Economics-Entry 16

Asian stocks and currencies join sell-off after Bernanke comments

Financial Times, June 20th, 2013
http://www.ft.com/cms/s/0/d2139184-d950-11e2-84fa-00144feab7de.html?ftcamp=published_links%2Frss%2Fmarkets%2Ffeed%2F%2Fproduct#axzz2Wj8CcxZz

Summary

The decision of Ben Bernanke seems to have great impact on the world economy. His remark of pushing for the selling of U.S. bonds led out significant reduction in most of Asian stock market. Bernanke's plan for halting purchase of U.S. bonds seems to last till next year or till a year after, when the U.S. unemployment rate finally goes down, and the multiplier effect of pulling out money in the U.S. seems to be quite great to Asian economy that just went through great upheaval due to Abenomics. Analysts say that Fed's decision may be detrimental to globally emerging market, especially developing countries, and many countries seem to bear more pain until bond selling ends.

My Thoughts

Even though America is facing significant economic stagnation, giving additional harm to Asian market was not a desirable action. Recently, some Asian economic powers, including China, Korea, and Taiwan, got a serious economic impact due to Abenomics, and this happening forced these countries to reduce interest rate. Just the moment after these countries seemed to resolve the problem, U.S. is giving another economic threat to Asia again. Though it is unavoidable choice for the U.S., I hope the U.S. to consider the following effect of its decision on other country and alleviate negative impacts.

Economics-Entry 15

Apple refreshed Macs and iOS, unveils iTunes Radio

CNN, June 11th, 2013
http://edition.cnn.com/2013/06/10/tech/innovation/apple-wwdc-2013/index.html?hpt=ibu_c2

Summary

Apple took a huge leap in software and hardware enhancement. Apple redesigned and added new features for iOS 7 that will be released in following fall. Despite some critics argue that there was no groundbreaking evolution in mobile device software, the newly released design and features had received compliments from some experts and users. In addition to software, Apple also released new Macbook Air with 12 hours long battery. However, there was no "groundbreaking innovation," and many people are grieving that there is no such "innovations" that Jobs had made in the past years.

My opinion

Apple's new items may be attractive; however, it would be still far to catch up the consumers who already turned their face toward Samsung and other Android devices. Especially in Korea, Apple's popularity (Mac and iPhone) is shrinking very fast, and Apple would not able to regain its fame unless it takes an outstanding leap as Jobs has done. Anyway, Apple's constant recession may be good for Korean companies since they can sell more cellphones to other countries while the number of cellphones imported to Korea is decreasing. (Kinda trade surplus in cell phone?)

Economics-Entry 14

OECD: End nears for Japan's deflationary spiral

http://edition.cnn.com/2013/05/29/business/japan-oecd/index.html?iref=allsearch
CNN, May 29th, 2013

Summary

In order to stop deflation that has been lasted for 14 years, Japanese government, under prime minster Abe Shinzo, embarked an economic plan of recovering Japanese economy from recession, a project called "Abenomics." Since it has been started in February, Japanese economy has seemed to be recovered from perpetuate deflation. On the other hand, because of excessive government spending, Japan's national debt has arose significantly. Experts are skeptical whether Japan can keep this inflation trend while putting down skyrocketed national debt to normal level.

My thought

I don't agree upon Abenomics since it is negatively affection other countries' economy. Because of Japan's excessive depreciation of Yen, Korea, China, Europe, and even America are having difficulties in exporting goods to Japan while low price of Japanese imports are threatening domestic products. In addition, this economic upheaval is already brining about side-effects, including increase of national debt, and some experts even say that Abenomics is a temporary stopgap and cannot solve out fundamental problems lying on Japanese economy. For the most part, I'm skeptical that Abenomics may bring about positive influence on world economy as whole.

Economics-Entry 13

Obama: Americans stand with Oklahoma for 'as long as it takes'

CNN, May 21st, 2013

http://politicalticker.blogs.cnn.com/2013/05/21/obama-to-make-statement-on-oklahoma-tornado/?iref=allsearch

Summary

President Obama decided to support Oklahoma "as long as it takes." As a result of the tornado, about 24 people, including 9 children, were sacrificed, and a large portion of Oklahoma City, the capital and hub of the state Oklahoma, experienced severe economic and human loss. Most houses, schools, and important infrastructures were ruined due to the disaster, and relief work is in progress right now. For more vigorous relief work and compensation, the President Obama declared disaster in Oklahoma, and the Federal government is planning for grand scale financial aid for this current disaster. The government is resolved to do whatever they can for recovery of Oklahoma.

My Thought

Tornado "attack" gave a great impact to Oklahoma; therefore, I agree with the government's immediate action. When hurricane Katrina hit Louisiana in 2005, government failed to redeem people from the disaster, and FEMA's ineffective measure further worsened the problem. For the most part, government should financially and humanistically support Oklahoma as soon and much as possible. Emergency aid is more effective as it is done in quick.

Economics-Entry 12

France set to tax smartphones to protect culture in digital age

http://edition.cnn.com/2013/05/14/business/france-smartphone-tax/index.html?iref=allsearch

CNN, May 14, 2013

Summary

France government decided to impose taxes on smart devices, including phones and tablets, for protection of cultural contents. These contents actually include almost everything we use in smartphones, including apps, movies, shows, etc. Some say imposition of smart taxes may invigorate French culture by subsidizing artists; however, others argue that this tax would finally end up supporting giant contents creators in France and increasing their domination. In addition, some public says that there is no need for additional taxes since people are paying copyright taxes for purchasing contents. 

My thought

I think smartphone taxes are not necessary. Even though it may be used for protecting artists, imposition of taxes should be focused on benefits of entire society (MSB) instead of small portion of people. A large number of people should be sacrificed for imposition of taxes (increase in unemployment, decrease in consuming), For the most part, France government should deliberately consider whether this tax is efficient or not. 

Economics-Entry 11

Japanese yen hits new 4-year low

http://money.cnn.com/2013/05/09/investing/japan-yen/index.html?cnn=yes
CNN, May 9th

Summary

Japanese economic agenda, a.k.a. "Abenomics" has been inspiring depreciation of Yen throughout the world. In addition, the positive prospect in U.S. job market is further catalyzing reduction in Yen value in the United States. In order to prevent deflation to happen, several economic powers, including South Korea and EU, are also encouraging inflation. South Korea, for instance, lowered interest rate in order to encourage inflation and is trying to follow the world trend sparked from Japan. Weaker yen is encouraging Japan's export as well as investment, leading rise of Japanese economy that was in dormant for decades.

My Thought

Abenomics is expected to spark economic development of Japan, which has been shrunken for more than two decades. Even though Japanese export still keeps its high rate, Japan has not gone through any "breakthrough"that brings about huge economic growth. Inflation would be a great opportunity for Japan to experience extreme economic development. I hope Japan to earn huge profit by this artificial depreciation of Yen.

Economics-Entry 10

Falling inflation and high unemployment puts pressure on European Central Banks to cut rates

Washington Post, April 30, 2013
http://www.washingtonpost.com/business/another-fall-in-eurozone-inflation-piles-pressure-on-european-central-bank-to-cut-main-rate/2013/04/30/c7cb6476-b174-11e2-9fb1-62de9581c946_story.html

Summary

People tend to buy less! So, inflation rate is falling, but unemployment begins to rise. Among the financial chaos, European Central Bank is suffering difficulties of reducing skyrocketed unemployment rate in some European countries and of encouraging spending of people. For the most part, to motivate spending, there is no way but to lower interest rate so that people can borrow more money and buy things more.

My thought

I believe there is no way but to lower interest rate in order to drag up shrunken consumption. While several countries have been still suffering economic difficulty for several years, increase of unemployment rate does not give a good sign that European industry may revive soon. I hope ECB to take a wise choice so that it can prevent entire Europe and world market to suffer another big trouble in the future.