Myrtle Beach Bank Fails, Year's 42nd

The closing of Beach First National Bank of Myrtle Beach made the bank the 42nd U.S. lender to fail this year as well as the first South Carolina failure in more than a decade. Victory State Bank of Columbia was the last bank to close in South Carolina (March 26, 1999). The Bank of North Carolina will take over the seven branches.

Bernanke Says Central Bankers Must Act Strongly to Stem Crises

Federal Reserve chairman Ben Bernanke has urged policy makers to respond aggressively following the financial crisis. He is hoping to restore the flow of credit to American families and businesses and hopes to have increased regulation on the financial industry.

Obama showcases advantages of stimulus tax benefits

In this article, it speaks about how Obama's new stimulus package that he put into effect last year and how it is benefitting those who experienced the tax cuts. This stimulus package cost $787 Million dollars in hope to help the US economy recover from the current recession. The tax cuts have benefitted families and businesses which was funded with $160 million dollars. Those who have already filed their taxes this season will see an increase in tax re-fund (up to 10%) which is the highest it has ever been. In addition, people who have purchased a home and have filed their taxes, can see up to $8,000 in tax credit. This stimulus package is good for those who have low income, and for younger adults, but will effect those in the higher tax brackets.

Interest rate hikes to hit consumers

This article is about how interest rates are going to start rising and the effect it will have on consumer habits. The reason for an increase in interest rates is because of the large amounts of debt the U.S. has accumulated over the years. The first area that will be effected is in real estate, and as a interest rates go up it will reduce the gains in the housing market. Before this point in time rates have been declining for about 30 years. As a side note some other rates that will be affected are credit cards and car loans.

Ten Myths About China

The title says it all and for this article, I choose one myth that I found interesting.
I found myth #2 the most interesting:

Myth No. 2: China could surpass the U.S. as the largest economy in 10 years.

Truth: There is a reasonable chance that China will never surpass the U.S.

China will might never pass the U.S. if the government makes the right moves to cut the federal deficit, keeping steady interest rates, expand trade, and reduce government regulation, especially taxes. These policy reforms may prevent China from passing the US economy. Furthermore, some economists take a look at the past 30 years and assume the next 30 years will be the same in economic progress. This is a fundamental mistake in analysis of any economy. For example, the USSR relied on its population to support its industrial economy, which the USSR put considerable emphasis on. Thus, with the increased pollution and decline in life expectancy, the nation collapsed. China is in a similar situation.

Japan's debt problem Sleepwalking towards disaster

From class, Goran, on occasion, has discussed Japan and their current economic situation. As of now, we know that their debt to GDP ratio is at 190% and the public buys government bonds, thus Japan is O.K. This article discusses that the Japanese government needs to make radical changes to its current system and elect bolder policy makers. The author notes three problems with Japan's situation:
1. The Japanese are depleting all their savings on government bonds and not investing in businesses', also known as the crowd out effect. Eventually, Japan will need to rely on foreign investors to buy government bonds.
2. Japan is deflating its currency in order to stop inflation from occurring. However, this pushes the debt to GDP ratio inexorably higher. And prices will continue to stay the same or lower as the standard of living stays the same. Thus, deflation leads to less consumption by consumers.
3. In the contemporary global situation, the country cannot rely heavily on export to fuel their economic growth; instead they must rely on domestic growth to fuel GDP advancement.
These problems will be fixed by electing bolder policymakers who will create structural reforms to raise productivity, fiscal reforms to boost growth and a strong monetary stimulus, all at once, to shock the economy back to life.

U.S. Steps Up Probe Of Hiring In Tech

The Justice Department is stepping up its investigation into hiring practices at some of America's biggest companies, including Google Inc., Intel Corp., International Business Machines Corp., Apple Inc. and IAC/InterActiveCorp., people familiar with the matter said.The inquiry is focused on whether companies, particularly in the technology sector, have agreed not to recruit each others' employees in ways that violate antitrust law. Specifically, the probe is looking into whether the companies' hiring practices are costing skilled computer engineers and other workers opportunities to change jobs for higher pay or better benefits.But the leadership of the antitrust division hasn't yet decided whether—or how—to challenge the hiring practices, these people said. About a dozen companies are meeting with top antitrust officials at the Justice Department this week and next, some to defend their practices, others to provide information.Antitrust experts say the Justice Department could argue that an agreement between competitors that holds down labor costs is as much a violation of antitrust laws as an agreement to fix prices.

EU set to offer Greece 30 billion euros in aid

Finance chiefs said Greece could receive as much as $40 billion (30 billion euros) at a 5 percent interest rate. It hasn't been unanimously decided yet but ministers have made the terms of a potential deal public. The IMF, will also lend another 10 billion euros in addition. The Prime Minister of Greece says that the country has not asked for a bailout. The situation in Greece is very grim. The interest rates on Greek government bonds has risen substantially and Greece needs to borrow a large amount of money in order to pay down maturing bonds and finance its budget deficit.

Soros Says Pound Devaluation Is Option for Next U.K. Government

George Soros, a billionaire investor, said that U. K. government should consider a further devaluation of its currency to rebalance the economy and assist the recovery. The pound has already dropped 25% since 2007, making U.K. exports cheaper overseas. Soros says that U.K. faces a huge budget deficit, mainly, because government had to take the debt of banks that were in trouble. Now U.K. budget deficit is at around 12% of the GDP, and its debt constitutes to 60.3% of the GDP, but as Soros says U.K. is not at the limits of its borrowing capacity. “It’s a question now of, if you now cut the budget deficit and borrow less, you could probably keep the currency, raise the interest rate, you could keep the currency from going down,” he said. But history shows that U.K still has room to borrow more money to bolster its public finances.

Claims Rose From Jobless Last Week

This article discusses the recent rise in newly laid-off workers seeking unemployment benefits. Last week it reportedly rose by 18,000. Economists had estimated an amount that would drop to 435,000, but the actual reported amount of workers was 460,000. But the initial claims have dropped four out of the past six weeks, and many economists are claiming it should further decline as expected. Jobless claims spiked during the recession at 651,000 during March 2009. According to the labor department, the amount of people continuing to claim benefits for more than a week fell by 131,000 to 4.55 million. Unfortunately many are now receiving extended benefits for an additional 73 weeks after having used up the normal 26 week period for benefits. This article also states that just over 5.8 million people were receiving these extended benefits from data collected from March.