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Paul Volcker outlined the work remaining to be done to make the U.S. financial system safe in an interview with Gretchen Morgenson in October 2011. On Fannie and Freddie he says it is important to get rid of Fannie and Freddie at the first opportunity, because they simply shouldn't exist, and it was a mistake to have institutions of this type that mix profit making private opportunities with an implicit government guarantee. If a government wants to help low income people find housing, subsidize them directly, don't do it in this way by hiding the liability behind a quasi-private institution, says Volcker, in the interview with Gretchen Morgenson of the New York Times. Volcker sees a point of vulnerability in the industry of money market mutual funds, which operate without reserve requirements and capital requirements. The money market funds did a huge amount of lending to European banks and aggravated the pressures on them when they pulled back. One way to correct this is to require mutual funds to post the value of their assets every day to reflect market fluctuations. Safeguards on bank deposit accounts, such as FDIC insurance and bank capital requirements, do not exist for money market mutual funds. Other areas Volcker emphasized are strong enforceable capital requirements for banks, making derivatives transparent and standardizing them, and rotating auditors....

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Sudhir Venkatesh, a Professor of Sociology at Columbia University, talks about how constructive expressions of anger that help us get out on the streets and talk to one another, to have stormy discussions in townhall meetings, and other constructive ways of expressing anger can help us overcome all those feelings bottled up inside us. Anger has a positive role to play in promoting catharsis and fostering real healing says Venkatesh. He even says we will recover our public life this way, by storming out onto the streets and then actually talking to one another. That is not so easy in a world of electronic devices and electronic communication like email and text messaging, and in a world where one tends to one's own little world with its daily frustrations and that credit card bill and the mortgage payment and the kid's tution payment. He actually invites the public to go out and do this rather than retreat each person into his own world of humiliation and struggles, or let the anger build up in an impersonal world of Internet, and with sporadic outbursts in small group protests. He doesn't see the Obama administration doing the broad and intensive campaign to shore up the housing, food and welfare safety nets which will be required, or the sustained committments from mayors, service providers and civic leaders. And he sees anger growing and its expression taking place only later on, as the public is patient for a long time, and then the anger just rushes out when it cannot be contained, as happened in the Great Depression. ...

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The tech boom bust since 2000 that has hurt America and Europe and which also laid the foundations for the loss of manufacturing and technology to China, ceding American leadership and critical advantage, is shown here in the WSJ. The role of the finance sector  is explained here. That has added one more factor to the factor of endless wars in the Middle East, where American and European investment in healthcare, education and new infrastructure was somehow diverted away, and much of America's and Europe's resources wasted- or not turned to the benefit of the people of America or Europe.  One financial firm that rode the tech boom to the hilt finds itself with unacceptable losses except in a severe recession. Tiger Global Management was using tens of billions of dollars from pensions, endowments and rich clients riding on some of Silicon Valley's hottest stocks.  With the plunge in tech stock values including startups in which Tiger pushed into aggressively now facing large losses after hyper valuations, Tiger's hedge fund which managed $23 billion at the end of 2021 was down 52% in 2022. Another of its funds that managed $11 billion has lost 62%. WSJ says this wiped out two thirds of the gains Tiger has made in the tech stocks since its founding. In addition large writedowns are expected on its venture funds valued at $64 billion at the end of 2021, says WSJ.  WSJ says cheap money (money somehow diverted from infrastructure and funding manufacturing in China instead of the US now goes by the misnomer cheap money) reshaped Silicon Valley in the last decade, as pension funds, rich investors and celebrities turned to well connected money managers such as Tiger to put money in tech stocks and startups. This WSJ report says compared to Sequoia Capital and an earlier generation of venture companies Tiger Global is simply not interested in management of companies it invests in, taking a broad brush approach, using Bain Capital for research, and trying to haul in a large load of fish like trawlers at sea hoping for some companies to make big gains. Many pension funds such as Calpers California's public pension fund invest in Tiger with a $400 million investment. WSJ also reports that Tiger Global's venture funds do not reflect the realities of the tech business as venture stocks will reflect the drop over 2022 and 2023, including its ByteDance Chinese tech investment which will need larger writedowns. Tiger has also not hesitated to get into cryptocurrency which has loss of about $1.5 trillion dollars. It is of interest to note that Julian Robertson, hedge fund manager of the 2000 period (when Clinton-Bush were US presidents) who ran Tiger Management provided the impetus for Mr. Coleman, then 25 years old, for the start of Tiger Global. Julian Robertson closed his fund in 2000 during the dot com bust. Coleman hired a Blackstone analyst and started on the next cycle of tech with social media platform Facebook now Meta, followed by China's JD.com as investments in a new China boom were started. The end result is that during a period of Middle East wars under Bush and Obama, and building dependence on Russian oil and gas supplies under Schroeder and Merkel, China was the gainer as the US and EU lost much of its manufacturing and technology to China. During this period US and Europe neglected investment in infrastructure that would benefit the people of America in ease of living and quality of life. Just as money was wasted in wars much of the tech investment was wasted. The companies that added value over time were started long before and relied on sales growth and new products that revolutionized their field such as Apple with smartphones that started well before the nineteen eighties, Amazon with logistics and its own style of management, Microsoft from an even earlier era. Tech monopolies Facebook, Google, and others would not be missed much in terms of real progress for the people of America. The cost is many decades of ceding manufacturing and technology advantage to China by US and the EU led by Germany. China 2030 and the war in Ukraine with China's support have shown how fragile the foundations have been with weak political leadership and a finance sector running backwards in terms of America's and Europe's strengths in new infrastructure, better healthcare, services and education for the people of America and Europe. Leaving it to the Biden administration and a new coalition of Greens and Scholz in Germany to begin the task of rebuilding America and Europe on strong foundations, including the dignity of the workers and families, that makes who we are and what we believe in, and why the free world believes in us. ...

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There is a clear warning in this WSJ report by Jonathan Weil of the opaque manner financial reports of some private equity are done, which take the lack of transparency in general of private equity funds to an astonishing level. One private equity fund gives information on some transactions in footnotes that run 3 pages- actually shown here. The report highlights the practice of private equity of buying funds on the secondary market at hugely discounted prices and marking them up immediately by upto 1000% to show large returns. How on earth are private equity funds not going to damage their reputations if they take up the task of investing the retirement funds of American's 401 K's. Historically these funds have been kept away from private equity. As their returns dwindle private equity funds including Blackstone are trying to get the US president DJT to allow private equity to manage retirement assets of ordinary Americans who can ill afford such investments.   ...

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Inflation is outpacing wages in the US by 4% in July 2022. Consumers are cutting back on spending. The US Fed is looking at another 0.75 percentage point increase in the interest rate in July 2022.

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Russian attacks on Ukraine grain terminals like this one on two US owned grain terminals in the port of Mykolaiv, are an effort to degrade Ukraine's ability to export food. This is seen as affecting the world's ability to feed hundreds of millions of marginalized communities in Africa, Asia and Latin America and is abhorrent to people all over the world.

 

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In a first Vietjet Air will connect Hyderabad, India to Da Nang, Hanoi and Ho Chi Minh City in Vietnam by November 2022. Direct flights will also be set up from Ahmedabad and Bengaluru to Vietnam.

This will build the connectivity for business and tourism as the new supply chain is set up by the US and EU in Asia with Vietnam and India.

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Canada makes the decision to reinstate the visa requirement for Mexican citizens effective February 29th 2024. This was lifted by Trudeau in 2016 without a careful understanding of its implications. Since then Quebec insisted it was at the breaking point and pushed for reinstating the visa requirement. The Biden administration also pushed for the visa requirement as more people were illegally entering the US from Canada.

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U.S. auto sales increased by 7.5% in October 2011. Chrysler sales were up 27% in October. Its Jeep vehicles had the best sales performance in 5 years. Jeep sales were up 25% and Ram pickup sales were up 21%. Ford Motor Company sales were up 6.2%, and GM sales were up 1.7%. Sales of Ford's F- series pickup trucks were up 7% and sales of Escape sport utility vehicles were up 30%. Lincoln sales declined 11%. For GM the Cruze small car and the Equinox crossover sales were up, while Buick sales were down 7% and Cadillac 12%. Because of limited vehicle supplies Honda and Toyota showed decline in sales by 1% and 7.9% respectively. The annualized seasonally adjusted selling rate in October was 13.26 million vehicles. Reasons given for the pickup in auto sales by analysts are that buyers had held off buying in 2009 and 2010 and are now back in the market as their vehicles show signs of aging. Hyundai sales were up 23%, VW's up 39.6% and Mercedes-Benz's sales up 28%.

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White drives a Chrysler 300 sedan diesel powered and made for European use, fast enough to go past speed limit but still gives an average of 28 miles in city and highway driving. The EPA rating for this car is 22 miles per gallon in its US V-6 model, so the Chrysler CRD 300 made for Europe has a 27% fuel efficiency advantage over its American counterpart. White borrowed it from a friend who was showing European diesel technology in the U.S. Cleaner diesel technology is spotlighted in this test drive. Also attention is drawn to fuel availability. This fall oil companies will be required to supply Americans at the gas pump with low sulfur diesel fuels on which the diesel cars with the clean diesel technology run, for cars like the Chrysler CRD 300. Automakers from Japan, Europe and the US are looking to transfer this technology developed for Europe to the US, with some improvements to meet American environmental standards, especially in lare sedans, SUV's and pickups. The statistics for US diesel use on the road are as follows: 1. About 3-4% of light vehicles in the US run on diesel. White quotes industry executives as comfortable with a JD Power estimate of diesel use by 2010-2012, or about 6-8 year horizon of 10% of all passenger vehicles. 2. John Moulton, president of the powertrain division of Robert Bosch Gmbh, forecast diesel use by 15% of the passenger vehicles in the U.S. by 2015. Use in Europe is about 50% by comparison. 3. Usage of diesel will be highest in the bigger cars and vehicles . This is where the 20-30% savings in fuel cost would be substantial enough to cover the $2000-$6000 additional cost for the diesel powered vehicles using the latest clean diesel technology. DaimlerChrysler is already moving forward with coming up with versions of the diesel models used in Europe for the American market. VW currently is the leader in the American market. About 20% of VW's sold in April 2006 use diesel. This is going up every year 12% in 2004, 14% in 2005. In 2008 VW will have all its mainstream models available in all 50 states in diesel versions. ...

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The Biden administration published an online security rule to strengthen its legal backing for restrictions on foreign based apps, including TikTok. It provides additional criteria the Commerce Secretary can use to restrict such apps that present "undue or unacceptable risks." Instead of the wording "subject to foreign coercion", there is the wording "subject to the jurisdiction or direction of a foreign adversary." WSJ throws light on the legal challenges called the Berman amendments. Berman's amendments took away the right of the president of the US to regulate or ban "informational materials" from adversarial nations. It was written at the end of the Cold War and is seen as needing to be completely rewritten.

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French youth are an important part of the protests in France in extending the retirement age from 62 to 64 years. A neuropsychologist at a Paris hospital says "are there any social benefits they haven't rolled back," in this report in FR24. Youth feel that the reform asking workers to work longer in the current situation in France is basically unfair at a time when workers are facing a cost of living crisis and are just coming out of a once in a century pandemic. And with the stress on schools, hospitals and older people, the shrinking savings of workers and families as pandemic period benefits are being phased out. In the US and Germany there is support for working families during the cost of living crisis, much less so in France, and even less in Britain. France is facing protests and possible strikes, Britain has strikes across health, transport and education. 

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2023 is the year of huge aviation orders. Some even say this may stave off a recession. Biden says this would create 1 million jobs in the US. Modi names about 10 American states that will benefit from India's growing civilian and military aircraft needs. The biggest order in aviation history was one of 500 single aisle planes from Airbus by India's Indigo Airlines. Before this order Air India made an order of 470 planes from Airbus and Boeing. Riyadh Air and the Saudi airline also place large orders. 

WSJ cautions that it takes 6 years for planes on order to be delivered. There are production and regulatory issues. Some of the orders can be pared down. One expert says it is a way to get in line for planes to be delivered by planning ahead as the Indians have done by foresight about rapidly growing demand.

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Biden will visit France for D-day and Italy for G-7 meetings in June, followed by a television debate in Atlanta. The concern about families struggling to make a living with high housing costs and grocery bills continues at the White House and president Biden says he is concerned telling one Congressman- "I care. I know people are hurting."  The Biden policies have worked for unemployment and for economic growth as the US is the only advanced economy in the world to return to pre-pandemic growth. Economic growth is now forecast at 1.7% for 2024 says WSJ, higher than the 1% forecast in January. Younger people in particular and newer voters who did not vote in 2020 are not informed about the economy and only see the difficulty making ends meet in living costs. These are the young people president Biden is making an effort to reach.

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Tension between the U.S. and Russia as Syria moves towards civil war and the Russians send arms to the Assad regime.

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Speaking at the Davos forum, economist Nouriel Roubini, who correctly predicted the global economic crisis, says this recovery is likely to peter out by the end of of 2009 with a long period of "sub-par gowth" ahead. His optimism for the emerging market economies is tempered by what he sees as an "asset price bubble" developing in China, Russia's aging population and political obstacles to structural overhauls in Brazil and India. In the U.S. and Europe other economists also generally agreed that the recovery will be "U-shaped" or "W-shaped" implying this recovery in late 2009 will not last beyond 2010.

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Egyptian leader ElBaradei describes his talk with U.S. Secretary of State Kerry and E.U. leader Ashton on the day of the coup on July 3, 2013 to convince them about the need for the military to intervene to oust president Morsi. He says two and ahalf years have been wasted but this time Egyptians have to get it right. Morsi was elected with the help of liberals, but failed in ElBaradei's view to form an inclusive government and respect all sides of opinion, including the young people who formed the core of protests against years of military rule.

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China's leading online retailer with its own warehouses and delivery similiar to Amazon is JD.com. It has 118 warehouses in 39 Chinese cities, and 1045 smaller pickup centers in 500 smaller cities. Its online service and infrastructure to support it has been built carefully since 2006. It can now deliver by 3pm the next day and handles 2 million orders per day. The company raised $1.78 billion on the NASDAQ in the U.S. in 2014. Hong Kong venture capital firm invested $10 million in 2006. As it added new systems and software other investors including Tiger Global, Yuri Milner, and the Waltons invested in the firm. JD focusses on low cost and reliable fast delivery using motorbikes for 20,000 couriers for China's congested traffic in cities. It is a unique combination of Amazon, UPS and Wal-Mart in its innovative way of running its retail operation. Liu is the son of a cargo shipowner from Jiangsu province who studied sociology at Renmin University in Beijing, before starting an electronics store in Beijing's high tech zone Zhongguancun. The online retail idea took off when he setup an online store in 2004. He says a lot has changed since the early days when delivery was slow with many customer complaints, and says logistics is important because of user experience. Because JD charges little for delivery margins are thin, and the company has focussed on growing the user base over profitability....

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Other than president Milos Zeman and the UN people still call the Czech Republic, the Czech Republic. The alternative Czechia is not liked by Mr. Babis, the prime minister, and is not the chosen word in the U.S. and Europe. The old name was Czechosolvakia. In 1990 Solvakia became an independent nation, with the other country being the Czech Republic with the capital Prague.

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Boosting vaccine production for the Indo-Pacific region that includes Bangladesh, Indonesia, Malaysia, Thailand, Philippines, Vietnam with production done through Biological E in Hyderabad will be discussed at the meeting with Biden. Japan will fund the project, and Australia will handle the distribution. This will be part of a followup to a March 12 virtual meeting of Quad leaders. This effort to meet the vaccine supplies challenge for the Asian region covering south east Asia and its population of 600 million will be one of the major outcomes of Quad countries collaboration, making it a peacetime collaboration that supports development in the region without burdening the financial position of any country.  The other part of US- Indian collaboration and Quad collaboration centers on two related themes after healthcare and pandemic. The immediate challenge is to tackle the breakdown in the supply chain for semiconductors. The US and Europe can no longer depend entirely on a supply chain based in Taiwan. The narrowest part of the Taiwan Straits which separates Taiwan from the Chinese mainland is only 81 miles wide, which makes continued dependence on chip production on Taiwan an unreliable option and the need to build a new supply chain for Japan, EU and US. Plans will be made to address this in the talks. The Biden administration has already taken action with Intel Corp making a U turn and bringing chip manufacturing back home to the US with $50 billion investment planned. India and other Asian countries may form additional options for semiconductor manufacturing. The third part of the Quad effort will center on US and Japan ramping up infrastructure building capabilities with India to build infrastructure across Asian countries and in Africa that will be financed in a way that will not have some of the liabilities of the Chinese initiative called Belt and Road. Loans given by Chinese state banks and contracts including manpower from Chinese contractors are now seen as not meeting the needs of Asian and African countries. These loans most of the time cannot be repaid as in Zambia, and other parts of Africa, and in Pakistan, leading to interest accumulating on debt and making future infrastructure development extremely difficult. The use of manpower from China also means no learning curve for infrastructure is formed for local companies and infrastructure comes without new jobs jobs being created.  For most of the period 1900 -1950 the British built Asian and African infrastructure. During the period 1950 onwards the US assumed a major role, as did the Soviets. This changed after belligerent Reagan administration policies and wars in the Middle East sapped the funds that could have gone to infrastructure building that would improved living standards in Asia and Africa. Mr Biden wants to see this change and this is what he meant when he said at the UN General Assembly today- " we want relentless diplomacy to take the place of relentless wars." He means every word of this and the diplomacy is between allies and also adversaries, but mostly with allies such as Japan, the EU and India to build a better world. That he has to do this quickly Biden is aware of that, which is why he said "the next 10 years will determine our future."   ...

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WSJ looks at how the case of Meng Wanzhou and the US Justice Department was settled. In early September the case of Canadians held by China was brought by Biden when he talked to Xi Jinping. Xi brought up the case of Meng, the daughter of Huawei's founder and CFO of the company. Meng was detained in 2018 in Vancouver at the request of US authorites for wire and bank fraud charges related to US sanctions on Iran. The case took a new turn in May when Meng hired a new lawyer William Taylor. Justice Department said it was willing to separate Meng's case from the case against Huawei. Meng's lawyer agreed to have Meng admit to doing what they said she did.  Both US and China wanted to remove an irritant in US Chinese relations. On September 19 Mr. Taylor sent a draft of what she was prepared to admit for wrongdoing. This was the basis of the statement of facts attached to her deferred prosecution agreement and release from Vancouver. The 2 Canadians were then immediately released from China- the Canadians had no knowledge of what had happened. ...

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Business Week's Chad Terhune points out that the health reform bill that passed Congress will do little to restrain the overbilling by pharmaceutical companies, medical device and equipment makers. Chad cites numbers from the U.S. Health and Human Services Department that shows $47 billion in Medicare spending went to dubious claims in the year ending Sept 30, 2009. This is 10% of the $440 billion Medicare program. And 10% of the Medicaid program also goes to dubious claims. Consider then that Congres allocated $10 million annual increase to fight fraud. A suit filed by a former Siemens manager at the federal court in Philadelphia states that Siemens routinely overbilled the Veterans Affairs Department and other governmental agencies by humndreds of millions of dollars for MRI and CT scan machines.

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The bottom half of all U.S. households have only recently recovered the wealth lost in the 2009 financial crisis. They still have 32% less wealth than in 2003 when inflation is taken into account. The top 1% of households have more than twice as much as they did in 2003. Wealth is defined as net worth that includes houses , savings and stocks minus any debt. The wealthy have 85% of their wealth in stocks and bonds. For the bottom 50% half of the assets are in the house or family home. Economic and regulatory trends have happened in ways that favored the people investing in stocks, and rescued people investing in stocks with policies designed with this purpose by central banks and the U.S. government. By contrast for the bottom 50% buying a home is more difficult today. The problem this WSJ report points out is that the next recession would most hurt the bottom 50%, even before they have recovered from the last one which was a result of shaky practices of banks in financial lending and not some cyclical swing in the economy. Policy was then geared to provide a recovery first for stock markets as a way to economic recovery. The bottom 50% have little stake in the stock market, the top 1% have most of their gains from the stock market. Much of the popular anger comes from the way policies by both Democrats and Republicans differed little in past administrations in the way they approached this in shaping economic policy. As a result infrastructure building and investments in public services took less priority in this period of 30 years with trade imbalances with China building up on the external front, in another side to this development. The shift to Trump and to right wing populists in Europe is only the first phase in the corrective action that has to take place to return to a fairer distribution of wealth that existed before the last 3 decades. Eventually it is not right wing or left wing factions or parties, but healthy policies, that matter to create a better balance for society.  ...

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The Fed votes 9-3 to cut the benchmark federal funds rate by quarter percentage point to between 3.5 and 3.75% in December 2025. US president DJT is pushing the Fed to cut rates as tariff policies are being implemented to cushion the economy as it adjusts to tariffs.

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This opinion piece in De Zeit says there are different ways to look at Chancellor Merkel's refugee policy, as a failure, as an act of compassion, influenced by her experience in East Germany, her Christian upbringing as a daughter of a pastor, or Germany playing a role in Europe after Barrack Obama failed to provide American leadership in the refugee crisis. It says some of this commentary in the media ignores the fact that it was always the intention to accept a large number of migrants as part of a policy of European humanism in the face of misery of refugees, but to carefully manage this influx, to reduce the flow of refugees, and wind down the flow by vigorously addressing the causes. From this point of view the commentary about Merkel's failure is overdone. It is interesting that some of the weirder descriptions describe Germans conscious of the history as being outpatients in a American clinic closed down by president Obama. In any case American presidents have overreached, consider Reagan and Bush with German's strong or cautious reaction, and underreached with Obama providing cause for concern and efforts to fill in for a missing American role, with both roles difficult to fill for Germany by itself. America is not defined by its presidents and its politics alone, but by its own history, which has reflected the same values since the founding fathers Jefferson and Washington. Germany's policy has merely reflected these same values, at a time when the U.S. was simply taking a pause from its foreign involvements in regions fragmented by tribal, religious and other divisions. In doing so being the true partner it was its intention to be. ...