Bernanke to Testify on Fed Exit Strategy on Feb. 10

This article discusses that on February 10 Bernanke and his colleagues plan to testify before the House Financial Services Committee about Fed's exit strategy to end the economic stimulus. Fed upgraded its economic outlook for near future, and decided to stop the liquidity and lending programs which sum up in a $1.25 trillion of stimulus to buy mortgage backed securities. Some of the tools that Fed may use to unwind stimulus would be reverse repurchase agreements, selling the assets on its balance sheet, and paying interest rate on excess reserves. Althought there is a great pressure from Congress for such an early action, without planning an exit strategy, the fear of expected inflation might cause uncerainty that might lead to bad consequences.

Is Debt Trashing the Euro

The article discusses how debt occurring especially in Greece could be bringing down the price of the Euro in all countries. This was brought on in Greece due to the fact that Greece was riding the strength of the Euro as well as lending money at extremely low rates causing huge debt. Now the problem facing the EU is whether or not they will have the ability to say no to Greece which will allow them to declare bankruptcy.

Stimulating debate

In this article, the author, Buttonwood casts his doubt on whether government’s policies are effective enough to overcome the economy recession. Buttonwood thinks of that the effect produced by governments is far less than the influence generated by the market itself. He believes that the stimulus measured by governments will not last long. He makes use of the example of Greece, where ten-year bond yields reached 7% last month. It is a rate that may even higher than the rate of Greek GDP growth. Therefore, it predicted that an austerity package is needed in order to prevent Greece from falling into this debt trap. Further, admitted that the stimulus may have inhibited the global economy from slipping into depression, he says, according to academic studies, higher government spending may actually slow down the rate of economic growth. Moreover, Buttonwood points out that the stimulus initiated by government has not really coped with the problem of debt; rather, it merely transferred the problem from the private to public sector.

In summary, Buttonwood argues that the authorities are facing a dilemma; reducing the stimulus now would probably plunge the economy back into recession, but if keep the stimulus for too long governments may risk damaging long-term growth prospects. Therefore, he concludes that economies need to stand on their own two feet.

Women Now a Majority in American Workplaces

In this article, the number of men and women holding payroll jobs are compared. It was the first time in recorded history that women outnumber men on the nation's payroll. It comes largely at men's expense because men have been losing their jobs faster than women. According to seasonally unadjusted data released on Friday by the Labor Department, women held the majority of nonfarm payroll jobs in January. They also did so during February, March, November and December last year. Women's slender lead was highest last month, when they held 50.3 percent of the nation's nonfarm payroll jobs in the raw numbers.
This is due to the differences between the types of jobs that are held by men and women. Men are more likely to work in industries like manufacturing, which rise and fall with the economic cycle. Women are more likely to work in government, health care and education, among the safest categories in a downturn. Male-dominated industries are actually especially cyclical in two different ways: they are not only influenced by the business cycle, but also by the seasonal cycle. Industries like construction, which tend to employ men, get more work in warmer months.

Steel

Although the steel industry declined in 2009 compared with 2008(World Steel Association); there are some graphical variations. The industry grew in China, India, and the Middle Age and had a large decrease in the United States and other countries. In the United States, the biggest steel-producing states include Indiana, Ohio, Arkansas, Alabama, North Carolina, South Carolina and Texas (United States Steel); but not at the levels they use to have.

Global Markets Shudder

This article is about the effect of the problems in Greece on the global market. Many of these dire effects on the world market are likely to be caused by expectations. The author seems to worry that the troubles in the European bond market will slow the world economic recovery from the recent real estate crisis. The price of gold even dropped, which is unusual in a time of crisis. The euro is actual at an eight month low against the dollar. This is causing investors to take their money out of the European market and put it into the safer U.S. Treasury bonds and even some are investing in the yen again. I liked this article because it really shows how an economic failure in one small part of the world affects everyone else. The world markets are competing, but a powerful nation cannot do too poorly or it will take the others down also.

The big jobs hole

This is an article about the situation of labor markets; it says that although the unemployment rates fell unexpectedly in January to 9.7%, yet 20,000 jobs that are created in this month are far fewer than the 150,000 jobs that were lost in December. Also it mentions that according to the government monthly report on Friday, it showed an unsettling reality that 8.4 million jobs have been vaporized since the recession began. Besides other adverse economic factors, it points out that another reason for the unoptimistic labor market is that employers are still very cautious about hiring people.

The reason I chose this article is because I think it analyzes the current situation of labor market from a relative objective view, neither too optimistic nor too pessimistic. In this article, it includes improvements and existing problems.

Sovereign Risk Meets Sovereign Reality

After months of shrugging off debt problems in Dubai, Greece and other smaller economies, markets yesterday seemed suddenly aware of the risks of sovereign default.

Back in November, when the question of Dubai's solvency came to a head, it was ultimately bailed out by its rich older brother, Abu Dhabi. Now, the European Union is doing its best to avoid promising a similar bailout to Greece, though in the end few believe Brussels will allow Athens to go under.

The current crisis in Greece is only the worst example inside the EU. The PIGS—Portugal, Italy, Greece and Spain—all boast public debt above or headed for 100% of GDP. Though the PIGS acronym was apparently coined by British bankers, Britain, Ireland and Iceland also smell distinctly of bacon.

The problem isn't confined to Europe. Japan and the United States, by most reckonings the world's largest economies, also face pressing questions about their sovereign debt levels. To be sure, the U.S. and Japan can sustain such deficits more comfortably than small countries like Greece or Portugal where the government's ability to curb public-sector spending is rightly suspect. Yet even in economic giants, bad policy could cause investors to move out of debt they have long considered a safe haven. The moment is approaching when the artificial line separating the wealthy from emerging markets will lose much of its relevance...

European debt fears plague world markets again

Unexpected up's and down's of the world economies is a cause of concern. After the reduction in the unemplyment rate of US in December this downfall of the stocks is certainly a shock to the people; on the other hand Portugal's plan to reduce budget deficit causing debt crisis to the world markets. The stability seem out of reach at the moment. Hope this article will be helpful in keeping track of the world stock markets.

Goldman Sach's Bonus

I think its great that they gave a smaller bonus then most originally believed. Plus it is in stock and can not sell for many years. This shows that the CEO must have confidence in the company and that they feel that the stock price will grow in the near future and that the company will be better in the near future (in my opinion). This also shows that they understand the difficult climate in the economy and are not willing to shell out millions of dollars for one position. I think this was a great showing by them and many companies should follow this trend.