Colyton Grammar School, Friday, January 20, 2017
What’s in this Issue?
2016 was an interesting year in Economics. Summing up how shares did at the end of 2016 is Josh L telling us what did well and what performed poorly. Also
with Trump’s inauguration this week Maddie W has been looking at what life in Economics might be like with Trump in charge. We’ve also been looking at the
costs of the 2017 fireworks over the London Eye, written by Eliot K. Furthermore in this issue we have articles about the NFL and Obama’s years in office by
Mike M and Katie F respectively (see page 2). Also have a go at our economics themed puzzles like the crossword ,which I must say is quite challenging, and
our Guess the name game which is a lot of fun.
Dropping this
Easter in
take 5
Bang out of Order? (and into 2017)
Once again, at the dawn of the New
Year, London welcomed 2017 in style by
putting on a firework display to remember (see picture on right). This modern
British tradition involved 12,000 fireworks lighting up some of London’s
greatest attractions including Big Ben,
the London Eye and the River Thames, to
help launch the county into what may be
an important year for British economics.
With the triggering of Article 50 and the
start of the Brexit process, 2017 has a lot
to unfold. However, how much does this
celebration cost? After all, hiring 12,000
fireworks, an out of tune Robbie Williams and his bottle of Tesco finest hand
sanitizer can’t come cheap . In fact, it is
estimated that up to £2 Million is spent
on pleasing the 250,000 who attended
The best
in the
market
the 13 minute display alongside the 12.5
Million who tuned in to BBC One.
Here are some facts about what £2M
could do if spent otherwise: Give 5,000
NHS hospital patients a bed and full
medical care for 24 hours, give 89 children a full education, train 10 fully qualified doctors, keep 80 prisoners in prison
for a year, pay off 45 student loans or
buy Robbie Williams 2,000,000 50ml
bottles of Carex Moisture Plus Hand Gel.
In all seriousness some people do think
that the display is over the top and believe that by cutting down London’s New
Year’s eve event, the money could be
spent elsewhere.
Brexit
Biscuits
Source: WeatherForecast London’s new years eve fireworks
Economic Forecast for Trump’s first year
as President of the United States
The Good and the Bad: The
results at the end of 2016
The FTSE 100 has had an increase since
November to peak at a record high of
7,208. This has lead to many companies
in the FTSE 100 and 250 reaching a record high in their share price. Despite this
some companies have had an opposite
effect with some dropping by over 10%
in share price.
Next plc has lost over 18% in share price
from 4,983 on the 30th of December
down to 4,086 on the 6th of January.
Next warned shareholders about the rise
of inflation having a negative effect on
their profit for this year. Next said that
there would be lower profits and that
2017 would be a tough year. The chief
executive, Simon Wolfson said that
clothes had had a good run however
people were moving away from buying
clothes to buying leisure activities such
as eating out and holidays. Due to Brexit
and inflation, sales may decrease for
Next as shoppers are being squeezed of
their incomes and the rise in prices
mean shoppers are discouraged from
buying as much as they did last year.
This has meant that all high street retail
stores have been affected. Debenhams
and Marks and Spencer have both felt
this impact in their share price dropping
by 6% and 4% respectively. Many analysts have stated that Next are not identifying with the target market and need
to rethink how they are going to attract
those customers this year.
In contrast, Royal Dutch shell Class A
(RDSA) has been one of the top performers at the end of 2016 being 50% higher
in share price than they were at the start
of 2016. RDSA has increased by over
16% in the last month due to the oil prices increasing by almost double the price
when oil prices hit rock bottom at $27 a
barrel. Now it is an impressive $53 dollars thanks to the Organisation of the
Petroleum Exporting Countries and their
deal to make Saudi Arabia cut oil production by 486,000 barrels a day. As a
result of the cut in global supply, oil prices are predicted to increase to between
$50 and $60.
It looks as though Donald Trump may
not be able to fulfil the promise he
made during his election campaign of
improving the US economy at the rate
he originally assured the American voters. Donald Trump promised that, in
the next ten years, economic growth
will double to 4%. This hasn’t been seen
since the 1990s during Bill Clinton’s
presidency. On top of this, Donald
Trump promised to create 25 million
jobs, however, many forecasters expect
the pace of hiring to slow and say that
he’ll weaken the Labour Market. According to the President of the National
Association for Business Economics
(NABE), Stuart Mackintosh, “more than
80% of the survey panellists estimate
that the potential rate of economic
growth will be at 2.5% or lower over
the next five years” as well as this, the
current prediction for the annual
growth rate in 2017 for the United
States is at 2.2%. Inflation is predicted
to rise next year by 1.3% as are interest
rates up to 1.125%. This all points to
the conclusion that Donald Trump’s
hopes for the economy aren’t looking
too good. About two-fifths of NABE
panellists said infrastructure spending is
the most important thing Trump and
his administration can do to boost economic growth. Next on the list of top
priorities for growth were tax reform
and regulatory reform, all of which
Donald Trump intends to do. Just 4%
cited immigration reform as a key factor for economic growth. For the duration of the election campaign, Trump
also focused on creating a growing
number of manufacturing jobs which
have decreased by around 5 million
since the year 2000. However, this decline has mostly been due to improvements in technology, not outsourcing,
which Trump is planning to crack down
on during his term as President. He has
warned US companies that they will
face “consequences” if they take their
jobs away from the United States and
he also plans to limit international trade
by introducing a 35% tariff on Mexican
imports and a 45% tariff on products
from China. He hopes this will encourage Americans to buy more products
manufactured in America. However,
this could prove to be bad news for
American businesses since Mexico was
the US’s third largest export, purchasing
$267.2bn in American products in 2016.
Trump is also hoping to renegotiate
many of the US trade deals with other
countries and has promised to withdraw from the North American Free
Trade Agreement (NAFTA) between
America, Canada, and Mexico if he feels
a satisfactory rearrangement cannot be
agreed upon. These terms also apply to
the Korean Free Trade Agreement and
the World Trade Organisation. Yet, one
country he is looking to have an amicable trade deal with appears to be the
UK. In October, Trump’s trade advisor,
Dan DiMicco, told the BBC that the UK
would be offered a free trade deal before the rest of the European Union and
that the UK would be at the front of the
queue for any future trade deals once it
has left the EU, which is in fact the opposite of what Obama declared in April,
that if Britain voted to leave the European Union, it would go to the “back of
the queue”.
Freshly imported from the
EU
Oh wait
The Economics behind sport:
The Super Bowl
American football is a huge part of American culture, and slowly
but surely it’s beginning to spread around the world. With 4 NFL
games to be played at Twickenham and Wembley in 2017, and a
lucrative deal signed with Tottenham Hotspurs to use their new
stadium being built in 2018 to host two further games in the UK,
American football has most certainly arrived in Britain. The Super
Bowl, American football’s answer to the World Cup final, is a
huge event, with many millions spent by many parties to bring it
all together. Some of the costs behind such a large event are extravagant.
The Super Bowl in 2015 recorded 114.4 million viewers, the highest of any TV broadcast in American history. Moreover, this number doesn't include viewers in groups, such as in bars, or “parties”
held where many people gather and watch in one place. It also
doesn't include those streaming via the internet, so this number
is undoubtedly much higher.
2017s half time show is presented by Pepsi with Lady Gaga as the
main performer, and Pepsi had to pay $7 million to gain the rights
to produce the half time show.
Many companies would see an advert on a super bowl as an excellent opportunity to get their message out there and sell their
product, however, most can't afford the hefty price tag for and
advertising slot. The cost of which was reportedly as much as $5
million for a 30 second advertising slot during the 2015 Super
Bowl. This number works out to cost $166,666 per second for the
company.
Along with the trophy and the elation of winning the Super Bowl,
for the team that manages to do so, it also comes at a monumental cost for the club. The winners get huge diamond encrusted
rings to commemorate their victory, with roughly 120 required to
be made, one for every player and member of coaching staff.
With each ring total coming in at a whopping $32,000 at highest,
that will set the team back over $3.5 million. Each player also
earns a hefty bonus, upwards of $165,000 for winning each divisional round then the Super Bowl.
Finally, and probably the most surprising cost on this list, is to any
fan who wishes to purchase a ticket to this huge event, which will
at minimum set them back $2500 per person, for seats right at
the back of the stadium. This cost then raises until game day
when fans can be seen paying up to $9500 for top of the stadium
tickets. For anyone wanting tickets near the front, be ready to
pay sums upwards of $11,000 from day one. For contrast, the
cheapest FA cup final tickets go for £50.
Guess the Name/ Brand