The so-called Millennial generation is now America’s largest group, at 80m people, and is comprised of adults born between 1980 and 2000. The group, which is just barely into its adult years, is the target of every major company and advertiser in the country. The reason why is simple—they are considered to be the most narcissistic of generations, and so are willing to spend much more on themselves. The Millennials have also grown up in a changing era, and many have been fully “wired” into technology from a very early age, making them the first fully digital generation. However, the group has proven as evasive as it has attractive to advertisers, as the generation has grown up in time of major public difficulties—9/11, multiple wars, and the Great Recession, which has made it less focused on generating wealth and less conscious of brands and marketing in general. Many sociologists believe the label of narcissistic is overly simplistic and unwarranted, as studies have shown that the group is on the whole highly moral, introspective, and for lack of a better word, “nice”.
FINSUM: This is a good study of the generation that is slowly inheriting the United States. For all seasoned “gray-haired” veterans who are starting to manage or deal with Millennials, this would be a good piece to read.
Over the last few months, Europe’s stance on the Ukraine-Russia crisis has seen a radical, if subtle, change—Germany is standing firm. For the first several months of the struggle, Germany opposed any form of EU sanctions and sought to deescalate the crisis through private consultation instead of sanctions. However, as the crisis has deepened, the country is increasingly putting its morality in front of its economy, and the German people are falling in line. The German population has long wanted to preserve close ties to their massive neighbour, especially because their economy, particularly the energy and export sectors, are closely tied to Moscow, but a recent poll showed that 70% of adults were in agreement about the strong steps Angela Merkel’s government has taken to deter Russia’s aggression. The oddest thing about the change is that German business has stopped fighting for preservation of relations with Russia, despite the clearly negative impact the loss of Russian business will have on their companies. Commentators believe the downing of MH-17 hardened the German people’s resolve to stand up to Moscow.
FINSUM: Whether or not the rest of the EU likes to admit it, Germany is in the driver’s seat when it comes to policymaking, and its 180 degree shift on Russia has radically altered Brussels’ approach to deterring Moscow. The economy is likely to slow as a result.
Following the tragic shootdown of flight MH-17, EU diplomats are planning a major strategy session to discuss broad sanctions against Russia which could ban all Europeans from buying any bonds or shares issued by Russia’s largest banks. The potential plan proves a remarkable turnaround for Brussels, which has for months been reticent to act against Russia because of internal discord over how the situation should be handled amongst its member states. However, last week’s tragedy seems to have united and emboldened Europe’s leaders to act against Russia’s meddling and westward advances. The new sanctions, if approved, would greatly limit Russia’s financial sector from raising capital in the West, thereby crimping Moscow’s ability to finance its economy, and leaving it at the mercy of its neighbours to the east, particularly China. The sanctions would prove far more extensive than any previously imposed by the US or EU, and would be a major signal that the EU is ready to stand up against Moscow. However, the likelihood of the sanctions passing through in their current form seems unlikely, because EU policy states that all member nations would have to agree unanimously to the measures.
FINSUM: Even if the full scale sanctions do not make it through, a slightly watered-down version would still prove a major blow to Russia’s economy. Additionally, the sanctions would likely work to further undermine Putin’s power base, as the country’s oligarchs would be incensed at the senseless loss of business created by what many see as Putin’s ill-calculated ambitions.
After over a decade of silence and much indecision, the ECB has announced that in order to help fight inflation it is changing its long held policy of silence with regard to its policy meetings. The ECB had long been reticent to publish its minutes for fear that comments would lead to home country scrutiny for the various board members, but it has decided that by letting the public know its logic, the Eurozone will be more likely to adopt a viewpoint which will allow inflation to rise. The bank will also change to a more Federal Reserve-style schedule of meetings held every six weeks instead of every month. Policy meeting minutes will be released three to five weeks after meetings. The new policy is likely to be implemented as soon as January.
FINSUM: Two issues here: firstly, the “public” is very unlikely to read the ECB’s policy minutes, so outside of the possibility of some niche publications covering them (like this one), word is not going to get dispersed enough to stoke inflation; secondly, this change puts in danger the independence of the bank itself, as committee members will now be accountable to their home country, meaning pressure could be applied in ways that did not exist before.
In what is likely to create a firestorm globally, the US announced last night that the Malaysian jet shot down over eastern Ukraine was brought down by land-to-air missiles fired by Russian-powered rebels in Eastern Ukraine. The Ukrainian government also released covert recordings of rebels reporting their shooting down of the plane, including voices which said the plane had Malaysian airlines banners. The large majority of passengers on the plane were EU citizens, most of whom were from Holland, and were on a trip to an AIDS conference in Melbourne. The crash is seen as being a new breaking point between Russia and the West and comes just a day after the US and EU imposed new sanctions against Moscow. For his part, Russian President Putin denied any wrongdoing, saying it would not have happened if Ukraine’s government had allowed peace in Eastern Ukraine.
FINSUM: While the newly imposed sanction are significantly stronger than previously, this may be the tipping point which finally infuriates the EU to the point of fully uniting against Russia, who it believes is feeding weapons to the rebels in Eastern Ukraine. Full-scale economic warfare between Russia and the West seems likely over coming months.
After an arduous two-year court battle, the World Trade Organization has ruled decisively in favour of China over a number of trade disputes between Washington and Beijing. China has complained bitterly about high tariffs imposed by the US on Chinese goods, particularly in the solar and steel industries. The US imposed the tariffs as a way to offset “overt” and “hidden” subsidies which made Chinese costs distortingly low and put US companies out of business. Now, in considering the case, the WTO has ruled that the US’ tariffs were inappropriate because they do not accept the US’ argument that the subsidies given to Chinese companies make them “public bodies”, an important but narrowly defined term in the WTO’s eyes. China says is hopes the US will abide by the ruling and abolish its punitive tariffs. The US also lost a similar case with concern to India, where the US used the same argument about the Indian steel industry.
FINSUM: The US has now lost a ferocious trade battle just at a time when the US and China are meeting to discuss future relations. Will Washington give in and abolish the tariffs, potentially wiping out the thriving domestic solar industry, or will it defy the WTO?