The Best Deal, Watching Emerging Markets

"Four months into legal recreational marijuana in Colorado, the market for medical cannabis is still by far the most cost-effective way to purchase pot in the state, a FiveThirtyEight analysis has found."

It is interesting to note that medical is cheaper than recreational pot and the reason for this is an unexpected decrease in supply in the first few months. And along the five basic quantities that are sold in a given period of time, there are price fluctuations (toward the consumer’s favor) as the consumer climbs the ladder of quantities.

It seems as if the demand and supply have not met yet….I say that because the demand is abnormally high yet I predict within a year and a couple growing seasons, depending on strains, the market will change and stabilize, seeing a slow mirror of the medical market.

Another reason for a choppy beginning:

There was an ‘automated’ effect which contributed to a downgrade in product with the anticipation of legalization, thus we see these fluctuations occurring naturally in response.

Lastly, the consumer and state confidence for this product is so high that demonstrating legal cannabis as a revenue generating giant will happen but in due time. Growers, sellers, and advocates are just 'jumping the gun’ due to its recent legalization.

http://fivethirtyeight.com/features/medical-marijuana-is-still-the-best-deal-in-colorado/

Fertility Rates Drop Universally

Bye-Bye, Baby

Nearly half of the world's population lives in nations where women give birth to less than 2.1 babies on average, which is the number of children necessary to replace both parents over their lifetime. The decline in fertility and marriage rates are associated with higher levels of education and occupational achievement. As the number of children in a nation declines, there are more educational resources per child, increasing the overall education level of the nation. Also, countries with lower fertility rates tend to see higher productivity compared to societies with higher fertility rates. Middle-aged workers with experience have far greater productivity than children. Low fertility causes young adults to no longer be in surplus relative to the labor market demand so their economic value to employers increases.

These low fertility rates can also have a negative affect on the nation's economy. National leaders will have to decide whether the early retirement ages and high payout rates of their pension systems, created years ago under very different economic and demographic circumstances, can be sustained in the long run.

Japan retail sales surge on tax hike

http://www.bbc.com/news/business-27184185

          Japan increased its sales tax, also known as consumption tax, from 5% to 8% from 1 April, the first hike in 17 years. The rise stimulated consumers to make a large amount of purchase before the sales tax hike. 

         Japan has been suffering deflation for more than two decades, which not only hurts its domestic economy but also makes the whole country stuck. Deflation makes consumers and businesses incline to put off their purchases because they think they can get lower prices in the future. Many people think this rise in tax will help Japan achieve its 2% inflation target.

"Half of all Jobs will be automated in 20 years"

A recent article in the Economist cites that half of all jobs around the world will be automated. Their analysis of technology in the job market and prediction for the future is  extremely bleak. Around the world, many large sophisticated economies already have large unemployment numbers but automated jobs in the future will most certainly make unemployment rise. So what does it take to safeguard yourself to losing your job to a robot. Creativity and good social skills are very key. The introduction of robots have already taken jobs in manufacturing from low-skill workers. Twenty years from now robots will be more advanced and be able to carry out almost all low-skill labor. Another survey shows just how much the modern worker's job has changed. 72% of British workers believe that they can now work more efficiently from home. As of now, it remains unclear exactly what will happen in the jobs market and to wealth inequality 20 years from now, but it seems very clear that having a college degree, especially from a liberal arts school, is a huge asset to have in the jobs market of the future.

http://www.huffingtonpost.co.uk/2014/01/17/rise-of-the-machines-economist_n_4616931.html?just_reloaded=1

Attention Coffee Drinkers

This CNN article illustrate one of the phenomenons that we have encountered one and again during class, namely, a negative shock to supply. In theory, this would shift Supply curve to the left and change the equilibrium price of the commodity, in this case, coffee. According to the article:

"Coffee prices have doubled since last year, and drinkers of the black stuff may soon start to notice."

This is the result of a severe drought in Brazil, the origin of reportedly 1/3 of the world's coffee supply. The rise in price will affect cost of production and will accordingly rise the price of the end product at consumer's cost. However, this won't affect large coffee houses that lock in price a few years in advance in case situation like this happens.

The drought, on the bright side, allows coffee growers in Brazil to charge higher price for their product. And the price rise of this commodity also allows some hedge funds, traders and brokers to profit. It is not after all totally disastrous.

Feel free to leave your comments for discussion.
Source:  Coffee prices skyrocket after Brazil drought

APR accuses Glaucus of manipulation

http://www.taipeitimes.com/News/biz/archives/2014/04/28/2003589040


Glaucus Research Group of the California LLC was recently accused of allegedly manipulating share prices by Asia Plastic Recycling Holding Ltd. APR, a company that creates ethylene-vinyl acetate foam from recycled plastic, claimed that their stock plummeted after GRG made a statement saying that APR's share prices should be zero. APR retorted by saying that gossiping in order to intentionally influence securities currently being traded in Taiwan causes a violation of Article 155 of the Securities and Exchange Act.  After GRG's statement, the APR stock price plummeted over the daily maximum limit in two consecutive sessions before it closed.  It will be interesting to see what happens in the long run for APR's shares considering they are the only company in China to be able to transform plastic waste into ethylene-vinyl acetate foam (or rubber foam products).

http://money.cnn.com/2014/04/23/smallbusiness/minimum-wage-exemptions/index.html?iid=SF_E_River

Many low-wage workers not protected by minimum wage

President Obama and the federal government is seeking to raise the minimum wage by $10.10 an hour. Not every worker in the united states is forced to be payed the minumum wage under a complex set of rules. People such as disabled workers, those who work for very small businesses, teenage trainees, tipped workers, home care aides and some agricultural workers are all examples of these people. These people will now be protected under the new law that President Obama is seeking to pass making it easier to live on a small paycheck.

Netflix comes to your cable box

Netflix could soon be just another channel on your television.  They just signed a deal with TIVO cable box which was announced on the 25th.  TIVO cable box is not a big name cable company but this is a big step for the movie streaming company.  Being able to browse through the channels and run into Netflix next to channels such as ESPN or CBS could be a game changer.  Having to set up your computer to your television can be a pain in the butt, however channel surfing has just gotten easier with the Netflix channel.  The company says that one of the hardest parts of getting new customers or keeping old ones is just the fact of getting another bill from the company.  Now being included with the cable buyers will be less turned off by the extra cost because the extra fee will be included all on one bill.  This deal with TIVO could open up a whole new world to the streaming giant.


http://www.businessweek.com/articles/2014-04-25/netflix-finally-breaks-into-the-cable-box-dot-why-does-that-matter#r=nav-r-story

Fireball Whiskey: Selling a Brand Shot by Shot

http://www.businessweek.com/articles/2014-04-24/fireball-whisky-gains-on-jagermeister-via-social-media-bar-sales#r=rss

Fireball whiskey has become a popular beverage among young adults. It's spicy burn appeals to men, but also has a sweet taste which appeals to women. Over the last couple of years, fireball has exploded on the market. In 2011, fireball accounted for 1.9 million in sales in gas stations, convenience stores, and supermarkets. This number jumped to 61 million in 2013. Fireball has become the trend of late and looks to overtake jagermeister as the go to shot. Jagermeister accounted for 81 million dollars in sales in 2013, but hasn't experience the growth that Fireball exhibiting. It will be interesting to see whether Fireball will surpass Jager?

Banks Are Making It Easier to Get a Mortgage

http://www.mainstreet.com/article/real-estate/banks-are-making-it-easier-get-mortgage?puc=yahoo&cm_ven=YAHOO

According to this article, banks are loosing their "credit spigots" making it much easier for individuals to get mortgages during this economic recovery.  The article talks specifically about Wells Fargo and how they require mortgage applicants to make a 5% down payment, and this payment can be from someone else if the applicant cannot afford it themselves.  The bank also announced that they will be lowering the required FICO score for applicants.  This is interesting because I wonder if it could start another issue like we had before the recession.

The article continues on to talk about how some individuals are skeptical of banks lowering their requirements because they feel as though it could send us back into a similar situation as we were in before the recession.  However, analysts do not seem as worried because they feel as though it is a part of the business cycle and it needs to happen in order for the country to continue recovering.