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The economic crisis in the Russian city of Yaroslavl, 150 miles northeast of Moscow on the Volga river. Auto sales are down 30% and the city's diesel engine making plant is down to working only 3 days aweek. Many of the other factories and plants here are laying off people and are also on 3 days a week. Cafes and bars in the city are empty and people are filling job search centers.

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The 25% auto imports tariff goes into effect April 2nd 2025. How much will it increase prices in the US for automobiles? The average is about 10%, say some experts cited in WSJ. This includes price increases on higher priced brands such as German brands BMW's and Audis, Mercedes Benz, and VW cars made in Mexico to ship into the US. It also includes European car makers including Stellantis that make cars in Europe and Mexico to ship into the US which could lose market share to American car makers who make most of their cars in the US. Ford makes 80%, GM 60%.  Overall US international Trade Commission in 2024 looked at the 25% US tariff in a study and showed 5% increase in auto prices in the US. President Trump's call to GM and Ford asking for restraint in pricing may be coupled with the government returning some of the money in tariffs revenue pool to American or foreign manufacturers investing more to make more cars in the US including to Hyundai which announced a $21 billion investment. More such investment decisions are expected from Japanese automakers. For example Subaru has capacity for 450,000 cars in Lafayette Indiana plant and sells 650,000 cars in the US. One would expect it to increase the capacity of the plant or add a new plant in the US. The Japanese government and Japanese business will have additional incentives to invest in the US because of the US support for Japan in the Asia-Pacific, US openness to give trade benefits to Japan in the post war period, incentive to make the Republican DJT plan for tariffs to work as a united Japan-US effort. This would include restraint on pricing.  Toyota is in much better financial shape than VW and has a large market share in the US which it will work protect with pricing restraint and more US investment. Only VW and German luxury car makers BMW, Mercedes may not cooperate. Yet VW sells only 300,000 cars in the US compared to 2.3 million for Toyota. BMW and Mercedes sell luxury cars where buyers could absorb the additional luxury brand cost without impacting inflation overall. Some of VW's car sales would be absorbed by American and other automakers considering VW was losing market share and nearly exiting the US market. before this. ...

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The contrast between Erdogan and a modest humble civil servant Kilicdaroglu is shown here in FR24. Kilicdaroglu is from the CHP or Republican party setup by Kemal Ataturk. Ataturk founded the party in Ankara after the colonial powers took over Istanbul by 1921 following victory in World War I and planned to breakup the Ottoman Empire. To resist this plan Ataturk responded similar to Japan by forming a new country based on the model of European nations and introduced a new alphabet to increase literacy. He took the country back to its European roots before the Ottomans in the 16th century and turned the Hagia Sophia into a museum. In the process rural people in the Anatolian heartland were not fully integrated by the 1960's and Erdogan appealed to these people, increased social mobility and incomes in Turkey between 2001 and 2018. In the period since then Turkey is faced with an economic crisis and rampant inflation that hurt ordinary Turkish people. The pandemic and earthquake made things worse. This is why Turkey is poised for a change and the Republican party hopes to build the Turkey of Ataturk with Turkey firmly seen as a European nation, with some changes that respect the right to wear scarves for women. For just the earthquake alone Turkey needs $90 billion for reconstruction and there are changes that are needed that would integrate the Turkish economy with the expanding economy of the US and the EU which can take place under Kilidaroglu and the new mayors of both Istanbul and Turkey who are deputy leaders of the CHP Republican party. ...

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This report in the NYT says US officials now say Russia was not involved in the attack on the Nordstream pipelines in the Baltic Sea. The pipeline was connecting Russian oil and gas undersea to Germany and generated revenue for Russia, cost $12 billion each to build for Nordstream 1 and 2, so that it would have no reason to sabotage its own pipeline, say US officials. Cost of repairing the pipeline would be over $500 million.  Nordstream I and 2 stretch across the Baltic sea from Russia to Lubmin, Germany for 760 miles under the sea. Nordstream 1 completed in 2011 cost $12 billion to make, with a similar amount for Nordstream 2 completed over American objections in 2021 by the Merkel government in Germany. American officials are still reviewing the intelligence to understand how it happened. Just as happened for the spy balloons over the US initial reports and speculation have turned out to be misleading. It shows the importance of getting all the facts right, more than ever.   ...

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Can Britain take it, more Tory austerity cuts? Mark Landler in the NYT calls it one of the most austere budgets ever imposed on Britain, a country already in recession. Prime minister Sunak and finance minister Jeremy Hunt introduce a budget that will cut government programs saving 30 billion pounds and higher taxes of 25 billion pounds or $29.7 billion. This will mean a drop of 7% in disposable incomes of people in Britain over 2 years. After a series of missteps first under Boris Johnson and then briefly under Liz Truss, the Tory government of Rishi Sunak concentrates on budgetary constraints ignoring the promises made for growth and improving infrastructure, leveling up of regions, that were made by a series of Conservative governments. It lacks broad support as this government was not elected with this mandate. Boris Johnson won the election with traditional Labour support for leveling up, growth and infrastructure. None of this is happening. Also cut are budgets for the defense ministry, foreign aid and aid to cultural institutions in London. ...

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Egypt's new capital city 40 miles from Cairo is shown here in the WSJ. The cost is about $45 billion. The Egyptian government will move ministries and public sector employees to the new city in 2023. Local developers are helping build the city and the Egyptian military is running the project. Cairo is overcrowded and densely packed with old buildings, with traffic congestion in the inner city. The capital is only part of a project that could cost 1 trillion dollars with help from oil rich Qatar and Saudi Arabia, and involves modernization of the Arab world's largest country- rail lines with fast rail in collaboration with German companies, and building new highways, airports, other infrastructure projects. 

The shift in building new infrastructure comes as India is building new cities including its own new smart city in Gujarat called Dholera in the Gulf of Kambhat (Cambay). Dholera is also a city built from scratch from the sand. 

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Construction spending in manufacturing was $108 billion in 2022. Total manufacturing employment is at about 10% of the private sector. About 800,000 jobs were added in the private sector in the last 2 years. The total number is 13 million, according to the Bureau of Labor Statistics. About 800,000 additional jobs are ready to be filled. For years after World War II the growth in manufacturing was at 4%. Today the growth will be higher after incentives introduced by president Biden in different sectors from semiconductors to electric vehicles.  In other products from eyeglasses to socks and bicycles there is a shift to adding factories in the US to be able to fill increase in demand and for stores carrying less inventory that can be replenished quickly from home factories. The supply chain problems and logistics cost increases during the pandemic have driven home the need for having supply from within the US or very close to the US in Mexico or Canada, or friendshoring in India or Vietnam. ...

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Trade between South Korea and India is growing rapidly and will have exceeded $30 billion by 2022. Samsung and Hyundai have expanded investments in India. India has strong cultural and Buddhist connections to South Korea. Cultural connections should be stronger than what they are considering the historical roots of Buddhism in India and Asian Buddhist regions such as Korea, Vietnam and China rediscovering their roots in Buddhism and the Ancient Path historical sites in India after the pandemic. This will happen now that India is like South Korea and Japan a rapidly modernizing country that has not lost its connections with Vedanta and Buddhism. South Korea has close ties to Japan. During the first phase of modernization it expanded its ties to Japan. During this phase of modernization both Japan and South Korea can increase exchanges of students and visits by tourists, and business exchanges between the countries, as there is great potential for this and the time has come to do this. ...

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Lyrarc Renewal America Insight For three decades America neglected its infrastructure. The Biden administration is moving quickly after the passage of the $1 trillion infrastructure package. Of the $1 trillion in infrastructure package passed into law, $120 billion is for competitive grant programs, money going to states for specific projects. WSJ shows how $1.5 billion in grants for doing the planning for projects is spent concentrating resources on key priorities. Projects getting priority are for improving bicycle and pedestrian safety getting 18%, road projects getting 50%, transit 18%, maritime 8%. Projects favored will reduce carbon emissions, increase bicycle paths, reconnect neighborhoods left out in earlier highways built. They include projects in St Louis County, Missouri for walking around safely, new transit center in Charlotte, N.C., and improvements in streets, sidewalks and bicycle paths in parts of Manchester, New Hampshire. Pete Buttigieg, Transportation Secretary is leading this effort. He says this will "improve infrastructure, strengthen supply chains, make us safer, advance equity, and combat climate change." ...

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Gary Starkweather, son of a dairy farmer in Lansing, Michigan, invented the laser printer in 1977 with the Xerox 9700.  He did this while working for Xerox Corporation, with his idea that optical technology could be used to provide pulses of laser striking a photosensitive drum, with toner attaching to the spots touched by light, the toner then fusing to the paper. His initial idea was rejected by his bosses at Xerox so he got a transfer to the Xerox Palo Alto Research Center where he worked on developing the first laser printer and then better laser printers. Interesting and useful are his thoughts on productivity and use of technology. His views were that it was not a good thing having people pressured working from the 40 hour week to the sixty hour week. He also disapproved of the pressure for people to stay digitally connected all the time. For him the concern about the future of information technology was- can I still be human in the process. ...

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The most eco-friendly Athletes Village of any Olympics is finished in time in the poorer suburb of Ile-St-Dennis in Paris, France. French president Macron opens the Athletes Village facility in this video in FR24. 40 lowrise tower blocks are shown and they will house 14,000 Olympic athletes. This is the first time a 'sober' model is being used by reducing the cost- using existing facilities, recycling, re-use, and putting climate change low carbon technologies. The organizer Nicholas Ferrand says the project was done by using the best know-how in France on how to best respond to the challenge of urbanization in 21st century. It uses low carbon concrete, wood structures and geothermal heating to cut carbon emissions in half compared to conventional methods. It is located by the river Seine in a regeneration effort in the economically deprived suburb of Seine-St-Dennis. The suburb also holds the national stadium and is the poorest and most crime ridden of France.

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Maine's shift from heating oil to heat pumps. Maine is the state with the largest use of heating oil in winter, 50% of homes use heating oil. It was because utilities found it hard to set up transmission pipelines in a sparsely populated state that this happened. Now heat pumps which have no carbon emissions and take heat from outside and transfer it to the inside of homes are effective in the coldest weather and far, far better for Maine than heating oil. About 100,000 homes have heat pumps installed in recent years, and another 175,000 will have heat pumps installed by 2027.  State rebates cut the cost of $12000 for heat pumps to half that and there is another $2000 tax rebate. Users like the even distribution of heat and had problems with the cold parts of the house when using heating oil. Some rave about it. If all homes in America use heat pumps it would be like taking 32 million cars off the road, according to one estimate.

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A states attorney generals lawsuit filed against Google states Google operates a monopoly that harms advertisers and publishers by lowering sales of publishers and charging inflated prices to ad buyers. Cases will go on trial in 2023. The Justice Department and 35 states attorney generals have a separate antitrust lawsuit against Google's search services. Democrats and Republicans in the Senate are pushing forward a bill that would treat Google search engine like a railroad operator making it illegal for it to give an unfair advantage to Google products and charge inflated prices by distorting the markets. This report in WSJ shows the way Google ran a series of programs named Project Bernanke, Reserve Price Optimization and Dynamic Revenue Share, to distort the normal operation of markets so that Google obtained an unfair price advantage. Bernanke program was operated between 2010 and 2019. In some cases the lawsuit says publisher revenue was reduced by 40%, according to internal company communications quoted in the complaint, as shown in this WSJ report. ...

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Coronavirus testing is being ramped up in the U.S. as the Food and Drug Administration new regulations allow commercial labs to manufacture and distribute  coronavirus tests. Now many players can now acquire and conduct tests including state and local governments, hospitals, universities, and private companies. so that tracking nationwide distribution is still difficult. Deborah Brx the response coordinator of the White House task force on coronavirus says U.S. has completed 220,000 tests in last 8 days.  In New York the scaled up efforts in a region with over half the coronavirus cases in the U.S., 13,000 were tested on Monday, March 23. Some hospitals in New York such as Mount Sinai expect to do double or triple the tests a day in a scaling up effort by March 30. In Los Angeles a city councilman negotiated with a South Korean company for delivery of 100,000 tests a week, having already secured 20,000 new tests. Additionally swabs and protective equipment are also needed to conduct tests and labs need to process results with speed. ...

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Cheap fixed rate mortgages make up two thirds of home mortgages in the US. Most are at 4% or lower interest rate. A new 30 year home mortgage in 2024 would be about 7%. About 660,000 job offers that required moving and selling the home were turned down. This means fewer homes left for people to buy leading to higher home prices. The additional equity people have in their home on average is $119,000 over 4 years and this means consumer spending is resilient in the face of higher interest rates and keeps inflation at 3%. How does this affect the economy? Fewer homes on the market means there is a loss to the economy of 3% to 5% of output, according to NAHB. The smaller supply of homes means there is less home inventory to search from- instead of 62% in more normal times affordability for someone with a $100,000 in income is now 37% of the listings. This is not expected to change in the next 2 years.

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States with zero tolerance laws for marijuana use are Arizona, Utah, South Dakota, Oklahoma, Iowa, Wisconsin, Michigan, Indiana, Pennsylvania and Georgia. Washington, Montana, Nevada,  Illinois and Ohio also restrict driving using marijuana. About 15 million people reported using marijuana in 2019 in the US, according to AAA.  And 15% of the US population uses marijuana up from 7% 10 years earlier, according to Gallup. Highway Safety officials at the state level say as lot of attention was paid into revenue coming to the state and not enough to highway safety for the legalization of marijuana use. 24 states legalized recreational use of marijuana, 39 states allowed medical use. States that legalized recreational use in the western US - Arizona, Nevada, New Mexico, Montana, Washington, Oregon, California, Colorado, Alaska, Hawaii. In the Midwestern US- Illinois, Michigan. In the Southern US  Missouri and Florida, Maryland. In the northeast, Delaware, Connecticut, New York, Massachusetts, Maine, Vermont, New Jersey, Maryland Washington DC,     ...

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McCartney of WSJ gives a list of things to do and what to expect on a flight where bumping of passengers is happening. He points out that crew have the right to give instructions which can sometimes be arbitrary, so passengers have fewer rights than assumed.  How to protect oneself? Get an assigned seat, check in early, and put all passengers on the same record to avoid being bumped. One unknown fact is that you are entitled according to law to cash compensation, and for getting you to destination on another flight from 1-2 hours late domestically 200% of one way fare or upto $675, over 2 hours domestic flights 400% of one way fare or upto $1350. Important to avoid smaller jets or small planes 30-60 seats as weight issues arise and these planes have higher rate of bumping passengers- and passengers are not entitled to compensation in 30-60 seat flights where weight or ballast is the issue. Other tips are avoid last flight of night or flights later in the evening where passengers are less likely to give up seats. Also consider buying a premium seat to get seat assigned if all seats are taken. ...

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Italy's oil company Eni's new CEO Mr. Descalzi, is a 33 year veteran, who headed the oil exploration division under former CEO Paolo Scaroni. He faces the challenge of reducing its 5.1 billion euro debt at the end of June 2014, with the possible partial sale of its 43% stake in oil services company Saipem. Eni's stake has a market value of 3.5 billion euros. Other decisions he faces are to reduce geopolitical risk in Africa by selling stakes in its oil projects in Africa. Under Scaroni Eni sold a 20% stake in its Mozambique field to China National Petroleum Corporation for $4.2 billion. Delays at its Kazakhstan project ,chronic problems in Nigeria, the fighting between militias in Libya have hurt earnings and cash flow. Reducing risks in Africa is a priority because Eni aggressively pursued opportunities for exploration in places like the Congo and Mozambique, so that a larger part of its oil comes from unstable regions than other large oil companies. Profitability from these fields is not what it used to be because of oil theft in Nigeria and the fighting between militias and the government in Libya, with North Africa coming in at $18 per barrel and sub-Saharan Africa at below $15 per barrel, compared to $30 per barrel from Kazakhstan for the last 3 years, according to Kepler Cheuvreux. Another problem the new CEO faces is the 800 million euro loss at the refining operations in the last 2 years. The government has a 30% stake in Eni, making refinery closings a sensitive issue. Refinery product demand is down with the economic crisis in Italy....

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An indepth look at Mexico, its assets, its huge potential and what is holding Mexico back. It ranks much higher than Brazil in many respects- higher investment as a fraction of its GDP, technical education, an easier place to do business, less regulation, better management talent, more industrialized. In 2010 Mexico had $400 billion of business with the U.S. With rising Chinese wages Mexico is an attractive place for foreign investment, with a hardworking and educated workforce. Mexico suffered badly during the 2008 recession in the U.S. It is trying to reduce its dependence on exports to the U.S in key areas such as the automotive industry. Exports to the U.S. by the automotive industry are now 65% of the total, and the auto industry association in Mexico is working to bring this figure to 50% by exporting to Latin America and Europe. Economic growth was 5.4% in 2010, and expected to be 4-5% in 2011. Drug violence may have reduced the growth by one percentage point according to some estimates. The think tank, Mexican Institute for Competitiveness, estimates that economic growth would be 2.5% percentage points higher if labor market and competition laws are changed, and the oil industry is opened up to foreign investment as happened in Brazil. A study by OECD and the Federal Competition Commission (CFC) of Mexico has shown that 31% of Mexican household spending goes to products operating in high price monopolistic or oligopolistic markets. The bottom ten percent spend even higher proportion of incomes, around 38%, for products supplied in such markets. This includes pharmaceuticals, airline travel, banking, and electricity. Taking on these cartels is a difficult task. The CFC is beginning to take the first steps in this direction, in what will be a long road to fair prices for Mexican consumers. Banking was opened to Wal-Mart. The collapse of Mexicana was an opportunity to auction landing slots to other airlines. An auction system has been developed by CFC for drugs. A new competition law sets penalties for collusion in pricing, with upto 10 years in jail. And Carlos Slim's telephone monopoly was fined $1 billion for its telecom monopoly practices. In 2009 the Calderon government shut down Luz y Fuerza, a state electricity company costing the governmment $3 billion in subsidies for an highly inefficient operation. ...

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With the introduction of the iPhone 4S, Apple announced the iPhone 3GS will be offered free, and the iPhone 4 for $99. This puts Apple iPhones priced to compete with smartphones in the middle and lower price ranges in the market. The free iPhone is a model first introduced in 2009. As the expansion of the smartphone market is now ocurring at the low and mid price ranges, companies making smartphones using Google's Android software and Blackberry's RIM are targeting this market. In the U.S., as of the end of July 2011, 82 million Americans owned smartphones, increasing 10% from the prior quarter, according to comScore. 42% of U.S. smartphone users use Android phones, only 27% use Apple phones, as of the end of July 2011, because of the price difference. In India Apple iPhones have barely made a dent because of large price differences. Rapid growth expected in emerging markets will also make this low end of the smartphone market attractive for Apple.

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The situation in Boise, Idaho. Home to many electronics and high tech companies like Micron Technology, Boise has weathered many downturns with unemployment rates well below the national average. This time things are not looking at all like previous downturns, as the unemployment rate in Boise climbed to 6% from 2.7%- it has already approached the national average of 6.7%, and is climbing. This suggests that high tech is also being affected seriously. Unemployment is expected to reach 8% in 2010, about the same as the national average forecast according to Moody's Economy.com. Goldman Sachs forecast is for the 2009 savings rate to be between 6% to 10% by 2009. Families like the Capps and Muirs that have young children or children in teenage years, are now serious savers, as profiled in this description. Down to getting their meat from a calf grown on a family farm in the Rocky mountain region where Boise is located, cutting their own wood in the mountains, buying 11 dozen eggs and freezing the insides of the eggs, buying on deals like $8 winter coats at Old Navy's store, bulk purchases of sugar and staples, growing and canning vegetables, handcrotcheting hats and scarfs for sale on Craigslist and local bazaars. All this from Mrs and Mr Muir including starting a Moneysavers Club, an email group of 30 people. The Muirs are a young family with their first child 5 years ago, who have stable employment, with Mr Muir working as a grape researcher for the state Dept of Agriculture, and his wife a dental assistant. But having taken 2 mortgages to buy their $144,000 home because they could not afford the 20% down payment. The wife's 401K of $3000 going for insulation and fence , and the husband's 401 K savings down to $13,000- reduced to half by the stock market. Suggesting poor decisions on housing debt with low savings for a couple in their thirties. The Capp couple in its forties has also low savings, having $40,000 in student loans, and credit card debt of $11,000 just paid off by using the $10,000 severance package for Mr Capp. The Capps are economizing on everything from skiing to using washable rags instead of paper towels. He worked as a field service engineer for Electroglass, a semiconductor equipment manufacturer based in San Jose which fired two thirds of its field service engineers, including Capp. They also used a $25,000 line of credit on their home to buy a used Toyota 4Runner. Considering their economizing skills, their responding to the downturn by paring down debt as quickly as possible, the information of Mrs Muir's skills at saving, the Capps continuing to use their 253,000 miles Toyota Corolla- these are families that were not crazy spenders, but just families that did not take saving seriously. The Capps made $65,000 from Mr Capps salary and $10,000 from Mrs Capps work at a mental health clinic (after getting a BS in psychology), yet their $2700 in savings suggests no effort was made to save for a rainy day. What this saving and economizing means is that restaurants are closing in large numbers in Boise. Retail stores, including electronics and clothing, are shuttering, All this is leading to higher unemployment, leading to saving measures like those used by the Capps and the Muirs. Meanwhile the numbers for savings accounts at Home Federal Bancorp in Boise, Idaho, a $725 million bank with 15 area branches, shows savings accounts up 26% in December from the previous year. And says the banks consumer banking head, the balances are increasing even as the unemployment rate is going up. Which suggests that Rodriguez and Goldman Sachs may be right (seee link) that the savings rate may reach 10%, and even higher, from what is happening in Boise. Views on currency valuation and the dollar as indicated in the analysis of the article about Rodriguez /Grantham/Scheiff, WSJ, January 2, 2009, may have to be separated from the analysis of what is happening in savings, as the weakening of the dollar relates also to the weakening of other economies and currencies. This steep upturn in saving is likely to affect Chinese exports severely and the Chinese economy. This also affect the German economy, as China imports less from Germany, especially its midsized manufacturers. See links. What is happening on saving, on the other hand, is very real, and happening before our very eyes....

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Gilead Sciences contracts with seven Indian generics drug makers to provide Hepatitis drug Sovaldi at $10 a pill for a 24 week course. These Indian companies will pay royalties to Gilead Sciences and supply the market in poor countries. There are about 350,000 deaths from Hepatitis C each year, most of them in middle income or poor countries. Worldwide about 180 million people are infected with Hepatitis C. There is intense criticism for the $1000 a pill charged for Sovaldi in the U.S., with $10 billion in sales for 2014 already set for the new drug's 12 week regimen that costs about $84,000. Gilead spends about 19% of sales on R&D.