Archive | April 13, 2013

America Attacks Yen Devaluation

As Japan is beginning to lower the value of the Yen other countries are put in danger since their amount of exports with go down due to Japan’s seemingly cheaper prices. Recently America has warned Japan to stop with their currency devaluation. The value of the Yen dropped a lot last week due to the announcement from its central bank that they would create a large increase in their money supply. Since this news, the value of the American Dollar to the Yen has seen an increase of 7%. China has also been put on the spot for keeping their currency at such a low value.

The devaluing of the Yen is having such a large impact on other countries, and will in turn make a large impact on the global economy as a whole. I think that it is unfair for one country to have such a large negative impact on the global economy for such selfish reasons. Japan should take into account the warnings given to them by other countries and hold back with the devaluation of their currency. This can also end up hurting their economy when the demand for their good largely exceeds their supply.

Written by: Jessica Ho
Source: The Wall Street Journal

Why Venture Funding Might Not Be For Everyone

The old American dream of successful might no longer be achievable in this day and age, most traditional Americans views is that you want to start your own business and be your own boss. But back in the 1800s and 1900s, having a start up capital is not as difficult as it is now. Raising enough money from venture capital is vital for any start ups and young company, it is the only way some entrepreneurs could make their dreams come true. This article talks about some success and failures of some venture capitalists  and it is really risky for some investors to invest into new companies but with the greater the risks, the higher the reward. 

I personally would be too afraid to ever start my own business. I do not have nearly enough money to risk and no business idea that I have is confident enough for me to risk not only my money but other people’s money as well. 

-Derby Ng


Twitter Will Introduce A Music Application

Twitter, a place where millions of people communicate, is introducing a music feature.  This feature is expected to recommend music to users by using the listening habits of their friends and contacts.  Twitter officials hope that this feature will give its 200 million users more to tweet about and entice them to stay logged in longer.  Although they have declined to speak about it, Twitter has made a number of moves that hint toward this new feature.  For example, it recently acquired We Are Hunted, which recommends music based on social media conversation.  It also set up a page on the Internet that, when visited, asked users to give a music application access to their Twitter accounts.

Twitter has recognized that music is the topic of many tweets.  The social networking service has decided to take advantage of that, and it should pay off.  Combining music with social networking is a great move because the two go hand-in-hand.  The feature is expected to launch this weekend, in time for the Coachella music festival in southern California.

Written by: Constantine Kostikas

Source: The New York Times

House the Mortgage Coming Along?

In the years following the burst of the housing bubbles, borrowers basically had to offer up their first child as collateral if they wanted to take out a mortgage. Nowadays, the requirements are still pretty tough, especially for those whose credit isn’t in good standing, but some regional lenders are mortgage issuers are starting to ease up on that. Various banks and credit card unions are are offering financing that is similar to that available during the housing bubble which lead to trouble for many borrowers.

For example, piggyback loans are back, meaning borrowers can take out two mortgages at once so they can avoid private mortgage insurance that is mandated on mortgages valued at more than 80 percent of the home. According to Guy Cecala, a publisher at Inside Mortgage Finance magazine, “We are starting to see some loosening, but it’s very specific. It’s just in its infancy now, and it’s not the type of piggyback loans or low down payment loans that we saw before.” While there were many complex and undeserved loans offered to borrowers during the housing boom, Mr. Cecala notes that the loosening is reasonable right now, but that may change in the future, depending on how far companies are willing to go to attract borrowers.


Written by Kevin Zhang





Verizon Delays Upgrades — Wireless Users Must Now Wait 24 Months to Get Subsidized New Phones

Various U.S. wireless carriers often compete for the same customers and search for ways to lower their costs. Recently, Verizon Wireless extended the amount of time it would take for their contract customers to upgrade their cellphones. They spent billions on smartphone companies, such as Samsung and Apple, to provide subsidized phones for their customers. This service leaves a negative impact on their marginal profit. Carriers subsidize cellphones, instead of having customers pay the full price, because cellphone costs are generally more expensive than customers’ budgets. This service would attract more customers, yet limit the amount of money they would have to spend. However, competitors such as AT&T Inc. and Sprint Nextel Corp. both allow customers to upgrade their cellphones after 20 months. Verizon’s changes may turn customers away. T-Mobile USA chose a different method to attract contract customers. With the iPhone 5 coming out for T-Mobile USA, they are offering interest-free financing for customers because cellphones are full price.

Currently, many people want the newest smartphones and gadgets. Therefore, wireless carriers have to attract customers while keeping low costs. There has been more competition among wireless carriers. Therefore, each of them have to further differentiate their services to attract contract customers.


Written By: Melody Mark


Gryta, Thomas. “Verizon Delays Upgrades — Wireless Users Must Now Wait 24 Months to Get Subsidized New Phones.” Wall Street Journal. Dow Jones & Company, 13 Apr. 2013. Web. 13 Apr. 2013.

CBS’s Moonves Pay Fell in 2012

Based on a company regulatory filing on Friday, the Chief Executive of CBS, Leslie Moonves had an 11% drop in compensation opposed to his earnings of $62.2 million in 2012.  In the past, he was paid with a salary of $3.5 million and a $27.5 million bonus, which makes him one of the highest paid executives in the entertainment industry. Under his guidance and direction, their revenue has increased by 3% compared to the previous year as well as their net earnings for the year that rose 20%. The overall drop in Leslie Moonves compensation is because of other lower options. His stock awards have decreased, while his compensation package has still been almost five times the average recorded by CEOs in the S&P 500 index.

Many of the CEOs of popular broadcasting networks in the entertainment industry earn high total compensation. I think that it is very challenging to break into the entertainment industry and be successful with high earnings such as CBS and Viacom because there are many dominating companies that already acquired many networks.

Written by: Samantha Chin

Source: The Wall Street Journal

IPhone Outpaced in Surging India by Less Costly Rivals

Sales of Apple’s premier product are being beat in India, but not by their usual competitor Samsung. Rather, the Indian market has quickly picked up cheaper brands of local competitors. Really, it all boils down to the price of the phone and, according to Karbonn executive director Shashin Devsare, the price of data. Karbonn has offered extra data incentives if customers buy certain handsets. Another brand, Micromax Informatics, is taking the same approach as Karbonn, and offering phones at a fraction of the prices that are placed on iPhones and Galaxies.

“India will become the third-largest smartphone market by 2017, according to the Framingham, Massachusetts-based researcher IDC, after China and the U.S,” which means current global phone makers will have to readjust their plans in order to stay relevant in the emerging markets. Apple has been at the focus of the issue of price for a long time, as their stock continues to tumble midst worries that the company will not be able to hold onto such large profit margins. As the local brands in India continue to steal market share, it becomes even more apparent that the smart phone market is quickly becoming saturated, and the competition between companies is only going to intensify, especially in markets where income levels are much lower and the importance of price is much higher.


Corporate News: Judge Says Penney Can Sell Martha Stewart Line

J.C Penney Co. has had a very chaotic year. Their most notable challenge is with Macy’s and it is still ongoing. The case is so controversial it has reached the New York State Supreme Court over the brand name Martha Stewart. Macy’s currently has a contract with Martha Stewart Living Omnimedia which also extends to some of her home products designed by the company. Therefore, they are trying to block a newer deal between J.C Penney Co. and Martha Stewart Living which allows Penney to sell bedding and other home products designed by Martha Stewart. J.C Penney Co. is one of Macy’s biggest competitors and in this past year, due to new management, has not been doing too well. They have suffered a sales decline of 25% for this year. Former Penney Chief Executive Ron Johnson’s strategy to reinvent the retailer has had a reversed effect. By cutting out clearance sales and coupons they have alienated their bargain shoppers.

The most recent ruling on this case allows J.C Penney to sell Martha Stewart-branded products, however they have to avoid using Martha Stewart in connection with any promotion to those goods. Macy’s believes they have a good chance on appealing and overturning this decision.

-Jonathan Chan

Support For The Fed’s Dual-Mandate

Central banks ordinarily serve to promote stable pricing in the economy, however the U.S. Federal reserve is also charged with stimulating maximum sustainable growth. This is referred to as a dual mandate, which many believe should not apply to central banks. The supporters of the dual mandate say that the Fed has performed well; “perhaps even better than single-mandate central banks.” The current monetary policy of the Fed is geared toward improving job growth during the time of low inflation; $85 billion of monthly bond purchases which keep interest rates low to encourage spending.

The dual mandate of the Fed creates considerable difficulties when it comes to implementing monetary policy since it becomes necessary to take other factors into account. The saying “don’t fight the Fed” has held merit for quite some time but only Siths deal in absolutes. Our central bank plans on continuing its current policy until unemployment reaches 6.5% or inflation 2%, but recent developments in the economy may influence the stimulus package to be tapered off sometime soon.

Evan Chang


The Wall Street Journal

Lion Air 737 Crashes Into Sea Off Bali With 108 on Board

Lion Air Company, a growing airline company in Indonesia has suffered a deadly blow to their reputation. In a recent accident, a Boeing 737 aircraft used by the company, carrying 108 passengers crashed into the sea during the expected landing at Ngurah Rai International Airport. On board were 95 adults, 5 children, an infant and 7 crew members. 53 people were reported to have suffered minor injuries and the rest was not disclosed. The Boeing 737 is damaged beyond repair, and reportedly split into two which means the air craft is a “total loss”. Considering Lion Air is the biggest airline company in Indonesia, partnership plans in Thailand, Myanmar and Vietnam might be halted.

With all the recent news involving aircrafts and failing systems, many people are already skeptical about taking planes. Airline companies should be more cautious and make sure everything is going well, ensuring passenger safety as priority. The recent incident will put more pressure on the company and possibly slow down their growth as potential partnerships will be delayed due to news and media.

Written by: Wilson Tang