Föhrenbergkreis Finanzwirtschaft

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Posts Tagged ‘WSJ’

The Future of Work: A Tale of Multiple Americas

Posted by hkarner - 23. September 2019

Date: 22-09-2019
Source: The Wall Street Journal By Irving Wladawsky-Berger

The U.S. economy looks good by almost any measure. Unemployment is at historical lows.  There are more job openings than unemployed people to fill them. Inflation remains low. A number of recent studies have concluded that over the next decade, the economy will create new occupations that will more than offset declines in jobs displaced by automation.

Why then are so many Americans so anxious about the future? Why do they feel left behind?

A recent McKinsey & Co. report sheds light on these questions, presenting a detailed analysis of more than 3,000 U.S. counties and over 300 cities.

The study found that while the country is doing well in aggregate, there are essentially multiple Americas, some of which are doing quite well, while others risk falling further behind. Den Rest des Beitrags lesen »

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Trump Repeatedly Pressed Ukraine President to Investigate Biden’s Son

Posted by hkarner - 22. September 2019

Date: 21-09-2019
Source: The Wall Street Journal

Interactions under focus amid whistleblower complaint on U.S. president’s dealings with a world leader

President Trump in a July phone call repeatedly pressured the president of Ukraine to investigate Joe Biden ’s son, according to people familiar with the matter, urging Volodymyr Zelensky about eight times to work with Rudy Giuliani on a probe that could hamper Mr. Trump’s potential 2020 opponent.

“He told him that he should work with [Mr. Giuliani] on Biden, and that people in Washington wanted to know” if his lawyer’s assertions that Mr. Biden acted improperly as vice president were true, one of the people said. Mr. Giuliani has suggested Mr. Biden’s pressure on Ukraine to fight corruption had to do with an investigation of a gas company for which his son was a director. A Ukrainian official this year said he had no evidence of wrongdoing by Mr. Biden or his son Hunter Biden.

Mr. Trump in the call didn’t mention a provision of U.S. aid to Ukraine, said this person, who didn’t believe Mr. Trump offered the Ukrainian president any quid-pro-quo for his cooperation on any investigation. Den Rest des Beitrags lesen »

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Ex-Prime Ministers Line Up to Criticize U.K.’s Johnson

Posted by hkarner - 21. September 2019

Date: 20-09-2019
Source: The Wall Street Journal

Brexit destroys the British convention of former leaders treading carefully around the incumbent

Former prime ministers Gordon Brown, Tony Blair, David Cameron and John Major, who attended a memorial service on Sept. 10, have all criticized Boris Johnson’s moves on Brexit.

LONDON—Brexit has dented another distinguished British convention: Former prime ministers no longer refrain from criticizing successors from their own parties.

On another bracing day in the drama surrounding the U.K.’s break from the European Union, two former Conservative British prime ministers threw barbs at Prime Minister Boris Johnson over the fraught issue. Den Rest des Beitrags lesen »

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Global Growth to Hit Decade Low Amid U.S.-China Trade War

Posted by hkarner - 20. September 2019

Date: 19-09-2019
Source: The Wall Street Journal

OECD expects growth to remain low in 2020 and possibly beyond if the trade conflict spills over

A man works at a steel production facility in Sichuan province, China.

The global economy is set to grow at the slowest pace since the financial crisis,
with business investment and trade hampered by an escalating dispute between the U.S. and China that could inflict even more damage over coming years, the Organization for Economic Cooperation and Development said Thursday.

The Paris-based research body said it now expects world output of goods and services to increase by 2.9% this year, the smallest annual rise since 2009 when the global economy was pushed into a recession by the near-collapse of the financial system. Den Rest des Beitrags lesen »

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The Workforce-Education Puzzle

Posted by hkarner - 18. September 2019

Date: 17-09-2019
Source: The Wall Street Journal By Gary Beach

The Business Roundtable caused a stir last month by saying businesses have obligations to their customers, employees and other stakeholders, not just their shareholders.

Among the group’s five commitments, a list that includes “delivering value to our customers” and  “dealing fairly and ethically with our suppliers,” the one that struck a bell with me is “investing in our employees.” That means not just granting proper compensation and benefits, but also elevating training—and retraining—as a core corporate value.

The Business Roundtable, whose members include the chief executives of many big U.S. companies, is the latest organization to recognize one of the economy’s biggest challenges: an underskilled workforce. Den Rest des Beitrags lesen »

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Israel Prepares to Unleash AI on Health Care

Posted by hkarner - 17. September 2019

Date: 16-09-2019
Source: The Wall Street Journal

In a small country with digitized records, big data could make medicine cheaper and more effective

Israel plans to combine HMOs’ digital health records that cover most Israelis into a single system for AI and data analytics to tap.

Israel is becoming a testing ground for the power of artificial intelligence to improve health care.

Digital medical records for the vast majority of Israelis are currently stored in databases maintained by the handful of semipublic HMOs that provide most health care in Israel. While the biggest health-maintenance organizations already leverage their records in partnerships with private companies to develop technology for more advanced health care, Israel’s government wants to take such efforts to a new level. Den Rest des Beitrags lesen »

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U.K. Parliament Suspension Is Ruled Unlawful by Scottish Court

Posted by hkarner - 12. September 2019

Date: 11-09-2019
Source: The Wall Street Journal

The decision will now head to the Supreme Court for a final ruling setting up an unusual showdown

Prime Minister Boris Johnson has suspended the U.K.’s Parliament until Oct. 14.

LONDON—Prime Minister Boris Johnson ’s decision to suspend Parliament for several weeks has been ruled unlawful by Scotland’s highest civil court, setting the stage for an unusual showdown in the U.K.’s Supreme Court between the government and its opponents.

Mr. Johnson’s decision to shut Parliament triggered complaints from opposition lawmakers that he was reducing the time available to them to hold the government to account over Brexit and to pass laws to avoid the U.K. crashing out of the European Union without a deal on Oct. 31.

Parliament shut down earlier this week for five weeks and will remain closed despite Wednesday’s ruling. However, opposition and rebel lawmakers have already been largely successful in their plans to frustrate Mr. Johnson’s bid to get the U.K. to leave the EU by the end of next month come what may. Den Rest des Beitrags lesen »

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High Debt Levels Are Weighing on Economies

Posted by hkarner - 11. September 2019

Date: 09-09-2019
Source: The Wall Street Journal
Borrowing helped pull countries out of recession but made it harder for policy makers to raise rates

’The world is in a delicate equilibrium,’ Mark Carney, governor of the Bank of England, said earlier this year.

Global interest rates are low and may head lower, driven by slowing economies and the U.S.-China trade war. A less appreciated reason for lower rates is a mountain of debt built up during the past decade.

Debt owed by governments, businesses and households around the globe is up nearly 50% since before the financial crisis to $246.6 trillion at the beginning of March, according to the Institute of International Finance, an association of global financial firms.

The borrowing helped pull economies out of the nasty recession, but left them with high debt burdens that make it harder for policy makers to raise rates. It also makes consumers and businesses more likely to pull back from spending money on new goods if economic conditions weaken.

“Globally, you are at worryingly high levels,” said Sonja Gibbs, managing director for global policy initiatives at the IIF. She said policy makers need to consider debt levels as they adjust interest rates. “There’s going to be an impact on the broader economy.”

In the U.K., Canada and Australia, central bankers have backtracked from rate increases in the past two years after consumers got bruised more than expected. U.S. consumers, who have borrowed to pay for college, cars and everyday spending, have been less affected because their debt burdens are much lower relative to their incomes.

“The world is in a delicate equilibrium,” said Mark Carney, governor of the Bank of England, in a February speech. “The sustainability of debt burdens depends on interest rates remaining low and global trade remaining open.”

Mr. Carney and other central bankers would have liked to raise rates further during the good years to give themselves room to cut when economies slowed. But the higher rates hit their economies harder than many expected.

“Tightening may have had more of a restraining effect than anticipated,” said Nathan Sheets, chief economist at PGIM Fixed Income and a former senior economist at the Federal Reserve. “It acts as a very powerful drag on spending.”

There is a direct connection between debt, interest rates and growth. Rising rates force consumers and businesses who take on adjustable-rate loans such as credit-card debt to pay more each month and reduce other spending. Even with fixed-rate loans, borrowers know they will have to pay higher rates to roll over the loans, so they start putting aside money that they would have otherwise spent.

It doesn’t take much for countries loaded down with debt to feel the strain. When the Bank of Canada raised interest rates in July 2017, the first increase in seven years, officials said higher rates signaled the economy was strong.

But the country’s households had been borrowing heavily, pushing their ratio of debt to after-tax pay to the highest level among the world’s most-advanced economies. After five increases drove the interest rate up to 1.75%, the resulting slowdown in growth was “sharper and more broad-based than we expected,” said former Bank of Canada deputy governor Lynn Patterson during a March speech. The bank stopped raising rates far short of the 4.25% level in place before the financial crisis.

U.S. consumers are better off because so much mortgage debt was wiped out in the financial crisis. The impact of higher rates was tempered by the popularity of fixed-rate mortgages.

But higher rates squeezed U.S. consumers with lots of credit-card debt and big auto loans, said Torsten Slok, chief economist at Deutsche Bank Securities. Average auto-loan interest rates jumped by almost 2 percentage points in 2018 to roughly 5% for 60-month loans, while delinquency rates jumped from roughly 4% to more than 4.5%.

When Bank of Canada began raising interest rates in 2017, the country’s households had been borrowing heavily. A for-sale sign at a Toronto house.

Higher rates slowed home and auto sales. Companies such as toolmaker Stanley Black & Decker Inc. blamed weaker sales on higher rates. Others, including Coca-Cola Co. , complained about the impact of higher interest costs on their expenses.

In January, the Fed signaled it was pausing its rate increases after worries grew about the economy, including the housing market, global growth and the impact of the trade war. “The fundamentals for consumers are more worrying than we think,” Mr. Slok said.

The Bank of England, facing the risks of Brexit on top of growth and trade worries, last raised interest rates more than a year ago. One reason is that households and businesses are struggling with debt. Through the first three months of this year, households spent more money than they made, marking an unprecedented run of 10 quarters of net borrowing, according to the country’s Office for National Statistics.

Business defaults, meanwhile, rose in England and Wales during the second quarter of this year to the highest level since the first quarter of 2014, according to the government’s Insolvency Service. Short-term rates in the U.K. are at 0.75%, down from 5.75% in July 2007.

In Australia, where consumers owe $2 for every dollar they earn, economists at the country’s central bank found that every 10% increase in debt shaves household expenditures by 0.3%.

Philip Lowe, Reserve Bank of Australia’s governor, acknowledged that the borrowing is leading to softer consumption when he announced in July that the bank would lower its benchmark rate to an all-time low of 1%.

It appears poised to fall again. The board kept rates unchanged on Tuesday but in its September statement said it “will ease monetary policy further if needed to support sustainable growth in the economy and the achievement of the inflation target over time.”

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Boris Johnson Vows Oct. 31 Brexit as Law Rules Out No Deal, Election Bid Fails

Posted by hkarner - 11. September 2019

Date: 10-09-2019
Source: The Wall Street Journal

British prime minister loses second bid to get Parliament to approve an October election

Parliament rejected Boris Johnson calls for fresh elections for a second time in a week.

British Prime Minister Boris Johnson stuck to his pledge that the U.K. would leave the European Union on Oct. 31—even as a law came into force preventing the country from leaving on that date without an agreement and Parliament again rejected his bid to call an election before then.

In his first meeting with his Irish counterpart, Leo Varadkar, since taking office in July, Mr. Johnson on Monday insisted he wanted to leave the EU with an agreement to smooth the U.K.’s departure from the bloc. Although he outlined some ideas, he didn’t give any detail about how he proposed to do it. Den Rest des Beitrags lesen »

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The Digitalization of the American Workforce

Posted by hkarner - 9. September 2019

Date: 07-09-2019
Source: The Wall Street Journal By Irving Wladawsky-Berger

Going digital has remade the American economy and the world of work. “And yet, for all of the evidence that big changes are underway, surprisingly little data exists to track the spread of digital adoption,” the Brookings Institution said in its Digitalization and the American Workforce report.

The Brookings report quantified the spread of digitalization by analyzing the changes in 545 occupations between 2002 and 2016 based on O*NET, or the Occupational Information Network, the most comprehensive database on U.S. occupations sponsored by the Labor Department. O*NET includes highly detailed, task-level information on hundreds of occupations. The 545 occupations Brookings studied accounted for 90% of the U.S. workforce. Den Rest des Beitrags lesen »

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