Japan grows at its slowest pace in a year

The third quarter of the year marks the slowest growth in Japan all year of a mere 0.2%, way below the expected growth of 0.8%. Although total growth was calculated to be 1.8%, 1.2% was subtracted after accounting for inventories. One of the major factors for this decline is due to a consumption tax implemented by the government in October, however, this slowdown is expected to affect the last quarter's growth too. During the Economic Outlook Conference, a student raised a question about the effect of US-China trade war on Japan, hurting the Japanese electronics, automobile and chemical industry. Paired with the consumption tax, the political background is only decreasing consumer and investor confidence in the economy resulting in even more of a slowdown. However, the Tokyo Olympics are just around the corner which is sure to give the economy a little boost.

https://www.ft.com/content/f2075cf4-0672-11ea-a984-fbbacad9e7dd

The U.S. economy may not grow at all in the 4th quarter

Recently, two Federal Reserve economic models forecasted dramatic declines in American GDP and economic growth. The first model, from the New York Fed, is predicting a fourth quarter GDP growth of 0.4%, and this is down from its initial forecast of 0.7%. The second model, from the Atlanta Fed, initially predicted a fourth quarter GDP growth of 1.0%, but this figure has also fallen significantly. Currently, the Atlanta Fed is forecasting a 0.3% growth in the fourth quarter. These economic figures fluctuate frequently, though, so an economic boost in late November and December could potentially lead to a better than expected economic and GDP growth. According to the article, the low economic forecasts are predominantly based on “negative surprises in recent economic reports” and “lukewarm consumer spending numbers.”

https://www.cnn.com/2019/11/15/economy/economy-gdp-fourth-quarter/index.html

Cancellation Phase of existing trade Tariffs between the US and China

The world's two largest economies seem to be coming towards the end of their trade war. A spokesperson for China’s Commerce Ministry said that both sides had agreed to simultaneously cancel some existing tariffs on one another’s goods. One of the important things to allow this to go through is for both countries to remove the same about of tariffs at the same time. These tariffs will also be removed in phases.
White House spokeswoman Stephanie Grisham said in an interview with Fox News that the Trump administration is “very optimistic” the two sides “will reach a deal soon.”
Economists, however, are skeptical and say a more comprehensive plan is needed to solve the problems and finally end the trade war.

https://www.cnbc.com/2019/11/07/china-says-it-has-agreed-with-the-us-to-cancel-existing-tariffs-in-different-phases.html

Economic Outlook Conference

IF you attended the economic outlook conference last night you understand we may be at a turning point in the economy. Ian Sheldon, who gave his outlook on the international economy, told us that we might as well be shooting ourselves in the foot with the tariffs we imposed on China as it is doing tremendous damage to our economy. I for one do not think we should be poking the economy with a workforce of over 1.4 billion people but should instead be actively negotiating with them. These tariffs could really come around to bite us in the butt especially if we are the only ones who experience an economic pullback in the coming years. I don't believe we will be the only ones because when the US hurts everyone hurts, but I do believe that China will have a bad taste in their mouths when it comes time to begin building our economy back up and that could be a trillion-dollar problem for us in the US.

What is your prediction on the outcome of this trade war?

https://www.cnbc.com/2019/11/05/china-presses-trump-to-remove-more-tariffs-in-phase-one-trade-deal.html

As the trade war presses on, there are uncertainties in the relationship between the two largest economies in the world. It continues to intensify and there have been significant repercussions. Negotiations are approaching a "phase 1" in which China is pressing President Trump to remove roughly 15% of tariffs imposed on $125 billion worth of Chinese goods. They also seek to relief from 25% tariffs placed on $250 billion of imports from machinery and semiconductors to furniture. Chinas economy has taken quite an impact from these tariffs and are attempting to have much of them removed to provide them with some economic relief since they rely so heavily on global trade. With additional tariffs on about $156 billion worth of Chinese imports scheduled to be put in place mid-December, China may want to find ways to incentivize the President Trump not to do so. Major reasons the U.S. jumped into this trade war were to get China to curb massive subsidies of state-owned firms and to end the forced transfer of American technology to Chinese firms simply as a price of doing business with them. China has not done so over the period of the trade war, so it does not seem that the U.S. will have much reason to back off on the tariff stronghold. Though it would be beneficial for both countries if a trade deal was arranged, neither country seems to be budging.
Which economy do you think has taken more of a hit, China or the U.S.?

Big companies feel the sting of Trump's trade war. But small businesses are in agony

With the 25% Chinese tariffs on the horizon, the anticipated outlook could have a large effect on small businesses that import or manufacture much of their product from China. Larger companies will still be affected, clearly, but with a much greater portfolio size come significantly less repercussions. Many small businesses today rely solely on Chinese exports. One disadvantage for smaller businesses is that it's very difficult to shift product sourcing to another country due to their limited resources available. Another complication is if their product were to suddenly cost them 25% more eating those costs are much harder for smaller businesses than larger ones. Raising prices for many of these smaller businesses may be out of the question as well. If you have to raise your prices by 25% it may push you well out of the range for what consumers are willing to pay.

https://www.cnn.com/2019/09/04/success/small-business-china-us-trade-war/index.html

Rising Yields Quiet Bond Market’s Key Recession Alarm

The ongoing trade war with China has caused numerous economists to panic over where the global economy is going. This article addresses a rarely seen positive outlook, keying in on the yield of treasuring bonds. The past few weeks there was a prediction of a recession because in the month of May there was an inverted yield curve, which makes short term investment more profitable then long term. This has since corrected itself, finally providing a positive sign. How important do you think that this really is? Also, does this help put to rest the idea that a recession is coming?

https://thesunbest.com/rising-yields-quiet-bond-markets-key-recession-alarm/

Elizabeth Warren's New Tax Proposals

article: https://www.nytimes.com/2019/11/10/business/economy/warren-billionaires-wealth-tax.html


Elizabeth Warren's new tax proposals are probably the single largest proposed tax hike on the mega wealthy in American history, or at the least since Reagan's tax cuts in the 80s. She plans to raise taxes on America's one percent, thereby increasing government revenue from taxes by a significant margin. The hope is that this will help hold the mega wealthy accountable for their fair share of taxes, and work on the growing income inequality in the United States. Naturally, this tax plan has a lot of opponents. Many of the opponents argue that this will limit growth, however Warren argues that by making the billionaires pay out some of their savings towards taxes it will actually make money circulate through the economy more. What do you think the affect of this tax plan will have on the economy?