Economics Scrapbook

By: Jagroop Bhangu

Unit 1

Germany being Europe’s largest economy definitely affects the global economy as they have recently decided to officially get rid of nuclear power plants by 2022. The key factor in this decision is opportunity cost, as choosing to replace the nuclear power plants with renewable energy sources making Germany give up one for the other. It also shows Germany sacrificing wants such as keeping the nuclear power plants as it is the simpler and less costly

choice at the moment, in order to satisfy wants for the future; in this case being able to have “the electricity of the future to be safe, reliable and economically viable.” Opportunity cost as well as a sacrifice of wants plays a significant role in the nature of economics.

Germany to shut down all nuclear power plants by 2022 - http://www.thestar.com/business/article/999283--germany-to-shut-down-all-nuclear-power-plants-by-2022

BERLIN — Germany's governing coalition said Monday it will shut down all the country's nuclear power plants by 2022. The decision, prompted by Japan's nuclear disaster, will make Germany the first major industrialized nation to go nuclear-free in years. “We want the electricity of the future to be safe, reliable and economically viable,” Chancellor Angela Merkel told reporters on Monday after overnight negotiations among the governing parties. “We have to follow a new path.” While Germany already was set to abandon nuclear energy eventually, the decision — which still requires parliamentary approval — dramatically speeds up that process.Merkel's government ordered the country's seven oldest reactors, all built before 1980, shut down four days after problems emerged at Fukushima. The plants accounted for about 40 per cent of the country's nuclear power capacity. Shutting down even more reactors, however, will require billions of euros (dollars) of investment in renewable energies, more natural gas power plants and an overhaul of the country's electricity grid. Germany's industry umbrella organization said the government must not allow the policy changes to lead to an unstable power supply or rising electricity prices, both of which would affect the country's competitiveness. “Transforming the energy sector is a hugely demanding project,” said Hans-Peter Keitel, the president of the Federation of German Industries. He urged the government not to set the nuclear exit date of 2022 in stone, but to agree on a date that would be adjustable if problems arise in the coming years.The coalition government's decision broadly follows the conclusions of a government-mandated commission on the ethics of nuclear power, which delivered recommendations on how to abolish the technology within a decade on Saturday, and presented them Monday. “Fukushima was a dramatic experience, seeing there that a high-technology nation can't cope with such a catastrophe,” said Matthias Kleiner, the commission's co-chairman. “Nuclear power is a technology with too many inherent risks to inflict it on us or our children.” The shares of Germany's four nuclear utility companies were down Monday. The biggest of them, E.ON AG and RWE AG, slipped by about 2 per cent, to €19.62 and €40.05 respectively. Neighbouring Switzerland, where nuclear power produces 40 per cent of electricity, also announced last week that it plans to shut down its reactors gradually once they reach their average lifespan of 50 years — which would mean taking the last plant off the grid in 2034.

Germany to shut down all nuclear power plants by 2022 -

A fundamental fact of economic life is scarcity; limited resources that can be used to produce a limited amount of goods and services to meet unlimited human wants. In this article it explains one of the world’s most crucial resources; drinking water. Water, being a natural resource is vital for beings to exist must be maintained and managed in an appropriate manner to

better sustain this resource, as we will need it for the future, all of which apply to the nature of economics.

Connecting Water Resources 2011 As awareness of the importance of water to our future grows, so too does recognition of the challenges of managing this vital resource. However, with new challenges can come opportunities to respond — opportunities for both action and innovation.From February 28 to March 3, 2011, the Canadian Water Network convened Connecting Water Resources 2011: Responding to the Opportunities. More than 300 participants attended this national conference to listen to presentations and panel discussions by leading international researchers and practitioners from diverse fields of water management, industry, finance, policy and governance. The event not only provided participants with critical insight into leading-edge research and practice, but it also showcased the national and international researchers and practitioners who are responding to opportunities for best water management.The conference provided a venue for a national and international dialogue that focused on three key questions –What is the state of knowledge in water management? What are the key Canadian and global opportunities to respond? Who are the innovators, catalysts and first-adopters that are creating opportunities and implementing solutions?Both plenary and concurrent sessions were structured to highlight compelling examples innovative water management in Canada and abroad. Speakers commented on Canada’s capacity to lead water innovation, and on what the Canadian water management and innovation landscapes will look like in the future. Keynote speakers offered a diversity of expertise, and ranged from world-class researchers, political leaders, private sector financial and economic leaders to innovative water managers and global water stewards. Panel discussions and question-and-answer sessions fostered a rich exchange of ideas. The cross-section of examples of leading water management clearly illustrated that, to be successful, innovation in water management will need to occur in many forms: at both large- and small-scales, across regional, national and international levels, and include social and technological innovations with the public, private and non-profit sectors. The collective issues, trends and opportunities identified in plenary sessions were well attended, ensuring that lively discussion carried through to concurrent sessions and networking events.

Connecting Water Resources 2011

The article explains the importance of distinguishing needs from wants. There are two types of wants, physical and psychological. It shows how maintaining your home isn’t the same as updating your home, although a lot of people confuse the two. When

maintaining your home psychological wants come first, as they are the needs that are necessary to sustain your home and or life/lifestyle. Wants play a key role in the nature of economics as well as our daily lives, as it also helps to show just how much we

take for granted.

Baeumler: Balance wants and needs in home reno decisions

Life is full of decisions. When it comes to our homes, those decisions are often expensive — so you want to make sure you make the right choice for you. Should you renovate the kitchen or bathroom? Perhaps the basement panelling should finally go. Do you update the insulation, plumbing or electrical? Should you build a man (or woman) cave, or perhaps head outside and add a deck? New siding or shingles? Maybe your house is too small for a growing family and you’re considering moving, adding an addition, or even tearing down your home and building a new one. And that’s only the beginning — once you’ve decided exactly what it is you’re going to do, there are a thousand more decisions on the plan, design and materials you’ll be using. Then there’s furniture, art, accessories . . . you get the picture. Maintaining your home isn’t the same as updating your home, although a lot of people confuse the two. Homes need constant maintenance and, unlike a condo, there’s only one tenant to pay the maintenance fees. Maintenance takes priority and will affect your overall budget. After identifying what your current home needs, you can start to look at putting together a want list. Ask yourself what your priorities are, and then make a list. Go through the list and prioritize your wants. Now, assign a very rough budget to those priorities from the top down until you’ve reached your overall maximum budget and erase everything below that line. Don’t forget to subtract any maintenance costs. Very few of us have bottomless pockets and your budget is the No. 1 limiting factor when it comes to what you can and cannot do when you decide to renovate. Hopefully your priority list has been widdled down a little by now, and you can start to think about specifics. If you plan to stay in your home forever, there really are no rules and (after essential maintenance) you can splurge on anything you want. The longer you’re planning to stay, the more money you can safely invest making your home your own. Remember that the larger the renovation, the more options you have, which also means the more decisions you’ll have to make. Laying out your plans well in advance will help you avoid becoming overwhelmed, and will also give you the opportunity to shop prices and stretch your budget. Now, go make a list — you’ve got some decisions to make.

Baeumler: Balance wants and needs in home reno decisions

In the article several different cases occurred in which the managers of Loblaw’s had to make crucial decisions all of which was done by opportunity costs in order to maximize their profits. They had the decision to either keep a long term customer in which 90% of that

customer’s sales were made with the help of Loblaws, or replace him with a more well known, brand name company in which they would make more money. Loblaw’s ended up picking the band name company, claiming it was simply a matter of keeping up with the changing

tastes of consumers, a key factor in the decision of what to make; representing the free market economy, all under the nature of economics.

‘No more room in the fridge’ for salad dressing dropped by LoblawsFor almost 20 years, Vince Forgione sold his Lisa’s Gourmet salad dressings to Loblaw’s. This week, he made his last shipment ever to the grocery giant after being told his wares were no longer needed.“It’s one of the better dressings out there, and that’s why we carry it. I really like their Caesar,” said Sebastian Maier, manager of the Avenue Rd. location of Bruno’s Fine Foods, a six-store chain that continues

to sell Lisa’s. Maier said his store sells at least three cases (30 bottles) a week. He said it sells less volume than Renee’s Gourmet salad dressing but that is because Renee’s is better known.Forgione, who wonders how his Concord-based business will survive after losing a client which accounted for more than 90 per cent of his sales, says he was told in late November by Loblaw Cos. Ltd. that

“there’s no more room in the fridge.” “When the Loblaw’s of the world charge for self space, large suppliers are always going to have an advantage over small suppliers,” agreed Satinder Chera, Ontario vice-president of the Canadian Federation of

Independent Business.So why are retailers doing it? It’s good money, and they need to keep up with the Joneses, says Hardy. In an environment where Loblaw is competing with other retailers such as Sobey’s and Metro, if one

company’s doing it, the others have to, just to keep up their bottom lines.“All retailers look at what their profit is from each stock keeping unit (SKU), and the listing fee is a part of it,” said Hardy.Part of what drives retailers to extract every bit of revenue they can is that customers are increasingly looking for bargains, Hardy says. With profit margins on products getting tighter, that means companies

have to look elsewhere to make up the profit slack.“It starts with the end customers who stock up on all the big deals,” said Hardy.One Canadian retail industry stock analyst said the listing fees are forming a greater portion of retailers’ profits than ever before.“It’s not the majority of their profits, but it’s significant. But you’ll never find it because they don’t break it out,” said the analyst.

‘No more room in the fridge’ for salad dressing dropped by Loblaws

Unit 2

Willingness and ability are the two conditions that must be satisfied in order for a person to have a demand for a particular product. In this case the recent natural disaster in Japan had a huge downfall for the company’s business last month after misconceptions. The March

disaster disrupted auto and parts production and inventories across North America and other countries. The disaster caused “production uncertainty” and kept shoppers away from dealerships last month, resulting in company sales falling more than 13%. Low demand for a

product results in lower net income for the company; showing the importance of supply and demand and the market for labour.

Toyota Canada scrambles to stem sales losses

Toyota Canada says it is moving quickly to stop further sales losses after misconceptions about the recent natural disaster in Japan slammed the company’s business hard here last month.

In response to a stunning 33-per-cent drop in May sales, the auto maker announced new incentives on Wednesday for several vehicles and guarantees on sweeteners if models aren’t available.Other major Japanese-based automakers also felt the earthquake/tsunami fallout for the first time. The March disaster disrupted auto and parts production and inventories across North America and other countries. In May, Toyota’s sales tumbled about 5,500 vehicles to 12,030. The company’s sales have fallen more than 13 per cent in the first five months of this year while the overall market has improved 1.8 per cent to 642,976 in the same period. A senior Toyota official said the disaster caused “production uncertainty” and kept shoppers away from dealerships last month.But Sandy Di Felice, Toyota’s director of external affairs, added that the company had adequate inventory at dealerships and has already accelerated production in Japan and North America.Chrysler Canada moved into second place in the month as sales jumped 17 per cent to 24,406 while General Motors of Canada dropped to third spot when volumes declined 11.7 per cent to 22,999 vehicles.

Honda Canada’s sales including the Acura luxury brand dropped 15 per cent to 9,831 during the month. The company attributed part of the sharp decline to shortages of the Civic, the country’s most popular vehicle. “It was not surprising that our May sales were down because of a product shortage resulting from a parts supply disruption that was caused by the natural disaster in Japan,” said Jerry Chenkin, Honda’s executive vice president.Nissan Canada’s business including the Infiniti luxury brand slid 18.4 per cent to 6,721 and Mazda’s deliveries fell 18.2 per cent to 6,587.

While many automakers struggled, Korean-based automakers bucked the trend with strong increases in May.

Toyota Canada scrambles to stem sales losses

Although the Canadian Union of Postal Workers could have ordered a full work stoppage of its members across the country, it chose to launch a 24-hour strike in Winnipeg. Worked were concerned with health hazards recently brought up as well as wages,

both of which are very important in terms of bargaining between the union members and the company. As a result to dissatisfaction, a strike has been imposed.

Canada Post workers strike in Winnipeg

Canada Post workers are officially on strike. About 150 workers in Winnipeg have taken to the picket line for the first in a series of rotating 24-hour strikes.Although the Canadian Union of Postal Workers could have ordered a full work stoppage of its 48,000 members across the country, it chose to launch a 24-hour strike in Winnipeg, where Canada Post has introduced new technology that the union blames for rising health and safety concerns.CUP-W says it expects to meet senior post office management on Friday.Even though the parties have been negotiating for seven months, the union says it has made little progress. That’s why national president Denis Lemelin issued a bulletin, hours before the strike deadline, announcing the Winnipeg walkout and warned other cities may follow.“Management has yet to drop its major demands to eliminate our sick leave and impose an inferior short-term disability plan and significantly lower pay rates and pensions for new hires,” the bulletin said, adding the union is scheduled to meet with negotiators on Friday.“The purpose of our strike is to encourage (Canada Post) management to return to the bargaining table with a proposal that meets the needs of current and future postal workers.”Canada Post spokeswoman Anick Losier said management made a revised offer on

Wednesday night that included raising the starting wage of new hires to $19 an hour and putting the short-term disability plan on hold, subject to a joint management-union committee review and possible arbitration.The union did not give a formal response on Thursday, saying the national executive board is still discussing the offer and the strike.“We obviously feel this is completely unnecessary especially since we gave them this revised offer on Wednesday,” she said. “It’s just going to penalize people in Winnipeg. We’ve done everything we can. We have given a lot of concessions. It’s frustrating.”Losier added that any strike will have a serious impact on those who depend on mail and parcel service, especially small- and medium-size businesses.Canada Post has said it needs to address labour costs.It notes the letter-mail business has fallen by more than 17 per cent since 2006 due to digital communications. Businesses and charities have been preparing for a big financial hit because of the postal strike, while rival courier services have been making plans to accommodate a potential increase in customers.Dan Kelly of the Canadian Federation of Independent Business says estimates the postal strike will cost small businesses between 200- and 250-dollars daily

Canada Post workers strike in Winnipeg

This article helps to show how labour unions work, in this particular case the Canadian Post. These Canadian worked had joined a union in which they negotiate contracts with the employer through collective bargaining. However they were not happy with the end

result if negotiating for eight months. Wages are also a key condition negotiated; in this case both sides are not able to come to an agreement. This then affects the willingness of people to work for the company, in this case it decreases resulting in a shortage for

labour.

Canada Post blasts union demands Canada Post has rejected its union’s latest contract proposal, calling it “a step backward” and warning it would add $1.4 billion in overall costs.“We were

surprised. We were disappointed after eight months of negotiating,” said Canada Post spokesman Jon Hamilton. “The costs would have to be either passed on to customers through higher rates, or taxpayers through a request for government support.“That’s not acceptable,” he said.Negotiators for the 48,000 members of the Canadian Union of Postal Workers are now examining the company’s counter-offer.In an interview before receiving management’s response, national president Denis Lemelin said the union is concerned about creating a two-tier system. Workers now earn about $24 an hour, and Canada Post has proposed $18 an hour for new employees, Lemelin said.“Canada Post has been profitable for 16 years,” he said. “Canada Post wants to create a cheap labour force, where they have lower wages, less holidays, some benefits, and pension changes.“It is not something we can accept,” Lemelin said. “It’s a social debate about what kind of society we want.”Another key issue is sick leave. Employees can currently bank sick days, and management wants to switch to a short-term disability program.Under federal labour law, the Canadian Union of Postal Workers must give 72 hours’ notice before it can walk off the job and as of Tuesday, it had not done so.Both sides have agreed to deliver federal pension and old age security cheques in the event of a strike, but all other mail and parcel delivery would cease. Purolator Courier would not be affected.Mail service will continue through this week, and businesses, government agencies and direct-mail marketers have been scrambling to come up with contingency plans.Ryerson University has told graduates to pick up convocation tickets on campus. Some businesses like Lee Valley Tools are warning catalogues won’t be delivered but orders will be sent out via UPS. Future Shop says it’s already switched from Canada Post to other companies as a precautionary measure.“With email, faxes and other technology, we rely less on traditional modes of communications like Canada Post,” said David Zweig, associate professor of human resources and organizational behaviour at the University of Toronto-Scarborough. “It won’t have the same impact it had 20 years ago, even 10 years ago.”Despite the tough talk, Canada Post says it remains committed to reaching a settlement.“There’s plenty of time. We believe we have more than enough time to sit down and negotiate a deal,” said Hamilton. “The last thing anybody wants is a work disruption.”

Canada Post blasts union demands

Although prices were not specified nor are they out to the public yet, we can make the assumption that prices will be high, as there is definitely a huge demand to walk around the CN Tower. The excitement for this new experience is very high, resulting in

many willing to pay for this service, thus again increasing demand and potentially prices.

CN Tower EdgeWalk overwhelmed by high demandTerrifying heights aside, the most challenging part of the CN Tower’s new EdgeWalk appears to be just getting a ticket.Walking

around a ledge at 356 metres above sanity is, apparently, highly appealing.Tickets sales for the CN Tower’s new attraction kicked off on Wednesday to the continuous drone of a busy tone.Stacey Kennedy was hoping to buy her husband, Phil Marambio, a $175 hands-free stroll around the tower’s main hub for his 40th birthday.Kennedy called two dozen times, only to receive a busy signal again and again. The EdgeWalk website is not set up to process online orders.Kennedy managed to reach a recorded message, and for a moment was excited to hear a real human voice. It apologized for the delay and gave her a new number to call. It was busy.“It’s brutal,” Kennedy said. “I was willing to wait on hold for 30, 60 minutes. This is a once-in-a-lifetime thing.“But no human beings picked up. I couldn’t believe it.”Jack Robinson, the CN Tower’s chief operating officer, said the first day of sales had been terrific. He didn’t specify numbers. “We are thrilled with the response” he said. “Due to the huge response, customers may experience some delays in getting through, but we ask them to keep trying. It’s worth the wait.”Kennedy agrees, but “if no one’s picking up the phone . . .”“This is such a cool thing, but they’re just not ready to take the demand I guess,” she said. “If you have an international attraction, you’ve got to have international customer service.”EdgeWalk opens Aug. 1.

CN Tower EdgeWalk overwhelmed by high demand

UNIT 3

Jim Flaherty is very encouraged by Canada's growth. Around the world, many countries are in major debt like US and Greece, but Canada seems to be doing stable and well. The GDP had an increase of 3.9 % and is expect to continue that trend through the future. Flaherty also said he's not worried by the Global events and he's encouraged by the domestic economic growth

showing that investment is picking up. Flaherty encouraged by Canada’s economic growth

The federal government’s upcoming budget will rely upon the same economic forecasts used in drafting the March budget derailed by an election call, despite some alarming global developments in the weeks since, Finance Minister Jim Flaherty said Tuesday.

“We will not be tweaking the forecasts,” Flaherty said after meeting with bank economists in preparation for the delivery of his June 6 budget.The budget being delivered next week will look much like the March version. But after Prime Minister Stephen Harper won a parliamentary majority in the

May 2 election, the opposition cannot stop its passage in the House of Commons this time around.A number of global events, including troubling debt situations in the U.S. and Europe, Japan’s massive earthquake and the high cost of oil, could threaten a

worldwide recovery and even foist another recession on the international economy.Economists had called in March for 2.9 per cent annual GDP growth, while they now project 2.8 per cent growth for the year, said Douglas Porter, deputy

chief economist at BMO Capital Markets, one of the 12 economists who met with Flaherty.“I don’t suspect that’s enough to rewrite a budget on,” Porter said.Little has changed since March because economists had already built in global challenges such as the tensions in the Middle East and the crisis unfolding in

Japan, although the full impact was not yet clear, he added.“At that point oil prices were already above $100 a barrel, the Japanese earthquake had just occurred ... and while the European concerns has intensified,

they were relatively well known back then,” he said.“We don’t want consumers to take on more than they can handle, particularly in residential mortgages, because it’s clear that interest rates are not going to

go down, they’re going to go up — it’s a matter of time.”For the sixth straight announcement date, the central bank said Tuesday the economy is not strong enough for monetary tightening and kept the

trendsetting policy rate at one per cent, where it has been since last September.The central bank gave few hints when it might start raising them again. But in an accompanying statement, the bank did change its advisory on future

action, indicating it is anxious to start moving rates closer to their normal levels. The problem, the bank said, is that the conditions are not right yet.

Flaherty encouraged by Canada’s economic growth

With interest rates expected to rise, more and more Canadians are beginning to believe that a fixed mortgage rate is the way to go over the next year. Variable mortgage rates tend to be lower than fixed rates because with fixed rates, you’re paying extra for

the peace of mind of knowing that if rates move up, you will not be affected. Financial planning experts typically suggest that homeowners who have a variable rate may want to lock-in when interest rates are on the rise. To try and prevent inflation it is

anticipated that interest rates will rise in September.

When rates rise, which mortgage is best?With interest rates expected to rise, nearly four-in-ten Canadians believe that a fixed mortgage rate is the way to go over the next year, a new poll shows.

Still, another 32 per cent, or nearly one-third, would choose a variable rate, which moves up and down with the prime rate, according to the survey released Thursday by the Canadian Imperial Bank of Commerce, “The results confirm there really isn’t one right answer when it comes to choosing a mortgage and the rate alone is not the only factor that Canadians consider,” Colette Delaney, senior vice president of mortgages, lending and insurance at CIBC Retail Markets, said in an interview.Variable mortgage rates tend to be lower than fixed rates. That’s because with fixed rates, you’re paying extra for the peace of mind of knowing that if rates move up, you will not be affected.Financial planning experts typically suggest that homeowners who have a variable rate may want to lock-in when interest rates are on the rise. But, Delaney stressed, that may not be the right decision for everyone. “There is a mathematical side to the decision, but there’s also the important issue of how your mortgage payment fits into your financial plan and that’s unique to everyone,” she said. The Bank of Canada opted to leave interest rates unchanged earlier this week. But economists believe the central bank will begin increasing rates in September to keep a lid on inflation, as well as household borrowing. Nearly two-thirds of those surveyed believe interest rates will be higher a year from now, while 24 per cent expect rates to remain the same, CIBC said. The poll results also highlight that views on choosing a fixed or variable mortgage can change depending on your stage of life. Among 25-34 year olds, who are more likely to be first time buyers or new homeowners, only 27 per cent would choose a variable mortgage.That climbs to 42 per cent among respondents 45-54 years of age, who are more likely to be near the end of their mortgage and are better able to deal with rate changes.Homeowners may choose to start with a fixed mortgage when you buy your first home, then transition to a variable mortgage in later terms when you have improved your financial situation and paid down some of the rincipal,” Delaney said. “It comes back to people wanting to choose a mortgage that’s right for them. After all it’s the biggest financial decision you’re ever going to make.”

When rates rise, which mortgage is best?

The Japanese nuclear disaster cost Tokyo Electric Power 15 billion dollars in net loss causing the President, Masataka Shimizu to resign. The disaster caused more than 80% of Tokyo Eltric Power's share price to drop. Anaylst Forecasts are also predicting a

25billion to 130 billion losses if the nuclear crisis continues on.

Tepco chief quits after nuclear crisisTOKYO—Tokyo Electric Power Co reported a $15 billion (U.S.) net loss on Friday to account for the disaster at its Fukushima nuclear plant, marking the

biggest loss in Japan by a non-financial company and prompting the firm to warn its future was uncertain.Much-criticized president, Masataka Shimizu, 66, resigned to take responsibility for the worst nuclear crisis since Chernobyl in 1986, making way for an insider, managing director Toshio Nishizawa, 60.Engineers are battling to plug radiation leaks and bring the plant northeast of Tokyo under control more than two months after a 9.0 magnitude earthquake and deadly tsunami that devastated a swathe of Japan’s coastline and tipped the economy into recession.The disaster has triggered a drop of more than 80 per cent in Tokyo Electric’s share price and forced the company to seek government aid as it faces compensation liabilities that some analysts say could top $100 billion (U.S.).For the business year that ended March 31, the company, commonly known as Tepco, posted a 1.25 trillion yen ($15 billion) net loss after accounting for 1 trillion yen to scrap reactors at the Fukushima complex and write off tax assets.The earnings figures were released after the close of Tokyo stock market trading and represent a landmark in the company’s 60-year history.Apart from compensation claims and quake tsunami damage, TEPCO expects other costs to include 700 billion yen this business year to buy more gas and coal to replace lost nuclear power capacity.Since the crisis, Tepco has been supported by banks that offered emergency loans. The government has promised to help Tepco handle compensate claims by thousands of households and businesses forced to evacuate from around the Fukushima plant because of radiation risks, although the issue is far from settled.Faced with so much uncertainty, Tepco did not offer earnings guidance for the current year to March 2012.Tepco has not made an estimate for the likely cost of compensating all victims. Analyst forecasts have ranged from around $25 billion up to $130 billion if the crisis at the nuclear complex drags on.On Tuesday, TEPCO said it aimed to complete initial steps to limit the release of further radiation from the plant and to shut down its three unstable reactors by January 2012.

Tepco chief quits after nuclear crisis

The article explains how mutual funds are becoming more and more popular, this being a positive change. Mutual funds are a good pick as an investment as it is a more safe investment because of diversification and professional management. Picking a mix of investments is key to prevent a huge loss in money and possible gain a rather large sum. Expert advice is always key as well, in

this case being able to get it from professional management.

Are Canadian mutual funds the place to be?

Balanced mutual funds proved increasingly popular at the end of 2010. As investors grow confident in the economy and markets, experts see Canadians willing to take on more risk for a chance at higher returns.

“I don’t think we’re fully back to where we were (before the financial crisis), but we have started to see the balanced funds coming back, and, now, we are even seeing, in the longer term, equity funds are starting to come on as well,” said Jon Cockerline, director of policy at the Investment Funds Institute of Canada, which tracks monthly mutual fund sales.

Among specific fund categories, the stars of 2010 were as Canadian as maple syrup.“Resources and Canadian small cap returns were certainly fantastic,” said David O’Leary, manager of fund analysis with Morningstar Canada. The top-

performing equity category for the past year was precious metal funds, up 52 per cent over the year, natural resources, which gained on average 26.5 per cent, and Canadian small mid-cap, up 26 per cent.

“Canadian equity (funds) in general did well because of the heavy resource and materials component.”Kellet’s top performers among Canadian equity funds were First Trust Raymond James Canadian Focused Picks Portfolio, up a whopping 59.4 per cent, and

the Bisset Microcap fund, ahead nearly 54 per cent.Among fixed income funds, the best performer for last year was the Chou Bond fund, which gained 32.7 per cent. High-risk, high-return fund manager

Francis Chou “invests with conviction” noted Kellett, and “has been known to play in distressed situations where something has gone awfully wrong and others are running for the exits.”

The idea that investors should guard against chasing last year’s returns was shared by Steve Geist, president of CIBC Asset Management Inc. Geist referred to a chart showing 15-year returns of various world stock markets which posted stellar returns one year and were followed by dismal results the next.

CIBC’s portfolio managers have a positive outlook for funds generally in 2011, Geist said.“They are expecting strong double-digit returns in Canadian equities and some strong foreign equity returns, and (are) particularly positive on the U.S.

Are Canadian mutual funds the place to be?

Unit 4

The article shows a clear connection to the stabilization policy by displaying an example of an expansionary policy. Since the

current economy is in a recession where unemployment is fairly high and very little growth in the total output of the country, the government should increase aggregate demand within consumers. It also recommended that the government should not cut

spending too quickly and that the Bank of Canada should keep interest rates low and even cut them if needed.

Canada’s economic growth at risk, IMF warns

OTTAWA—There are big risks to Canada’s economy as the recovery loses steam and officials should be ready to take additional steps to safeguard growth if necessary, the International Monetary Fund said Wednesday.The IMF forecast modest economic expansion this year and next, in line with Bank of Canada forecasts. It gave the country high marks for its comparatively solid fiscal standing, resilient banks and plans to gradually withdraw emergency stimulus while kindling growth.But it warned of the risks to that outlook, suggesting the deficit-wary federal government should not rush to cut spending too quickly and that the central bank should keep interest rates low and could even cut rates if needed.“We think it’s important to remain vigilant to any risks that could emerge. The report said growth would be muted in the second half of 2010 and in 2011 as household debt has run up to high levels, housing markets are cooling and fiscal stimulus is waning.“Risks are tilted to the downside, with a key risk that the global recovery stalls.”The Canadian dollar is “on the firm side,” but not significantly overvalued, the IMF said. But there is a chance that Canada’s higher interest rates could attract capital from low-rate markets and add upward pressure on the currency. he Canadian dollar jumped to parity with the U.S. dollar in April of this year. Since The IMF said the Bank of Canada should keep its interest rate low and, in the case of a global shock to the economy, it should be the first to respond with a rate cut.“Monetary policy should be the first line of defence if the outlook deteriorates, given the room to ease quickly, although fiscal policy has room to respond as well in a downside scenario.”The Bank of Canada raised its overnight lending target three times this year but has held the rate steady at 1 per cent since September, pending signs the recovery is entrenched.Finance Minister Jim Flaherty, who welcomed the IMF report, has the option of speeding up infrastructure projects and planned corporate tax cuts, it said.The IMF applauded the government’s decision to extend the deadline for stimulus spending by seven months to October 2011.The IMF predicted gross domestic product growth this year of 3 per cent, slowing to 2.3 per cent in 2011.It also highlighted an issue that has grabbed policy-makers’ attention in Canada recently—the alarming rise in household debt levels to 143.6 per cent of disposable income, just below the U.S. level of 148.6 per cent.Ottawa could curb borrowing by making it tougher to take out a mortgage, the IMF said.“At this point, probably the appropriate thing to do is to wait and see how the credit cycle matures but one option would be to take more steps on the mortgage market, or others, to rein that in a bit more if it doesn’t decelerate further to a level that’s more sustainable,” Kramer said

Canada’s economic growth at risk, IMF warns

This article shows how the government is playing a role in the economy by adjusting the tax on goods and services. The

government can control the tax to meet the needs of the people and make sure the economy will not fall but rather remain stable.

Top US senators call for tax code overhaul WASHINGTON - TOP US senators of both major parties called on Thursday for an overhaul of the tax code this year with an eye on spurring job growth in a

still-sputtering economy. 'The country is ripe for tax reform,' Democratic Senate Majority Leader Harry Reid told reporters, saying it would be one of the 'first priorities' for his party in

2011 because 'our tax system is broken and needs to be fixed'.'We all know the tax code is a disaster, and any effort to simplify the tax code, to get the rates down to make it more fair, I think we'd be open to discussing that,' Republican Senate Minority Leader Mitch McConnell said. Mr Reid said Senate Finance Committee Chairman Max Baucus, whose panel has jurisdiction over taxes, would resume hearings he began last year 'starting very, very soon' to flesh out the details of that difficult undertaking. Mr McConnell citing 'the outrageous corporate tax rate we have in this country' as a threat to US global competitiveness and said President Barack Obama 'seems to be open to an effort to reduce the corporate tax rate'.But deep divisions on what to change and how to change it, rooted in the parties' historic attitudes towards taxes, were expected to make any breakthrough difficult.

Top US senators call for tax code overhaul

This article questions Canada’s workforce as unemployment seems to be playing a huge role in the lives of many with special skills. This impacts

unemployment, a key term in economic stability and stabilization policy. Canada is a very diverse country to live in, however that is not always the best in terms of jobs as fewer opportunities are given for new immigrants and members of racial minorities. This as a whole then affects the unemployment

rate; one of the three key macroeconomic indicators. Parents also play a huge role in this, as companies are making them work harder and longer without that extra money that should be given.

Goar: Why talented Canadians can’t find work

Three reports have been released in the past week warning that Canada’s labour market is so badly broken that it creates more losers than winners and threatens the country’s economic vitality.The first, from the Metcalf Foundation, looked at the mismatch between skills and jobs in Ontario. Employers can’t find the skilled workers they need, it pointed out, while highly trained immigrants with credentials and experience can’t get their foot in the door. Meanwhile, talented graduates from Canadian universities and colleges are stuck in entry-level jobs. “The current system is not serving anyone,” concluded Tom Zizys, author of the 76-page report.The second, from the Toronto Workforce Innovation Group (formerly known as the Toronto Training Board), showed how the city’s economic transformation has outpaced its labour market, leaving a polarized workforce with a hollowed-out middle. This has led to extremes of wealth and poverty, less social mobility, more part-time, contract and casual work and a large, but inequitable, knowledge sector.

The third, from the International Labour Organization, said workplace discrimination is on the rise. It did not cite Canada specifically, but the symptoms it identified — cutbacks to human rights bodies; fewer opportunities for new immigrants and members of racial minorities; a disproportionate increase in youth unemployment, and a rise in support for populist politicians — are evident here. “Economically adverse times are a breeding ground for discrimination,” said Juan Somavia, head of the 183-nation body. parents are working longer and harder without gaining ground while their kids, who followed their advice and got a good education, are faring worse than they did at the same age.But the three publications, coming in rapid succession, underscored the urgency of the issue.Regrettably, all were heavy on diagnosis and light on solutions. They called for further research and proposed vague reforms. But there were common themes:• Waiting for the policy-makers to solve the problem won’t work. Government can’t create jobs for the well-educated graduates pouring out of colleges and universities. It can’t restore the mid-level jobs that once allowed workers to climb the career ladder. Elected officials can certainly update their policies, most of which date back to the industrial era when there were secure, full-time jobs with good wages and benefits. They can repair Canada’s fraying safety nets. At minimum, they can enforce existing labour laws and workplace regulations.• Waiting for big business to spot and hire talented newcomers won’t work. Most chief executives don’t venture outside their comfort zone. Most headhunters don’t approach candidates with no track record in Canada or the United States. Corporate leaders can certainly pay more attention to demographic realities and widen their networks. At minimum, they can check their own organizations for unused skills and wasted potential.That means the pressure for change will have to come from the multitude of Canadians trapped in a job market that is failing them, their children and their country.

Goar: Why talented Canadians can’t find work

Unemployment, being a key macroeconomic indicator is looked upon quite often, as it is a serious issue. In this article Tim Hudak has decided cancel the Green Energy and Green Economy Act, a disappointment to many. Not only does this increase unemployment, as it would cost Ontario thousands

of jobs and cause us to miss out on this clean energy revolution, it is also reducing environmental impacts, as well as the creation of more jobs and fuelling economic growth in countries around the world.

Green Energy

Hudak is endangering green jobsTim Hudak’s recent announcement that he would cancel the Green Energy and Green Economy Act is irresponsible. It would cost Ontario thousands of jobs and cause us to miss out on this clean energy revolution, a global transformation that is simultaneously reducing environmental impacts, creating jobs and fuelling economic growth in countries around the world.A lesser known feature of the act is that it contains domestic content requirements which stipulate that in order to participate in the feed-in tariff, a percentage of the labour and components in any solar or wind power project must be sourced from Ontario.As a result, companies are flocking to our province to establish manufacturing facilities. From Windsor to Kingston, Sault Ste. Marie to St. Catharines, the entire province is benefiting from this clean energy boom. To date, plans for more than 40 such plants have been announced, and many are already in production.Among the notable ones: Canadian Solar opened its first Canadian manufacturing plant in Guelph, where 500 people will find work manufacturing solar panels. Silfab recently opened a solar panel manufacturing plant in Mississauga. At full production, Silfab expects to employ 200 people. Heliene Inc., a solar manufacturer in Sault Ste. Marie, recently added another shift to keep pace with demand. In Toronto, Celestica has begun production at a new Don Mills solar panel facility where it expects to hire 300 people. An economic development officer in Windsor estimated that one in 10 of the jobs created in that city is a direct result of the Green Energy Act.Hudak’s threats have already contributed to a climate of uncertainty. Should he follow through on his promise, the impact will be even greater. Not only will many jobs fail to materialize, but those that have will likely disappear as manufacturers flee the province and head to other jurisdictions.For example, Paco Caudet, general manager of solar panel manufacturer Siliken Group, said, “It would mean, basically, that we would close our factory and leave.” Klaus Dohring, president of Green Sun Rising, said, “We would have no more basis to operate here . . . It would have a devastating effect.”Perhaps Hudak is unaware that these jobs are in demand. A few months back, more than a thousand people lined up outside Canadian Solar’s new plant in Guelph to vie for a job there. Just last week, more than 3,000 people waited in the rain to compete for one of 50 new jobs at a solar manufacturer in Windsor.Perhaps he doesn’t understand that these renewable energy companies are already hiring. Moreover, these workers speak proudly of their new careers as they talk about how their kids are proud of them, how they’re helping clean the environment and making a buck at the same time. One worker in Scarborough told us that for the first time ever his teenage sons are interested in what he’s doing. “Dad’s doing something good,” he said. Another solar fabricator in Mississauga told us, “This is definitely the way of the future. If we’re going to leave anything behind for our kids and our grandkids, solar energy is the way to go.”Globally, more than 2.3 million people are employed in renewable energy. In Germany, renewable energy is expected to create more jobs than the country’s automotive industry within the next two decades. And green energy is just one aspect of the green economy, a global push to align our societies’ environmental and economic realities in an equitable manner.

Unit 5

This article explains how the macroeconomic imbalances that had helped to create the Great Recession have not yet been resolved or even addressed properly. The process of increasing the connectivity and interdependence of the world’s market and businesses is key in globalization. Just a few years ago, global trade was booming and

economies around the world were showing impressive growth. Rebalancing global demand is not easy. In order for restoring balance there will be stark changes in spending and borrowing patterns in the world's major economies. The key to stability going forward will be shifting domestic economic systems from their current self.

Time to tackle trade imbalances Just a few years ago, global trade was booming and economies around the world were boasting impressive growth. Behind this calm facade, however, imbalances were moving to extreme levels. The U.S. trade deficit hit $800-billion, with about a third of that driven by an insatiable appetite for Chinese goods. Peripheral European nations were running current account deficits averaging more than 10% of their GDP. These consumption binges were fuelled by unprecedented increases in private and public sector debt, much of which was financed by savings of the emerging world. Instead of spending their windfall profits, they were simply lending them right back to their buyers.Rebalancing global demand A prerequisite for restoring balance will be stark changes in spending and borrowing patterns in the world's major economies. Specifically, debt-fuelled consumption will have to be eased out in deficit countries and surplus countries will have to begin spending their vast cash holdings.Repairing sovereign balance sheets Tackling the issue of sovereign debt is equally critical to restoring stability to the global economy. Inevitably, any discussion on this topic must begin with the situation unfolding in the European Union. Thus far, the emphasis has been on providing liquidity to distressed sovereigns and heading off contagion to the "core" European nations. The focus has now shifted to "reprofiling" the Greek debt, not a real restructuring. This insistence on kicking the can down the road is misplaced. Restoring solvency and growth requires some painful restructuring.We must avoid the trap of thinking about sovereign credit only in the isolated context of the eurozone. The recent drama surrounding the U.S. budget and debt ceiling provides an opportune time to closely examine the credit profiles of even the world's strongest nations. While fiscal adjustment is needed in both revenues and expenditures, any discussion that ignores health care, entitlements and defence spending will miss the mark.Embracing a global approach to financial-system risk management A final step to any program for enhanced economic stability (and likely the hardest) is increasing global co-ordination in the regulation of financial markets and economic policy. This is not a call for increased regulation but for more effective regulation and synchronization. Global markets and, consequently, systemic risks are more interlinked today than ever before, as financial products and markets are no longer restricted by borders. Financial regulation must adapt to this reality quickly, before the next potential contagion erupts.

Time to tackle trade imbalances

This article is significant to the Global economy as it is an example of globalization representing the fear or small business being impacted if the movie of Wal-Mart to South Africa does take place. Unions and government officials are worried the arrival of the world's biggest retailer will hurt jobs and local manufacturing. What is predicted to happen, which typically is a result of

these big companies is Wal-Mart ends up flooding South Africa with cheap foreign goods, thus forcing other retailers to do the same and putting local manufacturers out of business.

South Africa approves Wal-Mart deal with conditions Regulators say they have approved Wal-Mart's (WMT-N53.55-0.75-1.38%) 17 billion rand ($2.4-billion U.S.) bid to buy a controlling share of a South African chain, imposing conditions the companies themselves had proposed.Unions and government officials are worried the arrival of the world's biggest retailer will hurt jobs and local manufacturing. In its ruling Tuesday, the Competition Tribunal, the government agency charged with promoting competition and protecting consumers, said Wal-Mart and Massmart could not lay off any workers for two years, must respect Massmart's existing labour agreements for three years, and must invest in training South African suppliers.Opponents called the conditions inadequate. Powerful South African unions have threatened boycotts and strikes to keep Wal-Mart out.Arkansas-based Wal-Mart operates in Europe, Asia and across the Americas. Its interest in coming to Africa for the first time has been seen as a vote of confidence not just in South Africa's economy, but in the continent's potential.The unions and the government departments of trade, agriculture and economic development had argued Wal-Mart would flood South Africa with cheap foreign goods, forcing other retailers to do the same and putting local manufacturers out of business. They also argued during a week of public hearings before the tribunal earlier this month that Wal-Mart was anti-union, and that that would lead to lower wages and fewer jobs.Wal-Mart and Massmart say their critics' case for protectionism relied less on evidence than fear.Wal-Mart had initially sought to buy all of Massmart, but reduced its bid to 51 percent on the advice of Massmart shareholders, because that means the new entity will continue to be listed on the Johannesburg exchange.The deal was overwhelmingly approved in January by Massmart shareholders. Those include South Africa's government-owned Public Investment Corp., which invests on behalf of civil service pension funds, and Scotland's Aberdeen Asset Management. Massmart workers, most of whom are black, also have a stake through a trust set up as part of a South African campaign to help those denied economic opportunities under apartheid.Wal-Mart has 8,692 stores in 15 countries, among them Brazil, China and India.South Africa's Massmart operates in more than a dozen African countries, so buying in means Wal-Mart will have access to more than just 50 million South African consumers.

South Africa approves Wal-Mart deal with conditions

This article explains that the U.S economy is still very weak and it is possible that it could be hit by a period of depression. This affects the world as a whole (especially Canada) because the U.S is a super power country and deals with a vast amount of

important and exporting so if their economy collapses so will other major trade partners of the U.S

Fed - U.S. economy still weak despite improvements WASHINGTON, Jan 4 (Reuters) - Federal Reserve officials in December felt the U.S. economic recovery was still weak enough to warrant monetary

support despite growing signs of strength, Fed meeting minutes released on Tuesday showed.Wall Street economists have been busy revising up their forecasts for economic growth in recent weeks on the back of signs showing business activity and consumer spending picking up steam.But the Fed's policy-setting panel, which at its Dec. 14 meeting made no changes to a $600 billion bond-buying program first announced in November, was much less sanguine.The minutes did suggest the central bank is counting on a short-term boost to growth from the recent tax cut deal between President Barack Obama and Republicans in Congress.However, the minutes of the meeting showed policymakers are also still worried about risks to growth, including anemic hiring and a battered housing sector, which has been flirting with a renewed slump."Even with the positive news received over the intermeeting period, the most likely outcome was a gradual pickup in growth with slow progress toward maximum employment," the minutes said."The recovery (remains) subject to some downside risks," they added, citing housing and debt troubles in Europe as potential trouble spots.The U.S. economy, having emerged from its deepest recession in generations in the summer of 2009, has expanded in fits and starts since. Gross domestic product rose at a 2.6 percent annual rate in the third quarter, a pace still seen as too low to bring down the country's 9.8 percent jobless rate.The rather dovish tone of the minutes suggested those thinking the central bank might curtail its controversial bond-buying plans, known in the markets as the second round of quantitative easing or QE2, may be getting ahead of themselves.Some Fed officials indicated a "fairly high" threshold for reconsidering the $600 billion in purchases, and some noted more time was needed before any such re-evaluation."Members generally felt that the change in the outlook was not sufficient to warrant any adjustments to the asset-purchase program," the minutes said.Meeting participants generally thought inflation would remain below levels consistent with the Fed's mandate for "some time."

Fed - U.S. economy still weak despite improvements

This article explains how in the next decade, emerging economics will account of 55 per cent of the world’s output, compared with only 45 per cents at present. This means the market for Canadian products will increasingly be emerging economics. This not only

opens an opportunity for the Canadian resource sector, but also firms that are able to create products appealing to the growing class of consumers.

Bank of Canada: 'Get ready for global economy'The Bank of Canada continued its campaign Monday, urging Canadian business to prepare itself for an increasingly competitive global economy.Senior

deputy governor Paul Jenkins told a business audience in Toronto that Canadian business must adapt to an environment in which emerging economies will be growing at two or three times the rate of the developed world.In the next decade, emerging economies will account for 55 per cent of the world's economic output, compared with only 45 per cent at present. That means the market for Canadian products will increasingly be in emerging economies, Jenkins said.

Those economies present opportunities not only for the Canadian resource sector, but also firms that can create products that appeal to the growing consumer class in countries like China, he said.The problem is that productivity in Canada has been lagging in the past decade.Last week, Bank of Canada governor Mark Carney put the blame on Canadian business people, saying they've failed to invest in productivity-enhancing technologies despite government incentives, including a competitive tax system.Jenkins gave another reason for why the Canadian corporate sector is now well-placed to take advantage of the new global economy. Compared with many other countries, he said Canadian businesses are emerging from the recession with relatively healthy balance sheets and with borrowing costs at historic lows. He added that financial institutions have an opportunity to make more credit available to small- and medium-sized firms that want to step up investment.

Bank of Canada: 'Get ready for global economy'