in the retail market as sales have increased due to an increase in construction jobs and work going on.

            Unemployment has been the slowest rate to recover from the economic crisis. We should expect this to get better in the coming months.

Ethanol could be no more?

The days of promise and prosperity are dwindling for ethanol plants around the country. Once a thriving enterprise backed by government subsidies and mandates is now struggling to keep up with a decrease demand in gasoline thus a decreased demand for ethanol. Roughly 10 percent of the nations ethanol plants have stopped production in the last year. What was once a clever alternative to rising gas princes is now a failing industry.
Due to the recent drought it pushed commodity prices so high it made ethanol to expensive to produce. This paired with a dip in the production of gasoline have driven the ethanol market downward. This has left the ethanol world hanging in the balance. MAny barrels lay untouched in ethanol factories' warehouses because there is not enough gasoline to mix with the ethanol. This hurts two groups of people. It effects the people who live in the communities that were formed around the ethanol plants. With plants shutting down people lose their source of income as well as their sense of community. This also affects farmers who rely on ethanol as a secondary market for their crops.
The ethanol market has fallen from 9.7 million barrels production per year to 8.5 million barrels per year and there is no sign of slowing these receding numbers. Some cars run on flex fuel which is ethanol gasoline but the problem is the E85 gas is not offered everywhere and it is not much cheaper than regular gasoline. I have a feeling the future of ethanol will not be so bright. Especially with increasing alternatives to gasoline such as an increased production of electric cars. I believe ethanol is a dying market.

Consumer Spending in Britain

http://www.economist.com/news/britain/21573132-britains-squeezed-households-largely-explain-countrys-flatlining-economy-dropping-shopping

This article describes the current economic situation in Britain, and discusses the relationship between consumer spending and economic growth. It starts by pointing out that consumption is by far the largest component of GDP, accounting for 63% last year.  During the recession, consumption has declined due to the inflation rate rising faster than the wage rates. This causes real income to fall, and with less disposable income, consumption will fall as well. In addition, consumers are saving at a relatively high rate, meaning MPC is lower and they are spending less. Though some forecasters are predicting a growth spurt in the future, it is difficult to tell when this will happen.

Why are so many people leaving jobs?

People are quitting? In this economy?

A recent study by Accenture reports:

1) They don’t like their boss (31%),

2) A lack of empowerment (31%),

3) Internal politics (35%) and

4) Lack of recognition (43%)

I think enjoying the job you are working in now, and that you are going to be working in for some time, is one of the most important things to both your productivity and life happiness. It is still interesting to me that people are willingly leaving their jobs in an economy such as ours, where people are struggling to even find one job. Though I think one thing they omit in this article is that the people leaving this job have a great opportunity to find another because of their education (skill) and their previous work experience. 

Increased wedding bill in 2012.

http://money.cnn.com/2013/03/10/pf/wedding-cost/index.html?iid=HP_LN

According to an annual survey of 17,500 couples released by wedding website TheKnot.com, In 2012, newlyweds spent an average of $28,427 on weddings and related events — the highest amount since 2008.
The survey found out that couples spent more in all the categories, from the photographer and invites to the wedding DJ.  "Couples are a little bit more comfortable and able to splurge a little bit more," said site director Anja Winikka.
And at many weddings, a DJ or band was just not enough. Last year, 27% of weddings included additional entertainment -- such as a photo booth or caricature artist -- more than double the percentage who did so in 2011. 
According to Winikka, all those things, in today's world, is not a splurge, but a need.

China's Ecinomic Data Show Weakest Start Since 2009

China saw the weakest industrial output start to the year since 2009. New loal currency loans fell to 620 billion yuan in February, which is lower than the estimates, but exports increased 23.6 percent in the first two month of the year. There are positive signs of U.S. economic recovery which means that the demand for Chinese exports will continue to be high. Reliance on the U.S. economy is high and could help China in sustaining its GDP growth, but there are still significant internal problems. The growth in retail sales was below projections in January and February, and the efforts to crackdown on governmental corruption has revealed significant spending issues. Economists also show worry of higher inflation and government might have to put in place the policy to contain inflation in a short term.

Ending Deflation in Japan

http://www.economist.com/news/finance-and-economics/21573133-shinzo-abe-wakes-up-political-risk-higher-prices-without-higher

This article discusses the efforts of the Japanese government to reduce deflationary pressures in the country and for the central bank to meet its inflation target of 2%. However, for this to work appropriately, firms must raise the pay for their workers - something that has not happened in Japan recently. It is likely that firms will hold back on raises until they are confident that the growth in Japan is sustainable.

In addition, the government needs to be careful  that the required inflation be induced as demand-pull inflation as opposed to cost-push inflation. As the article notes, reflationary growth policies are popular to the public but not if their wages do not rise with prices soon enough.