Archive by Author | Kevin Zhang

Our Class – Wiki So Far

Although I have not started the creation or editing of any wiki pages, I have been conceptualizing what page I would like to create. Previously, I already had an idea to create a wiki on peer to peer file sharing services such as PirateBay, Limewire, MegaUpload BitTorrent, etc. and the recent blog post that we had to do on P2P sharing has solidified my decision.

I would enjoy creating content on this topic because it was something I had learned to use around middle school, but now there are all these ethical issues I would not have thought about in the past. For example, the arrest of the creator of file hosting sevices MegaUpload and Mega (after MegaUpload’s shut down), Kim Dotcom, caused quite a controversy. In addition file sharing/ P2P sites such as Limewire and Napster were shut down by the federal court.

Walt-Z On Out II

Yesterday, the Walt Disney Company announced it would stop producing apparel in Bangladesh after a series of unfortunate events that resulted in the deaths of several garment workers. As a result of such a big name leaving Bangladesh, the countries garment manufacturers are worried that other Western companies would follow suit and this would potentially threaten the economy of Bangladesh and livelihoods of millions of citizens would be at risk. Mohammed Azim, who is a member of the country’s parliament and owns garment factories himself remarks, “The whole nation should not be made to suffer,” in reference to safety concerns that were questioned after separate incidents and “This industry is very important to us. Fourteen million families depend on this. It is a huge number of people who are dependent on this industry.”

Several Western retailers have expressed plans to increase factory safety which means they will have to invest in rather than abandon operations in Bangladesh. However, none have made financial commitments to upgrade unsafe factory buildings or to endorse tougher inspections. So far, the common response of big retailer has been pledging money towards relief efforts in Bangladesh.

 

Written by Kevin Zhang

Source:

http://www.nytimes.com/2013/05/03/business/factory-owners-in-bangladesh-fear-firms-will-exit.html?ref=business&_r=1&

Walt-z On Out

Last week in Bangladesh, a building filled with garment factories collapsed and took the lives of around 400 people and as a result, Western apparel countries who have their productions based there, are trying to address growing public concern over safety conditions. Companies like Gap and The Children’s Place plus other retailers huddled to figure out how to improve conditions, and some debated whether to remain in Bangladesh at all. However, one big American company, Walt Disney has decided to leave altogether citing an earlier incident with a fire that killed 112 people.

Although less than 1 percent of the factories used by Disney’s contractors are in Bangladesh, the company ordered the end of production in their Bangladesh facilities. This move by Disney highlights the struggle that companies who have productions in countries such as Bangladesh as they have to balance profit and reputation. As a result of Bangladesh having some of the lowest wages in the world, its government eagerly tries to reel in Western Companies and their jobs but the string of recent disasters prove that there are many perils. “These are complicated global issues and there is no ‘one size fits all’ solution,” said Bob Chapek, president of Disney Consumer Products.

 

Written by Kevin Zhang

Source:

http://www.nytimes.com/2013/05/02/business/some-retailers-rethink-their-role-in-bangladesh.html?ref=business&_r=0

L-MAO

Imagine you are a car dealer and someone comes in to buy a brand new BMW 5 Series Gran Turismo in cold hard cash. While this may seem strange in America, this is not altogether bizarre in China. Lin Lu, who works in a car dealership in China amusingly recalls the day when” He drove here with two friends in a beat-up Honda,” and “One of his friends carried about $60,000 in a big white bag, and the buyer had the rest in a heavy black backpack.” Although China is very much modernized, it still prefers doing business the old-fashioned way with even potential homeowners making down payments with trunks of cash.

The reason why doing business in China requires so much cash is because Chinese officials have never printed any bills larger than a 100 renminbi note, which is equivalent to $16. Although Chinese officials and economists point to inflation as being a reason as not to print bigger bills, the true reason is because of corruption. With all the corruption and bribery present in China, having smaller bills makes it harder for people to bribe. For instance, if there were bigger bills, instead of having trunks of cash for a bribe, people could get away with just an envelope.  “In large parts of China, it still looks like the U.S. in the 1950s: most everything is in cash,” said Jeffrey R. Williams, executive director of the Harvard Center Shanghai and a former bank executive who has worked in China for more than 30 years.

 

Written by Kevin Zhang

Source:

http://www.nytimes.com/2013/05/01/business/global/chinese-way-of-doing-business-in-cash-we-trust.html?ref=business

Folks Wagen Their Tails

Although Volkswagen is Europe’s leading automotive company, this protected them from feeling the effects of Europe’s troubled market where car sales have dropped to the lowest point in decades. Up until now, Volkswagen had not really felt the full force of Europe’s financial crisis compared to other companies because of their size and  strong presence in China and the United States. Their shrinking profit margins are an indication of the steep decline in car sales as well as intense price competition. Thus, Volkswagen joins the list of foreign and United States automakers that are struggling in Europe, where car sales dropped 10 percent during the first quarter, the big hit being double-digit decreases in France, Germany and Spain. Now most automakers are wagging their tails relying on sales in the United States in order to make up for their losses.

VW’s chairman, Martin Winterkorn noted ““The coming months will be anything but easy,” and “The current environment is definitely a tough challenge for the entire industry. Suprisingly, its after-tax profit fell 38 percent, to 1.95 billion euros ($2.5 billion) in the first quarter even though their revenues only fell 1 percent to 46.6 billion euros.

Written by Kevin Zhang

Source

http://www.nytimes.com/2013/04/30/business/global/european-troubles-lower-results-for-vw-and-fiat.html?ref=business&_r=0

Valley Much Money

On the plate of many venture capitalists of Silicon Valley is no longer just technology, but they are also making big bets on food. For some, their goals might be to create ready to make dinner sets such as those in the picture above, create on-demand delivery services from local farms, or even create entirely new meat, cheese, and egg substitutes from plants. Whatever their goals are, because this is Silicon Valley money, their vision is nothing short of grand: to transform the food industry. “Part of the reason you’re seeing all these V.C.’s get interested in this is the food industry is not only is it massive, but like the energy industry, it is terribly broken in terms of its impact on the environment, health, animals,” said Josh Tetrick, founder and chief executive of Hampton Creek Foods, a start-up making egg alternatives. With the money of V.C’s something can be done to improve upon what we have now.

In 2008, $50 million was invested into food projects, but this year around $350 million has been invested by venture capitalists.  In terms of sustainability,  “There are pretty significant environmental consequences and health issues associated with sodium or high-fructose corn syrup or eating too much red meat,” said Samir Kaul, a partner at Khosla Ventures, who has so far invested in six food start ups. “I wouldn’t bet my money that Cargill or ConAgra are going to innovate here. I think it’s going to take start-ups to do that.”

 

Written by Kevin Zhang

Source

http://www.nytimes.com/2013/04/29/business/venture-capitalists-are-making-bigger-bets-on-food-start-ups.html?ref=business

That Ain’t Gonna Fly Around Here

After a harrowing weak of air traffic slowdowns, today the Federal Aviation Administration finally announced that it would end the furloughing of its employees. By furloughing, I mean the unpaid leave the employees had to take while President Obama duked it out with Republicans to see who was to blame. On Friday, Congress finally approved legislation that would relieve the nation’s air traffic control systems from the big spending cuts that result in big consequences such as the aforementioned furloughs, which lead to widespread flight delays.

According to the FAA, normal service should resume by Sunday evening which is good, but on the other hand, President Obama and Republicans could not reach an agreement as to how to minimize the damage caused by budget cuts. Noted by President Obama, passengers were rightly frustrated by the delays and “Maybe because they fly home each weekend, the members of Congress who insisted these cuts take hold finally realized that they actually apply to them, too.” Lastly, the legislation passed by Congress would allow the  transportation secretary flexibility to shift as much as $253 million to the air traffic control system in an effort to return all staff.

Written by Kevin Zhang

Source:

http://www.nytimes.com/2013/04/28/us/faa-says-air-traffic-staffing-is-returning-to-normal.html?ref=business

Able Abe

Despite Prime Minister Shinzo Abe’s efforts, deflation remains a major issue entrenched in Japan. For one of the world’s largest economies, Japan has no quick fixes regarding this issue. Minister Abe, who took office last December, has made it his priority to fight deflation by urging the central bank to commit to a target of 2 percent annual inflation, which is a percentage that economists consider healthy. These efforts are an attempt to get rid of the damaging decline in prices, profits and wages that has troubled Japan for the last fifteen years.

The central bank, under the leadership of its new governor, Haruhiko Kuroda who was appointed this month, started an aggresive and bold plan to reinvigorate economic and price growth. In addition, the bank followed through with its plans for inflation by doubling their holdings of government bonds and Mr. Kuroda described the program as “monetary easing in an entirely new dimension.” Plus, the Nikkei 225-stock index has risen 30 percent since the start of the year, while the yen has fallen 14 percent against the dollar. This provides much to the relief of Japanese exporters, because a weaker yen means that their exports are more attractive abroad.

 

Written by Kevin Zhang

Source:

http://www.nytimes.com/2013/04/27/business/global/27iht-yen27.html?ref=business

When Things Go South…Then North

Daimler, the maker of Mercedes-Benz autos and trucks represents Germany’s industrial might. However, when even Daimler announces that they are feeling the effects of the European economic crisis, then you know something’s up; it was an ominous sign for the continent. In the past, its been that German exporters have been seen as a beacon of stability in a land troubled with dysfunctional governments, shaky banks, and the large amount of unemployed youth, including the worst automotive slump in the last two decades. Daimler’s foggy forecast for 2013 indicates that relatively healthy countries such as Germany, Austria, and Finland are at the verge of  falling into recession which has been plaguing their neighbors to the South.

In the case that Germany does fall into a recession, a lot of things would be dragged along with it. Germany and the 26 countries of the European Union together represent the world’s second-largest economy, plus a German recession would cause a further delay in the recovery of the European economy and negatively affect growth in the United States, Asia and Latin America. According to Carl B. Weinberg, chief economist of High Frequency Economics in Valhalla, N.Y. “The E.U. has made Europe a much more cohesive economy, which is good when things are going up,” he said. “But when things are going down the multiplier is very strong. An outgoing tide lowers all ships.”

Written by Kevin Zhang

Source:

http://www.nytimes.com/2013/04/26/business/southern-europes-recession-threatens-to-spread-north.html?ref=business&_r=1&

Spring Swoon

Signs of a slowdown in economic activity were evident with the drop in demand for long term durable goods and modest business spending. According to the Commerce Department, the amount of durable good orders fell 5.7 percent in March. The drop in demand for these goods, ranging from airplanes and washing machines to toasters, meant to last for more than three years came after a 4.3 percent increase in February.

We have seen a considerable loss of momentum in the economy and that has been obvious in the round of data we had over the last four weeks or so,” said Jacob Oubina, a senior U.S. economist at RBC Capital Markets in New York noted. Unbelievably, the drop was double the amount economists had thought/predicted and this indicated cooling off in production at factories that had played a central role in the economy’s recovery from the recession. Economists have began to dub this economic slowdown as the Spring Swoon and point out that the problem lies within Washington as the government  tries to reduce their budget deficit.

 

Written by Kevin Zhang

Source:

http://www.reuters.com/article/2013/04/24/us-usa-economy-goods-idUSBRE93N0NH20130424

 

Karma’s A Bitc*

At Fisker Automotive, things are looking dead as its visionary founder had called it quits, employees had either been laid off or furloughed, and they stopped all production of their hybrid car, the Karma. After millions of dollars invested in the company by the government,  the company is now on the verge of bankruptcy. People are saying that this was a shaky investment from the start, back in 2009, a $529 million federal loan was granted to them. Two years later, after Fisker repeatedly missed production targets and other deadlines, the Energy Department suspended their loans. After the company missed a large loan repayment on Monday, the federal government uncharacteristically seized $21 million from their cash reserves.

Others government officials, including members of the Senate and the House, complained that standards for awarding federal loans were overlooked in the rush to promote the advancement of green technology. Senator Charles Grassley, a Republican from Iowa. “How did the Energy Department determine Fisker’s potential before writing a check?” and “Was there due diligence, or instead a blind hope that Fisker would produce something useful?”

 

Written by Kevin Zhang

Source:

http://www.nytimes.com/2013/04/24/business/fisker-broke-down-on-the-road-to-electric-cars.html?ref=business&_r=0

House It Goin’

For the month of March, home resales crept downwards which means a slowdown in the housing market and overall economic activity as well. According to the National Association of Realtors, existing home sales fell 0.6 percent last month to a seasonally adjusted annual rate of 4.92 million units. This was disappointing, as economists polled by Rutgers had expected home sales to increase to 5.1 million units. Plus, insight from Millan Mulraine, a senior economist at TD Securities in New York included “The disappointing pace of home sales provides some evidence that positive momentum in the housing sector is beginning to leak lower,”. However, the slight decrease in the housing market could possibly just represent supply constraints or not enough houses to go around instead of lack of demand, of course lack of supply being preferred.

Sales in March were 10.3 percent higher than the same month compared to  last year in 2012, and the median price for a home resale was up 11.8 percent, the biggest increase since November 2005, to $184,300. Ms. Mulraine also remarks ‘The report suggests that the overall thrust of the sector remains positive, with the demand and supply dynamics continuing to favor further price gains,”.

 

Written by Kevin Zhang

Source:

http://www.reuters.com/article/2013/04/22/us-usa-economy-housing-idUSBRE93L0LW20130422

Whats Poppin’

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

Source:

http://www.reuters.com/article/2013/04/21/us-eu-mortgage-idUSBRE93K0EZ20130421

G.M. China To Raise Profits

China, the world’s largest car market since 2009, has recently begun switching from fuel saving compact cars to more “American” sized cars. As a result, China’s oil importing bill is on the rise, as well as pollution levels, which automaker’s don’t care about since their profits are growing. For S.U.V.s, their sales have jumped 49 percent compared to last year and auto sales overall in China rose by 13 percent and almost 21 million vehicles were sold in China compared to the U.S. who sold only 15 million.

General Motors China the main automaker in China next to Volkswagen, has stated it would introduce nine new S.U.V. models in China in the next five years, while building four additional factories and creating around 6,000 more jobs. Bob Socia, President of G.M. noted that his company was focusing more on luxury vehicles and S.U.V.s and that ‘Not long ago, both were considered niche segments,” he said. “Both are now mainstream and growing rapidly.” In addition, he predicted that S.U.V. sales would double by 2015 to 4 million vehicles, but still trailing behind the 5 million midsize cars; midsize cars make up the largest market segment in China, bigger than Japan’s entire auto market or the  combined auto markets of Germany and Britain for comparisons sake.

 

Written by Kevin Zhang

Source:

http://www.nytimes.com/2013/04/22/automobiles/autoshow/chinese-auto-market-shifts-toward-larger-cars.html?ref=business