LyrArc Article Gist
Prospects for the global economy in 2016- debt to GDP ratios high in Turkey, Brazil and China lead to problems and slowing growth. India an exception in emerging markets with growth rate above 7%, benefitting from increasing foreign investment and halving of oil prices. U.S. recovers slowly, and the eurozone emerges from the debt crisis with need for further quantitative easing by the European Central Bank. Russia recovers gradually after a steep devaluation of the ruble. Ironically just when a slow recovery is taking place in 2015-2016, the private sector governance improvements, and serious tackling of debt problems, lead one to conclude that prospects for the long term are better today than in 2005 when the optimism was not well grounded because of weak governance and debt buildup.

LyrArc Article Gist
Consumer Financial Protection Bureau comes out of a playbook of one party that supported no changes in the Financial system in the US and no consequences for financial wrongdoing in the mortgage and banking speculation financial crisis of 2009 that upended the world's financial system. The Obama administration did little to tackle the root causes of the crisis and no serious consequences for financial wrongdoing. With financial interests vested in the structure of both parties work in the financial business could go on as usual with minor changes such as the Consumer Financial Protection Bureau and financial settlements of no serious consequence. Along with this rural areas, farmers and agriculture were given less priority than Silicon Valley during the years of the Obama administration 2008-2016. The passion for a serious overhaul stems from the sense of injustice suffered by rural America and by tens of millions of middle class Americans who took the first blows with patches of period of less work or parttime work at low wages in a battered economy in the aftermath years of the global financial crisis caused by irresponsible bankers in the years 2010-2014. This strained finances and savings only to be followed in 2019 by the Covid pandemic imposing more strains on finances of American middle class and working class people. ...

LyrArc Article Gist
People and parties of Kashmir on the attack on tourists at Pahalgam, Kashmir on April 22, 2025. The economy of Kashmir after the pandemic was recovering with a surge in tourism, new investment in agriculture, and the region benefitting from investments for Vikshit Bharat 2047.  Most of the Kashmir region remain closed in memory of tourists killed in the attack.  Kashmir region has a long history that has been lost in the coverage since 1947 as the colonial rule ended in the region with intermittent peace and conflict. For 7 centuries there was Hinduism from the Vedic period, Buddhism, followed by 7 centuries of Shiva religion till the 15th century when Islam entered the region for 3 centuries till the Sikhs and Sikhism a religion around deity Ram around 1819 and the British after 1850. The British set up a protectorate in Kashmir under the British Empire ruled by a Sikh king from 1850 to 1948. What this says is that after a unsettled period till 1948 to 2020, the region is likely to return to its history of tolerance for different people from South Asia, with one huge difference, the rapid modernization of the region in the 21st century replacing the feudal poverty and backwardness of a overtaxed and underdeveloped farmers communities. ...

LyrArc Article Gist
This look at China and leaders Mao, Chou-en-lai, Deng, Xi Jinping through the lens of the Hoover Institution series on authoritarianism "The Party's Interest Come First," by Hoover research fellow Turgian makes the same errors as is evident from expert at Oxford University/ Kennedy School Rana Shantasil Mitter of Indian descent. Which is to see China as an academic, not by immersing oneself in China of 1890- 1950 into the lives of China's millions of ordinary people. And how is one to immerse oneself into these lives. One can do this through the eyes of General Stilwell who loved and immersed himself in China like it could be said no other American of that period in Barbara Tuchman's well researched account of this China of 1890-1950.  One clue to this is also that Tuchman unlike Torgian or Mitter by a long shot is the only writer who met Mao in Beijing in the 1970's. In 1971 she met Mao and made observations on the lives of the people in "Notes from China- If Mao had met Roosevelt in 1945." As a result of Tuchman's account of Stilwell's personal experience of China since 1900's being lost to most Americans, there is no concept of what China had experienced with the gradual collapse of China's economy and politcal structures, its defense as China, like India, and Asia as a whole failed to experience the opening up to science and technology and modern ways of thought since 1600. The results were catastrophic for the Chinese people and for the people of India leading to economic destruction on a scale unknown in history and lives shortened and reduced by poverty.  ...

LyrArc Article Gist
Chile's experience in Latin America stands out for the painful experience of the dictatorship years and the mismanagement of the economy by the government preceding it. The governments of the last 20 years of the Concertacion have studied the mistakes of these years and corrected them to aremarkable degree, like no other country in Latin America. The new politicians decided that the economy had to be managed so that inflation was under control and these Concertacion administrations produced budget surpluses in all but 4 years says Finance Minister Velasco. Velasco himself was 13 years old when the dictatorship of Augusto Pinochet was set up, and his father a law professor had to leave the country for criticizing human rights abuses. He studied economics at Columbia University, and his principal focus there was he says, " to understand how did this happen to Chile and how do we make sure it will nhot happen again." His finding was that runaway inflation had created so much unrest among the people that coup plots could take place, and that political stability could not be maintained without good management of the economy. It also meant that Chile must avoid extremes, try to take amoderate position, which meant preserving the free market reforms that had taken place, and introducing policy measures, projects and investment which helped to bring up the vast majority of the people including the least well off of society. Velasco also studied the history of Latin American economies with their boom and bust cycle, the situation in countries especially Argentina and sometimes in Brazil and other countries since the fifties. He found as he says that when " a country seems very creditworthy, everyone wants to lend to you, capital flows in and consumption booms." At some point excessive amounts of capital flow in which cannot be absorbed and is wasted in unproductive ways, which becomes adebt burden as the bust part of the cycle takes hold. So Chile has been careful to control speculative inflows of capital. But Velaco went further. In 2006 he left a Professorship at Harvard University to become finance minister of Chile under President Ms. Bachelet. Copper prices were surging and Velasco insisted on caution. In 2006 he pushed through a law requiring the annual budget to be based on an independedt committtee's estimate of the average price of copper in the next 10 years. Any copper income above the budgeted price goes into a savings fund maintained outside the country. In 2007 the copper price used in the calculation was $1.21 a pound, while the market price was $3.23 a pound. The profits $6 billion for 2007 went into the rainy day fund, which is invested conservatively in government bonds or money market instruments denominated in dollars, euros and yen. This fund is now at$20 billion. What is remarkable for Velasco is the way this was executed. The price used was conservative, the political pressures from unions and students and other groups was resisted effectively, and the whole exercize was carried out to successful conclusion even as popular support for the government dropped. When the crisi hit in December 2007 copper prices plummeted. Velasco announced a stimulus package, getting the $4 billion stimulus package through both Houses of Congress in January 2009. Chile expects only adrop of 0.5% in GDP in 2009 year over year. $500 million was given to stae owned bank BancoEstado, which reduced consumer lending rates by half. The package offers subsidies for businesses to hire younger workers, $700 million for large infrastructure program designed to create 60,000 jobs in road paving, airport upgrades and housing construction. And 1.7 million families, the poorest 40% of the population received cash stipends from the government equivalent to $70, with another stipend due in August....

LyrArc Article Gist
Important to distinguish in GNP, GDP and GDP per capita. The official rate of 10-11% growth is questioned by Thurow by noting that 70% of China in the rural area is seeing slow growth and if the urban economy has to grow at 33 % if the whole of China is to grow by 11%. He also brings up electricity consumption historicaly growing much faster than the growth rate of GNP or GDP. At breakneck growth rates gorwth has still been 60% of the gorwth in electricity consumption because some of it is wasted or is not used productively.He does not give his electricity consumption growth for China numbers, but we can extrapolate from the 6% growth in China analogous to Japanese growth rates in the 1970's that he comes up with, to see that electricity growth rates he assumes in his math are 10% a year in China. That is based on 6% growth he gives for China constituting 60% of the growth in electricity consumption for China. Given the validity of this math China and India are growing at much slower rates than official math states. This also means productivity of capital remains a major issue and does not simply go away when seeing the countries as a whole not just coastal and other well developed regions of India and China. So the message that is being projected about Chinese growth may be misleading as urbanization in China will still have to proceed for many decades for the growth to even out geographically. Another fact that immigration has been a source of additional people for the USA and so a significant population increase will be seen in the US in the next few decades even as China's population declines, supporting much larger economic activity in the USA. Europe also is seeing no increase in population. Europe's per capita income fell from 85% of that of the US in 1990, to 66% in 2007 according to the IMF statistics quoted here. Validation of these numbers would provide a different assessment of overenthusiasm for the kind of haphazard growth which also wastes resources and sacrifices the environment and shortchanges health, education and other goals, and instead promotes a different view that constantly looks for better ways of meeting the difficult challenges facing China and India. With these...

LyrArc Article Gist
France's regional elections show president Macron's party has failed to covert national power into grassroots support. Macron's En Marche party was reduced to just 10% of the vote. Some called it a slap in the face for Macron's party. It was hastily setup during Socialist president Hollande's last year in office in April 2016 by one of his ministers Emmanuel Macron. The National Front of Marie Le Pen on the far right also lost support and won just 19% of the vote. About a third of the vote went to candidates from the former Republican party of president Sarkozy. Xavier Bertrand from the Republican party, which is in the Gaullist tradition, was one of the winners and emerges as a presidential candidate. Only 34% of voters turned out with very young people and people over 35 not turning out to vote. It appears that voters are now disillusioned with the party of Macron and Marie Le Pen that had hoped to win voters from the two traditional parties the Gaullist party and the Socialist party. The socialists did well in western France and have gained at a regional level. The Gaullist party, called Republicans under Sarkozy now looks to gain at the national level. The situation in Germany shows voters shifting back from the far right back to the traditional parties. In the regional election in eastern Germany the AfD far right lost to the CDU recently. Voters are beginning to return to the traditional parties. In Germany this includes a shift to the Greens party that has gained as the voters shift to moderate parties. Macron lost much support and was seen as not sensitive enough to people who had struggled to make a living because of changes in the economy and the urban rural split, social upheaval. He had a popular prime minister during the first wave of the coronavirus  in 2020 who Macron removed as this would create a candidate who might run against him in the national elections. A series of terrorist actions led to a sense of a lack of safety which added to voter unease and the shift to the traditional centre right Republicans.  ...

LyrArc Article Gist
Diversification has helped BHP weather the decline in commodities prices better than Rio Tinto, Anglo-American and Vale. BHP is expected to report profits of $12.5 billion for the last fiscal year. BHP is also in the oil and gas business, in addition to iron, ore, copper, coal and aluminium. This has made it possible to take writedowns of $5.5 billion and still make stable profits. Andrew Mackenzie, the new CEO of BHP, is a Scotsman who is focussing on the productivity of capital and cost-cutting. BHP announced $1.9 billion in cost savings since July 2012. Mackenzie's goal is to reduce capital expenditures from $18 billion today to $15 billion or less in 2-3 years. Capital is tied up in incomplete projects taken up in the boom period of higher prices, and the process of reducing capital expenditures is gradual. Capital expenditures in the mining business increased dramatically from $20 billion to $120 billion from 2003 to 2012. For most of this period China's economy registered growth rates of over 10%....

LyrArc Article Gist
The U.S. Senate voted 79-19 to go forward with a bill on sanctions against China for undervaluation of the yuan. The IMF says China's currency is "substantially undervalued."

LyrArc Article Gist
This editorial opinion in BBC News points to a Russian miscalculation on how its involvement in the U.S. elections would be seen in the U.S. Congress. The U.S. Congress voted for stronger sanctions on Russia with only 5 members in the Senate and the House of Representatives voting against sanctions- an overwhelming vote in favor of sanctions. This means future policy on Russia will be determined by the U.S. Congress, and with bipartisan support for such policies. President Trump reluctantly signed the bill, saying it took away from executive authority. Russia had hoped its efforts in favor of Trump would lead to an easing of sanctions, not grasping the role of Republicans in Congress who see interference in the democratic process in the U.S. in the same way as Democrats.

LyrArc Article Gist
This article in the NYT explains why the loss of jobs particularly in the auto industry to Mexico, with the experience of NAFTA passed by president Bill Clinton, has caused widespread opposition to the TPP trade agreement proposed by president Obama. Both Hillary Clinton and Donald Trump in 2016 oppose the TPP.

LyrArc Article Gist
The dollars situation may not be as bad as it looks. There are signs that the dollar is strengthening against the British pound and the Australian dollar and other important currencies. And the weaker dollar is already working to reduce imbalances in America's trade deficit. There are two aspects of the dollar's role, one is as a means of international exchange and the other as a store of value. For the first reserves of any country need to be highly convertible and America offers highly liquid markets and this has not changed. As a store of value the dollar has lost some of it value especially against the euro. But the reason that the dollar should not see a sudden drop in value is because the largest holders of dollar reserves China with $1.4 trillion and Japan with $1 trillion would stand to lose by shifting out of dollars significantly at atime when the dollar was so undervalued besides hurting their export markets if it affected the US economy. And though the euro looks good in the short term, over the longer term Europe's aging societies may see lower growth and the future may look different once the USA has corrected some of it imbalances which is precisely what the weaker dollar accomplishes as the US exports start humming. Seen against the historical background the USA has periodically gone through this situation with dollar weakness in 1977-79, 1985-88, 1993-95. In 1985 the dollar went to 81 Japanese yen and there was concern about its reserve currency status at the time. However the dollar has weathered these storms. And there is always the option for a country to peg its currency not to one currency alone but to a combination of the dollar and the euro. This was the case before 1914 when 3 currencies the British Pound, the French Franc and the German Mark were used. In the post 1918 environment the dollar replaced the German mark alongside the Pound and the Franc. The Persian Gulf countries have this option so they can use their own monetary policy to control inflation by pegging not just to the dollar but to a basket of currencies as Kuwait has done. See the link to the Persian Gulf countries handling of this currency issue in WSJ, November 20th and Nov 1, 2007....

LyrArc Article Gist
A worldwide trend to shorter term borrowing means that institutions and sovereign governments will compete in the capital markets, as they try to roll over existing borrowing by 2012. The US has $1.3 trillion to roll over by 2012. Worldwide about $5 trillion has to be rolled over, and of this $2.6 trillion is in Europe. With the European financial crisis which started in Greece it is becoming harder for sovereign governments to borrow in capital markets at favorable rates. A former economist of the Bank of England says this is of the highest importance for lending and for growth. The implications are reduced lending by banks to businesses and consumers, reducing output and growth, and limiting reductions in unemployment. It is a big issue say analysts, as debt needs to be rolled over over shorter periods. Moody's study shows new bond issues by banks during the last 5 years matured at an average 4.7 years. The stress say experts is likely to be on the less healthy banks like the savings banks in Spain, Landesbanks in Germany. Stress tests on European banks will be out July 23, 2010....

LyrArc Article Gist
Takes the risks of the bubble collapsing quite lightly in his reference to the Great Depression after the 1920's stock bubble in the USA. It took several decades for the economy to come back in the US after the 1920's China can ill afford such an experience as hundereds of millions of Chinese are not benefitting in the rural areas as are the coastal areas so for them it would be a great setback, and the economy would take years to recover which can be quite painful.

LyrArc Article Gist
The Trump administration proposes a zero policy for Iranian oil imports which says the U.S. will grant zero exemptions to countries importing Iranian oil.  Big importers China and India are likely to resist this policy.

LyrArc Article Gist
The Labor Department's rate of labor underutilization is 14.8% of thepotential workforce, much higher than the 8.1% unemployment rate. Which means that a lot of workers are not able to make the fullest use of their skills. If unemployment stays high for a very long period some workers lose their skills and become less employable. THat could leave the floor for unemployment at amuch higher level. Something like this is happening now and stay with us as the unemployment rate grows and the underutilization of labor rate with it. Physiscists call it "hysteresis"., a kind of laggard impact of some sustained force. An example is if you squeeze a nerf ball for so long that it doesn't bounce back when you release it. Higher underutilization of labor which could hit 20% by 2010 at the rate at which job losses are ocurring of half a million a month, would mean pressure on wages and fears of deflation, lower tax revenues and fears of persistent deficits, less cash to invest and companies having less capital to invest leading to lower earnings. And falling behind the curve is what Krugman fears could be happening now, even with the large stimulus and budget of the new President, because of a series of problems ocurring at the same time and reinforcing each other. And the efforts of the government still not large or effective to meet the scale of the challenge. See the link to this. ...

LyrArc Article Gist
This report in the Economist says that the days of double digit increases in the car market are a thing of the past. Future increases will be in the mid to high single digits, according to McKinsey consulting firm. China's economy is slowing and official estimates of GDP growth of 7% are described by experts as overstated, with real estimate of growth for the 1st quarter of 2015 by Citi, Conference Board and Capital Economics all below 5%, as reported in the WSJ. A sign of the change in the market is the need for higher use of incentives. The growth in the used car market offers buyers other alternatives. The new plants being added will increase production by 5.3 million light vehicles a year and come online in 2015 and 2016, this is in addition to the 22.8 million in sales in 2014. Average Chinese auto plants operate at 70% of capacity and the added volume will lower capacity utilization further. China's local automobile companies, with the exception of companies in joint ventures with foreign companies, have failed to gain customer loyalty. Many of these companies may be absorbed by foreign car makers or shut down as the industry consolidates. Foreign companies will find doing business less attractive as sales decline. ...

LyrArc Article Gist
Hillary Clinton returns on September 15, 2016, to the campaign trail after 3 days of rest to recover from pneumonia. She chose to speak at the University of North Carolina in Greensboro, with N. Carolina  now considered a state that is winnable, and with a new focus on young people on campuses where she wants to regain her once large lead in the summer. She said that the break had given her time to reflect on what it is she represents. "The campaign trail doesn't really encourage reflection and its important to sit with your thoughts every now and then. It helped me reconnect with what this campaign is all about." Adding that it was about quality health care, financial security, clean water and other critical needs of people.

LyrArc Article Gist
Inflation in China and rising wages are pushing up costs for American manufacturers. The pressure on China, most recently in Congress, is helping to push up the value of the yuan. This combined trend is making it attractive for some manufacturers to bring factories home to the U.S. A trend in the U.S. towards non-unionized labor and the new trend to a two-tier wage level- with lower wages for entry level workers- and the shedding of legacy health care costs, is creating a more cost competitive labor force in the U.S. This extends from older industries such as furniture and auto components to newer industries and technology. The new factories setup in the U.S. use technologies that require a smaller number of workers, in most cases less than half the number of workers that were employed earlier. This adds another element in cost efficiency, though it means fewer jobs are created with new plants.

LyrArc Article Gist
Wessel describes the changes in American manufacturing as it goes through some of the same changes that happened in Germany in the years after reunification. With high unemployment German manufacturing companies worked with unions and the government for wage restraint over the last decade, resulting in wages barely keeping up with inflation. The increase in productivity and wage restraint helped Germany become more competitive with factories in Asia and Eastern Europe. Wages are now increasing with larger wage increase negotiated by the unions in Germany, as skilled labor is becoming scarce. In the U.S. Labor Department figures show an increase in output per hour in American manufacturing of 13% in the last 5 years and 21% in the five years before that. Typical of the wage changes in manufacturing- American Axle & Manufacturing plant in Three Rivers, Michigan hires assembly workers at $10 per hour, with older "legacy workers" making $18 per hour. General Electric brought back manufacturing work from Mexico paying workers $13 per hour for new hires, compared to to $21- $23 in prior years. At GM, Ford and Chrysler workers make $16-$19 per hour in base pay compared to older workers with legacy rates of $29-$33. The Bureau of Labor Statistics shows earnings for production workers in manufacturing averaging $19.15 per hour in April, which is where they were in 2000 adjusted for inflation. The impact of this large increase in productivity with new machinery and production methods, and the wage reductions in manufacturing, is a return of offshored jobs. Wages increased in China and Mexico in the last decade. After a 35% decrease in the number of manufacturing jobs in the U.S. from 1998-2010, the number of jobs has increased by 4.3% to 11.9 million in April 2012, according to the Labor Department....