http://www.cfr.org/publication/23430/ceo_speaker_series.html
Some of you might be interested in watching this video featuring J.W. Marriott, the CEO of Marriott International. His comments on the world economy reflect the exposure of his business to almost every country. I was particularly interested in what he said about growth prospects in China, India and Brazil. He was not pleased with the 31% loss of travel business in the US in the last decade. When foreigners travel to the US it counts as a US export and it would stimulate our economy. He believes that there is a lot of interest around the world to visit the US but we have not done a good job of marketing the country and we have made it very difficult to obtain a visa. Europe has been booming and no visa is required.
Friday, December 3, 2010
Weak Numbers on Job Growth and Unemployment
http://voices.washingtonpost.com/ezra-klein/2010/12/an_ugly_jobs_report.html?hpid=topnews
The graph tells the whole story. Unemployment rate is up slightly and job growth is anemic.
The graph tells the whole story. Unemployment rate is up slightly and job growth is anemic.
- Wall Street Owes Its Survival To the Fed
CFR.org - Wall Street Owes Its Survival To the Fed
The Fed published its balance sheet in compliance with the financial reform law. This is a brief but informative response to the information provided by the Fed. We know that congress gave the government $700 billion under TARP for the rescue of the financial system. The Fed, however, provided $3.3 trillion in loans and guarantees to a variety of US and international institutions to rescue the worldwide financial system. Some of our largest banks, including Goldman Sachs and Morgan Stanley, were in much worse shape than they admitted at the time. Both were heavily dependent upon facilities made available by the Fed. The thrust of the article is not to criticize the Fed for its role in saving the worldwide financial system. Rather, the article suggested that the problem, if left to elected officials, may not have been remedied.
The Fed published its balance sheet in compliance with the financial reform law. This is a brief but informative response to the information provided by the Fed. We know that congress gave the government $700 billion under TARP for the rescue of the financial system. The Fed, however, provided $3.3 trillion in loans and guarantees to a variety of US and international institutions to rescue the worldwide financial system. Some of our largest banks, including Goldman Sachs and Morgan Stanley, were in much worse shape than they admitted at the time. Both were heavily dependent upon facilities made available by the Fed. The thrust of the article is not to criticize the Fed for its role in saving the worldwide financial system. Rather, the article suggested that the problem, if left to elected officials, may not have been remedied.
Extensive Examination of JP Morgan's CEO
http://www.nytimes.com/2010/12/05/magazine/05Dimon-t.html?_r=2
Jamie Dimon did a better job running JP Morgan that most of his peers. That may be a low standard, but he has survived, along with his company, better than most. This article describes his management style and his vision for JP Morgan. He wants JP Morgan to become an even bigger global bank than it is already. He envisions 50% of his revenues coming from international markets. This raises questions about whether we are moving from the problem of being to big to fail to becoming to big to save as suggested by Simon Johnson. JP Morgan has $2 trillion in assets today and the plan is to grow the asset base rapidly overseas. When the asset base a of bank becomes large relative to GDP, and internationally entwined, it may become to big to save much in the way that the Irish banks have become to big to be saved by Ireland. The impaired assets of the Irish banks, and the capital they required, was larger than the national GDP. Ireland has become dependent upon international intervention to restore its banking system and its economy.
Jamie Dimon did a better job running JP Morgan that most of his peers. That may be a low standard, but he has survived, along with his company, better than most. This article describes his management style and his vision for JP Morgan. He wants JP Morgan to become an even bigger global bank than it is already. He envisions 50% of his revenues coming from international markets. This raises questions about whether we are moving from the problem of being to big to fail to becoming to big to save as suggested by Simon Johnson. JP Morgan has $2 trillion in assets today and the plan is to grow the asset base rapidly overseas. When the asset base a of bank becomes large relative to GDP, and internationally entwined, it may become to big to save much in the way that the Irish banks have become to big to be saved by Ireland. The impaired assets of the Irish banks, and the capital they required, was larger than the national GDP. Ireland has become dependent upon international intervention to restore its banking system and its economy.
Imbalance of Demand and Supply for US College Graduates
http://baselinescenario.com/2010/11/20/how-are-the-kids-unemployed-underwater-and-sinking/#more-8301
A good summary of the job situation for young Americans. Their unemployment rate is much higher than the average, and many have jobs that do not require a college degree. There are more young people with college degrees than the available number of degree requirement jobs. This is not unlike the situation described in an earlier post about education and the economy in China. We have a growing service sector with many low paying jobs, and China has a growing manufacturing sector with low paying jobs. Demand for higher paying, knowledge intensive jobs is not growing as fast as the labor supply. Another major difference, however, is that our college graduates have an average student loan burden of $24,000.
One of the proposed remedies to this situation is to stimulate demand in high tech solutions for the "green economy" that will require government subsidies to make it cost effective for businesses to undertake. This will be a hard sell to those who believe that our "college elite" is not part of the real America.
A good summary of the job situation for young Americans. Their unemployment rate is much higher than the average, and many have jobs that do not require a college degree. There are more young people with college degrees than the available number of degree requirement jobs. This is not unlike the situation described in an earlier post about education and the economy in China. We have a growing service sector with many low paying jobs, and China has a growing manufacturing sector with low paying jobs. Demand for higher paying, knowledge intensive jobs is not growing as fast as the labor supply. Another major difference, however, is that our college graduates have an average student loan burden of $24,000.
One of the proposed remedies to this situation is to stimulate demand in high tech solutions for the "green economy" that will require government subsidies to make it cost effective for businesses to undertake. This will be a hard sell to those who believe that our "college elite" is not part of the real America.
What's a College Degree Worth in China?
http://www.nytimes.com/roomfordebate/2010/12/02/what-is-a-college-degree-worth-in-china?hp
This is an interesting discussion of the relationship between the economic structure of a society and the education system. China is producing many more college graduates than the economy can absorb. On the other hand, there are not enough workers to fill all of the jobs in its manufacturing sector. Consequently, the pay differential between college graduates and laborers is small. One wonders how this will affect the demand for a college education and the future development of its economy.
This is an interesting discussion of the relationship between the economic structure of a society and the education system. China is producing many more college graduates than the economy can absorb. On the other hand, there are not enough workers to fill all of the jobs in its manufacturing sector. Consequently, the pay differential between college graduates and laborers is small. One wonders how this will affect the demand for a college education and the future development of its economy.
Healthcare in Arizona
http://www.nytimes.com/2010/12/03/us/03transplant.html?hp
The Arizona legislature cut life saving medical transplants for Medicaid patients from its budget. Some people were willing to donate an organ to a stranger but the patient was unable to pay for the surgery. You may recall that the GOP criticized the health care reform bill on the grounds that it would ration health care to senior citizens. The Arizona governor who pushed the bill through the legislature is trying to put the blame on "Obamacare". The people have not been fooled on this one. They are calling it Brewercare after Governor Brewer.
This issue brings out an important point. A member of the legislature, when confronted with the possible death of a citizen who could not afford to pay for a transplant, shrugged (perhaps like Atlas) and suggested that he raise the money. This of course is price rationing. Most of us see a difference between using the price system to limit access to a luxury car, and when it is used to limit access to life saving medical care. The Arizona legislature says "let them eat cake".
The Arizona legislature cut life saving medical transplants for Medicaid patients from its budget. Some people were willing to donate an organ to a stranger but the patient was unable to pay for the surgery. You may recall that the GOP criticized the health care reform bill on the grounds that it would ration health care to senior citizens. The Arizona governor who pushed the bill through the legislature is trying to put the blame on "Obamacare". The people have not been fooled on this one. They are calling it Brewercare after Governor Brewer.
This issue brings out an important point. A member of the legislature, when confronted with the possible death of a citizen who could not afford to pay for a transplant, shrugged (perhaps like Atlas) and suggested that he raise the money. This of course is price rationing. Most of us see a difference between using the price system to limit access to a luxury car, and when it is used to limit access to life saving medical care. The Arizona legislature says "let them eat cake".
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