NBA basketball to allow shirt sponsorship

The NBA has announced for the 2017-18 season it will start allowing teams to put a small logo patch on their jerseys.  This is estimated to generate about 4 million per season per team.  This is the first sport of the main 4 in America (NBA, NFL, NHL, MLB) to allow this.  This is common among foreign professional teams, particularly for big time soccer clubs in the English Premier, La Liga and many more.  US professional teams have been hesitant to do this because of concern with turning away fans.  There may be some truth to this, and some people feel cynical about the NBA already and how it's all about the money and not a team sport, particularly during the regular season.  Many viewers prefer college sports because they maintain some level of purity (however fleeting that may be nowadays).  This may not make much of a difference to viewers ultimately, it may frustrate some people, but I am not sure if it's enough for people to dwell on.  We will see...For full article click below:

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The Economic Policies of Bernie Sanders

The New York Times recently published a think piece on the economic policy of presidential candidate Bernie Sanders, offering insight on how his views stood in relation to John Maynard Keynes. Keynes theory presents that after some point, there will be a cost of government intervention on the economy. Opposing this theory, Sanders has an idea that holds that it is not quite the people who set the price, but the government and corporations who in time can set these prices, to which the people will ultimately have to accept. Sanders has placed emphasis on free college, increasing infrastructure, increasing minimum wage and many other programs will ultimately work despite the fact that this largely plays against the traditional ideas of even leftist economics. What are your thoughts? In time, could his ideas work?

http://www.nytimes.com/2016/04/17/magazine/bernienomics-might-not-be-feasible-but-its-useful.html?ref=economy

Mortgage Principle Balances Cut

Fannie Mae and Freddie Mac decided today (April 14^th) that they would allow U.S. borrowers to cut their loan balances for borrowers who owe more than their actual home is worth. It is estimated that approximately 33,000 people will be eligible for this. In order to qualify, you must have a principle balance left on your loan of more than $250,000 and must be at least 90 days delinquent on your mortgage payment. The goal of this program is to give an opportunity to delinquent homeowners who are significantly behind in payments to avoid foreclosure and lose their homes.

While I think that this is certainly a program that may help many avoid foreclosures, I am not sure if it is necessarily fair. Although I certainly understand the fact that it can be extremely hard to pay off debt especially as interest accumulates, in a simplistic view it is essentially that seems people are being rewarded for not meeting their obligation of their debt. Although I understand why this program is being introduced, it seems like this move would be unfair to many that have kept true to their obligation. It seems like it would be more fair if this program was to cut down on the amount of interest these delinquent homeowners owed as that can accumulate quickly, but it is actually the principle that is being cut down.

            What is your opinion on this program? Is it fair?

http://www.reuters.com/article/us-usa-housing-loans-idUSKCN0XB2FC

Growing Chinese Investment in United States

     In an article published by the Guardian, Chinese investment has increased to more than $15 billion in the United States. The $15 billion was spread across a small number of transactions, 171 to be specific, with New York being the highest recipient. While investment in the U.S by China has rapidly increased, economic growth has slowed to 6.9%, a 25-year low according to the article. Many of the assets acquired by the Chinese seem to deal with manufacturing. So what are the implications of these increased investments, are the Chinese taking over? Not necessarily, as an increase in investment can pan out to nothing if not followed through with large revenue results. There must also be a demand for the goods the Chinese invests in, which there is... in America and other Western countries. The Chinese public has some demand for the products the Chinese have invested in but notably smaller when compared to other economically strong countries. Also much of what has been invested into has been goods dealing with entertainment and manufacturing, for example the production company Legendary Pictures which produced the recent Batman V. Superman movie and Pacific Rim which was a big success in China. But are these really the products, the Chinese should be spending most of there resources on, what about roads and transportation which China could really use more of outside the big cities. Chinese investment into the U.S may become the road to success for China or it could be the straw that broke the camels back.

 http://www.theguardian.com/world/2016/apr/12/china-investment-united-states-15-billion-dollars

Putin's Right-Hand Woman

Elvira Nabiullina, Central Bank of Russia governor is credited with saving Russia's economy from falling apart. Russia's economy has been held back by sanctions, corruption, and low prices of oil and gas, however the Central Bank of Russia has exhibited promising policymaking.
As a result of the crisis of 2008-9, Russia enacted two sets of reforms: First, it diversified its sources of funding. Second, its international reserves grew significantly. This has helped prop up the economy while oil prices are falling. Some critics say the Central Bank's strict monetary policy is the reason behind Russia's struggling economy because it cripples investment with the high interest rates, however corporate profits rose 50% last year. Ms Nabiullina cites the cause as "Our economic downturn is mostly the result of structural factors.” Her biggest worry is how "how quickly and dynamically" the country can improve its business environment. Elvira Nabuillina seems confident in her ability as well as the Central Bank's ability to bring Russia toward economic prosperity; it will be interesting to watch what path they choose to take.

http://www.economist.com/news/finance-and-economics/21696946-russian-economy-bad-way-elvira-nabiullina-has-saved-it?cid1=cust/ednew/n/bl/n/20160414n/owned/n/n/nwl/n/n/n/n

Regulators Warn 5 Top Banks They Are Still Too Big to Fail

     In an interesting article from the New York Times, the idea of banks being "too big to fail" is presented with a retrospective view after the Great Recession nearly eight years ago. I think this article is especially fitting since it directly ties into our discussion of the financial crisis of 2007 and 2008 from the past week and a half. From class, we learned that one of the main causes of the recession was the housing bubble burst due to the sub prime mortgages and risky loans. However, this housing crisis also spread to other parts of the economy as well and was amplified through leverage, liquidity, and complexity. This article elaborates on some of the relevant aspects of the over leveraged larger banks, and the fact that they had to be bailed out since they were "too big to fail."
      One part of the article that I thought was especially interesting was that it commented that 5 out of the 8 largest American banks were being criticized for not having "credible" plans for getting out of a recession without causing panic among citizens and that another government bailout would have to be the solution. A large part of the current political race contains controversy over these large banks and their growing complexities (even more complex then they were during the recession). With this idea in mind, several regulators seem to have backed Bernie Sanders idea to possibly split up some of the biggest banks and make them more manageable. Furthermore, both the FED and the FDIC have claimed that JP Morgan is "under prepared for a crisis in a number of areas." In the end, I wonder why banks are still becoming more and more complex and "too big to fail" after the Great Recession since it seems like they did not learn the key lessons that they should have.

Link: http://www.nytimes.com/2016/04/14/business/dealbook/living-wills-of-5-banks-fail-to-pass-muster.html?ref=business&_r=0

Summer of Trump Threatens Tattered Cleveland's Comeback Story

Cleveland has been through a lot. It used to be an economically stable city that specialized in manufacturing. Then in the 1960's manufacturing took a hit, and Cleveland's hard working blue collar inhabitants began to leave in search for new opportunities. Since 1950, the population has plunged 57 percent to its current population of 357,000. Of course over the course of those years Cleveland became the butt of many jokes due to a polluted river that caught on fire, a mayor's hair that caught on fire during a ribbon cutting ceremony (seriously), and a default on $15.5 million in loans in 1978. Cleveland was the first city since the Great Depression to find themselves unable to pay their obligations. 

However, Cleveland has reinvented itself by diversifying its economy. Now Cleveland has a strong financial services and banking industry among many others. The Rock & Roll Hall of Fame opened in 1995, which has brought in over 10 million visitors. LeBron James returned to his home, making every Cavs game a sellout. Due to all of this change, Cleveland earned the nod for the Republican National Convention.

While this may have seemed like a good thing at the time, the rise of Donald Trump has made many officials nervous. Trump himself has openly stated that riots will occur if he does not get the nomination. Roger Stone, a Republican operative and Trump ally said that he plans on organizing protests if Trump is not nominated. Many are afraid that the Cleveland convention will turn into the 1968 Chicago Democratic gathering, where images of riots and violence stained the great city's reputation. Cleveland has taken extra precautions by pledging 600 members of their 1,500 member police force, and purchasing 2,000 sets of riot gear. There is also always the threat of a terrorist attack, especially when one of the main figureheads for American hate is involved.

What do you think? Is this a good thing for Cleveland, or will we look back on it with regret? 

Link: http://www.bloomberg.com/politics/articles/2016-04-13/summer-of-trump-threatens-tattered-cleveland-s-comeback-story

The New Magic Number for Monthly Job Growth

     A recent survey of economists by the Wall Street Journal found that the U.S. economy needs to add an estimated 145,000 jobs per month to hold the unemployment rate steady. If more jobs than this are added to the economy, the unemployment rate is expected to decrease. On the other hand, if less jobs than this are added, the unemployment rate is predicted to increase.
     Economists estimating the break-even job growth have to take several figures into consideration. Population growth and the amount of people graduating from high school and college must be accounted for. Economists also must consider the amount of people reaching retirement age. With many baby boomers reaching retirement age, lots of jobs are freeing up, thus leading to less new jobs being required. The number of people re-entering the labor force must also be taken into consideration.
     In the mid-1990s to early 2000s, economists estimated that the U.S. needed 200,000 to 250,000 new jobs created each month in order to keep the unemployment rate steady. Many believe that this decrease in the break-even job growth shows the aging of the labor force.
     It is important that economists make these kind of estimates to better track the progress of our economy and how circumstances may change in the future. With more and more baby boomers retiring, the economy may not be able to experience as much growth in terms of jobs.


http://blogs.wsj.com/economics/2016/04/07/the-new-magic-number-for-monthly-job-growth-145000/

UK inflation rate rises to 0.5% in March

http://www.bbc.com/news/business-36023527

According to the Office for National statistics, UK inflation rate rose to 0.5%. It is below the target inflation rate (2%) set by the Bank of England. They expect it to remain well below 1% this year. The reason of a raise in the rate was because the raise in price of airline tickets, clothing and footwear. This influence was balanced out by the fall in food prices, along with the small raise in the petrol prices.
Even though the rates increased, this did not affect the Monetary Policy committee much and the trend remains weak. A vote was taken between the members of the Monetary Policy committee to freeze the rate to 0.5% and let it be like how it has been for the past seven years. This in turn could have an impact on the economic growth. After calculations, GDP may expect to slow down to 0.4% from 0.6%.

Rise of the Fuerdai in Canada and the West

Recently, more media attention has been drawn to the growing population of new Chinese millionaire and billionaire immigrants flooding Western countries like the U.S, and especially Canada. The article highlights several people, all sharing in common the identity of what most people would call "trust-fund babies" called fuerdai, a mandarin slang term for rich kids spending their parents money. Most are corrupt Chinese officials kids who were sent with their families and friends to Western countries amidst recent crackdowns on such illegal activities in China.

Countries like Canada that sport new immigration policies catering to wealthy foreign investors have seen huge increases in rich immigrants. "According to Canada's government figures, from 2005 to 2012, at least 37,000 Chinese millionaires took advantage of a now-defunct immigrant investor program to become permanent residents of British Columbia, the province that includes Vancouver...The metropolitan area of 2.3 million is home to increasing numbers of ethnic-Chinese residents, who made up more than 18 percent of the population in 2011, up from less than 7 percent in 1981, according to government figures."

The article goes on to mention the super car clubs that these kids who are often younger than 21 create, while buying/leasing new super cars that range from $150,000 to $400,000 every few weeks. This seems to be a response to being unable to show their wealth in China, where such actions and ownership of the cars would raise questions amongst the populace and officials, while it is less incriminating and odd in Western countries.  Along with the massive influx of the super rich fleeing China, they have driven up home prices, making the Vancouver area almost impossible to live in as prices are through the roof with foreign real estate agents buying up properties and creating an affordable housing crisis, with prices "increasing from 2005 to 2015, to about 1.6 million Canadian dollars ($1.2 million)", with the majority of these being absentee owners.

Question: Does the immigration of the super rich in this case have any beneficial impact to the economy considering their spending habits? Negative impacts? Are they just creating an artificial price bubble?

Link to the article:

http://www.nytimes.com/2016/04/13/world/americas/canada-vancouver-chinese-immigrant-wealth.html?ref=international&_r=0

For more information, there are several articles highlighting cases like these in the U.S and other countries, most noticeably in California. Just google nytimes and Chinese trust fund kids or something along those lines and you should find them. 

US international trade gap at $47.1B in Feb vs $46.2B expected

http://www.cnbc.com/2016/04/05/us-international-trade-gap-february-2016.html

This article brings up many interesting points. In the past February, the U.S. trade deficit expanded slightly more than expected. The trade deficit reached $46.2 billion. After being calculated for inflation, the deficit rose to $63.3 billion which is the largest since March of last year at $61.8 billion. This article also talks about how exports made a come back but this increase was leveled out due to the increase in imports. According to the Commerce Department, the trade gap increased 2.6 percent to $47.1 billion. This article also includes data that suggests economic growth slowing to a 1.4 percent annualized rate in the last three months of 2015 making growth estimates for the first quarter below 1%. Trade has been held back by the strong value of the dollar and low demand around the globe which caused a 1/10th% reduction from GDP in the fourth quarter. With that being said, in February, exports of goods increased 1.6% to reach $118.6 billion and this was the first rise since September. While this increase in exports is very comforting to hear about, I am curious as to how much of our exports consist of services rather than goods since the U.S. exports one of the largest amounts of services. The article brings up a couple things that are hindering U.S. exports like the undercut by the buoyant dollar and the slowing growth of Europe and China. These foreign factors diminish the demand of U.S. goods/services.  I hope exports continue to expand with that being said.
The dollar is actually down 1.3% on a trade-weighted basis so far this year after gaining about 20% against the currencies of the United States' most common trading partners between June 2014 and December 2015. It is interesting to see exports of industrial supplies and materials sitting at the lowest since March 2010. It is no surprise to see that capital good exports were at their lowest since November 201 and that Petroleum exports dropped to is lowest since September 2010 as well. China's exports also feel 2%. While imports of goods and services rose 1.3% to $225.1 billion, these imports are being kept under control by low oil prices, efforts to drop inventory overhang, and increased domestic energy production.

Japan’s negative interest rate brings ‘bad news’ to world’s central bankers

The Bank of Japan’s (BOJ) decision in January to take interest rates negative has sent bond yields tumbling, while doing little to curb a surging yen that’s squeezing the world’s third-biggest economy just when it needs a weaker currency. That’s put even more monetary and fiscal stimulus on the agenda at a time when Japanese households and companies are increasingly doubting the program.

If policy makers around the globe fail to gain traction soon with their actions, that risks a relapse into too-low inflation and even weaker growth, possibly roiling financial markets and increasing the threat that Japan-style stagnation spreads to more advanced economies.

BOJ Governor Haruhiko Kuroda’s freedom to double down on stimulus to stoke inflation and growth may be limited by G-20 agreements to avoid the competitive devaluation of currencies. He’s also up against critics in the investment community who argue that the central bank is harming the debt market and is on the cusp of running out of bonds to buy. The 71-year-old governor maintains that all options are on the table, including a deeper cut to the negative rate, and increased purchases of assets ranging from Japanese government bonds to exchange-traded funds and real estate investment trusts.

Link:  http://www.theglobeandmail.com/report-on-business/international-business/asian-pacific-business/japans-negative-interest-rate-brings-bad-news-to-worlds-central-bankers/article29580535/

John Oliver On Why Your Credit Score Is Probably BS

We see credit scores reported under many job requirement listings and John Oliver in his own unique way explains why credit scores are a complete sham.

On last week's show John outlines some irregularities in how credit scores are calculated. For example, 47% of employers use those three numbers in hiring decisions, despite there being no statistical evidence of a correlation between a healthy credit score and healthy workplace habits.
"Look at me, my credit score is probably fine," Oliver says. "But I routinely waste HBO's money on stupid costumes, pyrotechnic displays, and checkered dress shirts. I clearly cannot manage this company's money well."

Oliver explains how credit reporting agencies Equifax, Experian, and TransUnion generate a high number of errors in people's scores that sometimes are overlooked. "One in four (credit reports) had an error and one in 20 were seriously wrong," Oliver says. Some of these errors include things like, um, being mistaken for a terrorist or sex offender, or being accidentally deemed dead.

"If every 20th Frosty that Wendy's sold turned out to be a cup of warm goat semen," he says, "we would want some accountability and we would want it fast." Given that credit scores can determine employment or housing, the stakes are—or should be—that much higher.

Watch the entire video attached in the link, while very funny, it's also informative.

link:http://www.fastcompany.com/3058796/the-recommender/john-oliver-on-why-your-credit-score-is-probably-bs

From Australia to Zambia, China's economic slowdown delivers a world of hurt

The article was published by US News and written by the Associated Press. Theme of the article focused on China’s recession and how it affected the counties of Australia, Zambia, Chile, and Indonesia. Each of these countries have been affected by China’s quick downfall by lowered commodity prices, higher unemployment rates, and lower home prices. Since China has been accounted for percent of global growth in 2014 its not surprising to me that global economy is going to take a hit from this, just like global economy took a hit when US market crashed in 2008. China is steering away from exports, and is looking to increase capital domestically through consumer spending. So this affects countries that export raw materials to China.

            Australia has a heavy investment in exporting to China. Even when the US market crashed, Australia was able to sustain due to vast exporting of iron, coal, and coal to China used in their factories. Once China decreased investment of raw materials prices of Australia’s raw materials dropped, “price of iron ore from a peak of $185 per metric ton in 2011 to below $60…every 1 percent drop in China's investment shaves 0.2 percentage point off Australia's economy.” In the long run that 0.2 percentage drop will begin to add up. The other countries dealt with the same problem of their raw material prices dropping due to China decreasing imports. This goes to show how much China affects the global trading market