Italy and Greece fire their heads

This short article talks about how the markets in both Italy and Greece are reacting to the recent stepdowns of Italian premier and Greece prime minister. The market is actually rewarding these moves by increasing the borrowing rate. Also the DOW has went up recently as well because of this. This shows that the market approves these political moves, and it is somewhat confident that the new heads can improve the economic mess that these two countries are in. Clearly even the slightest hope right now for these two countries are giving the market confidence, and furthermore this story demonstrates how politics and economy are tightly linked together in not only the domestic country, but also the world as a whole.

http://www.economynews.us/economy/italy-and-greece-lose-their-heads-markets-reward/

Price increases are not affecting Mcdonalds, Nike and Starbucks

This news article presents the fact that people during this holiday season are not paying attention to some of the price raises from three of the major firms in America. Initially these firms feared that increased prices due to increasing in ingredients costs were going to scare the shoppers away. However, that assumption did not hold as people continues to buy the same amount of products from these three major firms. In my opinion, the reason people are continuing to buy products from these three companies is because Nike, Mcdonalds, and Starbucks are three of the most well known firms in America, and an increase of twenty cents on a cup of coffee isn't really going to change their mind especially during the holiday season. Thus, this shows a slight increase in price has minimum effects in people's spending behaviors.

http://news.yahoo.com/raise-price-theyll-still-come-144949482.html

Growth in GDP revised in the third quarter

This article talks about how GDP estimates is usually revised regularly by the government, which is something that I did not know before. Also the article talks about the third quarter growth rate is actually only two percent, which is lower than the 2.5% that was reported earlier. However, this is still a significant number compared to the second quarter's number of only 1.3% growth. Both consumer spending and corporate profits are up, which are two of the most important drivers of the GDP.

http://money.cnn.com/2011/11/22/news/economy/gdp_report/index.htm?iid=SF_E_River

Stronger Lure For Prospective Home Buyer

The article discusses that it is now more affordable to own house rather than to rent one. However, although monthly mortgage payments are below monthly rental payments, would-be buyers are not pulling the trigger on buying a house. Homeowners, who would like to move to a better, bigger property, are unable to sell their house. In addition, fallen home prices and mortgage rates did not out weigh the other costs such as taxes, insurance, and homeowner association dues and would-be buyers' wary of future decline in home price, suggesting that buying a house is not a good financial investment. If this is so, with household not readily willing to purchase a house could lead to a delay in purchases of durable goods such as cars or home appliances. So when will we begin to see households taking advantage of such affordability?

For more information:
http://online.wsj.com/article/SB10001424052970203764804577060502694077494.html?mod=WSJ_hp_LEFTWhatsNewsCollection

Rich and Poor Students Graduation Gap Increased

During class we have looked at the White and Black schooling years and the increase in women attending post-secondary schools. Now this article shines light on the graduation rate between the rich and the poor; which have increased. Many low-income students do not finish college, particularly from the result of low-income students attending less prestigious universities. These universities tend to have bigger classes with less attention for the individuals, suggesting that students have a less of an incentive to attend classes. On top of that, with college tuition increasing, families from the lower income group are not able to financially support their children. While those of the top income group are able to support their children, leading to more students from the top income group to attend and graduate college than low-income students. With jobs today requiring more skills and higher education, those who don't graduate (which tends to be the low-income students) are stuck with low wage jobs and fewer job advancements. This pushes for more programs to help these students from the low-income group attend and finish college, in hopes that they can financially support their children in the future. And with such programs, would we expect to see a convergence between the percentage of rich students and poor students graduating?

For more information:
http://money.cnn.com/2011/11/21/news/economy/income_college/index.htm?iid=HP_MP_River

South Park

I watched the South Park episode "The Last of the Meheecans", and many elements from the show reminded me of the migration topics we covered in class. The episode centered around a mass exodus of Mexican emigrants back to their home country. This results in a labor shortage in America, which severely cripples its economy. As more and more Americans are forced to pick up the menial labor tasks vacated by the Mexican migrants, the American sentiment towards immigration (including illegal immigration) dramatically shifts towards an attitude of welcoming embrace. Border patrol agents no longer enforce policy, and the U.S.-Mexico border becomes an open border. The episode makes a compelling case against anti-immigration sentiments in the U.S. As we learned in this course, the flow of immigrants into America in the 21st century is largely composed of folks of Mexican descent (35%), more so than any other ethnic group. Eliminating such an essential component of the American labor force would undoubtedly have a negative impact on our economy. Furthermore, we learned that immigrants are positively selected from sending countries today, including Mexico. In fact, one of the lecture slides indicates that the net difference index for Mexico is positive (0.2), indicating that twenty percent of Mexican migrants actually possess education levels exceeding that of natives. This aspect of positive selection is also reflected in the South Park episode, as it depicts some Mexican migrants working in high-skilled jobs, such as hospital technicians.

Source: http://www.southparkstudios.com/full-episodes/s15e09-the-last-of-the-meheecans

Glass Ceiling for Women in Finance

Nov.22, 2011- The finance industry has always been known to be an industry with apparent glass ceiling for females. Deal Book author Julie Steinberg recently published data on the topic: In 2011, only 16% of women in investment banking were promoted to be managing directors, the second highest rank in the business second  to partner. Furthermore, there's been a 5% decrease in the same measure since 2010. This article did not have any speculations as to why the phenomenon exists and I have one of the many reasons as to why: As women progress in their lives, they often need to choose between family and careers towards their early 30's and 40's. Most women after having children tend to weight family heavier than careers and thus would not be as aggressive as to climb up the professional ladder, which means the overall ratio of women-to-men leaders in a company is already low to begin with.

http://www.fins.com/Finance/Articles/SBB0001424052970204443404577054143139934280/No-Big-Gains-for-Women-MDs-at-Goldman-Sach

New York: OKing Same-Sex Marraige or Not?

June 19, 2011- New York Daily News author Rich Schapiro published an article showing the economic impact New York may experience if gay marriage is legalized in the state. Schapiro argued that voting yes on same-sex marriage could bring additional $184 million into the New York economy through wedding services alone. New York's demography has always been perceived as extremely diverse in terms of ethnicity, personal interests and sexuality. Schapiro's argument is thus based on two assumptions: 1) There are may same-sex couples in New York such that if the proposition is legalized, most if not all of them will rush to make the marriage commitmment. 2) A typical same-sex couple spends about $7,400 to $20,000 on their wedding, even in an economic downturn. Finally, the begging question is how should the public weight the economic benefits of same-sex marriage and other potential outcomes as a result of legalization?

http://articles.nydailynews.com/2011-06-19/local/29696836_1_marriage-bill-gay-marriage-gay-couples

Rice: the impact of the Thai floods on the crop price

November 12, 2011-The Economists published an article discussing how serious the impact of the Thai floods in late July be on the price of rice. As the world's largest rice exporter, Thailand provides about one third by volume of all internationally traded rice, approximately 20.3 million tonnes per year. Speculators may suspect the price of rice to soar immediately given the decrease in supply. Although this may be true, this article also suggests that rice is, in fact, a special type of crops that it is consumed where is grown. This implies the minimal effect of the Thai flood on the amount of rice consumption outside of Thailand. Although this article focuses on the effect of the Thai flood on Asia, I was able to see the connection between the decrease in rice supply and the American economy. As rice exports from Thailand decreases, it is reasonable to suppose that it could benefit the U.S. domestic rice price (increase in domestic demand of U.S. rice) as well as rice exports to nearby countries that no longer deem transporting the rice from the far Asian regions to be worth while.

http://www.economist.com/node/21538099

UC occupy

Since of the economic inequality and high unemployment in the U.S., occupy Wall Street has expanded to Occupy America, a nation-wide movement. Recently, the movement protesters are banding with UC students, and the movement grows to address students concerns. Many college students, especially those facing graduation, "have a lot to complain about." According to Jennifer Medina, L.A. correspondent for The New York Times, at the University of California, the tuition has almost doubled, but same time cutting resources. Students pursuit a higher quality education.

http://www.scpr.org/programs/madeleine-brand/2011/11/22/21497/uc-davis-pepper-spray-incident-draws-thousands-to-

Consumption Trends of Today's Economy

According to Gallup, recent consumption has risen since last year. Recent trends of the economy in the past few years have led many to claim this as the worst state of the economy since the Great Depression. If that is the case, it's interesting to observe differences between the way consumers of the Great Depression responded in their time, versus consumers of today. Following the stock market crash of the Great Depression, consumption fell, forcing interest rates down due to a drop in demand for money liquidity. This article explains that despite consumers having low opinions of their financial stability--72% have said that they were cutting back on spending--consumption has actually risen by 5% from the same month of last year. Though small, this increased spending should be raising the interest rate, forcing investment and borrowing down: the opposite of our class's hypothesis for the effect of the stock market crash on the depression of early years. One begins to wonder if this difference in consumer attitude, when coupled with the Fed's actions, could be one reason this recession is not completely explainable by current Macroeconomic models.

http://blogs.wsj.com/economics/2011/11/22/consumers-may-be-spending-more-but-theyre-not-happy-about-it/?mod=WSJBlog&mod=marketbeat

New Facts on the Gender Gap From the World Bank

This article by Sudeep Reddy, posted online from the September 18, 2011 Wall Street Journal, highlights the World Bank’s most recent statistics on the gender gap, it includes data on wealth, wages, mortality and education. With the data presented in the article it can be observed that despite decades of progress women in developing countries still face large inequalities. The article indicates that these inequalities still exist because of a variety of barriers, which include poverty and ethnicity. The message of the article is that countries that create better opportunities for women can increase output per worker, which increases productivity. This article relates to today’s lecture on women’s participation in the labor force. Today’s lecture focused on women’s labor force participation trends, and what caused these trends to occur. In lecture the main cause of the quiet revolution was proven to be new contraceptive technology. In processing this information I began to ponder whether contraception technology could be classified as one of the barriers listed in the article. If so then efforts to distribute new contraception methods in developing worlds would not only reduce poverty (a listed barrier in the article) but would also help close the gender gap and would ultimately give women more incentive to pursue long term careers, which would increase the output per worker and the productivity of the developing countries economy. If my initial thoughts are correct. This would kill two birds with one stone. So why isn’t it happening?

If you want to see the statisitcs here is the web address: http://blogs.wsj.com/economics/2011/09/18/new-facts-on-the-gender-gap-from-the-world-bank/

Failed Debt Crisis Meeting

http://online.wsj.com/article/SB10001424052970204531404577051842829678760.html?mod=WSJ_hp_LEFTWhatsNewsCollection

The article discusses the immediate effects of the U.S. failure to work out some sort of solution to the debt crisis. Aside from a bad day for stocks, the main point of the article discussed the possibility of another credit downgrade for the U.S. If a credit downgrade does become a reality, especially if implemented by a credit rating other than Standard and Poors, how will that affect the rate of interest at which the U.S. borrows? According to the model disucssed regarding interest rates during the Great Depression, a credit downgrade would lead to an increase in borrowing rates, and thus a further contraction of economic growth for the country.

As New Graduates Return to Nest, Economy Also Feels the Pain

Historians have suggested that during the Great Depression the purchase of durable goods in the economy was delayed due to uncertainty about future unemployment and income. This created a positive feedback loop in the economy as less consumption led to the accumulation of inventory and further layoffs. A similar parallel can be drawn to the current economic state of the United States as more and more recent college graduates entering the workforce (or trying enter) are delaying the durable purchases of houses. The New York Times article (linked below) states that 14.2% of young adults are living with their parents, therefore creating shortage in consumption demand of houses, furniture, repair/maintenance services, internet, utilities and other purchases that are associated with renting an apartment or home ownership. Optimists believe that this “pent up” demand of consumption will be unleashed once job prospects increase and uncertainty decreases, creating a surge in housing demand. It will be interesting to see how long it takes for consumption to rebound.

http://www.nytimes.com/2011/11/17/business/economy/as-graduates-move-back-home-economy-feels-the-pain.html?ref=education

Lessons from the Great Depression

The Great Depression was one of the toughest times in not only American history but World history. Unemployment skyrocketed, profits and prices dropped, trade plunged. As we go through the current U.S. recession, which thankfully isn't as severe as the Great Depression, there are more than a few lessons we can learn from the that devastating time during the 30s. Robyn Jackson did some research and found some advice on various websites from people who survived the Great Depression. Here are the suggestions she found: Lessons we can learn from the Great Depression

Occupy the Agenda

Nicholas Kristof goes beyond the violence that has come to characterize the Occupy Wall Street movement and delves into the root of the problem—economic inequality. He cites the statistic that 1% of Americans possess a greater net worth than the bottom 90%. In class, we discussed income mobility as a possible factor for the degree of welfare and redistribution in a country. Kristoff suggests that upward mobility in the United States is in fact more constrained that mobility in other industrialized nations; he instead suggests that varying educational opportunities and money used for political purposes are key drivers of inequality. His emphasis on money used in politics leads us to question the median voter model, as he claims that the rich have the most political influence.

http://www.nytimes.com/2011/11/20/opinion/sunday/kristof-occupy-the-agenda.html?_r=1&hpw

The Magic of Diasporas

Amidst current anti immigration policies in the United States and United Kingdom the author of this article is arguing and evaluating the economic importance of immigration. The author argues that diasporas in the modern world are important to economic growth for a variety of reasons: spreading ideas, building networks between countries, allowing business flow and providing a channel for the spread of money between countries. Moreover, the author downplays the negative impacts of immigration, mainly “brain drain” and cost of welfare on the public purse, by arguing that immigrants who go abroad for education often return with capital and/or innovation and immigrants often claim less welfare than their indigenous counter parts. This article ties closely with our own discussion on the United State’s history of immigration and can be found at the link below:

http://www.economist.com/node/21538742