Dr. Doom was wrong

http://business.financialpost.com/2013/01/21/how-roubini-got-it-wrong-on-a-greece-eurozone-exit/

In this article, the author shows that the man famous for predicting economic crisis 'got it wrong' on Greece's situation in the Eurozone. Economist Nouriel Roubini was labeled a skeptic and 'Doctor Doom' when he correctly predicted that the housing market collapse would create a global recession. This time however he had predicted that Greece would exit the Eurozone by now.

Since this has not happened, and the fact that Europe is again stabilizing financially, we can conclude that Roubini was wrong. The reason for this, as explained by the author, was that Roubini could not have seen the support of the European community and the Greeks' ability to sacrifice short-term gains for long-term, bigger gains. 

Chinese Economy

The Chinese economy is the second largest in the world; second to the United States of America. China has taken on an important role in manufacturing, producing many of the goods sold in the United States and Europe. In an article written by Damian Grammaticas, China correspondent for BBC, the decline and rebound of the Chinese economy is discussed. Grammaticas highlights that China suffered its slowest period of economic growth in 13 years, witness in the third quarter of 2012, an increase in Gross Domestic Product (GDP) of 7.4%. GDP increased by 7.8% in the fourth quarter of 2012. This shows signs that the economy is back on track. Grammaticas also highlighted that while China did see a decline in growth, their growth rate is still very high compared to other countries, about 2% in the United States. China is a "transition economy", the population is shifting from low-income earners to middle-income earners. This points to future growth showing similar patterns as the economy works out its "growing pains". All in all, the future is bright for the Chinese economy, which is closely tied to the health and stability of the economies of the rest of the world.


http://www.bbc.co.uk/news/business-21071546

The Fed Drives Best at Higher Speeds

http://www.nytimes.com/2013/01/20/business/fed-monetary-policy-drives-best-at-higher-speeds.html?ref=business

This article discusses the recent monetary policies Bernanke has implemented in order to help the economy continue to recover. They are currently using expansionary monetary policy in the form of open market operations through buying bonds. This approach includes the risk of creating inflation; but in her article Romer states that Bernanke and the Fed may argue that a strong dollar isn't necessarily desirable in a weak economy. This article also suggests that the current open market operations could be accelerated in order to bring back a strong economy faster. A pressing concern that is mentioned is the Fed's commitment to their new policies. According to Romer, it is important that they do not appear shaky on the policies that they implement and that a fast and aggressive approach is needed in order to bring back a strong economy as quickly as possible.

New Model Army- something to think about!

This is an article from The Economist which discusses the validity of macroeconomic models. It focuses on the fact that not all economic agents are included in these theoretical models that have been used over the years, such as banks. This is worth taking into consideration because , like the macroeconomic indicators used to measure the performance of the national economy, each economic model has its strengths & weaknesses and if banks & other financial institutions are to be included in the model, it's highly likely for the accuracy and validity of these models to increase as more economic 'agents/participants' are encompassed into the theories being analyzed, giving more details about the bigger picture.

http://www.economist.com/news/finance-and-economics/21569752-efforts-are-under-way-improve-macroeconomic-models-new-model-army?zid=307&ah=5e80419d1bc9821ebe173f4f0f060a07

How Economists do their jobs

http://www.economist.com/news/21567079-meet-economists-who-are-making-markets-work-better-micro-stars-macro-effects

Using some good examples, this article shows how economists around the world are using their knowledge, experience and thinkings everyday to helps their firms, or in a broader sense, the economy as a whole. The examples are varied, ranging from how Mr. McAfee used his experience at his previous company Yahoo to solve the same bandwidth problem his current company Microsoftwas was facing; to how Susan Athey of Microsoft utilized her economic knowledge to make both internet advertisers and users better off in a seemingly unavoidable trade-off between the two.

These examples are convincing not because they were all from well-known companies and individuals, they were also rationalized well. This article really helps me understand the role of an Economist better, and how economy theories can be applied to great effects.

A Philosophy Lesson

A piece of art becomes beautiful not just because of what it is, but also because of what it is not. This article, based on Lao Tzu's proverb “To attain knowledge, add things every day. To attain wisdom, subtract things every day,” explores ways to add beauty to the corporate and economic world through the art of subtraction. May gives us examples of corporate companies that have applied this idea of subtraction-- Apple, Instagram, Toyota-- and shows us how they changed the world. 

I feel it is an interesting, thought provoking article that shows gives one important lesson-- that less is more, and that "removing just the right things in just the right way," makes good things happen. 

Japan's Economy

http://www.economist.com/news/finance-and-economics/21569435-can-fiscal-and-monetary-splurge-reboot-japans-recessionary-economy-keynes

This article basically discusses the kind of economic policy Japan’s Prime Minister Shinzo Abe is adopting. Some of the spending to improve the country’s ‘rusting’ infrastructure to prevent disasters such as the one on December 2^nd when a tunnel collapsed and crushed 9 motorists. Advocates of the increased public spending believe it will help the economy out of the recession while critics believe it’ll just add to Japan’s already huge debt. Another policy that has been adopting is increasing money supply by printing more money, which is also reducing the value of the currency increasing exports.            However, the current account still struggles because of the need for energy imports. If the public spending is successful, it could result in increased efficiency and higher tax revenues. Some call Abe’s policies ‘Abenomics’. 

Public versus Private: might not be the debate we are used to

http://www.nytimes.com/2013/01/16/business/when-privatization-works-and-why-it-doesnt-always.html?_r=0

This article in the New York Times business section suggests that perhaps it is not so much a debate as to privatize industries but rather incentivizing the correct areas to shepherd people and companies into doing what is best for all. An example emphasized is British Petroleum (BP) as it has been under both private and government hands within the last ten years. Neither system was efficient because the private sector overemphasized profits and the government overemphasized public benefit. Neither found a balance, and it hurt the company. Goals in a company need to be clear and measurable and pull people behind them rather than being ambiguous because standards skew people. It seems simply sociology but plays a big role in whether or not a company, a country or even the world is geared for success or failure.

From cliff to ceiling

http://www.economist.com/news/leaders/21569423-debt-ceiling-america-serves-no-useful-purpose-and-should-be-abolished-cliff

After narrowly avoiding the fiscal cliff, the government is facing another upcoming issue with the debt ceiling. In about 5 weeks, the Treasury Department will run out of authority to borrow money once the national debt reaches the debt ceiling. If they fail to increase the debt ceiling there could be dangerous economic ramifications such as the government defaulting on it's obligations.
The last time the debt ceiling was raised, the threat of default forced the president and the Democrats into deficit cutting deals prompted by the Republicans. Many ideas are floating around to fix the problem that the debt ceiling raises such as the minting of a trillion dollar coin, invoking the 14th amendment section about public debt, and have the Treasury make interest payments on the debt. Whatever the solution is to the debt ceiling it needs to come quick because the impact of default could send the economy back into a recession.

Apple Drops to 11-Month Low on Reports of IPhone Cutbacks

We all know Apple (AAPL) as the giant that has brought us sleek looking and innovative performing technology. However, Apple's famed iPhone has come to a stand still on sales and has been cutting orders from its manufacturers. Since over forecasting, Apple has seen a major decline in equity; record breaking 11-month low.

This article looks back at Apple's most recent actions and how it could have effected the equity drop-off.  One of many thoughts is Apple's shortening product cycle. As well as observing the harsh competition between Google (GOOG) and the slow come-back of Research In Motion, Inc (RIM).