Wednesday, May 11, 2011

Oil Project

This article is about new changes in oil production. After the big oil spill in 2010, many more rules have been set in place to help prevent any more damage to the environment. The United States approved a Royal Dutch Shell plan to drill for oil in five locations under the Gulf of Mexico. As we all know, gas prices have been rising. With the recent great recession, people are very cautious with how much they use their cars. I think this new oil plan will help the economy. It may not help the environment, but if more oil is pumped, there is more oil to sell, if there is more oil to sell, the prices will start decreasing and the demand will go up. Price, as a factor of demand, should be in a range that people find affordable. Consumers need to spend money to help raise the GDP. The law of demand tells us that when prices are too high, the demand goes down. This plan shows the government kicking in. A lot of money is being put into create these oil wells, and that is exactly what our economy needs. We need a constant flow of buying and selling to bring our economy back to health. I think this is the perfect project to help bring our economy back to life. The trade-off to drilling more oil and bring down prices is that if too much oil is pumped out and sold at low prices it could hurt the environment and eventually lead to more problems.

Elianah- lead author
Haley- lead researcher
Iram- secretary

Should the Decriminalization of Marijuana be the next move for our economy?

Our economy is still suffering from a recession with GDP still very low and Unemployment rates have hit an all-time high. Serious action needs to be taken in order to fix Americas’ economic problems and the decriminalization may be the solution to our problems. Studies show that if marijuana were to be legalized and to be taxed as much as tobacco and alcohol are there could be a potential revenue as high as $6.2 billion dollars annually. It was also estimated $7.7 billion per year in state and federal expenditures on prohibition enforcement would be saved. These numbers are staggering sand such cash flow would give our economy a huge boost and take the first step toward the expansion of our economy. Regulation of the product would eliminate the need for a black market and therefore would allow the purchases of marijuana be included in GDP. The elimination of the black market would also prevent Americans money from going out of our borders due to the fact most marijuana is purchased from out of the country. However there is some uncertainty around the elasticity of demand for the product due to those who engage in home cultivation. source:
Will Noble, Andrew Velvin, Cameron Casey

Oil Prices Drop Below $100 a Barrel: Gas Continues to Go Up

An odd fact recently, is that gas prices continue to go up, but the price of the oil used to make gas goes down. Hawaii has the highest gas prices in the world still today, but unfortunately the heartland of the U.S. is catching up to Hawaii in gas prices. For example, Illinois’ average price for gas is $4. 32 for a gallon. Another example is the average gas price in Idiana. They have an average gas price of $4. 24. For the first time since March 16 the price of a barrel of oil was lower than one hundred dollars. Miraculously, oil prices have gone down. The oil price went down because there was lower consumer demand for gasoline and a concern about slowing global growth. The latest government measure of demand for gasoline in the U.S. shows that overall, drivers have cut back gas purchases by almost 2 percent in the past four weeks compared to a year ago. That kind of significant downward move in demand, coupled with rising stockpiles of oil in the U.S., mean prices of crude should be headed downward. Gasoline fell further after trade resumed, breaking technical levels. Total volume reached a record 240,000 lots.Brent crude settled down $5.06 to $112.57 a barrel. U.S. crude fell $5.67 to $98.21 a barrel, after touching as low as $97.50 a barrel.U.S. gasoline futures suffered the biggest daily drop since September 2008, with the June contract settling at $3.1228 a gallon, losing 25.69 cents, or 7.6 percent. It was the biggest loss in dollar terms since September 2008.Rising fuel costs this year have fueled calls by U.S. lawmakers to cut down on speculation in oil markets.

Commodities, U.S. Stocks Drop on Inflation

On May 11 commodities fell for the first time in three days. Following these commodities were silver and water. U.S. stocks retreated from London and Beijing because of the inflation they were having. This inflation in turn made Beijing and London raise their interest rates. The euro will be forced to restructure debt. The Bank of England Governor Mervyn King rose the cost of their pound value. He says that the inflation occurring in England remains uncomfortably high and that interest rates will more than likely rise. As prices grew in Germany and China, Poland unexpectedly increased its benchmark rate. Europe’s debt scared them and they weren’t too sure about their stocks. Even after the economy started to get better Europes’ stocks still decreased. Unfortunately for Europe, since it went into debt and had to recover, global rates will go up. Global rates always go up after state recovers. The pound gained against 11 of 16 major peers, rising 1.3 percent versus the euro and 0.7 percent versus the Swiss franc. The won appreciated versus all 16 major counterparts after South Korea’s unemployment rate fell more than economists estimated. The euro lost more than 1.3 percent of its dollar. The Euro is now a laggard in its environment.

Gas Prices

A big problem in our economy is our gas prices and is about to get worse. Prices are continuing to go up due to our necessity for oil. One way to help fix this problem is changing cars and how they run such as, electric cars. Cars that run on electricity definitely save money and also it is better for nature because it doesn’t pollute the air that we breathe and also the gas mileage is absolutely astonishing and is better than what you would get with gas. The average cost to drive twenty-five miles on an electric car is $1.03 while with a regular car that runs on gasoline gets an average twenty-five miles at $4.00 which is a difference of $2.97 which in the long run would save you a lot of money and would keep our air safe to breathe. The annual fuel cost for an electric vehicle is as low as $561 to $644. If we (The United States) all transformed to use electric cars the government could also benefit from this because they could save millions of dollars that they could use to pay off their debt instead of using it to buy oil. Overall everyone benefits from this because the government saves money as well as the people but also we protect ourselves from polluting the air which helps us live longer and live in a safer world and we can feel safe to breathe our own air.

Oil Spill in The Gulf

The Oil Spill in the Gulf of Mexico couldn’t have come at a worse time in our economy. This oil spill probably has to be the worst crisis besides the Debt that the government is in because gas prices and oil has been the main talk about how prices would go up and with this happening the prices will go even higher. This could also cause an energy crisis that we have been through before in the 1970s when we had to drill offshore. The chances for this to cause a long term affect in the coming decade is probable due to the fact that we were already in a crisis. This Oil Spill in the Gulf has also because other crises that has to do with our food intake. A lot of people like fish and other sea creatures. Also, it has decreased the tourism around this area and no one wants to live near or by the place where there was a spill in oil because the beach is no fun if all you can do is tan. Lastly, scientists are warning people that massive quantities of methane that are being spewed into the water could create dead zones where there is absolutely no oxygen and literally nothing lives in this region.

NFL Locks Out Economic Benefits

Due to the NFL lockout of the 2011-2012 season many workers could lose business along with their jobs. There are many people whose jobs and businesses depend on the NFL. It’s the 2,500 ticket-takers, janitors and other game-day employees at the Superdome in New Orleans, and the suburban dry cleaner who washes all their uniforms. It’s the receptionists and accountants for the New York Jets, and the high school band booster club that sells burgers and beer at Carolina Panthers games. It’s the Episcopal church that sells parking spots for Tennessee Titans games, the hotel across the street from the stadium in Houston and the ticket broker who opened a store facing Cowboys Stadium. And on and on it goes, across the communities of all 32 teams. If there is no 2011-2012 season then many jobs will be lost and many businesses will close. The bars and restaurants around the stadium depend mostly on game day dinners. Consumers don’t go to the stadium to eat unless there is as game. It is like a ripple affect. Sporting events help the communities in which they are held substantially, even the move of one player can change the economy around the community. Take a look at Lebron James, changing the economy for Miami and Cleveland with one move, Clearly better for Miami and hurting Cleveland. If one player can make this big of a difference could you imagine the difference having no NFL teams could make. If the NFL lock out continues the effects will to large for businesses around the sporting events to survive.

Recycling Our Economy

Recycling might be good for our planet but it is also good for our economy. Recycling can save money due to the cheaper prices to make products from recycled goods. This cheap price to produce goods also means they can be sold for lower prices as well. This large number of goods that are not being produced due to the recycling means less waste that needs to go through landfills or incinerators. With recycling, everything can be used to its maximum potential, nothing is wasted, and such cost-effective practices not only save money, but the environment and our resources too. Recycling doesn’t stop at saving money. Recycling also creates new jobs. Recycling creates new business such as transporting, processing and selling recovered materials as well as companies that manufacture and distribute products made with recycled materials. When you recycle more jobs are created than when you just dispose of waste. Dumping 10,000 tons of waste in landfills only creates 6 jobs while recycling 10,000 tons of waste creates 36 jobs. In California, waste recycling and management rank higher on the economic and job creation scale comparable to the state’s entertainment industry. Through recycling, a mainstream industry comprising 5,300 business operations and employing more than 85,000 workers has been created in California. Overall, $4 billion in salaries, along with $10 billion worth of goods and services, is generated each year. If the United States continues to grow as a recycling country it will create many new jobs, save money, and helping our planet is nice too.

Tuesday, May 10, 2011

2012 Olympics Could Boost the Economy

It is obvious that wherever the Olympics are held, there is big money. The Olympics can make a completely normal city into the spectacle of the world. It is very likely that London will see some amazing changes to its economy come 2012. I believe that the 2012 Olympics will inspire people to spend more, which will cause a tremendous boom in the economy. In 2008, China went so far as to construct entirely new buildings just for the games. If England chooses to follow in this path, new jobs will be created and people will in turn be happier. When the vote was final, Tony Blair called it a "momentous day for England". Also, because of the 2012 Olympics, many tourists and athletes from around the world will travel to London which will be a huge boost for the travel industry there. In conclusion, London is a terrific place for the games in 2012 and it will truly make the best of its much needed economic upturn.

New Gas Prices Affecting the Economy

Recently, due to various causes, gas prices have risen dramatically. Prices in the United States have gone from a standard 2 and a half dollars a gallon to almost 5 dollars a gallon. Because of this dramatic rise in price, many people are beginning to cut down on spending. For example, people are spending less money on various things in order to save money for gas. Even though saving money is good for the individual, it can be very bad for the economy. Also because of these gas prices, demand for more fuel efficient cars which is putting the SUV business down the toilet. If gas prices continue to rise, I believe that people will attempt to draw from other sources of transportation such as the dart rail way or public buses. It is interesting to see how when one business weakens, another grows strong in its place.

Microsoft purchases Skype for 8.5 billion

Microsoft's recent 8.5 billion acquisition of the Internet telecommunication giant Skype, shows Microsofts willingness to capitalize one the high demand that the public has for communication over the Internet. By making this deal Microsoft has acknowledged that their telecommunication technology is greatly inferior to that of their competitors Google and Apple, this will change soon though because as a result of his purchase of Skype, Microsoft will have access to Skype's superior telecommunication technology and Capitol. Over time Skypes technology will trickle down to many of windows products such as the Windows phone and the Xbox 360, demand for Windows phone 7 will also go up for a time because it will have superior video chat technology than the iPhone or Android phones. The acquisition of Skype could also help end the common misconception that it is less "hip" than google and Apple and that it is behind the curb in regards to video telecommunication technology. Sales of Microsoft product should also soar, because Microsofts products are already cheaper than their competitors products, the only reason Apple's products sold better was because they were of better quality and more high tech, and the majority of those thinking at the margin would rather pay up a bit more to get a better product, but now that Microsofts products will be more up to par, their sales and demand for their products will likely rise because of this. What do you think, do you think Microsoft's acquisition of Skype will have as big of an impact as many believe?

-Andrew Velvin, Cameron Casey, Will Noble

Demand of Houses Drop Along with their Prices

As the economy gets worse, people tend to save their money rather than spend it. When the economy goes into debt, the demand for high priced items is very low. Since the Lehman collapse, the demand for houses began to drop. In order for something to receive a higher demand upon it then the price must drop. This is what is happening to houses that are on the market. The government has spent their money in the past to help the housing market, however it did not help with the price and demand and money was waisted on this idea. People that receive home loans will never be able to pay off their home. They could have purchased their house when the economy was good, or at least better than it is now, and now since the prices of houses are dropping, their house could be doing the same. The debt that people are in and the low demand of houses on the market are bad for the economy and bad for businesses, such as real estate, trying to make money. However, the people that have saved most of their money can find a great deal on a home. They can buy a house for a price a lot cheaper then it originally was. The demand of people buying houses maybe low but it is beneficial to some individuals and family that have saved their money and are looking for a nice, cheap house to buy.

Bri Sharp, Catherine Gregory, Chris Kennard

Monday, May 9, 2011

The iPad 2

The iPad 2 will sell 1 million units faster than the 28 days it took the first-generation iPad to sell according to this article. The demand will eventually increase because the new tablet will be available in more stores, instead of just the Apple store. As the supply of a product increases the price will decrease because the producer will have more of the product to sell. The iPad 2 will sell at 236 U.S. retail stores and in more than 10,000 other stores, including AT&T and Verizon stores, as well as retailers such as: Target, Best Buy and Walmart in the United States. The supply for the iPad 2 will be much higher than the iPad 1 because Apple expects to be in 27 countries rather than 10 for the first iPad. Apple CEO Steve Jobs launched the iPad 2 on March 2nd; one week after Verizon Wireless launched the Motorola Xoom Android. The iPad 2 is thinner, lighter and faster and includes dual cameras for video chat via Apple's FaceTime application.  Even though the price will remain the same, the quality of the product is much better and it’s still offered at the same price.  The better quality for a lesser price eliminates competition such as the Android xoom.

Easter egg woe for chocolate makers as costs rise and prices are slashed

Everyone expects Easter weekend to be a huge weekend for chocolate to bring in a huge profit. This Easter chocolate makers are feeling the pain of their favorite chocolate eggs and bunnies not being as popular. Because of the low demand the chocolate makers are forced to lower prices. Even popular favorites such as Cadbury's Creme Eggs are finding it hard to make a profit with the rising prices of sugar and cocoa. The price inflation of these items makes the cost of production higher and low demand causes the price to remain low. Many stores use the deals on these Easter favorites to draw people into their stores so they can make a profit with other products. Although the demand of these items is obviously higher this time of year the profits are still not comparing to previous years. The amount of independent chocolatiers is slowly decreasing as large companies take over the marketplace. Rising prices of necessary ingredients may just cause these independent chocolatiers more discouragement from continuing in their business. While the Easter bunny may be enjoying the low prices the manufacturers and sellers are finding it hard to make their usual profit.

The Wedding Dress, Bridesmaids' Dresses and Pages' Uniforms

The royal wedding was all that anyone has talked about for the past 2 months. One aspect of the wedding that was the most anticipated was Cate’s dress. It was the dream of any designer to get to make the first dress ever to be worn by the new princess. This is because the designer who is selected will be classified as the best of the best. Cate decided to wear a dress designed by Sarah Burton at Alexander McQueen. The demand for her as a designer will skyrocket because of Cate’s selection. Her beautiful design and craftsmanship will be showcased on a worldwide stage. The cost of the dress would not have been an issue because the advertisement alone would bring endless opportunities for the designer. Based on the principals of economics the price of dressed made by this designer will continue to go up as the demand goes up. The dress is the centerpiece of the wedding and will continue to be talked about by everyone. The fact that Cate chose to wear this dress shows that she approves of the quality and craftsmanship. This dress will also stimulate the market for “look alike” dresses and I can imagine that the wedding dress industry will benefit due to high demand.

Sunday, May 8, 2011

Will recent natural disasters in the south effect the economy of the whole country?

Will recent natural disasters in the south effect the economy of the whole country? In the long run will government continue to give money for these natural disasters on our home front? The recent tornadoes that swept in Alabama took out many lives and homes. In the article federal emergency management agency administrator Craig Fugate thinks its imperative to make the response time to disasters quicker. This might mean that we as a country need to be economically ready if another disaster shall strike.  A quicker response time will allow for more people to get back on their feet sooner but what if the disaster reoccurs in two days or two weeks after the “fixing” process has already started. That would result in thousands of dollars lost.  A benefit of a quick response besides the fact that things are indeed being fixed is that citizens feel like the government does care about them. And when citizens or voters think they are cared for people get votes. On top of fixing homes and other buildings the loss of life would play a big role on getting a state back on its feet, there is a loss of jobs and people to work in those jobs. When companies are destroyed they don’t just losses the four walls but they loose the materials necessary to run the store. If there were a big hurricane in Florida that wiped out the orange groves that would affect Florida’s ability to sell and produce there biggest ticket items and income for the state would go down. Is there a way for the government to be able to make that up and support states who go through a traumatic state in history? 

Whats more important more money or the luxury items?

The price of luxury items has continued to go up and up, while the value has not changed. Many people would rather spend their money on a starbucks coffee then saving it. In this article the author makes it clear that she would much rather look at coffee as an occasional item even though it is something she buys daily. A daily item like coffee is for most people is not the same as going out at buying a new watch, which would be considered an extra expense, and not something bought every day. When her husband recommended putting it in the family budget she found it unnecessary, and said she could cut back. Instead of reducing spending in other places like excess shopping, pampering, etc. Even when her husband bought her a complex coffee maker that had the ability to make her regular order she only used it on the weekends and for parties instead of everyday to cut down that extra expense. The American dream has been to make money and live prosperously. When people don’t take inconsideration to save money for the stuff they want people end up spending on credit. During the Great depression this took a massive toll on a lot of people and again in the rescission. When people get to confident with their money it leads to more credit and in the case of the author an excess of money going to coffee could take a toll on the family’s budget. A $4 coffee everyday could be almost $1,000 over a whole year. This money could be used for many other more valuable things, but it’s all a matter of what is more important luxury items or money in a bank.