America vs the World, 1-0

http://www.economist.com/news/finance-and-economics/21635050-weaker-world-economy-does-not-hurt-and-may-help-america-lonely-locomotive

America vs the World, 1-0

While other countries and major economic areas are expected to falter, the United States is expected to improve. The lower worldwide gas prices and interest rates have actually been boosting the American economy. The economy relies less on trade and world’s misfortunes help, by the low interest rates and oil prices. The US GDP consists of only 13% exports which is less than the OECD countries and the euro zone has only a mild effect on the economy. Projections show that repercussions of fall in the euro zone will decrease the growth rates of Britain, Japan, and China more than America.

With looser monetary policy, the currencies of other countries have decreased while the USD has increased 6% which has only benefited the US dollar. The deflation in other countries has increased the borrowing rate in the US thus improving housing prices. However, if another crisis was too occur consumer confidence would fall too low and raise the real interest rates. The Fed wouldn’t be able to lower the nominal rates thus meaning a hoarding of cash by people.

This article is building off the recent success the US economy has been able to sustain. All is well now and looks great for future outlook, but if another crisis was too occur, we would be more vulnerable to a larger impact. All seems well now but a recent trend can be here or starting soon that could bust the US economy again.

November Gun Sales See a Large Boom

http://money.cnn.com/2014/12/02/news/economy/november-gun-sales/index.html?iid=A_E_News

In this article presented by CNN Money, it focused on the recent increase in gun sales for the month of November. As anticipated, the big hype of black Friday always shows an increase in gun sales, however; this year there was more to the boom that people weren't expecting. "Gun sales are often driven by fear and anxiety" which would make sense given the history of the fluctuation of guns sales, where record highs are attributed by national disasters, such as in 2012 when gun sales soared through the roof as a result of the Sandy Hook massacre. This years rise was mainly attributed to the violence in Ferguson, Missouri, where people rapidly bought guns after the incident occurred, and then again in November once the Grand Jury did not indict the police officer. 
Overall this article serves as a great example of how people purchase goods and services as a result of whats going on around them, and how certain events can cause significant increases in sales of certain goods.This was documented through the background checks administered by the FBI, in order for someone to legally posses a firearm.  

Chicago hikes minimum wage to $13

http://money.cnn.com/2014/12/02/news/economy/chicago-minimum-wage-hike/index.html?iid=SF_E_Lead

            In the article “Chicago hikes minimum wage to $13,” the author Katie Lobosco writes about the recent vote to raise the minimum wage in the city. However, a minimum wage of $13 will not be fully in effect until 2019. The wage will increase over time from $8.25 to $13 over the next five years. The first increase will take place in July of 2015 when the minimum wage will increase to $10. Wage for workers who are allowed tips will also see an increase from $4.95 to $5.95 an hour. It is expected that the increase in wage will affect over 400,000 workers and help remove almost 20% of those workers from poverty.

The wage increases was easily passed by a vote of 44 to 5 in favor of the increases. While the Mayor of Chicago, Rahm Emanuel, supported the raise, chambers of commerce and restaurants are concerned that it may reduce the number of low wage jobs.

Other major cities like San Francisco, Oakland, and Seattle also approved minimum wage increases over the next several years this fall. Statewide, Alaska, Arkansas, Nebraska, and South Dakota have passed increases to their minimum wages to join 12 other states and Washington D.C. that had already done the same. At a national level, talks about raising the national minimum wage to $10.10 from $7.25 have stalled.

Shopping on a Phone Is Still Uncommon but Growing Fast

          The sales this Black Friday were phenomenal, however the new trend this year was that most of the shopping was done online and thus the new culture of Cyber Monday and so people have decided to shop online now on everyone's cell-phones. E-commerce accounts for only 6 percent of total retail spending. Sales made on computers are growing at a faster rate than sales in offline stores — and sales on mobile phones are growing faster and faster too.
          Mobile commerce is now a new business and in my opinion is becoming more popular as it is more convenient. “Convenience is what sells here,” said Norman Sadeh, a professor of computer science at Carnegie Mellon University and director of its mobile commerce lab.
           Last year, 21 % of e-commerce sales on Black Friday were on phones, compared with 17 percent on Cyber Monday.

http://www.nytimes.com/2014/11/29/upshot/mobile-shopping-is-still-uncommon-but-growing-fast.html?ref=economy&abt=0002&abg=1

How inflation may force millennials to reconsider risk

http://www.marketwatch.com/story/how-inflation-may-force-millennials-to-reconsider-risk-2014-12-02

In class we've talked about the recent market crashes and the Great Recession, but we never have talked about how it may effect us. Many other articles have pointed out that millennials are buying houses later, but not any have linked it to the fact that we have lived through a housing market crash, and that economy is still recovering from the Great Recession.

Finally, Girl Scout Cookie Sales Go Online

http://money.cnn.com/2014/12/01/technology/girl-scout-cookies/index.html?iid=H_BN_News

Finally entering the 21^st century, Girl Scout cookies will now be sold online for the first time ever. The 112-year-old organization had, for quite some time, resisted in doing so, preferring their girls to engage in door-to-door sales. They argued that this was more in line with their mission as it provided a learning experience for scouts. The Girl Scout organization, however, has taken a turn to this thinking; they soon recognized that the Internet can also teach the girls invaluable skills. They believe the online retailing will teach the girls various technological, as well as interpersonal skills. Online sales are expected to begin December 12^th and will be in conjunction with traditional, door-to-door sales.  

I think this is a very smart move for the Girl Scout organization; simply stated, the Internet was made for business. Taking a business online allows for 24-hour access for customers anywhere in the world. With a traditional, brick and mortar company, you are limited to the number of customers who can visit your store at any given time. Online stores, by contrast, allow for thousands, maybe even tens of thousands of individuals, to visit the site at once. Ultimately, I think the Girl Scout organization will profit tremendously from their decision to sell cookies online.  

Lying, cheating bankers

Link to Article

This articles discusses about how banker's work make them become less honest. 128 bankers were split into two groups in an experiment published by Nature. The control group was asked non-work related questions such as how many hours of television they watched each week. The treatment group was asked questions about their work. Then each banker was asked to toss a coin 10 times in private, and they could win $20 if it was the right side. The result showed that the control group was more honest than the treatment group. Nearly a tenth of the treatment group claimed the full $200. The authors also tried that trick on non-bankers, result said that there was no effect.

In ever society, there are always people who believe that cheating is a "clever" way to make money, especially when their actions have so few consequences. These bankers tend to have very short-term of the economy and try to find immediate opportunities to make money. They ignore the importance of being honest and building up reputation in the society. Our society should make it clear that cheating has consequences no matter who you are, otherwise some people who think they are above the law would never stop cheating and bringing harm to the society.

The Impact of Zero Emissions Vehicles

http://www.economist.com/news/science-and-technology/21634544-are-zero-emission-vehicles-cleaner-petrol-cars-it-all-depends-zevs-invisible

Zero Emissions Vehicles (ZEV) are gaining popularity across the country, and quickly.  This will continue as the EPA introduces new regulations which will require car manufacturers to produce with lower emissions.  In 2016 the EPA will adopt the regulations of CARB (the California Air Resources Board).  In order to keep up with these new standards, car manufacturers will need to sell one ZEV for every six petrol of diesel vehicles, or pay a large fine.

This article in the economist asks the question of whether or not zero emissions vehicles are actually better for the environment, based on energy used to produce batteries and charge the vehicles.  The answer comes down to location in many cases.  For citizens of states which have large amounts of access to alternative fuel sources, ZEVs are successful in reducing emissions.  For those on the East Coast and Midwest where coal is still the primary source of fuel, there may be less of a helpful impact on the environment.

Oil and the Markets: Black Gold Friday

http://www.economist.com/blogs/buttonwood/2014/11/oil-and-markets

Oil in stock market fell 6.7% yesterday and OPEC decided not to cut production which has lead to lower gas prices around the country. Many currencies linked to the price of oil have dropped with it including the Canadian dollar and the Norwegian krone.

A falling oil price is positive for the global economy as it acts as a tax cut for western consumers.  It doesn't hurt the oil producers as they don't consume as much.  Now economists are wondering if this will cause the Euro zone to go into deflation because of lower inflation rates.

Black Friday: A Dark Day in Sales

Black friday has typically been the biggest shopping day of the year, and a day that both the retailers and consumers look forward to every other 364 days of the year. This year had a devastating decline of 11% of retail sales compared to the prior Black Friday. This is the second consecutive drop in sales in the past two years. This decrease is a strong indicator that the whole idea of Black Friday is becoming more and more irrelevant for the American consumers. It is not because consumers do not like to spend money, but it is the fact that sales start a few days, maybe weeks, before the traditional Black Friday following Thanksgiving. The extended days of offering deals allows the consumers ample opportunities to purchase discounted goods, as opposed to the chaotic rush of solely one. For example, Target initiated their “Black Friday” deals on November 10th, that’s 18 days before the actually Black Friday. Even Amazon’s sales declined. They offered a four day “Black Friday” weekend sale and it declined $134 million, 5.2% from the year prior. Overall holiday sales are expected to increase 4.1%, but it is not due to the holiday excitement of Black Friday. Black Friday sales is also on a heavy incline from personal shopping to online shopping to avoid the chaos and competition for the last flat screen television, or other hot holiday items. However, even this year online sales dropped by 2% from 2013. So the real question is that if people are intimidated in spending money during the highest commercial purchases of the year because they do not believe in the economy, or is it that Black Friday has lost all its hype and people prefer to do their shopping at home. I believe it is the consumers being nervous and unwilling to spend excess money on elastic good when they could spend it on necessities instead. 

Source: http://online.wsj.com/articles/holiday-weekend-retail-sales-sink-11-1417376714?tesla=y&ref=/home-page

There's still a pay disparity between men and women. But millennials are closing the gap.

This article discusses the wage gap between genders and the changes that are occurring because of newer generations. The author claims that in America’s youngest workers, the wage gap between men and women is the lowest it’s ever been. This provides hope for coming generations, as early starting salaries set the pace of earnings for a person’s entire career. However, even for the millennials, things aren’t completely looking up. “The higher up the career-ladder women go to reach manager and executive levels, the more the gender gap grows.” The difference in overall median pay between men and women millennial workers is 2.2% ($51,000 vs $49,000). Still, the change is promising for future generations.

http://money.cnn.com/2014/11/19/news/economy/gender-wage-gap-millennials/index.html?iid=SF_BN_Lead

Polluting factories cost Europe $235 billion

The European Environmental Agency released a report involving the dangers of air pollution. This included hazards such as death, medical costs, lost work days, infrastructure damage, and lost crops. They estimated that the costs of all such problems added up to $235 billion in Europe. That is a large number to be taken away from potential GDP, and we learned in class how a small percentage change in GDP growth can cause a giant loss in GDP in the long run. I'm sure many people downplay the impact that pollution has on every day life, but if very extreme actions aren't taken soon then these problems will only worsen. I fear for industry heavy economies such as the U.S. and Euro zone countries because these problems have been put off for too long and could very negatively affect the health of economies and people.

http://money.cnn.com/2014/11/25/news/economy/industry-pollution-cost/index.html?iid=HP_River

Russian Economy

http://www.economist.com/news/briefing/21633816-more-decade-oil-income-and-consumer-spending-have-delivered-growth-vladimir-putins

Russia's economy is currently in a very sorry state and with oil prices, one of Russia's primary sources of income, falling universally their economy may go into a deep recession. The article takes care of stating that if handled correctly things will not be too bad, but puts a lot of emphasis on how tricky handling it may be, considering policies Russia has followed to date.

Oil Prices Are Plunging. Here’s Who Wins and Who Loses.

As of recently oil prices have gone down by more than 9.9 percent,however; OPEC has decided that it would still not cut back on production. So basically among the slow growing global economy, coupled with the rise of oil production in the US has still not lead to a pull back in dominant oil producing countries. Countries from Saudi Arabia to Nigeria to Venezuela are gong to continue to keep pumping oil rather than cut back to raise the prices back up. The recent decline in oil prices has lead to oil prices in US to go under 70 dollars per barrel. Prices were almost a 100 dollars per barrel almost all of July, a significant decline s observed. 

The article goes into detail regarding the significant losers and winners of the recent decline in global oil prices.Firstly, the Global consumers are on the winning side of this. With oil prices at a new low this results in lower gasoline and jet fuel prices. Lower transportation costs will give retailers and manufactures less urgency to raise prices. The losers in this scenario would be the American oil producers and oil-producing state economies. Independent producers in the US cannot be analyzed due to them being privately owned, hence analysts rely on guess work. Another loser of today's scenario is Russia. Its economy is facing its sharpest challenges in years. Coupled with western sanctions imposed on Russia, has hampered it being a major energy producer. 

The winner and a Loser of today's oil price scenario are Central Bankers. The falling commodity prices have lead to low inflation rates and hence making their job harder. In Japan , the Euro zone, and the US the central banks have been trying to get inflation to rise and reach their annual 2% target. 

Source:

nytimes.com/2014/11/29/upshot/oil-prices-are-tumbling-heres-who-wins-and-who-loses.html?smid=tw-nytimes&_r=1&referrer=

Oil Prices from a Producer Perspective

John Wainwright

11/30/2012

Link: http://www.economist.com/blogs/buttonwood/2014/11/oil-and-markets

                For an oil-using consumer the fall is oil prices have a great outcome at the pump, especially during the holiday season when people tend to spend a bit more on travel. The article discusses how if a drop in DOW stock value that would match the volume of the drop oil prices would shatter the entire stock market. This drop was driven by OPEC’s decision to not cut oil production and the fact that oil producers continually kept raising their outputs in response to the previously high oil prices.

                One bit of information that intrigues me is what country will respond most positively to the drop in prices, for several countries oil production and exports are major factors of their economies (Venezuela, Nigeria and Russia). Russia in particular is hit very hard, the economic sanctions imposed upon Russia are nearly half the size of the expected loss Russia is expected to go through due to the drop in oil prices. Scotland’s independence plan and their corresponding methods to dealing with the new debt they would have incurred had expectations that the oil price would be around 40 to 50 dollars higher than it is now. The fact that a drop in the price of one good can affect countries around the world so greatly reveals how much we rely on natural resources to fuel our economies. In particular the Eurozone, if prices continue to drop I can envision how consumers would continue to benefit while major oil companies and groups would struggle to make profit or be sustainable in the long run.

                I would ask the author how much longer would this high supply have an effect on the price of oil, at what point does the demand catch up to supply and return prices back to normal?

                How does the lower price in oil have an effect on the average persons commitment to help the environment? How will this plan into the success or failure of “green” movements around the world?

Black Thursday? Thanksgiving sales numbers growing

http://money.cnn.com/2014/11/29/news/economy/black-friday-early-estimates/index.html?iid=SF_E_River

Spending has shifted this year, as stores decide to open up earlier than normal. Spending went up around 24% on Thanksgiving day, which bids the question, is Black Friday done? Is Black Thursday the new craze? Spending on Black Friday went down around 7%. With over $12.29 billion spent over the two day period, overall spending has also gone down in comparison to recent years. Just like spending, the amount of people who actually visited the store went up by 27% on Thursday, and down 5.6% on Black Friday. When looking at the actual numbers, the total amount spent on Black Friday still surpass the amount spent on Thursday by almost 3 times. With stores looking for an edge over their competitors, opening earlier does make sense, but does this mean Black Friday is done? And is it fair for the workers at these stores to be forced to work on Thanksgiving if this trend continues?

Shopping on a Phone Is Still Uncommon but Growing Fast

With technology advancing so fast and so often, shopping has changed and advanced with it. Now people are able to access so many deals, such as Black Friday deals, right from the comfort of their bed or couch, or even dinner table. Mobile shopping seems to be the way of the future, mainly for the convince of the whole process. From an economic standpoint, this many not be bad for store owners, who would no longer have to pay their employees overtime for working during Black Friday, as well as eliminating the daily operation costs of running the store during these shopping surge days. Owners can completely shut down operations and give themselves, and their employees, real holidays, while losing only a few, if any sales. On the other hand, for those employees who depend on that over time paycheck from working these times, this could be detrimental to their incomes.

I personally think this is the way of the future, and it wouldn't be bad for family relations either. Now instead of people camping outside of stores, sometimes days in advance (pretty ridiculous) they can be at home, visiting, cheering on their favorite football team, doing the dishes, watching the Thanksgiving day parades, and doing so many other memory making activities. Then when the times comes to score some of the best deals, you can walk out of the room for 5 minutes and purchase with your mobile device.



Link: http://www.nytimes.com/2014/11/29/upshot/mobile-shopping-is-still-uncommon-but-growing-fast.html?ref=technology&_r=0&abt=0002&abg=1

U.S. Economy Keeps Beating Expectations

Expectations for the third quarter GDP growth was initially 3.5% but this figure was later revised to 3.3%. In reality, the U.S. economy grew at an annualized rate of 3.9% in the last quarter.

According to the Bureau of Economic Analysis, private inventory investment decreased less than estimated while personal consumption and nonresidential fixed investment increased. Economists still aren't sure if this growth rate will be sustainable in the near future but they are hopeful.

With the holiday season in full swing, fourth-quarter GDP is expected to see an increase of 4.2%. Although the third quarter results are somewhat sustainable, it is understood that fourth quarter estimates are not a true representation of a realistic growth rate.

While manufacturers are busy vamping up production for mostly consumer products, it is interesting to see that there was an 16% increase in defense spending during the same time. Overall government consumption expenditure rose by 9.9% in the same quarter.

The U.S. economy seems to be headed in the right direction but next year's first quarter numbers will be a better indication of the true condition of the economy.

Read More: http://ow.ly/F6Amh

Thanksgiving Store Openings Doesn't Help Increase Sales

Black Friday has been creeping into Thanksgiving for the passed few years. Traditionalists find this quite annoying because Thanksgiving is a Holiday meant for people to reflect and be thankful for the people and things they have currently in their life. Its not about acquiring new things.

With that said, opening on Thanksgiving does little to increase sales. It simply shifts some Friday sales over to Thursday. Because of the early openings on Thursday, Black Friday sales shrunk by 1.5B last year only to find it replaced by an increase of Thursday sales by 1.8B. Is the .3B increase really worth Thanksgiving openings? Walmart's CEO thinks so who had a Thanksgiving sale which started at 6 pm during the Holiday.

What do you guys think? Should retail stores have their employees give up family time to work for only a small increase in sales?

http://money.cnn.com/2014/11/26/news/economy/stores-open-thanksgiving-no-sales-boost/index.html?iid=SF_E_River