Tag: Economy

Potential Issues with Brexit

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With the European Unions greatest financial point set to leave the Union, how can the EU ensure the stability of the Euro?

Even without using the Euro, The United Kingdom has been the primary go “middle man” for purchasing and selling financial products priced in Euros. They handle transactions that could reach 1.5 trillion Euro a day. From the Start the European Central Bank urged this market to be distributed among it members but was never had any authority to force London, a member of the EU, to stop the business. But with Brexit assured, thing could now change.

“Euro Clearing” in London employees about 83,000 jobs directly or by its support network. This would greatly impact the UK if they are to lose their request to maintain the market. At the same time moving these businesses could unnecessarily damage the EU by pushing up costs for companies who use the financial products.

Tech Stock in Trouble

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Billions of dollars have been lost as stock value of companies like Apple, Amazon and Microsoft are hit by the continued drop in Tech Stock.

This my not seem important to most, as people don’t actively participate in the Stock Market. But if you have a 401(K) or IRA, which is most North American citizens, then its likely you have investments in one or two popular companies.

This is important news as Tech companies (Facebook, Apple, Google and Microsoft) are positioned as top most popular mutual stock fund investment. Tech companies have gained increasing importance in relation to the US economy, which in turn makes it difficult to not want to invest in them.

Tech Stock has usually been viewed as a durable, long-term investment which will see continued growth in the long run, so people are quick to bet on companies like Facebook and Amazon and new markets they are opening. But because of this very reason, research into unknown an untested technologies ins VR, OS, storage, phones or game consoles can cause people to doubt a company and their directions.

This is worth considering as the start of drop can be linked to a selloff in Apple stock, closely after their WWDC and may be related to their new lineup of computers and laptops as well as OS.

 

Bitcoin Value Drops

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Recent cyber attacks have affected Bitcoin performance, causing a drop in trade value.

One of the suspected culprits is a a randsomware name WannaCry. This computer worm has spread worldwide, with about 150 countries, and Europol estimating around 200,000 computers being infected since its release in May 12, 2017.
Once infected, the computer files are encrypted and a prompt demanding payment fo $300 in bitcoin within 3 days or double on the 4th day. It is believed that as of 16 May 2017 at 12:00 UTC, a total of 238 payments and $65,970.35 in bitcoin had been transferred with no one recovering their information
The second cause for the drop in Bitcoin is attributed to expectations that withdrawal restrictions in Bitfinex exchange will soon be lifted. Analyst speculate this has caused Chinese trading volume to drastically increase its share, from 8.2 percent on May 1 to 22.8 percent Monday.
It is important to note that even with the resent decline, this volatile currency had doubled in value since March.

Macron takes 66% to Le Pen’s 34%

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For anyone not to date on the French Election, briefly sent the euro to a six-month high against the dollar, as markets reacted to the victory by the pro-EU candidate.

Mr. Macron promises is to overhaul the labor market, simplify the tax and pension system. It is an important time for the French Economy as they try to recover from rising unemployment and diminishing competitiveness.
Macron new plan is stated to correct the causes of France economic troubles and many independent economist agree it can accomplish this goal.
Without going into much detail:

  • 35-hour workweeks will remain with firms negotiating deals with their employees on working hours and pay.
  • Slowly unify pension plans and have payouts tied to contributions people pay in during their working lives.
  • Cut corporate tax rates.

Even with necessary backing, it is important to note that this new strategy will not have immediate results. This slow buildup could be linked to Macron wishing to reduce the risk of street protest but has many feeling the result will come to late to help the economy.

Emmanuel Macron also plans for France to remain in the eurozone. He has plans in place requiring German support and backing to help reform the eurozone. This plan is pending German elections, so at the moment he is focusing on domestic policies.