Online retail

Amazon, which was originally a big online bookstore, now gradually steps in the retailer business, online. Many parents will face the same little battle with their children when they go purchasing the household products in the retail store. Purchasing household products online can save a lot of efforts and time for them. Especially for career women with newborn infant, this is going to save a lot of time. Amazon can track the clicking habit of the consumers so that they can offer more information about related products for consumers. It gives them more opportunity and will get consumers buy more merchandise.

The fall of the American Consumer

The U.S. consumption used to cover about 20 percent in world economy. But now it drops to about a half. The consuming ability of Americans is not as usual since the financial crisis. Now the U.S. government wants less import but more export to other countries in order to help the growth of economy. The tipping point of global economy is that every country wants to grow more by importing goods to other countries, but no one wants to do the purchasing. Since the U.S. is sure not to be the biggest consumer next decade, will other countries like China or Germany replace the position?

Bank saved by private equity firm

One and a half years ago, bank United was sold to private equity firms by the FDIC for 900 million dollars. in the first half of this year they made 100 million dollars which is a remarkable ROI. Today the new owners said that they are ready to make bank United public again. This will be the first failed bank bought by private investors, to go public.

What else is needed for the economy to grow

Economy is growing for the last 15 months. The president top economy advisor, Austin Goolsbee, said we need faster growth to bring unemployment down quickly. If two present growth is not enough, what is?

To figure this out we need to evaluate how productive are the people that do have jobs. productivity is the rate of growth in which companies are evolving to get more product from fewer people. Right now productivity is at four percent rate; We need to get to four and a half percent. One way to do that is to export more. This is a problem because other countries want to do the same. It's not possible for everyone to export more. Some think it's not enough and that we need more domestic spending.

Power Consumption of TVs

In May 2011, the government is mandating that TVs have stickers on them displaying the cost to power it for a year. It is estimated that currently, TVs and related electronics such as cable boxes and sound systems account for 10-25% of the power consumption in a household. Yet, while laundry machines and refrigerators are being marketed for the energy efficiency, TVs are not. Households have an average of three TVs and they are turned on approximately eight hours per day.

(If those number are true, a more energy efficient TV could have a drastic effect on the power consumption in a household. This would draw a lot of customers, I believe. I also wonder how much research has been done on making TVs more energy efficient. It seems that all the innovation so far has been towards better picture quality.)

The Changing Face of Foreclosures

Interest rates for a 30 year mortgage are the lowest they have been in decades. Yet, stress among homeowners continues.  Obama has tried to help out these homeowners by creating a program to change the payment plans on some their loans. However, banks are unwilling to alter loans because they fear this will cause more people to come forward claiming to be unable to pay their loan and asking for changes as well. Still, for the few loans that were changed as a result of Obama's program, homeowners are still having trouble making the payments.

Plus, foreclosures are effecting people in large metropolitan areas such as Seattle, Chicago, and Houston. These are not areas typically associated with foreclosures.

The Year of Recalls

Toyota has just announced it is recalling another 1.5 million of their vehicles for fuel pump and brake issues. This is on top of the 8.5 million they recalled earlier this year for unintended acceleration. Honda has the same brake issues and Ford has engine fire problems which will also lead to recalls for those companies. All the recalls are making drivers tune some of it out, especially if the problems are viewed as non-threatening.

(Why are the leading car companies having such a hard time making cars that function properly? How are recalls determined?)

Holding Banks Accountable

Interview with Peter Swire, law professor at Ohio State University:
Peter Swire says that a way to hold banks more accountable so a bailout is not needed again in the future is to have top officials in banks sign their names to say that they have the system back under control and operating smoothly. The idea is that if they have them personally certify the banks operations, they will be more diligent to see that the bank is operating appropriately.

(What would the penalty be if an official signed their name and did not have the banking under control for their company? They're needs to be a harsh penalty to for this to work.)

Overpaying for bonds?

Gist: Investing government bonds is the same as lending money to government. Instead of getting the interest paid by government, people need to pay a little extra at front. That means starting out at a loss. This is rational, because this particular bond offers a guaranteed protection against inflation. These investors are betting the prices will rise, eventually. Although inflation marks the price up, the producers can make profit on that in order to keep the company surviving. Because of that, the Federal Reserve is expected to pour hundreds of billions of dollars into the economy and hope the deflation will not happen.

The investment on bond is similar the concept of time value of money we discussed. However this time, people hope the price will rise.

Good news from auto industry

Gist: When U.S. economy may still be struggling to recover, Ford Motor Company said it earned $1.7 billion in the third quarter. It is going to pay down more its debts and cut cost. They also build more cars that customers want to buy. They are selling more cars in U.S. because they are introducing new products like fuel-efficient small cars, Fiesta, and heavy-duty pickup trucks. These are the vehicle that people are willing to pay for and want to drive. Ford has a full line for model segments that customers are willing to pay for, and that is going to make profit for it. Ford precisely catches the trend of the market.

Technology means to human

Gist: Kevin Kelly, co-founder of Wired magazine, was talking about how the technology change people’s life. How technology is used by human or how human is controlled by technology? The technology invented by human not only changes the lifestyle of human, but also transform human itself physically. For example, the invention of cooking changed our bodies, it changed our teeth and jaws. Human remakes us with our own technologies. New technology is a possibility that will allow somebody’s talent can be fully expressed. If the technology has not been invented in the right time for the right person, there would be much great loss for human assets. Technology is a background, an environment for human to solve the problems. To solve a problem, people will not stop thinking about any possible ideas, they will come up any ideas even if it is bad. So does better technology will come out to help human to solve problems.