Amazon's Pricing Strategy Upsets Publishers

There is currently a lot of news surrounding Amazon's business plan. Publishing companies are outraged at the low prices Amazon is charging consumers. Amazon is listing newly published books at a mere 9.99$. This online price is detrimental to physical book stores, and the publishing companies. Amazon's gross profit is not astounding, but they're aim is currently to force out the physical stores and gain a monoply on the publishing of books. They are eliminating competition because the publishing companies can not survive on a book listing of 9.99$. One company in particular, Educational Development Corporation is so outraged that they announced a discontinuation of their books to Amazon's shelves. Although this publishing company is not a massive blow to Amazon's worth, it could jump start a rebellion against the online giant. The low price and high volume of books  available to consumers benefits the customers but threatens to destroy the publishing companies. I find what Amazon is doing is immoral. Physical stores and publishing companies are unable to compete with this "Wal-Mart" of bookstores. Although I can benefit from saving money, I believe they're actions and methods to gain market share are detrimental, in the long run, to the business of literature.

More information can be found at:http://www.nytimes.com/2012/04/16/business/media/amazons-e-book-pricing-a-constant-thorn-for-publishers.html?ref=business

Justice Department Sues Apple and Publishers

On Saturday the Justice department sued 3 publishing companies for colluding on eBook prices. These three companies were the Hachette Book Group, Simon and Schuster, and HaprerCollins. These three companies agreed to settle after their backroom business communications were uncovered. This price colluding scheme cost consumers an extra tens of millions of dollars. The collusion was a response to Amazon's attempt to promote there eBook device the Kindle by lowering there base price of new books to 9.99$. Apple's plan was to have book publishers sell through Apple while they took 30% commision instead of their previous wholesale model which publishers had been using previously. The wholesale model charged retailers 50% of the cover price for a book and then allowed retailers to set their own sale price. Apple's shadowy attempts to overcome Amazon's overwhelming market share and reduced retail prices breaks business ethics. This lawsuit shows that Apple is more interested in maximizing profit than providing the consumer with the best and most affordable product. From this lawsuit, "The publishers that have settled have agreed in principle to provide more than $51 million in restitution to consumers who bought e-books".

More information can be found at: http://mediadecoder.blogs.nytimes.com/2012/04/11/justice-files-suit-against-apple-and-publishers-over-e-book-pricing/

China Adjust Currency

China's economy is the fastest growing on the planet. With much international trading running through China it is paramount to acknowledge the changes in their currency. This past Saturday Chinese government announced that they would allow the Chinese renminbi, (6.3: 1USD) to fluctuate as much as 1% throughout the days trading. The central bank of China allowed this fluctuation against a fixed benchmark value. This increase int volatility, property of changing, was only allowed 0.5% since 2007. The increase in volatility will affect the international markets involved with trading in China. This change will effect foreign exchange rates, bets on currency, and will cause "exporters to demand more long-term contracts". In order to properly asses the changing in international commerce we must understand our competition.

More information can be found at: http://www.nytimes.com/2012/04/15/business/global/china-adjusts-currency-trading-rules.html?ref=business

America's Energy

One of the biggest concern across markets and throughout our economy is energy and oil prices. Although lately we have been struggling, the American ingenuity always prevails. We are finding nontraditional sources of energy; shale oil, shale gas, and even deep-water production in the Gulf of Mexico, and oil sands in Canada. This resurgence in american energy will greatly benefit our rising oil prices and remove a lot of pressure from our foreign dependence. North America accounts for 25% of foreign oil consumption. This dependency lead towards new sources of energy. These new sources of energy however are not agreeable on all accounts. Many environmental groups are protesting the shale gas removal process known as Fracking. Fracking is believed to contaminate ground water. This new age of energy sources will continue to play out in the coming years and have a big effect on the upcoming presidential term. Currently these new sources of energy are a lifesaving device for the United States economy. I personally find issues with drilling and fracking, but until research proves its dangers, I must admit this upswing in "homegrown" energy sources is quite beneficial for the country.

More information can be found at: http://www.nytimes.com/2012/04/11/business/energy-environment/energy-boom-in-us-upends-expectations.html?_r=1&ref=businessspecial2&ref=business

Obamacare

There is currently a lot of talk about Obamacare and the constitutionality of the mandate. The future of healthcare and President Obama's career are riding on this Supreme Court decision. Before me make or decisions based on the opinions of friends, collegues, and our favorite news station, we must first investigate where the idea for Obamacare came from and think logically about the situation we are in.

The fact of the matter is that many Americans are medically uninsured, which is detrimental to our healthcare ecosystem. Jonathan Gruber, an economics professor from M.I.T., is a leading expert in health care systems. His track record is quite impressive, helping Mitt Romney in Massachusetts, also helping with California, Delaware, Kansas, Minnesota, Oregon, Wisconsin, and Wymoing. To no surprise in 2008 Obama's team came to Dr. Gruber for help on our ailing health care system. He predicts that a nationally mandated health care is beneficial to Americans. He believes "Losing the mandate means continuing with our unfair individual insurance markets in a world where employer-based insurance is rapidly disappearing.” If health insurance isn't mandated the competitive market will continue to drive up premium prices since only the sickest would by insurance and the less sick would drop their insurance.

Opposition to his arguments are simple, they are relying on the rationality of people to buy health insurance if it is affordable and accessible. They also believe that if the mandate is passed Gruber is not taking into account "how hard it will be to enforce the mandate.". They believe he is overstating the approximated effectiveness.

Since Obama made health care the center of his campaign he is relying on the most researched and educated person on government mandated economics.

My opinion on the subject is biased and under-researched. I don't nearly know enough information on the state of our health care to give a justified answer. Think logically however, I know we must make a change to our current situation and I believe that if there were a person to help us out, it would be the one man who has researched it his whole life.

Change is a scary thing, especially when it is change to this degree. We have only known one type of health care system; the one we are currently living in. I believe if this mandate is passed it will only lead to good things for our Country. If the mandate is passes and seems to be failing we are always able to make corrective legislature and amendments to be more fitting to our economic situation. It will be interesting to follow this story over the next couple weeks.

-BW

FedEx Settles in Discrimination Lawsuit

Statistical analysis by an auditing company found FedEx to be discriminating in their hiring process which affected nearly 22,000 applicants. They're analysis found that Hispanics, African Americans, Native Americans, and women were rejected for positions based on their sex, race, or country of origin. Studies showed that "of the 21,635 rejected applicants covered by the settlement, 61 percent were female, 52 percent African-American, 14 percent Hispanic, 2 percent Asian and 1 percent Native American. " The women were often automatically ruled out because of the need for heavy lifting.

FedEx settled for 3 Million dollars although they admit no wrongdoing. They understand a more lengthy trial would be more costly. The result of this settlement will also open up 1,700 new jobs, upon the opening of the position, to these once rejected applicants.

I have a difficult time believing FedEx did anything wrong in their hiring process. There are certain standards which must be met like physical capabilities and time requirements. The article does not divulge the extent of their research, just the facts that more white men were hired than black, Hispanics, and women. If all grounds were held equivalent, number of applicants, physical and social demeanor, I believe the percentage of hired applicants would be much more even across the spectrum.

More Information can be found at: http://www.nytimes.com/2012/03/22/business/fedex-agrees-to-pay-3-million-to-settle-a-discrimination-case.html?ref=business

Greg Smith Resigns from Goldman Sachs

Greg Smith publicly resigned from Goldman Sachs investment firm earlier in this week. Since his resignation he wrote an Op-Ed piece about his reasonings behind his departure. The story follows Greg Smith, a genuinely ethical and more person caught up in an increasingly immoral wall street environment. He wrote in his paper about the companies continuing neglect for customers and clients while their main...rather only focus, was to make the most amount of money. This excessive greed is not new to investment banking firms, but they are focusing more on short term greed "from" their clients, not the traditional long term money making they earn with their clients. He states that this change has come primarily from the investment banks moving from private business to publically traded where clients look for the cheapest deals and investment firms look for the most clients. There seems to me that there is a great disconnect now between business and consumer in the investment banking world. Greg Smith saw this and was upset. The company he joined 12 years ago no longer held the same moral and ethical standards that he did.


More information can be found at: http://www.nytimes.com/2012/03/15/business/a-public-exit-from-goldman-sachs-hits-a-wounded-wall-street.html?ref=opinion


-BW