As the Fed continues to keep interest rates low more companies are borrowing money and going through with improvements that they have been planning since prior to the financial crisis. Many companies are borrowing money to physically rebuild themselves since the interest rates are so low. Since interest rates are low companies are borrowing more and spending more, and a lot of the money being borrowed is going into other capital investments. The money that has been borrowed is not going to anything important funds. The low interest rates aim to improve the economy but it seems as if it has not been doing much since the unemployment rate is still high.
It seems that the Feds have been trying to push these low interest rates for a while, but little positive changes have been made. Instead of pushing out money and having it land in unhelpful places the Fed should slow down with the easy money policies. Large companies are benefitting from these low interest rates, but the everyday citizen sees little to no change.
Written by: Jessica Ho
Source: The Wall Street Journal
Japan’s monetary easing strategies have brought drastic movements in the value of their currency. The Japanese Yen is now at its lowest level since April 2009, and for the past 7 months has declined 29% against the Dollar. Although the current economic strategies adopted by the Bank of Japan are aimed at reaching their inflation goal of 2%, it has also driven down demand for their government bond market. Because of the lowered interest rates, investors are pulling out their investments in government bonds and seeking others that provide higher yields.
Experts often compare Japan’s monetary easing strategies to how the Fed has dealt with the U.S. economy since late 2008. Since the Fed has launched its stimulus program, it has cut interest rates to its lowest point in decades, and is conducting large-scale asset repurchase programs in order to stimulate consumption and job market growth, which is exactly the strategy adopted by the Bank of Japan.
Examining the current economic movements in Japan is important in the global economy because the value of their currency greatly affects the demand of other currencies as well as prices in the global marketplace.
The Wall Street Journal
The Securities and Exchange Commission (S.E.C.), known for its strict regulations on Wall Street, recently replaced their chairman. Mary Jo White was chosen to take Elisse B. Walter’s place on Monday. There has been a lot of attention on this position because Congress wants the agency to enforce more rules that would further limit financial fraud on Wall Street. Although she was chosen unanimously, some critics suspect that she will favor large banks like JPMorgan Chase. Conversely, people who were familiar with her performance as a prosecutor believe strongly that she is the right person for this position. She is known for her ability to prosecute criminals and thoroughly investigate crimes.
With the background of a prosecutor, White will be able to eliminate fraud that occurs in the financial industry. Congress should allow her to oversee Wall Street because she has prior knowledge. Also, she proposes to sever all ties with the private firm she worked with previously to show the public that she has the ability and determination to regulate Wall Street.
Written By: Melody Mark
Protess, Ben. “With Senate Approval, White Is Set to Run S.E.C.” New York Times. The New York Times Company, 08 Apr. 2013. Web. 08 Apr. 2013.
Marissa Mayer, CEO of Yahoo!, has been buying start-ups in an effort to appeal to a younger generation. Yahoo! is know for having missed the opportunities that came along with the popularization of social networks and mobile devices. Along with the missed opportunities has come a loss of advertisers and employees to rivals like Facebook and Google. The Internet company has failed to take advantage of past acquisitions like Flickr and Delicious, which has only added to the pioneer’s downfall of sorts.
Mayer is looking to change Yahoo!’s past struggles. She has bought six start-ups for tens of millions dollars and has personally been involved in figuring out how to integrate them into the company. Since Mayer first took the job of CEO, founders and contributors of Yahoo!’s start-up acquisitions have noticed a change in attitude. Yahoo! has become a company that cares more about its developers now than it has in the past, which is good for its reputation among young developers. Overall, Mayer seems to be taking the company in the right direction.
Written by: Constantine Kostikas
Source: The New York Times
The Hang Seng Index began after hours trading yesterday, allowing trades to occur from 5 p.m. to 11 p.m. It is hoped that the after hours trading will allow Hong Kong traders to have more flexibility in adjusting their positions upon observations of other world events. As of right now, the plan is to extend the hours for futures in Hong Kong’s main two indexes, but there is no definitive plan in place.
The change is not universally acclaimed, however, as local brokers protest that they are going to lose their already tiny market share of trading. “Of the 571 Hong Kong stock-exchange participants, the biggest 14 accounted for 59 percent of the market in February and the largest 65 were responsible for 90 percent,” and they are only going to get bigger if they are the only ones who can afford the cost of setting up after hours trading. There is also the argument that the introduction of after hours trading may not even be worth it if the benefits do not outweigh infrastructure costs.
I believe that the extra hours provided to traders will be helpful to their positions, and I think the majority of them will take advantage of the new hours. Everybody wants to stay ahead of the markets, and extended hours will assist Hong Kong in doing so. Although, I feel bad for the many traders who are going to be facing longer hours on the job now.
Men with waist sizes measuring 40 inches or more or have high blood pressure, have to pay as much as $1,000 health-care coverage if they want to work at Michelin North America Inc. Not just Michelin, but other companies across America are demanding that employees share their personal health information because they are not able to lower the costs of health care without changing their habits. Companies are expected to carry out penalties because they feel that it will eventually lead to reward for its workers and lower the costs of health-care. Michelin chose to award workers who completed health-assessment surveys or participated in action plans for wellness. Those who are in healthy shape will receive up to $1,000 to reduce their annual deductibles.
With many companies across the nation beginning to adapt these new rules and guidelines for employees to submit their health records, others believe that it is a violation for discrimination as well as being a violation of privacy, I believe that this will lead to discrimination when hiring, which is unfair, but if it is established to lower health-care costs, these rules should be enforced in many companies.
Written by: Samantha Chin
Source: The Wall Street Journal
Martha Stewart is involved in a lawsuit again. But this time it’s not her that has , but two companies are having a dispute over a Martha Stewart’s products. Macy’s and J.C. Penney are fighting over the rights to sell Martha Stewart’s products. Macy’s has been selling Martha Stewart’s products since 2007. J.C. Penney has agreed not to sell any branded goods in the bedding, bath and kitchen. J.C. Penney has also agreed to not sell any products with her name until the trail is resumed.
As a former Macy’s employee, I know for a fact that Martha Stewart’s products are extremely popular among the consumers. J.C. Penney is one of Macy’s biggest competitor, and this could be a huge factor for both Macy’s and J.C. Penney. Although I am no longer a Macy’s employee, and just hopefully Macy’s will come out the winner. Not trying to be bias or anything but Macy’s was my first job and they treated me well.
General Electric is moving into a different segment approach in their expansion of its company. The focus is now towards the oil and gas industry; sales has grew 57 percent to $15.2 billion since 2009 which concludes becoming the world world’s largest crude producer.
Lufkin, a company that makes artificial lift equipments that brings crude and other material to the surface has rallying in revenue, which is up 37 percent compared to last year to $ 1.3 billion. Lufkin is a strong company that has over 4,500 employees in over 40 countries; also they specialize in equipments in submersible pumps, power transmission and automation system. GE attempts to buy Lufkin company to aid them in their expanding market of oil market. They are willing to pay $3.3 billion to purchase the company. GE will buy out this Lufkin Industries for a price of 13.5 times the value of Lufkin EBITA value.
The stock increase for Lufkin surged 38 percent, the largest increase since November 1990 due to this breaking news.
Written by: Victor To
Cambodia, unfortunately well known for its killing fields and landmines is the new target of foreign companies looking to outsource. For example, Tiffany & Co. just built a diamond polishing factory, Japanese manufacturers are aiming to make wiring harnesses for automobiles and touchscreens plus vibration motors for cellular device, while European companies are moving in with dance shoes and microfiber sleeves for sunglasses. The reason for so many companies getting a move on to Cambodia is simple, they want to stop relying on China so much.
For foreign investors, China is no longer the ideal place to go because blue collar wages have quadrupled within the last decade because of a factory construction boom coupled with decreasing numbers of young people going into the construction field. Due to China’s “One Child” policy and aging population, there has been a decline in the labor force. As a result, Cambodia is experiencing a positive effect of foreign direct investment, which rose 70 percent from last year, 2011 and is starting to raise millions out of poverty and destitution.
Written by Kevin Zhang
Bradsher, Keith. “Wary of Events in China, Foreign Investors Head to Cambodia.” The New York Times. The New York Times, 08 Apr. 2013. Web. 8 Apr. 2013. <http://www.nytimes.com/2013/04/09/business/global/wary-of-events-in-china-foreign-investors-head-to-cambodia.html?pagewanted=1&_r=0&ref=business>.
Hewlett-Packard is planning to go a new route with their new innovative technology. Their new low power chips could be a multibillion business. The new chips uses 89% less energy, 80% smaller than the average size today and will cost only 23% as much. This new technology also allows Hewlett-Packard to update new versions of servers every couple of months opposed to years making this technological approach much more efficient. As technology is growing, more computing takes place online so the market for this server is continuously growing as a rapid rate. Thee servers will have different types of performance characteristics that cater to specific business needs. Businesses will have the option of mixing and matching servers to their specific demands.
In my opinion Hewlett- Packard has a bright future ahead of them. The new technology will help the company grow. Companies can now personalize their servers by mixing and matching different characteristics that is ideal for their business, which would be very appealing for different businesses. Their new low power chips would also bring in a lot of appeal for customers who are looking to save energy at a low cost.
Written by: Wilson Tang
Apps have revolutionized the way people communicate, travel, eat, and in general live. Although the popularity of apps are much due to Apple’s iPhone, their apps account for a very small percentage of actual app usage. Facebook and Google on the other hand are very prominent in the market when it comes to non-game apps. However when it comes to popularity, games dominate the market by revenue. Most notably Candy Crush Saga is no. 1. According to comScore tracks app usage, Facebook’s app consumes about 1/5 of the time U.S smartphone users spend on their devices. This does not even include Instagram or Facebook’s Messenger.
Facebook has become so popular HTC is in the midst of creating a smartphone with a Facebook-themed home screen. If this is successful, the amount of mobile users will skyrocket. This will lead to a huge increase in advertising revenue for Facebook. I think this is a big wake up call for Apple because although they sell a very popular phone, they don’t have many popular apps.