The Job Market We All Hoped For

I don't know about you guys, but I also found the content in this article somewhat "comforting" (last paragraph). I agree that we are still recovering from the 2008 housing crisis, but the fact that the labor force is rising by such a great number is encouraging and it is hopeful that the economy will continue to grow! What do you think the fed will do in light of this information?

http://www.nytimes.com/2016/04/02/upshot/this-is-the-job-market-weve-been-hoping-for-all-these-years.html?ref=economy&_r=0

The Robots Are Coming!

What do you guys think about this? In light of all the political talk about immigrants taking jobs away from the "hard working citizens of America" Do we fail to remember the increasing technological achievements that are making some jobs obsolete? Especially in the banking industry. Do you all see these robots as a serious threat to the job market?

http://money.cnn.com/2016/04/04/investing/bank-jobs-dying-automation-citigroup/index.html?iid=hp-stack-dom

[5th_CB] The relationship between Bitcoin and financial crisis

Bitcoin is a type of intangible currency that only exchanges through online networks.  There is no intermediary for transaction. For more details, please refer to this link: https://en.wikipedia.org/wiki/Bitcoin. Bitcoin gets famous because "Bitcoins are created as a reward for payment processing work in which users offer their computing power to verify and record payments into a public ledger". The usage of Bitcoin was encouraged in the perspective of vendors because there was no fees for vendor that credit card companies used to charge 2~3% of commission. However, international governments including European Union warned that the usage of Bitcoin cannot be protected by the government funds.

 In the meantime, there is an interesting article suggesting that Bitcoin can be a solution towards another financial crisis. Please refer to this article: http://www.newsbtc.com/2016/04/03/next-looming-financial-crisis-potential-boost-bitcoin/.

In the article, the reporter claimed:

"As horrible as the thought of a new financial crisis is, there have been plenty of warnings about how things needed to change in 2007-08. Unfortunately, governments and central banks decided not to listen to these warnings, although some minor reforms have taken place in a few countries. But on a bigger scale, the economic situation has remained at status quo, rather than alleviating the stress of the financial crisis.

Then again, a secondary financial crisis would push even more consumers and enterprises in the direction of alternative financial services and solutions. Bitcoin is an obvious contender in this regard, as it is the only viable global form of transferring value that is not dragged down by the banking ecosystem. Despite some of the flaws in Bitcoin that need to be addressed – such as the scalability issue – Bitcoin is a far more preferable financial solution than other services.

Granted, there is still a mental entry barrier to overcome when switching from fiat currency and bank accounts to Bitcoin. That being said, the advantages outweigh the downsides, as users are in full financial control without relying on middlemen. Doing some research on the topic is necessary for everyday consumers, but it will be an eye-opener, to say the least."

How do you think about Bitcoin? Can it be a real solution for potential financial crisis in the future? What is your opinion towards the article above? Do you agree or disagree? Please feel free to share your ideas, opinion and other sources.

The land of opportunity

Spencer alluded to a theory that the United States had high income inequality but also had high social mobility.  The United States is the land of opportunity, right?  Unfortunately, recent research (see here for discussion) shows that no country has that kind of trajectory.  Instead high mobility countries have low inequality and vice versa. See the "Great Gatsby" curve below.





So education is not the great leveler we thought it was.  Inequality's effect persist. 

On The Topic of Jobs...

Keep in mind! The job market is always evolving, and the idea of being a big investment banker on Wallstreet is phasing out! People want to do what they are passionate about, and someone will always have a shared interest. What do you guys think about these kinds of jobs that go against the norm of chain stores? Do you think that economy is welcoming to these kinds of businesses?

http://money.cnn.com/2016/03/10/smallbusiness/dare-jennings-australia-surfing/index.html?iid=SF_River

Mexico and U.S. Globalization Wage Gap

This great article from CNN puts things into perspective and it makes a great point that investing in Mexico could grow the middle class there and could be better for business in both countries! As Carlos points out - "A lot of facilities in the U.S. are coming to Mexico because labor here is cheaper." It is interesting to think about the ramifications if something were to happen like what Mr. Trump wants i.e., building a giant wall and having Mexico pay for it, to the economic state of companies in the United States. What do you all think would happen if Mr. Trump was elected president to the state of businesses in light of this article?

http://money.cnn.com/2016/03/31/news/economy/mexico-us-globalization-wage-gap/index.html?iid=hp-toplead-dom

Consumers and the outsider candidates

The Credit Collapse Opened the Door for Trump and Sanders - Bloomberg



We have talked about most of the points in this article but I like the charts so here we go again.  In both cases, living standards took a hit. Between 2000 and 2007,
borrowed money was adding about $330 billion a year to Americans’
purchasing power, according to the Federal Reserve Bank of New York. By
2009, households were diverting $150 billion to pay back debt — a swing
of almost half a trillion dollars, even without counting the impact of
lost jobs....

 



Consumers borrow less which means that consumption and GDP growth is lagging.







Policy makers wouldn’t want a repeat of the borrowing binge anyway. The
question is: What fills the gap? Fiscal spending isn’t doing it. The
government has scaled back its post-crisis stimulus; business investment
is slowing; and wage increases during this recovery are only barely
outpacing inflation.



All of this puts a drag on economic growth.  Again, the Kenny's and Jay's are doing fine while everyone else has less than before the Great Recession.