The Japanese government flooded the Japanese stock market with over $85 billion (over a trillion yen) in money market funds to increase liquidity and financial stability after the devastating earthquake, according to the Associated Press. The Japanese market is still spiraling downward. Oil dropped to $99 a barrel worldwide.
The Wall Street Journal reports that Japanese auto makers have all but shut down most of their plants. This will impact not only sales of Japanese made cars but will impact other cars that rely upon Japan for parts. One of the cars that will be impacted the most is the Toyota Prius. Other manufacturers that have closed plants include Suzuki, Honda, Nissan, Mitsubishi and Mazda. Many of these manufacturers will be able to shift production to Europe. Plant closings are caused not only by the desire of employees to find missing family members but the coordinated power outages planned by the government for several weeks. The troubled nuclear power plants supply 20% of the nation's electricity.
The USA Today reports that almost 2 million workers have "disappeared" during the recession and left the workforce. In October of 2008, at the peak of the U.S. Labor Force, 155 million Americans were working or 66% of the population. Two years later, the number of Americans working or seeking jobs accounts for only 64.2% of the population, according to a CNBC report based on Bureau of Labor statistics. Interestingly, the workforce has aged, especially the female workforce with more older women holding jobs and fewer young women participating in the work force. In the 16-54 age group, 4.3 million workers have chosen not to remain in the workforce while over 2 million workers in the 55 plus group have rejoined the workforce. Experts surmise that it may be that many older Americans need to rebuild their savings while younger households are taking advantage of increasing their education due to the lack of jobs. Because 60% of the unemployed are male, the recession is being renamed the "man cession".
China arrested 3,001 individuals for product piracy this weekend, according to the Associated Press. China has long been known for copying products and selling them at low prices. Seventy percent of the U.S. Chamber of Commerce businesses believe China is ineffective at enforcing intellectual property rights. But China insists this is part of its new efforts to move China from just a low cost manufacturing country to a technology leader. Leaders insist the new mantra is "China innovated" not "China Manufactured". As part of the arrests, Chinese officials founds over 100 million capsules filled with sawdust and wheat flour being distributed under the brand names of over 201 medicines.
In a report issued by Roubini Global Economics on Friday, the firm, the first to predict the economic crisis of 2008, recommended maintaining a long silver position in the near term (1-6 months) and suggests trading silver to gold at a ratio where the exit point is approximately 37x silver to gold ratio.
Amazon . com is beginning to impact major retailers such as Walmart, Lowe's and Home Depot, according to the Wall Street Journal. Because Amazon provides free shipping and is not subject to state sales tax in many state, consumers are beginning to buy brand name identical items for less. Examples would include home appliances and tools. Many states are now determining how to tax online providers.
The rising price of oil is causing the Obama administration to finally begin issuing permits for deep water oil drilling to once again resume in the Gulf of Mexico, according to the Associated Press. The moratorium for wells less than 500 feet deep was lifted last October but wells deeper than that are required to receive permission from the Bureau of Ocean Energy Management, Regulation and Enforcement. The Bureau granted the first two permits in the last two weeks.
The American Banker pointed out that Capital One is seeking to move upscale and attract a wealthier client base with its new "Match My Miles Challenge". Capital One will match anyone's existing miles with a proof of existing miles. The annual fee will be waived if the client spends $1,000 in the first few months. Experts indicate that Capital One is taking advantage of the market because it currently has few customers with debit cards and other providers are struggling with potential losses in this business due to the proposed 12 cent per transaction limit for banks. This would be a growth market for Capital One.