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Gently does it

December 31, 2014

Prepare for a modest rise in interest rates

A stormier time ahead

December 30, 2014

Volatility returns to financial markets

The consensus is often caught out. If 2013 was a year when the pace of the stockmarket rally caught investors by surprise, 2014 was a year in which bond-market bears were dumbfounded. Yields fell, with those in Europe even becoming negative for bonds with two-year maturities. People were willing to make a loss to lend money to the French and Irish governments.

So what will be the surprise of 2015? Out of a wide range of candidates, the most intriguing would be the return of volatility. The most popular measure of volatility is the Vix, which focuses on the stockmarket (it measures the cost of options: in effect, the price investors are willing to pay to insure against sharp market moves). As the chart above shows, the 2008 economic crisis looks a bit like a sudden storm sweeping across a pond; there were two smaller subsequent squalls but all eventually became calm again. By the end of September 2014, the Vix was very low by historical standards.

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The World in Transition

December 30, 2014

A whistlestop tour of a year of eye-catching statistical landmarks

The way people think about the world will undergo a radical change in 2015, as assumptions that have held steady for years are overturned. In the economy and technology, especially, the year will bring a series of statistical landmarks.

The most remarkable shifts are geo-economic. America will overtake Saudi Arabia to become the world’s largest producer of oil, thanks to the shale-gas revolution (chart 1). Many aspects of international relations are built around American access to oil, and these will be viewed in a new light. The International Energy Agency forecasts that America’s oil pre-eminence will last until 2050 and beyond.

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Using 3-D printing to make jet engines

November 29, 2014

Ben Geie

@ben_geier

    Source: FORTUNE

A worker ensures the dimensional conformity of a prototype pattern. Today Alcoa can 3-D print the dies used to manufacture turbine parts.Courtesy: AlcoaAlcoa’s embrace of additive manufacturing allows it to turn ideas into reality faster.

Company Snapshot

Name: Alcoa
Ranking: 130
Headquarters: New York City
Employees: 60,000
Revenue: $23 billion (2013)

If you’ve spent any amount of time in an aircraft about to take off—gazing out the window at the tarmac, thinking about the cold beverage you’ll have at altitude—you’ve probably spent at least a passing moment wondering how exactly manufacturers make sure the iron birds don’t break. The answer is materials science, of course. But that’s not the whole story.

There’s a great deal of testing that goes into airplane parts to be sure they can handle the temperatures and stresses of aviation. Alcoa would know. The metals producer, more than 125 years old, makes parts for gas turbines, the engines that plane manufacturers such as Boeing and Airbus install to give planes the power to get you to your next meeting. The problem? All that testing takes time. Between tooling, development, and casting, it used to take Alcoa upwards of a year to manufacture one of the nickel-alloy parts that go into an engine, where it must withstand temperatures of up to 2,000˚F. Then the company caught wind of something called additive manufacturing—better known as 3-D printing.

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Can Money Buy You Happiness?

November 10, 2014

It’s True to Some Extent. But Chances Are You’re not Getting the Most Bang for Your Buck.

New research is suggesting that happiness is determined not by how much money one earns, but rather, how one spends it. University of British Columbia associate professor Elizabeth Dunn explains why. Photo: Getty.
By

It’s an age-old question: Can money buy happiness?

Over the past few years, new research has given us a much deeper understanding of the relationship between what we earn and how we feel. Economists have been scrutinizing the links between income and happiness across nations, and psychologists have probed individuals to find out what really makes us tick when it comes to cash.

The results, at first glance, may seem a bit obvious: Yes, people with higher incomes are, broadly speaking, happier than those who struggle to get by.

But dig a little deeper into the findings, and they get a lot more surprising—and a lot more useful.

In short, this latest research suggests, wealth alone doesn’t provide any guarantee of a good life. What matters a lot more than a big income is howpeople spend it. For instance, giving money away makes people a lot happier than lavishing it on themselves. And when they do spend money on themselves, people are a lot happier when they use it for experiences like travel than for material goods.

With that in mind, here’s what the latest research says about how people can make smarter use of their dollars and maximize their happiness.

Experiences Are Worth More Than You Think

Ryan Howell was bothered by a conundrum. Numerous studies conducted over the past 10 years have shown that life experiences give us more lasting pleasure than material things, and yet people still often deny themselves experiences and prioritize buying material goods.

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Younger Generation Faces a Savings Deficit

November 10, 2014

Postrecession Thrifty Ways Fade Amid Weak Jobs Market, Hefty Student Debt

By JOSH ZUMBRUN

After a flirtation with thrift after the recession, young Americans have stopped saving.

Adults under age 35—the so-called millennial generation—currently have a savings rate of negative 2%, meaning they are burning through their assets or going into debt, according to Moody’s Analytics. That compares with a positive savings rate of about 3% for those age 35 to 44, 6% for those 45 to 54, and 13% for those 55 and older.

The turnabout in savings tendencies shows how the personal finances of millennials have become increasingly precarious despite five years of economic growth and sustained job creation. A lack of savings increases the vulnerability of young workers in the postrecession economy, leaving many without a financial cushion for unexpected expenses, raising the difficulty of job transitions and leaving them further away from goals like eventual homeownership—let alone retirement.

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World’s first 3-D printed cars go on sale next year

November 10, 2014

Chris Woodyard, USA TODAY8:05 p.m. EST November 7, 2014

LAS VEGAS — For those frustrated at having to search dealers’ showrooms for just the right set of wheels, along comes an innovation that could make creating a custom-made car as easy as a few keystrokes.

A Phoenix company said this week that it plans to produce what it’s calling the world’s first 3-D printed car. Local Motors says it plans to make them available for sale in about a year at prices ranging from $18,000 to $30,000.

The basic idea is simple: Buyers would be able to select their ideal car on a computer screen, then hit the print button. A giant machine would then start making the car out of carbon fiber-reinforced plastic, weaving it out of thin lines of paste that harden to form the chassis, body and even the dashboard. The process takes about 40 hours.

Some of the car’s major components are then attached to complete the car, such as the wheels, controls and powertrain.

Instead of about 25,000 parts in some modern cars, Local Motors says the prototype that it’s showing off last week in Las Vegas at the Specialty Equipment Market Association (SEMA) trade show has about 50.

Because the car is easily changed on a computer screen, it can be shaped to however the buyer would like it, says CEO John “Jay” Rogers.

“If I want this car to be 10% bigger, I just click a button,” he says.

Don’t like the model called the Strati after all? Hang on to it for a few months, then go and choose another model. The 3-D-printed car will be recyclable as long as it has not been painted, Rogers says. Buyers quick to change fashions can grind up their existing car into fine particles again and use the materials to make a new model.

Rogers says the car will pass safety tests. And unlike other cars that can take months for improvements, Local Motors can change any part of its cars with a few keystrokes, allowing changes within hours of a crash test.

The notion of a 3-D-printed car “sounds feasible at some point,” says John O’Dell, an editor for Edmunds.com who specializes in eco-friendly cars.

He noted that handcrafters have made one-of-a-kind cars for generations, so the notion of a car made just for a particular person isn’t entirely new. Those cars, however, were generally not the for the masses. Rather, they appealed to the whims of the super-rich in the past century.

So O’Dell says he’ll watch with interest to see if Local Motors can pull off the idea of 3-D printed cars for the masses.

Investing: Can you retire on $1 million?

October 26, 2014

 John Waggoner, USA TODAY9:31 p.m. EDT October 23, 2014

Source: USA TODAY

f you read any financial advertising, you know that your savings are inadequate, and you’re likely to freeze to death in the dark a few weeks after retirement. For this reason, most Americans’ retirement planning involves keeling over at their desks, or, failing that, starting a bomb-disposal unit as a retirement business.

But how much is enough? How about $1 million?

If results from the past decade are any indication, the answer is a moderately qualified “yes.” The qualification depends on how much you withdraw each month, and how you invest it.

Financial planners have long said that if you want your retirement savings to outlast you, you should start with an initial withdrawal of 4% to 5% of your savings. Because the median family income — half are higher, half are lower — is about $50,000, let’s use a 5% initial withdrawal rate. (Five percent of $1 million is $50,000.)

USA TODAY

Middle-class adults have $20K saved for retirement

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Washington Scrutiny of ‘Supersize’ IRAs

October 12, 2014

The U.S. is Asking About Hard-to-Value Holdings, and Some Proposals Would Speed Withdrawals by an Heir

Updated Oct. 10, 2014 12:08 p.m. ET
Source: The Wall Street Journal

Washington is taking a hard look at tax-sheltered retirement accounts, especially “supersize” ones worth millions of dollars. Savers should consider what it could mean for them.

The U.S. Government Accountability Office, an arm of Congress, recently released areport on individual retirement accounts, requested by Senate Finance Committee Chairman Ron Wyden (D., Ore.). Its publication coincided with Senate hearings on retirement savings held last month.

The GAO study addressed questions many people asked after disclosures that former presidential candidate Mitt Romney had a traditional IRA worth as much as $101 million and technology entrepreneur Max Levchin put more than 13.3 million shares ofYelp YELP -5.11% stock in a Roth IRA before the firm went public in 2012.

How many supersize IRAs are there? The GAO estimates more than 300 individuals or families have IRAs with balances greater than $25 million, while more than 9,000 have IRAs worth more than $5 million. The GAO wasn’t able to distinguish between regular and Roth IRAs, given the data.

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Digital highlights, October 4th 2014

October 7, 2014

 by The Economist

Drowned by the wave
Rapid technological progress is leading to the increased automation of tasks that have previously been performed by armies of skilled workers. In our video, we explore the effect that this will have on labour markets and the world economy

Thinking outside the box

Brunello Cucinelli, a leading fashion-house in Milan, is unusual among medium-sized businesses in Italy in that it has opened its doors to outside investors. If Italy is to prosper again many other family-owned companies will have to do the same
Being led from behind

Afghanistan’s army is feeling increasingly isolated as it contends with a resurgent Taliban ahead and an ineffectual government at the rear. A recent agreement struck by the new president will provide welcome support from NATO troops

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Wealth without workers, workers without wealth

October 7, 2014

The digital revolution is bringing sweeping change to labour markets in both rich and poor worlds

Source: The Economist  

TECHNOLOGICAL revolutions are best appreciated from a distance. The great inventions of the 19th century, from electric power to the internal-combustion engine, transformed the human condition. Yet for workers who lived through the upheaval, the experience of industrialisation was harsh: full of hard toil in crowded, disease-ridden cities.

The modern digital revolution—with its hallmarks of computer power, connectivity and data ubiquity—has brought iPhones and the internet, not crowded tenements and cholera. But, as our special report explains, it is disrupting and dividing the world of work on a scale not seen for more than a century. Vast wealth is being created without many workers; and for all but an elite few, work no longer guarantees a rising income.

Computers that can do your job and eat your lunch

So far, the upheaval has been felt most by low- and mid-skilled workers in rich countries. The incomes of the highly educated—those with the skills to complement computers—have soared, while pay for others lower down the skill ladder has been squeezed. In half of all OECD countries real median wages have stagnated since 2000. Countries where employment is growing at a decent clip, such as Germany or Britain, are among those where wages have been squeezed most.

In the coming years the disruption will be felt by more people in more places, for three reasons. First, the rise of machine intelligence means more workers will see their jobs threatened. The effects will be felt further up the skill ladder, as auditors, radiologists and researchers of all sorts begin competing with machines. Technology will enable some doctors or professors to be much more productive, leaving others redundant.

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Physicians Salary with and without MBA (Masters of Business Administration)

October 2, 2014

Healthcare cost is increasingly becoming a concern in the United States. In the early years, the concept of health insurance took root as a means of reducing the burden of healthcare cost on an individual. It worked well but overtime  health insurance policies have become so costly that  many people are not even able to afford it. Hospitals are looking for ways to improve quality and cost of healthcare. As a result, physicians with management skills are being increasingly hired in leadership positions. Several dual-degree programs of MD-MBA has cropped up in various institutions. Many physicians with an interest in administration are also going for MBA programs. However,there are  physician executives who do not have a MBA degree. So what effect an MBA has on a physician executive salary?

Source: Physician Salary 

physician-salary-MBA

The mean annual salary of a MD physician specialist is $175,011 in the US, and $272,000 for surgeons. However, because of commodity inflation, increasing negligent costs, steep price rise of rental, the annual salary range of a physician varies and is not rising as fast as other professional pay.

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From Oil Boom to Sustainable Economic Growth

September 29, 2014

Corpus Christi and Coastal Bend
Economic Pulse
College of Business and EDA University Center
Texas A&M University Corpus Christi

By Jim Lee

Connecting the long road to sustainable growth from the current economic boom are physical and human capital accumulations, among other things. Workforce development appears to be the weakest link in South Texas, contributing to historical income and skills gaps with the rest of the nation. To bridge such gaps, local higher education institutions and workforce training facilities could accelerate their student enrollments and graduation rates by multiple folds. Yet a more effective alternative is to focus on academic programs of professional degrees, such as engineering and medicine, which generate higher “wage premiums.”

economic

(Please click on the image to read PDF file )

Long-Term Interest Rates from 2000-2013

September 26, 2014


EU
For more information, please visit the website: OCED

The headwinds return

September 16, 2014

Source: The Economist
Ten years ago, developing economies were catching up with developed ones remarkably quickly. It was an aberration
Sep 13th 2014 | From the print edition

NOWHERE are the consequences of different rates of growth clearer than on a trip up the Pearl River Delta in southern China. At the river’s mouth sits Hong Kong, a city in which average living standards exceed those in most rich European countries. Travel farther north and you pass the container ports of Shenzhen, behind which new skyscrapers tower over a sprawling melange of housing and factories. Since its establishment as a special economic zone in 1980, Shenzhen’s economy has grown at a frenetic pace, and incomes there are now just over half of those in Hong Kong, which is similar to what you would see in southern and central Europe.

 

Farther north and west sits Guangzhou, capital of Guangdong province, with its newly constructed motorways and tower blocks among the rice paddies. Average incomes in Guangdong are just a quarter of those in Hong Kong, equivalent to Algeria or Costa Rica. Finally, toward the western edge of the watershed, the tributaries reach across Guangxi into Yunnan—provinces where the people have yet to get into the flow of China’s voyage of development. Incomes there are but a tenth of those in Hong Kong, on a par with those in Angola or the Republic of the Congo.

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