U.S manufacturing Increase

With the increase in shale mining the U.S is seeing an increase in manufacturing. Shale mining itself is providing an increase in manufacturing through the need of pipelines and machinery for extraction. Cheap fuel has allowed for cost reductions for manufacturing industries and to better compete with the foreign imports. American manufacturing industries has seen a 17% increase and a 9.7% employment increase from 2011-2012.  The shale gas is credited for the lower production costs for feedstock and building materials. U.S is gaining a competitive advantage because of the cheaper energy and will gain more foreign buys for U.S products and help improve the trade balance. Employment is expected to increase 1% annually through 2020 in energy intensive manufacturing according to the IHS Global insight, while having three quarters of those jobs created in the United States.

Unemployment Rate Amongst U.S Veterans

The article discusses the unemployment rate changes amongst United States veterans since 2001.  One statistic that stands out is that about 9% of the 2.3 million American workers who served on active military duty at some point since September 2001 were unemployed in 2013.


http://blogs.wsj.com/economics/2014/03/20/unemployment-among-iraq-afghanistan-veterans-remains-elevated/?mod=WSJBlog&mod=marketbeat

The political consequences of authoritarian rule in economic activity

Alot of people tend to associate dictatorships with negative consequences in terms of a political spectrum. While it may be true that we live in the United States and democracy seems to work well for us when talking about long term economic growth, we must also realize that a dictator may not be such a bad idea economically. It may seem unfair to quote countries out of context, but perhaps we can take two countries very heavily influenced by dictators to maybe try and make sense of my theory. the first one is Libya and the very unpopular muhammadar Qaddafi. While Qaddafis rule was considered widely unpopular, the economic benefits within libya seemed  to suggest otherwise. the literacy rate was increasing, economic activity was increasing at a constant rate and libyans in general did well economically. However Libya alone doesnt stand as the only nation that did well in a dictatorship. Take for example Pakistan, under two seperate dictatorships,Ayub khans dictatorship is seen as the golden period of economic growth in Pakistan where economic activity was historically speaking taking a turn for the most positive gradient ever in the countries history. During general Musharaffs recent dictatorships, the economy yet again did better than democracies that both preceded it and followed up with it. What is it about dictatorships exactly that worked for these two countries? economic theories have suggested that perhaps the control of the countries economic resources (particular the monetary and fiscal policy) under one firm hand could prove wonders for a country that seems to be struggling. If all of this actually true,can an oppresive dictator mean golden economic activity ?

Teens face toughest job market on record

The percentage of teens with jobs in the year 2000 was at about 45%, and by 2011, this dropped to a mere 26%, the lowest it has been in the post WW2 era. States like California and Texas boast very low teen job rates, while on the other end of the spectrum, Provo, Utah has almost half of its teens currently employed. Though many of these teens are currently enrolled in school at the moment, many others say they would like jobs but just aren't looking for them. This report states that non-hispanic whites and young teens that come from higher income families are the most likely to have jobs. Blacks, young people from lower income families, and high school dropouts are the least likely to have jobs. The historic lows in job availability for young people is partially blamed on the education systems lack of preparing these students for having a job and going to school simultaneously.

http://money.cnn.com/2014/03/14/news/economy/youth-employment/index.html?iid=SF_E_River

Existing-home sales slowest since July 2012

http://www.marketwatch.com/story/existing-home-sales-slowest-since-july-2012-2014-03-20

This article talks about an unexpected argument for the reason why home sales are at the slowest selling times since 2012: weather. 

America is out of the recession of 2008 and home values are higher now than they were before the housing market bubble burst. however, seasonal fluctuations in the housing market have been exacerbated by the recent winters, particularly in the northeast. Banks are making it easier to obtain mortgages in order to continue to grow the economy, but some believe that the economy much worse than it actually is. Part of the reason is because the housing market has had an enormous comeback and housing prices are going up. However, the stagnation of middle class income families have hurt the market. 

Unemployment rates drop in 43 US states in January

http://www.washingtonpost.com/business/unemployment-rates-drop-in-43-us-states-in-january/2014/03/17/71dc7778-ade3-11e3-b8b3-44b1d1cd4c1f_story.html


President Obama announced January that he is going to raise the federal minimum wage for workers under new federal contracts from $7.25 an hour to $10.10. And according to the article published on Washingtonpost, the Unemployment rates fell in 43 U.S. states  in January. A substantially increasing number of people started looking for job and a majority of them found job quickly. It is said that twenty-three states had more hiring in January. "Harsh winter weather weighed on hiring nationwide, with employers adding just 129,000 jobs in January." Rhode Island had the highest unemployment rate of 9.2 percent because of housing bust while North Dakota had the lowest rate of 2.6 percent due to the benefit of oil. Texas had the largest gain, adding 16,700 positions, mostly in construction, education and health, and restaurants and hotels.

U.S. Quarterly Trade Deficit Was the Smallest in 14 Years

The Commerce Department on Wednesday announced that the United States exports and overseas investment have been profiting as a result the current deficit in the fourth quarter is at the lowest level in 14 years. “The imbalance fell to $81.1 billion in the October-December quarter, down from $96.4 billion in the July-September quarter, the Commerce Department said on Wednesday.”

American companies are producing goods that meets the demands of the American people and overseas. The goods exported increased to 1.9% to $405.4 billion due to the overseas higher sales on petroleum and agricultural product.  The current account deficit decrease to 1.9% and has been the lowest in the third quarter since 1997.

One of the reasons the United States have benefiting in decreasing the deficit is due to the American oil and gas. New drilling technologies have enabled or made it easy to drill in the states of North Dakota and Pennsylvania which decreased oil purchases abroad and strengthen American petroleum exports.

I like to think that someday we will bring our deficit close to zero, but I think this is a wishful thinking and even if it  does happens it won’t be in my life time. Nonetheless, this is great news to all the American people.

http://www.nytimes.com/2014/03/20/business/us-current-account-deficit-is-smallest-in-14-years.html?ref=business

The new age of crony capitalism

http://www.economist.com/news/leaders/21598996-political-connections-have-made-many-people-hugely-rich-recent-years-crony-capitalism-may

In this article from The Economist, crony capitalism in the modern era is discussed.  The article is optimistic about the future of capitalism world wide because the world has seemed to learn from the mistakes of years ago and is making progress toward implementing better policies.

Throughout history, there have been many examples of monopolies and industries that have thrived due to corruption. Much of this can be traced to ties with political officials who give certain people perks from their political resources. However, in modern times, we are seeing that countries realize the negative impact this can have. Aggressive anti-trust laws are showing up throughout the world which is making markets much more competitive and making society better off.

Hundreds of students occupy Taiwan's Legislature to protest China pact

In order to ease trade and investment, a trade pact was signed between China and Taiwan in Shanghai one year ago.  Officials have gathered for talks in Taiwan's Legislature to try and push the pact into action.  However many Taiwanese, most of whom are university students, gathered outside of the Legislature barricading the entrances.  Many Taiwanese feel that this pact will be extremely detrimental to the small island's economy.  Students even sang Bob Dylan songs because they felt that the situation is reminiscent of "the protest spirit of the 1960s."
It is agreeable that Taiwan should try to become more global and open up to the rest of the world. On the other hand, its economy is made up of many SMEs and small family businesses. If the pact were to be permanently established, this could and probably will benefit only large companies and leave the others grappling for their jobs.



http://www.cnn.com/2014/03/19/world/asia/taiwan-student-protests/index.html

Murky Path for the Fed as Yellen Takes Reins

The Fed is gradually ending the expansion of its bond holdings, one aspect of its economic stimulus campaign. It is widely expected to announce on Wednesday that it will add $55 billion in Treasury and mortgage-backed securities in April, down from $65 billion in March and $85 billion each month last year. Fed officials say they intend to end purchases in the fall unless the economic outlook changes sharply. Ultimately, the Fed believe that they have sufficiently stimulated the economy from increasing the supply of money, ending the bond holdings will reduce the money supply and in the long run the US dollar value will increase.

http://www.nytimes.com/2014/03/19/business/yellens-fed-will-sail-into-murkier-waters.html?ref=economy

Vietnam Looks to Promote Growth

http://www.bloomberg.com/news/2014-03-17/vietnam-to-cut-refinance-rate-to-6-5-from-7-to-support-growth.html

In order to reinvigorate Vietnam's economy, the Vietnamese government is implementing a series of fiscal changes. Specifically, the Vietnamese government is aiming to reduce the discount rate by 0.5%, reduce the repurchase rate by 0.5% and the refinancing rate by 0.5%. These changes will hopefully allow banks to offer lower lending rates in order to raise the rate of investment.

China’s official figures both understate and overstate inflation

The economy in China is starting to fall due to inflation rates.  This sounds nearly impossible since the central bank reported their GDP last year at 180% and other, third party, sources report as high as 215% increase in GDP.  Although GDP is extremely high, we can see that due to the prices of housing are slowing and exports are decreasing.  In addition, forecasters were inaccurate in saying that output would grow by 9.5% when in reality it has only grown by 8.6%.  The real problem, however, is the issue of inflation.  It was expected to have increased by approximately the same amount as previous years (3%), but it only increased by 2%.
Economists have analyzed this by comparing how much one spent in 2006 versus how much was in 2008.  The idea is to take figure how much someone would have in 2006 and convert that to 2008 dollars.  When economists went back to double check how the figures turned out, they learned that people were actually spending a higher percentage of income on food in 2008 than in 2006.  This means that those that were thought to have the same amount of money in 2008 (due to inflation), actually did not.  By going back and checking these figures, we learn that the inflation rates were off.  This is partly due to the fact that the cost of living increased faster than expected.
While inflation is only one part of the issue with China's economics, it is a crucial part as it seems the Chinese government lied about the inflation rates for no rational reason.  The first part, in my opinion, to fixing this economy is for the government and central bank to report accurate numbers so that economists can give solutions to these issues.

http://www.economist.com/news/finance-and-economics/21599051-chinas-official-figures-both-understate-and-overstate-inflation-alternative-view

Closing the gap: America’s labour market has suffered permanent harm

http://www.economist.com/news/finance-and-economics/21596529-americas-labour-market-has-suffered-permanent-harm-closing-gap

The job growth slowed down sharply in December and stayed weak through January. But the unemployment rate dropped from 7% to 6.6% in January since November. These numbers are showing how well America is recovering in recent years. According to recent researches, the unemployment rate is sending a message that America's labor supply does not grow anymore permanently, which means the economy is operating closer to its potential (using all the possible labors and capitals). The labor participation rate decreases from 66% in 2007 to 63%, because baby boomers are retiring early and people who had been unemployed for so long just gave up looking for jobs. This is one of the reason The Congressional Budget Office lowered American's potential estimation. And because of it, "the size of the output gap, which it now puts at a little over 4% of GDP. Has its estimates of the economy's potential not shrunk since 2008, that gap would be 10% of GDP". According to the article, "More monetary and fiscal stimulus may have saved them a few years ago, but are of much less help now." Because many people are tired of looking for jobs, when they quit or get fired, they would rather stay out of the labor force than re-entering. Finding ways to encourage people enter or re-enter the labor force  is one of the most important things that government and the Fed should take action right away.

How to Shave $1 Trillion Out of Health Care

In America we spend a lot of money on the service of health care.  In fact it is six percent more than other high-income industrial democracies.  Is this 1 Trillion dollar difference worth it for Americans?  We tend to pay more for a mix of procedures and services, along with higher prices to drug companies and physicians.  These countries that have a lower spending on health care have one thing in common, a universal insurance for basic care and more aggressive control of expenditures.  Because the private sector and the federal, state, and local governments split the cost of the health care bill, both sides would get 500 billion dollars. The governments could do many things with this money including; new and fixed roads, increase salary funding for schools, clean up for waste disposal and many more. In order to get these things we must give up a few also. We would have fewer visits to offices, fewer MRI and CT scans, less privacy, and longer waits.  Depending on how you look at it, the tradeoffs could benefit either side.   

http://economix.blogs.nytimes.com/2014/03/14/how-to-shave-1-trillion-out-of-health-care/?_php=true&_type=blogs&ref=economy&_r=0

Russia economy falls before Crimea vote

Stock in Russia have fallen by 2 percent looming on the upcoming Crimea vote.  Also The Ruble has fallen to an all time low of 36.7 to the American dollar.  This has all happened because of the vote on whether Crimea should become part of Russia or stay part of Ukraine.  The US and Europe has said this vote is illegal.  The threaten to put travel bans and freeze assets in Russia depending on the outcome of the vote.  33 Billion dollars have been taken away buy investors and that number could increase up to 55 Billion depending on the vote.  Russian economy is predicted to grow less the 1 percent in this year and may not even grow at all.  Last year it only grew 1.3 percent which was down from 3.4 percent in 2012.  All together it looks like this vote is killing the economy in Russia and with the spot light shining bright on the nation much more investors may put their money in different areas instead of the Russian economy. We will see how everything turns out after this highly debated vote.


http://money.cnn.com/2014/03/14/investing/russia-crimea-markets/index.html?iid=SF_BN_River

Number Of Millionaire Households In The U.S Hits New High

    There has been an increase in the number of millionaire households in the United States. These are people who have a recorded net worth of 1 million dollars or more. According to recent reports for the 2013 year 9.63 million Americans were classified into this bracket. This surpasses the pre-recession high of 9.2 million recorded in 2007. This is also a huge increase from 2008 where numbers fell to around 6.7 million. There is hope that these steady increases are signs of a brighter economic future for the US.  There has also been a significant increase in households with net worths of 5+ million and 25+ million. With new levels of wealth being obtained these are signs of households trusting markets and making new investments. This then correlates to a stronger/ healthier economy.




http://money.cnn.com/2014/03/14/news/economy/us-millionaires-households/index.html?iid=SF_E_River

After Mt Gox: Bitconned

http://www.economist.com/blogs/schumpeter/2014/03/after-mt-gox

This article is a reflection on the recent article from Schumpeter about the collapse of Mt Gox. Bitcoins have been a hot topic in the past year and its uses and (short) history have gained the currency a lot of criticism. Schumpeter’s article states that 744,400 Bitcoins are missing as a “result of ‘malleability-related theft’ that may have been going on since the exchange began operating” along with a software bug, which has been known since 2011, and many other technical problems related to the Bitcoin currency.

Japan’s thought to tax Bitcoin transactions and profits is interesting. Bitcoins were invented, in part, to avoid taxes and tariffs and so I would be curious to further analyze the possible effects of implementing taxes on the currency, when it is already in a delicate state. The rumors of a death possibly related to Bitcoins is scary, adding onto the dangerous incidents in the recent past relating to Bitcoins such as the trading website SilkRoad has been subject to.

I think the idea of an “outside of the system” currency, especially one online in today’s technological era, has a lot of potential to be resilient and have a lot of value, but it is obvious that the Mt Gox and Bitcoin system has not been sustainable and therefore must change.

Schumpeter article: http://www.economist.com/node/21597651

Dubai Rolls Over $20 Billion at Below National Inflation Rate

Dubai has recently refinanced 20 billion dollars in order in order to free cash and fund expansion plan. The sheikdom rolled over $10 billion of bonds to the central bank at 1%. The government also loaned $10 billion  at a rate of 1%. It will be interesting to see if this act will increase its credit. Dubai has seen a decrease in lending of late. The sheikdom is hoping that by refinancing their funds, they will have higher credit worthiness and also increase lending.

Crimea Votes to Secede From Ukraine as Russian Troops Keep Watch

Just today, as seen by the title of the article, Crimea has voted to secede from Ukraine at this time while Russia occupies there territory. This is against the advice of western powers and action will likely occur soon in response to this choice. What should the United States do about this situation? There are many options all with their own pros and cons, but it is hard to say what is right at this time as we do not want to aggravate tensions any more. http://www.nytimes.com/2014/03/17/world/europe/crimea-ukraine-secession-vote-referendum.html?hp&_r=0

Oil Imports Push U.S. Trade Deficit Higher

Link

The United State's trade deficit increased slightly in the month of January as imports and exports both increased 0.6%. Due to the fact that imports are already larger than exports, the same percentage increase leads to a larger quantitative increase in the import sector. The increase in the trade deficit tells us that U.S. companies are making less abroad compared to what foreign companies are making in the United States. This also means that the world interest rate is higher than the current interest rate in the U.S. market, leading to the increase in foreign investment. Though, the trade deficit is increasing, the rate at which it increases is beginning to decline. One major reason for this is the development of the domestic energy sector. The U.S. is having to import less resources and can increase its energy exports with the recent increase in domestic energy production.

Annual Change of the Inflation Basket in the UK

This talks about the annual reshuffle of the goods basket used to calculate the CPI and inflation in the UK. It gives an interesting look into how priorities and culture changes in society even over a period as short as one year. DVD recorders were dropped while online streaming sites such as Netflix were added, reflecting a change in technology and taste. The Office for National Statistics also changed the weights attached to each item to account for a change in the cost of living. Inflation in the UK as been below the targeted 2 percent, causing many to hope that the economy is on its way to recovery.

http://www.theguardian.com/business/2014/mar/13/inflation-basket-netflix-flavoured-milk-dvd

China Loones grip on Currency

http://money.cnn.com/2014/03/15/investing/china-currency/index.html?iid=H_E_News

The Chinese have alway kept s very tight hold on its net exports in order to keep its exchange rate to favorable yields. This has always resulted in the control of the range of fluctuation of the chines currency. However, this tight security on its currency has hurt it as it hasn’t been able to grow its economy to the extent that it can. China has alway talked about opening its economy and making everyone see that the Chinese want to be a currency that is susceptible to market fluctuations just as anyone else. Because China is known as a “safe bet” people constantly invest in China in some way thinking that it stands above the markets. China however is trying to establish that it has flaws just like any other countries. 

China Economy Fears Continue to Drive Markets

http://abcnews.go.com/International/wireStory/china-economy-fears-continue-drive-markets-22909166

Concerns with both the Chinese economy and the Ukrainian Crimea problem are pushing down stock market prices around the world. Sometime today, the preliminary results about the vote to remove Crimea from Ukraine which could shake up the Eastern European economy very much. The article talks of how economic analysts will likely be very concerned with the outcome of the vote in Ukraine. Because of these insecurities in China, because of bad economic news, and in Ukraine which might lose part of its land, and in Russia, who may face sanctions for it's involvement in the Ukraine scandal currencies and trading around the world are down.

This week was a bad week for the worlds economies. What happens next will be interesting.

http://www.businessweek.com/articles/2014-03-14/is-russia-pulling-money-out-of-u-dot-s-dot-for-safekeeping
There's new evidence that Russia has pulled money out of the U.S. after the recent events in the Ukraine for safe keeping. The federal reserve holds U.S. treasury securities in custody on behalf of foreign central banks and other institutions. From only March 5th to March 12th the Feds holdings have declined by $105 billion. Russia is most likely withdrawing the money so the U.S. can't freeze it while Russia braces for the next round of sanctions. This same sort of thing happened in 1957 when Russia moved money out of the U.S. for fears that the U.S. would economically punish Russia for its invasion of Hungary.

Crimea: Economic fallout of a 'yes' vote

http://money.cnn.com/2014/03/15/news/economy/russia-crimea-economy/index.html?iid=Lead

On Sunday, March 17th, Crimea will vote on whether or not the region will break from the Ukraine and join Russia. The decision could have major repercussions if the vote goes to Russia. The US, for one, does not wish for Crimea to join Russia and will likely put several restrictions on Russia, such business from the country. Russia will also have to face the demands of Crimea, as it currently gets a majority of its necessary resources from the Ukraine, and how to balance that with the needs of its own country as well as the rest of the EU. The European economy will see some fallout, but nothing outrageous. Unfortunately, the Ukraine will need lots of financial support over the next few months in order to survive, regardless of Crimea's vote. Ultimately, the vote in Crimea will affect every economy involved in and that works with Russia.