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Daisy Maxey of the WSJ talks to 3 financial advisers during Dec. 2014 about how investors should approach stock market volatility, the U.S. Federal Reserve's plan to raise interest rates, and tax issues in 2015. The advisers say investors should not let the volatility affect a steady long term investing strategy. Joel Isaacson says he prefers high-dividend paying stocks over the 10 year U.S.Treasury bonds because of the lack of much upside in bonds. He adds that taking extra risks on high yield bonds is not warranted. The advisers refer to opportunities in areas which are not doing well in 2014 such as in Europe. On tax issues having some money in Roth IRA's is suggested, to have money in tax deferred as well as tax free accounts. Annuities depend on individual situations.

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Barley says Greece's debt buyback plan in Dec. 2012 is attractive for private investors. Earlier some private investors had bought Greek debt at 10-15% of face value. Greece now has 10 billion euros, including 0.5 billion for accrued interest to buy back Greek bonds at 32.1- 34.1% of face value. This should help Greece retire 28 billion euros face value in Greek debt, reducing the debt burden by 18 billion euros The IMF had pushed hard in negotiations for reducing Greek debt as a percentage of GDP by 2020 to levels where it could again access private markets. This is critical to making the Greece bailout work. Nomura estimates this will reduce Greece's debt by about 10% of GDP by 2020. Every little bit helps in Greece's struggle to recover financial stability.

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China's cooperation agreement with the Maldives islands, and construction projects including a Friendhsip bridge from the capital Male to another island are leading to rivalry between China and India, the U.S. The Maldives are seen as part of the maritime corridor for China to the Middle East. The location makes the Maldives useful for China's Belt and Road Initiative. President Jinping visited the Maldives in 2014.

Debt financing by China is seen as leading to Sri Lanka turning over the port of Hambantota to China after Sri Lanka could not pay back the loans.U.S. Secretary of State Tillerson says infrastructure financing can lead to unsustainable debt leading to loss of sovereignty for small nations.

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The pound falls in value to $1.30 as Mr. Boris Johnson rejects the requirement stated by Mr. Macron of France that Britain must follow EU rules. Mr. Johnson says Britain  will choose sovereignty over anything else, creating the possibility of a hard Brexit. He says the UK should not be expected to follow EU rules, anymore than the EU should be expected to follow UK rules. Business leaders hope these are opening statements only. 

Mr. Johnson want a Canada style agreement or failing this an Australia style agreement, and failing this he would stay with the existing Withdrawal Agreement with the EU he negotiated earlier. The UK wants to complete negotiations for a deal by December 31, 2020.

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CEO John Chen's srategy in 2014 is to get more revenues from the higher margin mobile security business and with software service sales. As software service sales are uncertain, and with the threat from Apple in mobile security features, Chen is also introducing the Passport phone with features such as better reading of text for business users. Chen proved his turnaround expertise at Sybase with small targeted acquisitions and he is seen as using these skills at Blackberry. His plan is to breakeven on cashflow by 2015. Samsung and Apple have taken away most of the consumer market from Blackberry and what little remains is in emerging markets. Chen showed a small quarterly profit to send Blackberry shares up. Shares are now at $10.89 increasing 68% after Chen assumed the CEO position in November 2013.

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Obama's State of the Union address in 2014 focusses on increasing the minimum wage, reducing inequality and creating opportunities for the middle class. It marks a shift to doing things by executive order wherever possible to avoid protracted debates and delays by Congress.

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Yahoo CEO Mayer defends the progress made by the company especially in getting mobile users to the site. About 400 million users accessed the site on smartphones and tablets in Jan 2014, about half its users. Ad revenues are in steady decline.

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The yuan drops further as the PBOC intervenes in currency markets by buying dollars as part of its effort to create a 2% trading range for the yuan. It is down 1.5% since the beginning of 2014, ending at 6.1450 per dollar.

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Puerto Rico Electric Power Authority's longer term bonds trade at about 40 cents to the dollar in 2014. The utility struggled to make a bond payment, and has $9 billion in debt. Utility rates for customers are about twice that in the U.S.

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The Glasgow COP26 summit could be the beginning of a new era for mankind as the city that started the industrial revolution in Britain takes the world on a turn into a new era of ecologically conscious living. This BBC report looks at changes we should be experiencing in 2022 to 2030. Electric cars that take the place of current automobiles, increasing use of construction materials other than cement and concrete, use of solar and wind energy. From a mental health standpoint lifestyles built around walking and cycling, more forested areas and green spaces in and around cities, cleaner air, quieter cities, food choices and agricultural choices made around health and better ecology. Personal investments, corporate investments and pensions of $139 trillion invested in a way that cuts carbon emissions. Governments and private citizens enabling transparency and regulation, weekly monitoring on matters relating to emissions in one's own neighborhoods and local region.  ...

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About a third of coronavirus cases in France of three or more cases are in schools and universities as France tackles a second wave in October 2020. France has decided to keep schools open as a priority over closing schools as soon as there a couple of cases and there are no uniform rules across schools for masks to be worn. In France mask requirement begins in junior high with exceptions for lunch and gym class. In Italy the mask requirement is present for all grades until they take seats in class. Some schools ask children to keep masks on in the classroom. UK has no mask requirement in schools. Spain requires masks for all school children over age 6 years. Parents in lower income households lack the flexibility to keep children home while they go out to work. Many parents look forward to keeping their children in school after the long lockdown.

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Savings for China and Japan by increasing oil imports at low prices could amount to about 1% of the economy for each country. Japan imports of oil are one tenth of total imports, and amount to $75 billion. At prices half of what they were before coronavirus the savings are about $40 billion a year. This will offset some of the drop in economic growth of about 3% in the year ending March 2021.

For countries where the coronavirus has been relatively controlled with manufacturing and infrastructure projects ready to go ahead the benefit is greatest. China expects to see about 7% decline in GDP in the first quarter resulting in minimal growth for the year as long as export markets in the U.S. and Europe remain weak. For India it depends on how long the lockdown continues and how quickly economic activity can resume under new conditions. 

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The University of Washington Institute of Health Metrics and Evaluation has doubled its forecast of coronavirus deaths in the U.S. to 135,000, about twice what it is today at 69,000, by early August 2020. This is based on the assumption that with reopening the economy and return to actively operating in offices and shops, in construction and factories, the social distancing will be relaxed. Factors such as rising temperatures are not seen as offsetting the increased mobility in reopening. Dr. Fauci, top U.S. infectious disease official said on My 4, that the relaxing of social distancing could get a rebound started considering the coronavirus "phenomenal capabilities of spreading like wildfire." There is concern that the cases may be much higher in Brazil where there is not much testing, even higher than in the U.S. according to one university study. Argentina is a contrast having imposed a lockdown much earlier and has only 246 coronavirus deaths. ...

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Japan's economy minister, Yasutoshi Nishimura, says Japan is suffering an output loss of $300 billion. Japan has recovered halfway from the pandemic. It will take till 2014 to recover fully. In the July to September quarter the Japanese economy grew at an annualized pace of 21%, yet the economy is 6% smaller than in 2019.

The government is preparing an economic stimulus package of $100 billion in new spending. A planned cash give out of $500 a person following a cash give out of $1000 during the first wave of coronavirus is included. The government is planning public works projects to boost the economy, as capital investment has fallen. The second wave of the coronavirus is creating more uncertainty. Prime minister Suga aims to keep the focus on the long term with two key priorities, Japan's digital transition and making Japan carbon neutral by 2050.

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The Oxford second generation vaccine is being developed to handle several strains of the mutating virus at the same time. The Oxford team developing the vaccine is following what the vaccine is doing, in the way it is mutating, to develop the new vaccine.

The Oxford vaccine uses a virus that has been modified to contain a piece of genetic code from the coronavirus. When injected it causes human cells to produce the coronavirus spike protein, which the immune system learns to recognize. A single vaccine would contain different lines of benign virus, each containing the genetic code for the spike protein of a different variant so that the immune system can recognize several mutated coronavirus strains at the same time. This is also how the flu vaccine works. 

Quick regulatory approval is expected with much smaller trials that would be followed by immunization shots given in September 2021 when winter arrives.

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The Oxford vaccine manufactured and distributed by Astra Zeneca faced manufacturing problems in 2020. The company is fixing these manufacturing problems and plans to meet demand from Britain, the European Union, and the rest of the world. It plans to double vaccine monthly production to 200 million doses monthly by April. CEO Pascal Soriot says "Is it perfect? No, it's not perfect, but it's great, and tell me who else is making 100 million doses in February?" The Oxford vaccine has shown strong protection against severe coronavirus symptoms and is important in the fight against the pandemic. To tackle variants of the coronavirus the company plans to have another jab developed by autumn this year.

Britain and India are depending on Oxford vaccine to vaccinate large parts of the population. India has a second vaccine developed by Indian scientists at Bharat Biotech that is also in use.

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Only about a third of the people in southeast Asia are fully vaccinated compared to 58% in the US. With growing inequality and a slowdown in production the supply chain in this region is hit hard. The region includes Malaysia, Vietnam, Philippines, Thailand and Indonesia. This region's growth rate is cut from 4.4% in April to 2.5% for 2021 by the World Bank. Manila based Asian Development Bank forecast is for 3.1% growth as coronavirus outbreaks lead to major lockdowns. This happened in Malaysia, Cambodia, and Indonesia. It has also worsened the global supply chain disruptions from clothes to cars and commodities.

As supply chains are restructured, and western countries increase manufacturing at home to avoid higher shipping costs, uncertainty of far flung supply chains, production is likely to decline.

World Bank sees 24 million more people below the poverty line in Asia this year than projected earlier.

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NYT Shanghai bureau chief Alexandra Stevenson sends this report on the magnitude of the problems facing Country Garden, China's largest housing developer, Country Garden has $200 billion in unpaid bills, has missed interest payments on debt. It lost $7.6 billion in the last 6 months. A million apartments remain unfinished. The government's first concern is that buyers are made whole, it is less committed to housing as a driver of economic growth. And the numbers are just way too large for the government to tackle. By one estimate the unpaid bills goes as high as $370 billion in unpaid bills. What happens to all those construction workers, carpenters and other workers who remain unpaid. Country Garden follows failure of Evergrande another huge Chinese real estate developer in 2021. Experts say even if people buy Country Garden's apartments the losses are too large to make up.

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For two decades young computer specialists in their 30's have tried to say the right things to the American people to gain approval- with AI this is where it all ends. Watching Murthi and Altman on Stern's interview in WSJ one senses a lack of awareness that this is too big a technology to be handled by a few computerized work  specialists. Murthi says the right things with a faltering conviction, Altman lacks conviction, yet both cannot take on the responsibilities for AI on their shoulders. The chief technology officer of OpenAI takes over role of Interim CEO with the departure of Sam Altman. She graduated from the Thayer School of Engineering at Dartmouth. She worked at Tesla before joining OpenAI. Murthi was in charge of Operations, managing the teams that delivered ChatGPT product in 2022, and handling the relationship with Microsoft which invested $13 billion for a 49% stake in OpenAI.

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The U.S. government has said that there is enough evidence to start an investigation on the matter of imports of tart cherries from Turkey. Tart cherries are popular in agriculture near Traverse City, Michigan on the Great Lakes. About 300 million pounds were priced at revenue of $106 million in 2014 and today are priced lower to bring in $56 million. Prices dropped in 2019 from 2018 by over 30% with subsidized Turkish agricultural exports. After years of difficulty getting government to listen U.S. producers can bring fair competition issues to Washington D.C. The larger sweet cherry agricultural region is in Washington state with about $600 million for 345,000 tons in cherries. Michigan processors that pit, freeze and dry the tart cherries  normally destroy or freeze a percentage of the crop to maintain a stable selling price. A flood of imports changes price mechanism from operating for farmers.

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Italy is planning to place a quarantine in the north covering the region around Milan and 11 provinces nearby, in a draft decree from the prime minister's office, says this report in the WSJ. When a final decision is made the quarantine would go into effect March 8 and go on till April 3, 2020. This move is similar to the quarantine steps taken in China which helped limit the health crisis in China from coronavirus. The new decree also includes tight restrictions on travel in the affected areas. 

The new action is being taken as earlier measures have not limited the spread of coronavirus. They were requested by the government in Lombardy, which combined with Emilia Romagna and Veneto are the worst hit of the regions in northern Italy with about 85% of cases. It also means the industrial economy with 40% of GDP is affected.

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China is gradually getting back to normal. With few new infections from coronavirus, factories are starting production again, and stores are reopening, people gradually coming outdoors.

For factories there is one problem- as Europe and the U.S. battle the coronavirus and impose their own lockdowns demand has evaporated. Factories are seeing canceled orders and having to operate with smaller number of workers.

All the graphs shown in this report for Beijing traffic congestion, Guangzhou subway rides and property transactions show the curves for 2020 way, way below the curves for 2019.

This also gives some idea of what the road ahead will look like in the U.S. and Europe. That the recovery will take time and patience after a difficult period ahead tackling the coronavirus state by state. Lost jobs, diminished confidence and fallen income will take time to recover.

 

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Global update on the pandemic April 7, 2020. The U.S. has 368,000 confirmed infections, and over 10,000 deaths, as of April 6, based on John Hopkins University data.

Japanese prime minister Shinzo Abe issued an order for a month long state of emergency covering Tokyo, Osaka and five other prefectures.

Philippine president Duterte extended the quarantine for Luzon island to April 30.

The lockdown was placed on Wuhan, China, epicenter of the pandemic on January 23. On March 25 about 2 months later some travel restrictions were lifted. On April 6 trains were allowed to leave for several cities in China. 

Countries in Europe that stepped in early with restrictions such as Denmark and Czech Republic moved to ease them a bit. Czech Republic and Austria will require people to wear masks outside.

 

 

 

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Lee Jae-myung of the Democratic Party wins election for president in South Korea 2025- 49% to 41% for Kim Moon-soo for the conservative candidate. South Korea's election was the result of the ouster of conservative president Yoon, who was a former prosecutor who split South Korean politics with a hardline stance and was ousted recently. Lee is a factory woker who seeks to keep South Korea firmly with the US in Asia, yet also seeks to balance this with good realtions with key trading partner China.

Biden invited Yoon to the White House as he sought to bring South Korea and Japan as firm partners in the Asia Pacific only to see Yoon ousted over losing support within his own conservative party for conspiracy theories and declaring martial law, lack of flexibility. The election of Lee offers an opportunity to bring South Korea back to moderation and unity in its internal affairs.

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Under the Deferred Action for Childhood Arrivals (DACA) executive order of 2012, a group of immigrants brought to the country as children can have temporary status to stay and work in the U.S. In 2012 this was restricted to children brought in under the age of 16, with a maximum age of 30. The program was called "Dreamers." Under president Obama's executive order this will be changed to children brought in under the age of 18, with no maximum age. The number of immigrants goes up from 1.2 million in 2012 to 1.9 million with this particular change in 2014. A new group of parents of children who are citizens or legal residents residing in the U.S. for more than 5 years adds another 3.3 million to this number, with an additional 100,000 for parents of Dreamers. The total 1.9 million children and 3.4 million parents would be 5.3 million given new status to stay and work in the U.S. The 5.3 million will not be eligible for subsidies and for the Affordable Healthcare Act assistance. All will be required to pass security checks. This leaves about 6 million, including farm workers and other undocumented or illegal immigrants not touched by the new executive order. President Obama is expected to make the announcement of the executive order on Nov. 20, 2014, in Nevada, a state with a large Hispanic population. On the question of legal authority for the executive order, Prof. Stephen Yale-Loehr, an expert on immigration law at Cornell says the U.S. president does have broad authority to decide which group should get a reprieve from deportations. The decision to exclude benefits of government subsidies and subsidized healthcare was made to appeal to increased support of the American public for the executive order. ...