LyrArc Article Gist
Incentives for automobile sales are increasing back up to about $3000 a year from $2000, as auto sales reach a level of 16.3 million annual sales in month of October 2014, according to KBB analysts.

LyrArc Article Gist
U.S. president Obama repeatedly compared the Iran nuclear deal vote in Congress to the 2002 vote to authorize the war in Iraq under president George W. Bush, in a speech at American University. President John Kennedy made a speech on a strategy for peace at American University in Washington D.C. on June 10, 1963, offering negotiations as away to a comprehensive nuclear test ban treaty with the Soviet Union. Obama said the "choice we face is ultimately between diplomacy or some form of war." The nuclear deal faces bipartisan opposition in Congress on grounds of weak verification, doubts about Iran's intentions, lifting of a weapons embargo including ballistic missiles, and lifting of economic sanctions with snapback seen as unrealistic, and support limited to Democrats in Congress. Compared to the speech by Kennedy which was hopeful- " in the final analysis, our most common link is that we all inhabit this same planet. We all breathe the same air. We all cherish our children's future's. And we are all mortal." It was also a response to Soviet Union's head Nikita Krushchev's letter to Kennedy of Dec. 1962 following the Cuban missile crisis in October 1962, saying "the time has come now to put an end once and for all to all nuclear tests." Compared to the enthusiasm with which the Kennedy speech was received, the Obama speech brought up the divisions of the wars in Afghanistan and Iran, in which many Democrats including Senator Hillary Clinton voted to support the Iraq war, and missed the power of president Kennedy's (and Krushchev's) words of 1962. The last minute inclusion of a lifting of an arms embargo including ballistic missiles," created doubts about Iran's intentions in the U.S. Congress, unlike Kruschev and Kennedy's decisive response on the nuclear issue which led to the Nuclear Test Ban Treaty. The condition agreed to that the Iran nuclear deal of July could pass with only one third of Congess supporting it- based on a presidential veto if Congress did not approve it with a two thirds majority- created the prospect of the U.S. moving ahead on a major foreign policy issue with only limited support....

LyrArc Article Gist
Chuck Hagel on the need to bring in more countries to handle difficult situations such as the one the US faces in Iraq and Afghanistan. He says thats why the world now has a G20 and not a G8. No country can face these situations alone especially when there is a mutual interest of many countries in these situations. He calls it a 20th century reaction to 21st century realities. He says the 2 wars cost more than a trillion dollars. One sees a new respect for international institutions such as the UN, World Bank, IMF, and GATT renamed WTO, even with Republicans. Chuck Hagel's point makes a lot of sense and is generally accepted in people's understanding of the situation from the Defence Department to the Administration, and among respected politicians. It is putting it onto practice that is the hard part. As Hagel puts it, it is important to remember what Lyndon Johnson told Senatior Russell, that he knew the Vietnam war could not be won, and yet he did not want to pull out and be the first American President to lose a war. This is a contradiction because if it can't be won its going to be lost under the next President or the one after that, in this case Gerald Ford. Hagel says it not ours to win and lose. Here he points to the interconnectedness and shared interests of all nations. Every great threat to the U.S., whether it is economic, terrorism, nuclear weapons proliferation, health pandemics, environmental degradation, energy or water and food shortages, is also a threat to global partners ansd rivals. So its wrong to view engagements in Iraq and Afghanistan through the lens that says its about winning or losing. And he asks win what? Too many cultural, ethnic and religious dynamics are involved for any one nation to control. Hagel concludes by saying that the US, the Defense Department, the Obama administration, must get this right, as it affects the global architecture for the next generation. Fresh thinking is needed. Single issue engagement is obsolete in the 21st century in dealing with global partners or rivals, or countries with aspects of both....

LyrArc Article Gist
Lawrence Summers, former U.S. Secretary of the Treasury, writes on August 2, the day the debt ceiling deal passed the U.S. Congress. His reaction to the deal is one of relief, cynicism and economic anxiety. Relief that the deal does no immediate damage to the economy, which he says is no small achievement. This comes from not denting the U.S. safety net of Medicaid, Social Security and other social programs in the midst of high unemployment. And raising the debt ceiling through 2012 avoids a repeat of the kind of tense negotiations that took place recently. Cynicism because with the revised information from the Commerce Department of 0.4% growth in the first quarter and 1.4% growth in the second quarter of 2011, the new forecast of U.S. budget deficits would be much higher in the years further out. A mere loss of one half percentage point in the annual rate of growth could add $1 trillion dollars to the national debt in 2021. Summers points out that Congress votes annually on discretionary spending and a current Congress cannot control what a future Congress does. Caps and sequester deals can be reformulated in 2013 by a new Congress. This deal says Summers has only confirmed the lower levels of spending already negotiated for 2011 and 2012, even though the estimates show $1 trillion in deficit reduction. For the remaining $1.2 trillion in reductions to be negotiated by the "super-committee" there is no baseline for these cuts- it is not stated whether this baseline is with the Bush high income tax cuts included or excluded. His economic anxiety comes from the low rate of growth in the first half of 2011 which suggest an economy at close to a standstill. He sees a one in three chance of a U.S. recession in the absence of any efforts to spur growth. Martin Feldstein was quoted on television business channels on August 2, saying he sees a 50% chance of the economy slipping back into a recession. Steps Summers advocates are a non-extension of the Bush high-income tax cuts which would add $1 trillion to deficit reduction, some entitlement reform, extension of the payroll tax cut, extension of unemployment insurance, and infrastructure maintenance....

LyrArc Article Gist
The Chinese market for mobile phones has seen Chinese companies use their advantages of knowing local requirements and better distribution systems, especially in the rural areas and second tier cities, to establish a presence. By 2004 companies such as Bird and TCL made significant gains. Bird planned to take on overseas markets and take 8% of the global market. Ningbo Bird and TCL then had half the Chinese market. According to analysts this effort fizzled out and these two companies had sales decreasing as larger companies like Nokia started going into the smaller cities and rural areas. Now another company is using its knowledge of the special features desired by Chinese buyers and its distribution system in rural areas and smaller cities to establish a presence. Tianyu, better known by its K-Touch product introduced in 2005, started as a handset contract manufacturing company. Tianyu offers locally desired features not offered by makers like Nokia and Samsung- dual SIM card option popular because it allows keeping second generation phone numbers and accounts while keeping open the option for a 3-G line, bigger text for older users, text messages read aloud, touch screens, receiving phone calls for two numbers, and so on. And Tianyu does this for less than $200, a price that Nokia and Samsung can't match for features like touch screen. Comparison of the K-Touch E62 with a Taiwanese handset called HTC Magic using Android, both touch screen, showed a price for HTC Magic three times the K-Touch E62. The K-Touch E62 cost 798 yuan or $117. Does Tianyu rely too much on the cultural aspect of today's China which is described as "shanzai"? The meaning of this term "mountain stronghold" and has a defiant tone of local culture and tendencies fighting centralized control. It is often used to refer to the cheap knockoffs of imported products that are readily available in China. In the long run analysts believe that the larger Chinese players in telecom, Huawei and ZTE, which have smartphones appealing to Chinese consumers and 3-G technology, are more likely to have a sustained presence. ...

LyrArc Article Gist
Major decline in oil prices in Oct. 2014 as prices drop to $81 per barrel and are forecast to reach $70. U.S. oil production increased by about 56% or 3.1 million barrels a day since 2004. U.S. demand for gas and fuel declined 8% compared to 2004. Initially instability and wars in the Middle East sustained high oil prices in 2012-2013. Yet with growing output from shale and other sources in N. America and slowing economies of Europe and China, the situation reached a point in 2014 where supply exceeds demand. This shift more than offsets any instability in trouble spots. The situation affects the U.S. consumer favorably with an estimate of $1 billion in savings for American consumers with every one cent drop in price at the gas pump, by one estimate from Deutsche Bank analysts. Typical American families gained an extra $50 a month from the decline June to October 2014, according to analysts at Gasbuddy.com. The declines are a boost for the slowing economies of Europe, Japan, China, S, Korea and India. China's imports for 2015 are estimated at 61% of oil consumption, using official estimates. In the current slowdown the lower prices offer relief. India which imports 75% of its energy benefits signficantly, as this helps lower inflation and reduces cost of fuel subsidies for state run companies. Russia is adversely affected by the declines as it depends on oil and gas exports for 50% of the nation's budget. Estimates by AFK Sistema economists show the Russian economy contracting in 2015 with oil at near $90 per barrel (Brent crude is at about $85, and WTI at $81 in early Oct. 2014). Russia's former Finance Minister Alexei Kudrin reflects opinion among Russian executives and politicians, when he told state television that Saudi Arabia may be pushing prices lower to target Russia's oil resource based economy and Mr. Putin, in an effort to broaden the effect of sanctions. (The Saudis have strongly protested the Putin intervention in Syria.) Venezuela has used $120 per barrel and Angola $98 for its budget, leading to a strong hit for the economy. ...

LyrArc Article Gist
Jeb Bush sees many who come to the U.S. looking for a better life as similiar to people who arrived here in earlier waves of immigrants all the way back to 1800. He described the actions of many who come to the U.S. illegally as an "act of love," and "act of committment to family," in a talk at College Station Texas, on the 25th anniversary celebration of the presidency of his father, George H.W. Bush. Its breaking the law, he says, but different, not a felony. Benjamin Franklin describes German immigrants to Pennsylvania in his writings at a time when immigrants were what made this country. They were different in some ways then but long since became part of the fabric of America, as have new immigrants in the different periods of the 19th and 20th century. Here is what Benjamin Franklin says about the German immigrants whom he praises for habitual "Industry and Frugality they bring with them," in a letter to Peter Collinson, May 19th 1753, addressing the fears as well as what they could bring to the new country, which throws light on todays immigration debates in a new light. "In short unless the stream of their importation could be turned from this to other colonies, as you very judiciously propose, they will soon so out number us, that all the advantages we have will not in My Opinion be able to preserve our language, and even our government will become precarious." And then saying in the same letter-"Yet I am not for refusing entirely to admit them into our Colonies: all that seems to be necessary, is, to distribute them more equally, mix them with the English, establish English Schools where they are now too thick settled, and take some care to prevent the practice lately fallen into by some of the Ship Owners, of sweeping the German Goals to make up the number of their passengers. I say I am not against the Admission of Germans in general, for they have their Virtues, their industry and frugality is exemplary; They are excellent husbandmen and contribute greatly to the improvement of a Country." ...

LyrArc Article Gist
With $3.5 trillion dollars of commercial real estate debt outstanding, amid collapsing real estate prices, there is concern that this will hamper economic recovery. About $700 billion of commercial real estate mortgaes were packaged into securities and sold to pension funds, college endowments, foundations and other investors. This means the pain will be felt across the country, even in this small Ozark town of Springfield, Missouri, where the police and firefighters union has invested its entire 11% real estate allocation of $12 million in PRISA, a real estate fund of Prudential Insurance. Prudential in the boom years like 2005, was making as much as 25% return and large fees, and it marketed these products across the country. Even in a loss year of 2008 this generated $89 million in fees for PRISA. It decided to build 11 Times Square with a developer, 1.1 million square foot skyscraper in New York city, and the piece of that in the form of a security was marketed in this small Ozark town at a meeting between a Prudential representative and the towns pension fund board members, 1 policeman, 3 firemen and 2 city officials. The pension fund valued before the financial crisis at $131 million is now valued at $91 million, with 10% tied up in PRISA. A request for redemption of $5 million was rejected. The irony is that the pension fund was trying to boost returns to 7.5% from 5% on the advice of actuaries, to better fund the retiree obligations. The developer of the skyscraper Pozycki only comitted $15 million, or 4% of the equity, in exchange for developer's fees, having been burnt by earlier deals in the 1990's. As the building is nearing completion in 2009, not a single tenant has signed up. A loss of 50% is expected by 2009, because of so much vacant office space in New York city. Prudential will continue to collect its fees. And in Springfield the the losses will lead to budget cuts, reducing how often park lawns are mowed, and roads maintained, eliminating the summer concert series, multi-family housing inspections, and aservice to trap skunks and feral cats....

LyrArc Article Gist
Peter Galbraith explaining the true reason for his firing by Eide and the UN Secretary General Moon. The statement announcing his dismissal to be accurate would have said that this was over differences whether the UN was going to remain silent over evidence of electoral fraud in the Afghan elections, and the issue of ghost polling stations. There is another angle of this which risks endangering the US trrops in the north of the country. Karzai's opponent in the elction is half Tajik and half Pashtun, fraud in the elections may turn the Tajik north against US and coaltion troops, further complicating life for the US, and this is on top of the loss of credibility with the Afghan people of the Karzai government. See the separate article on General Jones telling McChrystal who commands US forces in Afghnistan to cooperate with the strategic review now underway, by not making statements to the press. The other questions arise about the manner in which this dismissal ocurred. A few days before this Hillary Clinton, Eide, and other representatives from the coalition told the press that they think Karzai would win. Had Obama authorized this and what would be the point of such a statement, and at the same time trying to conduct an unbiased assessment of the war in Afghanistan. Here Galbraith comes across as one who had the courage to decide according to what he believed would be right for America and the values it represents. His point is that he could not tolerate the last act of dishonesty in the dispute that went on for months, because of the loss of credibility for the UN itself among the many Afghans who do not support Karzai. This would destroy also the credibility of the US in the country. Can any number of troops make up for this? Wars in Asia have proven that popular support decides the eventual fate of the mission. Only by standing up for its values can the US not undermine the very principles that the troops are fighting for and the people support. ...

LyrArc Article Gist
What does transformational liberalism mean? What does fairness mean? What does it mean to have unemployment insurance, to have health care, to have jobs, to open the door to the middle class for a college education. Is this transformational liberalism? Or is this "transformational liberalism" a part of a vocabulary of cliches that have lost meaning as the nation confronts job losses of the magnitude of 500,000 a month, and this is only the beginning. Much of the increased debt the nation is occurring is going to provide government help to financial institutions like the $177 billion that has gone to AIG so far, just one company, and there are the Citigroups and other companies like AIG. What does it mean to have "burden sharing," when the rest of the country is frightened, scared, losing jobs, losing savings, and at this juncture cliches may have lost meaning, as its those who profited most and got us into this crisis like the investment bankers and senior management of companies in industries like the mortgage industry, auto industry who will be paying their larger share not because of redistribution, but because they may be the ones who can most bear this burden wihtout great sacrifices like cutting down on necessities and basics. See the link to Countrywide's Kurland who plans to profit both by overselling mortgages and creating the tinder that started this fire, and now to profit by buying distressed properties at pennies on the dollar, with $200 million from Black Rock as an investor, and $200 million on stock he sold before the crisis. Is a Kurland who has not been subject to any regulatory action, or management of AIG, or Citigroup or GM or the other companies receiving federal money by the hundreds of billions of dollars about to ask the half amillion of unemployed and the others threatened with job loss each month, for "burden sharing"? Nobody wants to see any of this happen, what has happened, including the debt, but it has happened, and it was not engineered in the new budget or in the few weeks since early January 2009....

LyrArc Article Gist
Obama is not going to shy away from developing a solution for the 12 million estimated illegal immigrants in the country, for some form of path to legal staus. The issue will be taken up this year. It does not have the same priorities as health care and energy and education, but as a human issue it will be addressed this year. The lives of people who are doing a lot of the work Americans normally do not want to do is entertwined with the economic crisis, as the lives of these immigrants are likely to be made even more difficult by this crisis. The idea is to give those who are here, and as it appears are likely to remain here, and their families, the opportunity to lead normal lives. Not see families broken or torn apart as a husband or wife has status and the other does not, or lives worsen for those who have done the menial and labor intensive jobs in factories, agriculture and in construction, that Americans born to parents from an earlier generation of immigrants do not wish to do because they have better opportunities. As it is an issue that has drawn opposition and aroused emotions, it will be tackled by framing it as "policy reform that controls immigration and makes it an orderly system." Rep. Gutierrez, who is from Chicago, is building support for the cause by speaking at churches around the country, and having church leaders speak at these meetings, in a movement that is reminiscent of the civil rights struggles for black people. Mr. Obama will speak publicly on the issue in May, in the summer he will convene working groups, including lawmakers from both sides and a range of immigration groups, to begin discussing possible legislation by early fall. The plan would not add new workers but normalize the living conditions of people already here, and who information shows are not returning home. Its also supported by a key and growing constituency in American politics, the Hispanic voters. It was a campaign promise that Obama intends to keep, and if successful only draws the Hispanic vote closer to Obama....

LyrArc Article Gist
A detailed account by Thomas Schweich, a senior official and deputy in the law enforcement bureau to Anne Patterson, Assistant secretary of State for international narcotics and law enforcement affairs. He talks about how the Pentagon and the UK military have thwarted efforts for aerial eradication of poppy fields which has worked in other countries like Columbia. In fact Anne Patterson was an Ambassador to Columbia and knows about this first hand. He also talks about how through their efforts northern Afghanistan was cleared of poppy fields but how the cultivation has shifted to the south to Helmand and Kandahar provinces. The government officials in these provinces are actively involved in the poppy farms that are being setup there and support Karzai and help him organize the Pashtun vote for coming elections. So Karzai is protecting these officials and because of this opposes aerial eradication and does not support using Afghan Army for land eradication. The military in the U.S. and the UK does not want to take more casualties by turning against them the officials and farmers who support the government, but this is a short sighted policy because this helps make the Taliban insurgency stronger with access to cash and weapons because they also are actively setting up farms in their areas of southern Afghanistan. Aerial eradication takes care of poppy farms in all areas and has been effective in other countries. In the long run the military takes many more casulaties because of the bigger insurgency and Taliban they have to deal with. The military's policy is called "Sequencing," and its basically we'll deal with drugs later which is based on a complete misperception and understanding of the situation facing them. Schweich is in the thick of these battles and has fought them wit courage it appears from this account. He has the support of Secretary of State Rice but has not been able to get the Administration to get Karzai to change the way he is operating. It risks making the situation and insurgency in Afghanistan a lot worse if not corrected. Its a call for action and for educating the public and clearing all the misunderstanding and myths and fog about whats happening in Afghanistan....

LyrArc Article Gist
The U.S. Dodd-Frank legislation has a provision requiring U.S.- listed oil, gas and mining companies to disclose payments to governments for access to mining and oil resources. The S.E.C. will decide how to implement this rule which goes into effect in 2012. This has a severe effect on the economies of developing countries as it siphons away significant part of revenues for the resources into the hands of government officials. From Nigeria to Equatorial Guinea in Africa, and in other parts of the world in Latin America and Asia, this is a serious problem and results in underdevelopment and retarded societies.

LyrArc Article Gist
Alan Blinder calls for something better than Social Darwinism to tackle the problem of foreclosures in the U.S. economy. Martin Feldstein has made the same call repeatedly. Homeowners under water need help from the government to avoid foreclosures. Rising foreclosures reduce the chances of a recovery in housing markets and U.S. economic recovery.

LyrArc Article Gist
Proposals from the Vickers Commission on banking reforms in the UK that could be adopted in the U.S. to reduce systemic risks from proprietary trading.

LyrArc Article Gist
NYT exhortation for Congress to resist the lobbying pressures of the banks to weaken regulation for a Consumer Protection Agency and derivatives trading on exchanges. The first by amending legislation for a Consumer Protection Agency so that no states can pass tougher consumer protection laws, something that prevented states from protecting consumers from abuses in the mortgage business. The second to propose legislation for derivatives trading that allows corporations and hedge funds to trade derivatives privately. NYT editorial says Congress should require all derivatives dealers and users -banks, hedge funds and corporations- conduct their trades on exchanges where they are reglulations and public scrutiny. NYT responds to the banks and corporations that say this would raise their transaction costs to hedge any given risk, by saying that this is debatable. Greater transparency should reduce costs but even if there were some higher costs it would be outweighed by the larger benefits to the banks themselves and the country through the lower systemwide risks. ...