Housing Market

Although investor confidence went through the roof after President trump election and there was a spike in the labor market and stock market. The housing market didn't get the same economic spike like so many other industries. With Trumps anti immigration law labor has become scare for construction companies leading to higher prices of housing. Also the new tax plan looks to cut deductions for homeownership which could also cause a spike in housing prices. scarcity of material and more expensive building permits have also hurt the housing industry. These high prices on homes has hurt consumers confidence of the market. hopefully The housing market bounces back.

U.S. ends fiscal 2017 with $666 billion budget deficit

The trump administration is pushing a tax cut bill because they believe that the economic growth we are experiencing could pay for it and continue to push the economy forward. In 2017, the US has already increased the budget deficit by 3.5% (80 billion) of gross domestic product. The outlays of this increase were dedicated to social security, Medicare, and Medicaid along with spending on spending for hurricane relief. Therefore, it is important to pay attention the effects of a tax cut in the economy. Although income will rise as an effect, businesses will suffer. 

We know that the tax cut will increase the US deficit. However, the trump administration is confident that economic growth will offset this deficit. As we have learned in class, tax cuts increase income and propensity to consume, but raise interest rates causing investment to crowd out. Although raising income is a good thing, we have also learned that business growth (investment) fluctuates more than other factors for the economy which means that this variable affects growth more than anything else. I hope that this tax cut does not crowd out investment as much as to create consequences from which the economy suffers.

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Las Vegas Travel Bookings Decline After Shooting

Since the shooting in Las Vegas travel to the area has dropped pretty significantly, the min factor obviously being that many feel it is unsafe immediately following the shooting. Although some companies also have pulled marketing due to the shooting which also would impact their overall sales. MGM expects their sales to decline about 5% in the 4th quarter for 2017, they also argue everything has returned to relatively normal even though airlines are still down 10-20% in overall bookings to Las Vegas. So for airlines the questions is really is when will it go back to normal? What should the airlines do to speed up the progress, personally I would lower prices to fly to Las Vegas and/or offer package offers with casinos that are also being hit by this lack of traffic. Only time will tell how Las Vegas's tourism industry recovers.


https://www.wsj.com/articles/travel-bookings-to-las-vegas-decline-after-shooting-1510356782

Disneyland shuts down cooling towers over Legionnaires' cases

Disneyland in LA was forced to shut down two cooling towers after an outbreak of legionnaires disease (a disease caused by Legionella bacteria and can be found in water systems) Health officials stated that 9 people developed the disease when they visited the park back in September. According to Dr. Pamela Hymel, chief medical officer for Walt Disney Parks and Resorts, “the towers were shut down after Disney was contacted by the county health care agency on October 27 about increased Legionnaires' cases in Anaheim.We conducted a review and learned that two cooling towers had elevated levels of Legionella bacteria," Hymel said. As of right now, the towers will remain shut down until they are verified to be free from contamination which could take up to two weeks.

http://www.cnn.com/2017/11/12/health/disneyland-legionnaires-anaheim/index.html

As digital payments spread, the cash lobby raises its voice

Many companies have pushed toward consumers using plastic or their smart phones to make payments because it is safer, cheaper, and more convenient, they argue. Companies in the cash industry, however, disagree and are fighting to keep cash as the preferred form of payment. These companies depend on cash for the livelihood of their business and want to keep cash around. The article points out that the cash production isn't in trouble exactly because the value of currency help by the public has been rising as a percentage of GDP in the U.S. A survey by the Federal Reserve revealed that Americans had an average of $59 in cash at any given time.  Why is cash continue to be popular? Some point to the low interest rates that have created little incentive to put cash in banks. It will be interesting to see how these numbers change in future years with forms of digital payment continue to grow in popularity.

http://money.cnn.com/2017/11/11/news/economy/cash-digital-payments/index.html?iid=hp-stack-dom

An optimistic economic outlook despite low Trump approval ratings

Americans have the most positive view of the economy since 9/11, but Trump's approval ratings are the lowest of any post-WWII president.  Across both political parties, 68% of Americans see the economy headed in a positive direction.  Meanwhile, Trump's approval ratings dropped to an almost unprecedented 36%. 

The discrepancy between economic outlook and presidential approval has occurred for the last three presidents at certain times in their presidencies, but the two have an undeniable correlation.  Views on the economy generally affects presidential approval, and presidential approval generally leads to more positive views on the economy.  The current discrepancy could indicate the public view of the economy as unrelated to the president, further decreasing the likelihood of reelection.

Source: http://www.cnn.com/2017/11/09/politics/trump-approval-economy/index.html

The global economy is booming. Here’s what that means

https://www.cnbc.com/2017/11/03/the-global-economy-is-booming-heres-what-that-means.html

The global economic health has been in continuous growth, according to International Monetary Funds forecasts, due to strong global economies. Fewer countries have fallen into a recession this year, which is the lowest level in decades. What this means is that more countries have increasing GDP’s and their trading and industrial activities are increasing which is leading to an overall healthy economy. Torsten Slok, Chief International Economist for Deutsche Bank, says ‘the economy has never been in better shape”. We are going to see fewer countries falling into a recession. However, Slok says that just because the future global economy is predicted to keep growing this doesn’t mean that the stock markets will also have a promising growth. The global economies biggest risk to its recovery is inflation, which is low, but shows signs of picking up in the upcoming years. The rise in inflation could ultimately lead the Fed to increase interest rates faster than what the market is expecting which could cause the stock market to slow down its growth.

            A healthy global economy could lead to many promising things such as higher GDP for countries and more favorable trade overall. This favorable trade would help decrease the amount of recessions throughout the world, which is a huge reason why a global economy would cease to grow. The result would be that many more countries will have an overall higher standard of living because of a decrease in unemployment and an increase in disposable income and output, which could lead to more consumption. This healthy global economy could also lead to a lower trade deficit which leads to a lower cost of borrowing and increased capital to make more investments in business ventures, manufacturing plants and infrastructures. All these factors are helpful in a growing global economy, because the world economies are more intertwined operating more and more like one big system.  

Senate Plan Could Increase Taxes on Some Middle-Class Workers

https://www.nytimes.com/2017/11/10/us/politics/senate-tax-bill.html

Mitch McConnell, the Senate Majority Leader, aforementioned that the middle class will not get a tax increase, but quickly revised his statement as false. According to McConnell, the Republican tax plan is aiming to adjust taxing depending on levels of income, hence regulating the amount of tax that should be paid for each taxpayer. They also outlined 2 main objectives: cutting taxes for middle and business classes, so the economic growth rises and wages could be increased. They would reduce taxation for every income level and corporate taxes from 35% to 20%.

It is definitely a good plan to reduce taxes in order to make people spend more and get paid more (wage increases). The concern is that if the government is reducing their income, how are they going to fill up their reserves? If the government gets on a higher amount of deficit, it will not bring about a positive impact. I agree that the Republican tax plan is magnificent, but I hope the congress comes out with a stable and effective plan to back up the loss of their income.

U.S. Finally Looking Into Bitcoin

Given Bitcoin’s newly found fame across the globe, President Trump’s Treasury Secretary, Steve Mnuchin, has officially confirmed that the U.S. government has been looking into the plausibility of cryptocurrency in America. While there has not a specific timetable released yet, Mnuchin has shared a few issues that the U.S. Treasury is debating on. The most pertinent issue lies within the currency’s role in illicit activities. The unregulated nature of the currency has made it easy for many to transfer large sums of money without any government having a direct influence or measures to monitor such transactions. As such, it is heavily implied by Mnuchin that there will eventually be government regulations put into place with regards to the use of cryptocurrency in America. It will be interesting to see just what kind of regulation will be adopted, and how that will affect just about every aspect of cryptocurrency usage in the U.S.

https://news.bitcoin.com/trumps-treasury-secretary-we-are-looking-very-carefully-and-will-continue-to-look-at-bitcoin/

A Coup in Saudi Arabia.

Crown Prince Mohammad bin Salman rounded up dozens of the country's business and political elites, including 11 of his fellow princes.  Officially he is doing this as an anti-corruption measure however many regard this merely as a political coup to eliminate all of those who would possibly oppose him from becoming king.    Many are unsure of what this could mean for the oil rich country.  Many believe that this could cause a less oil reliant Saudi economy in the future as this prince has seemingly been moderate in his tone.  Primarily as he has acted in this way before, sponsoring green energy projects, and allowing women to drive (which is considered progressive in Saudi Arabia).  To what extent this will have on oil prices, especially as OPEC tries to reign in production, will be very interesting.

   http://www.reuters.com/article/us-saudi-arrests-crownprince-insight/a-house-divided-how-saudi-crown-prince-purged-royal-family-rivals-idUSKBN1DA23M