Polaroid Cameras and Art

Photography are probably one of the best things to happen in the world of art. A single photograph can speak a thousand words, have a thousand painting hidden within it, a thousand pieces of music captured in a single slice of frame. Polaroid made it really easy for artists of every kind to capture the beauty of everyday life, and this article talks about their course over the past decades, from its rise in the 70s to its fall in 2001; and it concludes by talking about the future for this company and the photography industry in general. An interesting read. 

Real Madrid overtakes Man Utd in Forbes rich list

This article talks about Spanish football giants Real Madrid who have overtaken Manchester United as the worlds most valuable football club. This the first time since 2004 that the English giants have lost top spot.

Real Madrid FC  have constantly been generating the highest revenues in the world of soccer . Even though one might think that the European crisis might have had affect on sales of football matches. According to Forbes , Real Madrid FC currently is valued at $3.3bn , Manchester united now at $3.17bn and Barcelona FC at third with $2.6 billion. This success could be linked with having a star studded team like Cristiano Ronaldo , Kareem Benzema and Kaka on the pitch and Jose Mourinho on the bench.

http://www.bbc.co.uk/news/business-22193398

Low-interest-rate environment exposes seniors to fraudsters

http://www.washingtonpost.com/business/economy/low-interest-rate-environment-expose-seniors-to-fraudsters/2013/04/18/63d065dc-9c77-11e2-a941-a19bce7af755_story.html

There are always people in the world that will scam you into taking your money. There are more privacy and protection methods to protect your money and investments nowadays but there is an upward rise in scams on senior citizens. Government regulators and advocacy groups say unscrupulous dealers are taking advantage of a growing fear among seniors that they will run out of money in their final years of life. The FED dropped interest rates in 2008 in efforts to stimulate the economy however this meant a sharp drop in income for seniors. Because of many scams seniors have become more reluctant to hold onto their money instead of investing it. But monetary policy is all about the trade-offs. 

Gold no-longer shining

http://www.businessweek.com/articles/2013-04-15/the-price-of-gold-is-crashing-dot-heres-why#r=read

This article discusses the crumbling price of gold. It says that the most important factor for this plunge is   the falling global inflation rate, which is a problem because many investors hedge the value of gold against rising inflation. JPMorgan has backed the forecast that inflation will continue to fall.

The investors who hedged gold are scrambling to get a decent return on their investment.

Naked ambition

http://www.economist.com/news/international/21576366-iceland-determined-outlaw-worlds-oldest-business-can-it-succeed-naked-ambition

This article talks about how Iceland is trying to ban pornography and the steps it has already taken, like banning strip-clubs and prostitution.There are certain benefits to this like the police claims that law would be easier to enforce if such activities are totally banned. I think its a controversial issue but it will probably lead to expansion of black market operations in Iceland.

McDonald's sees fall in global sales

This article talks about a global fall in Mc Donalds sales in the first quarter. The fall in sales was directed towards a harsh winter in the states and the UK. Increasing competition from Taco Bell, Kentucky Fried Chicken and Pizza Hut was also seen as a major factor for these fall in sales. The worlds largest restaurant chain also expect sales to drop in April. The company blamed the ongoing economic uncertainty for the fall of sales in Europe.

http://www.bbc.co.uk/news/business-22212564

MIT shooting triggers massive police operation in Boston

At the moment, Boston police are on a manhunt for one of the suspects in connection with the marathon bombing. The other suspect was killed late Thursday evening after robbing a 7-11 and fleeing from the police. The neighborhood is on lockdown with an 18 block perimeter set. Police officials have been going door to door searching through homes for the remaining suspect. Boston police commissioner issued this statement: "We believe this to be a terrorist. We believe this is a man who came here to kill people. We need to get him in custody." 

Mother Russia Feeling the Heat

Russia has not been in the news too recently with regards to the economic crisis in Europe, but might now be facing their own problem. According to this article, they could be dipping into a possible recession if growth does not pick up in the remainder of 2013.

Putin's economic aide is '"opposed to heating up the economic growth by acceleration of inflation."' She feels the central bank, Bank Rossii, should focus more on economic growth trends. As well, she would like to implement monetary and credit policy to stimulate the economy.

In my own personal opinion, I feel some of the Cypriot crisis held a factor in contributing to this mess. This could be fixed by using reserves to buy other currency and start remaking profits. As well, taking money out of small islands, like Cyprus, could help their cause in the future. 

What is your take on the matter and what could be a possible solution?

Risk and Return

So, we have heard all of these reports in the news of North Korea showing off their missiles and making threats. However, as bad as this sounds, there has been some good. Due to this new "security breech," defense stocks have hit a high point during this time.

Now would not be the time to buy and take the one or two week gain since they have devalued and are at a true weight now. But, the real question is could now be a good time to buy and hold over the next few months to a year.

There seem to be more and more threats hitting our country which is speculated to then increase the need for weapons technology. Firms like Lockheed Martin (LMT) specialize in the creation and manufacturing high-tech weapons. Their factories and innovation labs could be swamped for the next few months.

What are your thoughts on the defense stock market?

South African Stagflation

http://www.bbc.co.uk/news/business-22180851

South African has started a period of stagflation in which the economic growth is slower than the rate of inflation.  These exact numbers being economic growth expected to be at 2.8% and the inflation rate at 5.9%.  This period of stagflation is due mostly to the Eurozone's slow down in importing the goods and South Africa being one of their main exports has felt this slow down.  This stagflation can be dangerous if it continues to long hopefully South Africa's central bank can figure out how to fix this problem for the continent's biggest and fastest growing economy.  The future is bright for South Africa and sub-Saharan Africa as a whole which is purposed to outpace the gobal average of growth for the next three years, hopefully this period of stagflation doesn't taint South Africa's bright future.

BMW to assemble Mini cars in India

This article talks about BMW who are set to begin building mini countryman models in India . This move shows the confidence that the German car manufacture as in India's emerging car market. Car sales have gone up in the country which has attracted attention of many major car brands.

India has a 100 % import duty on importing fully built cars .This move would save BMW a lot of import duties which it faces. BMW started selling minis in 2012 and have already sold a total of 300 cars. This move surely suggest that the market is demanding these luxury brands , even though latest figures have showed a slowdown in the market.

http://www.bbc.co.uk/news/business-22184453

Intel's profit drops by 25%

http://www.nytimes.com/2013/04/17/technology/intel-profits-fall-as-pc-slump-cuts-demand-for-chips.html

Intel's quarterly profit has fallen by 25%. It went from $2.74 billion to $2.05 billion. Intel mainly deals in PC chips and due to the recent rise of smartphone and tablet usage, the sales of PCs have fallen significantly.
Intel's CEO is retiring in May and is unsure of Intel's ability to compete across the computer market.
However, the company is still banking on the success of their new generation chips for hybrid and tablet computers.

The lucrative business of cigarette smuggling

http://money.cnn.com/2013/04/16/news/economy/cigarette-smuggling/index.html?iid=SF_E_Lead


Obama's increasingly high taxes on cigarettes is making the business of smuggling them illegally between state lines even more lucrative. If one were to smuggle a truckload of cigarettes (thats 800 cases, each holding 600 packs of cigarettes) then that person could make up to $1,944,000. The profit margin is to be made in the disproportional price differences between states such as Virginia that have low cigarette taxes/prices and states like New York that have high Cigarette taxes/prices. In 2011, more than 60% of all cigarettes sold in New York were smuggled illegally. It't not just New York either; there are 15 other states where that percentage tops 20%.

IMF lowers UK growth forecast for 2013 again

This article talks about the IMF lowering UK's growth forecast for the year 2013 again to 0.7% from 1% which was said last month. It also said that the world growth rate would happen at a 3.3% from 3.5%. It also said that the UK economy is progressing slowly. The economic weakness due to the lack of lending and the ongoing fiscal consolidation have lead to these cuts.

The IMF's world economic outlook report also cut the euro zones growth from 1.2% to 0.3% which is a large cut. Germany which is the strongest euro zone economy is expected to grow at 0.6% rate while the french economy is said to shrink by 0.1%. The lack of consumer and business confidence ,  high unemployment levels are leading causes for this slowdown in growth. Out of all the developed economies Japan was the only one to come with some good predictions from the IMF. Japan is going to see growth in this year and the year ahead by 1.4% and 1.6% respectively. Growth in developed economies would remain bumpy and not so bumpy for developing economies.

 http://www.bbc.co.uk/news/business-22164028

Cutting Social Security using a chained CPI

           As a part of negotiations to reduce the budget deficit, President Obama has released a new tax plan that aims to cut social security spending by using a new formula for calculating benefits. This new formula uses a chained CPI. The chained CPI reduces benefits for  senior citizens and other social security dependents by reducing the substitution bias currently included in the calculation of social security payments. Opponents to the new policy say that a reduction in benefits would lower the standard of living drastically for those who require social security to make ends meet.
          The government has not issued a formal response to this plan but it seems like it will not gain strong support in congress because it is strongly opposed by the president's democratic base. The republicans who are all out for small government might also face opposition in passing this bill due to strong opposition from their constituents. Also based on discussions from Public Finance with Dr. Gitter, if the government wants to reduce the budget deficit this is one of the options it has in doing this. However, this measure is not politically popular and if it goes through, the government would have to ensure that those who depend on Social security get alternatives. This can be done by policies designed to improve the savings rate and to ensure that families have adequate retirement savings, and policies ensuring that employers pay out adequate amounts into retirement accounts and provide prudent advice to their employees to ensure that their retirement accounts are relatively safe and adequate for their retirement life.


http://www.huffingtonpost.com/2013/04/10/elizabeth-warren-social-security_n_3053355.html?1365613267&utm_hp_ref=politics

http://www.huffingtonpost.com/rep-keith-ellison/why-cutting-social-securi_b_3084891.html?utm_hp_ref=business&ir=Business

UK construction output remains weak

http://www.bbc.co.uk/news/business-22120451

The UK has attempted for several months to improve their economic standing but through the construction industry, the future seems bleak. They've repeatedly tried to decrease unemployment through the construction sector but have failed to do so. The latest unemployment figures show that, despite a drop in the number of people out of work, many people are still looking for a job in the UK, like most countries these days. But what's surprising is that there are hundreds of thousands of job vacancies within the building industry at the same time! 

Firms count damage done by March cold weather

This article talks about a decline in business activity because of the exceptional cold weather in the UK. According to the BRC ( British Retail Consortium ) there was a decline of walk ins by 5.2% when compared to last year. This lead to a £174m losses for small business.

The areas which took the highest hits were the Eastern Midlands down by 8.1% and south west of England by 7%. While other reports have also suggested that the sales figures had increased about 1.9 % in march. This shows that people did actually go out and purchase goods. An accountancy group Ernst & Young have stated that the UK economy would expand by 0.6% this year. it also stated that because of the recent euro zone crisis, UK's exports would remain weak.

http://www.bbc.co.uk/news/business-22121894 

A Water Crisis Threatens Ghana's Economic Growth

http://www.businessweek.com/articles/2013-04-11/a-water-crisis-threatens-ghanas-economic-growth#r=glo-s

Ghana is a country with a lot of economic potential, with a very large workforce among other things. However the water situation in the country is greatly holding them back. Many places do not have access to water, and when they do it is often unreliable. The main supplier of water in the country is from a organization called Ghana water. Recently they have been plagued with faulty equipment, which has caused even more shortages. Many companies must buy water from outside places and get it shipped in by the truckload. To do so, companies are often paying eleven times more than they would if they bought there Ghana Water. Currently there is not solution in sight for this major problem, but until something is done, Ghana will not be able to produce at their potential. (Level of technology too low.)

Low numbers in March, but job market still strong

http://www.aljazeera.com/news/americas/2013/04/20134514471878168.html

                Only 88,000 jobs were added in the month of March, one of weakest periods for the labor market in recent times. This number was a third of that of the month February where almost 268,000 new jobs were created. This does cause some concern for president Obama and his new treasury team due to the fact that marked the first time in almost 30 months that numbers were this low. On average in the past 12 months there have been about 169,000 jobs added each month. However this wasn’t entirely un-expected, there were some hints that this would indeed happen due to some of the budget cuts going into effect.

                I personally do not believe that these numbers are much cause for concern. Yea they are low compared to recent months and it doesn’t look good, but things like this happen and the labor market will recover. With the housing sector growing bigger and bigger each day as well as adding more jobs through construction I see this as a slight bump in the road.

U.S. warns Japan over currency

http://www.marketwatch.com/story/us-again-says-china-not-a-currency-manipulator-2013-04-12

The U.S. Treasury on Friday warned Japan not to actively weaken its currency as it again refrained from naming China a manipulator. In its twice-a-year assessment of whether any nation is a currency manipulator, Treasury said it will “closely monitor” Japan’s policies and the extent to which they support the growth of domestic demand. The new Shinzo Abe administration has pushed for aggressive bond-buying at the Bank of Japan, and the yen -0.18%  has dropped 13% against the dollar this year. The Japanese currency rose in Friday afternoon trade after the report was released. 

Hopefully this is a sign that the Japanese will continue to strengthen their currency, despite other foreign pressures.

Economic Report Archives | Email alerts

April 15, 2013, 12:08 a.m. EDT

China economic data disappoint, slamming stocks

 http://www.marketwatch.com/story/china-economic-data-disappoint-slamming-stocks-2013-04-14

Chinese economic data released Monday, including first-quarter growth, came in weaker than expected, sending stocks lower across Asia, even as some analysts predicted a better numbers ahead. Gross domestic product for the January-March quarter rose 7.7% from a year earlier, the National Bureau of Statistics said, weakening from 7.9% growth in the fourth quarter, and missing projections for 8% growth in separate surveys from Dow Jones Newswires and Reuters. 

March retail sales rose 12.6%, improving from 12.3% year-on-year growth in the January-February period, but far less than the 15.2% gain in December. Results for urban fixed-asset investment (FAI) — a gauge of construction and infrastructure spending also showed slower growth. Reported on a year-to-date basis, FAI rose 20.9% in January-March from the comparable year-earlier period, down from 21.2% in January-February alone. Still, for all of 2012, FAI gained 20.6%, suggesting an uptick in recent construction activity.

Seniors may see Social Security cuts

Obama has proposed to calculate current cost of living prices using chain weighted CPI, which grows at a slower rate than inflation. Although only a small decrease the first year, basing the costs off of chain weighted CPI could have seniors losing thousands of dollars in the coming years. Social security makes up at least 90% of income for one-third of recipients, so these changes can lead to serious problems. If Obama's proposal passes, some social security recipients are thinking of going back to work, asking family members for support, and getting rid of their cars. Seniors are upset because Obama is going back on his promise to seniors not to touch social security. Many don't realize how little social security recipients actually get. The average monthly check is $1,262 for all seniors, which is close to nothing. This is a critical proposition from Obama in the lives of seniors.

http://money.cnn.com/2013/04/11/news/economy/social-security-chained-cpi/index.html?iid=SF_E_River

Too Big to Fail a thing of the past?

http://finance.yahoo.com/news/bank-regulators-gain-ground-against-054431339.html

I found this article relevant to the class because we recently discussed spending multipliers and how banks affect them. In my opinion, this is an interesting story because regulators are trying to convince banks they should not depend on a rescue plan, or "bailout", if they run into trouble again. On one hand, it's great to see more accountability, but it could also be dangerous if the failure of multiple big banks leads to a drastic reduction of the money multiplier.

Obama calls for cigarette tax hike of 94 cents a pack

http://money.cnn.com/2013/04/10/news/economy/cigarette-tax/index.html?iid=SF_E_River

President Obama's call for a 94-cent-a-pack hike on federal cigarette taxes to fund early childhood education programs is controversial. The tax is being presented as way to fund education and reduce smoking rates. It would raise roughly $78 billion over 10 years.   The proposed tax would be beneficial for all health wise and for the economy. Raising taxes on tobacco problems would reduce the use of the products and overall be beneficial for the health of all of us. With the increase in taxes on tobacco products could come a longer rate on life expectancy and overall health. Could this tax be beneficial or will this hurt our economy with the cut back of buying tobacco products. We will find out soon enough in the months to come. 

Jackie Robinson And The Bad Economics Of Baseball Movies

http://www.forbes.com/sites/dorothypomerantz/2013/04/14/jackie-robinson-and-the-economics-of-baseball-movies/

This topic interested me as I am a baseball player and I went to see 42 and thought it was a great movie. Baseball being a slowly declining sport should be seen as America's Pastime. A story like in 42 should show how far America has come and the numbers may not have been too high but it should be a well known movie as it has a great story line and teaches a great story of American history and the American Dream.

http://www.businessinsider.com/nomura-the-stage-is-set-for-an-economic-slowdown-2013-4

This article deals with responses to our policy in the government and they expected consumer spending to fall but it did not. According to this article it should fall soon but it is something that will only be seen in the upcoming years and it will definitely be followed as it can affect our country.

The Terrifying Reality of Long-Term Unemployment

The Terrifying Reality of Long-Term Unemployment

This article uncovers the dangerous effects of long-term unemployment, or people who have been out of work for more than 6 months. It goes on to say that, according to the Beveridge curve, job openings and unemployment should have a stable relationship. This happens if the structure isn't broken, and we are currently seeing this in all sectors of the unemployment, except for those that have been unemployed for more than six months. This is a sign of structural unemployment and something needs to be done about it. This shows that job training will not be able to fix this, and that companies value people who have kept up with their skills. The article suggests some solutions, the best one being that the government needs to take it upon themselves to hire those who have been out of work for long periods of time. This is a problem that needs dealt with or else this could permanently effect our production. 

As the economy continues to recover a recent slow down had been occurring.  Last quarter the U.S grew by 3%, the upcoming quarters are expected a growth of half that.  Jobs are growing at a slower rate then the previous 200,000 a month.  Consumer spending has also been low compared to previous months.  Despite of the economic problems occurring the stock market is continuing to rise.  All signs should point to a decline in the stock market but contrary to estimation it is steadily growing.  The biggest American companies will likely continue to produce good times.  There is no telling exactly which way the economy will continue to move, only time will tell.

http://www.nytimes.com/2013/04/15/business/economy/in-divided-market-the-bigger-the-companies-the-better-they-fare.html?pagewanted=1&ref=economy

Unemployment Down

http://money.cnn.com/2013/04/11/news/economy/unemployment-benefits/index.html?iid=SF_E_River

 

This article analyzes the current fluctuations in unemployment. This past week, 346,000 people filed initial claims for unemployment benefits. However, this is down from the 388,000 people filing initial claims the week before. The data is adjusted to account for seasonal trends, but numbers are often choppy in March and April because of the Easter holiday and spring breaks. When the data is smoothed out, numbers show that new claims have averaged around 358,000 over  the past four weeks. This level is consistent with weekly claims in late 2007 and early 2008 before the worst of the recession. The article also states that layoffs are back to pre-recession levels. Although this may seem like good news, it may not be enough to bring the unemployment rate down from its current level of 7.6%.

Firms enjoy the Drug War?

This is an interesting article giving a view point that I had not really thought of. In my mind the black market and the actual market were two separate entities, but after reading this article perhaps they are more intertwined than I had thought. In the article they claim that corporate entities get a portion of the money from  the anti-drug programs, so they are basically saying that even the drug war is a root of capitalism for these firms.

Europe to Face Washington Disbelief With Economic Progress Claim

http://www.bloomberg.com/news/2013-04-14/europe-to-face-washington-disbelief-with-economic-progress-claim.html

The United States have been openly displeased with Europe's efforts to speed up the recovery and jump start its economy. At the meeting of the group of 20 finance ministers, president of ECB will face some serious disbelief. Whats concerning is that Europe's own forecast has been equally discouraging, with euro-zone economy shrinking 0.3 percent in 2013. In defense to its growth Europe's officials had to adjust its policies and strengthen certain parts of economy, which have often been met with a lot of resistance from the governments and people. It will be interesting to hear Mario Draghi's testimony in European Parliament and whether he has some new prescriptions to treat Europe's weak economy.

Bitcoin and the Nature of Money

http://www.washingtonpost.com/business/a-primer-on-bitcoin-economics-internets-gold-standard-prone-to-wild-price-swings/2013/04/11/28b38a6a-a25d-11e2-bd52-614156372695_story.html

This article discusses the virtual currency phenomenon known as Bitcoin. It is a virtual currency created to be nigh immune to counterfeiting. In addition, it was created to be free of any and all government currencies. It as a slowly increasing supply, which is governed by algorithms, and has a maximum supply which it can reach (the supply grows more and more slowly over time). By the year 2032, 99% of this maximum supply will have been achieved. A currency of this form offers us an interesting opportunity to observe the functioning of a market such as this.

As can be expected, the price of Bitcoins is extremely volatile and spikes and crashes on a regular basis - which makes it a fairly poor store of value. In addition, due to the fixed nature of the supply - there is no way to stabilize the currency leading to large deflation and inflation with little predictability. The argument against the Bitcoin currency is the same argument that applies against implementing a gold standard and presents some support to the idea that policy should be active. In the end, money exists to facilitate transactions and raise standards of living in the economy while acting as a store of value - something that Bitcoin does not do very well.

Unions and Globalization

The importance and influence of labor Unions has been demonstrated throughout the past but in more recent years their significance has started to fluctuate and, in many areas, decline. The article demonstrates how in the largest developed economies of the world (the richer nations part of the OECD) such as the United States, Britain, Japan, Germany, and France have seen a considerable decrease in Union membership over the past years. Since 1980, the unions' share of workforce has dropped steadily to half its level. It is definitely no coincidence that the countries most exposed to globalisation are the ones seeing this decline in the significance of Unions as more work is being outsourced. The article demonstrates how data from the 1980s and 1990s, and more recent research in Germany, show a correlation between foreign direct investment, outsourcing and lower union-wage premiums. However, there do seem to some exceptions where Unions are thriving. This is happening particularly in Scandinavian countries. The model for these Unions is said to be less confrontational and more concerned with the competitiveness of the industry. The article does an excellent job of analyzing the different international trade patterns associated with labor Unions in todays extremely globalized economies.

http://www.economist.com/news/international/21575752-unions-are-trouble-some-are-learning-new-tricksfrom-bosses-unions-inc

Japan Getting Calls From U.S. to Europe Not to Drive Down Yen

http://www.bloomberg.com/news/2013-04-14/japan-hearing-calls-from-u-s-to-europe-not-to-drive-down-yen.html

The U.S. and Europe are  not happy with Japan's effort to create devaluation in order to defeat deflation. The U.S. officials endorsed Japan's recovery efforts but have voiced their concerns with Japanese officials targeting weaker yen. Bank of Japan's governor stated that central bank did everything possible to defeat deflation. Similar measures have been taken by the central banks in Europe and the United States and therefore and proved to be successful in achieving the goalsset by Japan.

The Hottest Frontier

http://www.economist.com/news/finance-and-economics/21575769-strategies-putting-money-work-fast-growing-continent-hottest

This article talks about Africa and how people should start creating strategies for putting money to work in the fast-growing continent. Africa’s equity markets are hot, with investors attracted by the sub-Saharan region’s GDP growth rate of more than 5% over the past three years. The main markets in Nigeria and Kenya have risen by more than 50% in the past year. Africa is short of savings and capital. That creates an opening for rich-world investors seeking a better return than is available at home. North Africa, tied to Mediterranean trade, is fairly well developed and is seen by some as a separate investment proposition. So is South Africa, the continent’s biggest economy, which has a slower growth rate than most of its neighbors and more mature consumer and financial industries. The big excitement though is in the frontier markets of sub Saharan Africa. It defiantly feels as if there is a lot more to gain than to lose.

Spanish semi-final tickets twice the price of German ones

http://www.marca.com/2013/04/12/en/football/international_football/1365792372.html

If you are interested in soccer and Champions League, you probably know that both semi finals involve one German team and one Spanish team. We all know that Germany is the strongest economy in the Eurozone, and Spain is one of the weaker ones. The cheapest ticket for Barca - Munich in Barcelona is for 91 Euros and the most expensive one is for 360 Euros, while in Munich leg prices range from 45 euros to 150 euros.

Tickets for the Real Madrid - Dortmund clash are similar, with prices ranging from 70 euros to 325 euros in Madrid and from 45 euros to 170 euros in Dortmund.

I am sure these differences in prices are to do with the on going crisis in Spain.

Intel seeing their market share decreasing

http://www.nytimes.com/2013/04/15/technology/intel-tries-to-find-a-foothold-beyond-pcs.html?pagewanted=2&_r=0&ref=business

This article is about how Intel is having a tough time adjusting to the PC market being in a downturn. With people going more towards Tablets and smartphones, many PC companies ares seeing their profits diminish each year. Intel is the leading provider for chips for these companies and as the computer companies struggle they are losing their profits as well. Many companies are going away from them as well to have new companies make their products they need. Intel needs to make sure that they can get back into the market soon or else they will be as irrelevant as the CD industry.

China Pumping the Brakes

http://www.reuters.com/article/2013/04/14/us-china-economy-idUSBRE93D0BX20130414

As the world's second-biggest economy, China has undergone unprecedented growth in the last decade. This quarter, expected growth has exceeded expectations and concerns about inflation have risen. China's population of 1.3 billion remains overwhelmingly poor, and inflation often makes basic necessities unaffordable. For the China's communist government, as far as economic concerns go, inflation has to be a top priority. Tighter monetary policy is set to slow the growth rate in the next quarter. It's scary to think that one of the fastest-growing economies in the world is continuing to gain momentum.

Monetary Policy: The Mystery of Stable Prices

http://www.economist.com/blogs/freeexchange/2013/04/monetary-policy-1

This article brings to light how an increase in the unemployment rate normally goes along with deflation. It asks why this has not happended with our current and most recent rise in unemployment. Of course it answers that central banks prevented that from happening, but then the question, "Then why is there so much unemployment?" was posed.

The article says the central banks' credibility is an extremely important factor. In the 1980s, when it handled the inflation well and "adopted low targets for it, they firmly anchored beliefs about future growth in prices and wages." This credibility is "self-fulfilling." As workers expect a rise in prices, they tend to, just slowly, not push as hard for higher wages. Firms kept prices and costs down. This also helped prevent deflation when the crisis happened.

"As inflation has become more anchored, its links with other economic indicators have weakened... the IMF shows that changes in unemployment now influence inflation much less than in the past."

As for business cycles, central banks used to a high correlation between inflation and unemployment will underestimate the effect of economic shocks. The article then poses the question: Has the link between inflation and unemployment broken down or merely changed?
-"Stabilisation of inflation may actually imply a shift in economic volatility to other variables... But stable inflation may also help translate variations in demand into quantity shifts rather than price shifts. "

It concludes:
"Central banks must either raise their inflation targets to reduce the extent to which demand shifts generate large real losses, or they must adopt and stabilise a new measure of demand, since inflation is obviously no longer adequate."

They offer the alternative of using nominal GDP. I agree that adopting nominal GDP would be a practical change that may be needed, but how well would we do if we changed from our common ways to something new? I think it would need some fine tuning. Would the choice be smart/worth it? What would come of it?

6 companies cashing in on Obamacare

 http://money.cnn.com/gallery/smallbusiness/2013/03/27/obamacare-startups/index.html

People would get sick and then leave the hospital but then moments later they would come back sick again right away.  These cost were not cheap and quickly added up for the hospital.  There were penalties that were involved for situations like this since cost were being paid through Medicare so the penalties kicked in late last year, and those little 1% slices add up fast. "If a hospital gets $300 million a year in Medicare payments, that's $3 million," says Sandeep Pulim, a co-founder and chief medical officer of Health Recovery Solutions, a startup that aims to help hospitals cut their readmissions.  Hospitals began to educate their patients so that they would not have to come to the hospital as often and so that the patient can be smarter about their health.  They would have little clips and at the end of each session they would quiz them to make sure they know what was going on. This will help reduce cost for the hospital and save money for more important things other than for somebody getting sick from the flu and coming back every time for that.

Student Loan Debt

Student loan debt is quickly becoming a bigger burden for all those in the United States. The level of student loan debt has now exceeded the level of credit card debt. This is very alarming as tuition for most schools are only increasing and the debt level shows no signs of stopping. There aren't any good proposals for solutions to fix this problem either. One proposal was to get rid of the fixed rate but this can help and hurt people trying to pay their loans. In good times it would be beneficial but then become a burden when the rates rise. Having this high amount of debt will only hurt the economy as more people will most likely put their money towards paying off the loans rather than products and services. This problem effects people of all ages as well in that besides people in their 20s and 30s having to pay off loans, people in their 60s are also having to pay back loans. Americans over the age of 60 have an estimated $43 billion in student loan debt. This comes from student loans taken out later in lives and co-signing for family members, ultimately leading to their social security checks being garnished when they are unable to pay. As a student who will have to pay off student loans by myself, I am worried that by the time I graduate and after, they won't be able come up with a solution for this growing problem and that it will be a problem I will be dealing with for a long time to come.



http://www.huffingtonpost.com/steve-rhode/student-loan-debt-creates_b_3055347.html?utm_hp_ref=business

The Human Effects of Economics

According to Okun's Misery Index, which looks at the publics moods during different economic times, unemployment and inflation are considered to be equally important. Recently, a few economists have come out against this and have compiled studies to re-evaluate this measurement. They have found that unemployment is in fact four times more important to the average person than high inflation. This could change the way central banks shape monetary policy. Before, they use to set a target for inflation and would fight to maintain that target. With this new information, central banks may be more willing to take on extra inflation to fight unemployment.

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/04/12/which-makes-us-more-miserable-inflation-or-unemployment/

Baseball's Highest Paid-- On and Off the Field

http://www.forbes.com/sites/kurtbadenhausen/2013/03/27/baseballs-highest-paid-players-on-and-off-the-field-2/
The start of the 2013 baseball season had the leagues most stacked team struggling. The New York Yankees are the most prosperous team in the league however most of their highest money making players have yet to see the field. Despite his 2009 confession of using performance enhancing drugs, Alex Rodriguez is still the highest played player on the team. Even though he is starting off the 2013 season on the bench he still is getting payed $29.5 million for the season even if he doesn't set foot on the diamond the whole season. Derek Jeter, the face of the Yankees, is also on the disabled list and is still getting $26 million for the season, not to mention all of the millions he gets for endorsement deals.

Nike's Big Gay Ad Campaign

Article: http://www.businessweek.com/articles/2013-04-12/nikes-big-gay-marketing-coup#r=nav-f-story

Nike has always been a company that is willing to take an edgier marketing approach when it comes to the selection of their ads' topic. Their next topic they've considered is promoting homosexual athletes. Although this does promote gay rights, this in turn comes back and puts more money in their pockets. Younger people are a key demographic for Nike's athletic wear as well as bigger advocates for gay rights on average. By playing into their interests, these younger people will spend more of their (or their parents') money on Nike apparel because they feel that it promotes a cause feel deserves support.