Thursday, March 7, 2013
Will Robots Take Over The Labor Market?
Many people will argue that in the future technological advances such as robots will take over simple human tasks and have many people looking for a job. In an article published in 2011 titled "Rise against the Machine" argues that workers will not be able to keep up with technological change. The article says that soon companies will able to eliminate millions of jobs. The jobs eliminated would be one where workers do mundane tasks such as cashiers. There have been studies shown that it is not as bad as we think. One researcher, David Autor, argues against this theory. He says that economists look at simple production functions that say that capital and labor are two different components and together they make GDP. He argues that in the real world capital and labor actually come together. He believes that technology will complement labor. This means that technology will replace mundane tasks that can easily be automated and allow workers to handle more complex issues. An example is a worker that prints airline tickets. He says that now a robot will print the ticket so the worker can handle issues such as cancelled flights or people changing flights. In the end robots will actually help workers become more productive by allowing them to focus on more complex issues without dealing with mundane tasks. Also, humans will always have a cognitive advantage over robots and firms will not be willing to allow robots to take over these jobs.
Wall Street ends flat after late fade; S&P up for fourth month
http://finance.yahoo.com/news/stock-index-futures-point-slightly-090532570.html
In recent times the Dow has been getting closer and closer to breaking all-time high records even with the stock market closing relatively flat. The S&P 500 has also been on a role with a 1.1% gain this month (February), it also ended February with four straight months of gains. The Dow was recorded to have ended the month with a 1.6% gain followed by the Nasdaq with an advance of 0.6%. 14,1980.10 is the highest point the Dow has ever been and that had been obtained back on October 11, 2007, now its just inching back towards that and it could very well break that record. Although there have been many gains in the stock market recently, some companies seem to still be struggling, for example JC Penny Co. Inc. was hit hard decreasing by 17% this past month. If there aren't too many more changes in the stock exchange and they continue to have gains, other companies may start to see gains as well in this slowly recovering economy.
In recent times the Dow has been getting closer and closer to breaking all-time high records even with the stock market closing relatively flat. The S&P 500 has also been on a role with a 1.1% gain this month (February), it also ended February with four straight months of gains. The Dow was recorded to have ended the month with a 1.6% gain followed by the Nasdaq with an advance of 0.6%. 14,1980.10 is the highest point the Dow has ever been and that had been obtained back on October 11, 2007, now its just inching back towards that and it could very well break that record. Although there have been many gains in the stock market recently, some companies seem to still be struggling, for example JC Penny Co. Inc. was hit hard decreasing by 17% this past month. If there aren't too many more changes in the stock exchange and they continue to have gains, other companies may start to see gains as well in this slowly recovering economy.
Wednesday, March 6, 2013
China pledges to tackle pollution crisis
http://money.cnn.com/2013/03/05/news/economy/china-environment-pollution/index.html?iid=SF_E_River
This article talks briefly about the recent national congress in China, in which the Chinese Premier Wen Jiabao pledged to start taking effective measures against the pollution engulfing China. China has been in a period of rapid growth and industrialization, but with rapid growth comes the problem of pollution. IT was interesting to learn that China burns 3.8 billion tons of coal per year or nearly as much as the rest of the world combined. And the pollution has only been increasing while the pollution and dust have been known to settle as far as California. Some measures that they may implement to reduce pollution are alternative energy sources and carbon taxes. The only question now is if the talk at the congress will be translated into action.
This article talks briefly about the recent national congress in China, in which the Chinese Premier Wen Jiabao pledged to start taking effective measures against the pollution engulfing China. China has been in a period of rapid growth and industrialization, but with rapid growth comes the problem of pollution. IT was interesting to learn that China burns 3.8 billion tons of coal per year or nearly as much as the rest of the world combined. And the pollution has only been increasing while the pollution and dust have been known to settle as far as California. Some measures that they may implement to reduce pollution are alternative energy sources and carbon taxes. The only question now is if the talk at the congress will be translated into action.
Service sector expands in February
http://www.usatoday.com/story/money/business/2013/03/05/ism-services-index-february/1964369/
"The service sector if the economy grew in February at the fastest pace in a year, buoyed by higher sales and orders." The service sector increasing is very good for the economy because the service sector is the largest part of the consumption portion of our GDP. When more people are consuming goods and services in the largest portion, then there is going to be an influx of money and jobs into the economy. The government will not release the February employment report until Friday, but when they do, I believe that the unemployment rate will have decreased from the previous month because of this increase in the service sector.
"The service sector if the economy grew in February at the fastest pace in a year, buoyed by higher sales and orders." The service sector increasing is very good for the economy because the service sector is the largest part of the consumption portion of our GDP. When more people are consuming goods and services in the largest portion, then there is going to be an influx of money and jobs into the economy. The government will not release the February employment report until Friday, but when they do, I believe that the unemployment rate will have decreased from the previous month because of this increase in the service sector.
Billionaires Dumping Stocks
http://www.moneynews.com/Outbrain/billionaires-dump-economist-stock/2012/08/29/id/450265?PROMO_CODE=FE8A-1
Very well respected investors, not to mention billionaires, have been selling off large percentages of their stock holdings despite all of the recent news of the DOW closing at record highs. Warren Buffett, John Paulson, and George Soros have been dumping most of their stock in companies that rely on consumer spending patterns. As we all know, 70% of the U.S. economy depends on consumption. If these billionaires are losing faith in our consumer spending habits and that they will fall dramatically, our economy is going to be in big trouble. Many people think the economy is just getting back to normal with real estate values actually growing in some regions, unemployment seems to have stabilized, etc. However, new research shows that the recklessness of the FED regarding their strategies for excessive money printing will eventually reach the stock market, and when it does, inflation will sore to heights most people living today have never seen. Treasury bonds will lose all value, interest rates will increase dramatically, and real estate values will collapse. In response, the U.S. stock market will completely breakdown. Although this is a worst-case scenario, it should not be ignored. In return, U.S. companies will start to spend more money on borrowing than on expansion, which means more layoffs and less profit. No one wants to hold stock in a company like that, which is why respected investors are dumping stock.
Very well respected investors, not to mention billionaires, have been selling off large percentages of their stock holdings despite all of the recent news of the DOW closing at record highs. Warren Buffett, John Paulson, and George Soros have been dumping most of their stock in companies that rely on consumer spending patterns. As we all know, 70% of the U.S. economy depends on consumption. If these billionaires are losing faith in our consumer spending habits and that they will fall dramatically, our economy is going to be in big trouble. Many people think the economy is just getting back to normal with real estate values actually growing in some regions, unemployment seems to have stabilized, etc. However, new research shows that the recklessness of the FED regarding their strategies for excessive money printing will eventually reach the stock market, and when it does, inflation will sore to heights most people living today have never seen. Treasury bonds will lose all value, interest rates will increase dramatically, and real estate values will collapse. In response, the U.S. stock market will completely breakdown. Although this is a worst-case scenario, it should not be ignored. In return, U.S. companies will start to spend more money on borrowing than on expansion, which means more layoffs and less profit. No one wants to hold stock in a company like that, which is why respected investors are dumping stock.
Tuesday, March 5, 2013
Dow Jones and FTSE climb to new highs
http://www.bbc.co.uk/news/business-21621048
The Dow Jones industrial average reached record highs today, achieving a key level in its recovery from the 2008 financial meltdown. Since the last record of 14,164 in October, 2007, the housing market collapsed, the economy has stumbled through years of slow growth and high unemployment, and the country has experienced the worst financial crisis since the Great Depression. The national debt has also increased dramatically from that point on, from $9.4 trillion to $16.6 trillion.
As of now, the housing market is improving and vehicle sales are generally increasing too. However, having a soft global economy and a substantial level of government austerity will not help, so the strong recovery that was once foreseen is hardly likely to happen, at least in the short run.
The Business of the Minimum Wage
http://www.nytimes.com/2013/03/03/business/the-minimum-wage-employment-and-income-distribution.html?smid=re-share&_r=0
Obama has recently proposed a raise in the minimum wage to $9 an hour. While this was very popular among the general public, many economists thought otherwise. The reason why a raise in the minimum wage is not a good idea is because this will only increase unemployment, which is one of the fights we are fighting right now as an economy. If companies have to increase their wages, then they are going to higher fewer people and possibly let go of some employees to contemplate the higher expenses. Statistics have also shown that over half of all employees working the minimum wage are people coming from a family with an income of $40,000 or more. So this increasing of the minimum wage would not make as large of an impact on the people below the poverty line as the general public may have thought.
Obama has recently proposed a raise in the minimum wage to $9 an hour. While this was very popular among the general public, many economists thought otherwise. The reason why a raise in the minimum wage is not a good idea is because this will only increase unemployment, which is one of the fights we are fighting right now as an economy. If companies have to increase their wages, then they are going to higher fewer people and possibly let go of some employees to contemplate the higher expenses. Statistics have also shown that over half of all employees working the minimum wage are people coming from a family with an income of $40,000 or more. So this increasing of the minimum wage would not make as large of an impact on the people below the poverty line as the general public may have thought.
Monday, March 4, 2013
Joe Flacco's New Contract
This article might be a bit stretched for economics, but it deals with money at the very least. Last week, Baltimore Ravens QB Joe Flacco signed a deal which made him the NFL's all-time highest-paid player. The new contract--worth $120.6 million with $52 million guaranteed--is the largest in NFL history.
With the deal, Flacco will earn more than the likes of Lionel Messi and LeBron James; only Alex Rodriguez of the New York Yankees will make more money. When asked about the contract, Flacco said, “It was never about earning the money and all that. It was about earning the respect."
Sports are an interesting industry because they are, in essence, funded by fans. Really, its the several-thousand fans who fill up Baltimore's stadium each Sunday who are footing the bill for Flacco. So I wonder: while playing in Baltimore, a city loved by Flacco, where he is respected, is it really not about the money?
http://www.washingtonpost.com/blogs/early-lead/wp/2013/03/04/joe-flacco-says-new-contract-was-about-respect-not-money/
With the deal, Flacco will earn more than the likes of Lionel Messi and LeBron James; only Alex Rodriguez of the New York Yankees will make more money. When asked about the contract, Flacco said, “It was never about earning the money and all that. It was about earning the respect."
Sports are an interesting industry because they are, in essence, funded by fans. Really, its the several-thousand fans who fill up Baltimore's stadium each Sunday who are footing the bill for Flacco. So I wonder: while playing in Baltimore, a city loved by Flacco, where he is respected, is it really not about the money?
http://www.washingtonpost.com/blogs/early-lead/wp/2013/03/04/joe-flacco-says-new-contract-was-about-respect-not-money/
Latvia applies to enter eurozone
This article talks about Latvia possibly becoming the 18th member of the European union after they formally applied to join the euro in 2014. This move had been anticipated and it came after Latvia met the required financial criteria. The country also states that it has met the five requirements to gain entry into the euro zone , which include levels of debt, deficit, inflation, long-term interest rates and having a stable peg to the euro. The decision on whether or not their request would be accepted would be decided in June by the European Commission and the European Central Bank
The country did suffer a deep recession in the financial crisis but recovered from it as it received an international bailout and also the huge spending cuts which were put in place by the Prime Minister Valdis Dombrovskis.Now Latvia is one of the fast growing economies in the EU. This move is met with a lot of opposition as many don't want a single currency.
http://www.bbc.co.uk/news/business-21656254
The country did suffer a deep recession in the financial crisis but recovered from it as it received an international bailout and also the huge spending cuts which were put in place by the Prime Minister Valdis Dombrovskis.Now Latvia is one of the fast growing economies in the EU. This move is met with a lot of opposition as many don't want a single currency.
http://www.bbc.co.uk/news/business-21656254
Sunday, March 3, 2013
Groupon boss leaves abruptly
http://www.economist.com/blogs/schumpeter/2013/03/groupon-fires-its-boss
Groupon, a coupon company where people can claim amazing offers just fired its CEO the other day. For the past few quarters they have fell short of expectations leading for stock prices to drop to a quarter of what they should be listed for. The surprising part for the company was the bluntness that the former CEO had he was a person who just flat out said he was fired for not doing his job correctly. Its refreshing to see a person take responsibility for his actions and be reprimanded for it.
Groupon, a coupon company where people can claim amazing offers just fired its CEO the other day. For the past few quarters they have fell short of expectations leading for stock prices to drop to a quarter of what they should be listed for. The surprising part for the company was the bluntness that the former CEO had he was a person who just flat out said he was fired for not doing his job correctly. Its refreshing to see a person take responsibility for his actions and be reprimanded for it.
Subscribe to:
Posts (Atom)