Art Cashin: I've been on Wall Street for 50 years and this looks like a market bottom

Even though the economy itself is healthy, the stock market has plummeted in the past few days, as people begin to worry about inflation and raised prices Art Cashin, UBS director of floor operation in the New York Stock Exchange,  weighed in on the issue. On Monday, major corporations like Dow and S&P faced all time lows since 2011, Dow trading down below 25,000 points. Regardless jobs in the United States are also secure, as unemployment rates remain relatively low. Trump’s administration displayed no concern for the stock market, simply stating that it is the “ebb and flow of our stock markets.” Both Treasury Secretary and Vice President began stressing that our focus should be direct towards “fundamentals.” Mnuchin accredited tax reform as an aid towards the strength of the fundamental economy. Trump's tax reform itself has called for increased tax cuts for major businesses, which has cause a lot of controversy. From these statements, the Administration has made it clear that their focus is directed on the long run.

What are the costs and benefits of record low stocks?

Should we be focusing on the bigger picture and the long run, or the “fundamentals,” as Trump has stated?

Sources:

http://www.chicagotribune.com/business/ct-biz-dow-jones-stock-market-falls-20180205-story.html

https://www.cnbc.com/2018/02/06/art-cashin-in-my-50-years-experience-stock-market-is-bottoming-out.html

Apple may offer rebate to customers who bought full-price batteries

In December, Apple apologized to it's customers for slowing down the performance of older iPhone models. Due to this, many customers began to pay for replacement batteries. Apple reduced the price of a battery from $79 to $29, however, now Apple is debating whether they should offer a rebate for all customers who purchased a full-priced new battery. Apple claims that the goal of the "slowdown" was to "smooth out peak demands and prevent older iPhones from sudden shutdowns as their batteries degrade." However, it just left customers angry and disappointed. Apple's Vice President of public policy, Cynthia Hogan stated that Apple's intentions are to give their customers the best products and experiences. Apple's CEO, Tim Cook, was asked whether investors should be worried about battery replacements cutting into users wanting to pay for an upgrade. Cook responded that he never even thought about how it would effect the upgrade rates, rather trying to do the right thing for their customers.

I think that Apple is showing an effort in trying to apologize for their actions. They are doing their best to apologize and make it up to the public. The fact that Tim Cook wasn't even thinking about his future profits, makes his actions seem genuine. I commend Apple for admitting to their fault and trying to fix their mistakes. I think even though Apple was at fault, I think that people will continue to purchase their products regardless because it's "Apple."

Questions:
1. Do you think Apple should fully refund their customers?
2. What do you think of Tim Cook's reaction? Is it genuine?
3. How do you feel about Apple products after this incident?

http://money.cnn.com/2018/02/06/technology/apple-iphone-rebate/index.html

Girl Scout Cookies and Pot Appear to be Compliments?

Urbn Leaf

Source: San Diego Union Tribune

A girl from San Diego recently sold over 300 boxes of Girl Scout Cookies within hours. What was her

secret? Well, considering the legalization of marijuana in California, she decided to wheel her wagon

right outside Urbn Leaf, a marijuana dispensary in San Diego.

There was a small argument about whether the girl was allowed to sell Girl Scout Cookies in front of

a business. However, the clever girl, knowing she wasn’t allowed to set up a booth in front of the

business, decided that she would walk up and down the sidewalk with her wagon instead. Others

disregarded the Girl Scout rules about selling their delicious cookies and decided that this was

completely disgusting. Girl Scout Cookies are a staple of american childhood, yet here we have a

Girl Scout selling her cookies outside a marijuana dispensary. Disgusting or genius?

We recently read about the Ten Principles of Economics, the first principle talks about efficiency. This

girl clearly demonstrates efficiency as she is receiving the maximum benefits that this dispensary

has to offer by catching the customers coming out of the shop who may be a bit hungry after their

purchase. She is also a great example of the second principle: Rational People Think At the Margin.

This girl is obviously a rational person as she is someone who systematically and purposefully does

her best to achieve her goal by finding loop holes in the rules and by using her common knowledge

to gain an advantage over her competition.

Should she be praised or looked upon with disgust?

How else does this event relate to the Ten Principles of Economics?

Job and Wage Gains Deliver a Promising Start for the Year

The unemployment rate has fallen in recent months, while the economy has risen. According to data, average hourly earnings jumped 2.9% in January compared to 2017. Slow economic recovery is beginning to reach American's pockets. Private sector wages and salaries have risen 2.8% more than the final three months of 2017. This has been the fastest growth in wages since the recession. People predict that they will begin to see an increase in our wages within the first six months of 2018. At the State of the Union address, Trump praises his strong economic record and Republicans are hoping that the strong economy can help Trump in the midterm elections. Wage growth seems to be increasing, but it is also predicted that it will fall back down in months to come. However, others believe that since job growth has been steadily increasing, unemployment rate has fallen to 4.1%. It is at a 17 year low, forcing companies to compete harder for workers, so they increase wages in order to give them an incentive to stay.

Many economists feel that Trump deserves little credit for the strong economy because the economy was already growing even before Trump became President. I believe that Trump will use this period of time to his advantage in order to give him a better chance in the November midterm elections, so that the public will perceive him as better. I think this increase in wages will benefit many, although I wonder if it will last, as not all companies can increase their wages just to keep their employees.

Questions:
1. How do you think this increase in wages and competition between companies for workers will effect unemployment rates in the upcoming years?
2.  Do you think the economy recovery was due to Trump's efforts?

https://www.nytimes.com/2018/02/02/business/economy/jobs-report.html

Democrats jeer Trump about 'treason' charge

During President Trump's State of the Union speech back in January, many, if not all Democrats attending decided not to clap during the speech. About a week has gone by since then and Trump has voiced his opinion on the Democrats not clapping, "'Can we call that treason? Why not?'".  He also described the Democrats, "...'they were like death. And un-American. Un-American'". Several Democrats have responded to Trump's comments saying that they actually are patriotic for exercising their First Amendment right, and that he shouldn't expect everyone to blindly be clapping after everything he says.

 I can understand both sides of the argument. Naturally we want to act like one strong unified country, with no disagreements or tension between the two parties. However that is not the reality of the situation; the Democrats clearly aren't happy with Trump's presidency and his policies, so why should they show support for someone that they don't agree with. I'm sure when Obama was President, the Republicans didn't show support for him, so I don't know why Trump is calling this an act of treason.
 article



Questions:
1. Do you think that everyone, no matter what political affiliation, should be supporting and encouraging our President?
2. Will this tension between Trump and the Democrats have any affect on Trump's actions as a President?

North Korea to Sends Official to South Korea

Article- BBC News

Summary

North Korea's head of state, Kim Yong-nam's, will go to Pyeongchang this week for the Winter Olympics. He is the most senior official to ever visit South Korea. Kim Yong-nam's attendance to the opening ceremony was confirmed by North Korea. Both will march under the same flag at the ceremony. Although this shows the two countries relationship improving, its said that it is not likely this will change the nuclear ambitions of North Korea. But it does show that Kim Yong-nam is maybe willing to improve their relationship a little. Kim Yong-nam is the ceremonial head of state,because of this he is usually held responsible for sending messages of condolences or congratulations to other foreign leaders.

Opinion

I think this is a good sign, although I don't think it will bring any drastic changes to the relationship of the two nations i think it’s a good gesture for North Korea to make, even if it apparently has little to no significance.

Questions

What do you think this means for the future of North and South Korea’s relationship?

What significance do you think this trip has?

Kylie Jenner Gives Birth to First Child with Travis Scott

Today, Kylie Jenner announced that she had given birth to a baby girl on February 1, gaining recognition that was almost enough to compete with the attention centered around the Super Bowl (key word: almost). While rumors had stirred about her pregnancy for well over 9 months, neither Kylie nor her HUGE family line, including friends, business partners, and brands names like Calvin Klein, had actually confirmed the rumors. Kylie herself had also stayed out of the public sight for the past 9 months, dodging paparazzi and social media,only posting pictures advertising her business. This afternoon, she took to Instagram to explain her reasoning behind going incognito, and why she wanted to keep her pregnancy low key, alongside posting a video on YouTube that documented her journey the past nine months. After her announcement, the HUGE family line I previously mentioned took to social media, tweeting, instagramming, vining (sike. RIP vine), and snapchatting their congratulations, expressing how proud they are of Kylie and how she is beyond capable of being a mother.
I think this whole incident revealed just how much power and control celebrities have. Global issues like the refugee crisis in Rwanda, unrest within the Middle East, Kenya’s political issues, and a million other global crisis are being dealt with, yet the Kardashian family, and A list celebrities are publicized and given a majority of the attention. I don’t necessarily blame news sources however, because they know that these type of stories will stalk up the readers. But it’s just interesting to see that the public has built up the Kardashian name, and those who feed into their daily lives (and I’ll admit I do it too), regardless of whether it’s to hate on them or adore them, are the ones who are responsible for creating their empire. Good for them though, they became one of the most whispered names, yet none of them had a unique or irreplaceable talent.

What was your reaction to the news?Even though people basically knew Kylie was pregnant, why do you think everyone was so shocked when she announced it to the world?What are the dangers of celebrities like Kylie having too much public power?

Source (shoutout to both fox news and cnn for their take on the story)

1. http://people.com/babies/kylie-jenner-welcomes-daughter-birth-announcement/
2. https://www.cnn.com/2018/02/04/us/kylie-jenner-baby/index.html
3. http://www.foxnews.com/entertainment/2018/02/04/kylie-jenner-reveals-shes-given-birth-to-baby-girl.html

Amazon Just Sparked A Race To Bring Robots To Our Doors

Amazon's patent application

Amazon recently applied for a patent to create a robot that could deliver items to front doors or even inside houses, as the patent describes the robot having the ability to open garage and front doors. Other companies, including Robby Technologies, Thyssenkrupp Elevator, and Starship Technologies, have also tried to create delivery robots. With so many companies moving to put these robots on the streets, it probably won’t be long until most of our purchases are being delivered by robots instead of people.

I think robot delivery is much more efficient than our current system. I could even see it speeding up deliveries. I’m not certain how these robots work, but I don’t think they need to stop at several locations before reaching your house and instead, bring your package directly. Additionally, they’re made to be safe; many prototypes that travel on sidewalks stop when pedestrians are in their paths and have a microphone for communication. While these robots will be replacing many delivery people’s jobs, I don’t think it will have a big impact on the job market overall. New jobs will open up, as people still need to create these robots and give specific packages to robots to deliver.

How will this impact the job market? What are your opinions on robots taking over people’s jobs?

Sources:

Forbes

CNBC

Republican Tax Reform's Potential Benefits for Democrats

Article Link

Tax cuts that President Trump campaigned upon and achieved in the end of 2017 may accelerate the demographic problems that threaten the Republican Party in its current form. If businesses and workers flock to Arizona, Texas, Georgia, and North Carolina due to cheaper real estate and lower taxes, Republicans may lose control of these states sooner than expected. The reason for this is younger voters are increasingly abandoning the Republican Party and they are the ones most likely to follow job creation in these Sun Belt states where Democrats have already been making gains.

Discussion Questions
1. Although the events of the next nine months will likely have a major impact, do you see the Democratic wave that began in Nov 2017 carrying through to the midterm election this November?
2. Will Republicans be able to counter potential Democratic gains in Sun Belt states by further gains of their own in Midwest states?
3. What will be the impact of Trump? Will he be able to attract independent voters by pointing to the nation's strong economy or will Republican pay an electoral price for his divisiveness and extreme rhetoric?

Trump Clears the Way for Release of Secret Republican Memo

On Friday, it’s expected that President Trump will approve a Republican memo about the FBI. The memo supposedly reveals that the FBI abused their authority and surveillance tools, possibly affecting the Russia investigation. However, there has been disagreement over what the memo actually says. Some Republicans say that the memo argues that political bias interfered with the investigation. Others, including Paul Ryan, have denied that the memo indicts the FBI or lies about the Russia investigation. Democrats have accused the Republicans on the Intelligence Committee of making changes to the memo after it was voted on, but before Trump reviewed it. The two disagree on the extent and number of changes.

Many have voiced their displeasure at Trump’s plan to release the memo. The FBI and some of Trump’s national security officers have warned him that it lacks important context and its release could jeopardize sensitive information. Moreover, it’s believed that Trump will use the memo to accuse the FBI’s top ranks of having bias and to undermine the legitimacy of the Russia investigation.

\With the controversy of the changes to the memo, I definitely believe that the committee should restart the process. The memo could reveal incriminating information and there’s no need to rush its release, so it should be approved by as many eyes as possible. I wasn’t surprised that Trump didn’t address the Russia investigation during the State of the Union, but in my opinion, if he really wants to promote bipartisanship, then he shouldn’t be pushing the publication of a memo that supposedly reveals how political bias has tainted government investigations and agencies.

What impact do you think the release of this memo will have? In this circumstance, do you think it’s appropriate to be releasing somewhat classified intelligence information?

Sources:

CNN

Washington Post

NY Times

Uber’s New Training Wheels: Testing Bike Sharing in San Francisco

Uber, with an estimated worth of almost $50 billion, is now testing the use and sharing of pedal-assisted electric bicycles as part of their company. After using the Uber app to find a bike nearby, users are given a pin to unlock it and are charged $2 for a half-hour use. As bikes come with a built-in lock and GPS tracker, users don’t need to find a dock to leave the bikes. However, this dockless-bicycle initiative, unassociated with Uber, has been introduced in China and other places and has encountered problems that include vandalism and misplacement.

While I can see how Uber decided to test this new model in a city where traffic is a problem, I don’t think that it will be too successful. People still primarily rely on cars for transportation, and since there have been large problems with dockless bikes in other cities, I’m unsure of Uber’s new initiative.

What do you think about Uber’s exploration in this new sector of bike-sharing? Do you think bike-sharing and dockless-biking can be successful in the US and large cities like San Francisco?

Sources:

Source 1

Source 2

12 Year Old Girls Opens Fire at Los Angeles School

Article 1 - BBC News
Article 2 - CNN
Article 3 - New York Times

Summary:

At 8:55 AM a 12 year old girl opened fire at Salvador Castro Middle School. Two kids were shot, a 15 year old boy in the head who is currently stable but critical condition and a 15 girl was shot in the wrist and is in stable condition. 3 others, 11-year-old boy, a 12-year-old girl and a 30-year-old woman, got minor injuries but were not shot. So far the police have the girl in custody but don't know about her motive for shooting the school or how she was able to get a weapon.

Opinion:

I think it’s horrible that news like this doesn't even shock me anymore seeing as of just a couple weeks ago we had already seen another student open fire at a school in Kentucky killing 2 people. The fact that a 12 year old girl can even get her hand on a gun is so disturbing. The only thing that is worse is that it seems that no one is doing anything about the gun control situation that has been growing exponentially.

Questions:

Why do you believe that shootings such as this one have become so common now and how could they be prevented?

How do you think the authorities will handle the situation seeing as the shooter was so young?

San Francisco Will Clear Thousands of Marijuana Convictions Dating Back to 1975

San Francisco just announced that thousands of marijuana convictions will be cleared under California’s Proposition 64, which legalized the recreational use of marijuana and was taken into effect in 2018.

When charged with marijuana possession or usage, convicts are unable to find jobs and receive other benefits and opportunities. District Attorney George Gascon explained how the clearance of over 3,000 people with misdemeanor marijuana convictions and the reduction of 4,000 felony cases will help them find support and employment more easily.

This issue has continually generated discussion around racial inequality —  in a 2013 study by the American Civil Liberties Union (ACLU) it was found that “African Americans were more than twice as likely to be arrested for marijuana possession as whites, despite similar levels of use … In San Francisco, African Americans were four times as likely as whites to be arrested for possession.”

I agree with San Francisco’s actions to clear previous convictions under the updated law. Evident through ACLU’s study, the number of African Americans targeted, convicted and forced to live under circumstances where they’re associated with a criminal history, as compared to whites is highly disproportionate. San Francisco didn’t take long to announce and apply the new law since it went into effect, and I hope that other cities will follow as well.

How do you feel about San Francisco clearing past marijuana convictions? What’s your reaction to the ACLU’s study? Do you think the city’s response is helping with the inequality problem? Should other cities and states follow San Francisco's actions?

Sources:

Source 1

Source 2

Source 3

Trump's SOTU: An Even Bigger Budget Deficit And National Debt Are On The Way

As everyone already knows (if you did the homework), last night Donald Trump delivered his State of the Union Address to Congress, calling on Congress to act upon his policy agenda. A majority of Trump’s speech centered around nationalism, veterans, immigration, foreign threats, and more veterans. However Trump’s new proposals geared towards the aforementioned topics call into question how the funding will be appropriated and reallocated, seeing that we are already in debt nationally

Firstly, Trump would cut funding directed towards Medicare and other mandatory spending entitlement programs, reversing the universal healthcare that Obama had strenuously worked to implement. An infrastructure deficit would be caused by the additional spending geared towards improving our roads, airports, bridges, etc. using AMERICAN workers,which he stresses repeatedly throughout his entire 80 minute speech. Of course, as most Republican presidents do, he wants to build and strengthen the military and border security by building a nuclear arsenal, increasing border patrol and security, keeping Guantanamo Bay open for detention, building a wall (that is reported to cost around $25 billion), refining detainment processes, and overall amending the structure and size of the military. Alongside, domestic programs including law enforcement and hurricane relief programs would be allocated money. However, he surprisingly fails to mentions mandatory spending reductions which must have been a huge shocker for his fellow Republicans. Regardless of the hefty budget reorganization Trump adheres to, he also never once addresses the national debt, budget deficits, and spending cuts. While he excessively praises himself for creating a tax cut bill that would cut taxes for both the American citizens and corporations, he leaves out a crucial piece of information: in a few years (when we will have to start paying taxes), the taxes will increase again for families, but businesses will continue to pay reduced taxes (30% to 21%)

Forbes analysts reviewed the speech and made the three following conclusions:

1. “If the program Trump laid out in his address is enacted, the annual budget deficit will be closer to $1.5 trillion than the $1.0 trillion many are projecting every year through at least the next 10 years.
2. Legislated deficit reductions of any kind, including mandatory spending, are not at all likely before the 2018 election.
3. Trump, who likes to refer to himself and his administration with superlatives, is very likely to be the biggest deficit- and debt-increasing president of all time.”

Opinion: By the tone of the summary, it is quite obvious where I stand on his speech, and to say it was disappointing is an understatement. Trump says he wants to make prescription drugs and medication readily available to ill people, but then goes on to cut funding for healthcare. It is already known that the military receives the most funding, and now he plans to make it bigger along with a 25 billion dollar wall.  Guantanamo Bay is also notorious for being overtly inhumane and racist, polarizing against Muslims and Middle Easterns. Also the tax cuts he has proposed would only benefit corporate companies, as if they don’t have enough money. In a few years the tax cuts for citizens will increase again, and as a recent graduate of college, my debts would already be piling up, so I really am excited to have a tax increase too.

Questions:

1. Do you think that more funding should be directed towards military and border security? Are there other programs that should be prioritized instead?
2. What effect will using American workers for infrastructure projects have on immigrant families and their economic contributions?
3. What does Trump’s budget plan mean for the national debt?

Amazon, Berkshire Hathaway and JPMorgan Team Up to Try to Disrupt Health Care

Amazon, Berkshire Hathaway and JPMorgan Chase have announced that they are collaborating to create an independent health care company for their US employees that could possibly expand to all Americans in the future, especially if other businesses follow their health care plans. Right now it’s unclear how the companies are expecting to do this (will they help find local doctors? negotiate lower prices for medicines?) or how it will affect taxes, but they do plan that this company will have no “profit-making incentives.” Right now, about 151 million people receive health insurance from an employer and many people are concerned about the high cost and uncertainty of the Affordable Care Act. Through this initiative, the companies’ executives aim to reduce health care’s economic burden and create a model for successful health care.

I like the idea of having cheaper and more easily accessible health care, but I don’t know how successful this plan will actually be in practice. In class we learned about how private corporations can work faster than the bureaucracy because their power is more centralized and they have more access to resources. So in theory, I do think Amazon, Berkshire Hathaway and JPMorgan Chase can find a solution to the US’s health care problem faster than agencies and Congress. However, their plan is still pretty new and vague, and even companies as powerful as these might not have much influence in the pharmacy area. I don’t think that these companies' health care will cost less than the current plan, but I hope I’m wrong.

What are your thoughts on this? Do you think this initiative can/will be successful? Amazon, Berkshire Hathaway and JPMorgan Chase only plan to offer this to their employees, but do you think they will be able to expand to more of the public in the future and sustain a smaller cost?

Sources:

NY Times

Reuters