The Government is looking at Agricultural Monopolies

Remember our discussion of Monsanto? Its "round up ready" genetically modified seeds are under investigation. Further than that according to NPR, Agribusiness as a whole is being examined for anti-trust violations. You know that wonderful vision everyone has of farms? the one with wide pastures for cows, neat rows of vegetables, and a single family running and benefiting from it all? That is a long way from reality. NPR focuses on an independent hog farmer attending the D.C. workshop

Twenty-five years ago, Montgomery County had about 200 independent hog farmers. Foster is one of two now. He's got just one steady buyer for his hogs.

Essentially, packing plants, which turn the piggies into pork, have gotten huge, demanding that farmers sell the hogs to them for a specific low price (think Walmart) which, in effect keeps pork prices down, but also favors huge industrial farms over small family run places. The suppliers of feed and other items necessary for pig production have also gotten huge, demanding that the farmer pay them a certain, high amount for their products, again favoring larger operations.

That leaves Foster trapped between giants — a situation he blames on "hands-off" economic policy.

Why is this of concern? Certainly this system is good for the consumer, we get cheap chorizo and chops. But ultimately it is bad for the economy, as with fewer farms packing plants and feed suppliers, there is less competition, and the large Agribusinesses can set any price and any quality on their products, giving little recourse to the consumer. There is also a sense of waste. On a huge farm, a sick pig can die: there are several thousands more so there is very little loss according to the company. On a smaller operation, a sick pig will be taken care of, one pig out of a hundred is a much bigger loss. Smaller farms have people living on them, people who want their children and grandchildren to do the same, so they're probably more willing to practice sustainability than a huge agribusiness which will just move its production once the land becomes so polluted that those who live around it start to complain. The Washington D.C workshop is a good first step, the same way its urban policy workshop was a good first step. But, the question remains: are they going to do anything?

Texas Toast

Texas Conservatives Seek Deeper Stamp on Texts

By JAMES C. McKINLEY Jr.

Published: March 10, 2010

AUSTIN, Tex. — Even as a panel of educators laid out a vision Wednesday for national standards for public schools, the Texas school board was going in a different direction, holding hearings on changes to its social studies curriculum that would portray conservatives in a more positive light, emphasize the role of Christianity in American history and include Republican political philosophies in textbooks.

The hearings are the latest round in a long-running cultural battle on the 15-member State Board of Education, a battle that could have profound consequences for the rest of the country, since Texas is one of the largest buyers of textbooks.

The board is expected to take a preliminary vote this week on a raft of changes to the state’s social studies curriculum proposed by the seven conservative Republicans on the board. A final vote will come in May.

Conservatives argue that the proposed curriculum, written by a panel of teachers, emphasizes the accomplishments of liberal politicians — like the New Deal and the Great Society — and gives less importance to efforts by conservatives like PresidentRonald Reagan to limit the size of government.

“There is a bias,” said Don McLeroy, a dentist from College Station who heads up the board’s conservative faction. “I think the left has a real problem seeing their own bias.”

The three-day meeting is the first time the board has met since voters in last week’s Republican primaries voted to oust Dr. McLeroy and another conservative and threw the future makeup of the board up in the air. Two other members — a conservative Republican and a moderate Democrat — are not seeking re-election, and it is unclear what the balance of power will be after the general election. At present, the seven hard-core conservatives are often joined by one or more moderate members in votes on curriculum questions.

Dr. McLeroy still has 10 months to serve and he, along with rest of the religious conservatives on the board, have vowed to put their mark on the guidelines for social studies texts.

For instance, one guideline requires publishers to include a section on “the conservative resurgence of the 1980s and 1990s, including Phyllis Schlafly, the Contract with America, the Heritage Foundation, the Moral Majority and the National Rifle Association.”

There have also been efforts among conservatives on the board to tweak the history of the civil rights movement. One amendment states that the movement created “unrealistic expectations of equal outcomes” among minorities. Another proposed change removes any reference to race, sex or religion in talking about how different groups have contributed to the national identity.

The amendments are also intended to emphasize the unalloyed superiority of the “free-enterprise system” over others and the desirability of limited government.

One says publishers should “describe the effects of increasing government regulation and taxation on economic development and business planning.”

Throughout the standards, the conservatives have pushed to drop references to American “imperialism,” preferring to call it expansionism. “Country and western music” has been added to the list of cultural movements to be studied.

References to Ralph Nader and Ross Perot are proposed to be removed, while Stonewall Jackson, the Confederate general, is to be listed as a role model for effective leadership, and the ideas in Jefferson Davis’s inaugural address are to be laid side by side with Abraham Lincoln’s speeches.

Early in the hearing on Wednesday, Mr. McLeroy and other conservatives on the board made it clear they would offer still more planks to highlight what they see as the Christian roots of the Constitution and other founding documents.

“To deny the Judeo-Christian values of our founding fathers is just a lie to our kids,” said Ken Mercer, a San Antonio Republican.

The new guidelines, when finally approved, will influence textbooks for elementary, middle school and high school. They will be written next year and will be in effect for 10 years.

In other testimony Wednesday, Hispanic activists asked that more Latino figures be written into the social studies curriculum, particularly early residents of Texas who fought the central government in Mexico when Texas still was part of Mexico. American Indians complained that their history had been given short shrift.

Many other people came to the meeting to support the conservative slate of amendments, including some people enraged at what they saw as socialist tendencies in Washington. One man asserted that the Tea Party movement should be included in the textbooks.

I'm sure it's my liberal bias, but I seriously had to giggle at this article. I mean seriously, maybe we don't put enough emphasis on the Reagan years, but for conservatives to want to insert their ideology and remove people like Nader sounds like Feminists who don't just want equality between genders but want things to starts slanting the other direction.

The economic point about Texas being a major book buyer and thus having a lot of say is interesting. I am thinking of what Professor McKinney said in class today of the importance of history to economics and wondering whether, despite my political prejudices, we should include more conservative historical figures. But I also wonder how good of an idea it is to emphasize that taxes are horrible and less government must be better because those are the policies that led us to the recession. It seems there is room for compromise on either side.

Women and the Economy

In a New York Times economix blog post, the author explains how women saved social security from a crisis during the last 3 decades of the twentieth century.

One of the great advances of 20th century was increased life expectancy. This advance might have bankrupted Social Security, if it were not for women in the work force.

Essentially, Social Security was set up in the 1930's based on the time period's assumptions. One of its assumptions was that the average life expectancy would remain at the age of 60. It also assumed (falsely even for that time) a nuclear family with the husband as a breadwinner and a wife as a homemaker.
Essentially, Social Security by design meant that men would go out, do the work for their households, and the government would take a certain amount of their cash and, when the man was old enough, would use that money to pay for both him and his wife. The shorter life expectancy literally means that a portion of the population would die before being eligible for social security, and the money the government took from them would be used to help others who did live longer.
Unfortunately, the designers of Social Security did not consider technological advances or higher safety standards (this was the age before seatbelts, Measles vaccines, organ transplants, and the surgeon general's warning on alcohol and cigarettes) that would up our average life expectancy to its current 78 years. With fewer people dying and more people living longer, Social Security was headed towards a huge deficit. But...

History did not quite turn out that way. In fact, millions of married women worked for pay and paid the payroll taxes as they did. This was largely profit for the Social Security system, because the system would have paid those women benefits regardless.

In spite of the June Cleaver ideal of the 1950's housewife, somewhere around a third of married women were working, and that number continued to increase steadily until the boom of the 1970's brought a majority of women, married and unmarried into the workforce. The blog entry ends:

The revenues of governments in the future will depend just as much on how women spend their time. Governments can expect more revenue if women continue significantly with their labor market progress, and less revenue if some of women’s payroll gains are reversed in the years ahead.

This entire piece essentially pointing out a very sound economic argument to insist on better pay for women. If the government continues to allow lower wages for women, it is reducing its own income, especially in terms of social security.

Women are the top consumers in the United States, married women especially, in a role that has been in place since the 19th century. Women have a huge amount of sway over certain elements of the demand curve, because they choose what they and their families buy. When thinking of economics, most people envision a bunch of middle aged, rich white men gathering around a corporate board room making all of the decisions normal people have to live with. In reality, everyone has much more of an impact on the economy than we may realize.

Need a Job? Get Ready to Move!

As the world finally see's a recovery slowly occurring after the recession, some places are looking better than others in terms of projected employment. According to The Economist, the countries projected that have the biggest difference in proportion in hirings and firings are Brazil, India, and Singapore. Based on what we have talked about in class about international trade, this did not surprise me because the economies of these countries rely heavily on imports to markets like the U.S. and the European Union. Therefore, if developing countries like Brazil and India, whose economies are not as stable as the U.S. or EU's, see a drop in demand, their economies falter. This is the same for an increase of demand, and it is due to a lack of a stable economy in times of economic downturn.

The other interesting factor in this graph is that "of the four countries where the outlook has darkened, three are in Europe". This again applies to the financial troubles occurring in Europe at this time in countries like Spain and Ireland.

What does this say about the "world economy"? How does a lack in demand by big markets like the U.S. and the EU effect developing nations economies? What else could account for this major shift in hirings and firings in these nations? How are these developing nations, like Brazil and India, recovering even though the EU is still having financial trouble, lower demand, and it's own bleak employment hirings and firings ratio? That being said, what does this say about the ability of countries like Brazil and India to recover without a major market functioning well?

Airline Group Halves Forecast for Losses in 2010

PARIS — A leading airline trade group slashed its forecast for industry losses this year in half Thursday, due to what it said was a stronger-than-expected economic recovery in emerging markets, especially Asia and Latin America.
The International Air Transport Association had been predicting 2010 losses of $5.6 billion as recently as December, amid concerns that unsold seats and empty cargo holds would keep a lid on revenues. The new forecast was for a loss of $2.8 billion.
“Passengers are returning to flying,” Giovanni Bisignani, the I.A.T.A secretary general, said in a briefing with journalists. “While it is still too early to celebrate, this is a good signal for the economy.”
The I.A.T.A. raised its forecast for 2010 passenger traffic growth to 5.6 percent from 4.5 percent, compared with a 2.9 percent decline in 2009. Cargo traffic — which dropped by 11 percent in 2009 — was now expected to jump by 12 percent this year, up from a December forecast of 7 percent growth.
However, the global growth picture remains uneven, the I.A.T.A. said.
Markets in North America and Europe were lagging, reporting gains in international passenger demand of just 2.1 percent and 2.3 percent, respectively, in January.
In emerging markets, the picture is strikingly different, Mr. Bisignani said. International passenger demand in the Asia-Pacific region climbed by 6.5 percent in January from a year earlier. The I.A.T.A. predicted that airlines in the region would swing to a combined $900 million profit this year, from a loss of $2.7 billion in 2009.
“This is a very dramatic shift,” Mr. Bisignani said, noting that airlines in that region were now facing a shortage of capacity, particularly for air freight.
The situation in Latin America was also encouraging, with international passenger demand up 11 percent in January from a year earlier. The association forecast that carriers in the region would record profits of around $800 million this year, in line with 2009.
Much of the strength in the region was due to growing economic ties to the fast-growing economies of Asia, the I.A.T.A. said, as well as a recent wave of cross-border airline mergers that have given carriers greater flexibility and economies of scale.
Globally, airline revenues are expected to recover sharply this year, to $522 billion from $479 billion in 2009.
“Revenues are half-way to recovery — $42 billion below the 2008 peak and $43 billion above the 2009 trough,” Mr. Bisignani said.
Airlines in North America and Europe, where consumer confidence and job growth remain low, were expected to record another year of losses in 2010.
North American carriers are likely to lose around $1.8 billion this year, compared with $2.9 billion in losses in 2009. Air travel demand is expected to grow by 6.2 percent, although first- and business-class travel remains sluggish.
European carriers were expected to lose around $2.2 billion in 2010, slightly less than the $2.5 billion the I.A.T.A. forecast in December, amid an expected 4.2 percent increase in demand.
Airlines in the Middle East were expected to see one of the sharpest recoveries in demand this year, up 15.2 percent from 2009, although they are likely to remain in the red to the tune of $400 million. Excess capacity in the region is weighing heavily on ticket prices.
After slashing capacity last year by cutting flights and using smaller aircraft, airfares and cargo rates are beginning to rise. The I.A.T.A. forecast that average revenue per distance traveled, known as yield, would improve by around 2 percent in 2010 for passenger travel and 3 percent for cargo, compared with a precipitous 14 percent drop experienced by both sectors in 2009.
Its interesting how the airline companies thing that the economy is getting better, i don't mean to say its not but we also have to take into consideration the cost of gas. For the past year, gas has been really expensive and many people decide to fly because it less costly. Also the places where these airlines expect to make a profit is surprising because North American region is expecting to have losses and i think this might be true because their is still to much unemployment. How those this affect the people? Are their goals reasonable?

Who is happy?

A recent Gallup poll asked whether respondents were satisfied with the way the United States is going. The percentage of those who are satisfied is now down to 19%. Is it health care? Unemployment? Wages? Or something else?

Que Sera, Sera

U.S. job openings rose 7.6 percent in Jan. to 2.7 million

THE ASSOCIATED PRESS
Published: March 10, 2010

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Job openings rose sharply earlier this year, evidence that employers are slowly ramping up hiring as the economy improves.

The number of openings in January rose about 7.6 percent, to 2.7 million, compared with December, the Labor Department said. That's the highest total since February 2009.

The report is a sign that the economy is soon likely to generate consistent job gains. Some economists expect employers to add up to a net 300,000 jobs in March, though as many as a third of them could be temporary hiring for the 2010 Census.

Hiring is critical to sustaining the economic recovery because job growth boosts incomes and helps restore the confidence needed to drive consumer spending. A gradual increase in net hiring would help prevent the recovery from fizzling.

There are now about 5.5 unemployed people, on average, competing for each opening. That's far more than the 1.7 people who were competing for each opening when the recession began. But it's down from just over 6 people per opening in December 2009.

Economists were encouraged by the report but cautioned that hiring likely will increase slowly this year.

"It's getting better, though not as quickly as you'd like," said Dan Greenhaus, chief economic strategist at Miller Tabak.

The economy has lost 8.4 million jobs since the recession began, the largest drop since the 1930s. The jobless rate was unchanged last month at 9.7 percent. Most economists expect the rate to remain elevated for several years.

The Labor Department's Job Openings and Labor Turnover Survey illustrates the heavy job turnover that occurs even in a sluggish economy. Employers hired about 4.08 million people in January, the report said. At the same time, 4.12 million people were fired or otherwise left their jobs.

Questions that occurred to me while reading this artilce:

Will the job market improve by the time we have graduated? I've always subscribed to the liberal arts philosophy of education rather than career training, but I wonder if I should be worried... Is Obama doing anything about this? Me thinks I heard tell of him sort of subsidizing the hiring of employees to encourage businesses to hire, but will this really create secure jobs? Look at the job turnover rate in the last paragraph; that is ridiculous! Why on Earth are we shifting so many people in and out of employment? The only things I can think is that companies are firing their high-up workers that have to be paid a lot and hiring noobies that will accept lower pay. I have no idea if this is true, but if I were corporate jerk I would do this. This is not to say all corporate level people are jerks. The point is, I'm not sure how much we can synthetically speed up the process of job creation through the private sector. What do you think?

A Futures Site to Bet Real Money on Movies

Think that this spring’s “Robin Hood” movie will be a blockbuster at the box office? Next week you will be able to put your money on it.
Cantor Futures Exchange, a subsidiary of Cantor Fitzgerald, expects to open an online futures market next month that will allow studios, institutional and average moviegoers to place bets on the box-office revenue of Hollywood’s biggest releases. Late last week, the company learned from regulators that customers could start funding their accounts on March 15.
“I’ve worked in the futures industry for a long time,” said Richard Jaycobs, the president of Cantor Exchange, a subsidiary of Cantor Fitzgerald, who has worked with derivative markets and the cotton exchange. “And none of the products has the overall appeal that this does. This just has a tremendous potential audience.”
Betting on the success of Hollywood releases has long been a parlor game for moviegoers. In 2001, Cantor Fitzgerald bought the Web site HSX.com (for “Hollywood Stock Exchange”), where users can place bets with play money on a film’s box-office success; smart traders win little more than satisfaction. Mr. Jaycobs said that he hopes to lure a sizable portion of that site’s 200,000 active users to the real futures exchange.
But buyers beware: If “Avatar” is any indication, the public isn’t always so wise about Hollywood fortunes. Most users of HSX.com predicted a flop, and if those users had placed real money on the Cantor exchange, they would have taken a serious hit.
In the real market, contracts on the Cantor exchange will trade at $1 for every $1 million a movie is expected to bring in — a figure determined by traders — at the domestic box office during its first few weeks in theaters. So if “Robin Hood” is expected to bring in $100 million in its opening weeks, a single contract could be bought for $100 by a trader who thinks Russell Crowe’s role in the movie will drive sales far above expectations. If that trader guesses right, and the movie sells $150 million in tickets, the trader makes $50.
Mr. Jaycobs said the metric used — domestic box-office receipts — “is as simple as it can possibly be.” He hopes the business will attract also professional and institutional investors. If a movie distributor, for example, screens a movie it has backed and thinks sales will beat expectations, the company can take an even bigger financial stake in the movie by buying contracts for it. The possible mix of investors — Hollywood insiders and moviegoers at large — creates an interesting laboratory, said P. Clark Hallren, a managing partner at Clear Scope Partners, a financial adviser to entertainment businesses who advises Veriana Networks, a company that is planning its own futures trading operation.
“Who knows more about the movie, the studio who made the movie or the public, who says I’m going to go see it or not see it?” he said.
Cantor expects to open the exchange shortly after April 20, when it hopes to get final regulatory approval from the Commodity Futures Trading Commission, the government agency that oversees futures markets. The box-office receipts will be based on figures provided by Rentrak, a company that can provide almost real-time sales data.
As in other futures markets, investors will also sell — or “short” — contracts. If a distributor thinks a movie it is backing will struggle at the box office, the company can sell contracts in the futures market. If the distributor shorts a $100 contract and the movie grosses $50 million, the distributor will make $50, thereby limiting the company’s total losses from a film.
Conflict of interest issues are handled by limiting the amount a company can hedge through the exchange, so that a distributor could never make more money by betting against a film through futures than by having that film succeed in theaters.
“The nature of the futures business is that many of the traders are in the business they’re investing in,” said R. David Gary, a spokesman for the trading commission. If an investor in agriculture sees that bad weather is going to lower the yield, he said, it is possible to hedge that investment by shorting a crop in the futures market.
Veriana Networks, a privately owned media and technology company, plans to operate a competing trading exchange, called Trend Exchange, in Chicago after receiving regulatory approval, which the company expects later this month. Trend Exchange, however, will work only with professional and institutional investors and build the market slowly, said Rob Swagger, Veriana’s chief executive, describing his business as the “tortoise” in the race.
Mr. Swagger said that demand and recent developments, including the advent of electronic trading and audited box-office figures, had provided the opportunity to create the new market.
Hollywood investors have long hedged their risks, buying insurance against bad weather during outdoor filming, for example. But reducing the risk of poor box-office results has been much tougher, said Alice P. Neuhauser, an adviser to Veriana who manages entertainment assets for Kushner-Locke, a film and television distributor in Beverly Hills, Calif.
These new markets, she said, present Hollywood investors with “an opportunity to acquire a contract to minimize the downside risk.” Or, she said, “you can double-down on an investment that you think is going to do well.”
The new markets also present an opportunity for people and companies to put their money into a movie project that they otherwise had no opportunity to invest in, she said.
I really like this article because it amazes me how people can apply everything into making a profit out of it. Its insane how this movie website plans to make a profit, i am looking forward into seeing how the companies work out. What is your thought on this article?

Have you heard Green Buiness before...?Here it is something about battery

The Battery Market Will Charge Ahead

The battery market, also known as the storage battery market, is big—and it's only going to get bigger between now and 2015.Batteries represent about $36 billion in revenues today and are expected to grow to more than $50 billion over the next five or so years, with rechargeable batteries leading the way.

1.The hybrid vehicle battery, which accounts for 1.7% of the world's rechargeable market, is expected to grow to 4.2% of the market by 2013. This surge is based on conservative assumptions about hybrid car growth.
2.The ultracapacitor and fuel cell battery growth forecast may also be low, given potential technology/performance breakthroughs in the next few years.
3.Growth in renewable energy, like solar and wind power.will drive additional demand for storage capacity, especially with increased smart grid electricity deployment all over the world.

How do you think about Green Business. Do you think the green business will make profits for the companies? What about the consumers? Are the consumers willing to pay more to use renewable energy?Is Green Business will bring more effects to environment than to business?

The Beautiful Game

The Beautiful Game

Clearly I am a soccer fan because I keep posting things about the world cup, but I am just excited for this event to commence and I’m also excited about how much the World Cup will boost South Africa’s economy and possibly the countries surrounding it therefore helping the homeland my parents came from and that I have heard so much about. So there is some passion behind these posts coming from a big, African, soccer family. The four weeks of international football in South Africa have acted as a channel for a big range of major transportation projects that have been pushed back for years many times, like a new airport, five years earlier than previously expected and more roads. It’s all exciting news that the country is benefiting so much from this upcoming great football tournament. And the article below from BBC explains more about the benefits and some of the negative effects of the upcoming World Cup:

South Africa starts 100-day World Cup Countdown

The man in overall charge of Durban's World Cup preparations fell like a stone towards the manicured grass pitch inside the city's spectacular new stadium.

"Durban is absolutely ready," shouted Mike Sutcliffe, red-faced but grinning, seconds after an elastic bungee rope had broken his fall and left him swinging gently in the humid air.

A hundred days before the World Cup begins in South Africa, this cosmopolitan port city on the Indian Ocean is racing to complete an ambitious billion-pound refurbishment of local infrastructure that officials insist will be on time, on budget, and destined to reshape Durban for years to come.

"No white elephants," said Mr Sutcliffe, the city's manager, after his inaugural stadium jump.

"Unlike any other country that has hosted a World Cup, or an Olympics, ours has been developmentally oriented."

By now, he was standing on a viewing platform, reached by a small train, back at the very top of the giant white arch that loops over the $372m (£250m) stadium.

"We've made sure everything we're building here is something for beyond 2010. Sustainability is really our buzz word… and we have not taken out one loan as a city to pay for this investment," he said.

'World class'

Four weeks of international football have acted as a catalyst for a whole range of major infrastructure projects in Durban. Some, like the stadium, are more or less finished.

Others, like the new sea-front park will probably keep the bulldozers busy right up to the last minute.

Mr Sutcliffe, a well-connected member of the ruling party, the ANC, said the World Cup had enabled the city to get a new airport "probably five years early," and he listed a string of other benefits, including an upgraded road system, an overhaul of public transport, and extensive broadband cabling.

"The world will think differently about Durban," he said. "They'll say - my goodness, these are not just hicks from a developing country. They are world class."

Critics have suggested the huge new stadium will not be sustainable, particularly since the local rugby team, the Sharks, is reluctant to move from their own, more intimate grounds, just across the road.

A local sports reporter, Zayn Nabbi, broadened the complaint.

"We've got roads, we've got airports and that's a huge benefit, but those have been improved in affluent areas. Your areas outside the city centre are still left decrepit and derelict, and that's the sad reality," he said.

"Expectations are too high," said Simphiwe Ntshweni, from Durban's Youth Advisory Centre.

"This is a Fifa event. It will come and go. People are hoping the World Cup will bring real money into their pockets, but the person on the street will find it is not easy to realise those dreams. Come back after July and you'll see a lot of people have not made money.

"But if you see all the infrastructure that is here now, the roads and public works - those positive things outweigh the negatives."

Not plain sailing

Will ordinary South Africans benefit from the event?

Cruising off the coast in a sleek white motor boat called Bring it on, marketing executive Trevor Tshuma acknowledged that not every business was going to benefit from the World Cup.

"There will be quite a lot of disappointment, but that's to be expected - this is a first for Africa, and there's no yardstick to refer to so certainly there will be quite a lot of losers," he said.

Mr Tshuma works for a new accommodation management company called Teatro, which has expanded rapidly in the past year by offering tours, rooms, boats and other tourist facilities to visiting fans.

The accommodation industry has been wrestling with issues of over-pricing, accreditation, low tourist numbers and the dominant role of Fifa's official partner, MATCH Services, but Mr Tshuma said Teatro was "going to make a very nice profit and a good turnover".

"There were a lot of people who over-inflated room rates, but we're keeping it realistic."

More important, Mr Tshuma, stressed, was the long-term impact of the World Cup on Durban.

"A lot of people have the wrong perception. People talk about crime but it's often exaggerated," he said. "When people come and realise how safe it is and how affordable things are... it will definitely give a positive impact for tourism in the future."

All around the centre of Durban, workmen are noisily racing to complete (and in some cases it seems, just starting work on) fan zones, park and ride zones and other World Cup-related infrastructure projects.

Beside one particularly noisy building site, a group of traders selling football shirts and other goods from their stalls seemed uncertain about Fifa's marketing restrictions around the stadium, and less-than-convinced that June and July would do much for their businesses.

But serving the lunchtime takeaway crowd at her busy curry restaurant nearby, Priscilla Powell was adamant.

"There's been a lot of road works; they're getting the country ready and it's changing for the better; I think we'll sell to a lot of football fans," she said with a grin.

China's Export Rise and Banking Revolution

In regards to what we have talked about in class, China and the United States have led the world out of the "Great Recession", although much work still needs to be done. However, China's recovery is booming compared to the United States after the Chinese government released figures that during the month of February exports had risen 46% when compared to February last year. According to the New York Times, this is good news because it shows that markets are rebounding and demand is increasing because of "orders from the United States, the European Union and Japan" which have "accounted for almost half the growth" during this past February. This is also the "third consecutive month of increases in Chinese exports and the fastest growth in three years". Chinese imports have also risen 45% over last year. This is good because it means the world is on the path of recovery, however it also brings out a lot of criticism against China.

As we have talked about in class, China sets the exchange rate for its currency, the yuan, very low compared to the dollar, which keeps "Chinese exports artificially cheap and depresses competing economies". This current boom in exports could further the discussions about having China "let its currency, the renminbi (another name for yuan), appreciate against the U.S. dollar". If this were to happen, as President Obama would like it to, then the trade imbalance between the U.S. and China would decrease. This is all the more important after "China reported a $7.6 billion trade surplus for the month", although though this was half of what it was a year ago. The explanation for this would be the rising cost of commodities. The United States will most likely pressure China to allow the yuan to appreciate, although it would benefit the United States more than it would China, because the U.S. hopes to grow its way out of debt through exports and also expand the GDP. If this were to happen, Chinese goods would become more expensive, and exports and demand would fall for China. However, Chinese prime minister Wen Jiabao said last week "that exchange rates would remain 'basically stable' for now".

China has also revolutionized its banking system as well after the Chinese government "unveiled strict new rules Wednesday governing bankers’ pay that are designed to limit risk taking". These new rules include, "payment of 40 percent or more of an executive’s salary must be delayed for a minimum of three years and could be withheld if the bank performs poorly". This may seem revolutionary, but because banks are government run, the employees are paid by the government and "their salaries are already significantly lower than those of international peers".

When we talked about banking regulation in light of the recession a few times in class, the most was criticism about how regulations were not made on the financial system in the United States after the bailouts. It appears the China is moving ahead of the United States in the aspects of banking regulation and exports, but at what cost? China runs its banking system where as the U.S. government does not run ours. Furthermore by China keeping its currency low, it is detrimental to other competing economies who wish to grow out of the recession, like the U.S. Therefore, this will be a big test for Chinese and U.S. relations, because essentially they are competing for market share as demand for goods and services continue to rise.

Should China allow the yuan to appreciate against the dollar? Are China's new banking regulations as meaningful as they would be in the U.S.? How will the U.S. respond if this trade imbalance continues, and how will it make its goods and services more attractive in the world market? How does China's trade surplus play into the U.S. national debt? How would the U.S. convince China to let the yuan appreciate against the dollar, meaning what incentives does China have to do so?

How the Average Consumer Spends Their Paycheck

Above is a really cool infograph about how money from the average consumer unit (I think this means household) is spent. The largest expenditures are housing, transportation, and food, which seem pretty standard. One obvious tie back to the class I saw was the huge chunk taken out of income after taxes (fiscal policy). Is there anything about this graph that you find alarming or unexpected?

For more cool economic-related graphs, click here.

Flying the friendly skies

I flew out on Monday on American. First to Chicago on a teeny tiny plane from Kalamazoo. We got there on time and the second flight to Washington was also on time. Again, a very small plane (the smallest one I've ever taken to Washington from a major city). All carry on luggage was "valeted" into a hold. Actually, this part is really cool IMO. All World War II WAC veterans are receiving a Congressional Medal of Honor this week in Washington. I sat next to one of the WACs who was from a small town outside of Knoxville, Tennesseee. She was this tiny woman who could still wear her service uniform (she had it on). During WWII, she had flown B-26s. She told me that she had enjoyed flying them until too many of her friends had been shot down. Then all she wanted was to come home. When she got home, she got to keep her parachutes which had bullet holes in them. Her sons used them as curtains in their rooms. She lives in a convalescent home today but does the bookkeeping and small management tasks. Wow.
Back to the airline. The insides of all four planes were old. Seats did not move up and back as they should have. All the planes were small. Flights out of Chicago were late all day yesterday because of early morning fog. Are US airlines in trouble? Why would they be?

Monsanto's and WalMart's New Playmate

Merck Joins With Sanofi in Vet Drugs

By THE ASSOCIATED PRESS

Published: March 9, 2010

Add to PortfolioTRENTON (AP) — Two of the world’s biggest pharmaceutical companies said on Tuesday that they were uniting their animal health businesses in a move to become the largest supplier of veterinary medicines.

Sanofi-Aventis, said they would jointly own the business, which would control about 29 percent of the $19 billion annual global market for medicines for pets and livestock. That is well ahead of the current leader, Pfizer’s Fort Dodge unit, which has about 20 percent of the market.

The joint venture will combine Sanofi’s Merial animal health business, the maker of theFrontline flea and tick treatment and Heartgard for preventing heartworm infection, with Merck’s Intervet/Schering-Plough unit, which makes vaccines and drugs mostly for farm animals. Merial operates mostly in North America and South America, while Intervet sells in Europe and emerging markets.

Last year, Merial had sales of about $2.55 billion and Intervet had $2.74 billion, for a total of $5.3 billion.

The chief executive of Merck, Richard T. Clark, noted their products and countries of operation were complementary, adding that anticipated growth would bolster resources for research.

The chief executive of Sanofi-Aventis, Christopher A. Viehbacher, said the animal health market was expected to grow 5 percent a year through 2014, fueled by multiple trends.

The deal, expected to close in the next year, comes amid an unusual level of jockeying in the veterinary medicine business recently.

Pfizer, the world’s biggest pharmaceutical company by revenue, bought Wyeth in October for $68 billion in a diversification strategy that gave it strong businesses in vaccines, other biologic drugs, nonprescription medicines and veterinary medicines. Merck made a similar move, buying Schering-Plough in November for $41 billion for its biologic drugs, consumer health products, veterinary medicines and strong portfolio of drugs in development.

Shares of Sanofi rose 3 cents, to $38.18. Merck shares fell 31 cents, to $37.04.

I found this article and it reminded me of monopolization and Monsanto and WalMart and then my heart vomited out of pity for the way our economy is going. We are losing to giant corporate profits. Already medicine prices are enough to make people want to go to Canada. (Keep in mind how badly Canada fucked up the opening ceremony of the Olympics. Also that they created a luge track so dangerous a man died. No offense to any Canadians who may read this. I love Kilarney.) What is to be done about horizontal integration of companies? Should we do anything? What is at stake?

Bank of America Ending Overdrafts On Debit Cards

In a move that could bring an end to the accidental $40 cup of coffee, Bank of America said Tuesday that it was doing away with overdraft fees on purchases made with debit cards, a decision that could cost the bank tens of millions a year in revenue and put pressure on other banks to do the same.
Officials of the bank said that effective this summer, customers who try to make purchases with their debit cards without sufficient money in their checking account will simply be declined. Debit purchases account for roughly 60 percent of overdrafts at Bank of America, the nation’s largest issuer of debit cards.
The change comes as banks brace for a new federal rule that will force them to get permission from account holders before providing overdraft services for debit cards and A.T.M. withdrawals. That change was already expected to wipe out billions of dollars in overdraft revenues for the banks.
The announcement comes after considerable consumer and political outcry against overdraft fees on deposit accounts. Over the last decade, the fees have become a major source of revenue for banks as they realized they could make more money by covering consumer overdrafts, offering a short term loan for a fee, than in denying them.
Last year alone, banks generated about $20 billion from overdraft fees on debit purchases and A.T.M. transactions, and another $12 billion by covering checks and recurring bills, according to Moebs Services, an economic research firm.
But as reports surfaced of customers racking up hundreds, even thousands, in overdraft fees, often for purchases of just a few dollars like a cup of coffee, regulators and lawmakers stepped in. As of July 1, the Federal Reserve will require that banks obtain a customer’s consent before they can charge them overdraft fees for A.T.M. transactions and debit purchases; currently, many banks automatically enroll customers.
In anticipation of the new Fed rule, some banks have begun marketing campaigns to encourage their customers to opt in to overdraft protection to keep the dollars flowing.
Several bills have been introduced in Congress that would go beyond the Fed’s rules on overdraft fees.
Bank of America, by deciding to scrap overdraft charges on debit cards purchases instead, is hoping to bolster its reputation with consumers at a time when anger at banks for their role in the financial crisis remains high.
Bank of America’s new overdraft policy takes effect on June 19 for new customers and early August for existing ones. Overdraft protection will still be available, typically for a fee of $10, to customers who link their checking accounts to savings accounts or credit cards.
Bank officials declined to say how much money the bank currently makes from overdraft fees, but anecdotal data suggest it had been a multibillion-dollar business for the bank.
“Consumers have shown a willingness to incur overdrafts if it’s covering mortage payments or car payments, but not to cover a hot dog and a soda,” said Greg McBride, senior financial analyst at Bankrate.com and one of a handful of analysts and consumer advocates briefed by Bank of America on its new policy. “They don’t want to incur overdrafts on everyday purchases.”
Martin Eakes, chief executive officer for the Center for Responsible Lending, called Bank of America’s decision “a very big deal.”
“If Bank of America can forego the fee income and do the right thing by their customers, this should be seen as a direct challenge to the other big banks to match and do the same,” said Mr. Eakes, who serves on a Bank of America advisory council, an unpaid position.
Of course, because of the new federal rule that requires customers to opt in to overdraft protection, all the big banks are anticipating a sharp drop in revenue once it goes into effect this summer.
But Mr. Eakes noted that because of Bank of America’s size, it might have still charged hundreds of millions of dollars in overdraft fees even if most of its 37 million debit customers in the United States dropped out of overdraft protection.
Most major banks continue to charge overdraft fees on debit purchases, though some have modified their policies to appease critics. Citibank, for example, does not allow overdrafts for debit purchases or A.T.M. withdrawals.
It was not known on Tuesday how other banks would react to the change in Bank of America’s overdraft policy. The bank briefed only a handful of news organizations, including The New York Times, with an understanding that its competitors would not be notified until Wednesday.
Last September, Bank of America announced less ambitious changes to its overdraft policy — not charging customers who exceed their balance by $10 or less, for instance — only to have other banks rush out their own overdraft changes that same day.
In its fourth-quarter earnings call in January, Bank of America said those modest changes, which also limited overdrafts to four a day, cost the bank $160 million in just that quarter alone.
Bank of America’s about-face comes as banks are rethinking their policies on consumer products like credit cards, mortgages and debit cards, to comply with new laws and regulations and the continued economic malaise. In the past, a relatively small number of customers generated such enormous fees from overdraft charges and penalties on credit cards that they literally subsidized free checking and generous rewards programs for the majority of customers.
In the case of overdraft, 93 percent of the fees are generated by just 14 percent of the customers who exceed their balances five times or more a year, according to a 2008 study by the Federal Deposit Insurance Corporation. Three quarters of customers are not charged overdraft fees at all, the study found.
But the meltdown in consumer credit, combined with new rules limiting banks’ ability to make money on credit cards and overdraft fees, has prompted banks to experiment with fees that reach a broader set of customers, like annual fees on credit cards and monthly fees on checking accounts.
In my opinion this new law is great both for the people and the bank. The people will be able to avoid that extra charge and avoid purchases that they can't afford. For the bank, this new law will attract other debit card holders and serve as competition. Will other bank react to this new law and do the same? What are some other benefit the bank or people can get from this? What is your opinion on this?

$10 trillion jump in debt under Obama budget

In class we have talked about our countries debt and some of the problems we have with the federal spending and budgeting. This $10 trillion added in debt is estimated by the  Congressional Budget Office, or CBO, and the White house. The CBO has suggested two main contributors the the debt below: 

NEW YORK (CNNMoney.com) -- If President Obama's 2011 budget were put into effect as proposed, the U.S. federal government would add an estimated $9.8 trillion to the country's accrued debt over the next decade, according to a preliminary analysis from the Congressional Budget Office.

Of that amount, an estimated $5.6 trillion will be in interest alone.

By 2020, the agency estimates debt held by the public would reach $20.3 trillion, or 90% of GDP. That's up from 53% of GDP in 2009.

Research done by economists Kenneth Rogoff and Carmen Reinhart has shown that such high levels of debt can cause a drag on economic growth.

The CBO cited two big contributors to the jump in debt.

One is the president's proposal to extend the 2001 and 2003 tax cuts for the majority of Americans. The other is the proposal to protect middle- and upper-middle-income families from having to pay the Alternative Minimum Tax (AMT).

Together those proposals would cost $3 trillion between 2011 and 2020.

"It points out the unwillingness of the administration to raise the revenues to pay for the size of government being proposed," said Robert Bixby, executive director of the Concord Coalition, a deficit watchdog group.

If Congress doesn't act, all of the Bush tax cuts are slated to expire at the end of this year and there will be no protection from the AMT.

But current law is not politically realistic, many say. That's why the administration prefers to compare the cost of its proposals to what lawmakers are likely to do -- namely, extend tax cuts and fix the AMT.

Hence, the White House Budget Office estimates that under the president's proposals, $8.5 trillion would be added to the country's accrued debt over the next decade, or $1.3 trillion less than the CBO estimate.

Either scenario is unsustainable, Bixby said.

The administration has also called the budget trajectory unsustainable and the president has created a fiscal advisory commission to recommend ways lawmakers can get annual deficits down to 3% of GDP by 2015.

That's well below where it would be under the president's budget, according to estimates from both the CBO and the White House. And while his proposals would chip away at deficits in the next few years, they start to climb again thereafter. By 2020, the annual deficit as a percentage of GDP will be 5.6%, according to the CBO. The White House estimates it will be 4.2%.

But there is no guarantee the fiscal commission's recommendations will be adopted by lawmakers.

The CBO notes that its estimates incorporate the Administration's revenue and spending assumptions for policies such as health reform and climate change, because the agency didn't have sufficient details from the White House about those policies to do its own analysis.

Do you think that tax cuts should be extended or continued? Is it more important at the moment to try to help the people of the United States rather then worry about reducing our national debt? Should the congress sign to continue the tax cuts? Will continuing tax cuts contribute to economic growth? Should president Obama reconsider his budge?