U.S. Economy
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China-U.S. Trade Relations Plagued by Protectionism
China yesterday (Wednesday) slapped the U.S. chicken industry with the second set of tariffs in less than three months, further escalating tensions with its all-important Western trade partner.
China's commerce ministry said the new tariffs, which will impose charges of as much as 31.4% on imports of U.S. chicken, were a response to what it said were subsidies that created an unfair advantage for U.S. chicken producers.
China in February imposed a 105.4% duty on imports of U.S. poultry after a government investigation found that such products were being sold by the United States at less than the fair value. The new tariffs could altogether close off the market to U.S. poultry producers.
China and the United States have a long history of trade disputes, but these conflicts in recent years have escalated in both frequency and intensity as the two nations vie for global influence.
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Should Investors Sell in May and Go Away, or Ride the Bull Awhile Longer?
I'm sure you have heard the old saw that it's a smart idea to "sell in May and go away."
That concept is based on the notion that the May-to-November span provides a weak environment for investors. I have already heard the cry go up recently because the major indexes are already up a lot more than anyone expected, and this would seem to be a convenient time to take profits.
Yet like most old market adages, there's not much substance to the concept if you take a good look at history. -
Question of the Week: Readers Respond to Money Morning's Financial Reform Query
A vote on financial reform Monday failed to produce the 60 votes needed to move ahead, as Republicans said they felt the bill was rushed and not ready to take the floor.
The Senate's second attempt at bringing the reform bill to debate occurred yesterday (Tuesday) on the same day as Goldman Sachs Group, Inc (NYSE: GS) executives - including vice president Fabrice Tourre, the only individual named in the suit - faced the Senate Permanent Subcommittee on Investigations in Washington. Tourre denied the Securities and Exchange Commission's charges and said the product in question "was not designed to fail."
Goldman was the recipient of $10 billion in bailout funds - one of the most contested topics halting financial reform progress.
The uproar over taxpayer-funded financial institution aid along with the looming financial regulation overhaul prompted our fifth installment of Money Morning "Question of the Week:" How do you feel about the status of financial reform? Has it gone far enough - will too much regulation crimp our free market system? Or does it need to go much further - and can the powers-that-be create an effective reform proposal?
Here is a collection of reader responses showing concern for the future, questions over government spending, and ideas for improvement. -
We Want to Hear From You: Do You Think Booming Corporate Profits Are the Sign of a Strengthening U.S. Economy?
The past few weeks have pulled in one earnings report after another for 2010's first quarter, allowing a better look at the status of corporate profits. Most companies hoped for marked improvements after restructuring and cutting costs in the wake of the financial meltdown that gave balance sheets a beating. And they weren't disappointed: JPMorgan [...]
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India and Brazil Join U.S. in Pressuring China to Let Yuan Appreciate
President Barack Obama's efforts to pressure China to let the yuan appreciate gained momentum Thursday when the central bank presidents of Brazil and India both spoke out against China's exchange rate policy. Speaking ahead of a Group of 20 (G20) meeting scheduled for this weekend in Washington, the Indian and Brazilian central bank heads surprised [...]
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World's Factories Manufacturing at Record Rates, Fueling Global Economic Recovery
The world's factories are churning out products at record rates, fueling the global economic recovery at a faster pace than thought possible just a few months ago.
The latest figures show factory output is growing at a record rate from the United States to China to Europe and beyond. And as manufacturing expands, economists expect the world's economies to continue to expand, creating jobs and putting money in consumer pocketbooks.
As long as companies have plenty of cash to finance expansion, output from the world's factories should continue to grow, according to Money Morning Contributing Writer Shah Gilani, who recently launched the Capital Wave Forecast, a new trading service based on capital flows.
Recent surveys show U.S. companies are sitting on almost $1 trillion in cash.
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Question of the Week: The Lingering Sting of a Jobless Recovery
The U.S. unemployment rate held steady at 9.7% for the third straight month in March as the world's largest economy added jobs at the fastest pace in three years - the most-certain sign yet that the worst job market in a generation is finally improving and ending the "jobless recovery," economists say.
"This recovery is for real," Chris Rupkey, an economist at The Bank of Tokyo Mitsubishi UFJ Ltd., said in a statement.
Still, there's cause for concern. -
Money Morning Mailbag: Can Anyone Fix the Fiscal Mess?
As opinions continue to pour in to the Money Morning mailbag, something is becoming quite clear: People are getting fed up with the national and global "fiscal mess." The pessimists outweigh the optimists and are tired of standing idly by watching ineffective financial policies.
As the United States continues to spar with China on currency issues and Greece has yet to make substantial strides toward recovery, U.S. taxpayers and investors fear that our country is headed for worse economic times. Despite the fact there's a financial reform bill on the horizon, there is overwhelming doubt that the government will implement as much of a financial system overhaul that's needed.
Here are some of the more passionate views on the government mistakes that caused a U.S. financial quagmire, threatening the country's future stability.
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We Want to Hear From You: Are You Confident in the U.S. Employment Outlook?
The U.S. unemployment rate held steady at 9.7% for the third straight month in March as the world's largest economy added jobs at the fastest pace in three years - the most-certain sign yet that the worst job market in a generation is finally improving, economists say.
Factories, retailers and hospitals stepped up their hiring, and the overall employment market got a boost thanks to hiring related to the U.S. Census. Overall, the economy added 162,000 jobs for the month, with about a third of those gains coming from the Census. The private sector added 123,000 jobs, the most since May 2007. And the outlook ahead is good, since about 700,000 Census workers will be hired for the formal U.S. population count this spring.
"This recovery is for real," Chris Rupkey, an economist at The Bank of Tokyo Mitsubishi UFJ Ltd., said in a statement.
Still, there are causes for concern.
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Why the Fed Won't Rescue America's Plunging Savings Rate
In the 1992 election campaign, H. Ross Perot predicted a "giant sucking sound" of U.S. jobs heading for Mexico if the North American Free Trade Agreement passed. Perot seems to have been wrong on that - wherever U.S. jobs have gone, it's not Mexico.
Nevertheless, if you listen carefully there's still a "giant sucking sound" - but this time it's the sound of U.S. capital headed overseas.
To find out what the Fed must do to keep capital at home, and why it won't act, read on...
