http://www.google.com/finance might be a good place to go for news about the economy. Please focus on items that have to do with the whole economy (not just one product) and on items that seem substantial (not cute or weird human interest stories). You should focus on news stories that have something to do with the fluctuations in the economy. So search for news about
- average workweek of production workers in manufacturing
- average initial weekly claims for unemployment insurance
- new orders for consumer goods and materials
- new orders for nondefense capital goods
- index of supplier deliveries
- new building permits issued
- index of stock prices
- money supply, adjusted for inflation
- difference between the interest rates on 10-year Treasury Notes and 3-month Treasury bills
- index of consumer expectations
- nonfarm payroll employment,
- the unemployment rate
- real compensation per hour of manufacturing employees
http://www.cnbc.com/id/49450120
ReplyDeleteThis article mainly discusses the flawed setup of unemployment benefits and how the expiration of emergency federal unemployment insurance will cause millions more of Americans to lose their jobs. As Steinbock points out, there are still 4.5 million fewer jobs on non-farm payrolls than when the recession began in December of 2007. He also notes that the labor participation force has plunged from 62.7 percent in 2007 to 58.7 percent. The second half of this article focuses on the fact that more than 40% of the unemployed are among long-term unemployed, who have been looking for work for 27 weeks or longer. Historically, every major recession in the past fifty years has been aided by emergency federal unemployment insurance, which has not been allowed to expire until unemployment rates fall to at least 7.2 percent. However, the current emergency federal unemployment insurance is scheduled to expire on December 31, 2012. Steinbock, and many other economists, are not only concerned about this potential distress but also about the general structure of this insurance and the collapse of labor participation.
New orders for nondefense capital goods
ReplyDeleteI wrote on the new orders for nondefense capital goods. An order for non-defense capital equipment not including airplanes has gone up 1.1% and total durable goods have gone down by 13%.This is after we had a 5.2% drop in July and a 2.7% drop in June. Manufacturing, that used to bring the economy back, has come to a stop. This is having an effect on large companies, like Caterpillar Inc. who is concerned about what kind of tax increases they will have next year, and is causing businesses to pull back. Manufacturers are struggling with slowing global growth and they’re worried about where the economy is headed in 2013.
http://www.sfgate.com/business/bloomberg/article/Orders-for-U-S-Capital-Goods-Signal-Business-3898630.php
http://www.theage.com.au/opinion/political-news/swan-unveils-11b-surplus-20121022-280c9.html
ReplyDeleteThe article I chose to write on focuses on the government of Australia's new tax plan for the coming financial year. National Treasurer of Australia Wayne Swan tweeted (a political move that raised plenty of eyebrows worldwide) out the the entire world Australia's changes in taxation for the coming fiscal year. The tweet spoke of Australia cutting significantly into baby bonus tax breaks, taxing private health insurance, and taxes on buisnesses and corporations. The baby bonuses will be dropped from 5,000 to 3,000 dollars for any family's second and subsequent child. The move to the increase on health care taxes will become effective in April of 2014 and is expected to bring in 700 million dollars over three years all while saving Australia 2.8 billion dollars during that time. Lastly, the move to start taxing buisnesses and corporations monthly as opposed to quaterly is expected to bring in 8.3 billion dollars in the next three years. Swan is in fact so confident in his plan's ability to help Australia that he announced to all of Twitter that this new plan will create a 1 billion dollar surplus for Australia's economy JUST WITHIN the next fiscal year.
http://www.bloomberg.com/news/2012-08-31/orders-for-u-s-capital-goods-fall-more-than-prior-estimate.html
ReplyDeleteIn this article, the author explains how in recent discoveries, the demand for capital goods in the U.S. has dropped significantly. The 4 percent decrease in bookings for non-military capital goods excluding aircraft exceeded the 3.4 percent drop estimated during that time which remained the biggest decline since the past November. Then with a high "volatile" surge for aircraft demand, it brought total factory bookings by 2.8 in July which was the biggest gain in a year. Yet companies have been delaying any sorts of spending due to their caution towards the demand. Most economists believe that this demand will range from a decline of 0.4 percent to an increase of 3.1 percent. On the other hand the demand for durable goods has increased to 4.2 percent and non-durable goods reached 1.5 percent (which mostly consisted of tobacco and clothing. Bookings for capital goods (excluding aircraft and military equipment) is necessary for future business investment because the category had been down in four of the past five months. The author then explains how "Shipments of those goods, which were used in calculating gross domestic product, fell 0.5 percent in July, also worse than the unchanged reading reported mid-August." Consequently, this whole uneasiness is overall due to the potential fiscal cliff America. Companies and factories will still be cautious in managing their discretionary operating expenses.
http://blogs.wsj.com/economics/2012/10/22/guest-contribution-greek-bond-buyback-boondoggle/
ReplyDeleteIn response to the European Central Banks refusal to bail Greece out, even a little bit, an ECB board member proposed a bond buyback.
Essentially, the ECB would repurchase some Greek bonds that were issued to private creditors after they agreed to take a 53.5% loss on the face value. Currently those bonds have a face value of 63 billion euros but currently trade at a steep discount."
This article vocalizes that the problem with this plan is the huge wealth transfer from the borrower to the lender, using the example of a debt of two euros in order to prove the point.
A country is 2 euros in debt and all trades at 50 cents per euro. If the country is able to pay one euro of the debt, and is given the 50 cents to trade that euro, “the country will then be left with 1 Euro of outstanding debt and can still pay back 1 euro, so that the remaining debt now suddenly trades at its face value.” In this case, the lender receives 1.5 euro instead of 1.
http://online.wsj.com/article/SB10001424052970203406404578071252617716998.html?mod=googlenews_wsj
ReplyDeleteGermany’s economy has been forecasted to slow down towards the end of this year. Their Finance Ministry has blamed this recession on the euro-zones’ weak economies. Germany has gone down in both production and exports. At best it will have moderate activity for this closing year. This is not a very ominous sign considering economies of foreign countries. On a brighter note in fact, Germany is predicted to pick back up in the year of 2013. It is said to have a GDP increase of 1% for this coming year. Germany is trying to recover from lack of job growth. There are now favorable wages given to workers and it is becoming stable on labor market. Taxes, however, are a bad indication for Germany’s economy. They are rising dramatically in order to have money circulating in the government.
http://www.dol.gov/opa/media/press/eta/ui/current.htm#.UIZ5pWl25k4
ReplyDeleteAccording to these updated statistics in the United States Department of Labor, last week there was 388,000 seasonally initial adjusted claims of unemployment insurance. This was an increase of 46,000 from the week before, which was a figue of 342,000 claims. However, the seasonally adjusted insured unemployment rate was 2.5% by the end of the first week in October. Thankfully this was a .1% drop. During that first week of October, there was 3,252,000 seasonally adjusted insured unemployment, which was a decrease of 29,000. There still seems to be an increase in insurance claims; however, there also seems to a decrease in accepted insurance rates. I believe, according to these numbers, unemployed people will continue to apply for a unemployment insurance, but the insurance companies will continue to deny more and more people.
http://www.marketwatch.com/story/frankenstein-economics-is-killing-capitalism-2012-10-23
ReplyDeleteThe article that I read was about how the capitalists of America might be damaging the economy by supporting a “Frankenstein” economics platform. The problem with the platform is that it is nothing new. It is basically old ideas with simple adjustments. In order for there to be any true growth in the economy there needs to be real change, which means replacing failed economic plans. Frankenstein economics is basically the idea that the capitalists can stimulate the economy themselves without the help from other classes. While this may have to truth to it, there is no way that the economy can be stimulated by one small sector of the American people. Another one of the problems with Frankenstein economics is that there is no way that it can compete with China’s new economic plan. There article was extremely bias against conservative capitalists, but it still held some truth.
http://www.quickmba.com/finance/invest/indices.shtml
ReplyDeleteThe website I found explained what exactly a stock index is. It does NOT represent the average dividend paid (the amount of money that the stock holder gets), but rather it represents, by definition, “only the under lying stocks and not the dividends paid”. Another important thing about how these indexes are reported is how the information is given. They do not present the money gained/lost, but weight things and typically work with percentages. This is important because if a stock with a value of $10,000 loses a dollar this is nothing, but a stock with (hypothetical numbers) a value of $10 loses a dollar that is huge. The dollar would appear to have a different “value”, for lack of a better term, between the two companies so they use percentage gained or lost so stocks can be more easily compared. It is important to understand what the charts mean and what they really represent so that one can safely invest and avoid being scammed by appealing charts that may not mean what they appear to say.
http://money.cnn.com/2012/10/19/news/economy/state-unemployment-rates/index.html?iid=SF_E_River
ReplyDeleteThere has been a declined in 41 of the states, seven of them, which are key points for the election this year. But this does not mean there has been an improvement in the country. For example Ohio State which hold 18 electoral votes, declined 7% from 7.2%. Ohio created 50,000 new jobs but 40,000 people had dropped out of the labor force. On the other hand Florida seems to be progressing. The labor force in Florida is growing, which gives good signs. Floridians are actively looking for jobs and are finding them and being hire. In the past, Florida has created 34,000 professional and business service jobs. 21,000 health care and social assistance jobs and 11,000 retail jobs. Florida, as one of the hardest hit states in the housing crisis, it still suffers from a loss of construction jobs.
http://money.cnn.com/2012/10/23/news/economy/spain-economy-recession/index.html
ReplyDeleteThis week’s article had to do with Spain's economy. Spain is in its second recession in the past three years. The unemployment rate for this year in Spain was at 25%; its almost like what happened in Greece. There have been countless riots due to unemployment rates. What is more frightening is that the situation doesn’t seem to be getting better. The prediction for next year is still more contraction in its growth. There have been increased taxes and increased spending cuts. This ia also angering the people of Spain to the point of angry riots.