There is a new company named BlockFi that is rolling out a new trading platform that allows users to trade, borrow, and earn interest on their crypto currencies. I found this article interesting due to the fact that most of buzz surrounding crypto currencies has died down for the most. After reading this article, Im curious of two things. Will this become a popular platform, and it this really the future of finance/economics. If this new platform proves that there is some serious money to be made through lending crypto, how long will it take until major banks offer loans in these types of currencies.
Thursday, December 5, 2019
The US-China trade and its impact on a potential recession
"According to a recent survey by the National Association for Business Economics, seven out of 10 economists expect a recession by the end of 2021."
We are nearing the end of 2019 and there has been little resolution to our trade war with China. Trump has actually renewed trade tensions recently. He has even stated there is "no deadline" for the trade war and claims that he wants to wait till after the 2020 election to fix this problem. This may be in response to some economists beliefs that Trump is waiting ease tensions with China right up until the election.
However, our domestic and global economies will not go on pause until he is ready to end this war. As we learned in class, imposing tariffs raises interest rates and lowers the amount of overall trade. If action is not taken soon, business investment may drop further due to trade uncertainty. And since investment is very volatile, GDP can decrease significantly, potentially contributing to a recession
https://www.washingtonpost.com/news/powerpost/paloma/the-finance-202/2019/12/04/the-finance-202-trump-could-spark-a-global-recession-if-he-imposes-more-china-tariffs-economists-predict/5de6e17688e0fa652bbbdbac/
We are nearing the end of 2019 and there has been little resolution to our trade war with China. Trump has actually renewed trade tensions recently. He has even stated there is "no deadline" for the trade war and claims that he wants to wait till after the 2020 election to fix this problem. This may be in response to some economists beliefs that Trump is waiting ease tensions with China right up until the election.
However, our domestic and global economies will not go on pause until he is ready to end this war. As we learned in class, imposing tariffs raises interest rates and lowers the amount of overall trade. If action is not taken soon, business investment may drop further due to trade uncertainty. And since investment is very volatile, GDP can decrease significantly, potentially contributing to a recession
https://www.washingtonpost.com/news/powerpost/paloma/the-finance-202/2019/12/04/the-finance-202-trump-could-spark-a-global-recession-if-he-imposes-more-china-tariffs-economists-predict/5de6e17688e0fa652bbbdbac/
Why US Garlic Farmers are fans of Trump
Garlic farmers in the USA seem grateful to Donald Trump for sanctions on China which has reduced imports of garlic into the USA. This has brought joy to farmers and is boosting the sales of locally grown garlic and is allowing their garlic to thrive especially in the large USA market.
The 25% tax put on garlic imports from China seems to be doing a whole lot of good for local USA farmers.
https://www.bbc.com/news/av/business-50493488/why-us-garlic-farmers-are-fans-of-trump-s-tariffs?intlink_from_url=https%3A%2F%2Fwww.bbc.com%2Fnews%2Ftopics%2Fc1038wnxypvt%2Fus-economy&link_location=live-reporting-map
Ford's Global Job Cut by end of August
About 7000 jobs are set to be cut in the global workforce of American automotive giant Ford. The carmaker will reduce its US workforce by 2,300 as it seeks to save $600m (£470m) per year. Most of these jobs are in management positions according to Ford. some of these job losses will be as a result of voluntary redundancies and compulsory redundancies. Chief executive, Jim Hackett said, “To succeed in our competitive industry, and position Ford to win in a fast-changing future, we must reduce bureaucracy, empower managers, speed decision-making and focus on the most valuable work, and cost cuts,”
https://www.independent.co.uk/news/business/news/ford-job-cuts-global-us-car-industry-a8922301.html
Wednesday, December 4, 2019
Mid-sized American companies are already moving away from China
As the Chinese-American trade war continues, American corporations and mid-sized firms face an increasingly uncertain economic future in China. Mid-sized firms, fearing the prolonged impact of these trade tensions, have realized the need to diversify away from China to protect their interests. Mid-sized firms have pursued the diversification of their corporations by shifting “their supply chains to other parts of Asia and by selling more to other countries to make up what they can’t sell to China.” To make up for some of their economic losses, the article notes that mid-sized firms in America have specifically sought new markets in Europe, other parts of Asia, and Latin America. The article also notes that the increasing cost of domestic labor in China has also played an essential role in the diversification of mid-sized firms.
https://www.cnn.com/2019/12/04/investing/midsized-companies-china-survey/index.html
US service sector slows more than expected in November
Trade tensions and worker shortages has caused the U.S. services sector to slow more than expected for November. Manufacturing activity contracted for the fourth straight month since 2012 according to the ISM. The non-manufacturing activity index decreased to 53.9 in November compared to 54.7 in October. These manufacturing slumps have also countered growth expectations for the fourth quarter, which had been increased by a "rush of upbeat reports on the trade deficit, housing and business investment. Do you think the service sector will keep slowing because of this trade war with China?
https://www.cnbc.com/2019/12/04/november-ism-non-manufacturing-index-comes-in-at-53point9-vs-54point5-estimate.html
https://www.cnbc.com/2019/12/04/november-ism-non-manufacturing-index-comes-in-at-53point9-vs-54point5-estimate.html
U.S. Private Sector Added 67,000 Jobs in November
The U.S. nonfarm private sector added 67,000 jobs in November, missing economists’ expectations by a wide margin. It was expected that the ADP National Employment Report to show an addition of 150,000 jobs. Mark Zandi, chief economist at Moody’s Analytics, said "“The job market is losing its shine... Job openings are declining and if job growth slows any further unemployment will increase". There were a lot of job gains in the service-providing sector, which added 85,000 jobs. The education and
health sector added 39,000 jobs, the most added in a category on the
services side. The worst industry performer in the services group was
trade, transportation and utilities, which lost 15,000 jobs.
Referring back to the economic outlook conference, Mark Schweitzer talked about how even though job openings have slowly been declining, job hires have still been increasing. Do you believe this still holds true? Are we closer to large unemployment than we really think?
Referring back to the economic outlook conference, Mark Schweitzer talked about how even though job openings have slowly been declining, job hires have still been increasing. Do you believe this still holds true? Are we closer to large unemployment than we really think?
Tuesday, December 3, 2019
Hit hard by the trade war, China’s economic outlook is uncertain – except for one thing: growth is sure to decline
This article talks about China's side of the trade war. It's main focus is on how the Chinese economy, which is based on the amount of trade they have, has slowed drastically in the past year, from 6.8% to 6%. While that may not sound like a large number, when you put into perspective with how large the China economy is, the entire global economy has been slowing down as a result. The article also talks about when their economy does get below that 6% number, this will impact consumer confidence so it will likely slow down at an even harsher rate if nothing is done to fix it. What could the Chinese do in order to prevent this from happening? Or if it does happen, what will they have to do in order to get back on track?
Monday, December 2, 2019
US consumer confidence falls for fourth consecutive month
According to this article, consumer confidence decreased for the fourth straight month. The Conference Board shows that the consumer confidence index dipped to 125.5 in November. It was expected to rise- economists polled by Dow Jones expected the index to rise to 126.6 from 126.1 in October.
The article also states that the situation index also fell from 173.5 to 166.9. These numbers suggest that economic growth in the final quarter of 2019 will remain weak. One of the last things the article states is that expectations for the holiday shopping season are strong. The National Retail Federation expects sales to grow by about 4% from last year.
If this is the case, my question is, how much does a drop in CPI impact holiday spending? Could CPI be very low and holiday spending still be very high?
The article also states that the situation index also fell from 173.5 to 166.9. These numbers suggest that economic growth in the final quarter of 2019 will remain weak. One of the last things the article states is that expectations for the holiday shopping season are strong. The National Retail Federation expects sales to grow by about 4% from last year.
If this is the case, my question is, how much does a drop in CPI impact holiday spending? Could CPI be very low and holiday spending still be very high?
US Consumer Confidence Falls
Consumer confidence has been hurting as a result of economic pressures around the world. It has dipped for the fourth straight month contrary to expectations. The Conference Board expected the index to rise to 126.6 yet it fell to 125.5. Recent data is pointing at slower growth and a weaker economy as the years end approaches. Lynn Franco, senior director of economic indicators of The Conference Board still suggests, Overall, confidence levels are still high and should support solid spending during this holiday season.” Expectations for spending in the holiday season are strong and projected to help sales grow 4% in this coming period. Hopefully the upcoming holiday season will help curtail this fall in consumer confidence as we approach the new decade.
Consumer confidence has been hurting as a result of economic pressures around the world. It has dipped for the fourth straight month contrary to expectations. The Conference Board expected the index to rise to 126.6 yet it fell to 125.5. Recent data is pointing at slower growth and a weaker economy as the years end approaches. Lynn Franco, senior director of economic indicators of The Conference Board still suggests, Overall, confidence levels are still high and should support solid spending during this holiday season.” Expectations for spending in the holiday season are strong and projected to help sales grow 4% in this coming period. Hopefully the upcoming holiday season will help curtail this fall in consumer confidence as we approach the new decade.
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