Since the United States’ last election, stocks have been falling. NYU Stern’s professer Nouriel Roubini has outlined six key reasons and Joe Weisenthal has summarized them.

The first reason is due to slow growth.

Next, the crisis in the Eurozone is going backwards. Things are not getting much better and Greece is running into troubles again.

There have also been political instability in the states as well as concerns regarding fiscal cliffs.

Some shares have had valuations that are too stretched, such as Google. These valuations are getting more and more difficult to justify, as there is technology for market deleveraging now.

Quantitative easing (QE), or to “increase the money supply” is running out of its impact. This has been done in the past and a QE3 was launched near a market peak. Unfortunately, this means earnings and revenue miscalculations are expected to increase.

Lastly, there is geopolitcal risk again in countries such as Israel, Gaza, etc.

On top of the above reasons, I also believe shutting down the NY Stock Exchange for the first time in years due to Hurricane Sandy also slowed things down in the stock market.

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Recently America has elected a new president. Blogger Matthew Yglesias has stated the winner “is poised to preside over a return to economic normalcy that’s bound to make any kind of basically competent governance look fantastic compared to the last decade of misery.”

The Congressional Budget Office (CBO) predicts 9.6 million jobs will be added in the next four years whereas Macroeconomic Advisors are aiming for 12.3 million .  Nonetheless, things might be looking up for the American economy, but there is a threat of a “fiscal cliff” which Frederick Wong also explains in his blog.

Essentially, the fiscal cliff is a build-up of “of expiring Bush-era tax cuts, and decreases in social services.” The best method to avoid falling off the so-called cliff is by having the country go into more debt. This is quite risky as the country is already in unsteady economic conditions.

As Fred pointed out, Canadians have reason to worry since our economies are so close. Canada exports a lot of our resources to the US and if the states can no longer afford the goods, Canada will also suffer. Furthermore, this situation might give emerging economic countries such as China an advantage in the playing field.

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Mark Sha recently blogged about corporate social responsibility stating the current business world has “clear evidence that proves that eco-friendly and socially responsible businesses have higher profitability ceilings due to consumer reaction”.

The Forbes article Mark discussed states more than half of the customers want to reward responsible companies by purchasing their products. As well, companies that implement  green initiatives, health and anti-hunger plans, and sustainability will also catch the customer’s attention.

However, the most successful corporate social responsibilities are based on impacts, and the ability to create value in our world. Companies such as Nike and Apple have utilized such concepts and are doing exceptionally.

I believe companies that genuinely show an interest and care about social responsibility will give that impression to their customers. This will promote a certain lifestyle, much like Lululemon. Although social responsibility may be expensive and difficult at times, consumers will still appreciate the notion and most likely be willing to pay a bit more for the products. Take again, Lululemon for example. Their products are more expensive, but it is justified as Lululemon uses organic materials and has excellent quality which reduces environmental waste.

In the long run, corporate social responsibility is something every company should invest in.

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Social entreprenuers are extremely inspiring as they make the world a better place. Jordan Kassalow is no different. He is a former optometrist and the founder of VisionSpring, a company that brings high-quality, low-cost vision care to neglected communities across the developing world. The inspiring article can be found here.

Mr. Kassalow came up with the idea when he gave a nearly blind boy with glasses that brought the boy his first vision of the world. After that enriching experience, Mr. Kassalow began to do extensive research and take trips to Latin America to get a gist of the environment. He concluded in order for him to do well, he “needed three things – a good idea, people, and money.” He discovered  “2,000 people with serious vision difficulties every week, of whom 70 per cent needed glasses only and the remainder required medicine or surgery.”

Today, VisionSpring has sold 1,000,000 eyeglasses and has a $216 million social impact to date.

I believe VisionSpring is a great idea. Typically in developing countries, the main concern is to satisfy basic needs such as shelter, food and clean water. Vision is usually overlooked. However, the ability to see is also quite important. Now that more organizations are helping with the basic needs in developing countries, other companies should work to provide more secondary needs.

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Supply chains are essential for getting products from the manufacturer to customers. However in the case of natural disasters, this can be difficult. Nonetheless, there are steps companies can do take to improve the efficiency of their supply chains. A Harvard Business Review Blog outlines some suggestions that can be enforced to eliminate supply-chain disasters.

1. After disasters, companies are more focused on assuring staeholders rather than restoring services. This is understandable but a system must be devised to make restoring services a priority.

2. Stakeholders need to work together and continuously improve the resilience of their supply chains. Chains are more efficient than they were 20 years ago, but need to be more resilient. Car companies are constantly updating their systems so customers can have confidence in their products. The same idea applies here- consumers need to have confidence in supply chains.

3. Government incentives are necessary. With more funds, companies can develop the responsiveness system that is necessary.

I think the above are valid solutions to solving supply chain disasters. However an essential step to improve the efficiency of supply chains is communication. Usually, the super storms that supply chains and stores need to worry about are forecasted. Thus, better communication between forecasters, supply chains and stores need to be utilized. If, for example, a hurricane is predicted to occur, the supply chain must anticipate the need for bottled water, non-perishable foods, etc.

If supply chains integrate the above suggestions, supply-chain disasters will be less devastating.

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Urthecast intends to build, launch and install two cameras on Russia’s Energia. These HD cameras will stream live footage of Earth from outer space, providing the world something it has never experienced before.  In other words, it will be a more dynamic version of Google Earth.

An unique aspect of Urthecast is the real-time social layer the company promises to integrate onto their website. Users will be able to tweet and update their statuses to a location somewhere on Earth. By doing so, the business hopes to make the website ‘stickier’ and provide more interesting content.

However, there are privacy issues with the social media proposal. Some users may not feel comfortable with the world knowing their whereabouts. The corporation has decided to deal with that by creating profiles for the users so they can control what is tweeted and updated. Nonetheless, even if the users can control what they are uploading, will they upload content? There is a possibility users might not upload content if they do not feel safe posting things on the website. If this is the general concensus with most users, then the social media layer will cease to exist.

In order for the privacy concern to be minimized, the company should allow the user to choose who can see where they are. Perhaps a system similar to Facebook that gives users the option to change privacy settings to only allowing their friends to view who they are rather than the general public should be implemented.

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Social media has become a method for companies to market their products. Currently, some social media sites are turning anyone’s Tweet, Facebook post, Pinterest image or e-mail into a possible paid promotion. If users “drop a link onto Twitter about a pair of shoes that they’re dying for… they could actually be rewarded.”

This marketing technique is known as affiliate marketing, aka word of mouth revenue opportunities. If a friend on Facebook shares a product, it is likely one of their friends will look at the product. By having a friend recommend something, the advertising is less likely to be ignored or viewed as spam.

The purpose of social media is to provide a means for users to stay in contact with their friends and family. However, social media is a great opportunity for businesses to market to their customers.

I think affiliate marketing is a good way to attract customers and keep them in the loop of new products. Nevertheless, social media’s main purpose should be a means for users to communicate with one another. If social media becomes more advertisements-heavy, it may not be used anymore. Thus, there needs to be a balance.

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The Europe Crisis is extremely dire and one of the countries, Spain is suffering.

Spain has a high budge deficit and its banks need tens of billions of rescue loans. However, the Prime Minister declined to cut pensions or freeze them. Instead, budget would increase payouts by 1% next year.

This can be justified, as Mariano Rajoy wants to protect his country’s 10 million retirees. Additionally, pensions have become a lifeline in Spain. The unemployment rate is 25% and higher among younger generations. This leaves many to rely on their parents and grandparents to support them.

However, pensions are nearly 40% of the public spending and 9% of the Spanish gross domestic product. Thus, it can be argued enhancing Spanish public pensions is one reason European debt and deficit problems are hard to fix.

It is debatable if Mr. Rajoy’s actions are a reasonable. On one hand, pension plans are reducing Spain’s ability to overcome the economic challenges. However, Spain cannot completely disregard the plans, as many people rely on the benefits.

I think Spain should continue to pay the pensions, but hold off on payout increases. Instead, the country should dedicate the payout increase funds towards increasing employment rates. More jobs need to be created so younger generations no longer need to rely on the pension plans. By doing this, the country can start to get back on its feet.

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It is widely acknowledged that C.E.O.’s are paid handsomely. However the reasons for the high pay may not be what one thinks. A recent article outlines interesting views.

Chief executives’ have important roles in their company, as the success or failure lies in their hands. However, the reasoning behind C.E.O.’s high wages do not seem to be related to job requirements. Rather, companies are using higher pay to try and keep their C.E.O.’s from leaving. Furthermore, companies try to prevent their chief executives from ‘jumping ship’ by offering similar wages as their competition. This peer-group benchmark pushes wages higher and higher.

However, studies have shown “chief executives can’t readily transfer their skills from one company to another”  resulting in “relatively few chief executives land[ing] new top jobs elsewhere”. This is not commonly known and the typical notion is that C.E.O.’s will leave a company if the pay does not keep rising.

In order to deal with this situation, the common notion of keeping C.E.O.’s by raising their pay needs to be corrected. As well, companies should implement benchmarks. The directors in the company will need to set up a standard of pay, which will be extra work but worth it in the long run.

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Foxconn is one of Apple’s biggest manufacturers. Over the years, Foxconn has received continuous criticism for their labor practices.

Foxconn’s tarnished reputation is mainly due to working conditions. Scrutiny revealed Foxconn had illegal amounts of overtime and industrial accidents that have killed four people and injured several hundred employees. Furthermore, rumours suggested that Foxconn has a military-like atmosphere, explaining the occurrence of suicides. Further details on Foxconn can be found here.

From the gathered evidence, it is concluded Foxconn employees are not being treated in an ethical manner. Workers are not  in a safe environment, which is a fundamental requirement in any company. An employee’s safety must be secure before a company issues them to begin working. On top of the unsafe surroundings, the factory’s atmosphere is so horrible that workers have committed suicide. Furthermore, employees are forced to work several hours of overtime, which sometimes goes unpaid. Under-age workers are also an occurrence, opening another can of worms regarding child labour. Vocational students are also told they “cannot graduate unless they continue working for the company.”

These are just some of the unethical behaviour occurring at Foxconn. Hopefully working conditions will improve and employees will be treated better.

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