The economy of countries in the Euro-zone are not doing very well, especially in the automobile industry. Germany is the Euro-zone’s leader in the automobile Industry and large contributor to their economy, it has been seeing decreases in automobile sales. Recently Germany has seen a decrease in sales of 12.9% compared to that of 2012. Car sales in the UK have also not been doing well, although they have done better as the years progress, they still have yet to reach back to their high point in 2003.
The Euro-zone has not been doing well and if the German Car industry is not doing good as well then the Euro-zone should really reconsider its monetary policies. The Euro-zone is having a large negative impact on the global economy, and since this topic has been coming up a lot lately especially with Japan and it’s new monetary policy, the Euro-zone should really rethink their policies.
Written by: Jessica Ho
Source: The Wall Street Journal
As competition between various technology companies increase, some are losing market share quicker than others. Samsung Electronics, just like other companies, is expanding and innovating in a way that brings in the most profit. They have developed smartphones and memory chips that have outperformed those produced by Taiwanese manufacturers. However, Taiwanese manufacturers feel threatened because they are no longer the top seller of technology parts, one of them being Taiwan Semiconductor Manufacturing Co. (TSMC). Although Samsung claims that they are not targeting Taiwan’s businesses, the Taiwanese government still supports the alliance of Taiwanese and foreign companies because it believes that Samsung holds too much power at the moment. Apple is also hoping that TSMC’s technology can outperform Samsung’s because Apple does not want to get its chip supplies from Samsung, a rival company.
The increase in competition among various technology suppliers reflects a society that is constantly innovating. While there is great competition between these companies, their products aim to outperform each other. As a result, people are able to benefit from these products and their continuous advances.
Written By: Melody Mark
Huang, Annie. “Taiwan Tries to Shore Up Its Defenses Against Samsung.” New York Times. The International Herald Tribune, 21 Apr. 2013. Web. 22 Apr. 2013.
War is said to be good for business; it increases government contracts while simultaneously creating jobs but what goes up must come down. With the U.S. withdrawing troops from the Middle East and the recent cuts in spending, private contractors and other businesses that benefited from the conflict are bracing for the inevitable downsize. One of the Pentagon’s biggest contractors however, has begun a lobbying campaign in the hopes of protecting jobs in its York, Pennsylvania production plant. BAE Systems PLC is attempting to convince lawmakers in Washington to divert funds so the company can continues its production of Bradley fighting vehicles which cost about $3.1 million apiece.
BAE had 3,000 workers at its York production plant at one point; a figure which has fallen to 1,250. If BAE is unsuccessful in convincing members in congress to divert funds, it will be forced to lay off an additional 250 workers. The growth of the economy is stalling and unfortunately this company is not the only one adversely affected by the sequester cuts.
Source: The Wall Street Journal
NetFlix recently reached their all-time high number of subscriptions reaching 29 million in the US alone. The company’s policy limits the customers to 6 different devices while only 2 of the devices can stream videos simultaneously. This policy is not enforced; therefore many people take advantage of this company policy. Netflix is planning to target this problem by either increasing their prices or enforcing limits on each account. Analyst believe that if Netflix follows through, that they may potentially gain up to 53 million subscribers by 2017. Chief Executive Officer Reed Hastings is deciding how to implement new policies so that Netflix can see a gain in subscriptions or revenue.
In my opinion, raising prices for Netflix could go either way for the company. It could definitely help boost sales if customers are forced to open their own subscription because of the enforced limit or the company can even potentially lose customers. Some customers only subscribe because they are able to share an account, therefore without this option anymore, Netflix could also lose current customers and struggle to find new ones.
Written by: Wilson Tang
McGraw-Hill is fighting a lawsuit from the U.S. Government, and the deadline to file their response is today. Specifically, the S&P unit is the one in trouble, recently drawing fire from the government that had made claims that their credit ratings were fraudulent and a major cause of the 2008 financial collapse. The S&P unit is facing more than $5 billion in penalties if the government’s claims are uncontested.
The government has cited emails between S&P employees that indicate fraudulent business practices, such as giving lower ratings to attract more business. Since the raters did not have any actual connection to the ratings they gave out, they could easily inflate ratings without any direct consequence. The focus of the government is the allegedly fraudulent ratings of collateralized debt obligations, which were a major factor of the housing bubble and the ensuing plummet. In their defense, S&P will have to consider the best way to present their case against the government while also working to preserve their name in the public’s eye so that they can continue to draw business as a reliable credit rater.
According to an expert’s opinion, the case will probably not go to trial, and instead, S&P will settle with the government. The government is “looking for a scapegoat.” In my opinon though, I wonder if S&P can really just settle and basically admit fault by paying the penalties without severley affecting their business. Their stock dropped significantly after the announcement of the lawsuit.
For the United States, irresponsible home created a domestic housing bubble that, when it burst, helped to spark the global financial crisis. In an attempt to avoid repeating the mistake of creating property bubbles and fueling the Euro zone’s debt crisis, European Union negotiators are trying to finalize common rules on mortgage lending. The new legislation would mandate lenders in Europe’s $8.5 trillion mortgage market to check on the creditworthiness of borrowers, in an attempt to weed out “liar” loans. Also, a big problem in the past was that the workers who performed credit checks for banks and lenders had their pay directly linked to the amount of mortgages they approved, in a commission sort of way, but that is no longer allowed.
On behalf of EU governments, a spokeswoman for the Irish EU presidency said, “We are hoping to conclude talks with the European Parliament on Monday on these important new rules to protect consumers and mortgage holders.” If and when the deal is reached, the rules will need to stamped by all of parliament and the government of the EU before it fully takes effect in the middle of 2015.
Written by Kevin Zhang
The European Parliament decided to make carbon cheap, rather than reduce carbon emission credits. Europe has completely disregarded the reasoning behind the start of the emissions-trading system, as carbon has been traded for 3 euros ($3.92) per metric ton recently, which is significantly higher than the 2008 price of 25 euros. On the other hand, the U.S. has seen a 12% decrease in energy-related carbon dioxide emissions from 2007 to 2012. America’s investment in horizontal drilling techniques has led to the switch from coal to natural gas as a source of electricity. As a result, U.S. coal exports rose 17% in 2012 and coal exported directly to Europe rose 23%.
A much as this is an environmental problem, it is safe to assume that Europe’s emissions-trading system has become a carbon emissions market. The market is set to crash, and with prices as low as ever, businesses have no incentive to cut carbon emissions. A future of sustainable energy consumption seems out of reach as long as these prices remain low.
Written by: Constantine Kostikas
Although the toy making company, Hasbro Inc. has improved its revenue for three of the four product categories, its first quarter losses have increased. Hasbro Inc. relies on brand innovation for its growth in revenue for its Games, Preschool, and Girls categories. The largest category of the company, boy’s products have dropped by 20%, which can account for such a loss in the first quarter. A factor that causes the decrease in sales for boys’ products that include Transformers and G.I. Joe toys is due to popularity of mobile-device play. For the first quarter, they have already reported a loss of $6.67 million, or five cents a share, which is an increase of three million since last year where they reported $2.58 million.
I believe that this overall affects the market in which children’s toys will be affected with losses and a decrease in the sales of their toy products. Technology has a large impact not only on companies in which adults are targeted, but now there is an increasing trend in the usage of mobile devices for children. Young children nowadays are spending more time on their parent’s tablets or phones rather than playing with traditional toys. The rival toy maker Mattel Inc., unlike Hasbro has seen higher profits with an increase demand in certain toy brands such as American Girl and Monster High dolls. This proves that toy companies will have to ensure that their company will target their audience in order for their company to survive in the market.
Written by: Samantha Chin
Source: The Wall Street Journal
After the sequester of the budget cuts for air-traffic controllers passed by the Federal government went in effect for the first day, plenty of flight delays has already happened. As Monday comes, only more trouble and traffic is expected to happen as heavier traffic is expected during weekdays.
Two of the most congested airports in New York City has already gave out delay warnings for J.F.K. and La Guardia, as busy airports take on more delays and heavier traffic, the Airlines will be the ones taking the most damage.
I am curious to see how these budget cuts will affect Airline’s stocks and shares in the coming week. As so many businesses require their employees to fly to different cities throughout the week, will the delays have a huge effect on the economy or will our newest technologies help us get through geographical differences. These budget cuts could mean more savings for the government but it could also mean Airlines will take a cut in their revenue as their flights get delayed. We will see how they do in the next coming weeks and maybe changes will be made.
Many resources that are mined and extracted have dropped significantly in price this past month. Resources anywhere from gold, silver, oil, aluminum and copper have seen a dip in prices. During the financial crisis many commodities and resources have rose in value. However, this past month shows otherwise.
When looking at year 2000 to March, you can see a general rise in gold prices, copper and oil, which they called a “supercycle.” Many expert economists believe we are entering a phase of declining prices for those resources. Although most economists suggest we are currently going to see falling prices, they have very different views for the future. Professor Jacks teaches economics at Simon Fraser University in British Columbia and believes that since most commodities are finite, population pressures and industrial growth will eventually rise the costs of the limited resources. Mr. Jessop, who is the chief global economist and head of commodities research for Capital Economics in London, on the other hand believes gold will recover while the other commodities will decline for a period of time. Mr. Jessop believes this because gold is often used as an alternative to currencies.
This affects us directly as the consumption of oil and other finite resources happen in our daily lives. This dip in prices could essentially save us some money.