Category Archives: Economy

China Investing Heavily in US Real Estate

Economy, Real Estate, ,

A recent study outlines the extent to which Chinese investors have been flooding money into the United States real estate market. According to the study a recent surge of Chinese buying of residential and commercial property as brought the five-year total investment to over $110 billion.

Conducted by the Asia Society and Rosen Consulting Group, the study shows that the huge size of the total investment helped the US real estate market recover from the real estate crash that began in 2006. The Chinese investment in real estate has also influenced other countries, inflating prices in developed markets such as Australia and the UK.

The study predicts that, despite the tightening restrictions of capital outflows by Beijing, the amount of investment will double to $218 billion.

“What makes China different and noteworthy is the combination of the high volume of investment (and) the breadth of its participation across all real estate categories,” including a “somewhat unique entry into residential purchases,” the study said.

Trump Suggests the US Solve its Debt Problem by Printing More Money

Economy, , , ,
Deutschland
In der Geldauflieferungsstelle der Reichsbank in Berlin.
(Aufnahme: Oktober 1923) Geldauflieferungsstelle der Reichsbank in Berlin.
(Aufnahme: Oktober 1923)
6823

During an interview on Fox Business  Donald Trump quoted newspapers who had claimed that “Trump wants to go and start negotiating with creditors.” His answer: “You don’t have to think about this, but we print the money.”

He repeated the same sentiment on CNN:

“People said I want to go and buy debt and default on debt — these people are crazy. This is the United States government. First of all, you never have to default because you print the money, I hate to tell you, OK? So there’s never a default.”

News outlets such as the New York Times annoyed Trump, the presumptive Republican candidate for president, when they suggested that Trump wanted to reduce the national debt by convincing creditors to accept less than full payment. The report said that such statements are a totally new frontier for modern political candidates.

Those remarks were based on an interview Trump gage to CNBC last week. He was asked whether the US should pay its debt in full, or maybe negotiate a partial repayment. Trump’s answer was:

“I would borrow, knowing that if the economy crashed, you could make a deal.”

Trump has described himself as the “king of debt” but added that debt is “tricky” and can be “dangerous.”

“I know how to deal with debt very well — I love debt — but, you know, debt is tricky, and it’s dangerous, and you have to be careful, and you have to know what you’re doing,” he said.

Employment Opportunities: Moving from Government to Private Sector

Companies, Economy, ,

When looking for employment opportunities, one question often posed is whether to seek a position in the government or private sector.  The decision ultimately depends on many variants as well as demographics and priorities.

It is a long, thought-out decision for many.  So much so that an entire discussion took place on Quora – vis-à-vis the Indian community – on this subject.  This indicated that some people find it very difficult to make the switch.

Despite these difficulties, many make this switch quite successfully.  For example, consider Sheryl Corrigan, who in 2006 worked for the Minnesota Pollution Control Agency as Commissioner, advising the governor and assisting the strategic direction for the state on environmental matters.  Today, Sheryl is Senior Vice President of Environmental, Health and Safety at Koch Industries.

How do Ms. Corrigan and others accomplish this difficult feat?  In 2012, Elizabeth Bacchus wrote an article in The Guardian entitled ‘How to successfully move from the public to the private sector.’  Given that at that time in the UK, it was predicted that a staggering 500,000 jobs in the public sector would be cut within 3 years of the article’s writing, people were looking for tips on how to make the switch.

The article outlined seven main areas on which people should focus for making the switch.  These were:

  1. Taking a focused and targeted approach
  2. Removing public sector terminology
  3. When speaking to recruiters, seeing if they are adept at helping with this particular transition
  4. Using social media
  5. Tailoring a resume to focus on private sector positions
  6. Understanding that customers are different from service users
  7. Looking for a job that isn’t formally advertised

In an article written last year on Renovo.uk.com, it was determined that “the gulf between public and private sector mindsets appears to be narrowing.”  Still though, what remains is “a significant difference between the short term mind-set of the majority of profit seeking companies and the longer-term approach taken in the public sector.”

Further, as Dan Ovsey noted in an article in The Financial Post a couple of years ago, “While no hard data exists in Canada to show the success or failure rate of government workers transitioning to private-sector roles, international research shows there can be some harsh perceptions of public sector workers among private sector hiring managers.”

Thankfully for those in this position, things might be changing for the better overall, and people’s experiences differ when moving from government/public to the private sector for work.  But it will take time to completely remove the stigma of how private sector employers view those who have been working in the public sector for most of their careers.

ECB Head Ready to Ease Monetary Policy

Economy, ,

 

European Central Bank President Mario Draghi told the European Parliament’s Economic and Monetary Affairs Committee that the ECB could decide to ease its monetary policy when it meets again in March. It is expected that this announcement might cause US markets to rally on Tuesday, the day after the US holiday of President’s Day, which is when Draghi’s speech was delivered.

Draghi said that when the central bank meets it will analyze how effective its monetary policy has been and how it has effected the general financial system, especially for banks. He added that the ECB will “not hesitate to act” to control inflation if they see any risks to price stability.

Increased volatility in global markets during the first two months of 2016 has heightened pressure on investors. They are worried that a slowdown in those markets could lead to a major recession in some of the world’s largest economies, including the US and Europe.
Draghi countered these fears by stating that the regulatory overhaul which was established after the Eurozone debt crisis, led to better, more durable foundations and resilience for the banking industry. Basically, he said, the situation today is not the same as back in 2012 during the crisis.

“Banks have built higher and better-quality capital buffers, have reduced leverage and improved their funding profiles… in 2015, the banks under ECB supervision further increased profits relative to 2014. This allows banks to have appropriate distribution policies while still meeting regulatory capital requirements and buffers, and to support lending to the economy,” he said.

Disappointing Number of Jobs Added in January

Economy, , ,

According to the Bureau of Labor Statistics, the United States added 151,000 jobs to the job market, helping to bring the unemployment rate down to 4.9 percent.

The figure of 151,000 was lower than expected and was a sharp decline from the number of jobs that were added in December, which was 292,000. The lower figures were pushed down due to the loss of jobs in education and transportation.

General US economic growth slowed as well, down to an annual rate of only 0.7 percent during the last quarter of 2015. Third quarter growth was measured at 2 percent in 2015.

The statistics have investors worried, reflected in a downturn in the Dow Jones average which closed lower by 215 points, or 1.3 percent. For other investors the news is a sign that  the Feds will most likely not raise interest rates.

“I’m a little surprised the markets reacted somewhat negatively to it,” said Sean Lynch at the Wells Fargo Investment Institute. “It is actually a pretty good number that should be welcomed by the equity markets, it takes some of the concern the Fed moves too quickly off the table a little bit.”