LyrArc Article Gist
GM has advertised the Volt and it can't just back off from it without losing face. New battery technology is needed sy experts before the Volt can be manufactured and there is no plan to put such a battery plant up. Meantime the new Volt has been given a target date of 2010 for a new plant in the GM-UAW agreement.

LyrArc Article Gist
Reseerve Bank's efforts to slow inflation by increasing the cash deposits banks have to keep with the central bank by half percentage point to 8%, this is the cash-reserve ratio. Wholesale price inflation is at above 7% above the Reserve Banks desired rate of 5%, but growth estimates of Crisil are still above 8%, at 8.1%, for year ending March 2009.

LyrArc Article Gist
Bernanke's plan to address the deep downturn is very aggressive and he is pulling out all the stops. This includes the purchase of mortgage backed securities, Fannie Mae and Freddie Mac corporate debt and other assets, Since it stated its intention in late November to buy such securities, the 30 year mortgage rates have fallen to 5.2% from 6%, and refinance applications have tripled. Now the purchases will be greatly expanded. See the related link to this in Hubbard and Mayer article based on their research paper, in the WSJ, that shows that at a mortgage rate of 4.5% the housing market prices could stabilize. Next step the Fed will, starting early 2009, pump money into markets for student, auto, credit card ansd small business loans in hoping to bring life to those markets. How much money is involved? Quite a bit. All told the Fed's assets could add up to $5 trillion says Ed Yardeni of Yardeni Research, up from $2.2 trillion now. Its these sweeping moves and decisions that have overshadowed the December 16 announcement cutting the target federal funds rate to a range from zero to 0.25%, the lowest in its history. Whats the thinking behind this? Coy of BW points to Bernanke's research on the depression years and the lost decade years in Japan. In 1999, in a book he contributed to, Bernanke referred to Japan's monetary policy and passive approach as a self induced paralysis, including all the zombie loans that were allowed to continue on company books and no effort to clear up the bad assets quickly. He always thought highly of the aggressive approach taken by Franklin Delano Roosevelt, and felt that more tools available and a better understanding of the market system since FDR's day enabled a lot more actions to be taken to reverse the kind of steep global downturn that might occur. Yardeni's view is that even though this huge asset buildup could lead to inflation down the road, the economy in the medium term faces a deflationary environment, and the only way to cope with this series of bubbles bursting is to create another bubble, rather than risk anything going seriously wrong. Basically Bernanke is making an assessment of the current situation, and he sees bad credit situation getting worse, bad unemployment situation getting worse, consumer spending falling off and getting worse, continued home foreclosures and falling prices, the transition between administrations and lack of policy direction for a few critical months complicating things, and he sees the economies of all trading partners in Asia and Europe weakening in great speed, and sees very tough years for 2009 and 2010 no matter what the administration and the Fed do. Not enough aggressive actions to forestall the worst is as bad as inaction in Bernanke's view. And with all the aggressive moves, including the $1 trillion stimulus and infrastructure spending to create 2.5 million jobs that Obama administration plans, the US and global picture for the next 24 months will still be a long uphill climb. So the risks for Bernanke are all in the region of not doing enough and not doing it vigorously and speedily to get the best results. ...

LyrArc Article Gist
The astounding fact in this French FR24 report on the Paris Climate Change Agreement and country carbon emissions show that China's emissions accelerated to rise 3 fold in 2015 to about 12 billion tons of carbon emissions from about 4 billion in 2000. US remains at about 6 billion. India is at about 3 billon tons of carbon emissions, about where China was in 2000 when it had about 4 billion tons of carbon emissions. This is shown in the graph on carbon emissions from FR24. The US, European Union graph curves on tons of carbon emissions since 2000 are all flat or declining, India rising slowly from a small base, China's curve is rising straight up from a large enough base at an unbelievable and dangerous rate. What has happened and is it getting worse? China's economy expanded too quickly as globalization was accelerated by banks, and business in the US and Europe, and by the Chinese governments at the local level and the state level. This had negative consequences for US, Europe and China. The too fast growth in China at rates of 10-15% based solely on False GDP indicators that did not take into account damage to the environment and workers was that it hurt manufacturing and working class in US and Europe and contaminated the environment. This was not like growth of Japan in 1960-1980, a smaller country in the way it affected the US and European working classes. Hyper Growth at 10-15% of a large country with 1 billion people compressed over a short period, is cited by Greg Ip in the WSJ as the cause of the negative impact on America.  It hurt China through pollution of rivers and land at an accelerated pace. It hurt China as trade with US and Europe became unsustainable with the loss of manufacturing in the US and Europe leading to a trade war. From these graphs of emissions it now appears that the 3 fold rise in carbon emissions from about 4 billion tons in 2000 to about 12 billion tons in 2015 is the result of unregulated business activity of all those who preferred to push hyper growth in China purely for reasons of profit such as investment banks and corporations in US, Europe, and state or local companies in China.  This has also aggravated inequality in US, Europe and China, and hurt rural populations. Xi Jinping is attempting to correct this in China, Biden is trying to correct this in the US, and Scholz will now attempt to correct this in Germany and the European Union. It is also to be noted that China in 2000-2015 did not have the benefit of the newer technologies that India now has access to, which is why India says it is able to reduce carbon emissions per each unit of GDP by 35% from 2005 levels by 2030. It is this efficiency in producing units of GDP with newer and newer technologies that China lacked in its period of hyper growth 2000-2015 that now looks to have hurt China- with overflow of highly polluting steel mills and other factories which it would prudently and wisely have cut back on. Looking back at this period one sees the wholesale transfer of highly polluting plants in Germany being sold and put up in China, a poor developing country in 2000. Was this a good decision for Germany or for China? In this way the banks and large corporations in the US and Europe who use economic indicators that are limited such as dollar profits, without overall indicators that include negative effect damage to the environment that requires huge investments to correct, problems of trade wars leading to political conflicts, are acting like a person walking blindly in one direction.  With some foresight China and all its trading partners would have done better with slower but more careful Chinese growth of 7-8% that would have better met societal goals in US, Europe and China, avoiding high carbon emissions segments of industries from Day 1. Jinping is doing this in China, and Biden is doing this in the US- cutting out highly polluting factories and segments of industries- but in a climate of mutual distrust, which could have benefitted the world when conducted in a climate of cooperation and trust. The pandemic made the situation even more difficult. Power shortages in factories and blackouts in Chinese cities have led to a reversal of policies on use of coal in China months before the COP26 Glasgow conference and G-20 summit leaving a huge gap. Without the presence of Xi Jinping at COP26 in Glasgow and with Chinese participation uncertain significant progress on climate change is elusive. Estimates by US Renewable Energy Agency is that it would cost $131 trillion to pay for limiting emissions to global warming of 1.5 degrees Celsius. Some major share of this cost can be attributed to the increase from about 4 billion tons in 2000 of carbon emissions in China to about 12 billion tons in 2015, increase by 3 times. One can clearly see from this sudden jump in carbon emissions in China that policies of hyper growth with unregulated polluting industries adding to GDP growth figures was bad policy for China, bad policy for US, and Europe, even if it offered temporary profits for individual companies. India has the advantage of learning from this experience and charting its own wiser course as a partner with US, Europe and Japan and by Modi's vigorous efforts in renewable energy. The lesson- look at all indicators of progress, including climate and society, not just economic indicators in profit or dollar terms, take the tough decisions early in regulating polluting companies and industry segments, and bring full and active public participation with transparent access to data on climate damaging activity in real time because climate and the environment we live in free of polluting substances belongs to all the people, belongs to all life on the planet from trees to animals and birds, not companies that can choose to ignore it. ...

LyrArc Article Gist
Brazil's economy is forecast to contract by 2% in 2015, the currency has lost about one third its value and the stock market is down 22% in the last year. This follows the decline in demand for Brazil's commodities exports as China growth slows down. Experts say Brazil is now seeing another boom bust cycle similiar to boom-bust cycles in the past, such as the 1966-73 boom followed by years of hyperinflation and stagnation. Brazil's exports to China declined 17% in the first 7 months of 2015. The crisis is in many ways similiar to crises in other emerging markets dependent on commodities exports. The resources boom leads to overvaluation of the currency, and decline in development of manufacturing away from dependence on commodities exports. Other errors rise from complacency and politics prevalent in such periods. These errors include mismanagement of resources with poor resource allocation decisions such as spending on soccer stadiums in cities in the northeast while basic bus services remained underfinanced in large urban areas, large overspending by the government using state owned bank BNDES to offer rates at below market rates, a credit fueled boom and credit card binge for households, and a reversal of capital flows from the U.S. and Europe with the sharp decline in investment climate. There is a severe loss of confidence in the government of Dilma Rousseff with her approval rating as low as 8%. Corruption scandals at Petrobras show close links between the Workers Party of Rousseff and executives, with about $2 billion in misused funds. Brazil, like other emerging markets such as Russia and India, have taken some lessons from the 1997 financial crisis by setting aside large foreign exchange reserves for a crisis. Brazil's reserves of $397 billion help it cushion the effects with funding of the safety net and support to industries to avoid large layoffs. Other problems not tackled as in Mexico, India, and other emerging markets, are the weak educational system, and poor infrastructure, that create bottlenecks for growth. Brazil could face a lost decade after the debt overhang, decline in foreign investment and commodity export generated revenues. ...

LyrArc Article Gist
The Economist magazine points out that even without the one-child policy birth rates would have declined in China because of rising participation of women in the work force, education, delayed marraige, and the high cost of education and housing for more children. As China pursues a two child policy starting in 2015, many of the same factors are at work and many women are seen as unlikely to have two children. The Economist says the right policy would have been to scrap this policy altogether. This may actually happen as China sees the social and economic factors behind the falling birthrate continuing to operate limiting the size of families, and creating problems of rapidly aging society as in Japan. Latin America provides strong evidence to support the Economist magazine's point because of the falling birthrates in Brazil and Mexico for social and economic reasons.

LyrArc Article Gist
Plans to let borrowers who would not be able to keep their home once the Alt A oans reset at a higher rate but who would be able to pay the interest at the initial teaser rate if allowed to do so is the group that is targeted for help. Treasury Department and a coaltion of lenders that Treasury has helped organize that would represent lenders and securitization interests are working out the details. The freeze could be for as long as 7 years. Those who can pay regardless of the increase in rates and those who should never have accepted the loan terms because of their finances would be excluded in this plan. About $352 billion of mortgage loans are due to reset in 2008. This should help the economy and homeowners and also the lenders as they also lose because foreclosures can be costly for lenders. The securitization interests who hold the mortgage securities are also represented and they benefit also because its better to get some interest than no interest at all.

LyrArc Article Gist
Matt Vela responded to Shailen's comments on this article on the BW site. Comments were on NYTimes columnist Tom Friedman's remarks, about the dangers of overdependence on Mideast oil vs. GM and Ford's efforts to simply move cars off the lot. A quick reading of reader comments about 5-6 (all comments) shows a huge perception and marketing gap for Ford and GM if this is even anywhere near a representative sample, because they were heavily negative. Friedman said in the NYT, that "GM is more dangerous to America's future" than any other company, that "its like a crack dealer" addicting Americans to SUVs in the face of higher gas prices- by offering buyers of its least fuel efficient SUV's gas capped at $1.99 per gallon. He also said GM is in cabal with Ford and DaimlerChrysler to buy votes in Congress. BY May 2006 compared to 2003, in just 3 years, once popular midsize SUV's like the Ford Explorer, Chevy Trailblazer, and Dodge Durango saw a sales plunge of 50%. And this after the gas promotions such as the Ford one for free gas upto $1000 with aprepaid Master Charge debit card, enough for 6000 miles. Add to this zero percent financing. GM offered rebates of $2500 to $3500 per SUV. In this manner the whole profit structure of SUV's is being lowered, and no new strategy is being developed to deal with changing conditions and changing consumer preferences, and a changing global situation....

LyrArc Article Gist
Matt O'Brien points out that the Chinese currency may be overvalued as other currencies including the euro and the Japanese yen weakened. Since 2005 China let the yuan appreciate very gradually. As China's economic growth slowed in 2014 investor outflows have increased with an estimated $800 billion leaving the country. China has spent some of its reserves to keep it stable. Before the move the yuan was managed by letting it trade up or down 2% each day around a midpoint set by the government. The new setup keeps this but lets the market set the midpoint based on where it closed the prior day. This move was recommended by the IMF to help in the transition of the yuan to becoming a reserve currency. O'Brien points out that the soft peg to the U.S. dollar means the yuan appreciated 9.2% against the euro and 57.8% against the Japanese yen in the years 2013-2015, and this is happening as the U.S. Federal Reserve is planning to raise interest rates- the real trade weighted exchange rate being up 14% for the yuan in the last 12 months. The 8.3% decline in the exports for July 2015 over the prior year led the government to this action. The increase in investor outflows as a result will lead to further declines, with some estimates of the eventual decline in the yuan at about 10%....

LyrArc Article Gist
As stimulus money reaches factories making products like hybrid buses, another trend is working to undo the positive effects. States are cutting back on their orders as they face budget shortfalls. See link to states budget shortfalls. The New Flyer hybrid bus fatory in St Cloud, Minnesota, is one such factory. The Chicago Transit Authority used some of the stimulus money to buy 58 hybrid electric buses. At the same time Chicago had to put aside plans to order 140 more buses using state money which now has disappeared. According to the Center on Budget and Policy Priorities these effects of undoing, with one hand giving and another taking away are acting out across the economy. While the stiluus law cut federal taxes to put more money into the economy, about 30 states have raised taxes according to the Center. The Stimulus provides $27.5 billion in federal money on highway projects, but according to the American Road and Transport Builders Association, 19 states are planning to cut their highway spending in 2009. Even as the Stimulus provides $8.4 billion for mass tranisit, tranist systems are facing cutbacks in service and capital spending. Says Dean Baker, co-director of the Center for Economic and Policy Research, and author of a paper called "The State and Local Drag on the Stimulus," these cutbacks and the tax increases at the state and local levels are heading in the direction of offsetting much of the Stimulus impact....

LyrArc Article Gist
Since 2002 when the AKP came to power consumer loans have surged from 2 billion Turkish lira to 129 billion lira or $81.55 billion. While this has created a larger middle class, the huge expansion of credit puts the economy at risk say analysts. Turkey is taking in imports at a rapid rate and the current account deficit is now 8.1% of GDP. The ratio of the current aaccount deficit to foreign exchange transactions is at 37%, according to Ankara based economic research foundation Tepav. This is significantly above the level reached before Turkey's last four economic crashes. The EU is Turkey's biggest market for exports, and the fastest growing market is the Middle East. With the economic growth sluggish in both regions the prospects for Turkish exports increasing is weak. Signs of excess are visible in Istanbul. A shopping mall for cars is being built the size of three sports stadiums with a test track on the roof called Autopia. Prime minister Erdogan talks about building a huge new shipping canal that would bypass the crowded shipping in the Bosporus. And the elections are being fought for the AKP to get more than 330 seats out of 550 in parliament, which would enable the AKP to change the constitution. This will be an unneeded distraction for the country at a time when economic policy needs a sharp focus to reduce the current account deficit before it is too late....

LyrArc Article Gist
Li Keqiang, China's new premier, entered Peking University in 1978 by excelling in merit exams. Li and a fellow student, Yang Baikui, translated the English book "The Due Process of Law" by British jurist Lord Denning. Professor Gong Xiangrui, brought the book to China and educated his students in the ideas of constitutional law and western liberalism. Yang says Li learned English on his own and meticulously carried a stack of notecards with English on one side and Chinese translation on the other. Li would study the cards while waiting for a bus or in the line at the school cafeteria. Li has political discusions with students from that time, some of whom joined the pro-democracy demonstrations of 1989. He is the son of a mid level county official from Anhui province and moved in the party ranks through diligent effort. Li's doctoral thesis is in economcs and he is expected to focus on economic changes, with Xi Jinping, the new president, taking the lead in making changes to the political system. Fellow students from Li's days at Peking University say the difference between them and Li is the pace of democratization, with Li looking at it as a longer process. Recent articles by Li Keqiang on economic change show his emphasis on urbanization as a way to improve agricultural conditions with a smaller number of farmers improving producitvity in agriculture, and the importance of creating a better social safety net for people in China....

LyrArc Article Gist
Peter Schiff says home prices are still too high. They would have to decline another 20% just to fit the long term trend line indicated by the Case -Shiller index of an average 3.35% increase each year, based on long term historical data. He says economists underestimate how distorted the housing market has become, and how little it has normalized since 2008. This is based on average increase in home prices of 3.35% per year for the 100 years between 1900 and 2000, as determined by Yale economist Robert Shiller, which is just a bit above the average rate of inflation. Taking the January 1998 10 city index of 82.7 and following the 3.35% annual trend line, he says the index would be at 126.7 in October 2010. Case-Shiller showed that it was 159.0 for October 2010. Schiff uses this to show that the market needs to drop by 20.3% from the current level to get back to the trend line. He says that the home buyers tax credit, record low interest rates, and the increased presence of Fannie Mae and Freddie Mac and the Federal Housing administration have for now put a floor on housing prices. Conditions in the US housing market with high inventories, the high unemployment, savings depletion and debt, point to this overshooting by 5-10% on the downside. See Roubini, who points to housing losses in 2011....

LyrArc Article Gist
Japanese prime minister, Yoshihiko Noda, of the Democratic Party of Japan, is pressing forward with a plan to increase Japan's 5% consumption tax to 10% by 2015. Noda told reporters in Tokyo: "There is no waiting in responding to this question" of how to strengthen the social security system. Adding that Japan is "faced with an aging society and a declining birthrate unprecedented in the history of humankind and we cannot sidestep the challenge." In theory the Liberal Democratic party supports this, but in reality the LDP sees a chance to force a new election. Japan has a lower consumption tax rate compared to other OECD countries. It was last increased in 1997. Polls show both parties are deeply unpopular- the LDP has 17% support from voters, the DPJ has 16%, and over 50% support no party. An increase in the consumption tax comes with its own risks for the Japanese economy, as Japanese exporters have been hit hard by the yen's rapid rise in the last year. At 76-77 yen to the dollar Japanese automakers find making compact cars in Japan unprofitable. A chip maker Elpida recently filed for bankruptcy, with its CEO saying he never imagined the yen at this level. Another difficulty maybe the size of the increase in the consumption tax, effectively doubling it at a time when European markets for Japanese exports are showing a marked slowdown....

LyrArc Article Gist
Fears that India may be falling behind China, Mexico and Brazil in healthcare for the people. A planned budget increase was never implemented. Today the Indian government spends only $20 billion on healthcare for a population of over 1 billion people. Annual spending on healthcare is about 1.4% of GDP. Now the Indian government is planning to increase this to 2.5% of GDP. One senior health official Amarjeet Sinha, says other emerging economies such as Brazil, Mexico, Malaysia, now have better public health indicators than India. In 1990 India's public health indicators were similiar to those countries. Another serious problem in India is malnutrition with an estimated 4 of 10 children malnourished. Underinvestment in healthcare is a significant problem as needs grow but there is a shortage of resources and trained healthcare personnel. Arvind Singhal, chairman of consutancy Technopak, says India needs an additional 1 million doctors and 2.5 million nurses to meet the needs of the current level of the Indian population. To do this 600 new medical colleges and 1,500 nursing colleges are needed. The child care advocacy group Save the Children UK, points out that just to meet India's committment to reduce the infant mortality rate by two thirds of the current level by 2015- to meet India's commitment to the UN Millenium Development Goals- India will need 2.6 million additional trained health workers. This shortage is most acutely felt in rural areas, especially in the large states of Uttar Pradesh and Bihar....

LyrArc Article Gist
Peugeot plans to shut down its plant at Aulnay-sous-Bois near Paris in 2014. About 3000 jobs will be lost at the plant. In all Peugeot plans to cut 8500 jobs, about 8% of its workforce in France. Peugeot says the pace of losses is unsustainable, with Peugeot losing 200 million euros in cash each month, putting the entire enterprise in peril. This also raises more questions about France's competitiveness as 400,000 manufacturing jobs were lost in the last ten years according to government data. Peugeot is seeing declining sales because of slowing sales in southern Europe, a critical market for Peugeot. Overall capacity utilization for Peugeot dropped from 86% in 2011 to an average of 76% in the second half of 2012, with sharper declines in the small car segment on which the company has focussed. The Aulnay plant produced 300,000 cars 2007, by 2011 this came down to 135,000 cars. Peugeots strategy of making smaller economy style cars with higher French labor costs presents a challenge say analysts, and its slower move into Asian markets has not given it the advantage enjoyed by German manufacturer VW. In addition to the 3000 jobs lost at Aulnay, Peugeot plans to cut 1400 jobs at its Brittany plant in Rennes, and 3600 corporate jobs. To assure unions the company will build a new car at the Rennes plant in 2016, and could move 1500 jobs from Aulnay to another plant near Paris....

LyrArc Article Gist
This editorial in the Economist says Britain's economic recovery will not be complete until interest rates are well above zero and productivity growth is established. Without productivity growth and growth in wages, both lacking in the economic recovery since 2009, tax revenues will not be enough to reduce the deficit, requiring more spending cuts. That means the Bank of England will not raise interest rates, keeping a situation of no rate changes prevailing since March 2009 when the central bank cut rates by 0.5%. In the current situation the Bank of England is not expected to raise rates till 2016, only after the U.S. Federal Reserve increases rates to avoid appreciation in the pound and further deflationary pressure, according to Goldman Sachs. With inflation currently at zero, following the drop in oil prices, and 10% appreciation in the pound since mid 2013 making imports cheaper, there is little pressure to increase interest rates. In 2011 inflation with rising food and energy prices reached 5.2% , but the Bank of England did not raise rates because of the eurozone economic crisis affecting growth. Only since 2013 has economic growth picked up with 1.2 million jobs created since the beginning of 2013, bringing unemployment down from a high of 8.5% in 2011 to 5.6% in May 2015. Throughout the recovery productivity growth is falling behind- 2014 productivity measured by output per hour worked was 1.3% lower than in 2011, and 14% below the pre-crisis trend, according to the Economist....

LyrArc Article Gist
Analysts and experts says Turkey faces a debt bubble like that facing Spain and Ireland. The budget deficits in Spain and Ireland were considered manageable before the banking crises in the two countries. Turkey's short term borrowing- most of the $221 billion in outside financing needed for the private sector in 2013 is in short term loans. The large current account deficit and rate of growth in credit approaching IMF warning indicators are a problem. Volatile capital inflows could reverse as investors look for safe havens with the continuing street protests in Istanbul. Earlier currency crises in 1993 and 2001 were currency crises from volatile capital inflows. Turkey's central bank is trying to manage this situation and has $100 billion in currency reserves. But it is the hidden buildup of external debt by banks and companies in Turkey that worries analysts like Richard Segal at Jefferies bank in London. A $400 billion public spending plan, over 50% of Turkey's $770 billion GDP, is being prepared by the Erdogan government for the 100th anniversary of the founding of the modern Turkish state in 1923, showing that the scale of public spending is not under control. Analysts say at some point the huge credit bubble will burst, as it has in other countries including Spain, where the central bank appeared to have things under control. The street protests add political risk to the increasing risk for emerging markets with the U.S. Federal Reserve's policy shift to increasing interest rates....

LyrArc Article Gist
How Calpers went over its head and invested in risky properties at the crest of the real estate boom when there were signs of a weakening in property markets and did this with borrowed money for 60-80% of the deals, so the returns on the downside are magnified. Much of it is for land near Pheoenix and Los Angeles that are empty tracts and now worth little in the depressed property markets, with losses of over $ 1 billion on the Los Angeles area land deal which was a $2.5 billion deal. alpers expects paper losses of 103% on its housing investments in the fiscal year ended June 30. Calpers residential and property investments represent 10% of its $182 billion portfolio and its real estate holdings are twice the percentage of the portfolio of average pension funds. Its also showing a 41% loss on its stock portfolio. Greed seems to have motivated Calpers as it sought higher and higher returns even as the market was showing signs of weakness, with returns on real estate deals in the good years averaging 12%. Calpers is the pension fund of the 1.6 million stae workers in the state of California. The average employer contribution rate for California governments including cities and counties is 13% of payroll. Calpers has estimated that if its investments show a20% decline then the payroll of employers would be hit with another 2 to 5% increase....

LyrArc Article Gist
Are bubble type incentives inflating the size of the U.S. auto market in 2012-2013 as happened in the past decade. This could hurt future sales. Japanese automakers have sharply increased incentives to make a come back after the tsunami and earhtquake restricted supplies. U.S. automakers are reluctant to go further down the incentives route that hurt them in the past decade. The result is higher inventories for Detroit automakers, another undesirable result. General Motors had 5 months of Malibu supply at dealers in Nov. 2012 at the current sales rate, Ford 4 months of Fiesta subcompact inventory and 73 days of total inventory overall, Chrysler 6 months of 2013 Dodge Dart inventory. GM has 3 months of Chevy Cruze inventory, and 138 days of Chevy Silverado pickup truck inventory. GM decided to idle one of two plants making the Cruze. In contrast Toyota has 2 months inventory for the Camry and Corolla. The largest incentives in the U.S. market are from Nissan, a 55% jump to average $4,273 in Nov. 2012 from $2,764 in Jan 2012. Honda increased incentives to average $2,428 from $1,978 in Feb. 2012, a 23% increase. Toyota up to average $2,075 in Nov 2012 from $1717 in Jan. 2012, a 21% increase, according to TrueCar.com, with zero percent interest rates not counted in these numbers. Ford offers $2895 off its 2013 Focus sedan, which has 2 months inventory. General Motors offers between $2900 and $3500 in average incentives , according to TrueCar.com....

LyrArc Article Gist
David Obey, head of the House Appropriations Committee who wants to see a war surtax so that the burden of the war does not just rest on military families. Says Obey, who came to the House in 1969, the first year Nixon engaged in the Vietnam war- "I am damn tired of a situation in which only military families are asked to pay any price whatsoever for this war." He asked Obama to listen to the archival audiotapes of President Johnson in Bill Moyers PBS documentary on the Vietnam War in which Johnson tells Dick Russell Senator from Goergia-" Well we know this is damn near a fool's errand but we don't have any choice." Obey has no faith in the governments of Afghanistan and Pakistan so he does not see any chance for a strategy to succeed in Afghnistan and he says "I didn't come here to be Richard Nixon's congressman, Reagan's congressman, Obama's congressman, I'm here representing the Seventh District of Wisconsin." To know Obey is to know him through the decades standing in Congress, fighting for spending on health, education and social programs, part of the agenda rooted in his Catholic faith, which he says demands that he try "to make this an equal society for everybody." In his spare time Obey plays the harmonica, with his rendition of "Amazing Grace" at a friend's funeral putting "everybody in tears," according to Governor James Doyle of Wisconsin. ...

LyrArc Article Gist
Eric Cantor, a House member from the Richmond area, who is the face behind the zero Republican votes in the House for the Stimulus Plan. He says Democrats should not take the message from this that they should not mess with the Republicans anymore in discussing the plans for the economy. Is this good policy though, when the bill has given some middle ground between tax cuts and spending, and the spending is on areas neglected for years such as roads and bridges, classrooms and energy infrastructure? And is there an element of lack of comprehension by Republicans stuck on ideological grounds, of the seriously deteriorating nature of this crisis which is likely not to come back with recovery in several years, and is a global crisis? When Prime Minister Thatcher, UK Prime Minister, left office, the British infrastructure rail, rapid transit, hospitals and schools, had been neglected for many years and voters were looking for ways to rebuild the dilapidated infrastructure. The economy was weakening under her Conservative party successor, giving the Labor Party its chance to make a come back on the grounds of rebuilding infrastructure and services, and improving the economy. In which case there are just as many risks in this approach of being left out entirely and losing credibility across the country. Sometimes a feel good position may not be the best, or the wisest option, and may be shortsighted. ...

LyrArc Article Gist
What is liquidity, Roche the author of "New Monetarism", asks. And points to all the credit that was created and moved off the bank's balance sheets and onto the balance sheets of nonbank financial intermediaries. This changed the very nature of credit as in this manner a theoretically infinite amount of credit could be created. Credit that is not supported by real money, because as credit soars real money remains the same or grows slightly. The whole traditional notion of liquidity had changed. What is suggested is that central banks can do litttle about it because whats on the balance sheets of the financial intermediaries is not going to go away and Citigroup in fact put that back on its balance sheet after Vikram Pandit took over at Citigroup. And this means that banks will be lending much less from now on and setting aside money for the bad loans as well as for any new loans they make shrinking the pool of available money to lend significantly in 2008 and beyond. Significantly China is mentioned as the next place to watch as the bubble that might pop with bad effects for the global economy. The exchange rate in China keeps Chinese goods from costing more and the US consumer bubble kept soaking up imports from China both of which will now go in reverse. And the Chinese stock market bubble is also something to watch that might pop....