LyrArc Article Gist
Macroprudential policies of central banks in S. Korea, Indonesia, China, Canada, and other countries, as concerns grow about a housing and credit bubble.

LyrArc Article Gist
This Journal editorial on Oct 5, 2012, says that by not offering leadership in the Syrian conflict beause it would lead to a wider conflict the U.S. and the European Union face a wider conflict. The current crossborder shelling between Syria and Turkey is the latest evidence of this. Turkey and the Saudis cannot handle this on their own. Without U.S. leadership the costs of this conflict will be even greater, and even poses risks for the Turkish economy if handled badly.

LyrArc Article Gist
A study by AARP of 514 brand name and generic drugs between 2005 and 2009, shows that generic drug prices went down an average of 31% during this period, and brand name drug prices went up by 41%. One of the authors of the report says that it is important to look at individual drug prices and not studies showing total spending on drugs, because this is a significant cost for people paying out-of-pocket, It drives up insurance premiums, and pushes retirees into coverage gaps in Medicare Part D drug program. Analysts indicate pharmaceutical companies are increasing prices on drugs before patent expiration to get as much profit before the patents expire.

LyrArc Article Gist
A very relevant comment about the media coverage on Putin's negotiations in Beijing for supplying natural gas to China, by a reader of the WSJ, Frank Peel. He points out China and Russia do not share the same goals and Putin talked about the Chinese as tough negotiators after signing the deal. The price as a "commercial secret" is because its years, could be 5, before gas actually flows to China from Siberian fields. Russia, is a smaller oil based economy- having failed to make the transition to a diversified economy- and very susceptible to the economic conditions in Europe and the U.S., as the 2008 crisis showed with very steep drops in output. President Obama has also pointed to this. Russia also shares with Argentina the tendency for elites- in the case of Russia a newly created oligarchy of business interests under Putin and his predecessor- to shift capital out of the country, making it even more susceptible to loss of value of the currency, the ruble. Devaluation of the ruble experienced under Yeltsin was severely traumatic for Russia, and the head of Russia's central bank went on state television recently to reassure ordinary Russians that this would not happen. The rainy day sovereign fund of over $400 billion acts as a cushion for shocks in short periods, but sustained loss of foreign investment would damage prospects for future improvements in standards of living or economic growth....

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
A strong U.S. jobs report in July with 255,000 new jobs, unemployment at 4.9%, provides positive sentiment going forward. The Federal Reserve is likely to be wary of raising rates because businesses are hiring but are not making the investments needed to spur economic growth, which remains at about 1%. The labor force participation rate is now at 62.8%. The measure of unemployment and underemployment shows a better picture of how different age groups are faring including the 25-54 years age group- this is at 9.7% in July 2016, it was 9.6% in June 2016. This measure shows those working part time because they cannot find a full time job. The market today is stronger for those with the right job skills, but not across the spectrum for all Americans, only setting the stage for further progress and increasing investment as confidence improves.

LyrArc Article Gist
This opinion piece in DW.com says India's prime minister should not isolate prime minister Sharif of Pakistan, as he had no part in the escalation of tensions in Kashmir. Foreign and military affairs are now run by the Pakistan Army, and isolating Sharif only entrenches the Army it says, which has kept up tensions similar to the situation in 1999 with the Kargil crisis when the Pakistan Army initiated a conflict in Kargil region. At that time Indian premier Vajpayee and Pakistan premier Sharif were improving relations. 

LyrArc Article Gist
Pakistan's GDP growth is expected to be 4% in 2012, an increase from 2% in 2011. Foreign exchange reserves are up to $18 billion. Repayments in 2015 to the IMF will be a quarter of the payment in 2012, says Finance Minister Abdul Hafeez Shaikh. Tax collections are up 24% for the first 9 months of the fiscal year 2012. Remittances from Pakistanis aborad are up 21% to $9.7 billion and exports up 5.5% over the $25 billion exports for 2011. In an WSJ op-ed, April 16, 2012, Michael Boskin,who helped negotiate the North American Free Trade Agreement for the elder President Bush, says it is time for a free trade agreement between India and Pakistan. Shaikh says he expects to see trade with India up from the insignifcant levels of $2.7 billion in 2012 to $10 billion by 2015. Boskin sees the potential for trade at $50 billion based on trade models. This would help change the landscape in the South Asian region after decades of neglect, strife and conflicts and is long overdue to benefit the billion people on the subcontinent....

LyrArc Article Gist
In Europe, France, Spain, Germany and other countries are giving cash subsidies to customers to buy cars when they turn in older cars. These refunds range from 1000 to 2500 euros, and reward the purchase of smaller more fuel efficient vehicles. It has boosted sales in Europe where sales are running at an annual rate of more than 13 million because of the subsidies, according to Credit Suisse analyst, which is well above the 11 million level of last year. The average American car says the analyst has been on the road for 9 years similar to that in Germany, so it makes sense for the USA. He says it could increase sales in the USA to 12 million cars, down from the 16 million sold in 2007 or the 13.4 million rate of 2008, but far higher than the 9.5 million rate in the first few months of 2009. In Europe small cars are dominant and it plays to the markets of large carmakers like Peugeot, VW, FIat, and Renault. But in the US Japanese carmakers are dominant in the small car market. Detroit carmakers make too many large cars and pickup trucks so the impact would be less. But the program could be fashioned in the US on a drop down in size and increase in fuel efficency, so that the clear direction is towards smaller cars. Turning in a pickup truck for a family car like a Malibu or a LaCrosse might promote fuel efficiency, and move things in the right direction. Its useful to note that even in Germany more expensive cars or brands have barely benefitted German car sales jumped 21.5% in February, but mass market manufacturers recorded a 37% surge, while sales of premium cars fell 19%. In Italy which started its program Feb. 6, buyers receive 1500 euros for trading in acar at least 10 years old. Fiat Punto sales have shown a strong increase. Fiat's facory in Melfi, southern Italy, is now running at full capacity after running on areduced scale from October 2008 to February 2009. It makes the Punto. In France 30-40% of car sales are coming from the scrapping deal, according to French Auto Manufacturers Association. Overall sales are running at about 6% below last year's rate, but in the absence of the scrapping deal sales might be off 10-15%. One concern for the French is that sales not drop off after the scrapping deal stops.France saw this happen in 1997and 1998 after ascrapping deal in 1994-1996. However considering that the cost to the German government for scrapping deal was $2 billion, the solution to this would be continue this program till the economy recovers and car sales are strong. Considering the benefits for an important industry and the societal benefit in lower pollution, it would be worth the cost....

LyrArc Article Gist
Former U.S. president Bush says the U.S. has an important role as a beacon of freedom, human rights and democracy in the world. The U.S. should not shrink from the challenges in the name of a false and temporary stability, and flexibility should not mean ambiguity, difficulties should not mean shrugging away from America's role. Patience, creativity and active American leadership are needed. The Bush administration supported the struggles of people in central Europe and in other countries. This is from a speech Bush gave at the Bush Institute, Southern Methodist University in Dallas, a year into the Arab Spring. A speech that was giving voice to the aspirations of people in the Arab world.

LyrArc Article Gist
The startling truth about health "reforms," - they won't control spending, and without that the whole system of health care will rapidly become unaffordable and unsustainable. Obama's Council of Economic Advisors points out in new report that since 1975 annual health spending per person, adjusted for inflation has grown 2.1 percentage points faster than overall economic growth per person. At this rate health spending which was 5% of the GDP in 1960, and is 18% of GDP today, would grow to 40% of GDP in 2040. Medicare and Medicaid would increase from 6% of GDP now to 15% in 2040, or equal to three fourths of federal spending. Employer paid insurance premiums for families which grew 85% in inflation adjusted terms from 1996 to $11,941 in 2006, would increase to $25,200 by 2025 and $45,000 in 2040. This would force employers to reduce take home pay. Samuelson says the uncontrolled health spending is singlehandedly determining national priorities, reducing discretionary income, raising taxes, widening budget deficits and squeezing other government programs, while it is producing large amount of waste in medical spending. See the link to Prof. Tyler Cowen of George Mason University in NYT, 6/14/ 2009, who cites the habit of doctors to write many expensive tests as one of the prime culprits in the wasteful spending. And in the process it delivers higher cost for lower overall quality of health for the American people. This at a time when many European countries provide live examples of doing it in a better way- lower cost, better health. The serious problem with the Obama health reforms says Samuelson is that it talks about restraining spending but may end up increasing spending. Its talk about controlling spending he says is good intentions, but based more on hopeful thinking, public realtions and risks becoming cosmetic reform. Because to really control spending will require coming to grips with its fundamental cause- hospitals and doctors are paid mostly on a fee-for-service basis and reimbursed by insurance, private or governmental. Such a system encourages doctors and hospitals to provide more services, expensive tests, favors heavy use of expensive medical technologies to increase profits, and for patients to expect them. Samuelson puts his finger on the root of the problem - there is no incentive and every disincentive for all the players in this game , doctors, hospitals and patients to seek reform of this system. For doctors and hospitals the hope would be that this cosmetic "reform" would leave the system basically unchanged, and patients to continue with a lifestyle and expectations that do not not acknowledge the fact that a lot of healthcare does not come from spending but from preventative care, education, good eating and exercize habits, and healthy lifestyles. And the uninsured are no exception, they would simply start consuming the expensive care for lower quality of overall health like everyone else. With this kind of situation confronting us, the views of Samuelson, and Professor Tyler Cowen of George Mason University, as welll as a growing chorus of informed public opinion on this subject, is that insuring the uninsured is a good idea, but doing it within the bounds of the present system, can only increase the costs. And too much is at risk, to rely on what Samuelson calls a scattershot of measures to control costs made up by Congress such as "evidence -based guidelines," "electronic record-keeping," "bundled payments to hospitals, to give the illusion of progress that won't make a serious difference. A sweeping restructuring of health care is needed, that would overhaul "fee-for-service" payment and reduce the fragmentation of care. It will also need what has not even be touched on adequately in the debate. This is the massive need for education in the schools about nutrition, eating, exercize, healthy lifestyles. It would also require opinion leaders in each field from sports and other fields to lead by example and with constant public presence, the media, and companies to form a partnership with private institutions to change existing eating habits and lifestyles that encourage obesity, smoking, fast food eating habits, large portions in restaurants....

LyrArc Article Gist
This WSJ editorial points out that the lack of action from the Obama administration has led to the current situation in the Middle East with Russian intervention, the wave of refugees from Syria, and the increasing sectarian conflict. It cites from president Obama's address to the UN General Assembly that "the nations of the world cannot return to the old ways of conflict and coercion," yet failing to take action in the Middle East to prevent this from happening.

LyrArc Article Gist
Six cities have rejected the Olympics, with Calgary in Canada being the last one. The problem with hosting the Olympics is how much it costs. Cost overruns are common. 20141 Sochi WInter Olympics estimated budget was $10 billion, in the end it cost $51 billion. 

Brazil is the latest example of the problem. With huge needs in sanitation, epidemic prevention, infrastructure and public services, the country did badly by spending money on new soccer stadiums in the northeast which were not used after the World Cup soccer championship, and in the summer Olympics. 

Learning from these lessons voters in Calgary, Canada, rejected hosting  the Winter Olympics. Voters or local councils in Innsbruck, Austria, Rome, Italy, Bern, Switzerland, Hamburg, Germany, Oslo and Stockholm have rejected the idea of hosting the Olympics. Other problems are the environmental impact with deforestation to create Olympic sites.

 

LyrArc Article Gist
This article by Saeed Shah and Syed Hasan describes the Taliban factions from the tribal areas that control parts of Karachi, Pakistan's main commercial city on the Arabian Sea. It provides a detailed map showing the outlying areas around the city centre, especially the shantytown areas and the areas with Pashtun majority population controlled by Taliban with roots in the tribal areas. The Taliban charge taxes and adminster law in the areas they control. A major operation was launched since Sept. 2013 by the Sharif government to free this key city of Pakistan from Taliban control and the wave of kidnappings, extortion and other violence from Taliban members. About 168 police officers have been killed in the efforts to control the city, but areas under Taliban control are still hard to patrol by government police and special Ranger force. Karachi anxiously awaits the result of peace talks of the Sharif government with Taliban. If the talks fail and an operation is launched against Taliban in tribal areas the repercussions will be felt in Karachi. Shah and Hasan provide a excellent picture of the tribal loyalties, religious extremism and entrenched culture of violent activity that extends from the border tribal regions of Pakistan into the commercial centres such as Karachi that is a vexing problem for the Sharif administration, police, business and ordinary citizens....

LyrArc Article Gist
J.P. Morgan Chase announces $2 billion in trading losses in May 2012. The Chief Investment Office unit made a bet with a trading strategy that CEO Jamie Dimon said had grown very complex. These losses could grow or shrink during the rest of the year.

LyrArc Article Gist
Krugman points to the connection between the failure to achieve debt reduction through debt forgiveness and the sluggish economic growth in the eurozone and U.S., five years after the global banking and financial crisis of 2009 and four years after the beginning of the eurozone debt crisis in 2010. In the U.S. debt reduction for homeowners was delayed with a wave of foreclosures, and in Europe austerity budgets were the norm as Germany pushed hard for austerity policies. In 2014 small relaxation of austerity to give relief to voters took place in Greece, France, Italy and Spain, with austerity budgets still in place. Growth also slowed in Germany to slight contraction in the third quarter and no growth in the fourth quarter of 2014. This is leading to the formulation of new policy to address growth challenges in the eurozone. Debt to GDP is growing in eurozone countries and Britain because of lack of growth, even though spending cuts have been made, showing the need for rethinking policy. ...

LyrArc Article Gist
A study by the Pew Research center shows minorities are the ones hardest hit in the millions of foreclosures taking place in the US. Counties with black or Latino majorites and the New York region are hit severely. What appeared to be a boon five years ago as black home ownership rose sharply after decades of discriminatory lending and zoning practices, has now turned into a curse with families losing homes to foreclosure, neighborhoods seeing increasing crime and declining house values, and renters being evicted. Lenders like Mozilo's Countrywide and other similiar lenders simply used the idea of home ownership as a flag to get political support for a wild west in lending practices, which allowed predatory lending to take place in the deregulatory atmosphere of the time. See the link to the impact on minorities. Nowhere has it been shown more pointedly that prudence and character in leaders in all areas is the essential conditon for progress, making free enterprise a necessary condition but subject to this essential condition, than in the way the housing and foreclosure crisis is hitting the American and the world economy in so many ways. This is evident in neighborhoods like this one on 145th st. in Jamaica, Queens, whaere black households making more than $68,000 a year are five times as likely to hold high interest subprime mortgages as whites of similiar incomes. Defaults occur three times as often in minority census tracts as mostly white ones. And 85% of the worst hit neighborhoods have majority of black and Latino homeowners. Which may also explain why there is not agroundswell of support for serious government foreclosure prevention measures like bankruptcy legislation and other legislation such as that suggested by Martin Feldstein and others for homeowners nearly or already under water, when faced with fierce lobbying by the banks and financial institutions. Consumer advocates say years ago many banks drew red lines around black neighborhoods and refused to lend, then as deregulation became the rage five years ago, these banks under unscruplous leaders targeted these neighborhoods for subprime lending. A dozen banks and lending companioes that made big profits from subprime loans accounted for half the loans given to the New York region'sblack middle -income borrowers in 2005 and 2006, a case of reverse redlining that the N.A.A.C.P. says in its lawsuit against these lenders. Housing and Urban Development Sec. Shaun Donovan, in aspeech to New York University said that 33% of the subprime mortgages given out in New York City in 2007, went to borrowers with credit scoresthat should have qualitifed them for conventional prevailing-rate loans. For anyone taking out a $350,000 mortgage, says the NYT, a difference of three percentage points - a typical spread between conventional and subprime loans- tacks on $272,000 in additional interest over the life of a 30 year loan. ...