Daily Economy Thread

[Luc 4,776]

thats a good risk to reward ratio lol...

 

if they fail, you loose 100%, but if they stabalize u could gain like 500%

Should've done it a few days ago... they've already been rising quite a lot. 

But about proctivity vs. economically liberal policies... what do you think? Is it better to have people work 50 hours a week for a total of $40000 avg or have people work 30 hours a week for a total of $35000? Most conservative/economically liberal choose the former while socialists prefer a higher productivity over long working hours (compare the Netherlands with the UK, for example).

[Economy 52,861]

Should've done it a few days ago... they've already been rising quite a lot. 

But about proctivity vs. economically liberal policies... what do you think? Is it better to have people work 50 hours a week for a total of $40000 avg or have people work 30 hours a week for a total of $35000? Most conservative/economically liberal choose the former while socialists prefer a higher productivity over long working hours (compare the Netherlands with the UK, for example).

I say longer working hours...

 

because when you work less hours its true your less tired and feel more refreshed so ur more productive per hour... But in total numbers i have a hard time believing you would be

 

I dont think you get a 1:1 ratio where for every 1 hour you cut of work that your  productivity rises enough to compensate for the hour lost

 

this would he especially true in manufacturing jobs where a lot of work is done by machinery and not the worker doig everything  

[Luc 4,776]

I say longer working hours...

 

because when you work less hours its true your less tired and feel more refreshed so ur more productive per hour... But in total numbers i have a hard time believing you would be

 

I dont think you get a 1:1 ratio where for every 1 hour you cut of work that your  productivity rises enough to compensate for the hour lost

 

this would he especially true in manufacturing jobs where a lot of work is done by machinery and not the worker doig everything  

When labour gets expensive, productivity risies automatically because businesses invest more in alternatives that increase productivity like machines. Also cuts are made in parts of a business wherever possible, leaving only the productive parts left. 

For example:

Netherlands: 1384 hours worked a year on avg

UK: 1654 hours worked annually on avg

Productivity: 

Netherlands: 60.2$/hr

UK: 48.5$/hr

In the end the average person is just as rich, but the Netherlands has/had stricter labour regulations while the UK had very liberal labour regulations.

[Economy 52,861]

When labour gets expensive, productivity risies automatically because businesses invest more in alternatives that increase productivity like machines. Also cuts are made in parts of a business wherever possible, leaving only the productive parts left. 

For example:

Netherlands: 1384 hours worked a year on avg

UK: 1654 hours worked annually on avg

Productivity: 

Netherlands: 60.2$/hr

UK: 48.5$/hr

In the end the average person is just as rich, but the Netherlands has/had stricter labour regulations while the UK had very liberal labour regulations.

are these numbers if average workers or average population? Cause even 1600 seems low. Are they including non working force population? If so that could skew the numbers.

 

Also that doesnt prove productivity is higher because of less hours. Other factors could come into play such as technology they use, the types of industries in the Country and current employment situation

 

the netherlands is also a major exporter abut also a big importer. Exportinf industries naturally generate more wealth but then u must also import more because ur a smaller nation and make less of yoyr own things

 

the UK is more domestic so trade makes up a smaller share of GDP. Exports are lower per capita but then so are their exports

 

domestic industries purely within the UK are more prevailant than in Netherlands and these industries generate less wealty regardless of how efficient a worker is

 

im not saying your wrong, but these numbers are comparing apples and oranges because too many things affect this besides number of hours worked  

[Luc 4,776]

are these numbers if average workers or average population? Cause even 1600 seems low. Are they including non working force population? If so that could skew the numbers.

 

Also that doesnt prove productivity is higher because of less hours. Other factors could come into play such as technology they use, the types of industries in the Country and current employment situation

 

the netherlands is also a major exporter abut also a big importer. Exportinf industries naturally generate more wealth but then u must also import more because ur a smaller nation and make less of yoyr own things

 

the UK is more domestic so trade makes up a smaller share of GDP. Exports are lower per capita but then so are their exports

 

domestic industries purely within the UK are more prevailant than in Netherlands and these industries generate less wealty regardless of how efficient a worker is

 

im not saying your wrong, but these numbers are comparing apples and oranges because too many things affect this besides number of hours worked  

It's true that it's there can be (too) many factors that differ so perhaps it's a flawed comparision, but I'll keep my opinion that labour market rules need to be adjusted to the current economic situation. In the case of Spain, more flexible, economically liberal labour market is needed to boost employment and make labour cheaper than in other countries or than alternatives. In the US or Germany, stricter, more socialist labour market rules are needed to increase productivity and perhaps less working hourd can result from that (which is good imo! Less working hours means a happier population).

[Economy 52,861]

It's true that it's there can be (too) many factors that differ so perhaps it's a flawed comparision, but I'll keep my opinion that labour market rules need to be adjusted to the current economic situation. In the case of Spain, more flexible, economically liberal labour market is needed to boost employment and make labour cheaper than in other countries or than alternatives. In the US or Germany, stricter, more socialist labour market rules are needed to increase productivity and perhaps less working hourd can result from that (which is good imo! Less working hours means a happier population).

Considering the US has falied to create as many full-time jobs as in past recoveries because job quality has been poor, there is a lot of part-times right now. In fact many are involuntary part time workers. They want more hours to pay their bills but its all they got. In essance right now the US does not need to push for more part-times. It already has more than enough

 

I think some part-times are good... Theres ppl who want them... Some are students, others are because they have a spouse making good money and dont need a full-time, others wanna still do something wuen they retire...

 

but most people cant pay their bills on part-times so that cant be the norm... And because any gained productivity likely wont compensate for the fewer hours worked, their hourly pay cant rise to the sake equivalent to make up for hours lost either so some ppl would be really tight...

 

But im bullish on technology. If productivity per worker keeps rising, then labor will be a smaller and smaller share of operating expenses... In time that will mean developed nations will have an easier time competing with cheap manufacturing and we could see nice wage raises too cause it wont make big different to big companies but will keep workers happy so many will be glad to do it

 

i also agree with you that higher labor costs promote efficiency... However u need to let it occur naturally not force it...

 

it will happen on its own if you have an educated workforce everyone wants, there will be investment and competition for labor and as companies develop they gain efficiency also... But this is very gradual process. U cant just surge minimum wage and expect everyone to suddenly become efficient. Ud kill many businesses that way.

 

I do still highly support decent minimum wages tho. Im jist saying dont exagerate thats all.

 

Also this is another thought that occured to me... High labor costs will always defer big companies from investing in ur nation unless u got skills they really need thats hard to find...

 

However supporting small businesses and encouraging their growth may be a long term solution... If forein businesses dont come to you, then grow the ones u have abd u may still get robust growth, and then those businesses being used to your environment become more productive as from infancy they learned to be efficient

 

Western Provinces in Canada where wages are high and labor been in shortage for past 10 years have more efficient compNies than in Atlantic Canada where labor is cheap and easy to come by  so i witness it even within in my country  

[Luc 4,776]

Considering the US has falied to create as many full-time jobs as in past recoveries because job quality has been poor, there is a lot of part-times right now. In fact many are involuntary part time workers. They want more hours to pay their bills but its all they got. In essance right now the US does not need to push for more part-times. It already has more than enough

 

I think some part-times are good... Theres ppl who want them... Some are students, others are because they have a spouse making good money and dont need a full-time, others wanna still do something wuen they retire...

 

but most people cant pay their bills on part-times so that cant be the norm... And because any gained productivity likely wont compensate for the fewer hours worked, their hourly pay cant rise to the sake equivalent to make up for hours lost either so some ppl would be really tight...

 

But im bullish on technology. If productivity per worker keeps rising, then labor will be a smaller and smaller share of operating expenses... In time that will mean developed nations will have an easier time competing with cheap manufacturing and we could see nice wage raises too cause it wont make big different to big companies but will keep workers happy so many will be glad to do it

 

i also agree with you that higher labor costs promote efficiency... However u need to let it occur naturally not force it...

 

it will happen on its own if you have an educated workforce everyone wants, there will be investment and competition for labor and as companies develop they gain efficiency also... But this is very gradual process. U cant just surge minimum wage and expect everyone to suddenly become efficient. Ud kill many businesses that way.

 

I do still highly support decent minimum wages tho. Im jist saying dont exagerate thats all.

 

Also this is another thought that occured to me... High labor costs will always defer big companies from investing in ur nation unless u got skills they really need thats hard to find...

 

However supporting small businesses and encouraging their growth may be a long term solution... If forein businesses dont come to you, then grow the ones u have abd u may still get robust growth, and then those businesses being used to your environment become more productive as from infancy they learned to be efficient

 

Western Provinces in Canada where wages are high and labor been in shortage for past 10 years have more efficient compNies than in Atlantic Canada where labor is cheap and easy to come by  so i witness it even within in my country  

You're saying people want to work full time to pay their bills.. but that's not what I mean with more part time jobs. I mean part time jobs that you can live from. I disagree with believing in a self-regulating labour market, government intervention is needed to push it in different directions dependent on the economic circumstances. It's time for Obama to cut greatly in the public sector or to raise taxes for a balanced budget, it's time for stricter labour regulations (nation-wide 12$ minimum wage maybe, 1 year paid sick leave, maternity and paternity(?) leave for 40 weeks, overtime pay guaranteed, 3 weeks of paid vacation).

 

What I mean with productivity and less working hours, is that when labour gets more expensive in a free market, they'll look for ways to make it cheaper eventually leading to less available working hours. At the same time, however, services are still just as needed in a consumption-based economy like the US and with the same total income, less labour will be funded.

I'm not saying that it's possible to work 1 hour a week for 1000$ an hour, but for example if the participation rate increased and more women and elderly people took part time jobs  

[Economy 52,861]

You're saying people want to work full time to pay their bills.. but that's not what I mean with more part time jobs. I mean part time jobs that you can live from. I disagree with believing in a self-regulating labour market, government intervention is needed to push it in different directions dependent on the economic circumstances. It's time for Obama to cut greatly in the public sector or to raise taxes for a balanced budget, it's time for stricter labour regulations (nation-wide 12$ minimum wage maybe, 1 year paid sick leave, maternity and paternity(?) leave for 40 weeks, overtime pay guaranteed, 3 weeks of paid vacation).

 

What I mean with productivity and less working hours, is that when labour gets more expensive in a free market, they'll look for ways to make it cheaper eventually leading to less available working hours. At the same time, however, services are still just as needed in a consumption-based economy like the US and with the same total income, less labour will be funded.

I'm not saying that it's possible to work 1 hour a week for 1000$ an hour, but for example if the participation rate increased and more women and elderly people took part time jobs  

the only thing that concerns me is that for everyone to live off part-times the hourly wages have to be quite high for most jobs and that would pressure most businesses...

 

As i said, i dont believe productivity per hour increases on a 1:1 proportional ratio to the hours cut so if workers have to get same income for less hours, your going to cut company profits and decrease your countries competitiveness globaly 

 

Also total production of GDP could be hurt if you dont have enough people working to compensate for the lower hours

 

As for women most already work (at least in my Country they do) so to get more labor force participation i think retirement age needs to rise

hopefully technology will raise productivity so much over time that high labor costs wont make a difference  

[Shadow 6,697]

From recent reports on housing, it appears the housing market is slowly recovering and prices have risen in 246 of the 277 cities tracked by Clear Capital, which is a provider of real estate data and a--lysis.  

Some cities who were hit the hardest in the bust have had huge gains, like surprisingly Detroit (in the suburbs, not the inner city), San Jose, San Francisco, Atlanta, Miami, and Las Vegas in the years leading up to 2014.
http://www.kiplinger.com/article/real-estate/T010-C000-S002-housing-outlook-2015.html

Even Boston’s cold market is starting to warm up, after months of bad storms last winter that kept many homes off the market:
http://www.cnbc.com/2015/08/13/boston-says-so-long-to-housing-freeze.html

Mortgage Applications have seen little to no growth lately:
http://www.cnbc.com/2015/08/12/weekly-mortgage-applications-edge-up-as-rates-stall.html

Although, the house flipping market has gotten much harder due to higher prices, it also has proved to more lucrative for successful sellers:
http://www.cnbc.com/2015/08/06/housing-flipping-its-riskier-but-more-lucrative.html

There is this sense of dragging on with the slow growth, but at least in the North Texas/Dallas area, it still feeds demand to the point that developers are even struggling to find construction workers to keep up with the demand in new housing developments from residential blocks to apartment complexes.

However, even with the growing housing market, the home ownership rate has been at its lowest in 25 years, so that is definitely not a good sign… 
http://www.cnbc.com/2015/04/28/homeownership-rate-lowest-in-25-years.html

 

 

 

[HANZ 4,380]

how is the economy of asian countries doing?

How's the economy of China, south korea and Japan doing?

which has the best future?

[Woolfsmck 2,763]

how is the economy of asian countries doing?

How's the economy of China, south korea and Japan doing?

which has the best future?

China is struggling with a slow down right now.  S.Korea is pretty strong due to several companies based there doing huge business with the US.  Japan is receding... But still pretty big due to auto and electronics companies being part of the American economy too.

[HANZ 4,380]

China is struggling with a slow down right now.  S.Korea is pretty strong due to several companies based there doing huge business with the US.  Japan is receding... But still pretty big due to auto and electronics companies being part of the American economy too.

but will south korea be as strong as it is today for more years?

or will it fade like other asian countries are doing?

I heard that south korean exports had a massive decline this year and the last one

[Woolfsmck 2,763]

but will south korea be as strong as it is today for more years?

or will it fade like other asian countries are doing?

I heard that south korean exports had a massive decline this year and the last one

I can't predict the future.  Japan and S. Korea are tied to the U.S. consumer economy tho... because that's their biggest export customer.

[Economy 52,861]

I can't predict the future.  Japan and S. Korea are tied to the U.S. consumer economy tho... because that's their biggest export customer.

Japan has too many internal problems to have any manor recovery...

 

highest debt burden in the world (over 230% of GDP)

Very old population and terrible demographics putting pressure on pension funds and healthcare

 

I dont think the. US rebounding is whats gonna save them.

 

Dont forget deceloped Nations have the domestic economy as the largest share of economy. Usually a slight uptick in exports cant make up for an ailing domestic economy

 

So far a weaker currency and improving US economy for instance didnt prevent a recession here in Canada and we export more to the US than Japan does

[Shadow 6,697]

Sinking currencies point to jitters about emerging economies

Aug 21, 3:18 PM (ET)

By PAUL WISEMAN and JOSHUA GOODMAN

WASHINGTON (AP) — The damage spans the globe.

Thailand's baht. Kazakhstan's tenge. South Africa's rand. Peru's nuevo sol.

In emerging markets worldwide, currencies are plunging over fears that developing economies are on the verge of a crippling fall. Success stories until recently, emerging economies are seen as casualties now — of slower growth in China, plunging prices for commodities like oil and iron ore, the prospect of higher U.S. interest rates and homegrown threats.

The damage has spilled across oceans, with the turmoil jolting investors in New York, Tokyo and Europe. Investors there worry that China and other major emerging economies will reduce their imports. They also fear a trade-disrupting currency war as some countries desperately lower their currencies' value to gain a competitive edge. A lower-priced currency makes a country's goods cheaper for foreigners.

(AP) In this Monday, June 8, 2015 file photo, Turkish Liras, Euros and U.S....
Full Image

The Dow Jones industrials plunged 400 points, or 2.4 percent, in afternoon trading Friday on top of a 358-point drop Thursday. It's down more than 6.5 percent in the past month. Tokyo's Nikkei index shed 3 percent Friday.

For all the markets' jitters, many economists say they remain confident that the U.S. economy is resilient enough to withstand a slowdown in the developing world. And Europe's economy appears to be emerging from its long slump.

Even so, the trouble in emerging markets is a surprising and unsettling reversal.

"It's remarkable just how things turned around so quickly," says Neil Shearing, an economist at Capital Economics and a former British Treasury official.

Consider Peru. Three years ago, its capital, Lima, was chosen to host an International Monetary Fund's meeting of global finance officials in what was seen as a celebration of Latin America's arrival in the economic big leagues.

But with the event six weeks away, Latin America's outlook has descended from boom to gloom. Peru's economy has steadily slowed, and its currency, the nuevo sol, has plunged 2.5 percent against the U.S. dollar in the past month.

And Peru boasts one of the region's healthiest economies. Brazil's economy is expected to shrink this year and next. Its currency, the real, is down 7 percent the past month and more than 30 percent the past two years.

It's hardly just Latin America. Kazakhstan's currency plummeted this week after the government decided to let it trade freely. The South African rand fell this week to a 14-year-low against the U.S. dollar. Turkey's lira hit a record low against the dollar this week.

Hung Tran, an executive managing director at the Institute of International Finance, expects developing countries to post 3.8 percent economic growth this year, down from 4.3 percent in 2014. The institute is on the verge of cutting that forecast further.

Analysts point to a primary culprit:

"It's all coming from China," says Masamichi Adachi, an economist with JP Morgan Chase in Tokyo. "Brazil, South Africa, many countries are commodity exporters, and the final destination is all going to China."

The Chinese economy is slowing more sharply than most people had expected from the double-digit growth rates of the mid-2000s. The world's second-biggest economy is expected to grow 7 percent this year, which would be its slowest pace since 1990.

Beijing is trying to manage a transition from rapid growth based on exports and often-wasteful spending on factories, real estate and infrastructure to slower, steadier expansion based on consumer spending.

That transition means China would need fewer raw materials — Chilean copper, Nigerian oil, Brazilian iron ore. That helps explain why China's pullback has loosed carnage in global commodity prices: The Standard & Poor's GSCI commodity index, which tracks 24 commodities prices, is down nearly 20 percent this year.

Emerging markets were already feeling the squeeze last week, when China devalued its currency, the yuan. That step ignited a semi-panic.

"The devaluation is a red flag about China's current economic situation," says Kurt Braybrook, who runs a Shanghai company that does quality control work. A falling yuan raises the risk that other countries will devalue their currencies to catch up.

Most countries can't blame China and the vagaries of the global commodities market for all their problems.

South Africa is battling labor strife. Brazil is contending with a corruption scandal at state-owned oil giant Petrobras. Turkey is struggling to form a government while its military battles the Islamic State extremist group and Kurdish separatists.

Adding to the pressure: America's Federal Reserve is expected, perhaps at its September meeting, to raise the short-term rate it controls from near zero. Investors could respond by moving even more money out of emerging markets to seek higher U.S. rates. That would lift the dollar higher and emerging market currencies even lower.

A Fed rate hike could also squeeze emerging market companies that have borrowed in U.S. dollars. Those companies would struggle to accumulate enough local currency to pay their now-more-expensive dollar-denominated debt.

Tran at the Institute for International Finance says dollar borrowing by emerging market companies surged from $700 billion in 2010 to $2 trillion through March.

The rising dollar and the hoard of dollar loans recall the 1997-1998 Asian financial crisis. Back then, a currency sell-off triggered an emerging market debt crisis that became a disaster for countries such as Indonesia and South Korea.

But the picture is less alarming now, a--lysts say. For one thing, developing countries have stockpiled foreign reserves that they can use to buy their own currencies and stop a crisis.

What's more, emerging market companies that borrowed in dollars in recent years tended to take out longer-term loans, notes Joaquin Cottani, Standard & Poor's chief economist for Latin America. During the '97-'98 crisis, companies had taken out short-term loans and couldn't refinance when the loans came due during a panic.

"Countries have learned from their experiences," says Monica de Bolle, visiting fellow at the Peterson Institute for International Economics.

 

http://apnews.myway.com/article/20150821/us--world_economy-currency_chaos-769b39e5a5.html

World’s Richest People Lose $182 Billion in Market Rout

http://www.bloomberg.com/news/articles/2015-08-21/world-s-richest-people-lose-182-billion-as-market-rout-deepens

Any idea why the currency has been dropping, @Economy