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Why are New York City hotel rooms costing $300 a night? This NYT report says there is a shortage of tourist lodging pushing prices up when 20% of hotel rooms go to asylum seekers and migrants. During 2022 hotels found the program of the city of New York at $185 a night to convert hotels to shelters for asylum seekers as away to remain in business during the pandemic. Since then 130 of 680 hotels in New York City have entered the shelter program. This presented a loss of 16,000 rooms leaving 121,000 rooms inventory for tourists, a shortage of about 3000 rooms as demand picked up after the pandemic.65,000 migrants are housed in hotels, tents and dormitories in New York City, as the city is obligated to find housing for people who need it, costing $10 billion over 3 years.

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Heat mapped sidewalk heat is shown in color images in the NYT for 3 US cities Phoenix, Sacramento and Portland. Phoenix one can understand but Sacramento and Portland are hard to grasp- such is the acceleration of climate change effects across the Us and in other parts of the world. Does one then sees anywhere in the NYT, WSJ, W. Post, the Guardian, on the television news channels any coverage of what each candidate for the next 4 years running the US government is going to do for climate change effects? Inaction on climate change would produce severe costs for the US economy which will drain its resources 2-4 years from now as the effects of climate actually accelerate when nothing is done. This could cost as much as a trillion dollars in 2028 if nothing is done for climate change under the former president.

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Ron Johnson (R-Wisconsin) who seeks deeper spending cuts, Josh Hawley (R-Missouri) who sees Medicaid co pay for able bodied at 100% of federal poverty level as a "sick tax," Lisa Murkowski who differs on taxing providers, and other Congressmen and Women in the Republican party are opposing the new tax cut package of president Trump. Senator Rand Paul (R- Kentucky opposes the raising of the debt ceiling, and is also opposed.

Most of the main Medicaid cuts come after 2029 after Trump no longer is president, so that Republicans who want to see the shrinking of the Medicaid program so it meets only needs of the most needy, want to see faster cuts while Trump is president. And there are other Republicans in Congress who face tight elections and see big risks of losing their seats.

 

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Peaple points to the challenge facing new Royal Dutch Shell CEO, Ben Van Beurden, with low return on capital below 1% on U.S. projects from high costs and declining prices. Shell's 2013 price earnings multiple is at 8.1, well below Chevron and Exxon. Van Beurden will become the CEO in January 2014. He worked for Shell for 30 years, with 10 years in the LNG business.

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Kozo Yamamoto joined the Finance Ministry in 1971, and is serving his sixth term as member of Japan's parliament. Since 2011 Yamamoto has convinced Abe, a colleague in parliament, about the need for reflationist policies now called Abenomics. This helped Abe make a comeback win for the prime minister's position for a second time. Yamamoto led the study group that convinced Abe of the need to delay the second increase in the consumption tax to 2017, and a 3 trillion yen stimulus package to encourage household spending, following the economy's fallback into a recession in Nov. 2014. He says it was important to not add to the headwinds the economy is facing. Yamamoto does not fall into the conservative mold of people from the Finance Ministry, as he takes tango lessons, is interested in fine pottery, and in Italian cooking. He has called bureaucrats in the ministry and central bankers "feckless" and "defiant," after years of questioning them in parliament and demanding reflationist policies. With the snap election in December 2014 the Abe led LDP is taking on the conservative Finance Ministry officials, who have insisted on sticking with the old timetable for the tax increase, regardless of the headwinds and slowing exports....

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The last days of the pro-Russian Donetsk People's Republic in eastern Ukraine, as Ukrainian government forces under the government of prime minister Poroshenko defeat separatists by July 2014. Russia decides not to intervene further. Opinion polls show a majority of Ukrainians in Donetsk do not favor separatism, and opposition is based on alienation from the poor quality of governance in Kiev. With the Poroshenko government committed to respecting the rights of Russian speaking Ukrainians, Tymoshenko soundly defeated in elections, and Russia's economy at risk in the adverse impact on foreign investor sentiment, Russia's sees little to be gained from supporting the separatists.

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Did Putin overreact as he did in Georgia. On the issue of Russian speaking people in neighboring eastern European countries Putin has strong emotional reaction, as evident in the 2008 Georgian conflict. In Ukraine the issue assumes significance because of the effect of western sanctions, adverse foreign investor sentiment and the tendency of rich Russians, similiar to Argentines, to shift assets abroad. Capital flight was $75 billion in the first 6 months of 2014. Add to this adverse effect on foreign investor sentiment on an already slowing Russian economy, and growth will be seriously affected. Car sales are expected to decline by 12% in 2014, according to a trade group. The rhetoric has been toned down on Russian television. And Russian analysts now say relations with the West must be maintained. Polls by state run polling company WCIOM show 66% of the Russian public oppose Russian forces entering Ukrainian territory.

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The U.S. and the EU join together for stronger economic sanctions on Russia. The sanctions affecting large Russian banks ability to raise capital in financial markets are likely to affect the Russian economy. Russia was suspended for export credit and development finance. VTB Bank was one of three more Russian banks added to the list of banks with economic sanctions. The EU took similiar action against Russian state owned banks and imposed an arms embargo in July end 2014.

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Teva Pharmaceutical plans to acquire the generic drug business of Allergan in 2015. Teva's sales of generics were $9.1 billion in 2014, according to EvaluatePharma, over 50% of its total sales, and 12% of global market. Alergan had $6.6 billion in generic sales in 2014. Allergan's strategy is to move up the market to branded drugs because of price competition from India in generic drugs. Teva's strategy is to increase the size of its generic business to better tackle pricing issues.

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Housing prices declined for the 22nd consecutive quarter in Spain, declining by 0.5% in the 1st quarter of 2014 over the 4th quarter 2013, and 3.5% over the 1st quarter 2013, according to the Development Ministry. Inventory of unsold newly finished home is about 1 million, many with Spanish banks taken from bankrupt property developers. Prices in the open market are down 30.6% from the high in 1st quarter 2008, according to INE. Except for Greater Madrid and Balearic Islands with large number affluent Northern Europeans with slight price rises, house prices dropped in all regions.

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Saudi Arabia's strategic moves at the OPE pricing meeting in Nov. 2014. Saudis push for keeping the production levels as they are, not making any cuts. Analysts say the Saudis are aware other OPEC countries and other producers outside OPEC such as Russia, are not likely to make cuts in production as they face severe budget constraints- especially Venezuela, Iran, Russia. In this situation they have decided to take a wait and see approach to see where prices are headed in coming months. A price of $60 for Brent crude is likely to lead to cuts, according to some analysts.

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China moves to build self sufficiency in technology so that it depends less on imported technology. China's state sector spending was $6.6 trillion in 2022. More of that investment is now going to replace foreign brands with domestic brands particularly in software.

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The new Secretary of the Navy is money manager John Phelan. Is he a good choice for the Navy with its many challenges for which Phelan lacks experience, asks this report in WSJ. The US is attempting to ramp up its Navy in 2025.

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Phoebe Weston looks at the ways the Swiss have transformed their dirty rivers and lakes from the 1960's into pristine waters by 2025. A look at Lake Geneva. Today 98% of Switzerland is covered by sewage treatment plants, in 1965 only 14%.

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India faces tariff of 25% with policies of reliance on Russia for arms and oil,  Mexico Canada and South Korea face higher tariffs August 1 2025 as they are holdouts now that UK, Japan, EU, Indonesia, Vietnam have agreements with the US on trade.

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Federal Reserve chairman Bernanke says he plans to keep interest rates low till the end of 2014. Bernanke told a news conference after a two day policy meeting of the Fed April 23-24: "It's a little premature to declare victory. Keeping interest rates low is still appropriate for our economy."

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Using caution with bubble type internet stocks, stocks with no profits, real estate with large price jumps is suggested by experts. Models and methods have been developed to detect bubble type activity. Sornette at the Financial Crisis Laboratory, Swiss Federal Institute of Technology and the Bank of Finland's Taipalus have developed models to detect bubbles, including the bubble activity in internet IPO's and stocks in 2014. Chancellor at Boston asset manager GMO and Utkus at the Vanguard Center of Retirement Research have also come up with methods to detect bubble activity. Utkus says investors could reduce allocation by 10-20% in the case of stocks with bubble activity. Investors were doing this by reallocating in April 2014 from biotech and internet stocks to safer large cap stocks, because internet and biotech stocks had seen sharp increases of over 25% in a short period.

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France was exceptionally well prepared says France 24, citing a report in Le Monde, for the SARS crisis in 2002 and the H1N1 influenza in 2009. A billion masks were stockpiled by 2009. Following the H1N1 influenza not appearing in any significant way the media, political parties and the public shifted their attention away from public health crises preparation. For H1N1 the government spent 1 billion dollars some of it going to pharmaceutical labs. The eurozone financial crisis that followed the global financial crisis shifted policy to austerity measures. The entire preparation effort for influenza type health crises was abandoned as too costly.  The same pattern repeated in Britain which was also well prepared before 2010. Austerity budgets after 2010 had little room for public health investment.  One could say a similar pattern was seen in the U.S. Today the worst hit countries are U.S., Britain, France and other European countries. France which had 1 billion masks in 2009 to tackle a possible H1N1 epidemic finds itself with 150 million masks in March 2020 and scrambling to find masks. Some masks which were usable were even destroyed as expired, ministers and experts who had built up the prevention effort in 2009 were even demoted and forgotten, as was much of the preparation in these years. It wasn't just medical supplies pubic awareness had practically disappeared. In the U.S., in Europe, the same situation of a lack of public awareness so that experts, government, and the public could work together quickly, was clear to see. In countries such as Taiwan the preparation led to speedy response at all levels, making contact tracing, isolation of clusters effective. In the U.S. and Europe this early, early, period was lost leading to makeup mitigation measures and the growing sense of a loss of control over the virus. ...

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WSJ's reporters Meichtry, L, Pokharel, and Soon look at the extraordinary rise of Gautam Adani through his efforts to develop reclaimed land at Mundra port in the state of Gujarat. Adani who started with a small family owned plastics maker in Ahmedabad developed Mundra port around 2001 with the help of the Modi administration. Modi saw the electricity shortages in Gujarat as an opportunity to tackle India's chronic electricity shortages. Adani's early development of a deep water port at Mundra offered both Modi and Adani the opportunity to tackle the electricity shortages by bringing coal in large ships to Mundra in the way that China was already doing by 2005 in its own efforts at industrialization. So deeply immersed was India under the Congress Raj of licenses and closed economy that India's established business failed to see what China was doing to break into the ranks of industrialized nations. India's first prime minister Nehru had build a command economy where not much happened without government licenses and approval often riddled unwittingly with corruption. Modi needed someone outside the established companies operating under the Congress Raj command economy and with a vision of an India with abundant electricity to take the risks Chinese companies were taking to build an entirely new economy. By 2005 Guangzhou was importing coal with large ships from Indonesia and Australia. State owned companies moved slowly and would take years to develop the port capacity. Using China's example Modi pushed ahead with Adani on a rapid time delivery making Mundra a Special economic Zone and helping to connect Indian Railways to the port of Mundra for coal deliveries. Adani Enterprises built the thermal power plants near Mundra and build electricity transmission lines on a rapid mission mode giving Gujarat abundant electricity supplies and giving Gujarat state in northwestern India a great leap forward in the way China was already doing right in front of everyone's eyes by 2005 with world class ports built at Guangzhou, Shanghai, Shenzen, Hong Kong and logistics connections set with the help of Maersk.  Maersk is now doing the same for modern logistics in India in collaboration with the Modi administration.  Modi and the younger generation of aspirational youth in India see a New India that can break into the ranks of the largest industrialized nations with world class infrastructure in the way China has done, and use new technologies with innovation that will speed up the process in a way that the world has never seen. A quick look at Mundra Port in Wikipedia shows the timeline, It starts in 1998 when Adani Port Ltd was setup and Mundra port work began, 2002 the port integrated with Indian Railways, 2003 when it was made a Special Economic Zone by the Modi government in Gujarat, 2007 when IPO of 40 million shares at price band of around Rs 400 was done.  The Biden administration and the Trump administration support India's efforts to build a new modern economy with a rapid shift to renewable energy. As India is building the ports and logistics with the help of Maersk and other companies in the European Union, president Biden is working with prime minister Modi to build a new supply chain that removes the overconcentration of manufacturing and supply chain logistics in China. This means new ports with the latest technologies in India to handle shipment to the US and the EU. Jake Sullivan set out the goals for president Biden to accomplish this task in meetings with his Indian counterpart Ajit Doval this week on iCERT. President Biden and Republicans, Germany and the EU, see India as a critical part of the Initiative on Critical and Emerging Technologies, and the new supply chain. For the Adani Group the IPO pause offers an opportunity to do what Nirmala Sitharman has done in the Indian Budget this week- build a stable growth path ahead for the long term in line with India's Amrit Kal the next 25 years to centenary of freedom in 2047. Nirmala Sitharaman set a goal of rapid capital spending and investment increasing capital spending in 2023 by 33% in 2023 over 2022, yet maintaining a stable fiscal path by keeping the deficit below 6%. ...

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Gerald Seib of the WSJ says president Biden is coming back with new actions to revive the Democratic agenda after a challenging period in the first year. Yesterday's first formal press conference of 2022 gave Biden an opportunity to respond. Why the WSJ, NYT, did not cover on their online edition front pages president Biden's first formal press conference on Jan. 19, after 1 year of the Biden administration, will remain a mystery. With the American press acting this way it did not take much for Germany's DW.com to run the story with the title "Biden's first year weighed down by disappointment," with a thoughtful Biden at the press conference replaced by a picture of Biden staring downwards.  This is only the first year of the Biden administration. Actions are planned to ease the supply chain situation and bottlenecks at ports. Much is made of inflation, Afghanistan, Ukraine, by Republicans assailing the Biden record. President Biden responded to this by asking at the press conference what Republicans are for. On Afghanistan Biden held firm on not investing billions of dollars every week when there is so much need in America and the rest of the world at this time of the pandemic after a failed adventure for 20 years in "a graveyard for empires."  Biden pointed to the bright spots in 2022- vaccination and testing achievements in the face of anti-vax sentiment with 200 million vaccinated, the job creation in the economy with unemployment way down and wage increases by employers, and the $1 trillion in infrastructure spending tackling much needed projects state by state with immediate impact. Rarely has a president faced so many challenges in the first year as Biden pointed out- vaccination drive in the face of the Delta variant and anti-vax sentiment, the Ukraine crisis with a president Truman period like event of the Berlin Wall coming up just potentially around the corner, and efforts to tackle problems left untackled for a generation in infrastructure, for working families and climate change. Scoring on infrastructure spending, one of the three, with the other two for working families and climate change to be tackled in the remaining three years and beyond.  Biden also told the American audience at the press conference that he was reminded of what his father used to tell him- that if all goals are equally important, nothing is important. In saying this he said help for working families through child tax credit, child care assistance, community college education funding, health care costs, climate change investment were priorities for his administration that would be tackled step by step. And he pointed out from the outset of the conference that only one or two senators were blocking the party's plan for children and working families. All 48 other senators were united in the Democratic party behind his plans for workers and families. As were 5 Republican senators who he said he would not disclose because of confidentiality. In that sense president Biden already has the majority he needs in Congress. This is not happening because of the peculiar situation of the 2016 and 2020 elections in the US and also in Europe- the historical problem of administrations of Democrats in US, Social Democrats in Germany, and Labor in Britain having give up on their working class families and middle class roots. Tech revolution and internet has further complicated the situation with economic changes, tech companies not paying taxes normally due, and tech workers shifting to Democrats yet living in a world distant from working class families fracturing social cohesion. This is changing in Germany with Scholz in Germany with the help of the Greens determined to restore the dignity of working class families, for Biden with a similar coalition, and a process underway in Britain as Labor returns to its roots. In essence Biden was saying- the process of unwinding decades of unwise policy that hurt America as a nation and leader of the free world would take time, requiring a patient step by step approach. To bring America closer to its own roots and Jefferson's immortal words of "all men are created equal and endowed by their Creator with certain unalienable Rights, and among these are Life, Liberty, and the pursuit of Happiness." Jefferson went on to say in the Declaration that when government becomes destructive of these ends it is the Right of the People to alter it.   ...

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The U.S. birthrate edged up slightly for the first time since the recession of 2008 led American families of childbearing age to defer having children. There were 62.9 births for every 1000 women of childbearing age in 2014, increasing from 62.5 in 2013, according to the Centers for Disease Control and Prevention. The total fertility rate also increased slightly to 1.862 children in 2014 from 1.858 in 2013. This is below the rate of 2.1 children a woman would have over her lifetime to keep population at the same level, without immigration. Kenneth Johnson, a demographer at the University of New Hampshire, estimates about 2.3 million more births if the 2008 recession had not led women to defer having babies. In 2014 U.S. births increased 1.4% to 3.99 million children from 3.93 million in 2013. Women over 30 and better educated are showing a larger increase in births.

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Mexican president Lopez Obrador overhauled the way the Mexican government buys pharmaceutical supplies to avoid being overcharged by suppliers. This has led to some shortages.The government says this has led to significant savings. It says the government paid out 58% more for medicines and acquired 38% less in medical supplies under the previous arrangements. The Mexican government first handed purchases of all drugs to the Finance Ministry and then in mid 2020 to a UN agency, the UN Office for Project Services which will handle purchases till 2024. 

The UN agency says it secured 97% of the supplies but only 44% of the medicine has reached hospitals across Mexico, according to Insabi the agency set up by president Lobrador to provide access to medical care to people without social security. This is because of logistical problems.

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US president Trump appointed Powell in 2016 in his first year in office. DJT's advisers have told him that it is important that the Fed have autonomy, and that the Fed was structured from inception for having the independent judgement for what is best for the economy. At times DJT has wanted the Fed in his first term to at least consult with the president.

In this context remember that Powell as chair of the Fed will be till May 2026. And Powell will remain as Governor on the Fed Board till Jan 2028. Of the current 7 governors the only other terms of a Fed Governor that expires early is Adriana Kugler in 2026.

DJT tariff and tax policies could increase inflation and growth which will require the Fed to recalibrate its views on cutting rates. 

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Glenn Kessler goes over the numbers cited by Romney and Obama and finds distortions on both sides. Which leaves voters with going by the records of Romney as governor of Massachusetts and Obama as president during 2004-2008, and their clearly stated policy committments on how they would approach healthcare, Medicare, Social Security, unemployment, incomes, and other issues uppermost on the minds of American voters.

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The Nebraska Supreme Court reverses a lower court ruling clearing a hurdle for construction of the Keystone pipeline. At about the same time the U.S. House of Representatives voted 266 to 153 in Jan. 2014 to pass a bill approving the project. It will pass a Senate vote. President Obama says he will veto the bill. The pressure clearly increases on Obama to approve the pipeline.