Fitch says UK downgrade more likely

This article talks about rating agency Fitch which may downgrade the UK's credit rating in April. This came after downward revisions were made to UK's growth forecast from 1.2% in December to 0.6% for 2013. In addition the United Kingdom have a higher than expected debt level. After this news was released from Fitch the pound fell sharply against the dollar. Fitch explained their decision by looking at forecasts published by the  office for budget responsibility which suggest that the dept levels will rise later.Moody  is another rating agency stripped the UK from its AAA rating.

http://www.bbc.co.uk/news/business-21900304

Economy Not As Bad As Some Think..

http://www.economist.com/news/special-report/21573229-political-gridlock-may-be-bad-americas-economy-says-edward-mcbride

It is a widely spreading belief that the U.S. economy is losing its edge. Even President Obama has feared that America is losing its economic edge to China and other competing economies. Our economy currently ranks as the seventh best economy in the world, quite a fall from the first place ranking we held a few short years ago. With all of the negative media constantly being pushed into the faces of citizens, it is not hard to see why this pessimistic view is so popular. This type of mindset may not be the most proper one to have, according to some. The U.S. is working hard on its research and development, education system reforms, and infrastructure reforms. President Obama and the rest of Washington D.C. are working hard to make to these reforms a reality. While it is true that our economy is recovering at an extremely slow pace from the recent recession, there is no reason to think that the economy as we have known it in the past is gone for good. 

Cyprus government 'to present bailout plan B on Thursday'

This article talks about Cyprus banks which are expected to be shut until the 25th March to prevent mass withdrawals and to prevent any money from leaving from the country. While the ATM machines are still giving out cash with limits and some are running low on cash. Business are refusing to take payments from Credit cards because they don't know when the banks would open. The German fiance minister said that if they don't come up with a solution quick the banks might never open.The country could be on its way to bankruptcy and could face a possible exit from the Euro Zone.

This decision came an emergency cabinet meeting that was called on Tuesday, rejected the EU-IMF deal, with 36 MPs voting against it and 19 abstaining and not a single in favor of it .The President is expected to come up with another plan on Thursday to figure out a way to fund the country's bailout. There are many options which are being considered like Bank mergers, a bond issue. The Cypriot Fiance minister is in Moscow  to negotiate assistance from Russia but nothing concrete has come up so far. The Russians hold billion dollar investments in Cyprus which also includes large deposits. All this money has been attracted into Cyprus because of its lower taxes.

http://www.bbc.co.uk/news/world-europe-21870801

Home construction gains steam

http://money.cnn.com/2013/03/19/news/economy/home-construction/index.html?iid=SF_E_River

There is good news this month in the housing market as home builders are filing for the highest number of building permits since 5 years ago in 2008. Ever since the housing bubble burst in 2007-2008, home building hasn't been able to recover so the 34% increase in building permits since last year is more than welcomed to go along with the other recent growth in the economy. On top of the new homes being built, there has been an increase in sales of new and old homes. This may be helped by the drop in foreclosures or the very low mortgage rate. With the new building permits, construction companies are hiring more workers, which will only help to decrease the unemployment rate. The actual cost of the raw materials for building homes has increased, so the construction industry is facing some problems even in this time of increased demand for homes.    

Sen. Elizabeth Warren to raise min wage to $22/hr

http://www.washingtontimes.com/news/2013/mar/18/sen-elizabeth-warren-raise-minimum-wage-22-hour/

In this article, Sen. Elizabeth Warren states she wants the minimum wage to be increased to $22/hr.  She says that if we follow the historical prices of the minimum wage back to 1960, then the current minimum wage should be $22.  The problem with minimum wage is that most people that are working at the minimum wage are living with families with over $40,000 dollars of income a year.  Raising the minimum wage would not effect these people.  Plus, if the minimum wage is increase by $14.75, this would cause the unemployment rate to rise substantially because firms wont be able to make a profit with such a raise.

Russian money in Cyprus: Why is there so much?

This article talks about the close financial relationship between Cyprus and Russia which goes back to the 1990s. In particular there are large amounts of Russian money invested in the smallest economy of the euro zone. There is about $31 billion of money in Cypriot bank accounts , $12 billion from banks and the rest $19 billion from business and individuals. Cypriot banks have also loaned out about $40 billion to Russian companies which are based in Russia. The Germans suspect that most of the Russian money in Cypriot banks is from ill-gotten gains.

The reason why there is so much of Russian money is because Russian business take advantage of low corporate tax rate and favorable tax rates for profit and dividends in Cyprus. Another reason is Russia's tax treaty with Cyprus which means that a firm will not be taxed in both places. Another quite important reason why banks are full of Russian money because Cyprus doesn't ask many questions about the origin of their money, while other countries are more careful and go under full dept as to where the money arrived.

This bailout deal is going to hurt many Russians, those with more than 100,000 euros are expected to pay 9.9%. Which means that Russia would lose around $3 billion. Cyprus has already taken a loan of about 2.5 billion euros from Russia and have asked for ab additional 2 billion euros. This tax on savings is surely going to make the Russians think again weather they want to loan out another 2 billion euros to this country.

Now looking at this situation there is obvious fear that business would not be willing to invest in Cyprus and they will move their money somewhere else. Even though many measures have been put in place to stop the money from flowing out but most of it has already left.

http://www.bbc.co.uk/news/business-21831943

Big Banks have Big Problems

This article is about how the some of the largest banks in the country might not have as much backing from politicians as they used to. It goes on too state a few large banks including JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, and a couple others in the recent elections all lobbied dollars to what turned out to be the losing sides. At the moment they are still receiving taxpayers subsidies but will these government officials they decided to go against give them as much help as they've needed in the past?

http://economix.blogs.nytimes.com/2013/03/14/big-banks-have-a-big-problem/?ref=economy

California Unemployment Rate holds at 9.8%

http://www.latimes.com/business/realestate/la-fi-cal-jobs-20130319,0,4105844.story

The employment rate in California has been held constant for the first quarter this year.  The employment is tied for the highest with Road Island, which has also had trouble adding jobs after losses to it's manufacturing sector.  Some are also blaming a rise in sale tax and an increase on income tax of the wealthy.  Another possible reason could be because of hurt  trade with Europe from the Northeast sector of the state.  However, trade in the western part of the state with Asia has been thriving and continues to grow.  That is why an emphasis is being placed on county statistics so they can locate where job growth is stalling.  Job growth is expected to grow though during the latter part of 2013 and into 2014, showing that the steady unemployment rate was not unexpected.

Argentina's Recovered Factory Movement

http://www.guardian.co.uk/sustainable-business/argentina-recovered-factory-movement

This article discusses a growth in some of Argentina's industry that signals valuable potential for economic growth in the country. A lot of these are 'recovered' factories that were set up during Argentina's recession of the 1990s. Ever since then, the companies have undergone a change in management and the way they operate. These seem to be factors that may have contributed to their recovery, alongside a change in Argentina's economic environment. The two major factors that have changed the way the companies function are a worker led management and increased support from the state. Argentina offers an interesting case study in steps that could be taken to help a bleeding industrial sector recover.

Seeking Profit for Taxpayers in Potential of New Drug

Federal Science - it has become a controversial topic since the Great Recession. Many lawmakers are calling for a review of federal policies they say have allowed businesses to profit on government research with limited return for taxpayers or consumers. Taxpayers are asking the government to reevaluate the funding provided for federal research into pharmaceutical drugs. I can understand this concern from taxpayers. In such tough economic times, people want their money put to good use. It can be frustrating to see funding fail to present any productive results.