LyrArc Article Gist
All sides had to make concessions to reach a new agreement on a restructuring of Greece's debt, and new terms for loans to Ireland and Portugal. The agreement was reached after negotiations between France, Germany, the ECB, and eurozone countries with a declaration issued on July 21, 2011. The powers and financing of the European Financial Stability Facility (EFSF) were expanded to be the main mechanism for channeling EU funding to reduce the burden of Greece's debt. Germany will provide new funding and be open to additional commitments, something German chancellor Angela Merkel had resisted since the beginning of the crisis in 2010. Earlier funding had come with high interest rates and only when the situation had reached a crisis, with Germany insisting on the punitive rates and conditions as a way to discourage countries from taking advantage of cheap borrowing. In exchange for commitment of German funds Ms Merkel had insisted that banks and private creditors share in the losses. Private bondholders resisted but finally agreed to take a loss of 20% of principal on a small portion of the bonds. Their larger concession was to take lower interest rates and extend the maturities to 15 years and 30 years on new bonds which are guaranteed by the EU. The specific terms of the agreement are as follows: The EFSF and the IMF will lend Greece 109 billion euros over 3 years at 3.5%. Private creditors including German and French banks will "voluntarily" turn in their old bonds for new ones that mature over 15-30 year periods. These new bonds include 15 and 30 year Greek bonds with varying coupons. Some of the bonds would have a 20% discount on principal. EU leaders say the private sector contribution amounts to 37 billion euros through 2014 and 106 billion euros through 2019. Another part of the program is for the EFSF to buy back some of the Greek bonds on the secondary markets, which would mean Greece would now owe a smaller amount to the EFSF on these bonds. The EFSF will now have additional financial support from Germany and other EU countries and be authorized to provide aid to countries before a crisis situation arises. It would also have power to buy Greek bonds at prices on secondary markets to reduce the Greek debt burden. Ireland and Portugal are also assisted in the agreement. The interest rate for EU aid to Ireland and Portugal is taken down to 3.5%. Ireland is paying about 6% on the EU portion of its 67.5 billon euros bailout and efforts to reduce the rate were resisted earlier. The main theme behind these concessions and provisions is to give Greece, (and Ireland and Portugal) a chance to grow. High interest rates came under strong criticism because it only increased the size of the debt burden of these countries with a shrinking economy and high unemployment. The failure to come together behind a broad and sensible agreement with all parties making serious concessions, the EU, the ECB and the political leadership in these countries especially Greece, was undermining confidence in the euro and the eurozone itself. By mid-July Italy and Spain were feeling the effects of contagion in the financial markets, U.S. debt ceiling negotiations were unsettling global financial markets, the pressure was intense to come up with the workable agreement achieved on July 21, 2011. ...

LyrArc Article Gist
Prime minister Modi of India's visit to Japan in September 2014 leads to a commitment of about $35 billion in Japanese investment over 5 years. Japanese companies such as Suzuki, Toyota and Toshiba already have large investments in India.

LyrArc Article Gist
China is implementing president Xi Jinping's policy to reduce foreign influence in China's internet, and promote local tech suppliers. Restrictive policies went into effect for IBM, Cisco, Microsoft, Qualcomm, to reduce their influence in China's core tech industries. Apple remained an exception till April 2016 when Apple was asked to shut down Apple iBooks and iTunes services in China. China sees this as an effort to promote in Jinping's words local "high quality content with positive voices for a healthy, positive culture that is a force for good.," according to Xinhua news service. It also increases the role of Huawei, Alibaba, and Tencent in the internet in China.

LyrArc Article Gist
WSJ's Trofimov talks to some of the 2.5 million refugees and displaced people in the sectarian conflict in Iraq in 2015. He finds a mood of despair and resignation to a permanent partition of the country following sectarian conflict between Shiites and Sunnis. The situation is being dictated by the facts on the ground as the refugees see little prospect of returning to their homes, and the different regions controlled by Sunni, Shiite and Kurdish forces with borders.

LyrArc Article Gist
Bank of Spain Gov. Miguel Angel Fernandez Ordonez said Spain finds itself in an "exceptional situation," as it goes "back into recession," and only exports acting to contribute to gains in GDP.

LyrArc Article Gist
A study by Chris Whalen, managing director of Institutional Risk Analytics, of 7000 regional and community banks from data presented for the second quarter to the FDIC, shows that the bank's financial picture is deteriorating. Institutional Analytics put afailing grade on 1,882 banks as of June 30, 2009, up 16.5% from the end of March 2009. He says even the best run banks are feeling the bad effects of declining employment and asluggish economy. Whalen says this calls into question whether the stress tests for the "big banks" by the Obama adminsitration are adequate to control the crisis. Whalen says the asummption in those stress tests was that thes big banks had tohave enough capital and earnings to withstand a 9% loss rate, but what he is seeing in the industry is that we are already at a 9% loss rate , and the cycle has not peaked yet. He says any reduction in loss rates as assumed by the government may be shortlived as he sees things worsening in the fourth quarter of 2009. What about the good news that the big banks have raised capital in 2009. He says banks face operational problems, in addition to loan losses and low recovery rates on unloading assets they face rising expenses to carry these properties that generate little revenue. This cuts into earnings and what they can allocate to reserves. In this period banks are setting aside only half of what they would normally put in reserves to offset expected losses....

LyrArc Article Gist
The maximum that can be paid out to executives in upfront cash for bonuses is 20% under the rules set by the European Union starting in 2011. And the amount of time that at least 40% of an EU banker's bonus must be deferred is 3-5 years. The US has not set up similiar rules restricting up front cash bonuses to prevent executives from taking excessive risks. During the 2008 financial many banking executives collected huge bonuses by taking excessive risks, even though the banks suffered huge losses after the departure of the executives. Now the SEC, the Federal Reserve and other government agencies in the US are reviewing the rules. Projected pace of Wall Street profits in 2010 are 28.7 billion for 2010, and the fear is for a repeat of the situation in 2008 as the US has no rules similiar to the EU. Britain's Financial Services Authority passed similar restrictions recently. The Dodd-Frank legislation for financial reforms requires the pay related regulations to be set by April 2011. That legislation specifically prohibits any bonus plan that "encourages inappropriate risks" at financial firms with more than $1 billion in assets. The view of the European Union's financial services commissioner, Michael Barnier, is that not enough has ben done in this area in the US, and doing nothing is to ignore the right lessons from the financial crisis....

LyrArc Article Gist
Reps. Eric Cantor (Va.), Kevin McCarthy (Calif.) and Paul Ryan (Wis.) have jointly written a book "Young Guns," that completely distances the new leadership in the Republican party from the leaders of a prior generation. The book says the older Republican leadership "betrayed its principles," by not controlling spending. See the the link to David Stockman who has criticized previous Republican administrations for their attitude to spending, including President Reagan. A recent NBC/WSJ poll shows only 24% of those polled seeing the Republican party positively. The idea is to differentiate the younger leaders as new voices in the party, different from the party's previous role.

LyrArc Article Gist
Mohammed Morsi, is the new president of Egypt at a time when economic issues will be dominant. Morsi is an engineer who received his PhD. in engineering from the University of Southern California before returning to Egypt. He was a professsor at the University of California at Northridge after receiving his doctorate.

LyrArc Article Gist
Forsythe describes the process by which the Chief Executive is elected in Hong Kong from a group of 1200 individuals mostly pro-business and loyal to Beijing. This was done under the Basic Law drafted in 1990, a mini-constitution that was the basis of transfer from Britain to China in 1997. In 2007 China's People's Congress promised Hong Kong a "one man, one vote" election for 2017. On August 31, 2014 changes were made to this planned election process to limit candidates to persons approved by Beijing, that was considered unacceptable by the protestors from civil society and the universities.

LyrArc Article Gist
The WSJ's Troianovski and Benoit's interview with German foreign minister Frank-Walter Steinmeier. Steinmeier served as foreign minister eight years ago in a prior four year term. Steinmeier says he does not know whether he would have taken such an active role 8 years ago in diplomacy and talks with other countries, given the German public's reluctance to take an active role in world affairs. He and chancellor Merkel are much more active and the chancellor has been vocal about Germany's position in a way that Germans are not accustomed to. This has led to criticism inside Germany about Germany's role. A poll by TNS Infratest Policy Research in spring 2014 shows that only 37% of Germans say they want to see Germany more engaged in international crises. The same poll conducted recently showed the results were still the same, little change in how Germans see their post World War II role. Steinmeier says this is the difficulty he faces, to do what is needed as crises happen and call for a German role, presenting no real alternatives. He has on his desk at the foreign ministry a color lithograph of Social Democratic Chancellor, and Mayor of Berlin during the Cold War, Willy Brandt, with Brandt's words from 1969- "We want to be and to become a nation of good neighbors, internally and outwardly." Steinmeier expresses disappointment with the recurring crises in Ukraine, and says he can only guess Russian intentions, that Russia is looking for international respect and recognition. German business critics point to lower exports to Russia. And most Germans prefer that Germany maintain a peaceful role without foreign engagements. Sanctions that hurt the Russian economy are not seen as part of the German role, but Steinmeier who headed the chancellery during Gerhard Schroeder's term as chancellor from 1998-2005, says in the long term Germany has to support a world with rules. It should be mentioned that Willy Brandt as Mayor of Berlin 1957-1966 during the Eisenhower and Kennedy administrations was internationally engaged in a way that goes even beyond Steinmeier's engagement today....

LyrArc Article Gist
Economic aid from Qatar enables the Morsi government in Egypt to defer agreement for an IMF loan of $4.8 billion which requires Egypt to cut social programs, further aggravating a difficult economic situation for the people of Egypt. It also comes as Egypt's economy has suffered a decline from two years of protest and its foreign exchange reserves have hit new lows. Qatar gave Egypt $3 billion in low interest loans at 3.5%. Earlier Qatar deposited $4 billion at the Egyptian central bank, and gave $1 billion in grant aid.

LyrArc Article Gist
In the Senate Obama backed bills favoring importation of drugs,of cheaper prescription medicine from Canada and other countries. But with the pharmaceutical industry and its lobbying groups contributing heavily in federal elections and its clout with the administration Obama turned his back on the bill. This happens as Americans are paying as much as ten times the prices Canadians and Europeans are paying for drugs and prescription medicne for identical medicine often produced in similiar facilities aby the same manufacturers. On this issue an impressive coaltition was assembled among bothe Democrats from Bernie Sanders of Vermont to Senator McCain of Arizona, but the bill introduced by Senaor Dorgan was defeated with the help of the Obama administration. Senators from states with big presence of drug manufacturers like New Jersey (Menendez), New Jersey (Lautenberg), Delaware (Carper), North Carolina (Kay Hagan) all argued to defeat the bill to allow importation of drugs to help the heavily burdened American public. The Obama adminsitration's FDA Commisssioner Margaret Hamburg issued a statement expressing concern about the "safety" of imported drugs....

LyrArc Article Gist
Two Harvard economists, Lawrence Summers and Lant Pritchett, say China is likely to revert to the mean of average long term growth of developed countries after this spurt of growth is over. Growth is likely to slow to 6% by 2016, and revert to the mean of 2% for industrialized countries in the long term. Goldman Sachs banker Jim O'Neill, says the growth at a higher rate could be sustained because of urbanization. Summers does not rule out this outcome as he accepts a range of outcomes, with the most likely outcome being a reversion to the mean. The factors often cited for slowing growth are lower of productivity of capital as corruption and close connections determine where capital is allocated, misallocation of capital, large increases in credit in the economy since 2009 leading to bad debt in the financial system, aging society and demographics with increasing numbers of older people. Other reasons are the choices being made by Chinese leaders for slowing down to address the problems of air pollution and contamination of water supplies, inflation in housing prices, overdependence on exports, need to shift to increasing domestic consumer spending but unable to do this with the lack of spending power of large parts of the population because wealth is excessively concentrated in the upper ranks of society. The need to manage these forces ensuring some measure of stability depends on finding ways to reduce the growing concentration of wealth and power, in itself a challenge for the Communist Party elite. A combination of different factors with some still unknown factors are likely to play a part in this reversion to the mean for China, a situation encountered by every country so far in North America, Europe and Japan. This makes it even more important that each developing society structure its development around the most optimal goals with the least costs attached to the development....

LyrArc Article Gist
In the next 15 years approximately India will have a higher percentage of working age population to non-working age population than China, based on information from the UN and Morgan Stanley. The number of people over 64 and under 15 has declined from 69% to 56% in 2010, according to UN figures. By 2020 the working age population will increase by 136 million in India, compared to 23 million in China. From this it can be seen that a huge demographic change is playing out. As China's economy matures and with the one-child policy in place, China's working age population is expected to decline; just as India's working age population picks up. This should give India momentum in the next 15-20 years, and lead to an increasing growth rate in India, just as China's growth rate slows. India's weak areas are infrastructure, and education. Infrastructure development will accelerate nevertheless, with larger private investments and participation in projects; and India will move up the experience curve as more projects are completed. Education for the poorer classes and in public schools will remain a problem. Private schools are making up for the weakness in this area, and private schools now make up 20% of attendance even in the rural areas according to one estimate. The strong points are democratic structures and the rule of law, private enterprise and private companies, English speaking middle class, and smart initiatives by business to develop low cost products that are affordable for all segments of sciety in India. For instance a $35 laptop developed by the IIT and Indian Institute of Science researchers, and Tata Chemicals development of a filter for 30 rupees or 65 cents that would filter water for a month for a family of five. This will bring the benefits of development to all segments of society as development progresses, and is crucial for balanced development in the poorer parts of Asia. Tata Motors 1 lakh ruppees car concept and the Tata Nano as its tangible product, is another verson of this kind of development being pioneered in India. Being a democratic country makes some processes slower, yet at the same time the private initiative enabled by democratic processes -cultivated over a long period from British times -enables a creative sort of development that could be turned into a distinct advantage....

LyrArc Article Gist
The Aam Aadmi, or Common Man political party founded by Mr. Kejriwal in India. It is expected to take 20-25 seats out of 70 in the Delhi elections. India scholar Ashutosh Varney at Brown University, says the anti-corruption movement is different from earlier protests because corruption is perceived differently by today's employees working in the large pirvate sector compared to public sector employees in previous decades when the private sector was still small. For this middle class corruption takes on a different meaning as holding back the country's economy and development, and making day to day life difficult for ordinary people because of corrupt officials in the government bureaucracy. This also suggests that the anti-corruption movement will be an active part of Indian political life in the future.

LyrArc Article Gist
Prof. Scott Kennedy of the Research center for Chinese Politics and Business, voices concerns of experts who think that the $585 billion stimulus and the doubling of lending this year, increase in exports by a third last month, all point to an economy that is expanding too quickly. Kennedy says that no one defies economic laws, that eventually endless growth can get get you in trouble. The concern is whether the overexpansion of credit and the size of the stimulus may have led to overreaction in stimulus spending. People's Daily newspaper of China said that China's leaders are moving much faster than leaders of developed nations. But the flip side of this is that in the rush to increase spending there may be a lot of wasteful spending resulting in many bad loans a few years from now.

LyrArc Article Gist
Ford plans to reduce the weight of its F-150 pickup truck by about 700 pounds, a 15% reduction in weight, by switching parts of the body from steel to aluminium. The new F-150 pickup truck is designed to be introduced in 2014 and capable of meeting new fuel efficiency standards through 2020. This would enable a 25% increase in fuel efficiency and help meet the Obama administration fuel efficiency standards of 2011, which require the U.S. vehicle fleet to average 54.5 miles per gallon by 2025.

LyrArc Article Gist
Orlik cites a 2011 survey from China's South Western University of Finance and Economics, which surveyed 8000 households and found that 55% of Chinese households had little or no savings for that year. 10% of households control 86% of wealth and 56% of household income. Surveys in 1995 and 2002 showed 10% of households controlled 31% and 41% of wealth. In the U.S. top 10% of households control 74% of the wealth, according to the Federal Reserve figures. What this means, says Orlik, is that before China can shift to consumption based growth the low incomes of the majority of households have to go up, requiring a major policy shift. Under current policies and even with movement in the direction of the DRC/World Bank policy report for China for a gradual shift away from state owned enterprises, there is little prospect for rebalancing the world economy.

LyrArc Article Gist
Car size shrinks as the Focus, Spark, Aveo, Cruze small cars attract attention at the 2010 International Auto Show in Detroit. The big change is that these small cars are following the European small car in being refined and sophisticated, with a lot of features. This isn't the Chevette that Americans knew in the sixties and seventies, and the perception of what is the right size and comfort is changing completely as a new generation of buyers brought up in a world of pc's, i-phones, and globalized cultures is in the driver seat.