How One Burger Chain Profits from Turmoil Abroad

            The American burger chain, Fatbuger has taken an interesting route in the strategy of global expansion.  The Los Angeles Based Company, which currently has 200 international locations, has become known for their expansion into less than desirable locations. Andy Wiederhorn, the firm’s founder recognizes the demand and desire for American brands in foreign countries. With strong competition in the United States and the pending financial crisis in 2008, the company went global in 2007.

            Numerous of Fatburger’s locations are settled in places experiencing tumultuous times. However, this does not concern the company.  Before expanding anywhere significant research is done. This research starts as examining all risk and concerns and then identifying how to best deal with them. One of the recommendations made for this research is using a consulting group. In addition, it was stated that a U.S. management team could not accurately access dangerous locations for expansion without an expert team in that location.

            With the reports that have been written in this class examining countries for business opportunities, very few would recommend entering a country with any kind of dangerous situation. This article raises the point that if it is done correctly and through a thorough process companies such as Fatburger can be successful.

Source:http://www.businessweek.com/printer/articles/235312-how-one-burger-chain-profits-from-turmoil-abroad

LinkedIn Users Are Suing The Site Over A Feature They Say Ruined Their Job Searches

LinkedIn is a professional networking site that has more than 300 million users. The purpose of the site is to help you get a job, but this article highlights a feature of LinkedIn that can accidentally have the opposite effect.

This feature is “Reference search”, a product offered to the site’s premium members. \Reference search gives the hiring company a list of people in their candidate’s network, including their old colleagues The hiring manager can then use a LinkedIn’s tool “InMail” to reach out to these people, and get their opinion about the candidate. This means that this feature can hurt the job hunters by opening them up to possible criticism from past coworkers and hirers.

But then again, LinkedIn is generally the monopoly of this kind of network. The lawsuit will likely fail, because I don’t think the best way to evaluate candidates is to contact random people on a social network who may not know the candidate and their job performance and personality. If a company actually does that then they should probably review their hiring process. Either that, or people are just finding excuses for being unemployed.

http://www.businessinsider.com/this-linkedin-feature-could-ruin-your-job-search-2014-11

China's Economy-Deflated

http://www.economist.com/blogs/freeexchange/2014/11/chinas-economy?zid=295&ah=0bca374e65f2354d553956ea65f756e0

          As surprising as it may sound, China, one of the worlds largest economy is currently going through deflation. Consumer and producer prices are falling for a while now and consumer price inflation is said to be at its lowest since 2010.
          Central bankers fear deflation and believe that it is the most destructive economic force as it causes consumers to delay purchases and companies to put off investment which in turn creates a viscous cycle of contraction.
          Moreover, the producer price index that is the PPI has reached the negative numbers. The PPI has been in deflation straight for the past 32 months. It has been caused mainly due to the slump in global commodity prices.
         The central bank of China has still not made a decision.

Will a Higher Minimum Wage Really Reduce Income Inequality?

http://money.cnn.com/2014/01/15/news/economy/income-inequality-minimum-wage/

Raising the federal minimum wage has been a high priority for President Obama. In so doing, Obama believes the increase will be good for both the economy as well as for families. The article above attempts to answer the real question behind the issue, whether or not the change will reduce income inequality. Proponents of the increase argue that the change may bring lower-wage workers over the poverty line. They also claim it will help restore the value of the minimum wage, which has not kept pace with inflation. Most experts believe it will reduce inequality but will not have a huge impact.

The article examines how much of an impact the increase will have and who exactly it will affect. To illustrate the impact, the author has the reader consider the 5-figure paycheck of a janitor versus the 8-figure salary of a CEO. Elevating the minimum wage from $7.25 to $10.10 would simply fail to narrow this gap. Additionally, there is a huge gap between those making 6-figures and billionaires. So, too, a change in the minimum wage would do nothing to narrow this chasm. Moreover, there is a gap between low-wage and middle-wage workers. This is the target where many say progress would be made.

Ultimately, increasing the minimum wage will not alter some of the root causes of income equality. I believe that focusing on globalization, technology and the U.S education system are better options than raising the minimum wage. 

Uber Said in Early Talks to Raise $1 Billion to Fund Growth

http://www.bloomberg.com/news/2014-11-09/uber-said-in-early-talks-to-raise-1-billion-to-fund-growth.html

Uber is an app that allows people who need a ride to connect with a driver through their app. Since Uber Technologies Inc. was founded in 2009, this service is available in over 200 cities worldwide. Recently, Uber began a campaign to raise around $1 billion to finance the businesses rapid expansion. New investors as of recent have been lining up at the door to get in on this opportunity, this may be because of the current technological stage we are in, but do you think this stage will last? How much longer do you think new investors will keep showing up wanting to put their money in this business? There is competition in the field, a similar app called Lyft which as of recent has raised $250 million earlier this year for their own business expansion. These two companies have reportedly engaged in rough tactics to recruit drivers, leading to a former executive of Lyft being sued when defected to Uber for breach of contract. Personally I really like the app, I use it all the time back home to get around town, it’s quick and it’s cheap. I’m not saying I am the next investor but I can see why people are jumping at the chance to get on board of this rising business. I’m interested to see how much longer Uber can keep up the rate of expansion as they have now. 

Detroit's bankruptcy plan --- A phoenix emerges

Link to Article

The article tells us that Detroit's plan for the adjustment of debts that will help the city pay off $7 billion of unsecured liabilities from its $18 billion. This shows that Detroit is doing pretty well on handling its bankruptcy but both pensioners and both bond holders will take the pain under the agreement. People's pensions of retirement will be cut by 4.5%. Health care benefits will also be cut by 90%. Bond holders like Syncora has to face huge cut, it will only get 26 cents on one dollar. Foundations, private donors and the state of Michigan raised $816 million to protect Detroit Institute of \Arts (DIA) from the city's creditors. The funds will go toward public workers' pensions. But it is only the beginning to be fully recovered since the situations that Detroit facing do not seems hopeful.
The adjustment plan sets aside $1.7 billion for basic services and infrastructure over the next nine years, but Detroit will probably run out in about five years. The city has to rebuild its credibility as soon as possible in order for outsiders to lend to.

Detroit needs good governance in order to get back up. With that said, our government needs to put the money into cities in need like Detroit instead of putting extra money into military defenses. Eliminating welfare for all able bodied people will help kick off people who depends upon welfare and crimes -- Ghetto Gangster class, will also help with the city's recovery.

Negative Rates in Germany?

http://www.economist.com/news/finance-and-economics/21631140-interest-rates-turn-negative-some-worse-nothing

What we have discussed in class is unfolding dramatically in Germany. To decrease savings, banks not only have lower interest rates than inflation, they are applying negative interest to sums greater than $625,000 (500,000 Euros). They are doing this to increase investing in longer term more liquid investments because the bank can make more money from this.

Some worry that the negative rates will encourage lending too much and without economic reform, we could see a very unstable system. As the German's struggle to figure out their lack investing issues, the world sits back and watches as the Euro falls and the Dollar gains value.

U.S. has added 2.3 million jobs this year

According to the government report released last friday, the unemployment rate fell to 5.8%. There is more optimism about hiring even though October fell short of expectations. On average the U.S. is adding around 200,000 jobs each month this year so far. 

The consistency of job creation and continued falling of unemployment is something to be optimistic about; however, wages are still stuck at $24.57 (average hourly). Long-term unemployment still seems to be a major problem as well. Although it has been dropping, it is still twice as much as its pre-recession level. 

Optimism about the state of our economy is certainly growing, many americans are still waiting to jump on that bandwagon. Until we see wages accelerate, there will be a large majority of americans who will continue to feel more pessimistic than optimistic. 

Australia Challenges Use of Unpaid Internships

http://www.nytimes.com/2014/11/10/business/international/australia-challenges-use-of-unpaid-internships.html?ref=business&_r=0

This article discusses the legality of unpaid internships in Australia as well as comparing them to the United States model. While these internships are often thought of as stepping stones to dream jobs, they come at a high financial cost. Oftentimes, these internships require extremely demanding hours leaving no time for a supplementary job. Many young adults spend their entire life savings just to work for free. Currently, Australia is looking into changing internship policies. For example, the US uses a scale to determine which interns should be paid. It will be interesting to see what they decide and the economic impact these decisions will have.

Diamond engagement rings are so over

Nowadays, there is a new trend among brides to choose non-traditional engagement rings over the standard white diamond ring, such as colored diamonds, gemstones and bands.

There are a few reasons behind this trend. First, it's about lifestyle. People want something that is unique to them. They want something that doesn't fit the norm and everyone else has. Also rings without an elevated diamond are more comfortable to wear and fit in well with today's active and conservative lifestyle, instead of a flashy one.

The price is also a big factor. For example an alternative sapphire engagement ring costs about half of a comparable diamond. Getting alternates also reduces risks of buying fake diamond.

However, there are opposite ideas, like diamond rings are much more durable and classic. Also, an engagement ring is not the place to make a fashion statement.

http://money.cnn.com/2014/11/06/luxury/diamond-engagement-rings/index.html?iid=HP_River