ECB to start asset buying programme

The European Central bank's head Mario Draghi said it would start buying covered bonds this month and other assets in the final three months of the year. They would then buy bonds and other assets for the next two years. Covered bonds are those backed by public sector loans or mortgages.
This is an unconventional instrument to stimulate an economy that has failed to reach it's inflation rate. Instead of setting interests rates, the ECB has chosen to boost the economy through "quantitative easing" or QE. QE is a situation in which the Central Bank buys assets with new money from banks. After buying the bonds, the banks are then, in theory, to buy new assets thus increasing the value of stock prices and decreasing interest rates.
The problem that the ECB faces is the consumer price inflation which fell to 0.3% in September. This is the lowest in five years and below the 2% that is goal. Major economies of Europe have been slowing down recently and this tool is supposed to push the economies of Europe in positive direction. This being said Mr. Draghi stated "The recovery is likely to continue to be dampened by high unemployment, sizable unutilised capacity and continued negative bank loan growth to the private sector. In particular, the recent weakening in the euro area's growth momentum, alongside heightened geopolitical risk, could dampen confidence and, in particular, private investment."

I agree that ECB should be exploring other options to raise the inflation of the eurozone. QE is just one option but others should be explored. The future economic outlook of the eurozone isn't appearing the strongest. 

http://www.bbc.com/news/business-29459157

Federal Reserve is making a major shift in interest rate policy

http://www.cnbc.com/id/102050278?__source=yahoo%7Cfinance%7Cheadline%7Cheadline%7Cstory&par=yahoo&doc=102050278
From attacking both unemployment and inflation, Fed now changes its goal into maximize employment. Just from the October meeting, Fed decides to raise interest rate, just because they based on "nebulous data". It will end the bond-buying program. Stanley Fisher said that this approach is dangerous and can get us into problems. Central bank doesn't want to increase interest rate even when unemployment rate is lower than 6.5%. There is also news that members of FOMC Dallas Fisher and Plosser will leave the Fed, make Obama chance to promote 2 new people into the Fed to make interest rate lower for longer.
We haven't deal with unemployment enough. It is true that unemployment rate is lower than 6.5%, it is not natural rate of unemployment (5%) yet. Also, we still have structural unemployment.  That needs Fed to deal with it. By raising employment, why did the Fed raise the interest rate? If inflation rate is now 2%, why raise interest rate?

As Fed Retreats From Stimulus, Central Banks Overseas Expand Theirs

The US Federal Reserve has been "turning a blind eye" according to this article on foreign currency manipulation. If the Fed begins to tighten its monetary policy, there is a good chance that economies in Europe, Latin America, and in Asia will experience a recession. The article states that the Fed's delayed action is due to the benefits the US will see from global growth, even if it means fewer jobs and harder to sell in the short run. The increasing value of the dollar has meant that companies have had increasing difficulty selling, but have attracted a lot of foreign investment. This has also slowed inflation. The Euro has purposely declined in value and they continue to do so. This will increase the amount of exports and decrease their imports, mainly oil, that will help spur much needed inflation. The Japanese have doubled the money supply to decrease the value of the yen by over 24%. Despite this the Japanese economy shrank by 7.1% after a sales tax increase.

What do you feel about currency manipulation to spur domestic growth?

http://www.nytimes.com/2014/10/03/business/international/as-fed-retreats-from-stimulus-central-banks-overseas-expand-theirs.html?ref=business&_r=0

Workers to See 3% Increase in Pay Next Year

With unemployment declining, employers are starting to experience competition to retain their employees.  The result of this is another slight increase in worker salaries.  On average, salaries are expected to increase by 3% in 2015, up from a 2.9% increase in 2014. 

The magnitudes of salary increases that we have seen have been in a negative relation with the unemployment rate.  In 2009, when unemployment was around 10%, salaries only increased 2.1%.  Now that unemployment is down to 6.2%, the salary increase is up to 3%.  Since more jobs options are available, employers want to keep their better employees by enticing them with salary increases.  However, it is believed that this 3% increase is the largest that we will see and employers will start using bonuses or other incentives to keep their employees.

http://money.cnn.com/2014/08/07/pf/worker-pay/index.html?iid=SF_BN_River

New York Times Plans to Eliminate 100 Jobs in the Newsroom

The newspaper also plans to cut some editorial and business positions. The plan is to offer buyouts and resort to "layoffs if enough people do not leave voluntarily." They are also cutting the NYT opinion mobile app that has not brought in as much revenue as expected. Other news sources, like The Wall Street Journal, have cut jobs this year as well. The New York Times executives are trying to control costs, maintain profitability, and secure the ability to invest in digital media as technology and tastes change. Despite job cuts several times in recent years, the New York Times actually has a nearly record high number of employees because of "adding jobs for digital efforts, like web producers and video journalists." The company will continue to invest in "initiatives that supported its growth strategy, like digital technology, audience development and mobile offerings." 
This is an interesting example of structural unemployment. As the media industry changes to become more internet based, journalists are losing jobs. The company is allocating money instead to workers who can further their digital expansion. I hope the print news industry never dies but it is inevitably shrinking. I also think it is interesting that the New York Times reported about laying off their own workers. 
Source:http://www.nytimes.com/2014/10/02/business/media/new-york-times-plans-cutbacks-in-newsroom-staff.html?src=me

Economists say yes to Uber

http://www.nytimes.com/2014/10/01/upshot/uber-improves-life-economists-agree.html?_r=0&abt=0002&abg=0

                                                   Uber improves life, Economists agree

40 Economists from different realms of study from schools of Political Persuasions to schools of thought came and took a survey of whether Uber was beneficial to consumers by competing with taxis and limousine services. All the economists in the study said they either strongly agree or agree, no uncertain or disagreeing because they know that competition generates welfare leading to innovation and choices that the consumers have if they do not have a ride or a bus pass. Uber creates this new outlook on driving and meeting new people where these drivers are rated and have comments and different personality traits that you can pick who you want to come pick you up in that certain area. Taxis and limos are complaining because Uber and Lyft have done so well where everyday people can make a little extra cash on their extra time or make it a full time job and drive around meeting new people everyday. The taxis companies want this banned because the idea is genius and they are losing a lot of business to the innovation of these new companies.

Bank to Pay Everyone at Least a 'Living Wage'

http://money.cnn.com/2014/09/29/smallbusiness/living-wage/index.html?iid=H_E_News

First Green Bank, located in central Florida, will be enforcing a new policy in the company which the founder/CEO refers to as the "living wage".  These raises are equivalent to approximately double the state's minimum wage.  Typically, wage increases are known to have negative effects on companies, causing their payroll expenses to increase to the point that it affects the company's ability to retain as many employees.  LaRoe believes that although this may be true, these extra expenses on the company will be off-balanced by a higher employee retention rate, as well as attracting higher quality job applicants.

Previous policies at the bank had salary caps set in place so that additional wages could not be earned unless that employee received a promotion.  LaRoe states, "That's just dumb, if you've got the best teller in the world, why don't you want to pay them the best wages?"

It is my personal opinion that choices such as these reap tremendous benefits for the companies who enact them - well over the amount given up by increasing their salary expenses.  These benefits can include attracting and retaining the best in job applicants, attracting the business of people who respect companies who act ethically, and creating incentive for current employees to work at their highest level of effort and productivity.

Ebola outbreak affecting airlines

Tuesday night the Center for Disease Control announced the first case of Ebola in the United States, Dallas Texas. On Wednesday morning, stocks of all the major U.S airlines dropped between 2%-4%, just from the first case being announced. The article predicted if the disease spreads anywhere else all transportation companies are going to suffer financially. Even though that hasn’t happened yet, stocks have continued to drop for airlines even though they are all having great years so far. Most airlines were having their stock prices boom in the previous months and the outbreak of Ebola has stopped that boom. Travel discount sites are also suffering from this news because people don’t want to travel anymore or even think about traveling. While the disease hasn’t spread anywhere else in the country it is important to note that just one case has already affected many companies. If more cases are reported the country and the economy will hurt together. 

http://money.cnn.com/2014/10/01/investing/ebola-airline-stocks-dallas-case/index.html?iid=Lead

Oil Prices Fall, and the Global Economy Wins

http://www.businessweek.com/articles/2014-09-29/oil-prices-fall-and-the-global-economy-wins#r=nav-f-story

This article discusses how prices of oil have fallen recently, with a surprising 16% decrease since mid-June. In order to keep prices from falling, countries like Saudi Arabia have cut down on their oil production. This strategy has not really worked fine as in the process, countries like Iran, Iraq, and Nigeria have increased oil production. In addition, the record increase in US oil production because of the shale boom have caused prices to go down as well. Although, oil prices are predicted to go up internationally in the next six months or so, the domestic prices in the US for oil are thought to get cheaper by next spring. That may not be great news for oil producers, but definitely is a good news for consumers and the global economy.

One of the main reasons for this decrease in oil prices is because of less demand and too much supply. Demand certainly could be stronger. A stagnant economy in Europe, slower growth in China, and flat gasoline consumption in the U.S. are all tamping down prices. According to the International Energy Agency, the growth in the world’s demand for oil will be the slowest this year since 2011.

But the bigger factor appears to be on the supply side, as production growth outpaces demand. That was the case last year and is shaping up to happen again in 2014.

In Europe, for example, where policymakers are already struggling with deflation, lower oil prices will only make the European Central Bank’s challenge harder in loosening its monetary policy to try and boost prices. It also might not be good news for some big oil-producing economies. While Russia and most of the Middle East will be able to weather lower prices, countries such as Brazil, Mexico, and Venezuela will be hit harder, primarily because they have not been saving much of their oil windfalls. 

U.S has already spent nearly $1 billion fighting ISIS

http://money.cnn.com/2014/09/30/news/economy/isis-cost/index.html?iid=SF_E_Lead

The first wave of U.S. military attacks against ISIS has cost nearly $1 billion, according to a military think tank. Costs could rise to as much as $1.8 billion a month if the U.S. military presence grows to 25,000 ground troops, as some have suggested.  U.S air strikes started in Iraq last month and expanded to syria last week.  

So far U.S. military efforts have mostly been limited to air strikes. There are also 1,600 U.S. troops in Iraq serving in advise-and-assist roles and staffing the joint operation centers. However, they aren't conducting combat operations against ISIS. President Obama said he has no plans for the U.S ground troops to engage in combat.

The Center said that even if operations don't escalate, it will cost between $200 million and $320 million a month to maintain the current level of airstrikes and support troops. That works out to as much as $4 billion a year.

It's been said that recent wars have been more of  Economic warfare than anything else.  Will we have to spend billions of dollars every time we have a terrorist threat to our society?  If so, how long before we constantly get challenged and lose our economic strength to other countries.  On the other side, I hope and believe that the U.S wouldn't spend so much money on a War unless it economically benefits us as  a nation somehow.  Maybe it's an excuse to tape out another oil filed that would bring the U.S millions of dollars per day LOL.