UvA Recap – Triple Crown Accreditation for the FEB – by Daphne Sweers
When wandering through the UvA in the past few weeks, you may have noticed the recently, prominently placed banners in the hallways with the text ‘Proud to be triple accredited’. Perhaps you also wondered, what does this exactly mean? In September, the UvA Economics and Business’ Amsterdam Business School has been accredited by the Association of MBAs (AMBA). This, together with previous achieved marks of quality from the Association to Advance Collegiate Schools of Business (AACSB) and European Quality Improvement System (EQUIS), marks the third accreditation to the UvA Economics and Business faculty.
The three institutions examine business schools on different criteria and aspects. The AACSB has the widest scope, accrediting management and accounting programs. The EQUIS awards business schools specifically, whereas the ABMA is most specific with a solely focus on a business school’s portfolio of MBA programs.
This ‘Triple Crown’ status affirms the strong reputation of the UvA’s Economics and Business section, reflecting the high quality of the faculty on all scopes. As worldwide only 1% of all business schools or faculties with a business programme have such status, it is not remarkable that the prominently placed banners serve to increase awareness about this achievement.
Amsterdam Dance Event – by Michel Mijlof In the days from Wednesday 19 October till Sunday 23 October, Amsterdam will be the capital city of dance. More than 2200 different artists from around the globe will be performing in 140 of the best clubs in Amsterdam with a total of 450 events. Every year the ADE (short for Amsterdam Dance Event) Festival attracts 375.000 visitors from around the world and it is truly the biggest international club festival covering the whole spectrum of electronic sub-genres. ADE is also not just a music festival. There are also some pop-up events, leading brands that show their gear at ADE Playground, art events, film events and some educational talk events. Traditionally, during the first night of ADE the list of the DJ top 100 is be released. We – the Netherlands – have been leading this list for years. DJ Hardwell was number one for two years and DJ Tiesto and Armin van Buuren where number one for a couple of years as well. This year, DJ Martin Garrix is the new leader. He is just 20 years old and he also grew up near Amsterdam, namely in the town of Amstelveen. Economics Recap – by Raffaele Di Carlo 30-year-olds in 2016 have it much worse than their predecessors did at their age. This is the conclusion of the Institute for Fiscal Studies (IFS) that in early October published a report about the current wealth of young professionals all over Europe and especially in the United Kingdom. They found that on average the access to real estate and pension funds for over-30s has halved in the last decade, due to rising housing prices and struggling welfare plans, which led to the definition of millennials as a “cursed generation”. The situation on the market doesn’t seem any happier: as the dollar underwent an unprecedented appreciation following the fall of the pound and the early stages of the ECB’s quantitative easing, the oil market saw an unexpected rise in demand which OPEC countries struggle to keep up with. However, Russian and Nigerian representatives suggested an increase in supply is a possibility in the near future. The price of crude oil has reportedly fallen by more than 2% as of October 20th. Nevertheless, there seems to be some overconfidence in US corporations. A report by Bloomberg suggests average expenditures exceed cash-flows by over 30%, which means corporations are taking on increasing amounts of debt. While low interest rates and long terms make the debt sustainable in the long run, earnings are potentially constrained by such a capital structure, and with corporate profits falling for the last four quarters, the future doesn’t look too bright. China’s Economy: GDP Growth and Unsustainable Level of Debt – by Tsz-Tian Lu The Chinese economy has successfully met the government’s yearly target and market expectations so far, with its GDP growth at an annual rate of 6.7% in the third quarter, which remains unchanged from the previous two quarters of 2016. Two critical growth engines are retail sales and investment, especially real-estate investment. Although the result alleviates the fear over China’s economic slowdown, the costs of hitting short-term points and the burdens put on the financial system can be detrimental in the long-run. China’s debt to GDP ratio has exceeded 250% and continues to rise since the financial crisis in 2008. The two main causes responsible for the country’s unsustainable level of debt are inflated corporate debt levels and overheated property markets, which are also the two fundamental elements that fuelled China’s GDP growth. So far, the government has approved fierce policies such as debt-for-equity swaps to kerb the rise of debt level, and multiple harsh restrictions on trading properties to control skyrocketing new house prices; but the effects are yet to be determined. For now, the Chinese authorities’ challenges are to curb future debt increase and reduce the risk of property-related crisis but without slowing down the economic growth at the same time. British Currency Is Taking a Pounding – by Artur Rymer 4 months after the Brexit referendum, nothing seems to reflect the political and economic uncertainty more than the British Pound. On the 1st of October, it was valued at $1.3. Following the end of the Conservative Party’s conference 4 days later, it fell to $1.27. 2 days later, after French President Hollande’s call for “hard Brexit” stance from the EU, the Pound plummeted to a 31-year-old low in Asian markets and traded at $1.18. Having recovered to the $1.24 level, it again fell on the 11th of October to $1.21, among others, due to expectations of higher interest rates in the US. For the following week it fluctuated around $1.22, when it was announced that the British Parliament might have a final say on the final Brexit deal with the EU and the Pound rose to $1.23. On the evening of the 22nd of October, the British currency is worth $1.22, 22% less than on the eve of the referendum. It is difficult to still call the Pound a stable, safe-haven currency when investors try to get rid of it at every sign of trouble and buy it when the situation seems to be more optimistic. It now has characteristics of a currency not of a top, global economy, but that of an emerging economy. It is worth mentioning that technology and human error might be blamed for some of the currency’s fluctuations. Still, the downward trends on the forex market and the fact that at some of the UK’s airports you can receive less than €1 for £1 might suggest that the sun is setting on the British Pound. Business Recap – by Nando Slijkerman The IMF issued a research paper about China’s corporate debt problem. Conclusion: the debt of China’s corporates is increasing, rapidly. Robeco stated that the confidence of the Dutch investors is increasing again. Banking shares are rising again. Goldman Sachs and Morgan Stanley reported a better-than-expected profit, which means a 47% and 56% increase in their profits respectively. This is mainly due to the positive circumstances at the bond trading desks. Earlier this year, Morgan Stanley restructured the unit, cutting 25 percent of staff and appointing new leadership. Goldman’s trading and investment-banking core performed strongly, in line with rivals like J.P. Morgan Chase & Co. and Bank of America Corp. that also benefited from investors shifting around their portfolios in response to mixed signals from the Federal Reserve on interest-rate policy and uncertainty surrounding the UK’s exit from the European Union. AEX rose 2.4% which is in line with the DAX (+2.66%). The S&P 500 increased by only 0.25% and the NASDAQ also had a disappointing outcome (+0.18%). We can see the difference in market circumstances between Europe and America. Bulls for Europe and sideway markets for America, not good to do business in American financial markets. The rumors around NN’s Delta Lloyd takeover caused an enormous increase in their stock price, which resulted in a 38.9% increase over September. Saudi Arabia issued EUR 15.9 billions of obligations. Samsung Galaxy Note 7 Recall – by Yana Chernysh In the beginning of September, a lot of issues started to appear regarding the newest model of Samsung Galaxy Note phones. First, there were problems with the battery, as there were cases associated with phone explosion. After that, Samsung launched an exchange program and distributed “safe” phones. However, the exact same problem has occured again. People’s trust towards Samsung and its phones significantly dropped. That is why, in early October all of the phones could be freely exchanged at Samsung, moreover, they could be returned. Eventually, the sales of the phone stopped. On October 10th, Samsung issued an official statement that they cut the production and distribution of Galaxy Note 7. Samsung also encouraged consumers to return the phone. One of the effects of this situation is a drop in Samsung’s stock prices. As well as this, Samsung has to work hard to obtain the trust of the consumers again and cover the loss it had from developing, producing and distributing Galaxy Note 7. Politics Recap – by Magdalena Wiśniewska On October 2nd, the long-awaited peace deal between the government and the Revolutionary Armed Forces of Colombia (FARC) rebels has failed in the referendum. The voters considered the proposed agreement not to be enough after 52 years of war. The ceasefire is supposed to remain in effect independent of the vote score. If you would like to read more about the referendum and the situation in Colombia, check out Rostra’s article on the topic.
On October 9th, a state of emergency was announced in Ethiopia, after the anti-government protest have turned violent. It will last for half a year and is feared to give the reigning president an abundance of power.
On October 13th the world’s longest-reigning king, King of Thailand Bhumibol Adulyadej, has died at the age of 88.
On October 17th, Iraq launched an offensive strategy to regain the city of Mosul, the last city to be under the control of the Islamic State. The actions are backed by U.S. air campaign. On the same day, Russia declared that the city of Aleppo will be given an 8 hours time span to evacuate civilians and wounded, as an answer for the UN’s demand of a 48-hours-long ceasefire.
Battle for Mosul Begins – by Michael van Rhee
The Iraqi army, supported by Kurdish troops on the ground and the international coalition in the air, has started its attack on Mosul, the last major Iraqi city that’s still in the hands of Daesh (ISIS). The attacks were preluded by a battle for Kirkuk, a city approximately 100 kilometers southeast of Mosul. Daesh has probably initiated these attacks out of revenge for the offensive that’s about to happen (desperate needs lead to desperate deeds…), but it was soon reported that the international coalition had taken control of the city. Now that it has, it’s making way to Mosul, where both parties are expected to go all out in a battle for the last major stronghold that Daesh still possesses in Iraq, and in a strategically critical region at that. Much like Kirkuk, Mosul is located in an area that’s known to be full of oil, which is a crucial source of income for Daesh, and thus vital to its survival. It’s expected that the international coalition will push IS out of Mosul and all the way back to Raqqa, its self-proclaimed caliphate. However, one thing is certain: it won’t be without bloodshed — a lot of it.
Thailand’s Saddest Day – by Hải Đăng Vũ
His Majesty King Bhumibol Adulyadej of Thailand was confirmed by the government officials to have passed away on October 13, 2016. When His Majesty turned 18 years old he was announced to replace his brother Ananda Mahidol, who was rumoured to be assassinated. At the time he was pursuing science studies and afterwards changed to law and political studies in Switzerland. He was the longest-serving living monarch of a country, which stood for more than 70 years.
In general, the Thais are very appreciative of the work of His Majesty and they could not understate his commitment and determination for developing the country. His earliest achievements to the Thai people are the Royal Development Projects, covering various fields including fishery, agricultural farming practices and the construction of dams for the prevention of flooding during monsoon season. When the issues were mitigated, the King established Research Centers for the purpose of advanced scientific studies and continually endorsed the proposal of “Sufficiency Economy”, in which he stressed out the importance of having the right balance in sustainability and development. His political stance was however controversial when he was believed to endorse military coups and his unclear position on the lèse majesté, the prohibition of insulting the royal family. Towards the end of his reign, he was awarded by the United Nations the UNDP Human Development Lifetime Achievement Award. The 2016 Nobel Prizes – by Leonie Ernst
The announcement of every year’s Nobel Prize winners is an exciting moment during the month October. On Alfred Nobel’s birthday (10 December) all awards will be given to ground-breaking researchers in seven different categories. The winners receive a sum of money equal to 8 million SEK (around 825 thousand EUR) and, of course, everlasting glory and praise.
This year’s winners in their categories are:
Physiology or Medicine: The Japanese Yoshinori Ohsumi was rewarded for his discovery of mechanisms for autophagy. Autophagy is the process by which human cells destroy themselves in order to keep the body alive. Mutations in the process can cause diseases and Ohsumi’s findings led to a new paradigm in which this process is better understood.
Physics: This Nobel prize was split between the British David J. Thouless and duo Duncan Haldane and Michael Kosterlitz for “theoretical discoveries of topological phase transitions and topological phases of matter”.
Chemistry: The trio of the British J. Fraser Stoddart, French Jean-Pierre Sauvage, and Dutch Bernard Feringa developed a so-called ‘molecular machine’. In this machine, molecules can extend controllable actions, which brings chemistry to a whole new level.
Peace: Probably the most important Nobel Prize is the prize for peace. This year’s winner is the Colombian President Juan Santos, who has negotiated to bring the civil-war that plagued the country for 50 years to an end. Although the agreement he made with the FARC was rejected by the country in a referendum, his efforts are praised.
Economics: Although the Sveriges Riksbank Prize in Economic Sciences is officially not called a Nobel prize, the Finnish Brengt Holmström and British-American Oliver hart may call themselves Nobel prize winners for their contributions to contract theory.
Literature: The fact that the songwriter Bob Dylan has won the Nobel prize for Literature surprised no one more than the musician himself. He was not even mentioned by the bookmakers, who predicted the Japanese Murakami would be rewarded. Dylan has not yet acknowledged the prize and is unreachable for any comments. It seems as if he feels burdened by the fact that his lyrics are valued literature, but some people argue his silence indicates his arrogance. We will see whether this great songwriter decides to show up on the 10th of December in Sweden or whether he refuses the honour provided by the Nobel Foundation.