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Cybersecurity and the Cost of Production 

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Cybersecurity and the Cost of Production 

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Shion Version of Essay(1)Income Inequality

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After the fall of Toys 'R' Us, toy companies like Mattel and Hasbro took a hit. But other factors are affecting sales too.

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After the fall of Toys 'R' Us, toy companies like Mattel and Hasbro took a hit. But other factors are affecting sales too.

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why the american toy industry is hurting - cnn video

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Why the American toy industry is hurting - CNN Video

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After the fall of Toys 'R' Us, toy companies like Mattel and Hasbro took a hit. But other factors are affecting sales too.

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"The global toy industry is a billion-dollar industry dominated by five main players: Mattel, Namco Bandai, Lego, Hasbro and Jakks Pacific. Danish company Lego, known for its interlocking plastic bricks, was the industry leader with the highest revenue, 5.49 billion U.S. dollars, amongst the major toy companies in 2016. U.S. toy manufacturer Mattel, closely followed Lego, with about 5.46 billion U.S. dollars in revenue. "

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Mattel CEO on film unit and toy industry

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Mattel CEO on film unit and toy industry

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Trolls Toys New Batman Toys Toys Go to the Police YouTube Toys Toys Video Pocoyo Toys 1988 TMNT Toys YouTube Video Toys Arbagetruc Girl Toys Toy Story Camping Toys Videos Clash of Clans Video Toys Video Care Toys Doll Eating Playdough Toys WWE Toys Megalodon Toys Dinosaur Toys for Boys Toys and Me World of Toys Toys and Games Toy Story 3 Games

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AVERAGE COST TO MAKE A MOVIEAverage Cost To Make a Movie 

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AVERAGE COST TO MAKE A MOVIEAverage Cost To Make a Movie 

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Austin Tausch

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YOU may never have heard of FANUC, the world's largest maker of industrial robots. But the chances are that you own a product built by one of its 400,000 machines. Established in 1956, the Japanese company's automated workers build cars for Ford and Tesla, and metal iPhone cases for Apple. The firm distinguishes itself from competitors by the colour of its robots' whizzing mechanical arms, which are painted bright yellow. Its factories, offices and employee uniforms all share the same hue.

FANUC is red-hot at the moment. Its shares have jumped 35% in the past six months, more than double the 14% return of Japan's benchmark Nikkei stock index. And the booming market for robots shows little sign of slowing. According to the International Federation of Robotics, unit sales of industrial robots grew 15% in 2015, while revenues increased 9% to $11bn. In 2016 turnover in North America rose by 14%, to $1.8bn. ABI Research, a consultancy, reckons that the industry′s sales will triple by 2025.
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The popular narrative about robots is that they are stealing human workers′ jobs. A new paper published by the National Bureau of Economic Research broadly supports this belief, estimating that each additional robot in the American economy reduces employment by 5.6 workers. However, the relationship between automation and employment is not always straightforward. One big trend is the growth of "collaborative robots", smaller and more adaptable machines designed to work alongside humans. Barclays, a bank, thinks that between 2016 and 2020 sales of these machines will increase more than tenfold. Moreover, by improving productivity, automation can sometimes create new jobs for humans, or at least relocate them. Adopting robots has made it economical for some manufacturers in high-wage countries to "re-shore" production from poorer countries. This year Adidas, a sportswear firm, will begin producing running shoes in a German factory staffed by robots and 160 new workers.

FANUC is not taking its dominance for granted. The company is working on smarter, more-customisable robots and investing heavily in artificial intelligence. Its efforts to adapt in the rapidly evolving robotics industry can be seen even in the firm's new choice of colours. When the company unveiled its first collaborative robot, CR-35iA, its trademark yellow colour had been replaced with green.

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YOU may never have heard of FANUC, the world's largest maker of industrial robots. But the chances are that you own a product built by one of its 400,000 machines. Established in 1956, the Japanese company's automated workers build cars for Ford and Tesla, and metal iPhone cases for Apple.

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by Austin T.

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Copyright ©, Futurism, LLC All Rights Reserved. See our User Agreement, Privacy Policy and Cookie Statement. The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with prior written permission of Futurism. Fonts by Typekit and Monotype.

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Universal Basic Income: The Answer to Automation? (INFOGRAPHIC)

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Copyright ©, Futurism, LLC All Rights Reserved. See our User Agreement, Privacy Policy and Cookie Statement. The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with prior written permission of Futurism. Fonts by Typekit and Monotype.

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Austin Tausch

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Universal Basic Income Explained – Free Money for Everybody? UBI

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"In the U.S. for full-time work (35 hours or more), women annually earned 60 percent in 1955, 79 percent in 2010 and 83 percent in 2014 as compared to men, according to Francine Blau and Lawrence Kahn, J of Economic Literature, in September 2017. This gap has remained almost unchanged in 2018."

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"In the U.S. for full-time work (35 hours or more), women annually earned 60 percent in 1955, 79 percent in 2010 and 83 percent in 2014 as compared to men, according to Francine Blau and Lawrence Kahn, J of Economic Literature, in September 2017. This gap has remained almost unchanged in 2018."

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"#Me Too" movement has drawn attention to the mistreatment, harassment, and sexual assault of women in general and in the workplace. However, it has also rekindled the controversy of wage earnings discrimination against women in the workplace, even though the gap has narrowed since 1955.

In the U.S. for full-time work (35 hours or more), women annually earned 60 percent in 1955, 79 percent in 2010 and 83 percent in 2014 as compared to men, according to Francine Blau and Lawrence Kahn, J of Economic Literature, in September 2017. This gap has remained almost unchanged in 2018. It is narrower between black women and black men as opposed to white women and white men. In Utah the gap is worse (ranking 49th in the nation). What explains the persistence of wage earnings gap and its slow down since the 1980s?

Wage earnings gap will arise if women have skills associated with low-wage occupations. For example, a Utah Women and Leadership Project study from December 2016 finds that more than 40 percent of Utah women work in two occupational groups with income gaps ranging from 14 percent to 59 percent from the average for all professions in the state ($31,446). Women in Utah have lower participation rates in higher paid occupations, such as construction and extractive industry, installation, maintenance and repair, and architecture and engineering.

As compared to other countries, the U.S. has a higher wage gap between lower and higher skills. Thus it creates a greater wage gap in the U.S. since women are concentrated in lower-skilled occupations. The paradox is that in Utah men and women have almost the same levels of education, at the associate and the bachelor's degree levels, but still have one of the worst earnings gap. Studies show that even though women have made much progress in entering higher paid occupations, they still lag behind men in occupations requiring skills in math, science, engineering and finance.

What about the earnings gap within the same occupations, with the same education and experience? It could be due to attributes, such as experience, turnover, absenteeism and part-time work. As the study by Blau and Kahn shows, even though experience in general has narrowed nationally between men and women, the above characteristics could lead to less specific training and experience in particular occupations, lower productivity and hence lower wages. Such factors matter more for women who face the problem of balancing work and family (more so in Utah due to large family size).

The report, Workplace Gender Gap in the Oct. 23, 2018 Wall Street Journal, finds that aside from experiencing harassment in technical and senior management positions, the share of women decreases at every step of the management ladder. Their share in industries, such as health care systems, retail, banking and consumer finance, tech and software, and engineering, declines at each level of senior positions as compared to their share at the entry level.

"#Me Too" movement has made business executives aware of the discrimination against women in the workplace. This movement has also made women realize their self-worth and made them more assertive in demanding equal treatment in the workplace. However, as WSJ reports, women CEO-founders of companies with less than $15 million of investor financing pay themselves less compensation than men, mainly due to the shortage of financial support by venture capitalists.

Evidence cannot discount discrimination against women in hiring, pay, promotion, and lack of mentoring and other support structure in the labor market. According to McKinsey study for US News and World Report, 2018, Utah ranks second from the top in the economy's performance and third from the top in education, but ranks 35th from the top in opportunity. Hopefully, senior executives in businesses and institutions will realize the loss of economic wealth to the nation if women's potential is not fully recognized and utilized.

According to philosopher John Rawls' concept of justice, in the meritocratic system of the free market, the distribution of income and wealth is just, "only if everyone has the same opportunity to develop his or her own talents. Only if everyone begins at the same starting line ... the winners of the race deserve their rewards."

Mathur is former chairman and professor of economics, emeritus, Department of Economics, Cleveland State University, Cleveland, OH. He blogs at mathursblogonomics.blogspot.com.

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"#Me Too" movement has drawn attention to the mistreatment, harassment, and sexual assault of women in general and in the workplace. However, it has also rekindled the controversy of wage earnings discrimination against women in the workplace, even though the gap has narrowed since 1955. In the U.S.

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"Overall, women still earn about 20 percent less than their male counterparts.That shortfall can vary widely depending on where you live.In Utah, for example, women only make about 57 cents for every dollar a man does."

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"Overall, women still earn about 20 percent less than their male counterparts.That shortfall can vary widely depending on where you live.In Utah, for example, women only make about 57 cents for every dollar a man does."

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As it stands, a woman makes about 80 cents for every dollar a man does nationwide. But that shortfall can vary widely depending on where you live.

A new report by GOBankingRates determined pay gaps between men and women across each state by analyzing data from the Census Bureau's 2016 American Community Survey.

In some states, like Wyoming and Utah, women make only a little more than half what their male counterparts earn - in part because the jobs in those areas are weighted heavily toward the energy-producing industry.

And there's no state in the country where earnings between the genders are equal, GoBankingRates found.

"In every single state women are earning less" said, Cameron Huddleston, a life and money expert for GoBankingRates, "and, in most states, women are earning less in every career field."

In Washington, D.C., which comes the closest to parity, women earn 83 cents on the dollar. (See map below.)

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These states pay women much less than men

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As it stands, a woman makes about 80 cents for every dollar a man does nationwide. But that shortfall can vary widely depending on where you live. A new report by GOBankingRates determined pay gaps between men and women across each state by analyzing data from the Census Bureau's 2016 American Community Survey.

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by Ayannah H., Richard V.

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Six Videos 2018 2018 Music Videos Musicales 2018 2018 Video Love Hindi Song 2018 2018 Musical 2018 Lunch Funny Videos 2018 Top Videos Artist Videos 2018 Video Hindi 2018 2018 Video Kaila Beach Stormy Danielle 2018 Video 2018 Songs 2018 Videos 1 5 2018 2018 Bokep Video Korea Selingkh New Songs 2018 Video 2018 Maram Susli Black History Videos 2018 Belmont 2018

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Is Lack of Competition Strangling the U.S. Economy?

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Is Lack of Competition Strangling the U.S. Economy?

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"Ten years ago, the top four U.S. airlines collected 41% of the industry’s revenue. Today, they collect 65%. In 1990, 65% of hospitals in metropolitan areas were “highly concentrated.” By 2016, 90% were. It’s a similar story in the beer business. Despite the proliferation of craft breweries, four brewers hold nearly 90% of the U.S. beer market. A slowdown in business dynamism means that entrenched firms have less to fear from upstarts; as a result, the economy suffers as innovation slows and job growth stalls. In the U.S., the rate of birth of new firms (as a percentage of all firms) fell from above 13% in the late 1980s to around 8% in 2015, according to the most recent official data. The number of jobs created by businesses less than a year old dropped from a peak of 4.7 million in the late 1990s to 3 million in 2015."

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Is Lack of Competition Strangling the U.S. Economy?

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There’s no question that most American industries have become more concentrated. Economists are trying to understand whether this is necessarily a bad thing for competition. The short answer: It’s complicated. Innovation superstars like Google have created winner-take-most markets largely by exploiting network effects, not through predatory behavior. However, research from the wider economy (including the tech sector) uncovers classic signs of unhealthy concentration: rising profits, weak investment, and low business dynamism. The government’s approach to antitrust violations is due for an overhaul. And regulators need to pay more attention to protecting economic vitality and consumer well-being — and less to industry lobbyists.

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Why American capitalism is failing – and can it be saved?

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Why American capitalism is failing – and can it be saved?

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Morality of Capitalism Cartoon Socialism vs Capitalism Capitalism Explained Capitalism and Tax Capitalism and Communism John Green Capitalism Capitalism a Love Story Full Movie History of Capitalism Capitalism and Occupy Wall Street Communism vs Capitalism Cartoon Capitalism Cartoon Karl Marx Capitalism Free Market Capitalism vs Community

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The Best Pricing Strategy - The Apple Way

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The Best Pricing Strategy - The Apple Way

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video about price strategies - Bing video

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Pricing Strategies for Presentation Pricing Strategies for Small Business Pricing Strategies Funny Types of Pricing Strategies Pricing Strategies for Services Pricing Strategies in Marketing Skimming Pricing Strategy Pressure Washer Pricing Strategies 5 Pricing Strategies Pricing Strategy Examples Price Strategy Definition

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http://2.bp.blogspot.com/-kRo7kPS1BsU/VPh7BVYFW8I/AAAAAAAADbA/IEkqR62fNTk/s1600/women%2Bworkforce%2BHC.JPG

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"The jump in the U.S. prime-age labor force participation rate was wholly driven by women. For males, this slipped to 88.9 from 89.1 percent; for women, it jumped half a percentage point to 75.3 percent"

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"The jump in the U.S. prime-age labor force participation rate was wholly driven by women. For males, this slipped to 88.9 from 89.1 percent; for women, it jumped half a percentage point to 75.3 percent"

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Alan Greenspan, longtime former Fed chairman (1987-2006), and Adrian Wooldridge of The Economist join 'Squawk Box' to weigh in on the global economy and their new book, "Capitalism in America: A History." 

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Alan Greenspan, longtime former Fed chairman (1987-2006), and Adrian Wooldridge of The Economist join 'Squawk Box' to weigh in on the global economy and their new book, "Capitalism in America: A History." 

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Alan Greenspan: Tightest labor market I've ever seen

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Alan Greenspan, longtime former Fed chairman (1987-2006), and Adrian Wooldridge of The Economist join 'Squawk Box' to weigh in on the global economy and their new book, "Capitalism in America: A History."

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DETROIT (Reuters) - Major automakers on Wednesday reported lower U.S. new vehicle sales for July amid steep declines in passenger cars, except Fiat Chrysler Automobiles NV (FCA) () (), which said its sales climbed 6 percent.

U.S. consumers have been shifting away from traditional passenger cars in favor of larger, more comfortable SUVs and pickup trucks, which are also more profitable for automakers.

"Every year there is a clunker of a month," Mike Jackson, chief executive of AutoNation Inc (), the largest U.S. auto retail chain, told Reuters. "I think July will be that month from a retail point of view."

U.S. new vehicle sales rose in the first half of 2018, boosted in part by an overhaul of the tax system, but are expected to fall in the second half amid rising interest rates and a glut of cheaper, nearly-new used vehicles.

U.S. auto sales fell 2 percent last year after hitting a record high in 2017. Full-year 2018 sales are expected to be lower than last year's.

FCA's rise in July sales was due mostly to higher sales to consumers, above all a 15-percent jump in sales of its popular high-margin Jeep brand.

Sales at Ford Motor Co () slipped 3.1 percent for July. Ford's retail sales sank 10.4 percent, largely due to a 28 percent slump in passenger cars.

But sales of Ford's high-margin pickup trucks jumped 10.2 percent.

The No. 2 U.S. automaker said earlier this year it would gradually cease production of most passenger cars in the United States. On a conference call, U.S. sales chief Mark LaNeve said Ford had ended production of its Focus sedan and was winding down output of the Fiesta.

Toyota Motor Corp () reported an overall drop in sales of 6 percent for the month, with U.S. passenger car sales down 16.5 percent and pickup truck and SUV sales up 2.2 percent.

Earlier this year, General Motors Co () stopped reporting monthly sales and switched to reporting them quarterly. The No. 1 U.S. automaker's sales were expected to be down slightly over 2 percent for July.

At Nissan Motor Co Ltd (), vehicle sales fell 15.2 percent in July. Passenger car sales were down 21.1 percent, SUV and pickup truck sales fell 10.6 percent.

Nissan "experienced some challenges" in July, but made progress towards "sustainable retail growth," said Billy Hayes, the automaker's vice president for regional operations in North America.

Nissan has worked to smooth its transition to the 2019 model year so it does not end up stuck with old models and has worked to reduce its inventory, Hayes said.

"It seems like it (July) was tough across the board, across the industry," Hayes said. "It seemed to impact us all."

Honda Motor Co Ltd ()'s July sales were down 8.2 percent. Its passenger car sales were off 19.3 percent, while sales of its SUVs rose 3.2 percent.

Ford shares dipped 0.8 percent in morning trading, while FCA's shares fell 1.4 percent.

Last week, Detroit's automakers warned that mounting U.S. and Chinese tariffs would hurt their results in 2018.

U.S. President Donald Trump agreed last week after meeting with European Union officials to refrain from imposing car tariffs while the two sides launch negotiations to cut other trade barriers, easing the threat of a transatlantic trade war.

But the possibility that Trump might reverse course impose broader tariffs is still a cause for concern in the industry.

"The whole trade war and tariffs are deeply unsettling from an economic point of view, AutoNation CEO Jackson said. "The threats of tariffs on motor vehicles is a great concern."

"It will make the other tariffs look like a company picnic."

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cyclical consumer goods and services (trbc)

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DETROIT (Reuters) - Major automakers on Wednesday reported lower U.S. new vehicle sales for July amid steep declines in passenger cars, except Fiat Chrysler Automobiles NV (FCA) () (), which said its sales climbed 6 percent. U.S. consumers have been shifting away from traditional passenger cars in favor of larger, more comfortable SUVs and pickup trucks, which are also more profitable for automakers.

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CNBC’s Phil LeBeau reports on General Motors’ plans to cut production and jobs in North America.

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CNBC’s Phil LeBeau reports on General Motors’ plans to cut production and jobs in North America.

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General Motors to cut 15-percent of workforce in North America

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CNBC's Phil LeBeau reports on General Motors' plans to cut production and jobs in North America.

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Venezuela's economic structure has undergone a significant change since Hugo Chavez's government came into power in 1999. President Chavez has announced the nationalization of several industries in the nation since 2007, including the communications and electricity sectors. The nationalization of the oil and petroleum sector, which contributes about one-third of Venezuela's GDP, has been the most critical amendment to the economic structure of Venezuela.

Venezuela Economic Structure: Overview

Venezuela's GDP, according to the CIA World Factbook, was $353.5 billion during 2009. The service sector contributed the lion's share of this amount, accounting for 61.4% of the total GDP and 64% of the total employment in the nation.

The growth of the manufacturing sector in the nation has been slow, primarily due to a lack of private investment. Nevertheless, Venezuela has a fairly strong manufacturing sector, employing 23% of the population, which exports apparel, beverages, steel, aluminum and textiles. The sector also manufactures cement, paper, tires and fertilizers for the domestic as well as export markets.

In the agricultural sector, Venezuela is basically not self-sufficient. In fact, the nation imports approximately two-thirds of its food needs. The US supplies about a quarter of Venezuela's food imports. However, Venezuela manages to export some food products, including rice, fish, tropical fruits, cocoa and coffee. Besides, the sector employs about 13% of the nation's population.

The contribution by different sectors to the economic structure of Venezuela, during 2009, was as follows:

Venezuela Economic Structure: Status of the Financial and Banking Sector

The Central Bank of Venezuela, also known as the Banco Central de Venezuela-BCV, is the monetary agent of the government. The bank is responsible for creating, incorporating and administering the various fiscal policies and tasks, including:

Holding foreign exchange and gold reserves

Making payments and collections for the Treasury

Buying foreign exchange (from exporters and oil companies) and reselling it to commercial banks or the

government.

Additionally, the BCV works in close association with the Venezuelan government to issue notes, helping to maintain balance of the Venezuela economic structure.

The government of Venezuela plays a significant role in administering the nation's financial system, particularly in administering the trade exchange rate. In January 2010, President Chavez announced a dual exchange-rate system for the Venezuelan bolivar. Under the system, the rate of imports for essential commodities, including medicine, food and industrial machinery, was fixed at 2.6 bolivar per US dollar. The rate for import of other products, such as telephones and cars, was fixed at 4.3 bolivars per dollar.

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Venezuela's economic structure has undergone a significant change since Hugo Chavez's government came into power in 1999. President Chavez has announced the nationalization of several industries in the nation since 2007, including the communications and electricity sectors.

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Venezuela's central bank just did something totally unexpected: it released updated economic figures showing the country has sunk into its worst economic crisis in decades. Data this detailed hasn't been published by the BCV in over a year, and it makes for grim reading.
The Bad News
Few Venezuelans would be surprised to hear the economy isn't doing well, but the new figures released by the Central Bank of Venezuela (BCV) on January 15 still felt like a punch in the gut. Annual inflation hit 141.5 percent in 2015 - double the 2014 rate, and easily the worst in the world. High inflation is nothing unusual in Venezuela. Yet since 1999, Chavismo has done a relatively reasonable job of keeping inflation well below crisis levels. However, the new figures also show Gross Domestic Product (GDP) has nosedived, sinking 7.1 percent by third quarter 2015. Growth isn't everything, especially in an economy aiming to transition away from capitalism. Yet these numbers are extreme. Moreover, the devil is in the details. In its breakdown by sector, the Central Bank of Venezuela's (BCV) report indicated food costs are among the biggest drivers of inflation. Venezuelan consumers saw the cost of food lurch upwards by 55.7 percent in the third quarter. Overall, food costs rose a whopping 254.3 percent in 2015 - a figure that easily surpasses wage increases by any measure. Increases of basic food costs disproportionately impact the poor, who typically spend a larger chunk of their income on necessities like staple foods. However, the BCV's numbers also show the state apparatus as a whole is also bearing a heavy load.

One of the most telling figures was to be found in the bank's current account data, which showed a US$782 million trade deficit for the 2015 third quarter. This is particularly concerning, as those numbers are from a time in 2015 when Venezuelan oil was fetching an average price of more than US$40 a barrel. Today, Venezuelan oil is selling for something closer to an average of US$25. In other words, the trade deficit figures are likely already worse, with no signs of a quick recovery.
Not The Whole Story?
It's important to note this isn't the whole picture. Firstly, while the economy as a whole is witnessing a serious downturn, the poverty figures we have available don't look too bad. On the contrary, the latest official statistics (released in mid January) suggest extreme poverty has continued to remain relatively low. The figures indicate 4.78 percent of Venezuelans now live in extreme poverty - down from 4.9 percent in November 2015, and less than half the rate in 1998. This figure indicates the poorest Venezuelans aren't bearing the brunt of the downturn, as soaring food prices would suggest. However, the picture remains incomplete, as we don't have fresh data on purchasing power. This means it's unclear how well impoverished (as opposed to extremely impoverished) and working class (colloquially speaking) Venezuelans are faring. For over a decade, most Venezuelans have enjoyed a steady rise in purchasing power for basic goods. However, if inflation continues to soar while wages struggle to keep up, purchasing power could go down the drain, and we may eventually see poverty figures rise. For now though, it at least appears Chavista social missions are not only keeping the country from slipping into extreme poverty, but actually modestly decreasing extreme poverty. In times like these, this in itself is a notable achievement.

Another point worth making regards the condition of the state. Venezuela's government still has a myriad of rainy day funds, which were put aside for exactly the kind of situation the country is facing now. The BCV's report also suggested the country has around US$35 billion in foreign currency assets, as of third quarter 2015. It's unclear how much more the government may have stashed away in various funds, meaning it's possible the government could have enough savings to hold out for quite some time. It's also worth noting this view isn't shared by many financial analysts. Where the risk of default once seemed remote, a report from Barclays in January concluded a default by the end of the year is now likely. The report suggested as much as 90 percent of Venezuela's 2016 oil revenue could be consumed by debt obligations. This eyebrow raising figure would suggest the government would basically be exclusively relying on its savings to get it through the year. Bloomberg has also reported credit default swap traders have settled on an estimate of a 79 percent chance of a missed payment by the end of the year. To summarise: the vultures are already circling. For anyone concerned about default, a key date to watch will be October 16, when PDVSA 2016 bonds mature. These bonds represent among the largest chunk of Venezuela's roughly US$10.5 billion in international repayments due this year.
A Badly-Timed Political Crisis
Now for more bad news: a political resolution to the economic downturn any time soon seems remote. The National Assembly is firmly in the hands of the right-wing coalition, the Democratic Unity Roundtable (MUD). Meanwhile, President Nicolas Maduro has retained control over the ministries, while the Supreme Court is still aligned with Chavismo. Most major public enterprises also remain on the Chavista side of the political divide.

The good news is the MUD may have a serious battle on their hands if they try to impose serious neoliberal reform in the coming months. The MUD probably can't succeed in removing President Nicolas Maduro until late in the year, and until then the Supreme Court might block many of the new MUD-dominated National Assembly's most egregious demands.

The bad news is Venezuela could now be staring down the barrel of a lengthy political stalemate. Since the right-wing took control of the National Assembly in January, neither Maduro nor the MUD have shown much interest in dialogue, let alone present a cohesive roadmap to economic recovery. The danger here is that the political crisis could exacerbate the economic crisis.
Sabre-ratting Abound
Indeed, there are already signs the political stalemate could be hard to break. The MUD sent a clear message they will fight tooth and nail against Chavismo on the second day of the new National Assembly, when they swore in a group of legislators temporary barred from office over allegations of electoral irregularities. The MUD has since backed down, only to enrage Chavistas by removing a portrait of 19 th Century liberation leader Simon Bolivar from the assembly. The MUD's National Assembly head Henry Ramos Allup justified the removal by arguing the portrait made Bolivar look too dark-skinned, and not sufficiently Caucasian.

In short: the MUD doesn't look like it's setting the groundwork for serious negotiations with Maduro.

In fact, the MUD itself is yet to present a cohesive economic strategy of its own, with no clear answers on how to ease inflation or boost productivity. This means it remains an open question whether the MUD will opt for the gradual imposition of Greek-style austerity or Russian-style shock therapy.

Unfortunately, Maduro has likewise failed to present a clear path out of the crisis. In his state of the union address on Friday, January 15, the president effectively declared he wanted new decree powers to fix the economy. Unsurprisingly, the MUD has already voted down the decree in the National Assembly. Even if the measure had somehow been approved by legislators, there's no reason to believe it would have done much to improve the economic situation.

The proposal would have granted additional funds to social missions, along with suggesting some bureaucratic tinkering such as reinforcing tax evasion measures and shoring up currency controls. While there's nothing wrong with improving the popular social missions, this doesn't constitute a broad-spectrum plan for economic recovery. Cracking down on tax evasion is likewise a great proposal, but not exactly a silver bullet. However, reinforcing existing currency controls can't possibly help. After all, the currency control system is part of the problem.
Currency Controls and The Forex System
If we momentarily turn back to the BCV report, we find even the bank has conceded current economic policies aren't working. The report stated the bank's "preliminary estimates find ... close to 60 percent of inflation registered in 2015 is the result of foreign exchange incidents, associated with the exaggerated depreciation of the Bolivar (currency)."

This means the BCV believes the lion's share of inflation is being caused by currency manipulation. The bank described this as part of an "economic war," and this is likely true. Venezuela's private sector has long attacked the socialist government. So much so, that for years Venezuelans have acknowledged that scarcity of basic consumer goods spikes around important elections, as businesses seek to pressure voters into turning against Chavismo.

In order to combat currency manipulation, Maduro has announced reforms to the exchange system every few months since coming to office in 2013. In a period of two years, none of his reforms have had any measurable impact on the currency manipulation crisis. We can debate why the reforms haven't succeeded, but we can't debate the simple fact that they haven't provided the desired results.

Currency controls aren't an essential feature of socialism, and there are alternatives for Venezuela. Progressive-leaning economists including Mark Weisbrot from the Center for Economic and Policy Research have repeatedly called for Venezuela to adopt a managed floating exchange rate, and for years it's been hard to disagree. If both Maduro and the MUD sought to negotiate economic reform, a managed float could imaginably be on the table.

However, today the crisis has become so serious, the chances of a clean, quick recovery seem remote, no matter what policy choices are adopted. For Venezuela, the hard times could be just beginning.
What Next?
In this situation, the economic status quo isn't viable. Inability to act puts Venezuela at risk of falling to neoliberalism. Yet the Maduro administration appears committed to a strategy of digging in and hoping it can somehow ride out the storm. While the government may have enough savings stashed away to keep things running for some time, the status quo has already proven politically problematic. This strategy has already led to Chavismo losing the National Assembly, and created a political stalemate.

The Role of Solidarity

Amid this new reality, there is still one source of hope: the Bolivarian grassroots. Progressive social movements must pressure the new mixed government to adopt positive reform. Whether this means re-radicalizing the revolution, or simply fixing broken policies like the exchange system, the grassroots are the only ones who can demand solutions; movements like the emergent #LATE, a social media campaign that has sought to re-orient the Bolivarian revolution away from the state bureaucracy and back to the streets. As international leftists, it's our obligation to support the progressive, grassroots movements. All the victories of the past 16 years have been the result of popular power making popular demands. We are now seeing the toughest moment in the revolution since the 2002 coup, and we should again do everything we can to support the revolution. Venezuela remains possibly the best chance for socialism in the world today, and it's worth our time, effort and love. Of course, the new economic data confirms the challenges facing Venezuela's revolutionaries are immense, and possibly overwhelming. Hope is slim, but there is hope.

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How Bad is Venezuela's Economic Situation?

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Venezuela's central bank just did something totally unexpected: it released updated economic figures showing the country has sunk into its worst economic crisis in decades. Data this detailed hasn't been published by the BCV in over a year, and it makes for grim reading.

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how much corporate video production cost

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How Much Does Corporate Video Production Cost? - CostHelper.com

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How much corporate video production should cost. Prices paid and comments from CostHelper's team of professional journalists and community of users. The cost of a corporate video varies according to the length and complexity of the project. For instance, a company training video typically requires less editing and therefore costs less (per finished minute) than a commercial.

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Shion Essay Inequality in pay causes health issues

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Private Student Loan No Cosigner Student Loan How Does Student Loans Work Student Loan Consolidation Gov Student Loan GuideWell Financial Chinese Student Loans Federal Student Loans Login Loans for Poor Credit Are Student Loans Forgiven Obama Student Loans Unsecured Loans Student Loan Network Consolidation Review Student Loan Calculator

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Massive student loan debt is having a crippling effect on the U.S. economy. According to the United States Federal Reserve, 44.2 million students owe $1.52 trillion . This amount is growing by $29 billion a quarter.

Student loan debt now surpasses all other forms of debt except mortgages. College debt exceeds what is owed for vehicle loans and on credit cards.

There is no consensus on how this debt burden impacts small businesses; however, it must affect buying decisions. It also lowers credit scores and reduces the ability to qualify for credit cards and loans for other purposes.

Student loan debt may reduce small business formation, but some argue Millennials are less interested in starting businesses than previous generations.

Saddled with debt, fewer can qualify to buy a house or a car. Lower home ownership reduces retail spending on furnishings and improvements.

Nearly 40% Of Student Loan Borrowers To Default By 2023

Brookings Institute analyzed new data released by the U.S. Department of Education in October 2017. They estimate that:

nearly 40% of borrowers may default on their student loans by 2023

10.7% are already 90 days delinquent

$31 billion is seriously delinquent

Students who are already struggling to pay their loans need to be proactive. No matter how overwhelming it may feel, they need to have a plan to get on top of them.

Make a plan to pay off loans as quickly as possible. Get professional advice on which loan(s) to pay off first and which repayment plan to use.

Cut back on expenses and do whatever is necessary right away. The longer borrowers wait, the worse it will get due to compounding interest.

Borrowers unable to pay the loans off quickly should look into restructuring, refinancing, or consolidating student loans. This is especially true if the payments are already in arrears.

The benefits of consolidating multiple student loans into one payment include reducing the interest rate and lowering the total monthly payment.

Do not listen to advice to defer loan payments or use forbearance because that will only result in the amount owed ballooning out of control.

Colleges have a conflict of interest that causes them to push forbearance. They can lose their financial aid options if too many of their students default in the first three years.

By encouraging students to use forbearance, they protect themselves. But opting to use forbearance can cause student loan debt to double, triple, or even quadruple.

Doing Nothing is NOT an Option

In this article for Fortune by Jim Rogers and Robert Craig Baum, they wrote:

"The higher education bubble (one-sixth of the U.S. economy) will likely burst with the force of all previous catastrophes combined - a shock wave so sudden, so large, that it gathers the full force of the savings and loan, insurance, energy, tech, and mortgage crashes, creating a blockbuster-level perfect storm."

Just as borrowers need to immediately take action to prevent defaulting on their loans, policy makers must choose to act sooner rather than simply wait for the crash.

What Congress and President Trump decide to do can affect what happens. To get an idea what might happen politically, review President Trump's publicly stated policies on higher education.

Student Loan Debt Treated Differently Than Other Loan Types

Consumer protection safeguards that apply to all other types of loans do not protect borrowers of student loans.

This is especially concerning due to the age and lack of financial sophistication of most college students. Interview after interview reveals that they focus on just getting into or staying in college.

They rarely look closely at the terms. And most do not understand the effect compounding interest will have on what they owe. Here is a typical story:

Student loans are the only type that can almost never be discharged in bankruptcy. Law changes in 1976, 1998, and 2005 made it increasingly more difficult.

However, recently some judges have opened that door a crack for extenuating financial hardships. Conditions for proving hardship vary by federal circuit.

Judges have sometimes sought to help debtors by cancelling private student debt from unaccredited schools. Some have encouraged attorneys to represent debtors pro-bono.

Others have modified tax obligations on debt relief programs. People who become permanently disabled can request loan obligations be cancelled.

Missing payments on government loans can result in wages, tax refunds, and even social security payments being garnished.

The Impact of the Student Loan Crisis

Debts Delaying Marriage and Family Formation

Spouses may be saddled with college debts if it is a private loan in a community property state. But that usually will not happen if they weren't married when the debt was incurred and their name is not on it.

Students are putting off marriage and family formation because they do not want to burden a potential spouse financially.

How Death Impacts Student Loan Debt

Even death may not end student loan debt. Cosigners are on the hook for the balance. The death of the co-signer or the student can result in a demand for immediate payment. So look into using a co-signer release with lenders who provide that option.

Federal loans can be discharged at death. Survivors simply need to present a certified death certificate to the loan servicer.

For Parent Plus Federal loans, the death of the parent or the student permits discharge of the debt. As a result, the amount paid off is taxable income which could create a sizeable tax due.

How Student Loan Debt Affects Students

This staggering debt has taken away the buying power of some percentage of 44.2 million students. The result is they:

Live with their parents into their late 20s and even 30s and beyond

Are unable to buy a car or a house

Delay marriage and having children

Have lower credit scores which limits access to loans and credit cards

Spend less on everything else they would otherwise purchase

Student debt does not only impact the debtor. It impacts their families, small business incomes, and all of society.

People burdened with these levels of debt may be less able to start businesses. But some argue that it is the economy, not the debt causing the decline in businesses owned by Millennials.

How Student Loan Debt Affects Society

What is going on in higher education is out of touch with reality. It is breaking the laws of supply and demand and creating a huge bubble that is bound to burst.

Easy money has a history of doing that and this is no exception. Tuition has quadrupled compared to even health care because students could easily borrow whatever the increased cost.

The number of college graduates far exceeds the careers available for them. Most degrees can never produce a positive ROI because the careers do not pay enough to cover the debt.

On average, about 45% of college students fail to complete their degree on time or at all.

Two out of 55% who graduate will remain unemployed

Another 18 will be underemployed

20 years on, 33% of college grads remain underemployed

When students incur huge debts and then are unable to land a position related to their college degree, society may end up supporting that debt and the poverty it can cause.

Why Student Loan Debt Will Continue to Climb

The debt can only continue to climb without policy intervention. This is because of how student loan payoffs are structured and the ever-increasing cost of a college education.

Financial aid expert Mark Kantrowitz told Marketwatch: "Student debt has a slower repayment trajectory than credit-card or auto-loan debt because it is repaid over decades instead of months or years".

He also estimates that 1 in 6 students leave school with debt that exceeds their income. The impact falls heaviest on students who fail to graduate.

Too many choose the wrong repayment plan. For Federal loans, there are seven different variations.

Use the repayment calculator linked from that page at least annually and switch plans whenever that will be beneficial. There is no cost to do this.

Anyone employed by a non-profit or the government may qualify for loan forgiveness after 10 years under the Public Service Loan Forgiveness Program.

Nerdwallet warns not to assume a forgiveness plan will be best. In reality, it can sometimes end up costing more under one of those plans than with other repayment plans.

Be sure to run the numbers. They state: "Loans discharged through Public Service Loan Forgiveness are not taxable, but debt forgiven through income-driven repayment plans is taxable."

So consider both the amount of repayment and the effect forgiven debt will have on tax obligations. Share this SmallBizTrends post that spotlights how the Student Loan Club can provide support on how to best deal with these loans.

What Would Happen If $1.4 Trillion In Student Debt Was Cancelled?

A February 2018 report "The Macroeconomic Effects of Student Debt Cancellation" from Levy Economics Institute of Bard College estimates that cancelling $1.4 trillion in student debt could:

Boost real GDP by an average of $86-$108 billion per year

Generate $861-$1,082 billion in real GDP (2016 dollars)

Add roughly 1.2-1.5 million new jobs per year

Reduce average unemployment by 0.22-0.36% over the 10 year forecast

Some argue that student debt needs to be forgiven for the sake of the economy.

Possible Solutions

There is not one solution to the existing or future college debt. First, parents need to realize that assuming a college education is the best path for every person is incorrect.

The days of getting a degree and going to work for a corporation and working there until you retire were over in the mid-1970s. That world simply does not exist any longer.

There are conflicting reports regarding whether we need more college educated workers or fewer. Regardless, many would be far better off going to trade school or becoming an apprentice.

For those who are going on to college, choosing majors likely to lead to actual employment related to their degree is critical. Do not assume - check the current research.

Often, what seems like a reasonable major to pursue financially actually has little demand or a surplus of unemployed applicants who have already graduated.

Some colleges and universities are offering income-based tuition programs. Repayment rates are calculated based on what graduates are actually earning.

The unemployed and those unable to work for any reason may not be required to make payments. If they are underemployed, the payments are on a sliding scale based on income.

Colleges need to be held to higher standards. Too many colleges and degrees are not worth what people are paying for them.

Employers need to stop using a college degree as a litmus test for eliminating applicants. Attitude and aptitude are far more important than most college degrees.

They need to be willing to pay salaries high enough to support the student loan debt or stop requiring them for no valid reason.

Message to Future [Potential] College Students

When there are insufficient high-paying jobs for the number of college graduates, consider that it may simply not make sense to take on that debt to get a degree.

Make sure you clearly understand the implications of taking on loan debt. Choose wisely and avoid creating financial issues for others through co-signing.

Most of all, only borrow what you absolutely must to pay for a degree that has sufficient earning potential to repay the loans.

Gambling that putting some of your loan proceeds into cryptocurrencies is something 21.2% of students admit having done to try to pay off student loans. That is high risk and not recommended (or permitted under the terms of college loan lenders).

Some believe the blockchain will be instrumental in changing education:
Source: Socratescoin

Avoiding the Student Loan Crisis Personally

There is a reason we call things "work". Work is what you do even when you don't feel like it. So choose a career you can be passionate about excelling at for decades.

That career may not require a college degree. Technical schools can be less expensive and take less time to learn marketable skills.

Apprentice yourself to the best in a field you're interested in. Gain valuable experience and get paid to be an assistant instead of paying to go to school.

If you really want to go to college, be serious about it. Research what degrees lead to well-paid careers. Work hard and focus on acquiring skills others will pay you to use - not simply grades.

Once you land your first job out of college, the odds that anyone will ever care what kind of grades you received back in college become slim.

What matters in business is results. Future employers will want to know how you will increase their incomes. Applicants who provide that benefit will be hired. Others are likely to stay unemployed.

Source: DegreeQuery.com

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Student Loan Crisis: $1.52 Trillion Bubble Growing By $29 Billion a Quarter

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Massive student loan debt is having a crippling effect on the U.S. economy. According to the United States Federal Reserve, 44.2 million students owe $1.52 trillion . This amount is growing by $29 billion a quarter. Student loan debt now surpasses all other forms of debt except mortgages.

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Causes, Effects and Possible Solutions to The Student Debt Crisis

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Causes, Effects and Possible Solutions to The Student Debt Crisis

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A look at why the United States and China are moving closer to a potential trade war

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Venezuela Economic Crisis Venezuela Food Crisis Venezuela Inflation Days Ago Venezuela Ecosystem Venezuela Economy 2017 Venezuela Economy YouTube Venezuela Population Venezuela Violence Venezuela Crisis ABC News Venezuela Shopping Venezuela Financial Crisis Venezuela Economy 2018 Latest Venezuela Crisis Venezuela Today Chile Economy

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FINAL RESEARCH PROJECT(4)trade war with China

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August 27
JACKSON HOLE, Wyo. - President Trump and the Federal Reserve - the nation's top economic policymakers - believe the U.S. economy is strong and they want to keep it humming. If the economy grows to 2020 without a stumble, it would be the longest expansion in U.S. history by far.

But Trump and the Fed have opposing approaches on what to do next.

Trump thinks the key is to juice the economy with a massive tax cut and low interest rates so businesses and families will go out and spend more. But Trump doesn't control interest rates; the Fed does. And the Fed is focused on gradually raising interest rates to ensure the economy doesn't overheat and bubbles don't form.

In many ways, this is an unprecedented situation: The United States has never experienced so much stimulus at such a good time for the economy, nor has it had this big of a trade war since the 1930s. There is no clear road map for what to do.

Trump has recently publicized the disagreement, breaking with years of precedent by openly criticizing the Fed and its current leader, Jerome H. Powell, a Trump appointee.

For now, Trump's trillion-dollar tax cut and ramp-up in federal spending helped send stocks to record highs and second quarter growth to 4.1 percent, the best in four years. But concern is growing that Trump's policies have created a sugar high in which growth will peak in 2018 and fall after, possibly into a recession late next year or in 2020.

Trump's tariffs are another point of friction: The president argues tariffs are a necessary negotiating tool to get better trade deals, while the Fed and many economic and business leaders warn a trade war could slow - or even tank - the economy.

"It's paradoxical that the United States is starting to put obstacles in the road at a time when its economy is firing on all cylinders," said Agustín Carstens, head of the Bank of International Settlements, in a fiery speech at the annual gathering of central bankers in picturesque Jackson Hole, Wyo., over the weekend. He warned Trump's trade policies could set off a "perfect storm."

The longest U.S. expansion lasted only a decade - from March 1991 to March 2001 - and this current economic upswing would break the prior record if it lasts past July 2019.
[U.S. stock market hits milestone: It's the longest bull market ever]
Trump is highly motivated to keep the economy charging through his reelection year, and he's relying largely on his instincts to guide him, buoyed by the fact that his approval rating on economic issues is 50 percent. He told Fox News last week that the market "would crash" and everybody would be "very poor" if Democrats impeach him.

His economic advisers are telling him the tax cut will trigger 3 percent growth this year and for years to come. They say the tax cut will trigger a "supply-side" boom in which businesses invest heavily in new factories, equipment and technology that raises productivity - and growth and wages - for years to come.

"The single biggest story this year is an economic boom that is durable and lasting," Larry Kudlow, Trump's top economic adviser, said at a recent Cabinet meeting. "Any business economist worth his or her salt would look at these trends and tell you we're going for a while."

The Fed and the vast majority of mainstream economists, however, predict 3 percent growth this year that fades quickly to 2.4 percent in 2019 and 2 percent in 2020. The Fed is clear that it relies on data to craft its policies, and so far, it doesn't see much sign of a supply-side bounce.

"My colleagues and I are carefully monitoring incoming data, and we are setting policy to do what monetary policy can do to support continued growth, a strong labor market, and inflation near 2 percent," Powell, the Fed chair, said at Jackson Hole.

His remarks came just days after Trump said he was "not thrilled" with Powell for raising interest rates, yet Powell said he believes "gradual" rate hikes "remain appropriate." Trump's feud with the Fed is almost certain to escalate in the coming months as the Fed is likely to hike rates again in September and December.

Central bankers at Jackson Hole brushed off Trump's comments and said they would have zero impact on the decision-making at the Fed, an independent institution overseen by Congress. But most acknowledged they expect Trump to continue his attacks.

"My own view on monetary policy is that it's a 24-hour-a-day global debate and lots of people are weighing in from all around the world. And given the president's style, it's not a surprise that he would weigh in too," James Bullard, president of the St. Louis Fed, said at Jackson Hole. "But to me, that's just one more person weighing in."

For all the rhetoric the president has directed at the Fed in recent weeks, including complaining about interest rates at a private fundraiser in the Hamptons, the president has not personally asked Powell to take a certain course of action, the White House said and Powell told senators earlier this month.

Powell continues to meet weekly with Treasury Secretary Steven Mnuchin, who has defended the Fed's independence and urged the president to resolve trade disputes quickly. Powell has also made it a point to meet frequently with Republican and Democratic lawmakers in an effort to be transparent and stay on good terms, a tactic likely to help him if Trump continues his Fed attacks.

The Senate on Tuesday confirmed economist Richard Clarida as the Fed's vice chair, a move that will give Powell a full leadership team as he works through this challenging time.

Bullard said he and other Fed leaders are focused on how they can get this economy to last another five years, if not more.

"A recession is not inevitable," Bullard said.
Related: Winners and losers in the longest U.S. bull market ever In U.S., wage growth is being wiped out entirely by inflation

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Can the 'strong' U.S. economy survive until 2020?

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August 27 JACKSON HOLE, Wyo. - President Trump and the Federal Reserve - the nation's top economic policymakers - believe the U.S. economy is strong and they want to keep it humming. If the economy grows to 2020 without a stumble, it would be the longest expansion in U.S.

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Research Essay(1)Venezuela A Dwindling Economy

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Final Economics researchThe Fall of the US Auto Economy

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Primary care is shifting from traditional office visits to urgent care and walk-in clinics even as large hospital groups continue to buy up independent physician practices, altering where and from whom clinical laboratories receive referrals and test orders

Medical test ordering and referrals from office-based physicians are the financial foundation of the clinical laboratory industry. Thus, recent trends reshaping how and where physicians practice medicine, and the ownership of their medical groups, could have both beneficial and adverse implications for medical laboratories and anatomic pathology groups.

Primary care doctors who own their own medical practices are disappearing from the healthcare landscape at an impressive rate, as large hospital groups expand their share of the primary care market. According to the New York Times ( NYT), in 2010, large hospital groups employed 23% of the nation's primary care physicians. By 2016, that number had increased to 43%.

However, office visits to primary care physicians fell by 18% between 2012 and 2016, according to a report by Health Care Cost Institute (HCCI). During the same period, visits to specialists rose 31%.
Walk-In and Urgent Care Clinics Replacing Traditional Office Visits
An increasing number of patients are selecting different types of providers when seeking medical care. Convenience, low cost, and shorter wait times have many patients choosing urgent care and retail or walk-in clinics instead of traditional office visits. Dark Daily reported on this growing trend last fall in " Five Reasons Why Retail Clinics Are a 'Game-Changing' Threat to Traditional Healthcare Providers That Could Strain Clinical Laboratories and Pathologists."

The number of retail or walk-in clinics in the United States has increased by 14 times over the past decade, according to Statista, a provider of market and consumer data. In 2008, there were only 200 retail clinics in the country. Current projections indicate there will be 2,800 walk-in clinics located throughout the country by the end of this year.

In 2010, retail clinic sales totaled $518 million. By the end of 2016, retail clinic sales were more than $1.4 billion representing an increase of 20.3% per year during that time period, according to the Kalorama report, " Retail Clinics 2017: The Game-Changer in Healthcare."

Retail or walk-in health clinics were originally intended for uninsured and underinsured individuals who sought an affordable option for medical services. These clinics are designed to treat non-emergency situations, such as burns, sprains, and minor infections or illnesses. Services at these clinics are usually administered by a nurse practitioner.

Retail walk-in clinics often are located inside larger, popular stores. Examples include:
Providing 24/7 Healthcare Services at Lower Costs
In contrast, urgent care clinics are equipped to handle more serious, non-emergency injuries and conditions and are generally staffed by physicians. The Urgent Care Association of America states that there are more than 7,500 urgent care centers in the US with an annual revenue of $18 billion. This industry is expected to grow by 5.8% in 2018. The largest urgent care group in the country- MedExpress Urgent Care in Morgantown, W.Va.-has 252 locations in 22 states.

Another growing urgent care center- ZoomCare of Portland, Ore.-has 36 locations in Oregon and Washington State. Services offered include: urgent care, primary care, pediatrics, gynecology, orthopedics, dermatology, dental care, ear nose and throat, chiropractic, podiatry, physical therapy, mental health, immunity, imaging, internal medicine, clinical laboratory, and prescriptions. They offer convenient, extended hours and some locations are open seven days a week.

"Our customers are looking for world-class conveniences," Albert DiPiero, MD, co-founder and Chief Medical Officer at ZoomCare, told Portland Monthly.

ZoomCare lists its menu of services/cost for both insured and self-pay patients on its website. Basic medical laboratory tests include:

Strep-$50;

Urine-$20;

Mononucleosis test-$20;

Pregnancy-$20; and,

Influenza A/B-$40.

The website states that half of ZoomCare's medications cost less than $10, and five out of six of the medicines are less than $20.

With such low costs and easy accessibility, it's understandable why the number of patients seeking care in non-traditional office settings is growing. Clinical laboratories must accept and support these new sites of healthcare delivery to ensure continued procurement of lab test referrals. Staying on top of these trends and adjusting to consumer demand will help labs thrive and survive in healthcare's ever-changing landscape.
-JP Schlingman Related Information: How ZoomCare is Shaking up the Checkup The Disappearing Doctor: How Mega-Mergers Are Changing the Business of Medical Care Healthcare Mega Mergers Push Primary Care Clinics Closer to Extinction: Five Takeaways AETNA and ZoomCare Announce New Accountable Care Collaboration in Oregon Number of Retail Clinics in the United States from 2008 to 2018 Retail Clinics 2017: The Game-Changer in Healthcare Urgent Care Industry Hits $18 Billion as Big Players Drive Growth Five Reasons Why Retail Clinics Are a "Game-Changing" Threat to Traditional Healthcare Providers That Could Strain Clinical Laboratories and Pathologists

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retail clinics 2017: the game-changer in healthcare

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Patients' Increase Use of Walk-In and Urgent Care Clinics Impacts Clinical Laboratories | Dark Daily

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Primary care is shifting from traditional office visits to urgent care and walk-in clinics even as large hospital groups continue to buy up independent physician practices, altering where and from whom clinical laboratories receive referrals and test orders Medical test ordering and referrals from office-based physicians are the financial foundation of the clinical laboratory industry.

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Urgent Care Centers Extend Hours to Meet Increasing Demand | Immediate Clinic

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For the past several years, urgent medical care has grown increasingly popular throughout the United States, and it isn't difficult to see why: the Urgent Care Association of America reports that more than 80% of patients at urgent care clinics wait 15 minutes or less for treatment.

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The movie business is a big business, garnering around $450 billion in 2007 globally. But even that huge number doesn't mean that all movies are money makers. Although there are thousands of movies made every year, only a percentage of those become feature films with the big budgets we often associate with the Hollywood movie-making business. And though the occasional independent, low-budget film will break out and become a runaway hit ("Napoleon Dynamite," "Super Size Me" and "Paranormal Activity" are all fairly recent examples), most blockbusters are on the high-budget end.

TUTORIAL: Budgeting Basics

In 2007, for example, the average cost to produce a major studio movie was around $65 million. But the production costs don't cover distribution and marketing, which was another $35 million or so, on average, in 2007, bringing the total cost to produce and market a major movie right at $100 million. Those kind of numbers are a long way from the lowly $400,000 it cost to make "Napoleon Dynamite." (For related reading, seeMovie Genres That Make The Most Money.)

Mega Movie Budgets
And $100 million is just an average. "The Lord of the Rings: The Return of the King" (2003) cost just over $100 million and made over $1 billion worldwide. Back in 1993, "Jurassic Park" was on the lower end of the average movie budget, costing $63 million; over 10 years later, in 2004, "Shrek 2" had a similar budget of over $70 million. Both "Jurassic Park" and "Shrek 2" grossed over $900 million worldwide. Then you've got the higher end of the movie budget spectrum: "Avatar" (2009) is a great example, with a mind-blowing budget of $237 million. The high investment paid off, though, with the movie grossing well over $2 billion.

Those are high-budget examples of movies that made enough to justify the expense, but not all movies do. Some costly flops include 2002's "The Adventures of Pluto Nash," which had a $100 million budget and managed to gross just a bit over $7 million. Then there was "How Do You Know?" in 2010, with a $120 million dollar price tag and a return of just under $50 million. Ouch.

Whether a movie makes or loses money, though, one question that seems to reappear often is just why it costs so much to make a movie. What magic potion must be acquired that brings the cost so high? (For related reading, seeThe Economics Of Summer Blockbuster Movies.)

The Costs of Making a Movie
According to an article by The Guardian, movie costs can be broken down into some broad categories, including script and development (around 5% of the budget), licensing, and salaries of the big-name players, which usually includes the producer, the director and the big-name actors or actresses. Then there are the actual production costs, which include the ongoing salaries of all the people needed to make production happen; production costs eat up a big chunk of the budget, easily taking 25% of the total. And production isn't the end of the story: special effects, depending on the type of movie, can be an enormous cost, and music has to be composed and performed as well.

Then, when the whole movie is made and ready to go, it's time to start in on the work of marketing and distributing. After all that money invested, you can be sure that marketing is not an overlooked part of the process. There's no point in making a $100 or $200 million dollar movie if no one knows about it. "Spiderman 2," which had a production cost of $200 million, racked up another $75 million in expenses for marketing.

The fact that marketing expense is not included in production cost figures is why studios may claim to have lost movie on a money that grossed more than its negative, or production, cost. If a movie cost $100 million to produce, and grossed $130 million, then they've got a $30 million profit ... unless there was also a $50 million dollar outlay in marketing and distribution, in which case the profit turns to a $20 million negative on the balance sheet. (For related reading, see 6 Money Myths You Learned From The Movies.)

The Bottom Line
Even with all those big numbers, and potential for huge losses, the movies keep coming. There must be some sense in it, though; despite the average cost of a movie ticket in the United States shooting up to almost $8 in 2010, we keep lining up to buy the tickets, eat the popcorn and watch those expensive movies. (For related reading, see Betting On The Entertainment Industry.)

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The movie business is a big business, garnering around $450 billion in 2007 globally. But even that huge number doesn't mean that all movies are money makers. Although there are thousands of movies made every year, only a percentage of those become feature films with the big budgets we often associate with the Hollywood movie-making business.

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Good question here from the forum today:

"Is wealth and income inequality inevitable in a capitalist system?"

I discuss this a bit in my new book, which, in my opinion, is a great primer for Thomas Piketty's book on inequality. If you want to understand Piketty my book lays the foundation for the entire discussion by helping you understand the macro framework in which he makes his argument. But here's my general view:

"Inevitable" is a bit of a generalization. "Highly probable" - yes. The thing is, capitalism runs on profits. And profits are optimized when they're monopolized. A good capitalist will try to monopolize the means of production therefore maximizing profits. And when profits are monopolized then you are very likely to get inequality because only a handful of people own the means of production. So capitalism has a natural tendency towards monopolization because capitalists naturally want to maximize profits.

Does it have to happen? No, it's not certain, but my guess is that if you left a capitalist system entirely to its own devices there would be a handful of capitalists who monopolize everything. In fact, this almost happened in the late 1800′s and early 1900′s before the US government came in and started busting up some of the big companies. We were well on our way to seeing a handful of people owning everything.

So, why is this potentially problematic? Well, the economy isn't like a poker game. It doesn't just end at some point where Warren Buffett gets to get up and walk away from the table with all the money. The other players have to keep playing to keep on generating profits for the big stack players. And if those big stack players just accumulate more and more chips then the other players have to rely on the incomes from their big stack employer, keep borrowing from the bank, relying on government redistribution to stay in the game OR compete with the big stack. Of course, they could "pull themselves up by their bootstraps", but that's often easier said than done. Especially when you're competing against the big stack who has monopolized the means of production. The endgame is a situation where the people who actually buy the goods and services that the big stack makes, don't actually have the income or credit necessary to be able to go on participating and so you get a very stagnant economy.

Anyhow, this is a controversial and highly theoretical discussion, but it is my opinion that capitalism, if left entirely to its own devices, would tend towards monopoly which would tend towards inequality as fewer and fewer people own more and more of the means of the production.

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Is Wealth and Income Inequality Inevitable in a Capitalist System? - Pragmatic Capitalism

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Good question here from the forum today: "Is wealth and income inequality inevitable in a capitalist system?" I discuss this a bit in my new book, which, in my opinion, is a great primer for Thomas Piketty's book on inequality.

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Recent political debate in the United States and other advanced capitalist democracies has been dominated by two issues: the rise of economic inequality and the scale of government intervention to address it. As the 2012 U.S. presidential election and the battles over the "fiscal cliff" have demonstrated, the central focus of the left today is on increasing government taxing and spending, primarily to reverse the growing stratification of society, whereas the central focus of the right is on decreasing taxing and spending, primarily to ensure economic dynamism. Each side minimizes the concerns of the other, and each seems to believe that its desired policies are sufficient to ensure prosperity and social stability. Both are wrong.

Inequality is indeed increasing almost everywhere in the postindustrial capitalist world. But despite what many on the left think, this is not the result of politics, nor is politics likely to reverse it, for the problem is more deeply rooted and intractable than generally recognized. Inequality is an inevitable product of capitalist activity, and expanding equality of opportunity only increases it -- because some individuals and communities are simply better able than others to exploit the opportunities for development and advancement that capitalism affords. Despite what many on the right think, however, this is a problem for everybody, not just those who are doing poorly or those who are ideologically committed to egalitarianism -- because if left unaddressed, rising inequality and economic insecurity can erode social order and generate a populist backlash against the capitalist system at large.

Over the last few centuries, the spread of capitalism has generated a phenomenal leap in human progress, leading to both previously unimaginable increases in material living standards and the unprecedented cultivation of all kinds of human potential. Capitalism's intrinsic dynamism, however, produces insecurity along with benefits, and so its advance has always met resistance. Much of the political and institutional history of capitalist societies, in fact, has been the record of attempts to ease or cushion that insecurity,

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Inequality is rising across the post-industrial capitalist world. The problem is not caused by politics and politics will never be able to eliminate it. But simply ignoring it could generate a populist backlash. Governments must accept that today as ever, inequality and insecurity are the inevitable results of market operations.

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Cyber Security becomes an important part of the US economy..

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Cyber Security becomes an important part of the US economy..

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Cybersecurity and the Cost of Production 

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Cybersecurity and the Cost of Production 

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Cybersecurity and the Cost of Production final

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final research project eco Film Production

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An increase of concentration of foreign-born workers in United States increases productivity growth.

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An increase of concentration of foreign-born workers in United States increases productivity growth.

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Research on an increase of concentration of foreign-born due 11-19-18

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The tax rates on inheritances can be as low as 1 percent or as high as 20 percent of the value of property and cash you inherit. Inheritance should not be taxed because the owner already payed tax for that.
Most people won't have to deal with federal estate taxes, which in 2015 is triggered when an estate has more than $5.43 million of assets.

"But the bar for state estate taxes be can much lower," says A. Timo Lipping, a CFP in New York City, who specializes in estate planning.

"Where the person you are inheriting from lived can make a big difference in how much you actually get to inherit," he explains.

For instance, taxes in Massachusetts and Oregon are levied on estates worth more than $1 million. Meanwhile, New Jersey taxes estates valued at more than $675,000 and residents are also subject to an inheritance tax with a marginal rate up to 16 percent, Lipping adds.

Do you agree? Explain.

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Why do we have to pay sales tax on a used car?

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Why do we have to pay sales tax on a used car?

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Consider an example. When you buy a used car from a dealer, they are going to charge you sales tax on the sale of the car. “If you purchase something and do not pay sales tax, you are supposed to report it to your state and pay use tax. Of course, most people don't do this, but that does not make tax go away. Cars are generally more "formalized" transactions involving state registrations, so it is an opportunity for your state to enforce the tax on you, a tax you genuinely owe. "

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Economic inequality is the unequal distribution of income and opportunity between different groups in society. It is a concern in almost all countries around the world and often people are trapped in poverty with little chance to climb up the social ladder. But, being born into poverty does not automatically mean you stay poor. Education, at all levels, enhancing skills, and training policies can be used alongside social assistance programs to help people out of poverty and to reduce inequality.

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Infographics on the distribution of wealth in America, highlighting both the inequality and the difference between our perception of inequality and the actual numbers. The reality is often not what we think it is.

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Inequality in income can cause health issues.

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How to prepare for the next global recession

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Cashmere products make up $4 billion of the $60 billion global luxury apparel market, according to data provided by Bain & Company. “The cashmere knitwear market is definitely outgrowing the luxury apparel market,” says Federica Levato, senior consultant at Bain & Company, who cites “casualisation of the market” — dressed-down, comfort-led trends like athleisure — as the main driver of demand.
While cotton, silk, or leather — all key raw materials on which the luxury fashion sector depends — can be produced in modified farming systems, cashmere production relies on natural grasslands in limited geographies. As a result, it is especially vulnerable to environmental change.

“The availability of cashmere has suffered because of the degradation of the native grasslands, which the animals depend on for their food,” says Elisa Niemtzow, consumer sectors director at BSR and co-author of Kering and BSR’s report. “We’re talking about changes in temperature, in water availability and in the extreme winter conditions.

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LONDON, United Kingdom - A fashion business exercises careful control: over its image; its business growth; where possible, over how consumers respond to its brand. But even the world's most prestigious luxury houses cannot control the climate.

According to a report released this month by and non-profit consultancy Business for Social Responsibility (BSR), climate change is already having noticeable effects on global cashmere supplies - and this impact is likely to get worse.

Currently, cashmere products make up €4 billion of the €60 billion global luxury apparel market, according to data provided by Bain & Company. "The cashmere knitwear market is definitely outgrowing the luxury apparel market," says Federica Levato, senior consultant at Bain & Company, who cites "casualisation of the market" - dressed-down, comfort-led trends like athleisure - as the main driver of demand.

In the last few years, the "democratisation" of the fashion industry has caught up with cashmere. Once a highly expensive commodity, available to an exclusive few; today, affordable, casual cashmere products have permeated the high street. At Uniqlo and , pure cashmere knitwear starts at $79.90; while athleisure retailer Kit & Ace has built its brand around "technical cashmere," - blends of cashmere and sport-friendly materials like spandex.

But, cashmere is under threat. Made of the fine winter undercoat of Hircus goats, the global cashmere clip is estimated to be between 15,000 and 20,000 metric tonnes, or 6,500 tonnes of "pure" cashmere after it is cleaned. Luxury brands are more selective in their sourcing, centring on Mongolia and Inner Mongolia (an autonomous region within China that borders Mongolia), and using only the finer, longer and whiter fibres. However, most of the global cashmere output comes from China, where The Nature Conservancy estimates there are over 100 million goats. According to the National Resources Defense Council, it can take four goats to produce enough fibres for one sweater.

While cotton, silk, or leather - all key raw materials on which the luxury fashion sector depends - can be produced in modified farming systems, cashmere production relies on natural grasslands in limited geographies. As a result, it is especially vulnerable to environmental change.

"The availability of cashmere has suffered because of the degradation of the native grasslands, which the animals depend on for their food," says Elisa Niemtzow, consumer sectors director at BSR and co-author of Kering and BSR's report. "We're talking about changes in temperature, in water availability and in the extreme winter conditions."

According to the United Nations Development Programme, 90 percent of Mongolia is fragile dry-land, under increasing threat of desertification. In 2010, the combined impact of a drought the preceding summer (which reduced available forage in the grasslands) and a dzud (an extremely severe winter), saw more than nine million livestock perish in the country, of which most were cashmere goats.

According to Pier Luigi Loro Piana, deputy chairman of Italian fashion house Loro Piana, which specialises in luxury cashmere and wool products, the recurring dzud has seen Mongolia and Inner Mongolia suffer cashmere shortages for 50 years. "You learn over the years how to balance these potential shortages," he says. "Unfortunately, they continue to have an impact on the shepherds and their communities, on the animals, the environment."

However, in recent years, the environmental obstacles facing cashmere have worsened. To tackle rising demand, many producers increased the size of their herds - from 1993 to 2009, Mongolia's livestock population grew from approximately 23 million to 44 million - creating a vicious cycle. More goats mean more grazing; which, in turn, leads to degradation of the grasslands. The result is undernourished goats with coarser hairs, causing the supply of high-quality cashmere to shrink. To make up the lost revenue, herders breed bigger herds, setting off the cycle again.

"There's been an absolute avalanche of people wanting more and more cashmere, and pushing the price, pushing the supply chain," says James Sugden OBE, a director of luxury cashmere clothing label, Brora, and former managing director of Scottish woollen mill, Johnstons of Elgin. "It has created a problem, insomuch as in some areas, some growers, tempted by higher volumes have gone for volume rather than quality."

"Lately what has really worried us as a potential risk for the whole industry is the quantity approach: quantity seems to be overtaking quality," concurs Mr Loro Piana.

Cashmere's future is even more precarious. While the dzud is an extreme, cashmere yields depend on harsh winter conditions to grow their high-quality undercoats. Looking forwards to 2036 to 2060, Kering and BSR warn that rising temperatures due to global warming could also constrain goats' winter hair growth, causing further decline in the quality of cashmere. "There's sort of a perfect storm," says Elisa Niemtzow.

So, what does this mean for fashion businesses? According to Niemtzow, luxury brands are already seeing decreases in availability of high quality cashmere. "You can either take it as a decrease in quality or a decrease in availability," she says. Either way, the raw material is running out.

Two years ago, the Chinese government put restrictions on farmers' acreage, in a bid to reduce the stripping of the pastureland. However, Outer Mongolia and other producing regions like Afghanistan have no such controls. Even within China, "The problem still remains in terms of finding quality fibre, consistently," cautions James Sugden.

These changes present not only an environmental concern, but a business risk too. So how does an industry respond, when a raw material that its products - and, therefore, its profits - rely on, becomes endangered?

"Our industry's challenge is to change this unsustainable system and put new, sustainable practices in place," says Marie-Claire Daveu, chief sustainability officer and head of international institutional affairs at Kering. "Companies need to recognise that their business depends on natural capital and also impacts many livelihoods at the base of their supply chain."

According to Daveu, Kering's brands are working with their suppliers to create "production systems that are more resilient to the shocks of climate change impacts," such as sustainable herding practises and holistic management of pasturelands, or implementing early warning/disaster management systems to respond to negative weather events.

But, with demand for cashmere still high, companies must consider the herding communities in their supply chains, and make it worth their while to farm less, but better. "Desertification also exacerbates economic hardship for herders and drives them into poverty and displacement to urban slums," says Una Jones, chief executive officer of the Sustainable Fibre Alliance (SFA), which was formed in 2015 to unite companies, governments and NGOs to tackle sustainability issues in the cashmere industry, by establishing the first Sustainable Cashmere Standard, which will pilot in 2016.

In 2009, Loro Piana, which was acquired by LVMH in 2013, launched a five-year selective breeding programme, involving about 24,000 cashmere goats in China. By breeding only the most productive animals, the scheme aims to elevate the quality of hair on each animal, resulting in smaller herds but higher yields of quality cashmere - thus easing pressure on the land and avoiding desertification.

The project has "improved standards of living for goats and pastors, as well as a restored balance between animals and environment," says Mr Loro Piana. A luxury fashion business, he says, must choose "Integrity, investments, research, respect and aiming for the best quality versus mere exploitation."

"In bad years, we pre-pay. We give the farmers advance money, in order to see them through the winters," says Sugden of Brora, which processes its garments in Scotland and sources its cashmere from Inner Mongolia, where goats are not just sources of cashmere, but meat and milk for the herding communities. If the commodity price of cashmere drops, "Our responsibility is to try and not take advantage of that. We want consistency of quality, number one. The price is secondary," he says.

"A number of luxury brands and retailers are stepping up to the plate," says Una Jones, to tackle the industry's current "unsustainable production and consumption patterns and how the sector will have to change to meet their future demands." Last year, for example, Burberry added protecting its cashmere supply to the company's environmental targets for 2017.

But is it too late for the so-called "diamond fibre?" Should fashion business also adapt their strategies to the possibility of shrinking cashmere supplies?

As more environmental changes make farming more challenging, and modernisation across Asia tempts younger generations away from their families herding businesses, James Sugden says luxury brands have a "duty" to support their suppliers, by protecting the price, and ensuring suppliers understand, "It's better to be at the top end of the market, and not to be tempted by the larger orders from Uniqlo or the like." But, he adds, "The bulk producers have a responsibility."

At Kering, Daveu, remains positive. "Ultimately, availability will also be positively affected," she says, of Kering's collaborative efforts. "We have a tremendous opportunity now to work on this issue to create a vibrant cashmere industry that helps regenerate natural systems and supports the livelihoods of millions of people. Let's look to the solution, not just the problem."

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LONDON, United Kingdom - A fashion business exercises careful control: over its image; its business growth; where possible, over how consumers respond to its brand. But even the world's most prestigious luxury houses cannot control the climate.

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Assume, Disney just raised its 3 day 3 park pass from $110.00 to $121.00. Sales fell from 4,000 per week to 3,000 per week.

1.     Calculate the price elasticity of demand using the arc elasticity of demand formula.

2.     Is demand elastic or inelastic?  Why?

3.     Did Disney management do the right thing?   Why?

4.     What should they do next?

(Hint – look at revenues)

5.     Provide and analyze actual data on Disney prices for the current year.

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It's February and seasoned Disney Parks fans know what that means - it's time for annual ticket prices to go up.

At Disneyland, ticket prices are increasing by nearly 18%, as well as prices for Signature and Deluxe passes which are increasing by 17%. The renewal for a SoCal pass is also increasing, but is discontinued to new customers. SoCal Select, which is Disneyland's lowest priced and most restricted pass, is increasing by 9%, while their unrestricted Signature pass is going up by 10%.

The official word from Disneyland is, "We know how important making memories at Disney theme parks is to families and we will continue to evolve our pricing in way that gives families a range of options to meet their budget and helps better spread attendance throughout the year so they can make the most of every visit."

Disneyland isn't the only one affected by the increase in ticket prices; the Walt Disney World Resort is subject to it, too. Annual pass prices are going up anywhere between five and nine percent, while the One-Day ticket prices range anywhere from two to four percent. Other price increases include theme park parking, theme park lockers and the newer service, Minnie Vans.

As noted earlier this year by Walt Disney World Resort, the current date-based pricing applied to one-day tickets will be extended to multi-day tickets later this year, in an effort to spread attendance throughout the year at each of their four parks.

Broken down for you below, here are the price changes for each resort:

Disneyland Tickets and Passes:

Walt Disney World Tickets and Passes:

These are effective as of today, February 11th, 2018.

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Full List of 2018 Ticket Price Increases for Disneyland and Walt...

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It's February and seasoned Disney Parks fans know what that means - it's time for annual ticket prices to go up. At Disneyland, ticket prices are increasing by nearly 18%, as well as prices for Signature and Deluxe passes which are increasing by 17%. The renewal for a SoCal pass is also...

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CLOSE

Ticket prices at Walt Disney World will vary based on the date picked with a new online planning tool debuting next month.

Disney World officials said Monday that prices at the resort's four theme parks - Magic Kingdom, Animal Kingdom, Hollywood Studios and Epcot - will be tweaked next month so they're the same instead of Magic Kingdom having a higher price.

Disney introduced flexible pricing at U.S. parks three years ago as an incentive for guests to visit during less busy times. Each month was divided into value, regular and peak days.

More: Here's what's on tap at Walt Disney World theme parks in Orlando in 2019

More: Port Canaveral: More Disney cruise ships, upgrade to Disney cruise terminal

More: Food Network star Guy Fieri opens Chicken Guy! at Disney Springs in Orlando

Under the new plan, which debuts Oct. 16, prices will vary based on the particular day. Single-day tickets will range from $109 to $129, depending on how popular the day is expected to be.

The news about the flexible-pricing planning tool comes a few days after Disney announced its lineup for 2019.

Among the highlights:

* Star Wars: Galaxy's Edge, aka Star Wars Land, will open at Disney's Hollywood Studios in fall 2019.

* A new nighttime spectacular will replace IllumiNations: Reflections of Earth at Epcot.

Visitors can find the lowest-priced days by clicking on a calendar at disneyworld.com.

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Disney World tickets: Flexible pricing for Orlando theme parks starts in October

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CLOSE Ticket prices at Walt Disney World will vary based on the date picked with a new online planning tool debuting next month. Disney World officials said Monday that prices at the resort's four theme parks - Magic Kingdom, Animal Kingdom, Hollywood Studios and Epcot - will be tweaked next month so they're the same instead of Magic Kingdom having a higher price.

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Will new studies push demand for coffee to a record? 

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Will new studies push demand for coffee to a record? 

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Coffee is an international crop. The top five coffee-exporting nations are Brazil, Vietnam, Colombia, Indonesia, and Ethiopia. In these nations and others, 20 million families depend on selling coffee beans as their main source of income. These families are exposed to enormous risk, because the world price of coffee bounces up and down. For example, in 1993, the world price of coffee was about 50 cents per pound; in 1995 it was four times as high, at $2 per pound. By 1997 it had fallen by half to $1.00 per pound. In 1998 it leaped back up to $2 per pound. By 2001 it had fallen back to 46 cents a pound; by early 2011 it went back up to about $2.31 per pound. By the end of 2012, the price had fallen back to about $1.31 per pound.

The reason for these price bounces lies in a combination of inelastic demand and shifts in supply.
The elasticity of coffee demand is only about 0.3; that is, a 10% rise in the price of coffee leads to a decline of about 3% in the quantity of coffee consumed. When a major frost hit the Brazilian coffee crop in 1994, coffee supply shifted to the left with an inelastic demand curve, leading to much higher prices. Conversely, when Vietnam entered the world coffee market as a major producer in the late 1990s, the supply curve shifted out to the right. With a highly inelastic demand curve, coffee prices fell dramatically.

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Drinking Coffee May Help You Live Longer, Study Says

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A study finds that drinking coffee - decaf, caffeinated, ground or instant - may help you live longer, regardless of caffeine metabolism

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Why Coffee Shortages Won’t Change the Price of Your Frappuccino

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Why Coffee Shortages Won’t Change the Price of Your Frappuccino

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(Photo: Rob Taylor/Flickr)

How much did you pay for your last cup of coffee, and what did you get for the price? Maybe it was $1 for a quick cup at one of those rickety carts that line the streets of Manhattan during commuting hours, a Styrofoam container of liquid that's hot and brown but little else. Or it could have been as much as $10 for a high-end cappuccino at Budin, a new Scandinavian cafe in Brooklyn that makes caffeine intake as complex as cocktails. But if you're like the millions of Americans who frequent Starbucks, the world's biggest coffee chain, every day, you probably paid somewhere in the middle, from $1.75 for a tall coffee to $4.65 for a venti caramel macchiato.

But those prices may have recently jumped. On July 21, Starbucks stores raised the price of its ground and whole-bean coffee by around eight percent, or $1 per bag, following up on a one-percent raise on in-store prices last month, an increase of 10 to 15 cents a drink. Given that over 70 percent of the company's revenue comes from beverages, that couldn't have been an easy decision to make. But Folgers, Kraft Food Groups, and Dunkin' Donuts have all raised their coffee prices over the past year as well. That's because coffee itself is becoming more expensive to buy wholesale, with prices jumping around 53 percent this year alone.

A drought in Brazil, the largest grower in the world, is cutting production by as much as a third, as well as impacting the overall quality of the beans. And coffee rust, a fungus that attacks coffee plants, is running rampant across Central America, cutting supply 15 percent over the past two years. "It is very close to crisis," Mark Visocky, the director of economic growth office for USAID in Guatemala, told NPR. The U.S. Department of Agriculture estimates a total annual production drop of 1.5 million bags, down to 147.8 million bags, in 2014-15.

Starbucks has already locked in the prices for its 2014 supply of beans at favorable rates, meaning the burden will fall more heavily on producers than on the corporation.

This could all spell a disastrous year for Starbucks-but the Seattle-based company is two steps ahead. Starbucks has already locked in the prices for its 2014 supply of beans at favorable rates, meaning the burden will fall more heavily on producers than on the corporation. And customer loyalty at the chain is more than strong enough to withstand a dime increase in price. The same goes for coffee in general. "There's very low price-elasticity-of-demand for coffee," Paul Christopher, the chief international strategist at Wells Fargo Advisors, told Bloomberg. "Price-elasticity-of-demand" refers to how demand is impacted by a positive or negative change in price of a good-in this case, an increase in cost will cause little, if any, decrease in demand. Caffeine addicts will remain addicts.

And the coffee giant already adds a significant mark-up to most of its products, which is why the recent price change only affected plain coffee drinks-not dessert-like Frappuccino beverages, which were already overpriced. "Companies charge what the market will bear," writes Yahoo Finance's Jeff Macke. "Starbucks is betting its most loyal coffee junkies, specifically those ordering venti-sized vats of liquid speed, are willing to pay more."

The interesting thing about rising coffee prices is not how they're changing coffee supply and demand in the U.S., but how they aren't. "When you can't find cheap coffee anywhere it'll be inflation," Macke adds. "For now think of this as a luxury tax." Coffee can bear this variability in pricing in part because it's a luxury good, from bodega to-go sludge to Nordic cafes. Drinking a cup isn't, strictly speaking, necessary, but we do it to take part in a culture of coffee that has always been aspirational.

IMPORTED FROM THE MIDDLE East, coffee was popularized in Europe over the course of the 17th century. Coffee houses became places where intellectuals and the well-to-do gathered to discuss the matters of the day-in 1663, the London diarist Samuel Pepys noted drinking " a dish of coffee" at the Royal Exchange, a center of commerce in the city, before heading home to dinner. (Pepys, like others of the time, took his coffee black; several weeks later in his diary he makes reference to a dish of coffee that was "was poorly made, with a little sugar in it.") That year, English coffee houses were taxed 12 pence as a license, according to Mary Goodwin's 1965 Coffee House Historical Report. At the time, a single dish of coffee cost one pence, plus a small fee for use of the space; the price rose to two pence in 1714 following an agreement among coffee house owners.

London's various coffee houses attracted select clientele. Some served the gentry, others merchants, and yet others booksellers. They were seen as cultural destinations, inspiring the term "penny university" for how they provided access to a crowd of caffeinated, talkative intellectuals for just the price of entrance. The beverage has maintained this aura of exclusivity, even if it only makes you feel smarter.

Experts split our experience of coffee over the past century into several "waves," each of which augmented the perception of coffee as a luxury good. The first wave, as defined by LA Weekly's Jonathan Gold, was the proliferation of Folgers in American kitchens over the first half of the 20th century (a cup of Chock Full o' Nuts coffee cost $0.35 in 1955). This was the era of coffee as fuel, "the best part of waking up." Then came the second wave in the 1960s and '70s, with the rise of intentionally upmarket coffee companies like Peet's and Starbucks that focused on procuring good beans and roasting them carefully (in its first year, Starbucks actually bought unroasted beans from Peet's). The third wave covers the arrival of shops-like Stumptown and Blue Bottle-that treated beans as a kind of farm-to-mug art form.

Cafes like Budin, that make Starbucks seem like an airport instant-coffee machine, might signify the fourth wave; and with beans carefully cultivated from specific vines on specific farms, we're paying a lot more than any corporate price increase for the pleasure of taking part. In fact, we've gone so far into the stereotype of coffee as conspicuous consumption that Matt Buchanan, an editor at The Awl, lamented the rise of " fake good coffee" in a recent article. These are "coffee shops that trade in the signs of 'good coffee' but in fact serve hot sewage," appropriating the signifiers of hipster coffee-raw wood tables, chalkboards, hemp bags from Peru on the walls-as a way to justify high prices without actually serving a decent flat white.

Hip baristas are likely to sneer at anyone asking for something as silly as a Frappuccino. Yet the very existence of a $10 Nordic brew of milk and espresso makes it easier to have mainstream customers paying half as much for a Starbucks concoction, a much higher price than the market might command without the added luxury aura. After all, coffee is culture.

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Coffee Shortages Won't Change the Price of Your Frappuccino

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How much did you pay for your last cup of coffee, and what did you get for the price? Maybe it was $1 for a quick cup at one of those rickety carts that line the streets of Manhattan during commuting hours, a Styrofoam container of liquid that's hot and brown but little else.

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The world is running out of coffee — here's why

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The world is running out of coffee — here's why

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Worldwide demand for coffee is increasing but the supply of specialty coffee beans is struggling to keep up. Following is a transcript of the video.

Coffee supply is struggling to keep up with demand. The International Coffee Organization estimates 143 million bags of coffee were produced in 2014. And that 150 million bags were consumed.

Coffee farms tend to be small with very low returns. Some farmers might prefer to work or send their children to work in cities where they could earn more. And that's not counting for climate change, which can also impact growth.

It takes 4-5 years for a coffee plant to mature before its beans can be harvested for roasting. Experts say the industry needs investment and a new strategy, but that might take years. In the meantime, the international coffee organization says consumption is growing annually by 2.5%.
Editor's note: This video was originally published on February 8, 2016.

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The world is running out of coffee - here's why

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Worldwide demand for coffee is increasing but the supply of specialty coffee beans is struggling to keep up. Following is a transcript of the video. Coffee supply is struggling to keep up with demand. The International Coffee Organization estimates 143 million bags of coffee were produced in 2014.

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Example of price elasticity that may have affected you...

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Example of price elasticity that may have affected you...

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Hollywood had a pretty good 2012. Movie attendance rose by around 6%, and theater revenues and average ticket prices both hit all-time highs.

Steve Bonini / Getty Images

Hollywood had a pretty good 2012. Movie attendance rose by around 6%, and theater revenues and average ticket prices both hit all-time highs. Curiously, the numbers also indicate that it was a pretty good year for consumers hoping to get decent value at the movies.

How could consumers be paying more than ever, and yet still arguably be getting better value? Well, as Deadline.com and others have reported, the average movie ticket sold for $7.96 in 2012. Yes, that's an all-time high. But it's up only a smidge from the 2011 average of $7.93. The numbers aren't adjusted for inflation. So even though the average increased by 3¢ from 2011 to 2012, moviegoers essentially paid less last year once inflation is factored in.

The slight price increase in 2012 goes against the trend seen in previous years, in which the average rose much more noticeably. The Hollywood Reporter noted that ticket prices increased 5% in 2007, and another 5% in 2010, for example. It's probably no coincidence that during this time period, the overall number of tickets sold steadily dropped, year after year.

( MORE: Game Over? Why Video Game Console Sales Are Plummeting)

What's more, 2012 was a successful year because studios and theaters gave movie fans more of what they wanted (blockbusters that were actually good films, such as "The Avengers") and less of what they didn't (higher prices because a mediocre film was shown in 3-D).

At year's end, the Los Angeles Times offered a very simple explanation for why theater ticket sales rebounded in 2012:

Theater owners and distribution experts are attributing the uptick in domestic business primarily to better studio movies this year.

The fact that ticket prices essentially remained flat last year helped bring in the crowds as well. In 2011, by contrast, moviegoers seemed to grow tired of escalating ticket prices, especially with regards to the premiums charged for so-so films shown in unnerving, totally unnecessary 3-D. A new kind of "3-D effect" was noticed, in which fans seemed to avoid mediocre movies like the latest installment of the "Pirates of the Caribbean" series mainly because it was rarely available in a basic, cheaper 2-D format.

( MORE: Can IMAX Save the Movies)

This doesn't mean that moviegoers aren't willing to pay extra for 3-D or IMAX showings. They're just more inclined to pay a premium when it's a film they really want to see, and when the fancy format enhances the experience. In the fourth quarter of 2012, the average ticket price was $8.05, 2.8% higher than the same time in 2011, partially due to the more expensive 3-D showings of hits like "The Hobbit: An Unexpected Journey." The average price in 2012's second quarter was even higher, at $8.12, thanks to the mega-hit "The Avengers," which was also shown in 3-D.

The movie studios are always looking for a formula for business success, and based on the data from last year, we now seem to have one: Make good films, and don't rip people off.

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Movie Ticket Prices Hit All-Time High in 2012: Why That's Probably Good for Moviegoers

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Hollywood had a pretty good 2012. Movie attendance rose by around 6%, and theater revenues and average ticket prices both hit all-time highs. Curiously, the numbers also indicate that it was a pretty good year for consumers hoping to get decent value at the movies.

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Since President Trump has taken office he has changed laws, changed tariffs, and built a wall. but what people haven't noticed is that he has created 2.4 million jobs!
The hypothesis:
President Trump has created around 2.4 million jobs while in office, also noted that the African-american unemployment rate has reached an all time low.. also the hispanic unemployment rate is the lowest in 5 years! which is giving a lot of Americans the ability to support their household and support our economy.

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DONALD TRUMP: I can't be. We are a country that is being beaten on every front economically & militarily. There is nothing that we do now to win. We don't win anymore. [If our] wages are too high, we're not going to be able to compete against the world.

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by Gregory D. and Ayannah H

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by Charlise & Christian

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by Elizabeth and Tyler

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Externalities in the Cashmere Market by Austin T. Zack P.

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Externalities in the Cashmere Market by Austin T. Zack P.

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Externalities in the Cashmere Market.

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Externalities in the Cashmere Market.By Capri, Riley, Courtney

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Externalities in the Cashmere Market.By Capri, Riley, Courtney

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1. Draw the graph for the cashmere market, showing private and social costs and the private and social equilibrium.
2. Formulate an economic prediction about the cashmere market.

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Evan Osnos talks with Stephen Colbert about Cashmere and the impact of cashmere production in China

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Tov Province, Mongolia (CNN) -- Forty-year-old Bayanmunkh has learnt the hard way about overgrazing. Riding slowly behind his herd of close to 2,000 animals across Mongolia's arid plains, the herder reminisces about how the land has changed.

"Life has become much harder today. Nature is not what it was 10 years ago; there is more and more desert and less and less pastureland," he says.

Now Bayanmunkh has made the tough decision to move far away from the increasingly sand-covered area his family has grazed in for generations to find a new home.

According to U.N. Development Program estimates, 90 percent of Mongolia is fragile dry-land; land under increasing threat from desertification. Part of the reason for this is thought to be global warming, but in Mongolia's case another significant factor is the rise of the global cashmere industry.

Mongolia is the world's second largest producer of Kashmir goat's wool behind only China with 20 percent of the world market.

Mongolian herders have found that cashmere is by far the most profitable source of income available to them.

They can make 50,000 tugrik a kilogram ($37) in a country where 35 percent of the population still lives below the poverty line. Because of this, herders have been turning more and more of their attention to increasing their goat population.

A sharp drop in global cashmere prices last year encouraged herders like Bayanmunkh to increase the size of their herds to compensate.

Before last winter's harsh conditions decimated herds, goats accounted for almost half of the country's estimated 44 million livestock, a record high.

The sheer number of animals grazing is putting a considerable strain on the limited pastureland. Goats are much more voracious eaters than other livestock, and consume the root of the grass thereby stopping it from growing altogether.

"Every year an adult goat molts about 300 to 400 grams of raw, greasy cashmere," says Andrei Marin, a doctoral student writing a thesis on climate-change adaptation at the University of Bergen in Norway. "It is therefore one of the very few constants in herders' lives and their economy."

Marin also suggests that goats are more efficient at securing food from low-productivity sites and are more likely to give birth to triplets and twins, thus helping herders recover faster in the aftermath of harsh winters like this last one.

In 2005, USAID released a report which concluded: "The herding sector [in Mongolia] may well have surpassed the total herd size that can be sustained by Mongolia's pasturelands and its herds may already be causing desertification."

With livestock numbers increasing since then, the problem has only intensified, with previously green pastureland being swallowed by the sand, though not all see the Increasing goat population as key.

"There are, to my knowledge, no studies that show goats have a more negative effect on pastures than other livestock," says Marin.

Others, however, put the blame firmly on the rising proportion of goats.

"The growing number of goats has been a major reason behind [the decline in quality of Mongolian pastureland]," said David Sheehy, of the U.S.-based International Center for the Advancement of Pastoral Systems, in a World Bank report published late last year, "but there is also the general problem of too many livestock and the added impact of climate warming."

Following the return of free market capitalism, the size of the country's livestock population has grown dramatically -- almost doubling from approximately 23 million in 1993 to 44 million before this last winter. While policies to counter pastureland degradation have been implemented it is proving tough to limit the impact of overgrazing.

"The threats of land degradation, and consequent desertification, are becoming a serious obstacle to the growth of Mongolia," says Shoko Noda, deputy resident representative of the UNDP. "This last winter was caused by a combination of global warming but also an unsustainable number of animals."

But with demand for cashmere still high, and shop after shop in the capital of Ulan Bator selling Mongolian cashmere products, it will be hard to persuade herders to limit their involvement in the lucrative business.

"It is about moving from quantity to quality of animals, but that is very difficult," says Noda. "We have tried to discuss this with government, but it sounds as if we are trying to limit the earning potential of herders, who are also voters."

So far, little has been done to persuade herders to rein in their herds, though they themselves are seeing the impact of the overgrazing as increasing amounts of pastureland is eaten up by the desert.

"For the moment there is enough pasture, but it is getting harder," says Ariunzaya, as he sits beside a small lake 20 kilometers up the road from Bayanmunkh's slow-moving herd. His own animals, 600 goats and 800 sheep, drink nearby. "More and more people are coming here because the land is getting worse elsewhere," he says.

Like the majority of herders, Ariunzaya earns most of his money from the cashmere trade. He sells around 150 kilograms of cashmere a year, earning about $7,600 from this, a sizable sum in Mongolia, but he is unsure how long that can last.

"When I first arrived in this small area in 1996 there were just five families -- now there are 35. In 1995 there were about 3,000 goat and sheep, now that number is about 15,000. I am not sure how many more it can support."

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High cost of cashmere on Mongolia plains

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Tov Province, Mongolia (CNN) -- Forty-year-old Bayanmunkh has learnt the hard way about overgrazing. Riding slowly behind his herd of close to 2,000 animals across Mongolia's arid plains, the herder reminisces about how the land has changed. "Life has become much harder today.

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Hypothesis: Will more urgent care visits soon decrease the demand of emergency room visits?

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As a Ford (NYSE: F) shareholder, nothing would make me happier than to say the contraction from "peak auto" was over and rekindled growth was in store. I can't honestly say that though. Unfortunately, Ford and peers like General Motors (NYSE: GM) and Fiat Chrysler (NYSE: FCAU) - the dominant names of the U.S. automobile market - still have more headwinds to plow through.

Not because of the worry I voiced several times last year, however. Rather, the concern now is the underlying reason I was concerned a year ago. Used cars are not only not getting cheaper anymore, they're becoming more expensive specifically because of increasingly heightened demand.

Other ancillary evidence in support of the idea has materialized in the meantime.

State of the Industry

If the idea seems vaguely familiar to you, it may be because I floated the notion several times within the past several months. The most recent instance was in September of last year, when yours truly pointed out that back-to-back hurricanes would only drive a temporary surge in vehicle purchases. Automobile sales were already slowing at the time, despite ever-rising dealer incentives.

That's largely how it played out. Sales did indeed surge in the aftermath of Harvey and Irma, but that surge once again faded back into a slump. The industry hasn't seen net growth since 2015. Even truck sales, the industry's savior of late, is leveling off.
Source: Thomson Reuters Eikon
Things aren't quite the same now as they were then though.

Some investors may recall my chief worry at the time was price drops of used (though still relatively young) vehicles against a backdrop of uncomfortably expensive new vehicles was prompting consumers to meander over to the used car side of dealers' lots looking for the better buy. That trend has shifted in the meantime though. That is to say, according to reports from JD Power and NADA, used car prices started to trend higher almost that very month, and as of August of this year, are back to multi-year highs.
Source: JD Power/NADA August 2018 Used Car Guide
Theoretically, that should have coincided with a shift back towards demand for new cars, which may have cost a little more but offered all the advantages of "new." That's not how things panned out though. In spite of increasing costs to purchase a not overly used car, buyers have continued to shun new vehicles.
Source: St. Louis Federal Reserve Data Repository
And just for the record, it's not like prices for used cars are rising in step with a sales slowdown. Total purchase activity continues to edge higher despite rising used car prices. Total spending on used cars surged to a multi-year high during the second quarter of this year, extending a pivot made back during the first quarter of 2017.

Jonathan Smoke, chief economist at Cox Automotive, recently noted, "We estimate used-vehicle sales increased 3 percent year over year in July, with one fewer selling day. The annualized pace of used-vehicle sales is up 1 percent over last year to 39.5 million, a new peak for this expansion period. We estimate the July used SAAR at 39.2 million, the strongest July in six years."

Car market research outfit Edmunds confirmed the trend with its second-quarter report on used car sales activity. The same report that pointed out inventory levels of 3-year-old vehicles - the proverbial sweet spot for this segment of the automobile market - reached a record high during the second quarter of this year.

Those figures are part of a bigger trend that's undeniable and inescapable.

The "In the Meantime" Could be Rough

The industry is adapting, to be clear, not just to the current supply/demand dynamic but to the change in the way we as a society are rethinking mobility. For Ford's part of the evolution, it's making connected cars that can reroute themselves as a means of avoiding congested traffic - one of many projects that will be tackled at its planned Corktown campus in Detroit. In a bigger-picture sense though, Ford made clear last year that it wanted to be help shape the inevitable change in the way the world gets around. Electric vehicles and R&D partnerships were both made priorities.

Neither the company's short-term nor long-term initiatives are apt to be enough to sidestep what's already been working against Ford in the meantime though. Cox Automotive's Smoke further explained in his commentary penned for Automotive News, "This trend can't last long, but it may persist through summer and early fall until the tariff threat is resolved and/or negative economic news occurs... While used retail sales will peak soon, we expect they will plateau at the peak and not decline for at least a year."

Automotive News' editor-on-chief Keith Crain also suggested in August that, "if you talk to knowledgeable auto retailers, they all seem to have one thing in common. Everyone is convinced that they better keep their eye on their used-car lot. That is where the action is going to be."

The Edmunds report mostly concurred with Crain's point. It read (bluntly) "High volumes of off-lease vehicles are establishing a trend that will hold for years. In Q2 2018, 25.5 percent of all franchise dealer sales were of 3-year-old vehicles, which is a 3.2 percentage point increase from last year's 22.3 percent. Taking into consideration that new-car lease penetration rates have held at nearly 30 percent through 2018, off-lease vehicles will now effectively constitute the majority of franchise used sales until at least 2021."

The report went on to explain that the prospect of a drawn-out tariff war would only further crimp new car sales by making used vehicles even more affordable, relatively speaking.

Bottom Line for Ford, GM and Peers

None of this is to suggest Ford shares are overvalued. In fact, at a trailing P/E of 5.6 and a plausible forward-looking P/E of 6.8, the shares are priced as if an apocalypse is inevitable. Rivals GM and Fiat are facing a similarly misguided valuation problem.
We don't own Ford or GM in the Well-Rounded Investor portfolio, for the reasons given above. If you do want to hear about some stocks that are part of the early stages of cyclical growth though, take a free two-week test drive of the WRI newsletter.
Being a martyr doesn't pay you anything extra on Wall Street though. If investors are too terrified to step into a certain stock, that stock is not going to move higher. And believe me when I say I want nothing more than for Ford shares to move higher.

The point is, of all the reasons investors have to worry about Ford's and GM's foreseeable future, they're not worrying about the biggest one. New cars are falling out of favor, and used cars are a massive part of the reason. More than a handful of industry experts believe the stage is set for a long, rough ride.

Disclosure: I am/we are long F.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: James Brumley holds a long position in Ford, but the stock is not a current holding in the Well-Rounded Investor portfolio.

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Here's The Biggest Thing Ford And GM Shareholders Should Worry About

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As a Ford (NYSE: F) shareholder, nothing would make me happier than to say the contraction from "peak auto" was over and rekindled growth was in store. I can't honestly say that though. Unfortunately, Ford and peers like General Motors (NYSE: GM) and Fiat Chrysler (NYSE: FCAU) - the dominant names of the U.S.

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Due to the huge advancement in technology over the past decades the demand and supply for toys that are stocked at Toys R Us, will decrease and take a leftward switch. Stores have closed and many customers have replaced toys with devices like ipads and tablets from companies such as Toshiba and Apple.

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Your usage has been flagged as a violation of our terms of service. For inquiries related to this message please contact support. For sales inquiries, please visit http://www.bloomberg.com/professional/request-demo

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A LINGERIE trader, a building-materials supplier and two fruit-and-vegetable importers are all accused of laundering hundreds of millions of euros through their accounts with ING, a big Dutch bank, between 2010 and 2015. Its accounts were also used by a telecoms company, VimpelCom (now VEON), to pay $55m in bribes in order to operate in Uzbekistan (the firm admitted the charges and reached a separate settlement with Dutch and American authorities in 2016).

ING, Dutch prosecutors say, missed the signs because of "serious and repeated shortcomings" in its approach to anti-money-laundering rules. On September 4th they fined it €775m ($900m). It has acknowledged failings and will hold back bonuses for, or suspend, senior staff who fell short of standards.
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ING is not the only lender in the spotlight for carelessness with dirty money. On September 4th the Financial Times reported that an independent investigation commissioned by Danske Bank, Denmark's biggest lender, had concluded that $30bn of Russian and ex-Soviet money had been parked in its Estonian branch in 2013 alone. An earlier investigation by Berlingske, a Danish newspaper, accused the bank of allowing $8.2bn of dodgy money to flow through the branch in a nine-year period. The bank is now carrying out its own inquiries. In July its boss admitted it had not lived up to its own standards when it came to preventing illegal activities. Authorities in Estonia and Denmark have launched criminal investigations.

Although regulators in Estonia found in 2014 that Danske's Estonian branch had violated anti-money-laundering rules, and those in Denmark have pinpointed "serious deficiencies in the bank's governance", it has not yet been fined. Its own findings will be published later this month, five years after a whistleblower first raised the alarm.

The cases add to concerns about Europe's defences against money-laundering. In 2012 members of the euro zone agreed to cede regulation of systemically important banks to the European Central Bank (ECB). But national authorities still supervise compliance with anti-money-laundering and terrorist-financing rules.

Money-launderers target countries where defences are weak, says Bill Browder, the chief executive of Hermitage Capital Management, an investment fund. He is a noted critic of the Russian government, and it was his complaint to Estonian authorities that led to the criminal probe into Danske. Banks in Cyprus, Latvia and Lithuania have faced allegations. In July the European Banking Authority (EBA) found failings in Malta's oversight of Pilatus Bank, a lender that has been at the centre of money-laundering accusations. The Maltese authorities expressed "serious reservations" about the EBA's findings. The bank, which had its assets frozen in March after its chairman was arrested in America for allegedly violating sanctions against Iran, has denied all charges against it.

Small countries with oversize banking sectors are thought to be particularly vulnerable. They may lack the cash-or zeal-for monitoring and investigation. Regulators may not be truly independent, says Panicos Demetriades, a former governor of the central bank of Cyprus. Where political ties to Russia are strong, for example, they may be pressed to look the other way.

Some law-enforcement agencies regard money-laundering as a victimless crime and care little about it, says Mr Browder. He criticises Britain's in particular. America's are more assertive-and have a global impact. ABLV, one of Latvia's largest banks, went into liquidation in June after the Treasury labelled it a "primary money-laundering concern" and warned other financial institutions against dealing with it.

Anti-money-laundering rules in the European Union have been tightened once this year. Another review is under way. A report on improving oversight, prepared by EU authorities, has been sent to members. One of the proposals includes a centralised anti-money-laundering body. The idea has the support of both Danièle Nouy, the ECB's bank-supervision chief, and Andrea Enria, the head of the EBA, which harmonises national supervisory rules across the EU. But countries with close links to Russia may have to be dragged along.

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ING and Danske Bank are in the spotlight for their handling of dirty money

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A LINGERIE trader, a building-materials supplier and two fruit-and-vegetable importers are all accused of laundering hundreds of millions of euros through their accounts with ING, a big Dutch bank, between 2010 and 2015.

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Hypothesis: If  student loan debt increases, then recession may occur soon.

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Last year, in these pages, I reported that, on January 13, 2017 (just one week before the Obama administration exited DC), the Obama Department of Education released a memorandum confessing that it had "overstated student loan repayment rates at most colleges and trade schools." The "updated numbers" provided by the Department were analyzed by the Wall Street Journal's staff, who found that the new data "revealed that the Department previously had inflated the repayment rates for 99.8% of all colleges and trade schools in the country" (emphasis supplied).

As troubling as those revelations were, new data released last fall by the Trump Department of Education paints an even bleaker portrait of the lives of student loan borrowers. Education researcher Erin Dunlop Velez has just published a thoughtful study that analyzes the new student loan data now available. What she finds in the new statistics is still more alarming.

In the course of delivering her findings, she debunks three common myths regarding (1) how long it takes students to repay their loans, (2) how long it takes the average student borrower to default, and (3) the relation between default rates and the amount a student borrows.

The first myth called into question by the longer-term data is the common belief that most students pay back their loans within ten years (ten years is the standard repayment period for federal student loans). Until now, higher education analysts were forced to try to analyze student loan repayment in the absence of the long-term data they needed. Now that the Department of Education has made this data available, it appears that, in fact, the average student loan borrower takes longer than ten years to repay his/her loans. Velez's research finds that "even among those who borrowed only for their undergraduate education . . . only half of students had paid off all their federal student loans 20 years after beginning college in 1995-96." Instead, average borrowers in "this group still owed approximately $10,000 in principle and interest, about half of what was originally borrowed, 20 years after beginning college" (emphasis in original).

The second myth that Velez finds debunked by the new data is the view that "Most defaults occur in the first few years after students leave college." This assumption appeared credible heretofore due to the fact that recent graduates can find themselves hard-pressed to find well-paying jobs at the outset of their careers, thereby limiting their ability to repay their student loans. More important, "current federal default statistics measure default only in the first three years after students exit college." However, Velez's analysis of the new, longer-term data finds that, "among 1995-96 beginning students . . . more than half of students who defaulted within 20 years of beginning college were in repayment for more than three years before they defaulted. The average time between students entering repayment and their first default was 4.9 years" (emphasis in original).

Because "more than half of defaults occur outside the [time] window covered by current federal default statistics, overall default rates are much higher than previously thought." How much higher? Velez goes on to argue that, "among students who began college in 1995-96, one-quarter defaulted on a federal student loan within 20 years of beginning postsecondary education." However, "among students who began college in 2003-04 . . . one-quarter defaulted in just 12 years after beginning college. Time will tell what their default rate will be at the 20-year mark." Given the number of defaults of 2003-04 college entrants in only their 12 th year after starting college, it is reasonable to expect their 20-year default rate to be still higher.

The third and final myth pounced on by Velez's analysis of the new student loan data is the belief that "increasing default rates are caused by increases in student debt." Given that the rate of student loan defaults has been growing over time, it is understandable that it has been widely assumed that a "major cause of this trend is increasing tuition prices, which have led to increased student loan debt." That is to say, it appears to make sense to "assume that the more debt a student takes on, the harder it will be to repay." But the new data belies this assumption: "those who borrow the most are not the most likely to default." Why?

Although additional borrowing can make it harder to keep up on one's student loan payments, "students who complete degrees also borrow more than students who drop out, and degree completion is a major factor related to default." It stands to reason that students who complete a bachelor's degree borrow more than those completing an associate degree or a certificate. Moreover, students who fail to complete college "borrow less, on average, than those who attain a bachelor's or associate's degree."

But Velez demonstrates that, although those completing bachelor's degrees "borrow more, they have significantly lower default rates, whereas certificate recipients borrow far less, "but are considerably more likely to default." From this Velez rightly concludes that we need to look more closely at degree completion and degree type, rather than solely at the amount borrowed, to better explain student loan defaults. These data suggest that whether a degree is completed, and what type of degree is completed, may be more important factors related to the increasing default rate than the amount students borrow.

Velez promises that the statistics now available are only "the tip of the iceberg of the analyses that can be conducted with this new data source." Her "hope is that the data can trigger a deeper understanding of loan repayment."

I share her hope, for the misleading repayment and debt numbers with which we have had to deal in the past have served only to exacerbate the growing student-loan debt crisis. Flying blind is never a sound strategy.

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New Report: The U.S. Student-Loan Debt Crisis Is Even Worse Than We Thought

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"Even among those who borrowed only for their undergraduate education . . . only half of students had paid off all their student loans 20 years after beginning college in 1995-96." Average borrowers in "this group still owed approximately $10,000 . . . 20 years after beginning college"

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Emergency Visits Decrease as Urgent Care Becomes More Popular

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Emergency Visits Decrease as Urgent Care Becomes More Popular

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Due to the huge advancement in technology over the past decades the demand and supply for toys that are stocked at Toys R Us, will decrease and take a leftward switch. Stores have closed and many customers have replaced toys with devices like ipads and tablets from companies such as Toshiba and Apple.

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Bankrupt retailer Toys "R" Us plans to close 182 stores - 20 percent of its fleet - by April, the company said in a court filing.

Most of the stores to be shuttered have posted declining sales, Toys "R" Us said.

The embattled chain suggested that it could be forced to close even more stores if it is unable to secure favorable rent terms from its landlords.

"Some of these are good stores," said Gerald Storch, a former Toys "R" Us chief executive who's now CEO of Storch Advisors. A number of them are close to other Toys "R" Us stores that could pick up a portion of their sales, he added.

Some Toys "R" Us stores that will remain open will be converted to a co-branded Toys "R" Us/Babies "R" Us format, the company said in a memo posted to its Web site.

In the memo, Chief Executive David Brandon seemed to confirm speculation that the 70-year-old retailer had a weak fourth quarter.

"I want you to know," Brandon wrote, "that we can and will address the gaps in the experience that you may have had when shopping this holiday."

Toys "R" Us filed for bankruptcy in September, just as it was gearing up for the holidays. The timing of the filing spooked some vendors, who limited their shipments - and it may have had a negative effect on shoppers who feared that the stores would not be open after the holidays for returns or exchanges, say experts.

Closing 20 percent of its stores could make it difficult for Toys "R" Us to offer competitive pricing, a key strategy Brandon laid out for 2018.

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Bankrupt retailer Toys "R" Us plans to close 182 stores - 20 percent of its fleet - by April, the company said in a court filing. Most of the stores to be shuttered have posted declining sales, Toys "R" Us said.

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Economic Effects of California's Legalization of Cannabis 

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Economic Effects of California's Legalization of Cannabis 

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I think it would be a very economic and professional benefit especially in California because it is one of the main states of the US that would make an example and be able to pull other states in to see the actual benefits of it and not it being bad.

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Just two days after California began sales of legalized adult-use cannabis, Attorney General Jeff Sessions decided to rescind the Justice Department's Cole Memorandum.

This Obama-era document listed guidelines for states that legalized marijuana. Sessions decision, however is more bark than bite because it doesn't change the Rohrabacher-Blumenauer amendment which cut off funds to the Justice Department to enforce laws that say marijuana is federally illegal.

It also looks like Sessions will leave it up to state attorneys to choose whether they want to crack down or not.

This will be welcome news for the state of California that began legal sales on January 1 of adult-use cannabis. Its state attorney general, Xavier Becerra, defends his state's law, with good reason. Legal marijuana is a major jobs creator and tax generator.

The recently released Green Market Report predicts that legalization is going to create 160,000 new jobs. New government jobs, new retail jobs, new manufacturing jobs. Many of these jobs will pay well and that will be the best part of this green rush for the state of California. This is something that Sessions should be taking seriously when he considers curtailing legal weed.

As of November 2017, California had a record low 4.6 percent unemploymen t rate. Still, compare this to Colorado's unemployment rate of 2.9 percent.

In 2012 Colorado suffered from a whopping 8 percent unemployment rate. That was before legalization. Colorado has since reaped the job benefits of the marijuana industry. Its biggest problem now is managing the massive growth of Denver.

Legalization brought high achieving scientists, chemists, retailers, horticulturalists and tech entrepreneurs to the state ready to solve the industries challenges. This should happen in California as well.

While people outside California see the riches of Beverly Hills, the country's most expensive zip code in Santa Monica, and the outrageous housing costs of San Francisco, many towns in the state have never recovered from the 2008 financial crisis.

There is a great deal of attention paid to the outsize salaries of Silicon Valley workers, but real Californians know that when you venture outside these specific areas the economy declines dramatically.

In some areas, housing prices remained stagnant and employment fell by 15 percent. These depressed desert towns are welcoming the large cannabis cultivation facilities that cities like Los Angeles have no desire for.

Desert Hot Springs declared a fiscal emergency in 2014. The median income was $33,000 in 2015. It was one of the first cities to embrace legalizing marijuana cultivation. Land prices have now tripled in value.

Not to be outdone, nearby Adelanto has issued 27 licensed permits for cultivation. Two years ago, this town also faced a fiscal emergency. It now boasts one million square feet of warehouse space ready to be used for marijuana.

Weed jobs are also a boon to workers that other industries overlook. Older women, people with multiple visible tattoos and people that don't fit into the traditional corporate cubicle are welcome in the weed industry. Someone with a neck tattoo might not be the best choice for a bank job, but this industry doesn't bat an eye at neck ink or ear gauges.

ICF International published a white paper last year saying they believe that these jobs would result in $3.57 billion to $4.52 billion in labor income. The ripple effect of all these new salaries is felt throughout the local economies. Then there are the secondary jobs - from security to construction jobs to build grow facilities and create new dispensaries that meet new local laws.

California's current budget deficit is $1.6 billion. The state is projected by ICF to earn between $2.4 billion and $3 billion a year in tax receipts from sales of marijuana. This will essentially wipe out the state's deficit in one year.

Not only will marijuana reset the state's financial health, it will foster a new wave of entrepreneurs and jobs that will revitalize depressed parts of the state. So, all those people lining up to buy Pineapple Express are creating a whole new industry for the state that will revitalize employment and the economy. Let Sessions put that in his pipe and smoke it.
Commentary by Debra Borchardt, co-founder, CEO and editor-in-chief at the Green Market Report, which focuses on the financial news of the rapidly growing cannabis industry. Follow her on Twitter @ WallandBroad. For more insight from CNBC contributors, follow @CNBCopinion on Twitter.

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Debra Borchardt, co-founder, Green Market Report

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Here's what California's new weed law will really ignite: Jobs growth

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Just two days after California began sales of legalized adult-use cannabis, Attorney General Jeff Sessions decided to rescind the Justice Department's Cole Memorandum. This Obama-era document listed guidelines for states that legalized marijuana. Sessions decision, however is more bark than bite because it doesn't change the Rohrabacher-Blumenauer amendment which cut off funds to the Justice Department to enforce laws that say marijuana is federally illegal.

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Film Production Costs: Why Does It Cost So Much to Make?Hypothesis:Costs of camera equipment, behind the scenes workers, and actors are reasons why it costs a lot to make a film.  

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Film Production Costs: Why Does It Cost So Much to Make?Hypothesis:Costs of camera equipment, behind the scenes workers, and actors are reasons why it costs a lot to make a film.  

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One of America's most iconic beer brands is in crisis

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Anheuser-Busch InBev, the brewing company that makes Budweiser and Bud Light, announced that revenues in the United States dropped by 3.1% in the second quarter as its two main brands lost market share.

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Will new studies push demand for coffee to a record? 

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Will new studies push demand for coffee to a record? 

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Drinking Coffee May Help You Live Longer, Study Says

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A study finds that drinking coffee - decaf, caffeinated, ground or instant - may help you live longer, regardless of caffeine metabolism

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Does an increase in concentration in the mobile wireless industry increase combined market power and reduce the competition? 

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Does an increase in concentration in the mobile wireless industry increase combined market power and reduce the competition? 

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Oligopolies are common in the US economy, and concentration is increasing in many industries, for example, in the mobile wireless industry.
The hypothesis:

If companies in the mobile wireless industry can increase their concentration, then their combined market power will increase.

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September 26, 2017
A new federal report affirms what many consumers have experienced for themselves: There's a functioning and competitive marketplace for cellular service.

Amid falling prices for wireless plans, the growing popularity of unlimited data and recent improvements in network quality and coverage, the wireless industry today is marked by effective competition, the Federal Communications Commission said Tuesday.

The finding is important because it sets the tone for policymaking at the nation's top telecom regulator. But as merger rumors continue to swirl around two of the country's four national providers, T-Mobile and Sprint, some are wondering whether this blissful period for consumers is destined to last.

"Like everyone else, I read reports of mergers waiting in the wings," said FCC Commissioner Jessica Rosenworcel. "So while this report celebrates the presence of four nationwide wireless providers, let's be mindful that a transaction may soon combine two of these four."

Top Sprint executives have made no secret of their desire for a deal with T-Mobile. Consolidating could put the combined company in a better position to compete with larger rivals such as Verizon and AT&T - at least, that's been the argument from Sprint chairman Masayoshi Son ever since he first tried to sell regulators on the idea in 2014. T-Mobile and Sprint didn't immediately respond to a request for comment.

But talks of a deal are coming at a sensitive time, as members of both political parties have expressed concern over the rising concentration of power in numerous industries, including the technology and telecommunications sectors. Whether a deal between Sprint and T-Moble would be more likely to benefit consumers or to hurt them is one question the FCC would be responsible for answering if the two companies sought to merge.

But Tuesday's report doesn't try to peer into the future; it's largely a snapshot of today's conditions. "Most reasonable people see a fiercely competitive marketplace," said FCC Chairman Ajit Pai. "This is strong, incontrovertible evidence."

Asked about Rosenworcel's remarks, Pai said that Congress's mandate with the competition report was for the FCC to study the current state of wireless competition, not what it might be in the future. The FCC takes no position on how many national carriers there ought to be to preserve competition, he said.

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The wireless industry is competitive, the FCC finds. But some wonder for how long.

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September 26, 2017 A new federal report affirms what many consumers have experienced for themselves: There's a functioning and competitive marketplace for cellular service. Amid falling prices for wireless plans, the growing popularity of unlimited data and recent improvements in network quality and coverage, the wireless industry today is marked by effective competition, the Federal Communications Commission said Tuesday.

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HYPOTHOSIS:
new technology is related to the decrease in cyber crime

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Ariel Evans is an American Israeli cybersecurity expert, entrepreneur and business developer. She recently took the helm of an Israeli cyber risk company that provide enterprises, cyber insurers and M&A teams quantification of cyber risk. Additionally, she consults for over 30 Israeli companies and is the go-to person in Israel that connects cyber startup companies to funding and business development opportunities.

An entrepreneur herself while in the U.S., she raised over $200 million from private equity and venture capital firms and has two successful exits under her belt. Evans was the Chief Information Security Officer for a major telco in the United States. She is recognized as a leader on Wall Street in Risk and Compliance having held positions at The McGraw-Hill Company, XL Capital, JPMorgan Chase, and Merrill Lynch as well as Lockheed Martin. Her insight into regulation, governance and business inter-connectivity technology allowed her to provide expert guidance to the Department of Homeland Security, The Payment Card Industry and other governing bodies that are accountable for reducing risk and understanding its implications with complex technologies.

Christopher P. Skroupa: What are the major areas of growth in cyber security?

Ariel Evans: There are three major areas of growth in the next decade: cyber risk, cyber insurance and IoT security. Each of these three areas are green fields, and are the next level of assurance in cyber.

The board and executives of organizations must protect the assets of the business. Seven out of ten Target board members were ousted and the CEO was fired - they had no visibility into the risk that cyber had on the business. Cyber risk must be understood in dollars and cents to communicate in a language that the board and executives understand. Only then can senior executives have a cyber strategy that allows them to protect the assets properly.

Cyber insurance is in its infancy, and as such, organizations need to understand how much cyber insurance they need. Target had $100 million of cyber insurance and has over $450 million of loss today, which is estimated to total at $1 billion by the end of 2017. This isn't a little off - it's way off. Cyber insurance is a tool to transfer risk that needs to be correlated to cyber risk.

There are over one billion IoT devices in use today, and by 2020, that number is expected to be over 50 billion. The large and unprecedented IoT-centric DDoS attack a few months ago caused major outages for many sites, including Twitter, Amazon, Tumblr, Reddit, Spotify and Netflix by attacking internet infrastructure companies that had not reset default passwords on their firmware. Unfortunately, the password is hardcoded into the firmware. Tools to disable the firmware are not present, and to top it off, the web interface is not aware that these credentials even exist. This is basically unfixable, and will remain a cyber threat. The only way to protect against them is to unplug them from the Internet.

Once again, history is repeating itself. Security by obscurity is the name of the game. Malicious individuals and nation states are taking advantage once again of the inability to bake cyber security controls into technology.

The bottom line is organizations have to be in front of cyber, not behind. We must proactively bake security in - not bolt it on. We have to be strategic in our thinking and not reactive. Cyber risk allows for thought leadership, cyber insurance provides that extra layer of protection and IoT security if not addressed now may lead to Cybergeddon.

Skroupa: How can companies evaluate the effectiveness of their cyber security tool stack? How is this related to cyber risk?

Evans: Most organizations have layered security tools in place such as firewalls, Intrusion Protection Systems (IPS), Data Loss Preventions (DLP) and Security Incident and Event Management (SIEM). These organizations likely look only at control maturity then evaluating cyber risk.

Control maturity is a term commonly used by IT to measure their ability to perform and is derived from IT governance methodologies such as CobIT (Control Objectives for Information and Related Technologies), ITIL (Information Technology Infrastructure Library) and CMMI (Capability Maturity Model Integration) models.

Control maturity provides no visibility into the effectiveness of these layered tools. This bottom-up approach to security only describes the implementation status of the control. It stops at the system level and does not tie the business processes to the data assets and the systems, hence it lacks the ability to demonstrate the effect a missing control, or a discovered vulnerability has on cyber risk. Bottom-up methods have proved themselves to be extremely inaccurate as they measure controls on the technology level and only describe the control maturity and not its effectiveness.

As an example, an anti-malware solution can be 90% mature because it is installed on 90% of the endpoints. But from an effectiveness perspective, the policy this control is enforcing could be irrelevant to the risk - its effectiveness could be 0%. Measuring cyber risk by evaluating controls maturity puts organizations at a high probability for cyber loss.

A top-down approach ties the business impact of the assets and processes to the cyber risk and demonstrates the effectiveness of cyber security tools. A top-down approach is the only means to measure risk of assets, prioritize remediation properly and equate that to the amount of cyber insurance that is needed.

Skroupa: How is cyber insurance evolving?

Evans: Cyber insurance is one of the fastest growing segments of the insurance industry. Cyber insurers are beginning to understand the need to differentiate themselves and price policies based on the actual risk of the insured. Today, it is the neighbor method. You sold Bank A a $500 million policy for $5 million, and you think that will work for Bank B. The issue with this is that the cyber security posture of Bank A could be wildly different than that of Bank B. Would you insure a 21 year-old New Yorker with a DWI for the same premium as a 50 year-old from Montana with a spotless driving record? Hardly.

Insurance has always been based on risk, so why is cyber not in sync here? Cyber insurance companies have been trying to take the easier, softer way and the results are nil. Measuring cyber risk requires understanding how the business assets are impacted by a cyber attack. Assets must be prioritized. A system that makes money or could cost you money in fines if breached is much different than a system with minimal business impact. Visibility into the risk exposure in dollars and cents provides the cyber insurance companies competitive advantages that allow them to differentiate policies for good cyber drivers and gain a competitive edge. Risk metrics allows for risk accumulation scenario analysis for data exfiltration and cloud compromise across the portfolio of the cyber insurance company. Lastly, risk metrics demonstrate now much cyber insurance is actually needed by an organization.

Skroupa: How will IoT impact cyber security in the next few years?

Evans: IoT means interconnectivity. IoT is the internetworking of physical devices, vehicles (also referred to as "connected devices" and "smart devices"), buildings, and other items - embedded with electronics, software, sensors, actuators, and network connectivity that enable these objects to collect and exchange data. The Internet of Things revolves around increased machine-to-machine communication; it's built on cloud computing and networks of data-gathering sensors; it's mobile, virtual, and instantaneous connection; and they say it's going to make everything in our lives from streetlights to seaports "smart." This smart framework has a set of risks associated with technologies that have high risk already. Combine these together and you exponentially increase the risk.

Cloud and mobile technologies are notoriously riskier than on-premise technologies. As more and more companies manufacture sensors and devices, they continue to skimp on security to be competitively priced. This exacerbates the risk. As IoT explodes, security risk will explode with it, leaving a trail of data breaches with high price tags. Regulation always lags behind technology and IoT will be no different. The issue with this is that the cost of security by obscurity may finally reach it's boiling point and you and I will be left holding the bag.

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The Cost Of Cyber Breach -- How Much Your Company Should Budget

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Ariel Evans is an American Israeli cybersecurity expert, entrepreneur and business developer. She recently took the helm of an Israeli cyber risk company that provide enterprises, cyber insurers and M&A teams quantification of cyber risk. Additionally, she consults for over 30 Israeli companies and is the go-to person in Israel that connects cyber startup companies to funding and business development opportunities.

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Cost of cyber crime rises rapidly as attacks increase

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Cost of cyber crime rises rapidly as attacks increase

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Shipping containers could not be booked, lawyers were locked out of their laptops and a production line was prevented from churning out chocolates, as serious cyber attacks swept through major companies earlier this year.

Large multinationals from Mondelez to Moller-Maersk, Reckitt Benckiser to FedEx, were forced to warn shareholders that the 'NotPetya' cyber attack had hit their bottom line, costing each company hundreds of millions of dollars. They said that the extent of the damage to their finances was not yet known but projected that the year's revenue would be hit.

The rapidly spreading attack highlighted that what matters for most corporate boards is the cost. Never mind the stories of shady criminals, nation state hacking factories and dark web marketplaces packed with stolen data, this is about the bottom line.

Charles Carmakal, vice-president at Mandiant, part of FireEye, has personally responded to hundreds of breaches. He said some companies are still conducting postmortems to figure out the impact of NotPetya. The June attack, which exploited a vulnerability in Ukrainian accounting software, ended up being much more extensive than WannaCry, a ransomware worm that swept through systems in May.

"It was a state sponsored attack against Ukrainian business and way of life but non-Ukrainian victims were likely collateral damage," he said. "Most of the cost is the loss of business, the inability to generate revenue but obviously there are possibly millions of dollars worth of IT costs for rebuilding systems."

The price of a cyber attack varies significantly depending on the kind of breach a company suffers, a company's size, industry and country, and how well prepared it was for an attack. Overall, the cost of cyber security for companies rose 22.7 per cent last year to an average of $11.7m, mainly due to a rising number of security breaches. The number of breaches is up an average 27.4 per cent year on year, according to the Ponemon Institute's Cost of Cyber Crime report. The report was based on 2,182 interviews from 254 companies in seven countries.

The most extensive research has been done on the cost of data breaches, the theft of customer information by hackers, as in the US credit rating company, Equifax hack, where the personal information including social security numbers of 144m Americans were stolen, as well as thousands of UK customers, and the Yahoo breach, where details for over a billion accounts were hacked.

This year, the average cost of a data breach fell from $4m last year to $3.6m, partly because of a strong US dollar, according to a report on data breaches by the Ponemon Institute. The cost of losing each record went down - from $158 to $141 per record - but companies did experience larger breaches, where they lost more records.

However data breaches are just one type of attack. Cyber criminals can embark on distributed denial of service attacks, taking a business offline, and nation state actors are stealing intellectual property.

"One client told me intellectual property they valued at $1bn was stolen," Mr Carmakal said. "That's a real loss if someone else ends up leveraging the data."

Larry Ponemon, founder of the Ponemon Institute, said hackers are increasingly adopting destructive techniques, which leave the business without its valuable data. Ransomware attacks, where hackers encrypt computer files and demand a ransom in return for releasing the decryption key, doubled in frequency in the last year to make up 27 per cent of all incidents.

"The ransomware attacks are the start of something that is a lot more sinister," Mr Ponemon said, adding that criminals could infect industrial control systems, creating huge outages unless companies pay a ransom. "Cyber extortion is the next big wave."

Other cyber security experts warn that hackers could create chaos by not stealing or destroying data, but inserting the wrong data into the system, forcing companies to question the integrity of their records.

There are many factors an individual company can't control: the cost of a breach in the US is much higher than in Brazil, the cost of a stolen record is much higher in healthcare than in the media. Some measures can, however, help keep costs down.

Good detection matters: the faster a breach can be identified and contained, the lower the cost. Having an incident response team, participating in threat sharing with other companies and using security analytics can help lower the cost of data breach, according to Ponemon.

The cost of a data breach increases if it involves a third party, if the company has extensive migration to the cloud and extensive use of mobile platforms, according to the report.

To foil hackers companies should consider segmenting their networks, so that when data thieves come, they can't take everything. Orion Hindawi, chief executive of Tanium, a private cyber security company, says that as companies collect more data, there is more to steal. "A lot of very important data can get stolen at once," he warns, if you do not segment your customers.

Ed Stroz, co-founder and co-president of Stroz Friedberg, an Aon Company which responds to cyber attacks, says companies need to invest in creating spare capacity in their systems. They should not treat redundancy as a "nice to have" but a "crucial" way to cope with attack, for example, being able to use another production line if one becomes unusable because its controls have been hacked.

With so much uncertainty, companies are inevitably turning to the cyber insurance market for protection. The market is nascent - but that can play to customers advantage, argue many cyber security experts, as insurers are willing to pay out significant costs in order to build their businesses.

Christian Hoffman, national practice leader at Aon Risk Solutions, said more companies are realising that they need to spend on cyber insurance. "From property damage, to product liability, to coverage for business interruption, coverage continues to expand significantly within the cyber insurance market," he said.

Some insurers are now even expanding directors and officers insurance policies to protect directors for the decisions they made about security and responding to a breach.

When production grinds to a halt, it is now board members being held accountable, not the IT team. The chief executive of Equifax was the most recent leader to resign in the wake of a cyber attack - and directors are now nervous that an attack will not just harm their company, but also themselves.

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Cost of cyber crime rises rapidly as attacks increase

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Shipping containers could not be booked, lawyers were locked out of their laptops and a production line was prevented from churning out chocolates, as serious cyber attacks swept through major companies earlier this year.

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There are 6.7 million job openings and just 6.4 million available workers to fill them, according to the Bureau of Labor Statistics.
The hypothesis:
While job availability may have risen due to inflation the average minimum wage or base salary that a lot of jobs provide is not sufficient enough to sustain the average household.

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The jobs market has reached what should be some kind of inflection point: there are now more openings than there are workers.

April marked the second month in a row this historic event has occurred, and the gap is growing.

According to the monthly Job Openings and Labor Turnover Survey released Tuesday, there were just shy of 6.7 million open positions in April, the most recent month for which data are available. That represented an increase of 65,000 from March and is a record.

The number of vacancies is pulling well ahead of the number the Bureau of Labor Statistics counts as unemployed. This year is the first time the level of the unemployed exceeded the jobs available since the BLS started tracking JOLTS numbers in 2000.

As of April, the total workers looking and eligible for jobs fell to 6.35 million, a decrease from 6.58 million the previous month. The number fell further in May to 6.06 million, though there is no comparable JOLTS data for that month.

Under normal circumstances, the mismatch would be creating a demand for higher wages. However, average hourly earnings rose just 2.7 percent annualized in May, up one-tenth of a point from April.

"Given these trends, the sluggish wage growth rate is even more perplexing," said Cathy Barrera, chief economist at ZipRecruiter, an online employment marketplace. "If employers want to fill these 6.7 million job openings, they are either going to have to raise wages or find more clever and creative ways to recruit workers off the sidelines."

Employers have been complaining for years about a skills mismatch, or the inability to find workers with the right training for the positions available. In the meantime, companies are adding other incentives to retain workers and pull new ones in.

As the demand grows, workers have gotten more confident about leaving their current positions for better ones.

The total "quits" rate has been nudging higher this year and was at 2.3 percent in April, the highest since 2005 and above the 2.1 percent rate a year ago and the 1.3 percent bottom set in 2010. Barrera said the rate should be higher.

"While more people are getting into jobs, folks aren't moving around much once they do," she said. "Unfortunately, the lack of mobility means that employers face little pressure to raise wages. They just aren't competing over jobholders."

How long it will take until the gap is bridged has confounded economists and policymakers at the Federal Reserve. April saw the difference between job openings and hires continue to be wide as the labor market gets closer to full employment.

"This is the ongoing difficulty of employers finding qualified workers. The disparity between job openings and hiring is over a million again for the second month in a row," said Jessica Rabe, co-founder of DataTrek Research. "In terms of wages, it's hard to increase wages when you don't have the proper qualifications for a worker to fill that role."

Another factor working against wage gains is demographics and the aging workforce.

While the unemployment rate has dropped to 3.8 percent, tied for the lowest rate since 1969, the level of those falling out of the workforce has surged. The total of those counted as not in the labor force is now at a record 95.9 million, a 21 percent rise over the past decade.

WATCH: Cramer says the jobs market is just right - for investors.

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There are more jobs than people out of work, something the American economy has never experienced before

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The jobs market has reached what should be some kind of inflection point: there are now more openings than there are workers. April marked the second month in a row this historic event has occurred, and the gap is growing.

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North Korea: Will The Country’s Reintegration Into The International Economy Increase Productivity of Agricultural Sector?

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North Korea: Will The Country’s Reintegration Into The International Economy Increase Productivity of Agricultural Sector?

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The hypothesis:
If allow private farming and the private ownership, then North Korea's agricultural sector will become more productive.

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This paper reflects the views only of its author. It is intended to inform NCNK membership and the broader public about economic issues in North Korea, and does not necessarily represent the viewpoints of NCNK or its members, of which, no doubt, there are many.
Executive Summary

The North Korean economy remains weak and vulnerable, but its structure is changing as it confronts major internally- and externally-generated pressures. Ironically, as UN sanctions have tightened in recent years, the economy has become more decentralized and productive, as weakening state controls have allowed the spread of market activities, providing incentives for individuals and families to work in their own self-interest. Central planning is weakening as money replaces the once ubiquitous ration coupon, and self-reliance on both a national and localized level is increasing as foreign trade and foreign aid dwindle. However, the state-run economy has not withered away, and Pyongyang dictates perhaps half of all economic transactions, a far larger share than does the central government in any other country. The state and its enterprises and the huge farmers' collectives still own most capital and property, and through their extensive regulations and police powers extract large rents from individuals and families.

The people of North Korea are very poor. The country's GDP per capita - estimated at anywhere between $700 and $2,000 - places North Korea near the bottom of world rankings, and even these figures give an exaggerated notion of living standards. A large share of GDP is spent by the government for itself and its military, and relatively little goes to people's consumption. People continue to suffer from shortages of food, fuel, electricity, running water, and other necessities, although there is little evidence of an ongoing famine as experienced in the 1990s. Malnutrition and food insecurity remain widespread, especially outside of Pyongyang, although UN nutrition surveys have shown a gradual decline in malnutrition rates since 2000. 1 Unusually for a command economy system, few state resources appear to be devoted to investment. The country runs a persistent and large merchandise trade deficit, financed by small amounts of foreign aid, net service sector earnings, illicit activities, and remittances from tens of thousands of overseas workers and compatriots.

Never the "hermit kingdom" suggested by outsiders, or the self-reliant economy as promoted by the ruling Kim family, North Korea is now being forced into a shell as its nuclear activities create barriers for economic interaction with the rest of the world. The various UN sanctions resolutions adopted in the past two years prohibit nearly all of the country's exports and other income-earning activities, and have also banned or restricted many categories of North Korean imports, including fuel. With the adoption of these sanctions, even China - mostly a steadfast partner for sixty-five years - is sharply cutting its purchases from North Korea, and other countries have essentially stopped trade. But sanctions have been just part of the problem. North Korea's lack of membership in the world's market trading system, the WTO, has meant that major trading nations automatically place high tariffs on North Korean exports, making them uncompetitive internationally. Pyongyang's decades-long sovereign debt default, meanwhile, adds to its inability to access foreign credit or direct investment.

Ironically, these economic and political troubles provide a narrow pathway for reforms that could unshackle the economy, creating growth even greater than its stellar neighbors, South Korea, China, and Japan, at equivalent periods in their development. As with those countries, major policy corrections must be made internally, but overseas aid agencies and the UN, given their own poor record of success, also should reconsider their programs and condition future work on market and productivity enhancing reforms. These could begin with:

Transferring ownership of property from the state to the private sector wherever possible, liquidating real assets to generate funds for public investment while allowing private interests to use this property more productively. This is the China model.

Unifying the bifurcated monetary system, possibly under a U.S. dollar or RMB currency board. The current system, with domestic and foreign currencies used side-by-side for domestic transactions, entails great vulnerability should the North Korean won begin to slip in value.

Unifying the wage system by bringing state salaries in line with market wages, and paying workers directly with real money, rather than ration coupons that stifle productivity and prevent financial savings.

Allowing private farming and the private ownership and transfer of farm assets, allowing the agricultural sector to become more productive and thereby increasing the size of the urban workforce.

An end to international sanctions, which would presumably require the dismantlement of North Korea's nuclear program, would be necessary for the country's reintegration into the international economy, but would by itself be insufficient to revitalize the country's economy. To fully unshackle the potential of the North Korean economy, the U.S. and others could couple the prospect of sanctions relief with an offer to sponsor North Korea into a WTO accession process, as it did with China seventeen years ago. WTO accession would be a win for all sides, given it would require most of the above reforms and would open the world's markets to what would no doubt become highly competitive North Korean industries.

North Korea's Macroeconomic Confusion

North Korea publishes little economic data, hence many measures of aggregate production and consumption are little better than guesswork on the part of outsiders. The country's only officially released macroeconomic data is that given to the UN Statistics Division responsible for systematic national income accounting (GDP) of all UN members, but the GDP figures Pyongyang provides are extremely small - only $16.8 billion in 2016, or just $665 per capita - and appear unreliable. 2 Finally, North Korea's data also show the total population as 25.3 million in 2016, growing at a slow 0.5 percent per year, and an age dependency ratio - the proportion of the population supported by those of working age (15-65 years) - of a modest 44%. 3

Two foreign agencies, South Korea's Bank of Korea and the CIA, attempt to fill in the gaps by making annual proxy estimates of GDP using, presumably, extensive intelligence collection on North Korea. The Bank of Korea estimates that North Korean GDP grew by four percent in 2016, rising to about $32 billion, or about $1,500 per capita, as electric power, coal, metals, and manufacturing each are thought to have rebounded from declines the year before. Agriculture improved slightly, and services, both government and private, are figured to have declined. 4 This was the fastest estimated growth since 1999, although most if not all the improvement is likely to have evaporated in 2017 due to plunging exports and a weak harvest. The Bank of Korea's estimate of North Korean GDP, which uses South Korean prices and value-added weights to calculate the value of North Korean economic activities, would put it at about one-fortieth of South Korean production, or one-twentieth South Korea's GDP per capita. The CIA, in its World Factbook, makes a parallel effort to gauge North Korea's economy, coming up with GDP in a wide range of $30-$50 billion and with a slight decline in 2015, its latest estimate. 5 It says its methodology is rough and its goal seems to be to fill in a gap in its worldwide GDP presentation. It ranks North Korean per-capita income as 215 th out of 230, in league with South Sudan and The Gambia. 6

Regardless of the roughness of these numbers, each paint a broadly accurate picture of a partly industrialized country with a large though outdated capital stock, a literate and well-trained workforce, extensive but poorly used natural resources, modest and dilapidated infrastructure except in its capital city, and a socialist control system that in theory and in law denies private ownership of the means of production, including virtually all capital stock and land. 7 The Korean Workers' Party, through its planning commission and price control bureau, has tried since the 1950s to implement a centrally planned or "command" economy, in which most normal economic decisions are made by central authorities and markets - even money - play minor roles. Nominal prices, wages, and interest are supposed to be fixed according to social desirability, not private demand. Economic growth is desired, so production is geared to investment goods, not goods for consumption or for export.

The system never worked well, and key parts broke down amidst a massive famine in the 1990s. The result in 2018 is a hybrid system with unregulated and often unruly markets, and with market prices and profit-driven allocations competing with the state's fixed prices and planned allocations. It is thus a land of many prices for the same good, service, or hour worked. Trade with the rest of the world is severely constrained by the need to protect this fixed price system. (Otherwise, for example, with domestic prices of coal cheap and external prices expensive, all the coal would be exported with none left for electricity production. If domestic prices were increased, coal-intensive heavy industry would be bankrupted.) Even before the adoption of UN sanctions, the result of this system was extremely poor efficiency in the use of labor and capital and thus a poverty-stricken population. But while malnutrition remains widespread, pockets of relative wealth are emerging as market activity takes hold in some areas and among some population groups.

The resiliency of this bifurcated economic system - one money and profit driven, the other commanded by the central state through rations and coercion - is often seen as remarkable given the torturous path the economy has undergone. North Korea has consistently defied predictions of collapse or systemic reform, which were especially prevalent during the 1990s after the Soviet Union and its Eastern Bloc satellites collapsed, as China shifted from plan to market, and as North Korea itself underwent famine and the death of its founder, Kim Il Sung. One explanation for this resiliency may be that foreign aid, which has historically been quite high relative to North Korean GDP, has provided the central state with just enough resources needed to prevail in its epochal fight with private markets, but never enough to buy back the economy and fully reinstate the command system.

As shown in the sections below, the country, and its economy, is not without strengths, often overlooked in the morass of poor policy decisions that have nearly extinguished the productivity of the hard-working and long-suffering people. These offer hope for the people should economic reforms ever be given a chance.

Infrastructure-Opportunities in Rust

North Korea's physical infrastructure is in poor shape after three decades of neglect as the government has focused its limited resources on nuclear, missile, and other military programs, and on building a modern city in Pyongyang. This neglect extends through the rail and road systems, electric power supply, water and sewer systems, heating systems, public health infrastructure, and many other areas. Communication systems are a bit better off but only because modern technology has advanced so rapidly, in terms of both performance and in lower costs, that even in North Korea communication has improved dramatically. Investment by an Egyptian company, Orascom, brought a 3G cellular network to the country, though data services remain limited and mobile phone users cannot connect to the internet. (North Koreans are restricted to a domestic intranet, though foreigners in North Korea are able to access the internet through the country's 3G service.) Costs associated with rebuilding the country's infrastructure to a level adequate to promote economic modernization are likely in the hundreds of billions of dollars, and are often assumed to require massive South Korean or foreign assistance. 8

The necessity of foreign aid can be debated, however, as infrastructure redevelopment may be the quickest avenue to increased productivity and growth in the economy and may easily be self-supporting. Like China in about 1980, the real property that underlies all infrastructure is owned by the state and is used very inefficiently. Privatization of even a small portion of these assets could provide enormous funds needed to build both public and private infrastructure. Extraordinary real returns are likely given the footprints of former structures are already there (for example in rail transportation and power distribution), and immediate productivity boosts could be expected in all lines of work. Foreign investment would help, and a forward-looking, post-sanctions North Korean government easily could elicit competitive bids from the huge construction and engineering companies of South Korea, Japan, and China eager for such work, with North Koreans providing the labor. But even absent significant foreign investment, North Korea might be able to do most of the work itself, and build private companies up in the process if it allowed a banking or private capital system to channel domestic savings into productive investment.

The footprint - that is, the existing framework for infrastructure development - is already there, making potential development relatively easy and fast. An ancient civilization with well-developed villages and towns, northern Korea received a large amount of Japanese investment during the colonial occupation (1910-45), including a modern rail system, ports on both its east and west coasts, hydro-electricity, and telephone and telegraph services. This infrastructure avoided damage during World War II but was devastated during the Korean War and then rebuilt in its aftermath. Between 1953 and the mid-1980s, Pyongyang, with substantial assistance from the Soviet Union, Eastern Europe, and later China, added significant thermal electric power, a limited express road system, and petroleum-related energy infrastructure. These have been very poorly maintained, however. Transportation routes are hindered by a mountainous interior that divides the country east and west, with reliance on an aging and nearly decrepit electrified and coal-powered steam rail system. Extraordinary delays are met even in travel between Pyongyang and Wonsan, only 90 miles apart across the middle of the peninsula. Travel between Pyongyang and the country's second largest city, Chongjin in the northeast corner, can takes days by train. In contrast, north to south travel on the west coast (less so on the east) can be accomplished relatively quickly by road or rail.

Ports, and the rail system that links them to the interior, were originally developed to service trade with Japan and remain adequate for the small amount of international trade currently undertaken by North Korea. The major Yellow Sea port is Nampo, downriver from Pyongyang and accessible through a large "lock gate" system to deal with tides. Others include Haeju, bottled up by the Northern Limit Line (the de facto inter-Korean maritime border); and Sinuiju, also limited to minor coastal trade, on the Yalu river. Generally, the west coast is encumbered by the extreme tidal variations of the Yellow Sea and by extensive marshes. East coast ports are much deeper and include Wonsan, Sinpo, Chongjin, and Rajin, which all enjoy reasonable access to the country's mineral and metal resources, but lack easy access to the important Pyongyang and west coast industrial areas.

Various schemes have been floated to take advantage of the country's geography, sitting as it is near or even between rich economies in South Korea and Japan, and the vast potential of China and Russia. Nothing but disappointments have come of these, however. As part of its "Sunshine Policy" of engagement with the North, South Korea rebuilt a rail line into the DMZ, with the idea of connecting it to the trunk line extending through Pyongyang and on into China, but after a brief period of limited service in 2007 and 2008, it has awaited passengers for more than a decade. A similar east coast rail line also has come to naught. China recently built a modern highway bridge across the Yalu River near Sinuiju in hopes of replacing a well-worn 1940s-era railroad and vehicle bridge linking Sinuiju and Dandong, but North Korea has failed to build the connecting road to what is otherwise an apparently completed project. Russia and South Korea have periodically discussed building rail links and an energy pipeline connecting South Korea with Russia's Far East via North Korea, but the project remains on ice. Russia has, however, enjoyed modest success in rebuilding the short rail line between its border and the North Korean port of Rajin, primarily to use the port as a transshipment point for Russian coal exports. UN sanctions include an exception that allows Russian coal to be transshipped out of Rajin, and Russia has reportedly used this route to ship 3.2 million tons of coal to China from August 2016 through August 2017. 9

Electric power, a relative strength of the North Korean economy in its early decades, is currently one of its weakest links, and perhaps the most visible indicator of the centrally planned system's gradual collapse. Under that system, electricity is allocated by the central plan and is nearly free, as is the coal, equipment, and labor needed to provide it. In the absence of a pricing mechanism, scarce electricity is allocated on the basis of political priorities. This proved workable enough when central planning dominated the North Korean economy, even if the lack of price signals led to the inefficient use of energy. In the mixed system, however, power plants are at a loss to purchase needed inputs and then give away the power. Installed capacity has stayed even at about 7,000 MW, with constantly degrading equipment, for three decades, evenly split between hydropower and coal fired thermal plants, and an antiquated high-voltage grid connects most parts of the country.

Two power plants dominate North Korea's electricity production: Supung hydro plant on the Yalu, which began operations in 1943 as the largest in Asia, with seven 100-MW turbine generators split between China and Korea; and the even more important Pukchang coal-fired plant, with sixteen 100-MW generators, furnished by the Soviet Union in the 1960s. Responsible for about a third of the country's power output, Pukchang sits next to underground anthracite coal mines worked at least in part by political prisoners, or what might be called slave labor. A handful of petroleum-fired power plants, dozens of smaller coal-fired plants, and hundreds of small hydro plants fill out the system. One petroleum-fired plant at Rajin in the northeast is being retrofitted to burn coal, although even that will not purge the entire system of the need for oil, since the difficult of burning anthracite means that coal plants need some fuel oil to start.

Anthracite coal resources in North Korea are plentiful, but the collapse of the centrally planned management system has left coal mines flooded for lack of power to run their pumps-some of the largest mines are under sea level-even as power plants lack coal to supply the electricity to the pumps, a chicken and egg problem only possible in a command economy. In recent years a large expansion of coal exports to China may have hurt the power industry as well, although UN sanctions now may be forcing the coal back into domestic use. 10

Since at least the early 1980s, the North Korean energy industry has planned for nuclear power to play a large role but, subordinated to the nuclear weapons program, huge funds have been expended and no capacity has been created. A large setback occurred in 2002, when revelations of Pyongyang's covert pursuit of uranium enrichment capabilities led to the breakdown of the Agreed Framework with the U.S., North Korean withdrawal from the Nonproliferation Treaty, and the abandonment of two 1,000 MW light water reactors (LWR) that were being built and funded by the U.S.-managed KEDO consortium. These reactors would have expanded the country's total usable capacity by about a third to a half. The KEDO plants thus joined at least two other nuclear projects Pyongyang had initiated on its own and had abandoned at the outset of the Agreed Framework. In 2012, Kim Jong-un announced yet another new (but only pilot scale) 25-30 MWe experimental LWR project to great fanfare, where preliminary testing appears to have recently begun after several years of apparently stalled construction. 11

With little new capacity coming on line in decades, deteriorating distribution equipment across the board, and inefficient allocations and use of electricity, the North Korean economy is plagued by shortages of power. Industrial equipment, lights, trains, and even elevators are often shut down due to power outages. However, as market activities expand elsewhere in the economy, off-grid energy systems are becoming increasingly common, as households and enterprises turn to markets to buy solar panels imported from China, diesel generators, and imported fuel. Output from the devices is then sold at very high prices to people desperate for power, generating stiff profits. Some wealthy households have also reportedly bribed officials to siphon off electricity from politically-prioritized institutions, such as military bases or local Party headquarters. 12

Pressures may be building for a similar solution to the national grid. The Daily NK reports that apartment units in Pyongyang are being required to purchase electric meters and that power will be sold by the actual amount used, not by the number of appliances, as is the current rule. 13 If so, it would be relatively easy for Pyongyang to gradually raise the price and allocate more funds to the power plants to buy coal and improve or repair equipment. A big casualty of market pricing, however, would be heavy industry, which uses cheap power very inefficiently. As has occurred in China and the former Soviet Union, huge sunk investments in outdated equipment-equipment optimized for cheap energy and expensive capital-would instantly be made worthless by market priced energy and cheaper (or at least available) capital.

Mining and Manufacturing-Look to Comparative Advantages for Growth

Under North Korea's Juche or self-reliance philosophy, the country tries to produce a little of everything that it needs, and to encourage autarkic practices at the local scale. The result is an impressive array of factories and farms that do a little bit of everything, but nothing very efficiently. Inevitably, the quality of goods is suspect and the quantity is insufficient - casualties of a broken planned system, a chaotic market that overlays it, and the huge obstacles to foreign trade imposed by both domestic imperatives and (more recently) by a world seeking to sanction North Korea for its nuclear weapons program. However, if these barriers were replaced with solid incentive structures and access to global markets, the mining and manufacturing industries could drive rapid economic growth.

While impressive in some aspects, the ultimate result of this system is hungry people: a country that can't export enough products to afford to import enough food even to keep them alive. The output of a few large zinc mines - of which North Korea has many - probably could have been traded in world markets for enough grain to stave off the famine that killed hundreds of thousands of citizens in the 1990s. Or, in today's world, zinc exports could be used to service the country's debt and restore its creditworthiness. Those mines are nearly shut, due to lack of electricity, fuel, equipment and (most importantly) entrepreneurial, profit-driven management that could compensate for the breakdown in the plan mechanism.

A rational division of labor would likely focus on building up several key industries while shutting down others. A look at the structure of the country's trade with China is instructive though not complete, given the irrational nature of prices in North Korea. Comparative advantages can likely be found in many high-valued mineral and metals products, including zinc, lead, iron, anthracite coal, gold, and rare earths. North Korea's work force is well-skilled and literate, which is conducive to construction, many types of manufacturing, and textile production - providing the basis for both a solid export base and for the reconstruction of domestic infrastructure. Some large chemical or iron and steel plants, such as the Kim Chaek Iron and Steel Complex in Chongjin - North Korea's largest industrial establishment with tens of thousands of skilled workers 14 - might be rebuilt from the ground up, and then could likely compete effectively with equivalent Japanese, South Korean, and Chinese industries, given North Korea's excellent resource base and highly competitive skilled labor. Comparative disadvantages are likely found in hundreds of smaller factories that waste energy and labor inputs; production of relatively scarce minerals such as aluminum and copper; certain electronics and consumer goods; and most importantly, the low-productivity agriculture, which engages one-third of the work force.

In developing its service sector, North Korea likely would have a large comparative advantage in tourism, an area that Kim is currently trying against all odds to develop. Relatively rich populations in China, Japan, and South Korea would likely flood to North Korea given the right political and security conditions, given the country's location, scenery, and historic context. Facilities easily could be self-supporting and would generate hard currency. However, North Korea would first have to make significant changes in policies that address the needs of tourists, assuring potential visitors that the country is safe to visit and convincing the U.S., South Korea, and Japan to remove travel-related sanctions. In other services areas such as education and healthcare, North Korean providers would likely be at large comparative disadvantages and require imported material and expertise.

Agriculture - Comparatively Disadvantaged, But Necessary in Transition

As was the case in Deng Xiaoping's China, agriculture may hold the key to economic reform given the potential for unleashing productivity gains among North Korea's many farmers. 15 Unfortunately, it is also the sector most frustrated by the country's dogged adherence to collectivist policies. Perhaps not coincidentally, agriculture has experienced much foreign intervention, including many billion dollars of food aid over the past two decades, amid efforts by UN and foreign aid agencies to improve farming practices, which continues. 16 Even as UN sanctions mounted in the summer of 2017, the World Food Program issued new calls for food aid due to what it thought might be the worst drought since the famine. 17

Two major crops, rice and corn, provide the bulk of the nation's food supply, although potatoes have risen in importance in recent years, grown in marginal fields and on hillsides. Rice is grown in irrigated paddies, especially in the large southwestern plain, between Pyongyang and the DMZ. Corn is grown in the colder and drier regions of the north and east. Both are susceptible to the country's highly variable climate, with droughts and floods often impacting production across different regions in any given year. Pyongyang, and foreign aid agencies, often cite bad weather and the rugged geography as cause for shortfalls and hunger, but agricultural self-sufficiency has long been a poorly-conceived national goal. Southern Korea always was the national granary, and North Korea is rich in many other resources, easily traded for food.

North Korea's labor productivity in agriculture is even weaker than its other industries, having declined from its heyday in the 1960s and 1970s when, copying Soviet practices, farms were mechanized and utilized great amounts of chemical fertilizer to overcome poor soil conditions. After reaching this peak, however, agricultural mechanization gradually decreased due to shortages of equipment and diesel fuel, and the heavy use of chemical fertilizers led to badly depleted soils. After subsidized fuel imports and fertilizer production bottomed out in the early 1990s, farmers were left with degraded and unproductive land, tilled by hand or oxen and often fertilized with night soil -- leading to famine and associated public health challenges. 18

The famine opened an era of foreign food aid that brought in millions of tons of grain from all over the world, including large amounts from the country's putative enemies in South Korea, Japan, and the United States. Importantly, the famine ended the universal food rationing system, since the state was unable to acquire enough grain to meet urban rations, and it let citizens forage on their own, especially in rural areas. This led to grain markets that now provide the bulk of the nation's food, even in cities.

The emergence of these markets, along with some modest changes in agricultural practices and policy, has led to increased agricultural output since food production bottomed out two decades ago. Prices for rice and corn are somewhat regulated but generally rise and fall with supply and demand conditions, and no major famine has been observed since markets took on the job of distribution, despite declining imports and a near cessation of foreign food aid. However, the agricultural sector remains highly inefficient. The North Korean data provided to the UN shows agriculture provides 22 percent of GDP, and that the rural population accounts for about a third of the total. 19 CIA estimates are similar, with agriculture put at 25 percent of GDP and the agricultural workforce at 37 percent of the total. This implies output per worker of only around $1,000 per year; South Korea's aged farmers each produce 15 to 20 times more output. 20

The largest problem is that North Korea's farms continue to be organized along strict collectivist lines - most are large cooperative farms encompassing dozens of villages and thousands of farmers, where the most productive land is used to grow grain in fulfillment of state-imposed quotas. (There is also a smaller number of state-run farms that produce more specialized products.) Private ownership of land, and most residences, is not allowed. Work teams of about ten families are the core production units and are allowed some rights to produce after annual quotas are fulfilled - this production can be sold externally at prices higher than the rationed rate but below full market value. Since the famine, individuals have been allowed to farm peripheral land, including on hill sides, with the output privately consumed or sold in markets. More recently, farmers have been allowed to cultivate and sell fruits, vegetables, and other non-grain crops grown in privately-built greenhouses. Naturally, more attention is given to this private farming, a misuse of labor since the better-quality collectively owned land is underworked. 21

Market prices for food in North Korea have fluctuated, both seasonally and in conjunction with overall production and monetary policy. From the famine to 2012, the price of rice and corn increased exponentially, requiring several episodes of massive currency devaluations that shook the faith in the North Korea won. Kim Jong Un, to his credit, has gotten inflation under control, and grain prices have flattened since he came to power in 2012 and are now stable. However, this has come at the cost of allowing U.S. dollars and Chinese RMB to saturate the economy, the long-term consequences of which remain to be seen. The relative price of corn, considered by North Koreans to be an inferior substitute to rice, has also fallen from its long-term average and is far below the famine era, suggesting less deprivation in food supplies.

Source: Daily NK

Foreign Trade: The Sanctions Crush Begins

The "Hermit Kingdom" has been a misleading moniker for North Korea for better than half a century but, if the latest UN Security Council sanctions are enforced, it may soon be all too accurate. North Korea's foreign trade was once far more varied than its current reliance almost entirely on trade with China would suggest. When UN sanctions were first adopted in 2006, just after its first nuclear test, Pyongyang's foreign trade was small but relatively diversified, with China holding about 38 percent of trade; South Korea 30 percent; Japan and Russia about 5 percent each and the rest of the world 22 percent. 22 And before that, the Soviet Bloc, Western Europe and Japan were large partners, as well. 23 (The US is alone among major countries in never having traded significantly with North Korea.) Debt defaults, the collapse of the Eastern Bloc's fixed price trading agreements, and angry episodes with Japan and South Korea progressively cut into Pyongyang's trade from the 1980s through the early 2000s.

Source: Global Trade Atlas

Source: Global Trade Atlas, February 2018
Beginning around 2010, however, North Korean trade with China began to rise dramatically, more than compensating for North Korea's trade losses elsewhere and making Beijing the only consequential trade partner for Pyongyang, accounting for 91 percent of North Korea's exports and imports in 2016 as tallied by mirror data. 24 Rising trade with China has had a significant impact on North Korea's evolving markets, with Chinese-made consumer goods and electronics in high demand by North Koreans with newfound cash to spend. But with the adoption of increasingly comprehensive (rather than simply arms, luxury goods, and WMD-focused) UN sanctions in 2016 and 2017, and an apparent newfound willingness in Beijing to enforce these sanctions, it appears that North Korea's trade with China may soon begin to plummet. Though China's long-term willingness to enforce sanctions remains to be seen, its trade with North Korea declined rapidly in the fourth quarter of 2017, down 42 percent from the same period a year earlier.

The latest UN sanctions have hit North Korea's major exports - anthracite coal, non-ferrous and ferrous metals, fish products, and textiles - especially hard. China's exports to North Korea have been relatively less impacted, causing a big and likely temporary increase in China's trade surplus - now running about $200 million a month - which likely is draining North Korea's hard currency reserves and reducing its ability to import needed products. Restrictions or bans on the export of refined petroleum, industrial equipment, and metals to North Korea will, if enforced, have a ripple effect throughout the North Korean economy, and as North Korea's currency reserves dry up the country will likely face difficulties funding the imports of other products, as well. North Korea will likely try to increase sales of non-sanctioned goods such as fruits and vegetables, which are already on the upswing, but it is doubtful that these can compensate for the loss of its big earners.

Monetary Impact of Sanctions - Key to "Maximum" Pressure - Not Yet Evident

Source: Daily NK, data through February 21, 2018
Curiously, the tripling in North Korea's merchandise trade deficit with China to $1.68 billion in 2017 has not hurt the value of the North Korean won in informal North Korean marketplaces, where it appears to be traded freely for U.S. dollars and RMB. 25 (The official North Korean exchange rate, at around 100 to the dollar, is grossly out of proportion with the informal rate of 8,000 to the dollar, but this rate has become increasingly irrelevant and now exists mostly to create a two-tiered pricing system for foreign visitors.) North Korea probably runs a surplus on the rest of its current account - net services income, remittances from overseas Korean workers and relatives, unreported sales of arms or other illicit goods, and some aid from UN agencies and others. Since the country is effectively bankrupt, new borrowings or inward investments are virtually impossible, so net capital account income is zero and the current account must be self-financing except for use of reserves. It is difficult to see, however, how the non-goods component of the current account could be rising to cover this rising goods deficit, especially since new sanctions target overseas workers and their remittances as well. Spending of foreign exchange reserves could pay for some of the imbalance, but these are not likely large enough to go on for long, and much of these funds presumably are controlled by Kim Jong Un himself, so he would feel like he is spending his own money.

Transferring ownership of property from the state to the private sector. Pyongyang, in effect, owns the country. By liquidating real assets, the state can generate funds needed to build infrastructure and fulfill its social obligations, while allowing private interests to raise productivity of the country's not-small quantity of industrial and real assets.

Unifying the monetary system, possibly under a U.S. dollar or RMB currency board system (as did Hong Kong in 1982 in a successful step toward integrating with China). The recent dollarization of the economy has achieved monetary stability, a considerable achievement of the Kim Jong Un government and the starting point for market development. But the two-currency system, with won and hard currencies used side-by-side, creates great vulnerability should the won begin to slip in value. The chance of financial panic in these circumstances is very high.

Unifying the wage system by bringing state salaries in line with market wages, and by paying workers directly with real money, not in ration coupons that stifle productivity, prevent financial savings, and are rife for abuse. A ration-based economy can't take advantage of the multiplying impacts of money circulation-where activities in one area breed further activities in another. (The payment of wages is required by the International Labor Organization; North Korea is about the only UN country that does not subscribe to ILO rules.)

Allowing private farming and private ownership and transfer of farm assets. As has occurred in China over the past three decades, the one-third of the North Korean population engaged in farming could double or triple their productivity, creating surplus income and a workforce capable of generating lucrative export-driven growth. (Beginning in 1978, and lasting for two decades, Chinese provinces near North Korea experienced 8 percent per year productivity growth in agriculture following such reforms.) 28

Large questions thus arise as to how long the regime can maintain this monetary stability, especially an exchange rate that is nearly fixed to the dollar, and what will happen if its citizens suddenly lose confidence - as they have on several occasions in the past, most recently and most disruptively in 2009 - when the won was forced to devalue by orders of magnitude and inflation soared. Money, either won or dollars, was much less important than it is now, and in today's money-driven North Korea, panic easily could erupt, at least among the monied elites and the merchants. Short of that, one can expect declines in imports with consequential impacts on prices and availability of consumer and investment goods.

Understanding these dangers, Pyongyang's monetary authorities no doubt are keeping a close eye on the informal exchange rate and may even be intervening (spending reserve dollars and RMB) to keep won fixed at the 8,000 per dollar rate. The informal exchange rate for the won has been remarkably stable since 2013, following a period of hyperinflation in the aftermath of the 2009 currency revaluation. Monetary interventions aiming to stabilize the exchange rate can be painless if the public accepts the power of the state to enforce the rate, but a significant price movement in favor of the dollar - for instance caused by a missile or nuclear test and calls for new sanctions - could lead to panic selling of won, subsequent hyperinflation, and turmoil for the growing class of money lenders. Meanwhile, monetary authorities, seeking to defend the value of won, are not likely providing much credit for state enterprises and government agencies, forcing the state to try to raise funds wherever it can and crimping the already extremely low state wages.

So far though, there has not been much market reaction to the visible trouble in the trade sector. The biggest exception is the doubling in the market prices of gasoline, diesel, and kerosene fuels last summer; prices declined somewhat after rumors that China would cut crude oil supplies dissipated, but have remained much higher than international prices. Fuel prices will likely stay high and may climb higher now that sanctions on imports of refined products have set in. Also evident are new campaigns to raise government income by charging tolls and, possibly, raising the price of electricity. 26 With strong sanctions only a few months old, it may be a nervous time for North Korea's growing class of money lenders and foreign exchange traders, and certainly for anyone in charge of Kim Jong Un's money reserves.

Sanctions May Provide Leverage for Lasting Reform

A South Korean legislator, presumably using information from his government's intelligence services, said in February that North Korea has about $3 billion in cash reserves that it is quickly running down. He said the reserve would last until October, thus assuming about a $250 million per month net outflow, consistent with Chinese trade data, and suggested panic will set in before then. 27 Whether or not this is accurate, it illustrates what has become a three-way race of sorts between Pyongyang's ability to withstand a large net outflow on its current account; its continuing nuclear program; and foreign tolerances for maintaining the stiff sanctions, especially by China and South Korea. Regardless of these strategic considerations, these sanctions ironically are creating a potential pathway for overseas aid organizations, and the UN, to press the case for radical reforms in North Korea - reforms that could save the country from the debilitating crush of its classic long-term poverty trap, where there is no savings surplus available to invest and all production is needed just to sustain the lives of the people and the activities of the government.

Pyongyang, at this point, may be more interested in systemic reform than it has previously been, given its need for hard currency and the dangers it must understand are coming from the increasingly dollarized economy. Drawing on the examples of post-war Japan, Park Chung-hee's South Korea, and Deng's China, such reforms could include:

A start to this process could begin with the US offering to sponsor North Korea into a WTO accession process, as it did with China seventeen years ago, and an end to sanctions, in return for an end to Pyongyang's nuclear development program. WTO accession would be a win for all sides, given it would require most of the above reforms and would open the world's markets to what would no doubt become highly competitive North Korean industries. More importantly to the Kim family, it might prevent hyperinflation and people in the streets.

William Brown is an adjunct professor at Georgetown University School of Foreign Service where he teaches courses on the Chinese, Japanese, and Korean economies, and he continues to do contracting work for the federal government from which he is retired. His most recent service was as Senior Advisor to the National Intelligence Manager for East Asia in the Office of the Director of National Intelligence. Prior to that his career as an economist and East Asia specialist has included extensive work in CIA, Commerce Department and the National Intelligence Council where he served as Senior Research Fellow for East Asia and as Deputy National Intelligence Officer for Economics. Brown was a founding member of the National Committee on North Korea, and currently serves as a non-resident fellow at the Korea Economic Institute of America. He received an MA in Economics and Chinese studies, and most coursework for the PhD, from Washington University in St. Louis and his BA in International Studies from Rhodes College in Memphis. Brown was raised in Kwangju, Korea by Presbyterian missionary parents who themselves were born and raised in China and Korea, respectively. He and his wife live in Herndon, Virginia and have four grown children.

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Special Report: North Korea's Shackled Economy (2018)

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This paper reflects the views only of its author. It is intended to inform NCNK membership and the broader public about economic issues in North Korea, and does not necessarily represent the viewpoints of NCNK or its members, of which, no doubt, there are many.

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Why Economists Love Price Gouging, And Why It’s So Rare

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Why Economists Love Price Gouging, And Why It’s So Rare

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I think Price Gouging should be legal. We have been having more and more natural disasters which makes us go out and get things and sometimes there aren’t enough supplies because everything is taken. Such an increase of demand during these events and always a shortage of goods so if we raise the price then some people can just by the goods they need and not overdo it. Price increases will encourage people not to over buy and to conserve so other people can have a chance to get the supplies they need.  Also, it helps other businesses as well, such as outside the disaster zone. It will make people go to other businesses where their prices are cheaper, and businesses will be able to profit.

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As flooding in Alberta continues to wreak havoc on people's lives, property and well-being, the media's initial dramatic disaster coverage has started to move on to more human interest type stories.

Thankfully it's been mostly good news: survival stories, loved ones reunited, and cats swimming to safety. It is disappointing, however, to hear the condemnations of "isolated incidents" of "looting and price gouging."

It's obviously troubling that a small number would use the disaster as an excuse to loot; to violently steal another person's possessions, cause damage and inflict even greater misery on an already suffering community. But is price gouging really at all comparable to looting? I'm disappointed not that price gouging is occurring, but that it's only been isolated.

So-called price gouging is a critical economic tool to ensure that supplies last and so can meet ongoing demand. Making it illegal is ridiculous, and here's why:

1. Without price increases, many people buy extra supplies "just in case", regardless of what they have tucked away at home already. If too many people do this, supplies run out and people who need them much more urgently miss out. With price increases, people who don't really need supplies will leave them on the shelf not out of the goodness of their heart, but out of concern for their wallet.

2. Price increases encourage conservation of resources people already have. Those who can most easily adjust their consumption will do so, leaving resources free for those who can't. People might, for example, use their cars more sparingly to avoid having to fill up while prices are inflated.

3. The ability to raise prices encourages businesses to stock excess reserves. Space in stores and warehouses is limited and products (even water) go off over time. If they're not allowed to raise prices on those items, they'll use that limited space for other products that have higher profit margins the rest of the time.

4. Allowing price gouging actually encourages citizens to be more prepared for disasters. Do you have enough food and water and other essentials stored at home for you and your family if disaster strikes your town? Or do you just assume you'll be able to go to the store and buy what you need when something goes wrong? Knowing that prices might double, triple, or more during a disaster is a pretty big incentive to go and stock up now instead of waiting -- even for that person who lives right next door to the store!

5. Finally, rising prices attract more resources from outside of the disaster area, where prices are lower. Nearby businesses, small or large, can easily profit by shipping essential supplies in and selling them at a premium. Without the ability to charge that premium, they would actually end up losing money through shipping costs, overtime wages, and inherent risks of operating is a disaster area. Without the profit motive, many don't take the risk.

Of course, people could do all of the above voluntarily and it would be nice if we could rely solely on the goodness of people's hearts. Plenty of this does happen in times of crisis -- people do drive supplies in from out of town at their own expense. But shortages still often happen in the real world regardless -- shortages that we could prevent.

In the United States, corporate giant Walmart -- a common target for anti-capitalist complaints -- actually hires a team of weather forecasters to predict extreme weather events, so they can ship extra goods to areas likely to be affected. Walmart does this to make a profit, but the end result is that they ensure critical supplies are available to the public when they're most needed.

In fact, the more people and businesses that attempt to "exploit" shortages, the less prices would actually increase as all the new suppliers compete against each other. One couldn't sell water for $5 a bottle, if Walmart was selling it for $3.

Some hope that a restriction on the quantity of goods people can buy during crises, can mitigate shortages. But rationing just leads to black market sales at even higher premiums. These restrictions also don't ensure resources go to those who most need them and does nothing at all to incentivize businesses to increase supply to affected areas.

Despite the economic arguments, many people still can't stomach profiting from a disaster, even if it helps the community.

In Calgary, a Facebook page called "YYC Flood Profiteering Shame Wall" sprang up to try and embarrass businesses who increased their prices and has already attracted more than 7000 fans. The page featured posts condemning stores for high prices of water in some stores in the city and praising other stores for putting their water on sale.

Those running the Facebook page missed the irony when they later had to inform people that many stores which had earlier offered sales were now sold out of goods.

So why do we blame the disaster if the store runs out of product, but blame the storeowner if he raises prices? Perhaps because we can easily see one side of the story as a storeowner offers cheap or free essentials to grateful shoppers, but we don't see the people who show up 2 hours later and walk away with nothing after the reporters have left.

Charity has its place, but removing the profit motive from businesses virtually ensures shortages during crises.

"Price gouging" is a derogatory term meant to belittle. A more accurate description would be "sustainable pricing" -- pricing that ensures supplies are sustainable to meet the demand of future customers.

Distributing resources according to whoever lives closest to the store and can get there first isn't any more just than distribution based on prices that reflect need. Higher prices can be painful but at least they allow people to obtain the products they desperately need.

It's time we legalized the art of sustainable pricing to ensure critical supplies are readily available for everyone the next time disaster strikes.

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5 Reasons Price Gouging Should Be Legal (Especially During Disasters)

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As flooding in Alberta continues to wreak havoc on people's lives, property and well-being, the media's initial dramatic disaster coverage has started to move on to more human interest type stories. Thankfully it's been mostly good news: survival stories, loved ones reunited, and cats swimming to safety.

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Hypothesis: By equality in the workplace, the US economy will benefit greatly.

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Posted on

This year, Equal Pay Day falls on April 4. This means that the average woman had to work from the start of 2016 through April 4, 2017 to earn as much as an average man did in 2016 alone. Put another way, women currently earn 80 cents for each dollar that men earn.

As a result of these factors and others, women can lose hundreds of thousands of dollars in earnings over the course of their careers. But it isn't just women's individual bottom lines that suffer: The gender wage gap is also a drag on the U.S. economy, and closing the gap should be a top priority of any economic policy agenda that seeks to strengthen and grow the economy. In fact, comparing it to the current top priority of the GOP-tax cuts for the wealthy-equal pay would put twice as much income back into our economy as their current proposed tax cuts.

There are a number of factors that contribute to the gender wage gap. Women still encounter persistent structural barriers in the labor market. Take, for example, the fact that women are often offered less pay than their male counterparts for the same work. Or that women are often driven into female-dominated occupations that are devalued, such as care work. Then, of course, there are instances of outright sexist discrimination.

Wage discrimination, occupational segregation, less job experience-often owing to taking time off to care for family-and other factors result in lower earnings for women regardless of their productive abilities. And the gender wage gap is even worse for women of color: African-American women earn 63 cents for each dollar that white men earn, and Latinas earn 54 cents for each dollar that a white man earns.

According to the Institute for Women's Policy Research, or IWPR, women's increased pay as a result of equal treatment in the labor market would add $447.60 in additional income to the U.S. economy. IWPR calculates this lost income by giving women the same rates of return as men for their human capital, such as education and years of work, and job characteristics, including occupation and industry. For example, women get less of a pay bump for receiving higher education than men do, so IWPR's calculation applies the pay bump men receive for more education to women equally. They find that if women were treated fairly, then they would collectively earn almost $500 billion more per year.

To put this in perspective, as the current administration and congressional Republicans are arguing for tax cuts to spur economic growth, since they believe that lower tax bills, especially for wealthy families, will lead to more growth. The Tax Policy Center's analysis of the House Republican tax proposal blueprint announced June 2016 shows that the GOP is prioritizing tax cuts equal to $203.6 billion in 2017. However, there's no clear evidence that tax cuts will increase economic growth, especially when the primary beneficiaries are wealthy Americans who will be less likely to spend their income in the economy.

But increased earnings for women workers and their families are more likely to increase economic growth, since women are more likely to be lower-income and middle-income workers, and these workers are more likely to spend a larger portion of their income on consumption, boosting aggregate demand and leading to spillovers in the economy that encourage economic growth, like those projected by minimum wage increases that also affects low-income workers.

An economic agenda focused on gender equity and closing the gender wage gap can start by robustly addressing wage discrimination and implementing comprehensive work-life supports, including paid family and medical leave, paid sick days, fair scheduling, and affordable child care. There are already a few federal bills on the table that, if passed together, would address these issues and expedite the closing of the gender wage gap.
Kate Bahn is an Economist at American Progress.
The Paycheck Fairness Act would enhance retaliation protections, bolster damages for victims, and hold businesses accountable to address their own wage gaps. Additionally, the Healthy Families Act would allow workers paid sick days to recover from a short-term illness or take a sick child to the doctor, and the FAMILY Act would allow workers to take longer-term paid time off to care for themselves or a loved one. The Healthy Families Act and the FAMILY Act are particularly beneficial for women since they primarily still take on caregiving duties. Policy can be the first step toward pushing a culture that values women's work equally to men's and reverses systemic devaluation that has led to the persistence of the gender wage gap.

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The Value of Equal Pay to the U.S. Economy - Center for American Progress

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Posted on This year, Equal Pay Day falls on April 4. This means that the average woman had to work from the start of 2016 through April 4, 2017 to earn as much as an average man did in 2016 alone. Put another way, women currently earn 80 cents for each dollar that men earn.