Apple’s online book, film services go dark in China

I found this article very interesting because it is an ‘interesting’ twist to consider an Internet and media controlling policy as a trade barrier.
First, China is trying to transform from a low-end manufacturing economy into a technology-based economy. The main purposes for these policies is: 1. to help those start-ups to have a fair starting point in comparison to some of the foreign competitors. 2. regulate the online free but illegal download of books and movies. It’s extra interesting because people love to accuse the Chinese government for not enforcing copyright laws, but when they try to do something, it became a trade barrier.
Second, each country has its own social norms about what is appropriate to show the public. There are tons of American made movies and dramas are show to the public in China. It is not like the government refused any sort of incoming ‘ideology’.
The bottom line is that media should keep a neutral attitude toward news, leave the judgment part to the readers.
https://www.washingtonpost.com/business/economy/apples-online-book-film-services-go-dark-in-china/2016/04/22/f0cb66ba-08be-11e6-b283-e79d81c63c1b_story.html

General Electric First Quarter Earnings

General Electric reported greater operating profits and higher revenue in the first quarter compared to first quarter last year. However, their earnings fell short of expected earnings. Earnings per share were only 1 cent, falling far short of the 18 cent S&P Global Market Intelligence. GE shares fell by 1.2% in total in the first quarter.

GE announced in April 2015 that they would sell nearly $200 million of its assets. The sold off a substantial portion of their GE Capital division throughout 2015. They also asked the U.S. government to remove GE Capital's too-big-to-fail designation. GE's oil and gas business has taken a serious hit as a result of plummeting oil prices.

http://www.usatoday.com/story/money/2016/04/22/general-electric-first-quarter-2016-earnings/83376658/

GM Temporarily Idle Four North American Auto Plants

Link: http://www.cnbc.com/2016/04/22/gm-to-temporarily-idle-four-north-american-auto-plants.html

This Friday, General Motors said that it will close four North American plants for two weeks. These four plants mostly make cars as opposed to making SUVs and trucks, and they are being shut down because of a parts shortage due to the recent earthquakes this month in Japan. GM looked at parts availability and their plants in North America and decided that the four plants chosen to close will help ensure adequate parts supply. They said that these steps are being taken carefully as they "continue to assess the potential impact on its supply chain" of the earthquake, which has slowed down distribution for auto supplier plants in Japan.

The plants that are going to be shut down are in the following towns: Lordstown, Ohio; Fairfax, Kansas; Spring Hill, Tennessee; and the Flex Oshawa in Ontario. They will shut down beginning on April 25th, and GM said that they will make up production lost during the shutdowns by the end of this year. This "temporary adjustment" is not expected to affect GM's full year production plan, as well as its second quarter or full year financial results for North America.

The Lordstown plant makes the Chevrolet Cruze, the Spring Hill makes the Cadillac XT5 SUV, the Fairfax makes the midsize Chevrolet Malibu and the Buick LaCrosse, and the Flex Oshawa makes the Chevrolet Impala, the Buick Regal, and the Cadillac XTS.

As of Friday, GM shares went down 1.5 percent at $32.16.

Regulators introduce new rules to curb Wall Street pay

U.S. regulators proposed new laws on Thursday to reconstruct the way Wall Street executives are paid. The new rules are intended to stop executives from making risky financial bets to boost their pay and then collect large bonuses before the fallout is clear. The proposal is coming at a time when Bernie Sanders presidential campaign calls to break up big banks. Under the proposed laws, the nation’s largest banks would have up to 7 years to draw back executives bonuses if their actions hurt the institution. In addition, instead of handing an executive their bonus in one year, their bonus payment would be spread out through 4 years. The Dodd-Frank Act was pasted in 2010 to initially limit pay and bonuses given to top executives at financial institutions.  However, critics said the Dodd-Frank Act was weak, observing it did not address compensation of traders who can potentially draw the largest bonuses. The new proposed laws are ‘slightly’ stronger but still leave the industry with some wiggle room. This is coming in light of the Financial Crisis when AIG took a taxpayer funded lifeline of more than $100 billion, but was setting aside millions of dollars for employee bonuses and retention pay. Wall Street has become stingier with bonuses and the average bonus tumbled by 9% last year. However, bonuses at head funds and private equity firms can still reach millions of dollars a year. JPMorgan Chase boosted its chief executive, Jamie Dimon, by 35% last year to $27 million. The National Credit Union Administration approved the executive compensation rules Thursday, but 5 more agencies still need to act before they become binding. 

https://www.washingtonpost.com/business/economy/regulators-introduce-new-rules-to-curb-wall-street-pay/2016/04/21/4a8ae25c-07cf-11e6-b283-e79d81c63c1b_story.html

SCHLUMBERGER: The oil industry will continue to deteriorate

I found this article very interesting because the price of gas is increasing at the pumps so i would of thought that this meant that the price of oil was increasing to but that is not the what this article is talking about. i also read that the low oil prices are also affecting other companies negatively, for example CAT came out and said that there sales are below average this year and they say it has to do with the oil company's  not buying new equipment.  

Metropolitan Museum of Art Plans Job Cuts and Restructuring

This article talks about how the Metropolitan Museum's ambitious plans may have been too much.  The museum is already facing a $10 million deficit and may escalade to $40 million due to its new additions. To fix this, they announced a 24-month financial restructuring plan that will likely include staff reductions, slower construction of its new wing, and reduced programming.  70% of the museum's expenses go towards salaries, so reducing workers is sadly essential.  Once this 24-month span is over, the museum plans to move its finances back to normal.

  http://www.nytimes.com/2016/04/22/arts/design/metropolitan-museum-of-art-plans-job-cuts-andrestructuring.html?_r=0

The one country where negative interest rates may actually be working

Although negative interest rates have adverse economic impact in Japan and Eurozone, Sweden has been benefiting from adopting negative interest rates. Negative interest rates lead people with saving to lend money with lower interest rates. Borrowers take advantage of the lower interest rates and spend more, helping to push economic growth higher. Riskbank, Sweden’s central bank, has been trying to raise the annual inflation rate to 2% and negative rates help reach the target by creating inflation. Sweden’s currency, the krona, has been appreciating and it makes goods from Sweden more expensive than those of the rivals, making their goods less competitive. Negative rates cause inflation and reduce the value of the currency helping Sweden’s goods more appealing on global market. 

http://www.marketwatch.com/story/guess-the-one-country-where-negative-interest-rates-may-actually-be-working-2016-04-20

Wall Street flirts with record high levels as companies report

This article is extremely relevant to what we are learning in class with The Great Recession. However, in this case, Wall Street is doing really well right now after the quarterly results were released. The S&P 500 is currently trading at around 17.8 times the expected level, which is the highest it has ever been since 2004. The article reveals many bright spots in the economy with the only negative being that Coca Cola's stock has dropped for the fourth straight quarter. Both S&P and Nasdaq are performing well. The S&P 500 index showed 25 new 52-week highs and no new lows, while the Nasdaq recorded 56 new highs and 16 lows. For more numbers on the rise in investment, check out the link below.






http://finance.yahoo.com/news/wall-st-set-higher-open-130105053.html

Goldman Sachs sees 'upside risk' for US economy

It seems that consumers are more confident with the economy and so is Goldman Sachs.
Remember last year when China devalued its currency and the market went nuts? Well, so much for that.

The subsequent tightening in financial conditions that came with the bold currency move has vanished, according to Goldman Sachs. The bank said its proprietary Financial Conditions Index has returned to its August 2015 level, providing a bright spot in an economy that otherwise has been lackluster.
Goldman economists Jan Hatzius and Chris Mischaikow said in a note to clients. "The implications for U.S. growth are quite positive."











 http://www.cnbc.com/2016/04/19/goldman-sachs-sees-upside-risk-for-us-conomy.html

Intel to cut 12,000 jobs globally

One of the largest chipmaker companies in the world, Intel, plans to cut about 11% of its entire workforce or 12,000 jobs globally, most within the next 60 days.  The company was able to grow and maintain stability through the PC industry, but is no longer able to compete with mobile devices.  About 60% of Intels sales came from the PC industry, so with a decrease in demand for PC's there has been large negative impact on Intel.  For the future, Intel plans to invest more in "growing" areas of business like gaming and tablet devices.  "Sales in Intel's microprocessor and chip division rose 2% to $7.5 billion over last year, but dipped 14% from last quarter." meanwhile, "The Internet of Things group reported 22% growth to $651 million, while the data center division logged a 9% increase to $4 billion."  The company predicts to save $750 million this year and $1.4 billion by the middle of next year from job cuts.  I'm interested in seeing how this effects the labor force as well as how the company progresses.  

http://money.cnn.com/2016/04/19/technology/intel-layoffs/index.html?iid=hp-toplead-dom

Who Gets the Blame for the Slowing Economy

Steven Rattner is a Wall Street executive who in this article discusses the possible reasons that the global economy has been slowed. He starts off by mentioning that many people, possibly pessimists, view the slow-down as high potential for another recession, Globally he mentions that factors include governments lack of action when necessary or incorrect action, causing more problems rather than helping each other which is to be expected. In the United States, he sees the possible issues as a lack of investment as businesses like Amazon are less capital-oriented, a restrictive banking policy due to fear of recession, and an increase in use of loopholes by cooperation due to the absence of a recent tax reform. Abroad he mentions countries like Greece causing issues for the Euro, and China's opacity when it comes to decisions and growth.

Rattner avoids much discussion about whether we are heading towards recession or what factor exactly will be to blame, but keeps his analysis more general, identifying which factors potentially could cause a bigger issue, The article discussed a variety of topics mentioned in class such as investment and policy and is worth a read.

http://www.nytimes.com/2016/03/10/opinion/who-gets-the-blame-for-the-slowing-economy.html?ref=economy&_r=0

Obama addresses anti competitive behavior

President Obama is beginning to take initiative to work more closely with the SEC in order to help the American consumer and increase innovations The president states that America's long history of innovation and its free market are what has made it such a successful economic nation. His latest stab at corporate America may actually help it in the long run.

Prior to the deregulation of the telephone industry, consumers actually rented telephones from telecommunication providers and they were only limited to the bell companies that serviced their area in particular. After deregulation, infrastructures of different companies increased and consumers were free to choose between providers.

In its early stages, Obama's executive order will seek to deregulate many consumer goods and sevices including cable television. Consumers will have an opportunity to purchase a cable box, and then purchase services from a number of providers as opposed to the current state where the box is rented in many cases under contract with the promise of purchasing services for a set period. This allows industries to price fix and become unnaturally profitable - in many cases because of actions taken through mergers approved by the SEC in years past.

Who will be affected by these executive actions? I would state that those affected would include large players in the television industry including Time Warner, Comcast, and AT&T. I could also see a positive impact for consumer electronics producers such as Sony, Apple, and Samsung, because they will be able to use their comparative advantage in marketing in order to sell the new "free market entertainment centers " to consumers as opposed to the current companies whose marketing presence is in the B2B world. (I don't even know who manufactures my cable box at home - maybe Motorola?)

Source:
http://finance.yahoo.com/news/obama-war-on-business-trump-free-trade-sanders-big-banksr-on-business-172458948.html

Making Africa Work:

“‘IS ANYONE here actually hoping to make any money, or are you all just trying to minimise your losses?’ The question, asked at a dinner in London for investors who specialise in Africa, showed how the mood has changed in the past year. The financiers around the table—mostly holders of African bonds—all said they were simply trying not to lose money.”

                The opening of the article is mildly misleading. The article from the economist, actually goes on to argue that even though African’s growth as a whole has slowed down in the last decade (from 7%-8% to 3%) it is in better shape than it ever has been for economic prospects. The article, draws attention to the fact that the majority of African countries are no longer warring territories. Furthermore, of the still remaining warring countries it is only small sections that remain in chaos. Additionally, “Africa is also far more democratic than it was. In the 1960s, 1970s and 1980s, only one sub-Saharan government was peacefully voted out of office. Now nearly all face regular elections, which are harder to rig thanks to social media. Voters have real choices—one reason why policies have improved.” Along those lines the article mentions that, the percent of African’s living in absolute poverty has fallen by over 15% in the last decade. Not to mention that African school enrollment has also risen by 20% (remember this is on a rather large average). All these circumstances, point to a far more profitable future in terms of investment bonds in Africa. Though, the article shows that at the moment most investors are looking at losses, long term investments could be prospers as Africa as a continent growths.

The article does raise a small degree of hesitation pointing out “There are some worrying signs. Leaders once hailed as democrats are amending constitutions to escape term limits. In Congo, Joseph Kabila’s efforts to cling to power risk restarting a civil war, as the president of neighbouring Burundi already has.”

How do you feel?

http://www.economist.com/news/leaders/21696933-continents-future-depends-people-not-commodities-making-africa-work?fsrc=permar|text5

Why There's Hope for the Middle Class (With Help From China)

America has traditionally thought of itself as a middle-class nation. This claim clashes with data, though. Since the early 1980s, income inequality has been rising and median household income is lower now than it was in 1999. The lack of middle-class wage growth has originated from many factors including foreign competition, technological changes that favor highly skilled workers, and the existence of persistent poverty. A majority of the competition for American manufacturing has come from China, causing a stifling of American middle-class wages. This may come to an end, though. Higher wages in China and other competitive nations are now limiting the advantage of those economies. In addition, as China nears technological maturity, it is likely to spread innovations to consumers, creating a net gain for people in the United States. Income inequality may also be able to reverse itself due to evolving social norms of religions and social movements with strong moral codes. The author stated that when inequality trends begin to reverse themselves, it will be because those processes are operating largely outside of politics. Technology, trade, and even religion may restore the prosperity to the middle class.

Link: http://www.nytimes.com/2016/04/17/upshot/why-theres-hope-for-the-middle-class-with-help-from-china.html?ref=economy&_r=0 

Cricket Wireless launches a $65 unlimited plan

Cricket Wireless, AT&T's pre-paid subsidiary, announced a new prepaid unlimited plan that will begin April 17, 2016. This unlimited talk, text and data plan will cost customers $70 a month, which goes down to $65 a month if they sign up for Auto Pay.

Something to note is the data plan offers an unlimited amount of data you can use, not the speeds at which you can navigate.

Cricket also offers more affordable plans such as the Basic, Smart, and Pro data plans which go for $35, $45, and $55 a month using auto-pay.

Cricket was one of the fastest growing prepaid wireless companies in the US in 2015 according to John Dwyer, president of Cricket Wireless.

AT&T discontinued their unlimited data plans back in 2011.

Tar Heel Tatters: LGBT Law Strips the State of Business, Investment

This article talks about large business's reactions towards North Carolina's House Bill 2 (HB2).  The new law allows cities and local governments to not expand "employment" or "public accommodations" protections to others, such as on the basis of sexual orientation or gender identity.  Multi-billion-dollar companies are taking a stand and withdrawing investment from the state as some residents look for "friendlier" locations.  Most recently Deutsche Bank has stopped upgrading their new facility that would have created 250 jobs in the state.  Even 170 small businesses have signed a petition to repeal HB2.  I am curious to see what the government plans to do with the impact HB2 has made.

http://www.nbcnews.com/business/business-news/tar-heel-tatters-lgbt-law-strips-state-business-investment-n556686