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WSJ reporter Bob Davis writes this report on the end of the China economic miracle in 2014 as he completes a 4 year assignment covering China. He says China's economy is slowing rapidly and he is pessimistic abou the future. Construction cranes visible across China's skyline says Davis, can no longer be interpreted as growth inducing. With rows upon rows of empty flats in third and fourth tier cities which account for the bulk of the increase in housing construction, the consequences of a debt fueled construction boom are easy to see. Davis cites the IMF on the dangers of credit fueled growth in China- only 4 countries have experienced as rapid an increase in credit to GDP ratio in 5 years. Each of the 4 countries Brazil, Ireland, Spain and Sweden experienced a sharp decline in GDP growth and banking crises following the credit bubble. Estimates of debt to GDP are as high as 250% for China. Krugman, Roubini and other economists have warned about the credit bubble, saying China is no exception to the rule for the risks posed by such a bubble. ...

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Brazil's currency, the Real, moved up to 1.7 per 1 US dollar, on the eve of the Presidential election in the first week of October 2010. Brazil's overnight interest rate of 10.75% attracts speculative foreign capital in the carry trade, where investors boorow cheaply in the US and Japan and invest it in Brazil. The central bank has kept these rates high to finance a current account deficit of $46 billion in 2010 -which is forecast to hit $60 billion in 2011- and to finance a high level of government spending. This spending is likely to continue with Ms Rousseff as the new President, as Rousseff plans to invest in infrastructure such as bullet trains and river dams, as well as the FIFA world cup and the Olympics. Government spending has increased by 18% so far in 2010. Exporters are affected by the artificially high value of the Brazilian real. Goldman Sachs economist, Alberto Ramos, says the real is overvalued by 55% compared to its fair value of 2.65 to 1 US dollar, based on a computer model that incorporates factors such as trade, inflation and productivity. Sao Paulo is already the most expensive city in the Americas, according to one survey....

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U.S. Middle East policy in 2015 becomes one of weighing different options without taking sides as the Middle East descends into a messy sectarian conflict between Shiite Iran and its proxy allies with Sunni Arab states, with the remaining currrents of the Arab Spring remaining as background. If someone had asked the question what the world would look like without the U.S. exercizing its leadership role, this provides an answer in one part of the world after years of inaction and skepticism about the U.S. role in the Obama administration.

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Chandrasekeran looks back on the troop surge ordered by President Obama on the advice of General Petraeus and General McChrystal in Afghanistan, and the results in Afghanistan as the U.S. withdraws troops in 2012-2013.

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Poetry of migrant worker Xu Lizhi at a Foxconn factory in Shenzhen, China.

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Calls at the BRICS leaders New Delhi summit for a change in quotas for the World Bank and the IMF, and a more open merit based selection process for heads of the two financial institutions. According to the Economist Belgium has a larger quota than Brazil at the IMF.

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Ford making plans to put 2 plants one in Nanjing, China, and one in Thailand with about $1 billion investment combined suggests Ford is looking at GM's strategy and planning for a new era in automobile production, one that makes more cars in high growth regions of Asia. The demand is expected to grow largest in India, China and the rest of Asia. And these cars will have to cost a lot less than they are today for the lower purchasing power of Asia's new middle clases and lower middle classes which are growing in numbers. Meantime the costs in the US are still high even after reducing the health care burden through the health care trust that GM negotiated with the UAW. The UAW agreement with GM reduces labor costs for new workers but existing workers costs continue to be at the levels from before. And non assembly new workers not all new workers get paid at lower rates than the existing rates. So the progress in labor costs is still short of where GM or Ford needs to see it to compete effectively worldwide. Meantime the automobile markets continue to change and grow worldwide. The American car companies cannnot wait, they have to make decisions based on the labor situation in the US and their response is to build new capacity in the Asian markets, even while maintaining labor peace at home so as not to have upheavals in the domestic markets in the USA. New product and designs can still be handled in the USA so GM could agree to make commitments for manufacturing new product at plants in the USA, while at a minimum getting the UAW to agree to take over health care responsibility and agree on the playing field in labor costs for the future, which would have to take into account global competition and not just a labor social contract from another era. Ford's 2 investments are in alliance with Mazda, of which it owns 33%, and which generated $168 million in profits in 2006. Of the product in Thailand 80% will be exported to the rest of Asia excluding China and India, and also to S. Africa and Australlia and New Zealand. It will make about 100,000 cars. Currently Thgailand exports about 650,000 vehicles out of production of 1.25 million vehicles. About 70% of exports are pickup trucks....

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Saudi Arabia needs current oil price of $60 a barrel to move up to $80 a barrel to balance its national budget. To do this OPEC needs to coordinate its oil production cuts with a group of 10 countries led by Russia that includes Mexico. These countries include countries in the former Soviet Union.  In December cuts of 1.2 million barrels a day were coordinated between the 2 groups to push up oil prices. Now the OPEC cartel plans regular meetings with the Russian led group to push up oil prices. Under a draft document an alliance between the 2 groups would last 3 years and include regular meetings. Earlier Prince Salman led Saudi government proposed replacing OPEC with a new group combining Russia and Saudi Arabia and the other countries in OPEC, yet giving most of the decision making power to Russia and Saudis. This was rejected by Russia and was received poorly by Iraq, Iran  Nigeria, Angola, Algeria. The Iraqis reminded Saudis that OPEC was started in Baghdad. ...

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The challenges facing Nokia as it has to come up with a full range of Lumia model smartphones at different price points to appeal to customers in the U.S. and emerging markets. Increasing price competition at the low end in emerging markets and competition with the Apple iPhone and Android based phones at the upper end.

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How the energy business sale of gas turbines to provide electricity in the middle east is boosting GE's energy business worldwide, increasing sales to over $20 billion in 2007, at the last peak in 2002 sales reached $22.5 billion for GE's energy business. Couple of things to note. GE's revenue is growing at about 20% a year in the middle east. Its sales in the middle east now exceed China's with $8 billion in Middle East for 2007 vs. 6 billion in China. By 2010 sales from China India Brazil and Middle East will total $50 billion compared to 30 billion today. thst is an increase of 67% over 3 years. Power is a big chunk of this in addition there are aircraft engines and health care equipment. See the other article on middle east growth July 19, 2007 WSJ. About half of the population of 300 million in the middle east is under 20 years of age. Also note the last runup in GE's stock price was from its surging energy business in the 1990's.

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This article in the NYT explains why the loss of jobs particularly in the auto industry to Mexico, with the experience of NAFTA passed by president Bill Clinton, has caused widespread opposition to the TPP trade agreement proposed by president Obama. Both Hillary Clinton and Donald Trump in 2016 oppose the TPP.

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As China's food retail stores landscape has changed with more and better options offered to consumers, they have shifted upscale, especially with the rapid growth of incomes in China in the last decade. With a decline in growth for Yum Brands in China the company has decided to spin off its operations in China into a separate company, in the hope of giving the local company more room to respond to competitive changes in the food retail store business. As Chinese consumers urban disposable income showed rapid growth from 7700 yuan in 2002 to 23,700 in 2015, the market for food retail chains has changed. With this growth came other competitors such as Pizza Express, a UK chain at the higher end with local Chinese partners, and at the lower end Taiwanese competitors Ting Hsin International Group with its Discos fried chicken chain competing with KFC Yum Brands stores. Local Chinese competitors also moved upscale with Xiabuxiabu Catering serving hot pot, for consumers to cook meat and vegetable in broth doing it themselves. Other factors hurt Yum Brands growth and brand respect with the media reporting use of growth hormones and antibiotics by Kentucy fried chicken suppliers in 2012. And a local media report in 2014 saying that a KFC supplier supplied expired meat hurt sales with adecline of 14% in the fiscal 3rd quarter 2015. The opinion for Pizza Hut, a Yum brand has changed from as recently as 2012, with one survey showing a drop from 39% to 25% for consumers who see it as a desirable brand. A Beijing teacher for example now sees Pizza Hut as a cheap option compared to spending 128 yuan or $20 on a better quality pancetta and sun dried tomato pizza. More discriminating Chinese consumers means this trend will continue, and the media constantly looking for flaws in quality standards. As many companies are finding out the Chinese market is not going to be easy for the complacent....

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Google's You Tube video service first affirms the right to show a video about a Brazilian candidate in a local government election, and then blocks the video after a court in Sao Paulo orders the arrest of the head of Google's affiliate in Brazil. Brazilian election laws ban personal criticism of candidates in elections.