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Metro Detroit has 90% of the 17,000 cases in Michigan as the pandemic reaches its peak there this week.  The large Detroit airport renovated and enlarged is seen as a source of the coronavirus as Detroit is where all 3 auto U.S. auto companies are located. GM, and Ford have large manufacturing operations in China, and  Chrysler has plants in northern Italy, the locations where coronavirus has hit hard, and in the case of China where it originated. Health experts say the busy Detroit international airport connecting the Detroit hub to other auto hubs in northern Italy and China- both virus hotspots- may have contributed to the virus hitting Detroit early. This country to country transmission along some route is how the virus has traveled to over 150 countries. For instance German reports show Bavaria as the source of the early cases in Italy's Lombardy region. It could be that German auto companies located in Bavaria with large operations in China resulted in inadvertent transmission of the virus from China through airport in Munich from flights between Germany and China. A Shenyang municipal bureau report provides information on German  investment in Shenyang, Liaoning province. Munich based BMW makes 1.3 million cars here. There is also the newly built Chinese German Tiexi industrial park in Shenyang with 50 German companies BASF, Siemens, located there.  Once the virus arrives in one location its spread depends on the environment with densely packed areas and the health conditions prevailing in a particular area playing their part. Both in New York and Detroit metro area this helped its faster spread in lower income densely packed areas.   ...

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Bondholders and the Greek government are stalled in talks and waiting for Germany and the IMF to come up with the 14.5 billion euros that is due on March 20, 2012. It may suit the bondholders holding out for a higher interest rate in the 4-5% range for the new bonds to be issued at 50% of face value with long term maturities, but is bad for Europe. This Journal editorial points out that this is bad for European taxpayers and points to other steps that can be taken which are being discussed in European circles. One step is for acollective action clause to be inserted for the existing Greek bonds under which all bondholders have to accept losses if two thirds of the bondholders agree to accept losses. To ensure the safety of the Greek banking system Greece would restructure the bonds held by Greek banks so that they continue to be acceptable as collateral with the ECB, and issue new bonds to the ECB with face values, interest rates and maturities matching existing holdings. The idea is to make it possible for Greece to reduce its total debt and its debt servicing costs- which is really the only way out of the crisis. The ECB and Greece would use the collective action clause to restructure the Greek debt to reduce interest and debt servicing costs on new bonds to be issued. The Journal editorial says it should also mean Greece and the ECB are not required to put up the 30 billion euros in up-front cash that was agreed to in a poorly devised agreement in 2011....

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GlaxoSmithKline will have a new CEO in May 2008, Andrew Witty. In an internal webcast to employees he described some of the changes he will make in Glaxo's organization. Instead of lumping all countries outside of the US, Europe and Japan under International with their own heads, he will split International up into emerging markets which include India, Russia, China, Brazil and the Middle East. He has hired Abbas Hussain from Eli Lilly to head this division. The rest of Asia and Pacific region will be another division.

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The declining prospects for construction and heavy equipment manufacturers in the Chinese market with the slowdown in growth in China. This affects Caterpillar Inc, Volvo AB and Komatsu Ltd. Between 2008 to 2010 investments in machinery, construction projects and other types of fixed assets went up by 61% to $4.36 trillion. China's domestic manufacturers Sany Heavy Industry Co. and Zoomlion Heavy Industry Science and Technology Co. also expanded during this period. Now analysts see demand in China as having collapsed compared to the earlier period. Monthly sales of hydraulic excavators for July 2012 declined by 23% to 5886 units, and first half sales were down by 38%, according to machinery trade association. China's stimulus spending also contributed to the surge. The new stimulus planned for 2013 is more selective in investments and much smaller because of overcapacity and overbuilding in many sectors. Some investments such as John Deere's new plant under construction in China and two in Brazil also under construction, will move forward at a slower pace and impact margins. Cummins CEO, Linebarger sees the situation continuing throught he second half of 2012 and recovering gradually in 2013. The slowdown is not deterring construction machinery equipment manufacturers. Caterpillar CEO, Doug Oberhelman, sees demand accelerating after the lull and is slowing its plan to double workforce in China to 11,000, and quadruple excavator production by 2015, but not idling assembly plants so that he has inventory on hand for a recovery. Exports of made in China excavators is also an option, and exports increased 115% in July 2012, over the prior year. But this may be based on manufacturers belief that the drop in demand in 2008 and recovery in 2010 will recur, which may only result in higher inventories as the current stimulus is much smaller and selective. The Chinese government plans to follow the DRC/ World Bank Report and is moving away from the large role of state run firms in the economy....

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United Airlines has asked Airbus and Boeing to come up with competing bids for 150 new jetliners, an order worth an estimated $10 billion. After the 9/11 bombings, with the slowdown in air travel and the steep losses airlines suffered from high oil prices, its the overseas airlines that made the big orders. The domestic airlines were content to work with an aging fleet. United's move at this time may be calculated to take advantage of the improving credit situation, and the lower prices of steel and other commodities to get better pricing from manufacturers. The thrust of the order is to replace 11 of United's wide body fleet, the Boeing 747,757,767,and 777 model fleet. The average of these planes is 747-13 years, 777- 10 years, 767- 14 years, 757-17 years. See graph. The most crucual conditions United is looking for are financing arranged by the manufacturer that does not use United's cash, and the flexibility to change the order later if market conditions change. United sees this as amove to get good pricing and financing terms now so that when the planes are delvered over time, spread out over several years, the planes would come in just when air travel is picking up with an economic recovery. If it does not get the terms it wants, United may wait. It has already retired half of its oldest planes, the Boeing 737's, with the remaining half due to be replaced by end of 2009. United's competitor American Airlines, announced in fall 2008, that it wants to order upto 100 Boeing jetliners if it can get new agreements with its pilots union. In spring 2009 American speeded up deliveries of 737-800's to replace some of its old MD-80's. Newer aircraft mean better fuel efficiency, and ways to cover routes that are not possible with older aircraft....

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The last thing we want to do is to bring back the images of the 1953 American sponsored coup, which ousted Prime Minister Mohamed Mossadegh and returned Shah Pahlavi to power, says Senator John Kerry in an op-ed article in the NYT. He cautions America getting involved in Iran, letting Iranians decide on their own, as the CIA supported coup that overthrew Mossadegh's elected government and put a king in his place because he would be more friendly to American oil and other interests in the region, may arouse bitter memories of America's influence in avery negative way in an earlier period. Most Americans may not remember the American sponsored coup. Mossadegh was a socialist during the Cold War and wnated to nationalize the oil industry run by foreign companies in the country. During those days the interests of American oil companies, the Cold War with the Soviet Union, and British-French colonial era interests in the Middle and Africa and Asia, were all intertwined. The Korean war had just ended, Suez crisis of 1956 with the nationalization of the Suez Canal by Egypt, was a few years away, the French were fighting to keep their colonial empire in Vietnam, and America was supporting Pakistan with Sabre fighter jets bringing a version of the cold war to the Indian subcontinent even though India was the largest democracy in Asia. Partly because its leader Jawaharlal Nehru, was an independent minded socialist, who avoided joining the cold war with his non-alignment policies. Adlai Stevenson, Democratic candidate for President against Eisenhower was very enthusiastic about Nehru in his speeches, but Republican Secretary of State Dulles saw things differently, just as today there are huge differences between the way a Rumsfeld and an Obama see the world. Many of the problems today in places like Pakistan Afghanistan, Iran and Iraq had their beginning during this period....

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Questions raised about the government's committment to serious health care reform. New leaders of China who took power in 2002 and 2003 with concern for the poor, did not put discuss reform till 2006 and during this crisis there isn't the urgency that is needed. Recent documents, says the Economist, that were circulated secretly within the bureaucracy for 3 weeks before being made public, provide no clear target about how much people would be reimbursed for medical treatment. The other concern is that the central government provides only 40% of the 850 billion yuan allocated for additional spending on health care in the years 2009-2011. This is about $125 billion. Burt local governments may not be keen on spending on health care as officials are still judged by how much they can boost employment and GDP growth. Over three years the central government's annual share of the additional spending on health care of 850 billion yuan is 111 billion yuan, according to Caijing, a business magazine.But the 2009 budget on health care is 118 billion yuan, so its not clear that things add up. The central government's additional spending in each of the 3 years is only $16 billion. How this can provide help to the 200 million uninsured, the insured who still pay a large amount for health care, and pay for essential pharmaceuticals on a list prepared by the government, and pay a portion of the expensive diagnostic tests that hospitals like to make money from, is not clear. The whole system will have to be overhauled so that hospitals do not have the incentive to prescribe these expensive tests and pills that cost more. The government says it will be 2020 when 90% of Chinese are covered by agovernment financed health insurance system- 11 years away. This only means that domestic consumption may remain depressed for a decade or so. With export markets collapsing, this leaves China dependent on infrastructure spending for growth for a long time, and lower growth rates with higher unemployment. ...

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The Adventures of Amir Hamza is a story much like the Odyssey but set in the Persian, Central Asia Islamic world. It was born as far back as the 9th century. It has a South Asian version since the epic is retold in different settings and has a oral tradition of being recited by dastangos who used to recite these myths and legends . Amir Hamza is supposedly the uncle of the prophet Mohammed. Its South Asian version is in the Hamzanama that was commisssioned with painted manuscripts by the Mughal emperor Akbar. It has 1400 illustrations and formed the basis of Mughal art which was a fusion of the artistic worlds of Hindu India and Islamic Persia and Central Asia. In those times the Persian speaking world extended from Tabriz to Hyderabad in south of India and the Hamza Adventures were told around campfires and in the outdoors. The Hamzanama paintings commissioned by Akbar were shown at the Sackler Gallery around the time of the Iraq invasion in the summer of 2002 and show a world long forgotten. The Saudi type of Wahhabi Islam and religious zealotry is a far cry from this more open world of art and legend and life in central, south and western Asia, of commerce, trade and ways of life intermingled and flow of people across a large region in Asia. What it may suggest is that the current wave of religious zealotry is a kind of phase that like a passing wind comes and then is dispersed, maybe its a reaction to western interventions, maybe a failed response of tradition with modernization, maybe something else, a clinging to old outmoded patterns in areas that are most left behind by change, with ethnic and other strife mixed in with it. No single or simple response to it makes sense and a lot of patience is needed. Conflict of civilizations talk and the like may simply be overdone and way oversimplified things....

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About $200 billion in speculative or hot money entered China and landed mostly in bank deposits which pay 4% interest rate compared to 2% for dollars in the USA with the idea of profiting from the interest rate and the appreciation of the yuan, in the first 5 months of 2008, according to economists at Logan Wright, an economics research firm and at Beijing University's Guanghua School of Management. Beijing's foreign exchange reserves are at 1.8 trillion dollars at the end of May 2008 so even if their is an abrupt reversal of flows of this hot money China would not be protected but an abrupt outflow could hurt the banking system. Amore relevant fear is that this speculative inflow will raise inflation in China as the central bank prints more yuan to buy dollars and keep the yuan from appreciating and then sterilizing the excess liquidity by issuing bills or increasing bank's reserve requirements. Sterilization is now upto its limit and the central bank has raised the reserve requirement 16 times since January 2007 from 9% to 17.5%. The Peoples Bank of China, China's central bank only pays i.9% on reserves so this hurts bank profits and there is a limit to raising reserve requirements also. This leaves one time appreciation of the yuan but this would have to be of some magnitude about 20% to stem the speculative inflows of money trying to take advantage of the appreciation of the yuan. Another problem this situation presents for the central bank is making monetary policy tools like increasing interest rates to calm inflationary expectations not available as the increase in interest rates would only increase the profit to be made in bringing in speculative money into China. So where does this leave the Chinese economic policy managers? Monetary policy will continue to be losse and with large amounts of speculative inflows in the rest of 2008 and into 2009 inflation is likely to continue its upward climb. Inflation was at an annual rate of 7.7% in May. 2008....

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After the hearing on November 18, 2007, in the Senate in front of the Banking Committee, most senators remained unconvinced. Prof. Morici of the University of Maryland and some senators including the senator from Tennessee asked tough questions about the automakers business model and viability going forward and some senators voiced deep concern about the automakers resistance to better fuel efficiency standards. The testimony given in advance and the remarks ahead of the questions showed the Detroit automakers CEO's were in a disconnect as they did not come forward with an acceptance of past mistakes on fuel efficiency, lack of vision on energy conservation, and failure of union and management to address benefits and work rules that were obsolete a long time ago, relying too heavily on lobbyists and on the plea by Michigan senator Debbie Stabenow for aid. Failure to do this and relying too heavily on the job losses and economic threat may have alienated many senators who are outside the midwestern region where most of the Detroit automakers are concentrated....

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In a meeting at 10 Downing Street on July 25, 2016, British prime minister Theresa May and Ireland's prime minister Enda Kenny, said there was strong will on both sides to maintain the Common Travel Area, which allows passport free travel between Northern Ireland and the Republic of Ireland. Ms May also stated that Brexit should not affect the gains made by the Ireland peace process. Kenny said that it is in all our interests to see a "prosperous and outward looking UK which retains a close relationship with the EU."

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U.S. president Trump has a meeting with the Pope at the Vatican in which both were seated at a wooden desk in the pope's private study, and both listened carefully. Trump told the pope, "Thank you, thank you, I won't forget what you said." The pope gave Trump an encyclical on the environment, in which he said that capitalism had contributed to degrading the environment and this hurt the poor. Trump said he would read the encyclical. The U.S. president was critical of the Paris climate change accord on the campaign trail in 2016. Now as he decides whether the U.S. should withdraw, aides at the White House in favor of it see this as an opportunity for Trump to get a better understanding of the issue before deciding. Mr. Trump gave the pope a first edition copy of Martin Luther King's writings, and Francis gave Trump a medal bearing an olive branch. Trump then met for 50 minutes with the Vatican Secretary of State Cardinal Parolin.

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U.S. Fed chairwoman Yellen moves cautiously to raise rates in December 2015. The Fed raises the benchmark federal funds rate-its overnight lending rate- from near zero to between 0.25% and 0.5%. Yellen emphasized her cautious approach by saying "we have very low rates and we have made a very small move." This follows seven years of near zero rates after the QE program for monetary easing under Ben Bernanke, the previous chairman, following the 2008 financial crisis. The Fed plans to raise rates gradually and slowly over 3 years. With oil prices falling below $35 the prospect that inflation may fall well below the 2% target could put off further plans to raise rates. Yellen said the Fed would "monitor inflation very carefully," and if it remained at unexpectedly low levels the Fed would reconsider its outlook and respond with "appropriate policy."

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Workers ended a 3 month strike at Caterpillar's Joliet, Illinois plant, essentially giving in to reduced healthcare and pension benefits and wage freezes for older workers. Under the deal workers hired before May 2005 receive no hourly pay increase, workers hired after that date get a one time 3% pay increase with future pay increases decided by Caterpillar management. Hourly pay at the plant ranges from $13 to $28. About 25% of the older workers are eligible to retire. A $7.8 million fund to supplement incomes of laid off workers will now be used for retirement bonuses. Caterpillar persuaded workers to ratify the contract by increasing the bonus for ratifying to $3100 per worker from $1000. During the strike Caterpillar continued operations by using managers and temporary workers and using 100 workers who crossed picket lines.

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During the civil war the Libyan government of Gaddafi used mercenaries from Mali and the Shaharan region region to suppress the young people fighting for democracy. After the fall of Gaddafi, these troops with arms returned to Mali and the Sahel region and formed militias that now control the northern part of Mali. These mercenaries who linked up with Al Quaeda are suspected of the attack on the U.S. consulate in Benghazi. The U.S. with French support is only now focussing on this problem. During much of the Libyan struggle for democracy the Obama administration let France take the lead in Libya, and may have missed the volatile situation developing in the Saharan region of Niger and Mali as a result of the flow of arms into the region from people of Mali and Niger returning to their countries from Libya.

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Vegetable prices in China went up by 22% in July 2010, from a year earlier, and grain prices went up by 12%, eggs by 8%. About a third of household budgets go to food in the budgets of people in India and China. Wheat prices are climbing on world markets after the ban on Russian exports, and rice prices are also climbing with the floods in Pakistan ruining the rice crop- Pakistan being the No.3 world's rice exporter. Personal spending accounts for 36% of overall GDP in China and 57% in India. Food prices in China were up 6.8% in July, 2010. Industrialization in China, and agricultural land freely taken over for factory sites with the consent of local authorites, may be a complicating factor. See the link to BYD's acquisition of agricultural land for factory site.

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Discussion in China's inner Communist party leadership circles about the way forward for democratic reforms, including free speech, and monitoring of government policy through criticism. This follows an unusually frank sppech in Shenzen in August, by premier Wen. A number of party elders call for further action in democratic reforms for better governance, and to curb corruption. The sense that China is reaching an impasse, and further development beyond what has been achieved in three decades requires democratic freedoms for the people of China. This has the potential to be a signifcant development, because it comes as economic policies of the past will have a harder time working now because of western resistance to high level of Chinese exports. The search for a new economic model may involve soul searching, and new thought on the political models that are needed now.

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Ford Motor opened its new plant in Chongqing, China. It was approved in 2009 and is operated in a joint venture with Chongqing Changan Automobile Company and Japan's Mazda Motor. It has annual capacity of 150,000 cars and will manufacture the redesigned Ford Focus. Ford says this will be part of 15 new models in China by 2015. Further expansion is expected to be slower from now on, because China's policy is shifting towards consoldating its manufacturing base for automobiles- which experienced hyper level growth in the last decade- and not adding new capacity. Ford made a late entry in the Chinese market compared to GM. It sold 519,300 vehicles in China in 2011, compared to GM's 2.55 million vehicles. The change in China's policy may mean Ford has less opportunity to catch up with VW, GM and Toyota in China.

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Spain's underground economy and family support is helping people in Spain cope with unemployment at 24.4%. Economists say that the unemployment figures may overstate unemployment by about 5 to 9% because many laid off workers work in the underground economy now work on a cash basis. It also means that the government has less revenues because workers in the underground economy do not pay taxes, and that this hurts consumer spending as many of the workers now get paid one half of what they made earlier. When the worker cited here was laid off at Ikea subcontractor Pantoja in Seville, to deliver and assemble furniture, he began working on an informal basis by helping customers at the Ikea store do assembly and any other work such as painting and repair. This worker now makes half of the 800 euros he made earlier.

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European Union leaders including European Council president, Herman Van Rompuy, European Commission president, Jose Manuel Barroso, ECB president Mario Draghi, and Eurogroup finance ministers head, Jean-Claude Juncker, draw up a 10 year road map for "a genuine economic and monetary union." The prime ministers of Italy, France and Spain push jointly for deposit insurance to cover European bank deposits, Europe wide banking supervision, and bailout funds to directly purchase sovereign debt of Italy and Spain without conditions. This takes place June 22-27, 2012, with the EU leaders increasing pressure on Germany for the first time in concerted fashion. Ms. Merkel and her coalition partners the Free Democrats see this as an effort at mutualizing debt. Merkel says Europe will not have total sharing of debt "as long as I live," in her talks with Free Democrats.

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Barcelona sculptor Jaume Plensa and his 44 foot high work " Echo," which shows a girl's head. This was raised in Madison Square Park in May 2011. It gives viewers pause amid the bustle of the Flatiron district of New York city. Plensa recently went to Chichester Cathedral in England. He is creating a sculpture for the cathedral's nave, a hand raised in blessing , which will be formed with a stainless steel lattice of letters in eight alphabets. Plensa's focus on the body is evident- something from the nineteenth century sculpture tradition but done in a twentieth century way. Plensa wants to see people pause at the sculptures such as the Echo, to be jolted out of their everyday consciousness when they are listening to the constant chatter of voices outside, so that the can hear the voice from inside themselves.

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A three judge special bench of India's Supreme Court led by chief justice Rajendra Mal Lodha, said the process of allocation of coal licenses by the coal ministry lacked accountability and openness. Lodha said: "There was no fair and transparent procedure, all resulting in unfair distribution of the national wealth. Common good and public interest have, thus, suffered heavily." A report by India's federal auditor in 2012 stated the improper allocation of 200 coal leases to private companies cost the government about $30 billion. Former prime minister Manmohan Singh of the Congresss party headed the Coal ministry for part of the period when the improper coal leases were given, leading to intense criticism from the media. This was an issue in the elections leading to the defeat of the Congress party by the BJP party led by Mr. Modi.

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A veteran campaigner for Hong Kong values and civil rights presents his view of the Hong Kong protests for free elections. Is it in China's long term interest to let the same "cronyism" that is embedded into China's political governance be imposed on Hong Kong, when cronyism and corruption eventually lead to lower productivity, poor economic decisionmaking, and slower growth. Future leaders may need Hong Kong people to tackle these economic problems emerging from poor governance common to many countries leading to stagnation. With a rapidly aging population China risks falling into the middle income trap. The past governance achieved economic gains but an open system with a truly open Hong Kong is likely to be needed to generate the kind of economic growth needed inthe future. Opportunities lost can never be recovered in the same way again.