Most of the Recession’s Stay-at-Home Dads Are Going Back to Work

This is an interesting article about the househusband and housedad returning back to the labor force. 

According to the article, the percentage of U.S. families with children under 18 and married parents featured an employed mother and a father who was either unemployed or not in the labor force keeps dropping for the fifth year in 2015 since the rising during 2007-09. The share of married-couple families with a working mom and a nonworking dad rose during the 2007-09 recession from 4.8% in 2005 and 2006 to 7.4% in 2009 and 2010. And last year, it went back to the long-run average, 5.3%. 

Actually I have heard of the tendency that many men leave the labor force market back home during the recession time, around 2008. Actually it's good to see them gradually getting back to the labor force because it can be seen as a signal of economic recovery. Also, at the same time, as what we have talked about in class, I guess we probably can see the decrease of unemployment rate because more people get into the labor force. 

What's more, I find the comments under the article is interesting which shows that many dad left the workforce is not only because the recession but also because they want to spend more time with family. This can be seen as a changing of social ideology. 

Here's the link: http://blogs.wsj.com/economics/2016/04/22/most-of-the-recessions-stay-at-home-dads-are-going-back-to-work/ 

China debt load reaches record high as risk to economy mounts

China’s total debt rose to a record 237 percent of gross domestic product in the first quarter. Economists says this could mean a financial crisis in looming or a a prolonged slowdown in growth. China has turned to a massive amount of borrowing to boost its growth. Another concern is how fast China has accumulated all this debt, the total amount of debt was only 148 percent of GDP at the end of 2007. China ominous debt situation could be a problem for other advanced economies. China is having a difficult time finding ways ways to invest these loans given such a small time frame. China's economy continues to be a problem, and the worse seems to still be ahead. Hopefully China makes good on their loans and prevents their financial troubles from worsening and spreading into other markets.

 http://www.cnbc.com/2016/04/24/financial-times-china-debt-load-reaches-record-high-as-risk-to-economy-mounts.html

Disappearing pensions hurt U.S. economy as well as workers

 U.S has increased the elimination of pensions,  this has caused the U.S. to move closer to a capitalist economy where companies no longer rely on pensions to attract workers and also don’t have a safety net where companies and workers are taxed to raise money for their pensions, as is the case in most European countries. That change has led to increased inequality, because low- and middle-class workers cannot afford pensions, whereas the wealthy can. 

http://www.usatoday.com/story/money/2016/04/23/pensions-economy-workers/83292892/

$20 Billion in Tax Credits Fails to Increase College Attendance

In this article, Susan Dynarski talks about how tax credits that people receive do not encourage people to attend college. Tax benefits for people in college makes up most of the benefits the government gives to any level of education. This is because these benefits were suppose to help deduct interest on student loans and help students pay their tuition. What studies have found is there is no correlation between the two, in fact, these tax credits do not have any effect on people who attend or do not attend college. This is mainly due to the fact that families who receive these tax credits are either middle class or upper class families, and the amount they receive from these credits, which ranges around $2,000 to $3,000, have no affect if a family is going to send their child to college or not. Also the credits that are given out, usually come out after most schools' deadline to pay off their tuition, so these credits do not help with paying for school in that year. To me, if the government wants these tax credits to encourage people to go to college, the government needs to offer more of an incentive for families, or give them out earlier so they can help families pay their children's tuition.


http://www.nytimes.com/2016/04/20/upshot/how-to-use-tax-credits-to-increase-college-attendance.html?ref=economy&_r=0

China's middle class beats America's

This is a very interesting article that inspects how many Americans think trade is not beneficial to the domestic economy.

Chinese middle class is 'booming,' it says, where growth in America has stagnated. The article also incorporates the idea of the rise Trump supporters with them believing in his ideas of "bringing back jobs from Mexico and China."

Here is the article: http://money.cnn.com/2016/04/24/news/economy/china-us-trade/index.html?iid=Lead

Volkswagen Posts Deep Loss After Taking $18.28 Billion Hit on Emissions Scandal

After selling diesel cars in America that contained software designed to cheat emissions tests, Volkswagen, the German auto manufacturer, delivered a proposed settlement to U.S. federal judge this week to help end their legal battle.  The company proposed a buy back or repair of as many as 500,000 diesel vehicles sold in the U.S., while also offering payments to owners. Volkswagen estimates it will cost $18.28 billion in 2015 alone to put the crisis to bed. This will probably increase demand for other competitors in the auto industry, and will decrease demand and customer loyalty for volkswagen.

Early Analysis of Seattle's $15 an Hour Wage Law

Peter Kelly of UW Today reports that Most Seattle employers surveyed in a University of Washington-led study said in 2015 that they expected to raise prices on goods and services to compensate for the city’s move to a $15 per hour minimum wage. But a year after its implementation, this doesn't appear to be the case. According to one survey, "Sixty-two percent of employers said they expected to raise prices of goods and services to accommodate the higher wages brought by the law. Ten percent of the employers believed incorrectly that the ordinance would force their business to move to a $15 wage immediately upon implementation". The purpose of the study was to develop a full understanding of how businesses and nonprofits change their practices to accommodate higher wages, and of whether a higher minimum wage meaningfully transforms lives.

http://www.washington.edu/news/2016/04/18/early-analysis-of-seattles-15-wage-law-effect-on-prices-minimal-one-year-after-implementation/

U.S. Airlines fearing the pesty Norwegians

The airway market in the United States has been facing controversy recently. Recently, Norwegian Air International was approved to being able to fly in U.S. airways. This is being hit with massive backlash and has the potential to change the airways immensely. This is because NAI is based in Dublin, Ireland. In Dublin, costs of running the airline are much less stringent and give NAI a substantial advantage over U.S. airlines, which is the cause to all of the backlash. It will be interesting to see how it plays out.

http://www.businessinsider.com/norwegian-air-international-america-boeing-2016-4

Investors aren't going to make money in this Fragile market

"How can investors generate sustained positive returns against this type of turbulence?" The answer is many can't, at least in the traditional areas of money management. We're increasingly looking to the alternative area as a result." This article talks about how investors are increasing speculation every year and have withdrew almost $15 billion from the banking sector in the last year. The article expresses its concerns that which such figures and an expected increase in withdrawals in the coming years, the focus is shifting from the banking  to other areas to generate revenues specially the tech industry. 

Link: http://www.businessinsider.com/blackstone-market-is-fragile-2016-4

$20 Billion in Tax Credits Fails to Increase College Attendance

The federal government spends over $30 billion annually in tax benefits for college. The American Opportunity Tax Credit and the Lifetime Learning Credit also provide benefits for deductions on interest on student loans. The government spends a lot more money on college education than elementary and secondary schools. The tax benefits are in place to get more people into and through college. Two economists at Stanford University have found that tax benefits and tax credits have no effect on college attendance. They believe this could be because they are going to middle and upper class families whose decision to send their kid to college is unlikely to depend on around $2,500. Also the benefits are often not given back until after tuition is due which would not effect enrollment. The complexity of tax benefits doesn’t seem to be helping raise college attendance rates. It will be interesting to see if they change how and when they give the credits in the future, and if it will increase college attendance.

http://www.nytimes.com/2016/04/20/upshot/how-to-use-tax-credits-to-increase-college-attendance.html?ref=economy&_r=0

Exide lead contamination cleanup

In this article they talk about how Governor Jerry Brown ask the lawmakers at California to spend $177 million on testing and cleanup of lead after the contamination caused by the Exide company. The Exide plant in Vernon, California was close due to the high contamination to the communities of Los Angeles. Exide was a manufacturing company that made lead-acid batteries, automotive batteries and industrial batteries. However, this company was creating so much pollution to its surroundings that people had to petition to close down this company. Now the company has been shut down but recent studies show that there is so much contamination in the area of Los Angeles that is it necessary that everyone gets tested.

They will receive a loan in which it would allow “the Department of Toxic Substances Control to expedite the cleanup process around Exide and then the state will go after the contaminator for the money that was spent.” Being from Los Angeles I have seen the community trying to get the government officials to realize that this was a serious issues. After years of being unheard they have finally began to do something about this issue. However, due to the recent studies there is a lot of contamination in the area that will cost them a lot of money.

The Los Angeles city mayor also released a video in which he encourages the community to get tested. Lastly, they also created a website in which people from the community can visit and get information as to where to get tested or how to get someone to test the lead contamination on their homes.

Article: http://www.scpr.org/news/2016/02/17/57646/governor-proposes-176-million-for-exide-clean-up/

Website:  http://exidecleanup.lacity.org/

Regulators warn about too much defense industry consolidation

Federal regulators have issued an unusual warning about the perils of defense industry consolidation, noting the importance of competition to keeping prices down. 

This statement corresponds with recent moves made by the world's largest defense contractor Lockheed Martin, after they acquired helicopter manufacturer Sikorsky. Also, over the last 6 months Lockheed Martin has announced 700 layoffs in their IT department as they move to combine IT services with Leidos in a $5 Billion deal. 

Federal regulators stated, "If a transaction threatens to harm innovation, reduce the number of competitive options needed by [the Department of Defense], or otherwise lessen competition...[regulators] will not hesitate to take appropriate enforcement action."

Government spending has actually declined severely since the recession, which has had the biggest hit on military contractors. Therefore the defense industry has had to make tough choices like merging with each other. Some companies have gone looking for military business globally or even in the commercial sector. 

After many job cuts and realignments defense giants have seen profits improve in the past year. But industry officials still have concerns about increased consolidation within the industry, arguing that the slowdown in spending from the Pentagon has made mergers and acquisitions necessary. 

https://www.washingtonpost.com/news/business/wp/2016/04/12/regulators-warn-about-too-much-defense-industry-consolidation/

Money from Heaven: Free exchange

The central banks are considering alternatives to borrowing and bonds but giving money through incentives and tax breaks. This article discusses "Helicopter money", which is printing money to fund government spending or to give people cash, this is in response to nations chronically low inflation and interest rates especially in Japan and Europe. The goal would be to increase government spending, tax cuts or pay citizens directly, governments have tried quantitative easing where governments would hold onto bonds until maturity. The downfall is that citizens may choose to save their money rather than spend it, thus not helping the economy at all. The ECB has been slow to recover especially because they are not able to finance governments. Countries are struggling with lowering their deficits. This article speculates that if countries don't have the framework to use helicopter money, then they will not be able to react as efficiently to the next financial crisis.

THE ARTICLE

$20 Billion in Tax Credits Fails to Increase College Attendance

New research and evidence is showing that a 20 billion dollars in tax credits for college expenses has little influence on encouraging people to attend college.  The tax benefits were created to get low income college students in and through college.  The IRS released dozens on data sets, which show that college enrollment rises with income, but this is not exactly true.  One explanation could be that the credits mostly go to middle and high class families, whose decision to attend college is usually not affected by a small savings.  Another explanation could be that credits are given too late to affect enrollment.Students and parents usually don't receive the tax benefit until after tuition is due.  Some people cant afford to wait.  The process is currently being edited to hopefully raise college enrollment rates.  20 billion dollars is a lot of money. Lets not let it go to waste.


http://www.nytimes.com/2016/04/20/upshot/how-to-use-tax-credits-to-increase-college-attendance.html?ref=economy

Apple Has Upside as Investors Worry

High expectations aren’t always helpful to Apple. Low expectations just might be.

When Apple posts results for its fiscal second quarter Tuesday, it will be a first in some different ways. Revenue and iPhone unit sales are both expected to be down on a year-over-year basis. 

Apple hasn’t reported a drop in quarterly revenue in 13 years. The iPhone hasn’t posted a negative sales quarter since the smartphone was launched in 2007.

This shouldn’t be shocking. 

Apple itself forecast the revenue drop in its last quarterly report in January. And while conflicting reports have surfaced lately about more production cuts, the performance bar is now so low that it is tough to see Apple not clearing it. Analysts are projecting 50 million iPhone units sold in the March quarter—an 18% drop year over year. Revenue is expected to fall 10% to $52.1 billion, while per-share earnings are expected to slide 14% to $2.

Why the bleak numbers? Apple is largely a victim of its own success. The iPhone 6 delivered such record-busting growth last year that its successor could hardly be expected to keep up. Fewer people are rushing to buy the iPhone 6S this year. The newly launched iPhone SE may boost performance in the June quarter, but won’t pull Apple out of the slump on its own. Analysts expect iPhone unit sales to still be down 7% for that period.

The bigger question is what comes next.

We don’t even have a leaked photo yet of the iPhone 7, or whatever Apple decides to name its next gizmo. It needs to be good enough to bring Apple back to growth. Analysts are already modeling a 6% gain in iPhone sales for fiscal 2017, led by the new device.

The unseen phone is relevant to investors now. Apple’s stock peaked about a year ago, when fears of an iPhone slowdown surfaced. Since then, the company has shed about $180 billion in market value. This puts the stock at a lowly multiple of only about 8.5 times forward earnings, excluding net cash. The iPhone slump is now more than priced in.

http://www.wsj.com/articles/apple-has-upside-as-investors-worry-1461510598

A $30 billion hedge fund had staff program a robot to play air hockey to help make them better at making money

This is a very interesting topic that I would like to share. As the advance of technology, robots are gradually taking place human in some areas, but in this news, Two Sigma just hosted an artificial intelligence competition.

Two Sigma is a hedged fund that try to look for the investment opportunities by the advanced technologies.

The competition has human bracket and AI brackets, the champions of two brackets would meet in the final.


http://www.businessinsider.com/two-sigma-artificial-intelligence-air-hockey-2016-4

Iran Might Still Outwit Saudis on Oil

Link for the curious: http://www.bloomberg.com/gadfly/articles/2016-04-24/iran-might-spoil-saudi-arabia-oil-plan

Since the sanctions on oil sales was lifted for Iran in January, their sales and exports of oil have absolutely taken off. If the exports continue at this rate, there could be some major discussion at OPEC's next meeting in June. From March to April, Iran's oil exports increased from 1.45 to 2 million barrels per day, a staggering increase which shows Iran is here to play.

Iran refused to participate in the output freeze early on in the year because they wanted to restore their exports to pre-sanctions levels. The original estimate was that this process would take up to a year or more. However, it appears it's been done in just 3 months. This complicates the Saudi situation as they will have to make a choice at the upcoming OPEC meeting as to whether or not they will work in an output freeze or not.

It will definitely be interesting to keep an eye on Iran's production for the months of May and June and to see the results of OPEC's June meeting.

System Says Slow: The IMF sees political danger in the economic doldrums

This article is very interesting and explains why the IMF has recently released a forecast showing slower GDP growth than it did before. In explaining the predicted decline chief economist Maurice Obstfeld proclaimed that the biggest threat to the economy is coming from "non-economic risks". The risk that he is referring to stems from the political spectrum of the economy. He notes that any slide in GDP tends to lead to lower investment which leads to high political tensions. The article notes that Brazil exemplifies the problem of how a bad economy can be made worse by political paralysis. Other political factors are present today such as the possibility of Britain leaving the EU and the refugee crisis that is putting pressure on the EU's border policies. Only time will tell how global issues like these will affect the economy, but it seems apparent through this article that political upheaval certainly will not lead to a healthy world economy.

http://www.economist.com/news/finance/21696883-fund-sees-danger-economic-doldrums-imf-downgrades-global-growth