With the revelation that the special prosecutor Robert Mueller will hand out the first indictments, this has greatly increased the volatility in which the stability of the U.S. government is viewed.  As such this may make many see in an in the stability of the U.S. government.  If this instability continues then it could be quite possible that the stock market takes another dive, similar to the one it took this past May when Robert Mueller was named the special prosecutor.  Investors detest instability and as such we may see U.S. government-backed securities to be sold off to a certain degree, or possibly, even more, to be bought as some may think this will warrant a higher yield on the bonds.  Such actions may have repercussions in international markets as well as this may lead to change with the U.S. relationship with Russia and other countries may want to consider how they deal with a U.S. President who may not be around for much longer.

https://www.nbcnews.com/politics/politics-news/grand-jury-approves-first-charges-mueller-s-russia-probe-report-n815246

Brexit: EU bank may not fully repay UK until 2054

Article: http://www.bbc.com/news/uk-politics-41774817

The UK has 3.5bn euros of capital in the European Investment Bank (EIB) which could be worth 10.1bn euros considering reserves and profits. However, Alexander Stubb, the vice president of the bank, said UK's investment won't be fully repaid until 2054.

All 28 EU nations are shareholders in this Luxembourg-based bank, with the UK being one of the largest with 16% next to Germany, France and Italy. The EIB uses capital given by the EU countries to provide loans at low rates which are mostly used for major infrastructure projects.

There has been talks about how there are delays in authorizing new loans while the UK remains part of the EU. For example, a housing association, Stonewater, has reported that it may build roughly 300 fewer homes because their application for 100m pounds to build new properties has come to a halt. Apparently Stonewater's executive director said that the bank has to wait for assurances from the UK government before their application can continue. It is not clear what these assurances are, but it most likely has to do with the UK wanting it's taxpayer's money payed back to them.

If housing associations are having to limit the amount of homes they can build, one might wonder what other infrastructure related projects are being hurt by this? Since the UK's money could be tied up for decades, would this problem also persist for decades? It will be interesting to see what will happen to the EIB's ability to loan out funds as time progresses.

Economy grew brisk 3% in Q3 despite hurricanes

Despite the two devastating hurricanes that recently hit our country, our economy continued to grow in Q3 of this year. While housing construction dramatically fell, business stockpiling and consumer spending picked up the slack. The U.S's GDP increased at 3% following a 3.1% increase in the Q2, marking the first time since mid-2014 that the GDP grew at or over 3% for consecutive quarters. Economists expected the hurricanes to cause a decrease in GDP of around .5% but that didn't happen. GDP actually increased to 3%. Economists are also forecasting an increase in output as construction crews repair the damages caused by the hurricanes and consumers make purchases for their newly re-built homes.

Workers are not switching jobs more often

The common conception of ‘Millennial job hopping” has evolved into a misconception as of late. Anyone born after 1982 is considered a millennial, and they are more likely to switch jobs than older colleagues. In America at least, the trend in job tenures has not changed in years. The Bureau of Labor Statistics gathered data showing workers 25 years and older now spend a median of 5.1 years with employers, just slightly more than those of 1983 (between 4-6 years). The only drastic change in job tenure length of the years pertains to middle aged men, ages 45-54. Job tenure average has dropped from 12.8 years in 1983 to 8.4 years in 2016. This drop is due to a collapse of semi-skilled jobs and a decline of labor unions. However, the decline has been offset slightly because women have been staying longer in their jobs and retirement ages have increased, hardly changing the overall numbers. Some millennials are in fact switching jobs more often, these millennials are in Europe. Research from the OECD shows that France, Germany, Italy, and Spain each have increased overall job tenure, but the younger workers (millennials) have shown a decrease in tenure length. Labor-market restrictions in Europe have nudged younger workers to take on “temporary gigs” and fixed term contracts. With new industries, the startup scene where apps are created and sold every six months only to start the next, one would think that the job tenure length would be shifting toward a decreasing average.

Do you think we should expect to see consistency in average job tenure among the younger generations for the foreseeable future or not and why?

https://www.economist.com/news/finance-and-economics/21730440-millennials-it-turns-out-are-loyal-and-boring-previous            

Amazon reveals Employee number

Amazon revealed that it had over 541,000 employees in the third period.  Just over a year ago that only had about a little more than 300,000 employees during this period.  It is believed that most of this employee growth is from the acquisition of Whole Foods that occurred a couple months ago.  During that time Whole Foods was at around 87,000 employees before the buyout.  Another reason for the enormous growth in the employee numbers is because of the new facility they are planning on building and have jobs for customer service reps and fulfillment centers.  The number will grow even more once they build their new headquarters somewhere else around the country which should produce a good number of jobs.  Amazon still has a long way to go to surpass Walmart's employee number which stands at about 2.3 million employees but with the growth Amazon has been having in the recent years, I see them growing significantly and will soon pass Walmart's employee numbers.  Also the profit of the company has also grow for the tenth straight quarter in a row and they up over $250 million in profit in the third period.  Amazon is a great company that has made a lot of great strides and will soon be one the biggest company in the entire world and the growing number of employees will only bring growth to the company as a whole.

http://money.cnn.com/2017/10/26/technology/business/amazon-earnings/index.html?iid=hp-stack-dom

What’s the answer when globalization causes people to lose jobs?

While free trade can make both countries that trade better off overall, it can also negatively affect certain towns or regions in one or both countries. This can happen for example when another country manufactures a good more cheaply than it can be manufactured domestically in the US. When overseas wages are lower than wages in the US, the lower production costs may mean the good can be made more cheaply overseas. As a result, Americans would naturally decide to export the good from that particular country overseas rather than buy the local product--assuming no high tariffs or taxes on the imported good. Unfortunately, this could cause situations where factories or companies have to fire people and even close down.

According to an article in The Economist this week, it’s difficult to know what policies to use to respond to this problem. One policy, using government subsidies to keep an industry going, can just end up making the depressed town or region overly dependent on the subsidy and doesn’t really provide a solution. Another solution, according to economic theory is for the people who lose their jobs to move to a more prosperous town or region and take on different jobs. But many people would find a move disruptive to their lives. According to The Economist some subsidies can actually work well when the money is used to retrain people. Tax incentives as a subsidy can also work when they attract new businesses to set up in a depressed area. There could be problems here too when the incentives expire. Will firms even leave once incentives expire? Globalization and its different effects can present some big challenges in these ways as well as opportunities.

https://www.economist.com/news/briefing/21730406-what-can-be-done-help-them-globalisation-has-marginalised-many-regions-rich-world

Mnuchin and tax reform

Treasury Secretary Steve Mnuchin is having a hard time advocating for the tax reform plan proposed by House Republicans. In several public appearances, he has undermined the White House's message about the tax plan by admitting that eliminating the estate tax will help the wealthy (as estate taxes only apply for estates with a value of $5.45 million or more), incurring the White House's ire; he has also alienated House and Senate Republicans by making a bizarre request that the Congresspeople vote for tax reform not for the substance of the plan or for President Trump, but for him (Mnuchin), who they have known for a few short months.

This is interesting because it speaks to the difference between finance (which has been Mnuchin's specialty at Goldman Sachs) and economic public policy like tax reform. Most members of the public would probably assume that these backgrounds would relate to each other because finance and economics seem so similar, but Mnuchin's experience speaks to the importance of having a background in tax policy and politics before being appointed to such an important role as Treasury Secretary. Tax reform is an incredibly important part of policy and will impact every part of the economy, and Americans deserve someone who can speak for their interests and effectively advocate for their legislation.

http://www.politico.com/story/2017/10/26/mnuchin-treasury-congress-wall-street-244184

NAFTA

Canada,Mexico to firmly reject US NAFTA  proposals. NAFTA is the agreement between Mexico,Canada ,and USA that allows free trade. Nafta has benefits both for consumers and businesses. Consumers get lower prices and greater selection of goods. For businesses NAFTA allows for more market access and elimination of tariffs. If a new deal cant be reached it could make for an economic disaster. It would increase cost for consumers and effect multiple industries such as agriculture , manufacturing , and automotive. Although leaving NAFTA  has some cons it also has some positives . NAFTA cost the US 750,000 manufacturing jobs to Mexico, also it lowered US wages in those given industries. What decision should the US make in regards to NAFTA? 

Uber's new credit card targets Millennials

Uber announced on wednesday that it is launching its own credit card. People who get approved will be able to start using the card on November 2nd. Uber's card will come with an annual percentage rate of 15.99% to 24.74% depending on your credit worthiness. The card is set up to reward users "by integrating tracking and redemption of points into the Uber app". The card is targeting millennials and their busy lives. The no fee Uber visa card offers many ways to earn rewards points. The rewards are set up with 4% back on dining, 3% back on travel, 2% back on online purchases (which has never been seen before in credit card rewards), and 1% back on all other purchases. The redemption of the points starts at 500 which would get you $5. The card is obviously targeted for frequent Uber users as the points system goes straight into the app which can be used to pay for rides. Most other credit cards have been transitioning to cash back instead of a points system, Uber realizes this but thinks they have a simple system that will be very convenient and beneficial for preexisting Uber users.

I think this is a smart move by Uber to diversify and add something to the user experience that is pretty rare. Their rewards system sounds very beneficial if you are an active Uber user which would apply to a lot of millennials that live in big cities without a car. It will be interesting to see how popular the card gets in the coming months.

http://money.cnn.com/2017/10/25/pf/uber-credit-card/index.html?iid=SF_LN

US new home sales soar to highest level in a decade

The sales of new homes in the United States was the highest last month, since 2007. More people have been looking for new construction, rather than buying older houses. Also, the hurricanes have impacted this statistic because new homes are in high demand in the areas where there was a lot of destruction. In the South, where hurricanes hit, there was a 26% increase in the sale of new homes last month. However, the South was not the only region that showed an increase in the last month. In the Northeast, sales rose 33%, and in the Midwest, sales grew 11%.

Right now there is an excess supply of existing homes in the market. Potential house buyers are frustrated because of the high amount of old homes, and the low amount of new ones. Therefore, the demand for construction should increase for the next couple months or years. However, construction companies are having trouble trying to find enough workers to keep up with the demand. Also, most of the new houses being built are not projects that can be done overnight. In fact, the average price of a home last month was $385,000, the highest average price since 1963. Last months sales showed more than 19,000 houses sold over $500,000 and less than 13,000 houses sold under $200,000. This shows the type of houses that are in high demand right now.

http://www.foxnews.com/us/2017/10/25/us-new-home-sales-soar-to-highest-level-in-decade.html

The Economy Is Humming, but That May Not Win Janet Yellen Another Term

Since Janet L. Yellen became the Federal Reserve’s chairwoman in February 2014, unemployment in the United States has steadily declined while inflation has remained low. Few Fed chairmen have achieved comparable success.

Yet President Trump, who is scheduled to meet Ms. Yellen on Thursday, says he is still considering whether to nominate her for a second four-year term, and key White House aides are pressing for her to be replaced.

Ms. Yellen’s peril reflects the polarization of American politics. The three previous Fed chairs were reappointed at least once by a president of the opposite political party, but some Republicans are eager to oust Ms. Yellen, a registered Democrat who has strongly defended post-crisis financial regulations.

She may also become a victim of her own success. Steady economic growth and the tranquillity of financial markets have emboldened some critics, who see an opportune moment for a transition to new leadership.

But Mr. Trump also faces warnings that replacing Ms. Yellen is an unnecessary risk to the economic growth the president has repeatedly pointed to as a primary success of his young administration.

Yet, Mr. Trump is considering four candidates to replace Ms. Yellen. On that short list: Gary D. Cohn, the president’s chief economic adviser; Jerome H. Powell, the only Republican on the Fed’s board of governors; John B. Taylor, a Stanford University economist who has criticized the Fed for raising interest rates too slowly; and Kevin Warsh, a former Fed governor and a fellow at the Hoover Institution.

Mr. Trump wants to loosen financial regulations, which he regards as an impediment to economic growth. Ms. Yellen, who played a key role implementing the new banking rules after the 2008 crisis, has acknowledged room for improvement. But in a high-profile speech in August, she also issued a warning against going too far.

https://www.nytimes.com/2017/10/18/business/economy/janet-yellen-fed-second-term.html?rref=collection%2Fsectioncollection%2Fbusiness-economy&action=click&contentCollection=economy&region=stream&module=stream_unit&version=latest&contentPlacement=1&pgtype=sectionfront