Monday, March 25, 2013
Bernanke Says Easing by Advanced Nations Helps World Economy
This article talks about a lot of the things we have learned about when it comes to interest rates, trade deficits, unemployment, growth and more. Bernanke talks about his plans domestically and how the interest rates here will remain this low as long as unemployment rate is above 6.5% although they are lowering and the outlook on inflation is below 2.5%. In the article it talks about how other countries are taking the low interest rate approach as their goal is growth as well and they are using growth as a focus rather that using it to focus on trade exchange rates. But, overall, Bernanke sees this approach as a benefit to the world economy.
China's largest solar energy provider bankrupt
http://www.economist.com/blogs/schumpeter/2013/03/suntechs-bankruptcy
The Chinese company Suntech, the worlds largest provider of solar power has just declared bankruptcy this week. The company in 2005 was one of the quickest rising companies in the world with its Shi Zhengrong was the wealthiest man in china for a short period of time. But after the subsidies stopped and the economy faded for solar power production the world was left with a glut of solar technology without having a market for it. In the past year as many as 1 in 30 plants had been closed or declared bankruptcy meaning the market for solar energy is slowly fading.
The Chinese company Suntech, the worlds largest provider of solar power has just declared bankruptcy this week. The company in 2005 was one of the quickest rising companies in the world with its Shi Zhengrong was the wealthiest man in china for a short period of time. But after the subsidies stopped and the economy faded for solar power production the world was left with a glut of solar technology without having a market for it. In the past year as many as 1 in 30 plants had been closed or declared bankruptcy meaning the market for solar energy is slowly fading.
The Hedge Fund Manager Immigration
As we watch the European debit crisis continue, US hedge funds are snagging top talent across the pond. US funds are capitalizing on firms overseas firing and layoff untapped talent in the banking and finance sectors. The hope is to add to an already successful team of traders and mangers to drive fund returns even during this downturn in the economy.
So far some professionals overseas, such as Pierre-Henri Flamand formerly at Goldman Sachs, have since liquidated funds to pay off investors, and then headed to the US for positions at top hedge funds. This trend is also happening at smaller firms in the UK who have seen significant losses. John Purcell, CEO of his own London-based executive-search firm, said “If they lose assets, they really struggle to raise them again -- that’s the risk of going to a smaller firm."
How can this overseas job trend help or hurt the job market for hedge fund managers?
Can this economically benefit the US with an increase of top talent in the financial sector?
So far some professionals overseas, such as Pierre-Henri Flamand formerly at Goldman Sachs, have since liquidated funds to pay off investors, and then headed to the US for positions at top hedge funds. This trend is also happening at smaller firms in the UK who have seen significant losses. John Purcell, CEO of his own London-based executive-search firm, said “If they lose assets, they really struggle to raise them again -- that’s the risk of going to a smaller firm."
How can this overseas job trend help or hurt the job market for hedge fund managers?
Can this economically benefit the US with an increase of top talent in the financial sector?
Spanish Bank Downgraded to BB-
We should, by now, be familiar with the Spanish banking system. Names such as Bankia and Santander have been thrown around after bailout requests were made. Well, Bankia is back in headlines.
As of this morning, S&P analysts have downgraded the long-term debt rating of Bankia to a BB-, or three levels below investment grade. This rating change was exercised due to last year's 22 Billion Euro asset transfer to a bad bank, resulting in a 21.2 Billion Euro after-tax loss.
What affect do you see for long-term lending in the EU as a whole?
As of this morning, S&P analysts have downgraded the long-term debt rating of Bankia to a BB-, or three levels below investment grade. This rating change was exercised due to last year's 22 Billion Euro asset transfer to a bad bank, resulting in a 21.2 Billion Euro after-tax loss.
What affect do you see for long-term lending in the EU as a whole?
Cyprus Banking Crisis
As we ave seen the past few days, Cyprus is scrambling to make deals with the Russians and other investors. Their pleas were not well heard and no deals were finalized. Their last resort has been to tax the bank accounts of its citizens. With limited withdrawals allowed, Cypriots are scrambling to buy necessities and salvage what cash they have left.
Do you feel a government should be allowed to dip their hands into the accounts of its citizens to pay off debt they themselves have accumulated?
What are the consequences for not only Cyprus, but the rest of the financial world?
Do you feel a government should be allowed to dip their hands into the accounts of its citizens to pay off debt they themselves have accumulated?
What are the consequences for not only Cyprus, but the rest of the financial world?
Cyprus bailout: Deal reached in Eurogroup talks
This article talks about an agreement being made by the euro zone finance ministers on a 10 bn euro bailout for Cyprus. This would prevent the collapse of the Cyprus banking system and also keep the country in the euro zone.
This deal is a good news for all depositors who have under 100,000 euros as all their deposits would be untouched while the deposits more than 100,000 will face big losses. The percentage to be levied on these large accounts are still unknown and would be solved in the coming weeks. This decision is going to hurt the Russians as they have large scale financial investments in the country and could damage their financial sector as well.
Laiki Bank which is the country's second largest bank would be split into good and bad banks and the good assets would be merged with the bank of Cyprus. The banks are still closed and the talks of when the banks would be open would be discussed on Monday by the Cypriot government and troika. The banks have lowered their daily limits on withdrawals from ATM machines to 120 euros by the Bank of Cyprus and 100 euros by Laiki.
http://www.bbc.co.uk/news/world-europe-21916102
This deal is a good news for all depositors who have under 100,000 euros as all their deposits would be untouched while the deposits more than 100,000 will face big losses. The percentage to be levied on these large accounts are still unknown and would be solved in the coming weeks. This decision is going to hurt the Russians as they have large scale financial investments in the country and could damage their financial sector as well.
Laiki Bank which is the country's second largest bank would be split into good and bad banks and the good assets would be merged with the bank of Cyprus. The banks are still closed and the talks of when the banks would be open would be discussed on Monday by the Cypriot government and troika. The banks have lowered their daily limits on withdrawals from ATM machines to 120 euros by the Bank of Cyprus and 100 euros by Laiki.
http://www.bbc.co.uk/news/world-europe-21916102
Sunday, March 24, 2013
Living Standards in the UK
http://www.bbc.co.uk/news/business-20138393
This article argues that the quality of life will be no greater by the end of 2020 than it was in 2000. There are several reasons that living standards will remain stagnant. As the UK is pulling out of another recession, the economy's output is still not growing. High unemployment continues to depress wages while administrative and manufacturing jobs continue to decrease. However, there are several possible solutions to this problem. Boosting low pay, raising skills, and increasing female employment could help many UK families. To prevent this recovery from only benefitting the wealthier half of the population, the Resolution Foundation recommends more subsidies for cheap childcare and cutting national insurance contributions for certain workers. If the government takes action, the UK may soon see an increase in the standard of living.
This article argues that the quality of life will be no greater by the end of 2020 than it was in 2000. There are several reasons that living standards will remain stagnant. As the UK is pulling out of another recession, the economy's output is still not growing. High unemployment continues to depress wages while administrative and manufacturing jobs continue to decrease. However, there are several possible solutions to this problem. Boosting low pay, raising skills, and increasing female employment could help many UK families. To prevent this recovery from only benefitting the wealthier half of the population, the Resolution Foundation recommends more subsidies for cheap childcare and cutting national insurance contributions for certain workers. If the government takes action, the UK may soon see an increase in the standard of living.
Cyprus told: take bank levy or leave euro
http://www.guardian.co.uk/world/2013/mar/24/cyprus-bank-levy-leave-euro
Cyprus, which earlier rejected a proposed bank levy on deposits to raise the money required, may now be forced to accept that same bank levy as options are quickly running out. The country's financial sector is already in chaos with withdrawal limits being imposed as people are desperate to get their money out of the banks.
A lot of people with money is Cyprus, particularly Russians, stand to lose a lot of money with the imposition of a levy that could range from 5% to 25%. While it initially appeared that this option would not have to be embraced - there seems to be little choice now. The Eurozone has offered Cyprus an ultimatum - to raise the required sum or leave the Eurozone. And they have few options other than the harsh levy. This situation also serves to stress that the Eurozone is far from entirely stable and is not yet out of troubled waters.
Cyprus, which earlier rejected a proposed bank levy on deposits to raise the money required, may now be forced to accept that same bank levy as options are quickly running out. The country's financial sector is already in chaos with withdrawal limits being imposed as people are desperate to get their money out of the banks.
A lot of people with money is Cyprus, particularly Russians, stand to lose a lot of money with the imposition of a levy that could range from 5% to 25%. While it initially appeared that this option would not have to be embraced - there seems to be little choice now. The Eurozone has offered Cyprus an ultimatum - to raise the required sum or leave the Eurozone. And they have few options other than the harsh levy. This situation also serves to stress that the Eurozone is far from entirely stable and is not yet out of troubled waters.
The Falling Cyprus Economy
http://www.nbcbayarea.com/news/national-international/NATL-Cyprus-Economy-on-the-Brink-Says-Its-Biggest-Bank-199467331.html
Cypriot officials met Thursday to discuss a plan of action for its largest bank, which is currently plummeting. As these discussions commenced, the Cyprus public rushed to ATMs to retrieve their money, even as bank workers did their best to protest.
The EU and IMF announced that Cyprus needs to raise 5.8 billion Euros by this week in order to receive a 10 billion Euro bailout from its European allies. If Cyprus is unable to raise these funds, its banks will be allowed to collapse and the nation will fall into financial crisis.
Here, the EU presents an interesting scenario. On one hand, the economic ties between European nations serve to create a more stable economic network. On the other hand, though, the fact that the EU has proposed an ultimatum serves to show that even allies have a price.
Cypriot officials met Thursday to discuss a plan of action for its largest bank, which is currently plummeting. As these discussions commenced, the Cyprus public rushed to ATMs to retrieve their money, even as bank workers did their best to protest.
The EU and IMF announced that Cyprus needs to raise 5.8 billion Euros by this week in order to receive a 10 billion Euro bailout from its European allies. If Cyprus is unable to raise these funds, its banks will be allowed to collapse and the nation will fall into financial crisis.
Here, the EU presents an interesting scenario. On one hand, the economic ties between European nations serve to create a more stable economic network. On the other hand, though, the fact that the EU has proposed an ultimatum serves to show that even allies have a price.
The Seven States Running out of Water
http://247wallst.com/2013/03/21/the-seven-states-running-out-of-water/
According to this article, the US is in one of the worst droughts since the 1980's. Over half of the lower 48 states were recorded to have abnormally dry conditions and are suffering from as least moderate drought. When the drought began in 2012, the worst conditions were those states in the corn belt; like Ohio, Indiana, and Michigan. This year the drought is continuing westward to states like Nebraska, Kansas, Colorado, and Oklahoma. The seven states that are in avery poor condition of water are; Oklahoma, Wyoming, South Dakota, Colorado, New Mexico, Kansas, and lastly Nebraska. This growing drought is causing feed shortages, which is driving up prices in livestock. The increasing price of livestock is also driving up the price of wheat. There is worry that this drought will have a large effect on the winter wheat crop, which is one of the largest crops grown in the US. This could cause huge profit losses for those effected. The drought is just one indicator of the important movement towards an awareness for renewable water.
According to this article, the US is in one of the worst droughts since the 1980's. Over half of the lower 48 states were recorded to have abnormally dry conditions and are suffering from as least moderate drought. When the drought began in 2012, the worst conditions were those states in the corn belt; like Ohio, Indiana, and Michigan. This year the drought is continuing westward to states like Nebraska, Kansas, Colorado, and Oklahoma. The seven states that are in avery poor condition of water are; Oklahoma, Wyoming, South Dakota, Colorado, New Mexico, Kansas, and lastly Nebraska. This growing drought is causing feed shortages, which is driving up prices in livestock. The increasing price of livestock is also driving up the price of wheat. There is worry that this drought will have a large effect on the winter wheat crop, which is one of the largest crops grown in the US. This could cause huge profit losses for those effected. The drought is just one indicator of the important movement towards an awareness for renewable water.
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