China is a growing country that has been generating a large amount of exports for the past few years but for the first quarter of 2013 China has seen a drop in the growth of their GDP, this is not to say that their GDP did not increase, but that the increase had seen a decrease. The GDP increase was 7.9% in the last quarter of 2012 but for the first quarter of 2013 the GDP had only increased by 7.7%. The global economy has not been doing very well, there are many countries still struggling to recover, and the slow down of GDP growth is not a good sign for the economy.
The slow down in the GDP growth of China may be due to Japan and it’s Yen devaluation, with the value of the yen decreasing, Chinese exports may begin to seem less appealing, and in turn causing their GDP to see less growth. The United States and countries in the Euro zone are also not doing so well, these countries are countries that have a large impact on the global economy, so Japan should rethink their policy on increasing money supply.
Written by: Jessica Ho
Source: The Wall Street Journal
Another country joins the bandwagon, as South Korea announces a $17.2 billion stimulus plan. South Korea is facing results of the yen’s devaluation, but is also going though domestic issues as their economy slows to its lowest rate of growth since 2009.
In relation to all of the attention of Japan’s aggressive monetary policy, South Korea’s won has had the inverse direction, strengthening in recent years rather than weakening. Thus, the effect on exporters like Samsung and Hyundai are felt twice, and it is putting a lot of downward pressure on spending and the economy overall.
The yen’s drop in value has been cited several time when officials announced lowered estimates for growth in the coming years, but there is optimism now due to the government’s plans for stimulus. “It’s the government’s biggest stimulus package since interventions to lift South Korea out of financial crises in 1998 and 2009, according to the Finance Ministry.”
I do not think that the currency war is really being played out yet, but I see South Korea’s actions as a slight warning of what could potentially happen. I feel that, given South Korea’s close proximity to Japan and sluggish economy, the stimulus is well placed. The country still has to ensure that they are growing at a decent pace as well, despite what other countries may say in response.
McDonald’s Corp. is expected to see a decreasing trend in sales, despite expectations that first-quarter profits will increase. Chief Executive Don Thompson explained that the world’s largest restaurant chain would have to sacrifice profit margin to attract consumers during a time where consumer spending is down. McDonald’s has noticed that it must advertise the Dollar menu more aggressively, as promotions of higher-priced menu items were unsuccessful last year. With high gas prices, the payroll tax rising, and employment increases slowing down, advertising value has become the key for any business.
After McDonald’s stock dipped 10% in 2012, the company has rebounded to reach a new closing high of $103.59. Perhaps the best news about the restaurant chain’s recent struggles is that it still outperformed its competitors. The fast-food sector has made no improvement, with growth declining in January, and with that trend expected to continue, McDonald’s may be forced to continue sacrificing profit.
Written by: Constantine Kostikas
Source: The Wall Street Journal
National Public Radio (NPR) is a publicly and privately funded radio station that provides news and cultural programs. When they received a $1.5 million grant from Corporation for Public Broadcasting, they invested the money in reporters, editors and bloggers to research the topic of race, ethnicity and culture. The station’s goal is to expand their audience and including more voices in their programs. The four-part series called “Changing Races” will include a study of how cultures have developed over time. It is also part of the station’s plan to diversify their listeners. They hope attract a younger audience through various marketing strategies.
Some of NPR’s most popular programs, such as “Morning Edition” and “All Things Considered” have up to 13.4 million and 12.5 million listeners, respectively. This is because many people have the time to listen to the news during their broadcasting times (4:00pm to 6:00pm). Also, many people can relate to broadcasted topics. “Changing Races” is a program that will be able to attract the younger audience because it involves their lives, and would help them understand the reasoning behind the shifting culture.
Written By: Melody Mark
Jensen, Elizabeth. “NPR Series on Race Aims to Build a Wider Audience.” New York Times (blog). New York Times Company, 14 Apr. 2013. Web. 15 Apr. 2013.
Free sites like Facebook and Vogue must love advertisements. According to this article, the advertisements on Facebook’s news feed appeals to a large number of users. After the new improvements, Facebook has now developed a way to to track what ads appeals to users. They show certain advertisements to certain individuals. One ad that stands out is an ad that shows nomorerack, this ad has more than 66,000 likes and over 20,000 shares.
I am really surprised at how the ads could track what ads we want to see. But if I have never clicked on any ads, is there a way for them to track what we like then by just our conversations on Facebook. How private are our conversations and interests on Facebook and are they ever shared with businesses. But nonetheless, these ads are why we could use Facebook for free.
Citigroup, one of the biggest banks in the US is doing better than expected. The released report of Citigroup’s first quarter profit and revenue is higher than analyst had anticipated. The increased revenue and profit has the market responding as shares jumped 1.4% to $45.42. The new and efficient operation under Michael Corbat is showing that the company is headed in the right direction. Unnecessary branches and workers have been laid off to help increase revenue and efficiency. Revenue reported increased to $20.5 billion compared to the $19.4 billion last year. Investors are also responding to the company’s deferred tax assets and mortgage loan-loss reserve release. All of these positive have investors pushing their share prices up.
Despite the slowly recovering economy, Citigroup had to lay off workers and close down branches. As a result, the company has shown to be more efficient, beating analyst expectations and driving the stock prices to go up. In my opinion, Citigroup came out successful with their current approach to cut down cost and increase revenue. If Citigroup keeps up their profit growth, their stock price will continue to grow as investors are looking for more yields.
Written by: Wilson Tang
Eric Rosengren, president of the Federal Reserve Bank of Boston and a Fed pessimist, is having a change of heart after seeing an increase of jobs around his neighborhood. After the weak job report in March, speculation concerning the slow-down of the economy increased but Mr. Rosengren believes the economy is only beginning to gain traction. He views the growth in interest-rate-sensitive sectors like housing and auto as a positive but has not disregarded last month’s job report and the potential instability in Europe. Mr. Rosengren is expecting the U.S. economy to lose some steam this quarter but projects a 3% growth for the second half of the year; his projection of a 3% growth will come along with a decrease in unemployment to around 7.2% by the year’s end.
Everything I had read regarding the Fed’s stimulus package always insisted its modification would not occur until unemployment hit 6.5% or inflation 2%. Word on the street however rebukes this; Mr. Rosengren himself said he would be prepared to begin tapering the package if the economy meets his expectations towards the end of this year.
The Wall Street Journal
Dish Network Corp is interrupting the third United States wireless carrier acquisition by Softbank Corp. of Sprint Nextel Corp., by making a $25.5 billion bid. Softbank made a complicated proposal to buy 70% of Sprint for $20.1 billion where Dish is offering to pay $4.76 in cash and $2.24 in Dish stock. The largest shareholder and chairman of Dish is Charles Ergen who is attempting to acquire Sprint, which presents the movement from the slow-growing pay television business to the fast-evolving wireless industry. A reason for Dish wanting to acquire Sprint would allow the company to offer the package of video, high speed Internet, and voice service across the country. If accepting the bid, the combined company would carry over $36 billion in debt, but Dish defends itself by claiming that if advised by Barclays, they can raise the funding. Mr. Ergen’s pitch to the board and shareholders is that they are offering much-needed cash and assets, but Softbank is actually a much larger company than Dish.
I believe that Dish Network’s bid should be thought out carefully by Sprint and whether or not that the combined company in the future would make profits. With the estimated $36 billion debt, it may not be worth the acquisition because Dish Network is also newly introduced to the wireless business. Mr. Ergen wants to acquire Sprint to enter the wireless business rather than building their own network. I would not accept the bid because of the lack of experience in Dish Network being a satellite television provider, rather than a wireless network company.
Written by: Samantha Chin
Source: The Wall Street Journal
Analysts described China’s recent economic expansion as a “a big disappointment” and a “truckload of unpleasant surprises.” Data released on Monday showed that the country’s growth had unexpectedly lost steam; it expanded 7.7 percent in the last three months, but fell short of the forecasted 8 percent. As a result, banks such as JPMorgan Chase, Royal Bank of Scotland and Société Générale have reduced their growth forecasts for China.
Zhiwei Zhang, a China economist at the Japanese investment bank Nomura in Hong Kong remarked “We have been expecting growth to slow down again, but not until the second half of the year,” and he predicts that “The next couple of quarters will bring more headwinds, and growth will probably trend down even more.” Following the country’s mediocre economic growth, policy makers have to struggle between maintaining growth or containing financial and property market risks. Mr. Zhang adds “I don’t envy them,” and “They have a very difficult job to do.”
Written by Kevin Zhang
Buckley, Bettina Wassener And Chris. “In Surprise, Recovery in China Loses Steam.” The New York Times. The New York Times, 15 Apr. 2013. Web. 15 Apr. 2013. <http://www.nytimes.com/2013/04/16/business/global/in-surprise-recovery-in-china-loses-steam.html?ref=business>.
Corporate News: Google Makes EU Concessions — Web Giant to Alter Search-Engine’s Look to Allay Concerns It Is Hurting Rivals
Google has recently agreed to a proposal by the European Union antitrust lawyers. Google Inc. has been blamed for using its Web-search engine to hurt competitors. This proposal will last for a period of five years and also a neutral third party will ensure Google’s compliance. When this initiates, Google will only slightly change in Europe. The search engine will remain the same in the U.S and the rest of the world. Interestingly enough, although Google is only changing slightly in Europe, Europe holds an even larger market share in Web Search that in the America.
The only change this proposal includes is Google’s growing practice of posting links in search results that lead users to their own specialized sites. Google+ local-business listings for example has been accused of hogging more and more Web traffic which in turn hurts websites like Yelp. This proposal is to merely check if Google is hogging consumers. In Google’s proposal they will be posting three links to rival non-Google sites every time it promotes one of its own specialized sites.