Week 6

Cyprus gets $13 billion bailout, must crack down on banking

CNN News
By Ben Brumfield
March 16, 2013
http://edition.cnn.com/2013/03/16/world/europe/cyrus-big-bailout/index.html?iref=storysearch

Summary:

Eurozone finance ministers Saturday granted a $13 billion bailout package to Cyprus as it struggles with a bloated financial sector that is threatening the region's economy. It reckoned at €17 billion and seemed likely to impose an undue burden on Cyprus. Official loans on that scale would amount to 95% of Cypriot GDP. The Mediterranean island's banking system has become "fragile" and must be downsized. The Eurogroup said in a statement announcing the 10 billion euro bailout.

Opinion:

I was very shocked that the official loans is very large size that is even relative to the country's GDP. I cannot imagine how enormous amount that is. In practice the main answer will be to support Cyprus's pension funds and domestic banks into financing the government bonds.

Week 5

25,000 US Deaths Linked to Sugary Drinks

abc News
By Katie Moisse
March 20, 2013
http://abcnews.go.com/blogs/health/2013/03/19/25000-us-deaths-linked-to-sugary-drinks/

Summary:

In a study that's sure to shake up the soda ban debate, Harvard researchers have linked the sugary drinks to 180,000 deaths a year worldwide, 25,000 in the United States alone. The study comes one week after a judge blocked New York City Mayor Michael Bloomberg’s proposed ban on super-sized sodas, and one day after Mississippi Gov. Phil Bryant signed a bill preventing municipalities from setting limits on soda and salt content.

Opinion:

I think it is such a serious problem in the United States that can harm people's health. I was very shocked that the sugary drinks is extremely harmful to our health. However, I don't think it is the role of government to micro-regulate citizens' dietary decisions. The responsibility for one's personal health depends on individual choices about a proper diet and appropriate exercise. The government has no reason to worry about what people eat or drink. They need to focus more on important things that will actually fix the country's problems. Due to the regulation, health care and insurance costs might increase. As we learned this week in economics class, government regulation can affect supply. I hope this study would prevent people from drinking sugary drinks.

Week 4

Crude Oil Futures Settle Higher on U.S. Jobs Data

The Wall Street Journal
By David Bird
March 7, 2013
http://online.wsj.com/article/SB10001424127887323628804578345653207763868.html

Summary:

U.S. crude oil futures prices climbed 1.3% to settle at their highest level in a week Thursday on hopes that signs of an improving employment outlook will translate into stronger oil demand. The price of oil rose and briefly topped $92 for the first time this month. Many traders believe that the large supply of oil in the U.S. has kept a lid on prices. Carl Larry, analyst at Oil Outlooks and Opinions said that the key is jobs. The economy will be improved and translate to jobs growth and higher demand for oil.

Opinion:

The market will need to overcome the level in order to continue higher. One important factor will be U.S. strength. After all, there was a stronger than expected jobs number for the month of February, and if there is more hiring going on in the U.S., then it means that there will more than likely be more manufacturing going on, of which there is normally more demand for oil. This week, we learned about demand. Oil is inelastic because their is no substitutes. However, if the price of oil keeps growing, the quantity demanded will eventually decrease. Therefore, the price should be balanced to satisfy the demand. 

Week 3

Some Employers Could Opt Out of Insurance Market, Raising Others' Costs

NYTimes
By Robert Pear
February 17, 2013
http://www.nytimes.com/2013/02/18/us/allure-of-self-insurance-draws-concern-over-costs

Summary:

Federal and state officials and consumer advocates have grown worried that companies with relatively young, healthy employees may opt out of the regular health insurance market to avoid the minimum coverage standards in President Obama's widespread law, a move that could drive up costs for workers at other companies. Companies can avoid many standards in the new law by insuring their own employees, rather than signing up with commercial insurers, because Congress did not want to disrupt self-insurance arrangements that were seen as working well for many large employers.

Opinion:

The new health card law created powerful incentives for smaller employers to self-insure. However, this trend could destabilize small-group insurance markets. It is not clear how many companies have already self-insured in response to the law. In our lecture, insurance is required to protect people from the financial effects of unexpected losses. I strongly believe that employers should provide an insurance coverage for their employees.