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.

Economics-Entry 9

Toyota Predicts a Hybrid Majority

http://blogs.wsj.com/japanrealtime/2013/04/18/toyota-predicts-a-hybrid-majority/?mod=WSJBlog&mod=japanblog

WSJ, April 18, 2013

Summary

Since Toyota began producing hybrid vehicles in 1997, the demand of hybrid car has been steadily increasing worldwide. At the time Toyota started hybrid car product, they were not able to confidently predict share of hybrid car among vehicle market; however, significant increase in hybrid car proves that Toyota's prediction was right. Despite several big obstacles to overcome, including low share in the U.S. and Europe, hybrid car is the most appropriate alternative for normal cars since electric and hydrogen vehicles are not fully developed to be produced. For the most part, in this trend, people may buy more hybrid cars.

My thought

It is undeniable that people are buying more hybrid cars than the past. Since 2011, Hyundai and Kia also began producing hybrid cars in order to meet the trend, but it seems not as successful as Toyota did in the world market. I reckon Toyota's early action played significant role in starting hybrid trend in automobile market, making Toyota the best hybrid producer as well as seller. If Toyota had not tried to produce hybrids because of risks and let other corps to produce those for people, Toyota would have been also lagged behind the trend and had hard time as Hyundai does.

Economics-Entry 8

Japanese Rush to Sell Gold as Price in Yen Jumps

http://online.wsj.com/article/SB10001424127887323820304578412283865306950.html?mod=WSJ_Markets_LEFTopStories

WSJ, April 9, 2013

Summary

Even though world gold price is decreasing in general, the gold price in Japan is steadily rising. The primary reason for gold price rise in Japan is high Yen price. Skyrocketed price of Yen is triggering the rise of overall metal price in Japan, and people are selling gold due to significant price increase. Government is planning to increase the value of Yen in world market so that it can drop the rising price of gold and other imported products. If it worked successful, Japanese people would began to open their purse that has been shrunk for 10 years.

My thought

Japanese are famous for not spending but saving things in consideration for the future. In addition, the high Yen price is further shrinking consumerism in Japan. For the future of Japanese economy, Japan should encourage people's spending and lead out inflation in Japanese economy. Gold price rise is one incidence that signifies the overall condition of Japanese economy. I hope Japan's vigorous development in the future.

Economic-Entry 7

AirAsia Announces India Hiring Plan

Wall Street Journal, April 3, 2013
http://online.wsj.com/article/SB10001424127887324600704578399871038216436.html?mod=%253C%2525mst.param%2528LINKMODPREFIX%2529

Summary

AirAsia expanded its business into India, one of the most biggest market in Asia. AirAsia began to recruit Indian workers and are still preparing for settling business in this newly emerging market. For the entrance of Indian market, AirAsia formed a partnership with Tata group, one of the most biggest corporations in India and is waiting for government approval until regulation of foreign investment gets relieved. AirAsia's expansion to Indian market would lower market dominance of Air India, domestic airline company.

My thought

AirAsia is predominant in Southeast Asia, including Thailand, and Malaysia; therefore, it is wise for AirAsia to enter Indian market in which consumers prefer cheaper ticket price. As a multinational corporation, further expansion to bigger market is quite risky but necessary step for growth of business. Outsourcing and making a firm in new market may be costly, but I believe that AirAsia would get a tremendous profit when it successfully enter Indian airline industry.

Economics-Entry 6

Troy Resources Makes Takeover Bid for Azimuth Resources

Wall Street Journal, March 28, 2013

http://blogs.wsj.com/dealjournalaustralia/2013/03/28/troy-resources-makes-takeover-bid-for-azimuth-resources/?mod=wsj_nview_latest

Summary

Troy Resources, one of the biggest global gold mining company, tries to augment its market share over its rival Azimuth resources in South America by making takeover bid. It is prospected that South America possess plentiful amount of gold reserves; therefore, Troy tries to buy Azimuth to get more share of gold mines.

Opinion

Troy Resources is trying to take over the entire gold mine industry. I do not really know whether oligopoly of government is naturally efficient or not. If the market is solely dominated by fewer people, gold price would not get dominated by producers; however, it would be less efficient to increase competition among producers. I hope market dominance may be beneficial for gold market.

Economics-Entry 5

Cyprus rejects bank levy, bailout in doubt

CNN, March 19, 2013
http://money.cnn.com/2013/03/19/news/economy/cyprus-bailout-europe/index.html?hpt=ibu_c2

Summary

Cyprus is experiencing a bank crisis due to undue taxation on bank deposits. As a result of abrupt taxation policy, Cyprus people suddenly got into trouble and confused what to do. The primary reason Cyprus government proposed unprecedented tax on deposits was to receive bailout from EU; however, its attempt to gain financial support led uncontrollable upheaval in Cyprus economy. For Cyprus, low tax on deposit is the incentives that attract investors; therefore, increasing taxation rate would be fatal for Cyprus' economic and resource development, including natural gas reservoir. Russia already perceived Cyprus' intention and stopped financial support on Cyprus since 2011. For the most part, Cyprus is facing a huge dilemma: to get bail out or to reject deposit taxation.

My Opinion

Bailout is the most important for Cyprus that is experiencing huge financial problem. All the banks are in default, and it is impossible for Cyprus to sustain its life solely based on investment of other country, which now won't even attempt to invest. Though it may create significant crash in Cyprus' economy, bailout is necessary for Cyprus; therefore, despite the unreasonable demand of EU, Cyprus should accept their demand and receive bailout as soon as possible. For now, it is necessary to deal with an urgent problem first.

Economics-Entry 4

'Anti-Bloomberg' bill stops overregulation
 

March 14th, 2013, CNN
http://edition.cnn.com/2013/03/13/opinion/smith-anti-bloomberg-bill/index.html?hpt=ibu_c2

Summary

Anti-bloomberg Act, an act of regulating the selling of high-caloric beverages in restaurants, is facing a great opposition from consumers and producers. Government's stance is that such food is threatening health of American, so it is necessary for government to intervene selling of health-threatening foods. However, there are many alternative ways of promoting healthy life of people instead of limiting people's rights to pursuit happiness and market. Because of this act, many stores are closing their business, and this indiscrete intervention is delaying economic development. For the most part, government can make better and more reasonable agenda, including renovation of sidewalks or encouraging consumption of vegetable and healthy food. Government's regulation on selling fo high-caloric beverage is only provoking opposition of people and not producing any beneficial result.

My Opinion

Approving Anti-bloomberg Act is a huge dillema for Congress. Nobody can deny that high-caloric beverages are catalyzing obesity of American population. However, is it reasonable for government to harshly regulate selling of drinks, like cigarettes? The significant difference between cigarette and drinks is their popularity. Sodas and coke are one of the most popular beverages that American has loved for a long time; therefore, dramatic reduction of drink would cause (and actually is causing) significant oppositions among soda consumers and producers. For the most part, such a radical change is not a good method, but it would be better for the society to refrain from such drinks step by step, such as exhortaion or campaigning. Regulation would not only be disproductive in health issue but also in economy as well.

Economics Entry-3

Why China Need to Spend more on welfare?

CNN, March 5, 2013
http://edition.cnn.com/2013/03/05/opinion/china-economy-gan/index.html?iref=allsearch

Summary

Chinese government potentially can grow much rapidly and explosively; however, inequality between rich and poor is decreasing people's purchasing power, leading to shrink of Chinese economy. Since China adapted market economy system, financial gap between high class and lower class people has been drastically increased, and this gap is one of the China's biggest social problem. In addition to socially deteriorating China, rising gap between rich and poor is even worsening China's economy, and it has become the most serious problem that Chinese government should cope with as soon as possible. Some experts suggest Chinese government for a vigorous transfer or social welfare system that may redistribute wealth concentrated on high class. Such reformation will not only improve the life quality of people but also the Chinese economy as a whole.

My Opinion

Chinese economy is one of the significant power in world economy. As the major economic power, China is obliged to sustain economic development for the health of world economy, and it is necessary for Chinese society not only for internal economic growth but also for the world economy. I knew that Chinese society has serious social gap between rich and poor; however, I did not know that such gap is serious enough to threaten the purchasing power of the society. For sustainable and sounding economic development, Chinese government should deal with this issue ASAP, and display its potential fully. (And it is somewhat ironic that communism government is actually negligent of social inequality...:( )

Econmics-Entry 2

Two days to cut: What's Congress doing?

CNN News, February 27, 2013
http://edition.cnn.com/2013/02/27/politics/congress-cuts-countdown/index.html?hpt=ibu_c2

Summary

Significant budget cuts will be passes within two days; however, several conflicts should be done before this serious cuts to be placed on the U.S. society. Without making a determined choice, Republican Party is having conflict over approving/disapproving budget cut that may significantly impact not only in economy but also in the society as whole. Though Democrats argue that the government would compensate loss of budget cut by collecting more taxes from rich people, but it is still an insufficient measure to alleviate ripple effect of budget cut. In addition, some are worrying that the government would release some criminals in part of budget cuts and arguing that Obama's Administration is threatening safety of American people.

My Opinion

Even though budget cut will bring about significant impact on economy and ripple effects on American society, it is unavoidable for government to reduce its budget in order to reduce national debt that is rapidly increasing. Obama failed to effectively deal with economic problem in his last term, and it is responsible of him to bring about such a catastrophic result in American economy. I hope the U.S. to reduce national debts even if it is small amount. I hope the sacrifice of American people will bring about a worthless result.

Economics-Entry 1

Doubts loom over eurozone recovery

CNN, February 21st, 2013

http://edition.cnn.com/2013/02/21/business/eurozone-recovery-doubts/index.html?hpt=ibu_c1

Summary

While Germany's prospect of eurozone in 2013 seemed optimistic in the edge of 2012, there are still some difficulties and problems are remained to be solved. Composite output index, which counts both services and manufacturing, of France, the second economically stable eurozone country, was decreased about 0.3 from last months, and the index of other eurozone countries were dropped about 0.2 to 0.3 in average. Even though this recession casts a doubt whether eurozone is able to successfully recover from financial crisis, most economists seem to have an optimistic stance on eurozone's recovery, considering such drop as "reality check" that may allow eurozone to take further actions in propelling economic growth. Still, the future of eurozone in this year is an ocean covered with thick mist. 

My opinion

Since eurozone did not take many actions for solving the economic problems for this year, it is hasty to stipulate that the future of eurozone will be as bleak as it was in last year. Though it could be merely an optimistic speculation, many economists and analysts prospected that economics condition of eurozone will further get improved in this year, and eurozone countries are ready for adjusting policies and carrying out projects to face the problems. Unexpected reduction in production rate would be frustrating for most of the eurozone countries; however, this recess can be a good chance to look for faults in eurozone economy system and lead out further progress in this year.