http://money.cnn.com/2014/03/23/autos/arizona-tesla-gigafactory/index.html?iid=SF_BN_LN
Many states have passed laws to not allow Tesla electric cars to be sold with many dealerships not wanting them to be around. Arizona is bypassing the dealerships and going straight for the consumers to sell this new electric car. They say that the location for a factory in Arizona would bring in around 6,500 jobs to the area, although the model is illegal in other states, could Tesla be the next big change in the car industry?
Monday, March 24, 2014
Stimulus: Not-Political, Not Efficient
~http://blogs.wsj.com/economics/2014/03/20/stimulus-in-2009-not-politically-driven-or-particularly-efficient/
~http://www.brookings.edu/about/projects/bpea/papers/2014/arra-political-economy-discretionary-spending#recent/
A postmortem on the 2009 Stimulus bill, which dispensed nearly $800 billion into the domestic economy, was released by researchers from economists Christopher Boone of Columbia University, Arindrajit Dube of the University of Massachusetts Amherst and Ethan Kaplan of the University of Maryland.
They found that, thankfully, the money was not dispensed in any politically-advantageous way for the Democrats, then the majority party in the House of Representatives. Perhaps more worrisome was the inefficiency of where the money was spent: “There was no significant or consistent relationship between the amount spent and a number of different measures of local unemployment, including the unemployment rate in January 2009, the change in the unemployment rate between 2007 and 2009.” Furthermore, “We find no relationship between extent of award and measures of the severity of the downturn in the local economy, or the pace at which funds were spent,” they write. “We do find more funds flowing to areas with more economic activity and a greater incidence of poverty.” Ironically, “The good news is that political constraints appear to have made fiscal policy more politically neutral; the bad news is those constraints may have also reduced the counter-cyclical efficacy.”
If you want, you can watch the brookings video to learn more about the study. Tell me what you think about the results you found. Are you surprised?
~http://www.brookings.edu/about/projects/bpea/papers/2014/arra-political-economy-discretionary-spending#recent/
A postmortem on the 2009 Stimulus bill, which dispensed nearly $800 billion into the domestic economy, was released by researchers from economists Christopher Boone of Columbia University, Arindrajit Dube of the University of Massachusetts Amherst and Ethan Kaplan of the University of Maryland.
They found that, thankfully, the money was not dispensed in any politically-advantageous way for the Democrats, then the majority party in the House of Representatives. Perhaps more worrisome was the inefficiency of where the money was spent: “There was no significant or consistent relationship between the amount spent and a number of different measures of local unemployment, including the unemployment rate in January 2009, the change in the unemployment rate between 2007 and 2009.” Furthermore, “We find no relationship between extent of award and measures of the severity of the downturn in the local economy, or the pace at which funds were spent,” they write. “We do find more funds flowing to areas with more economic activity and a greater incidence of poverty.” Ironically, “The good news is that political constraints appear to have made fiscal policy more politically neutral; the bad news is those constraints may have also reduced the counter-cyclical efficacy.”
If you want, you can watch the brookings video to learn more about the study. Tell me what you think about the results you found. Are you surprised?
EU still stuck in the crisis
http://online.wsj.com/news/articles/SB10001424052702304026304579451554163000382?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702304026304579451554163000382.html
Recently Vladimir Putin, the president of Russia has decided to annex Crimea and it has been phenomenal to the EU, since this is a double-edge situation as of now. Either they deal with Russia, extremely aggressive at the moment. However the alternative still is costly as well, which is helping Ukraine with putting effort to block off Moscow. At the moment, the EU sanctioned 12 more appellations from access to visas and assets, in order to shake off Putin's influence. For now, the EU is pressing onto the alternative of supporting Ukraine and making it as a "success of the Europe". The cost will not be cheap, but this would make the country substantially independent from Russia, not only economically but in political perspective as well.
The higher interest rates are coming
http://www.washingtonpost.com/business/us-stock-market-looks-ready-to-inch-up/2014/03/19/7d65d90e-af69-11e3-b8b3-44b1d1cd4c1f_story.html
The investors took messages away from the Federal Reserve on Wednesday that higher interest rates are coming and sooner than you think.
As we already discussed in class, the higher interest rate will reduce the investment because it will raise the cost of company borrowing money. It will cut the consumption also. According to the news from WashingtonPost, "The Dow Jones industrial average lost 114.02 points, or 0.7 percent, to 16,222.17. The Standard & Poor’s 500 index dropped 11.48 points, or 0.6 percent, to 1,860.77 and the Nasdaq composite lost 25.71 points, or 0.6 percent, to 4,307.60."
At the meanwhile, the higher interest rates also suggest the economy is getting better. The Fed is going to cut bond purchase from $65 billion to $55 billion. If the Fed keeps the interest rates low for a long time, it will cause overheat in U.S. economy and inflation.
The investors took messages away from the Federal Reserve on Wednesday that higher interest rates are coming and sooner than you think.
As we already discussed in class, the higher interest rate will reduce the investment because it will raise the cost of company borrowing money. It will cut the consumption also. According to the news from WashingtonPost, "The Dow Jones industrial average lost 114.02 points, or 0.7 percent, to 16,222.17. The Standard & Poor’s 500 index dropped 11.48 points, or 0.6 percent, to 1,860.77 and the Nasdaq composite lost 25.71 points, or 0.6 percent, to 4,307.60."
At the meanwhile, the higher interest rates also suggest the economy is getting better. The Fed is going to cut bond purchase from $65 billion to $55 billion. If the Fed keeps the interest rates low for a long time, it will cause overheat in U.S. economy and inflation.
Sunday, March 23, 2014
Banks Urge Young Analysts to Do the Unthinkable: Take the Weekends Off
Lately, various banks on Wall Street have urged their young employees and interns to take more weekend days off each month as part of a new policy designed to relieve some of the stresses of the hectic Wall Street business world. This policy encourages the younger workers to endure their busy work lives when they first enter the job market rather than become overwhelmed to the point of stress-induced insanity. This sudden concern for the well-being (rather than just the production) of employees reflects an increasing appreciation for the morale of the employees, something that has not always been appreciated in the workplace. In turn, happier and less stressed employees are expected to be more efficient when they do work; a reduction of stress is simply another form of payment that is much cheaper for the business than a cash bonus.
"Sonia Marciano, a professor at the Stern School of Business at New York University, said her students expected more than big bonuses these days.
'My students, men and women, talk much more openly about an expectation of work-life balance,' said Ms. Marciano, who has been teaching for 20 years. 'It’s a shift that seems pretty real and substantial.'”
"Sonia Marciano, a professor at the Stern School of Business at New York University, said her students expected more than big bonuses these days.
'My students, men and women, talk much more openly about an expectation of work-life balance,' said Ms. Marciano, who has been teaching for 20 years. 'It’s a shift that seems pretty real and substantial.'”
Candy Crush mania coming to Wall Street
http://money.cnn.com/2014/03/23/investing/king-candy-crush-ipo/index.html?iid=Lead
The producer of Candy Crush Saga, King Digital Entertainment, is going to sell 22 milion shares at $21-$23 per share, making its market value about 7$ billion. Some of King’s competitors such as Activision and Zynga, have a market value of $15 billion and $4 billion consecutively. Last year, King had an avenue of $1.9 billion and profit of $568 million. Many are concerned that King’s profit margins mostly came from only one game- Candy Crush Saga; but according to Tim Keating, chief executive in making pre-IPO investments, King has strong profit margins and a huge 1000% revenue growth in 2013.
The producer of Candy Crush Saga, King Digital Entertainment, is going to sell 22 milion shares at $21-$23 per share, making its market value about 7$ billion. Some of King’s competitors such as Activision and Zynga, have a market value of $15 billion and $4 billion consecutively. Last year, King had an avenue of $1.9 billion and profit of $568 million. Many are concerned that King’s profit margins mostly came from only one game- Candy Crush Saga; but according to Tim Keating, chief executive in making pre-IPO investments, King has strong profit margins and a huge 1000% revenue growth in 2013.
Your workplace health insurance costs $1,200 more
Health premiums for workers have been increasing 19% on
average since 2011, despite a slowing in the overall growth for health care
spending, while company shares of premiums have increased 14% since 2011. In addition, deductibles, co-pays, and
co-insurance costs have been rising quickly.
One reason for this is a desire for more awareness by
workers for the true cost of health care.
Employers believe that by having employees pay more of the cost
themselves, they’d be more conservative and cost-conscious in making
appointments and getting tests and procedures.
Another reason is a “Cadillac tax” coming in 2018 that would
cause companies with health plans over certain designated amounts to pay a 40%
tax on the excess of those amounts.
Increasing out of pocket expenses is a way for companies to decrease
amounts calculated in that tax, as premiums are counted, out of pocket expenses
are not counted.
Digi-Key is a distributor of almost one million electronic
parts to key brand names such as Apple and Microsoft. Over the last year the
company has grown in size almost tripling their employment from 1,000 to 2,850.
The major issue Digi-Key faces is not sales rather frictional unemployment. The
company’s headquarters remains in Thief River Falls Minnesota making it very
difficult to attract workers unless they have a passion for fishing. Digi-Key
attacked this problem head on by giving out an $850 relocation bonus to anyone
who moved from over sixty miles away. Another solution was giving out a $500
bonus to any worker who brings in a new hire that stays for over six months.
The company offers scholarship to students as well as a part-time job. It is clear that when your company’s
headquarters is located in Minnesota one must constantly be thinking of ways to
make your job offer more enticing then the competitor down the road.
Unemployed may never work again
http://economix.blogs.nytimes.com/2014/03/20/unemployed-you-might-never-work-again/?ref=economy
This article discusses ideas surrounding the fact that the longer one is unemployed, the harder it becomes to secure a job. One idea is that those that remain unemployed for long periods of time are older and more educated, thus making their services more expensive and harder to sell. They may have more experience, but price often wins over skill. Another idea is that employers discriminate against long term unemployment because it can be taken as an indication of laziness.
This article discusses ideas surrounding the fact that the longer one is unemployed, the harder it becomes to secure a job. One idea is that those that remain unemployed for long periods of time are older and more educated, thus making their services more expensive and harder to sell. They may have more experience, but price often wins over skill. Another idea is that employers discriminate against long term unemployment because it can be taken as an indication of laziness.
Netflix Decides The Free Market Isn't So Good After All, Wants Government To Step In
http://www.forbes.com/sites/markrogowsky/2014/03/21/netflix-decides-the-free-market-isnt-so-good-after-all-wants-government-to-step-in/
Netflix and Comcast have decided to partner up and provide "excellent user service."to their
customers. Netflix will be paying to Comcast to deliver the Netflix content directly to the Comcast users, without any signal interruption. Its a great news for the 3 million Netflix users. Reed Hastings, the CEO of Netflix, thinks that, though this kind of leverage is effective against Netflix(a large company), the smaller companies cannot afford this.
This act indicates the need for stronger net neutrality protections.The internet connection is not owned by one company. Its a multiple chain link, where various companies transfer information to each other.
This act of partnering might cost Netflix exorbitantly, as Netflix might have to start paying to other internet broadband services too(middle chains). This could lead to an increase in the price of Netflix service or if Netflix does not pay to the other companies then Netflix users will suffer from bad internet connection while streaming.
The Federal Commission of Communications(FCC) have two rules for wire broadband service providers that 1) they cannot block anything from their users and 2) they cannot discriminate on any content. However the catch here is there are no rules for non disclosure terms such as 'peering' and 'interconnection.'( The middle points between the ISP's and the users).
Thus FCC needs to make definite rules on the transformation of content, otherwise it will lead to exploitation.
Netflix and Comcast have decided to partner up and provide "excellent user service."to their
customers. Netflix will be paying to Comcast to deliver the Netflix content directly to the Comcast users, without any signal interruption. Its a great news for the 3 million Netflix users. Reed Hastings, the CEO of Netflix, thinks that, though this kind of leverage is effective against Netflix(a large company), the smaller companies cannot afford this.
This act indicates the need for stronger net neutrality protections.The internet connection is not owned by one company. Its a multiple chain link, where various companies transfer information to each other.
This act of partnering might cost Netflix exorbitantly, as Netflix might have to start paying to other internet broadband services too(middle chains). This could lead to an increase in the price of Netflix service or if Netflix does not pay to the other companies then Netflix users will suffer from bad internet connection while streaming.
The Federal Commission of Communications(FCC) have two rules for wire broadband service providers that 1) they cannot block anything from their users and 2) they cannot discriminate on any content. However the catch here is there are no rules for non disclosure terms such as 'peering' and 'interconnection.'( The middle points between the ISP's and the users).
Thus FCC needs to make definite rules on the transformation of content, otherwise it will lead to exploitation.
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