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Wall Street Journal Original article ›
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Axel Friedrich, a top German Environmental Agency regulator who advocates using modifications of existing vehicles as a more effective solution to the auto emissions problem. He recently reconfigured the VW Golf to show that by making changes- such as lighter seating and weight saving hood other steps to reduce the car's weight, low resistance tires, and engines that turn off when stopped and start when accelerator is pressed, more efficient gear ratios, removing the mirrors and substituting tiny cameras, and improving the aerodynamics- emissions can be cut 25% even with horsepower intact. Working with the Institute of Automotive Engineering at RWTH University in Aachen, Germany, Axel redesigned the Golf in this way to achieve a CO2 emissions reduction from 172 grams per kilometer to 131 grams and is working to bring it to 120 grams. 120 grams per kilometer is the EU's tentative target for emissions for cars sold in the region by 2012. Automakers have for years complained that this would be difficult to do in this manner because customers were concerned about safety and comfort. Its not clear that this would affect safety. However with global warming a big issue in Europe, most automakers are making changes now to prepare for a shift to 120 grams per kilometer in emissions. VW has announced a diesel version of the gasoline version that incorporates some of the redesign changes that Axel Friedrich made on his Golf, such as low resistance tires, and more efficient gear ratios, lower chassis for improved aerodynamics etc. This diesel version costs a base price of euros 20,615, and is only euros 315 mor than a standard diesel Golf. BMW has a new diesel version of its 1-Series with low resistance tiresand a gearshift indicator, which emits 16% less CO2 and costs nearly same as its predecessor. At Frankfurt Auto Show Mercedes Mercedes is expected to announce more cars with stop start systems. All this will help automakers in Germany achieve the EU 2008 target of 140 grams of CO2 emissions by 2008 on the way to the 2012 EU target of 120 grams. ...
CNN Original article ›
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In paying respects to the those injured in the attack by a Afghan asylum seeker in Munich on Feb 13 2025 Vance said at the Munich Security conference -“No voter on this continent went to the ballot box to open the floodgates to millions of unvetted immigrants.” It was a speech that raised serious questions about European politicians and parties excluding voices that warned about a decade of illegal migration which has taken Europe and also the US to the point that a fifth of the population is from outside the country. It is not that Northern Europe has adopted this approach. Denmark's Mette Frederiksen of the Socialist Party and before that Boris Johnson and now Keir Starmer parties on both the opposite Conservative and Labour sides have opposed human trafficking gangs and mass migration into their countries.  JD Vance said of Germany shutting down other voices on migration's ill effects on public safety and public services, on the cultural framework itself of their country, as pernicious. "Democracy rests on the sacred principle that the voice of the people matters... There's no room for firewalls. You either uphold the principle or you don't." DJT calls the speech "brilliant" and "well received." “And I think it’s true, in Europe, they’re losing their wonderful right of freedom of speech. Europe has to be careful it has a big immigration problem.” ...
Wall Street Journal Original article ›
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The Europeans led by France and Germany demand stricter regulation and a financial regulatory system that oversees the entire financial system, and oversees all the larger countries. The US in contrast wants to see a lighter regulatory system, and lighter regulation of parts of the financial system like hedge funds. For the USA where the crisis originated, the emphasis is on larger stimulus spending. For the Europeans which have a larger safety net that they would like to see considered as part of their stimulus- and their social arrangement such as reduced hours in Germany to avoid layoffs, and the presence of a large public sector in France that is about 52% of GDP- the situation as they see it does not require breaking the EU's committment to control large deficits. The cultural and historical roots are also different. Germany was hit by hyperinflation in the period between the two wars, and there is thought there that this helped the rise of demagogic leaders and the collapse of democracy there. At that time the issue was war reparations that Germany found difficult to absorb in an economy devastated by the first war, which strained German finances. France and Germany also have no foreclosure crisis, and car sales and consumer spending are not in the deep decline that is seen in the USA. In fact car sales have increased in the two countries with the refunds for scrapping old vehicles, with no such plan in place in the USA. Making there is a credible position on the European side. Germany does see itself hit by the collapse in international trade. Germany and France face the prospect of helping their banking systems deal with the large bad loan situation facing them in Eastern Europe. At the same time Germany and France want to save some firepower for coming to the aid of key parts of the European community like Spain, Greece, and Ireland, which are facing a worsening crisis. In short both sides have credible positions, and some form of accomodation as events unfold may be a better desired outcome than some unified outcome. And little has been said of the position of the other countries in the G20, the emerging countries like Brazil, India, China, Russia, Indonesia, Argentina and others, and the position of the World Bank speaking for the poorest countries. These countries may favor stronger stimulus, and would favor the stricter regulation and supervision of global financial systems favored by the Europeans. This is because they may rightly feel that the messups in the global financial system have stolen their chance, at just the point where they were turning the corner in their efforts at bringing better standards of living to their peoples....
BusinessWeek Original article ›
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Public opinion in France is divided about France's dependence on nuclear power. Ifop's survey of Nov. 13, 2011, shows 40% of the French are now "hesitant" about nuclear power, about 33% favor nuclear power and 17% are against it. About two-thirds of the ruling UMP party of Nicholas Sarkozy supports nuclear power, while half of the Socialist party supporters say they are not sure about the path ahead. The issue is becoming important in the election, as the UMP claims the Socialist party's proposal to shut down 24 of the 58 reactors if elected will cost thousands of jobs and solar power cannot take its place overnight. The French are a bit puzzled by the nuclear issue in contrast to Germany where the issue arouses strong emotions, because nuclear energy had become accepted in France till the Fukushima nuclear disaster raised safety issues. EDF which operates the plants plans to increase spending on safety measures and on maintenance after audits by the French nuclear regulator. EDF's share price was down 40% since the nuclear accident at Fukushima, Japan....
The Guardian Original article ›
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As with so much in life too much of anything is bad. Obsession for dealing with inequality without grasping the potential of new technology and people with skills, has hurt both China and India, with both moving to correct this in the last 20 years. Allowing too much inequality disturbs the balance in society damaging democratic processes and creating new dangers for democratic processes.  Today Piketty, and other Western and Asian leaders are presenting the argument for fairer societies principally because this is the only way to generate the kind of cycle for growth seen after the second  world war in the 1940's, 1950's and 1960's  following FDR and Truman, De Gaulle and Adenauer. At some point the curve for growth simply drops with extreme disparities in society- something that happened with disastrous consequences in the history of China and India in the 1500's and the long descent into colonial or semi-colonial rule. That pattern is documented in Adam Smith's Wealth of Nations. And it is a drop no nation or society would want to repeat because of the immense suffering, and the decline of Asian societies in a social and cultural sense, leading to a closed outlook to science in general and knowledge accumulation behaviours based on scientific observation of Nature over the course of the 17th to 19th century.  Some traces of this in the early stages are evident in the US and Europe which is why all well meaning people and people of goodwill for their countries seek a way out of this endless fracturing, the rural-urban divide, the society blind and morally neutral views of tech, and the starving of resources which benefit the broad segments of society for infrastructure, health and education through the misallocation of resources to other places. In the long run what is important is not the long theories which can fail, but to "Just Do," follow good common sense, do the right thing as Modi has done for women in essentials such as water, toilets, cooking gas, digital bank accounts, dignity, safety, access to education. And what Xi is attempting to do for Common Prosperity in China. And what Biden and Scholz are setting out to do in the US and Germany. ...
The New York Times Original article ›
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Hubbard and Erdbrink report on U.S. president Trump's visit to Saudi Arabia to begin a new chapter in relations with the Gulf nations and the Saudis. Under president Obama the U.S. distanced itself from the Saudis and the Gulf nations, preferring to pursue a policy of closer relations with Iran and signing the Iran nuclear deal. This included a policy of staying out of Syria to the point of turning down a decision to deploy U.S. airpower to maintain no-fly zones to protect refugees. Syrian government forces fighting rebels were supported by Iran. The new policy is dictated by the new conditions in the Middle East. The U.S. has sought since the presidency of Reagan to balance the power relations in the region. With the nuclear deal signed and Iran respecting the deal according to independent reports, the U.S. allied with Iran in the battle against Islamic State in Iraq,  a shift was needed to balance the support provided to Iran by Russia which worsened the refugee crisis in Syria. The Republican party and Mr. Trump were critical of the Obama Iran policy during the nuclear deal negotiations. The safety of Israel is also a factor as non-state actors were supported by Iran threatening Israeli security. For these reasons the shift is an effort to rebalance the relations in the region. The arms deal in its size and president Trump's statement that Iran had "fueled the fires of sectarian conflict and terror," can be seen as this rebalancing. A business aspect of the large arms deal is that it will promote job growth in the defense industry in the U.S.. Other countries including Germany have seen growth in their defense industry. This is not the best way forward for the Middle East, yet it is a way the U.S. and nations in the region are adjusting to realities- the collapse of the Arab Spring from within and without the help from outside, the sectarian conflict arising from the Shiite pushback from Iran following the Baathist and Sunni control of Iraq which collapsed with the U.S.invasion, where the majority of people are Shiite yet with a strong Sunni presence. Elections brought Shiites in power, leading to a Sunni response in the form of Islami State caliphate move into Mosul, Iraq's second largest city after Baghdad. A decade of conflict and the efforts by the Bush administration ended in failure and sectarian conflict, resulting in the U.S. policy of rebalancing in favor of Iran to negotiate the nuclear deal. In this sense the arms deal does not solve anything. A similar rebalancing under Reagan by arming one side, followed by arming the other, led to involvement with ground forces under president Bush. It only leaves the region poor after years of sanctions against Iran to the point where a NYT reporter was not sure whether it was safe to fly from Tehran to Mashad with Iran Air because of the lack of spare parts for the airline. War torn, with millions of refugees in Syria and Iraq, the region remains broken in many ways, waiting for a sensible non sectarian view to prevail in the interest of the people in the region. The election of Rouhani in Iran by 57% of the vote is only a sign that young people in the region given a chance would opt for a different course in future. The rest of Asia has moved forward and shows a path that can be followed. ...
New York Times Original article ›
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The language and tone of the leaders says something about what is likely to be the outcome of the G20 summit. Its a first for significant participation, as countries as diverse as Russia, China, India, Indonesia, Saudi Arabia, and the Netherlands are represented. The credible positions of both sides, the US, UK and Japan, and the European side of France, Germany and the Czech Republic, well presented, provide for some serious discussion and negotiations. France's Sarkozy and Germany's Merkel want to see a global regulator that would reach inside the borders of the US with stricter regulation. Sarkozy calls this "nonnegotiable." And he said that he would reject an agreement that puts off stringent new regulations on banks, tax havens, and hedge funds. He said "the compromise has to come from all countries around the world." US President Obama said that if there is going to be renewed growth it can't just be the US as the engine, everybody is going to have to pick up the pace," at the same time saying that the US had to be concerned about its own deficits. The fact is that the US stimulus will mostly help a severely impacted domestic economy recover with social safey net payments to local and state governments and unemployment insurance, as well as targeted investments in infrastructure, education, energy and health care. It will not mean anywhere near the kinds of imports the US made from other countries, especially China. And Obama made that clear when he said the US will never return to that situation, where the US had become a "voracious consumer market." For the Germans the major market for their middle companies is China, and China has its own stimulus spending on infrastructure spending, which should provide for continued imports of machinery from Germany at a much lower level. Thus Germany and France see a strong tendency to call the source of the crisis and repeat that call till the US listens, and refer to the failure of free market capitalism in its unregulated form. And to insist on fixing it through a global regulator with strict and systemwide rules. So you hear this in Merkel's words, "the foundation for this finacial architecture must be laid now, that is why we seem to be so tough." While the vivacious Sarkozy talks of compromise, and a US gesture in regulation in return for Franc's gesture of joining NATO, the mild mannered Merkel is clear and focussed about her concern. She rejects the idea of linking stimulus spending demands of the Anglo-Americans with the Franco-German demands for global systemwide regulation. "This is not a bargaining chip," she says. The media may mistakenly report lack of consensus as a failure of the summit. But in the long run in the presence of good positions on both sides, it could lead to some tough negotiations even if continued at another meeting. And result in something serious, credible and lasting in its impact, rather than something that was easy and did not in Andy Grove's useful words involve "constructive confrontation." ...
Wall Street Journal Original article ›
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Elsa Fornero is an economics professor who is Labor Minister in the government of Mario Monti. After several decades Italy has finally tackled the much needed changes to the 1970 Workers' Charter that forms the basis of Italy's labor laws. The Charter protected workers jobs but was designed during a different period and had long since lost its relevance in a modern economy. The laws led to Italy losing its competitiveness and entrenched small family firms in the economy. The new labor law protects the individual instead of jobs, by increasing the safety net to cover unemployed workers for shorter periods and lower benefits, and makes it possible for firms to layoff employees for economic reasons. Fornero says Italians need to recognize that work is not a right to be enshrined in laws but something that is earned through hard work. Article 18 of the Worker's Charter was originally intended to remove discriminatory practices in the workplace, but was enlarged to provide blanket protections to workers so that companies could not fire workers and avoided hiring. Under the new law discrimination is illegal, but now companies can layoff employees for economc reasons and not face long legal disputes and be forced to rehire the workers. The new law will increase productivity says Marcello Giustiniani, a labor specialist at Milan law firm Nonelli, Erede & Pappalardo. Italy's productivity gap with Germany has widened to over 30% since the introduction of the euro. The ASPI, new unemployment insurance plan, goes into effect in 2013, older programs will be phased out by 2017, giving time for the culture change in Italy for workers and business. Another major change is designed to help 2 million workers earning less than 18,000 euros. Businesses will have to give these workers proper contracts. Fornero's effort to tackle the pension system also includes linking retirement checks to how much is contributed over the lifetime- a practice common in other countries- not the final and highest salary. This simple change was not not implemented by 10 governments since a law was passed in 1995, showing why the Monti government was needed to get things done....
The Times Original article ›
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This report in The Times shows the need to counter misinformation in parts of the media about vaccines. Inadvertently or through a poor comprehension of the data, German media reports in Handelsblatt and the Bild have stated that vaccine effectiveness for older people is 8%. Here in The Times of London, Oxford University and Astra Zeneca point out that the 8% figure is for the number of people in the trials who were given the vaccine in the age group 56-70 years. This does not refer to how effective the vaccines were in older people.  The first dose increases monoclonal antibodies for people of all ages, say Astra Zeneca and Oxford. We are now beyond trials in a sense today as Israel has vaccinated large parts of the population and the UK, India are vaccinating millions of British and Indian citizens. Israeli reports from one of the major medical centres show that the second dose increases monoclonal antibodies by multiple times and provides effective protection. As British data is available from medical research institutions from the vaccination drive in Britain, and from India, the effectiveness of the vaccines used in Britain and India will be shown more clearly. India today has used a package with near 100% compliance to tackle the virus relatively effectively by combining safety protocols (masks+ social distancing+ hygiene) with nutritional, medicinal protocols, restricted overseas flights. Cases are down to 13,000 for 1.2 billion people, with positivity rate in testing down to 1.66%. One readers comment in The Times says a lot- She says her 79 year old Irish mother was given the vaccine today in Coventry, England. She was given the Astra Zeneca Oxford vaccine jab by a British Asian doctor who took the time to talk to her, and listened to her and thanked her for her service as a midwife for 40 years. That these few minutes were the happiest time in 10 months for her mother. It also showed she says the very best of this country.   ...
BusinessWeek Original article ›
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Efforts to save the VW brand in North America as it faces disappointing sales. It lost $1 billion in North America for each of the last 3 years. VW faces perception issues among customers in the USA who read JD Powers surveys. The surveys show VW in the bottom 20% for reliability, quality and service. Its younger customer base does online shopping and compares models and this led to sales declining from 338,00 to 235,000 in 2006. Now Jacoby, an accountant by training, who headed VW global sales and marketing and boosted market share from 18.1% to 20.3% in European car sales, has been given charge of the American operation to get VW to breakeven n North America by 2009. Previous ad campaigns showing VW safety in car crashes and Helg a German dominatrix failed to stir up much interest in Jetta and Passat models.
Wall Street Journal Original article ›
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As exports and manufacturing decline, China is continuing to maintain high rates of fixed asset investment with the focus now away from factory construction to infastructure like roads, bridges and rails. The National BUreau of Statistics reported that urban fixed asset investment expanded 26.5% in Jan-Feb 2009, compared to 26.1% growth rate for 2008. Fixed asset investment was 42% of GDP in 2008, according to JP Morgan strategist Jing Ulrich. Now it could go up higher to 45%. China's growth has been off-balance say experts, now it is becoming even more so. As long as factory construction as fixed asset investment a lot of new jobs were being created in the manufacturing sector, now these jobs are not being created. China's small and mid sized companies that generated about half of the 4.42 trillion GDP, like GenTech of Mr Yu profiled in the other linked article in WSJ, and which created 90% of the new jobs, are now contracting. With smaller private consumption, and the efforts to improve the safety net and provide universal medical care inadequate and coming late, domestic demand will not help balance the economy and boost manufacturing. Private consumption is only 35% of GDP in China, a much lower percentage than India. The comparable figures for the US are 71%, UK 64%, Australia, Canada, France, Germany and Japan 57%. The balance is now heavily skewed towards government spending. Investment spending from HongKong and Taiwan, the home bases of industrialists with made for export industries inceased investment by 1% in Jan-Feb of 2009 from the year earlier, compared to 17% growth in all of 2008. And foriegn funded companies have comparable figures of 2% for Jan-Feb 2009 compared to 15% growth in all of 2008. Real estate investment growth also fell to 1% for Jan-Feb 2009 compared to 21% for all of 2008. In short the other pillars of growth in housing, and investments from Hong Kong, Taiwan and the West are declining. ...
Wall Street Journal Original article ›
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Bondholders and the Greek government are stalled in talks and waiting for Germany and the IMF to come up with the 14.5 billion euros that is due on March 20, 2012. It may suit the bondholders holding out for a higher interest rate in the 4-5% range for the new bonds to be issued at 50% of face value with long term maturities, but is bad for Europe. This Journal editorial points out that this is bad for European taxpayers and points to other steps that can be taken which are being discussed in European circles. One step is for acollective action clause to be inserted for the existing Greek bonds under which all bondholders have to accept losses if two thirds of the bondholders agree to accept losses. To ensure the safety of the Greek banking system Greece would restructure the bonds held by Greek banks so that they continue to be acceptable as collateral with the ECB, and issue new bonds to the ECB with face values, interest rates and maturities matching existing holdings. The idea is to make it possible for Greece to reduce its total debt and its debt servicing costs- which is really the only way out of the crisis. The ECB and Greece would use the collective action clause to restructure the Greek debt to reduce interest and debt servicing costs on new bonds to be issued. The Journal editorial says it should also mean Greece and the ECB are not required to put up the 30 billion euros in up-front cash that was agreed to in a poorly devised agreement in 2011....
Detroit News Original article ›
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The new Ford Focus being unveiled at the Detroit Auto Show in 2009, is a new kind of car for Ford. This is a new kind of effort, a new discipline that Ford CEO Mullaly has advocated from the beginning. Making one car for all markets worldwide. Early on Mullaly told Ford's chairman Bill Ford that Boeing did not have a 737 for Europe and a 737 for the US and a 737 for Asia, why was Ford building a Focus for Europe and a Focus for the USA. In fact before Mullaly the Focus for the USA was a stripped down version of the European Focus and did not make much of an impression. The new Focus will have 80% common parts and 75% of parts from the same suppliers worldwide, so that a Focus made in Germany and the USA will share the same parts as a Focus made in Russia and a Focus made in China. And all of these plants will go into production at about the same time with the new Focus. To accomplish this transformation of Ford for "One Ford" worldwide, which is also on every business card carried by Ford managers, Mullaly appointed Derrick Kuzak as head of global manufacturing. See link for Derrick Kuzak. And the strategy was announced in mid-2008 with the start of retooling of truck factories in Mexico, Kentucky and Michigan, to make small cars designed in Europe for global markets. The task of coming up with one design for a global car was given to Martin Smith, a British designer based in Cologne, Germany. Smith says tastes are converging worldwide with the internet use, and customers are more unified than one would think, and whats emerging is a new kind of global cool if one looks for it. This is what happened when Focus protypes were shown to consumer panels in Europe, the USA and Asia, with a good impression created in all 3 markets. Aligning the US and European tastes was easier, China was a bit harder and the yellow leather interior popular in Shanghai had to be crossed out. Another challenge that had to be met in adisciplined manner was the varying safety rules and emissions around the world. For example European designers liked to have the windshield further forward, and Ford's global small car chief had to tell his engineers to move it back to meet US crumple zone standards. Similiar challenges had to be met in purchasing by global purchasing chief, Tony Brown, with a massive coordination effort needed to be done globally. And plastic trim from Michigan has to fit perfectly with sheet metal stamped in Michigan, and Ford used a virtual manufacturing system that allows the car to be built in cyberspace, and the bugs taken out at that early virtual build stage. The entire change is part of a metamorphosis at Ford, a change of culture and mastering a new discipline in coordinated effort worldwide for "One Ford." One year ago the Wayne Truck plant here in Detroit made the Navigator and the Expedition large vehicles.. With a $550 million investment this plant will make the Ford Focus a year from now. ...
Washington Post Original article ›
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Fuel efficiency rules require average fuel efficiency in the U.S. of 35 mpg by 2016. The debate is now on what to do for 2017 to 2025. New technology such as the P2 systems for hybrids already used in VW, Nissan and Hyundai vehicles makes a 20% increase in fuel efficiency possible. Large investments are being made to bring new technology to bear on increasing fuel efficiency significantly. Government agencies are looking at different scenarios by which the new fuel economy standards beyond 2017-2025 could be set between 47 mpg and 62 mpg. An additional factor is the reduction in greenhouse gas emissions- at 47 mpg the reduction would be 3%, at 62 mpg the reduction would be 6%. Another factor is how much the impact is on the cost of vehicles and reduced cost on gasoline. Here there is a wide range in the numbers for average mpg rules at 62 mpg- with EPA estimates at $2800-$3500 increase in vehicle cost and $5000 savings in fuel cost, Centre for Automotive Research estimates at $9790 increase in vehicle cost. The 62 mpg translates into "real world" actual efficiency of 45 mpg. In April 2011, 17 senators put out a letter of support for the 62 mpg proposal. There is a public value involved in this that is also significant- the reduced dependence on foreign oil means savings in defense expenditures in parts of the Middle East, and an economy that is less impacted by volatility in the price of oil. As this aspect of public value or benefits cannot be quantified easily even though they are significant, this may tend to be lost in the debate and the politics of fuel efficiency. For automakers there is significant marketing value in having a visible and strong presence in fuel efficient vehicles because of perception as forward looking- something that hurt Detroit carmakers in the last decade. During periods of gasoline prices at $5 a gallon this provides carmakers with an extra cushion of safety in securing car sales. Carmakers in one country such as the U.S. also have to worry about what carmakers in other countries such as Japan and Germany are doing- if the standards in the U.S. develop a gap compared to other countries developing advanced fuel efficiency technologies this poses significant risks because of the global nature of the automobile marketplace. See the group "Asleep at the Spigot" for more details on this. Many of these less quantifiable factors do not get the attention they deserve because they are significant from experience but not easily quantified. Throw into this the large unknown of what new technologies not yet developed lie ahead with a burst of effort by one country or another, which bring cost reductions at the same time - and the debate requires as much a good sense of what is the path offering the greatest advantages in years ahead than a pure exercize in numbers. ...
Economist Original article ›
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The crisis of late 2008 and early 2009 in the global economy saw huge stimulus programs, resposible economic management, and rapid recovery by the end of 2009 in developing countries. China put in place a large stimulus program, and in most developing countries, India, Vietnam, Brazil and other countries efforts were made to strengthen the safety net for the poor and to introduce stimulus for creating jobs. India and Indonesis saw the return of ruling party governments and in Brazil Lula da Silva had favorability ratings above 60%. So contrary to earlier fears in late 2008 their was both asense of political stability and asense of confidence in the developing countries. Capital is flowing into these countries and the IIF says that net private capital inflows to developing countries will double in 2010 to $672 billion. Russia which saw capital outflows of $50 billion in the first 9 months saw $20 billon of capital inflows in the fourth quarter of 2009. Half of the 140 million laborers working in Chinese cities returned home in early 2009, a fifth stayed there and another fifth counld not find work when they returned to the cities. But as the stimulus in China kicked in, and infrastructure development surged, (see link to the rail infrastructure spending) by the middle of 2009 jobless ness among rural migrant workers went down to less than 3%. This shows in the Pew Global Attitudes Project wth more than 40% of respondents in India, China and Indonesia saying that they were satisfied with their lives, in China this was 87%. In France, Japan and Britain the share is below 30%. In America 49% of those in the Pew pollingfelt that America should mind its own business internationally, 30 points higher than in 1964. When asked "Are you better off in free markets?" the respondents share fell in 2009 in Germany by 4 points, in Spain by 10 points. Shares rose in India and China, and stayed flat in Brazil and Turkey, so there is no backlash against free markets in developing countries....
Wall Street Journal Original article ›
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France has a large public sector which gives it protection in this crisis from mounting job losses. According to the OECD France had91 public sector jobs for every 1000 peopple compared to 49 for Germany. Public spending is 52.4% of GDP in 2007, compared with 44.4% for the UK, and 37.4% for the USA, according to the OECD. Still the unemployment rate is rising. The unemployment rate was 7.9% in November 2009.
New York Times Original article ›
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Detail about Tata's $2500 car. What it looks like- a jelly bean small in front, larger in the back for aerodynamics, 30-35 horsepower, with bearings good for 45 mph, top speed 75 mph, trunk in front to hold a briefcase and battery, rear mounted engine with continuous variable transmission, a hollowed out steering wheel shaft, engine designed by Bosch 600 to 660 cubic centimetres 35 hp. Tata CEO, Ratan Tata, says in a interview the car will do far better on emissions than today's low end cars, and that the emissions standards were much easier to meet than the crash and safety tests, because of the lightness of the vehicle. Todays lower emissions standards in developing countries makes it easier by not having to use more expensive technologies. Electronic sourcing and internet auctions are used by Tata to a greater degree, 30-40 % of parts sourced this way compared to 10-15% by other larger carmakers. This helps meet the aggressive cost target. On the safety isssue its interesting to note that most of the people buying this car will be millions of motorcycle families and individuals (typically a couple of people can ride an Indian motorcycle). They may be safer in a light car than on a motorcycle. This has to be seen in the particular context of India. Renault-Nissan used the experience of lowcost car engineering techniques and secrets from its Logan car made in Romania and transferred it to its other models. Tata started with a clean sheet of paper, asked the quesion what they really had to have and was there some other way. It was Ratan Tata's dream to build a car in 1 lakh or 100,000 rupees or about $2500. The project had all out backing and tested Indian engineers ingenuity. The Tata effort will be studied by carmakers from around the world. Bosch does not underestimate the value of this business, as the car will target a market of hundreds of millions of people in India and China and developing countries. Ariba a supplier to Toyota, and BMW a supplier to Tata, helped Tata buy parts through electronic sourcing. China's Cherry Automobile company, another pioneer, had an Austrian firm help it design its engine for its small car. Tata worked with German company Bosch on the engine. And both must have used cutting edge technology but with a different goals and specifications to achieve unique tasks....
Wall Street Journal Original article ›
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Japan has coped with its long period of low growth by increasing the temp workforce. Loss of nontraditional workers jobs was 158,000 between October and mid February and accounted for much of the 220,000 jobs lost in the October to January period, according to the Japanese Labor Ministry. During the years that EU countries liberalized their labor markets allowing the hiring of temporary workers. During the 1990's Spain, Italy, Greece began allowing the hiring of temporary workers and workers on shortterm contracts. Germany allowed temporary workers and loosened labor laws earlier in this decade. By 2007 17% of the workers in the EU countries which share the euro were temporary workers. Many of these are young people or immigrants. But the labor laws in the EU for permanent employees remained the same and the worker protections were in place, including unemployment benefits and severance. This helped bring the EU unemployment rate down to 7.2% in 2007 during the upturn years. Now this whole process is going into reverse with the young and immigrants hit hardest. In Germany it costs 11,927 euros to layoff a permanent employee according to the Cologne Institure of Economic Research, and zero for laying off a shortterm employee. Now as the economy deteriorates the shortterm workers are being laid off first in large numbers. BMW has laid off 5000 shortterm workers. And short term contracts usually last only 4.7 months on average in Germany, about 12% of temp workers in Germany get hired as permanent workers. To get full unemployment benefits the workers have to have worked steadily for at least 1 year in Germany. ...
Wall Street Journal Original article ›
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Changes Novartis CEO Daniel Vasella is making in the pharmaceutical business. He has hired Joe Jimenez, who is running Novartis's consumer health care business to be the new pharmaceutical division chief. Jimenez previously worked at packaged goods companies including H.J. Heinz Company. Jimenez is cutting 25% of the jobs at pharmaceutical division's headquarters in Basel to reduce bureaucracy and costs. In March he promoted Trevor Mundel and Andrin Oswald, 2 young executives, to head the drug developmet group which puts drugs through human testing and submits them for regulatory approval. This group had become too bureaucratic and slow to move and take initiative. To improve its functioning Jimenez is organizing it into small teams with each team assigned an experimental drug in Novartis's pipeline. Each team of 8 people including physicians, experts in regulatory affairs and marketing and toxicologists work together to spot potential safety issues early and discuss them with regulators to determine whether to put the drug through expensive clinical trials. Each team takes the responsibility to take its drug to the market. The pharmaceutical unit is also being organized to be more nimble. It solicits health systems early on whether its willing to pay for drugs. And Jimenez has startd 4 pilot projects in tough markets to improve relationships with payers, including the Pacific Northwest where Novartis has offered to train an HMO's nurses in aspects of heart disease. Vasella supports the generics division of Sandoz because the growth is in generics, with generics commanding 60% of the prescription volume in Germany and USA, and sales for generics up 25% this year in the generics division. And Novartis paid $39 billion for Alcon, a eye care company. Its also working aggressively in the vaccines business, which like generics enjoys double digit growth. ...
New York Times Original article ›
LyrArc Article Gist
The Ethics Commission appointed by Chancellor Merkel following the nuclear disaster in Japan has recommended that the German government close all of its nuclear plants by 2021. Merkel said that Germany will end its dependence on nuclear energy and use nuclear as a bridge technology till other sorces are developed. Germany gets 22.6% of its electricity from nuclear energy, according to the Energy Ministry. It has 17 reactors, six of the boiling water type, a design used at Fukushima, and 11 using pressurized water. A former Environment minister, Klaus Topfer, heads the panel, with the other 22 panel members draw from the energy industry and nongovernmental organizations. While recommending closing the plants "to eliminate risks," the panel said it would also boost the German economy. It said "a withdrawal from nuclear power will spur growth, offer enormous technical, economic and social opportunities to position Germany even further as an exporter of sustainable products and services." Germany has already moved ahead in developing wind and solar energy sources, and is developing leading edge technologies and capabilities in the area of environment friendly alternative energies. Wind and solar energy and renewable sources already meet 16.5% of Germany's needs. Italy and Switzerland said they would not develop new reactors after the Fukushima nuclear reactor meltdown. Only Germany with its strong environmental consciousness across all parties is making a decisive break with nuclear energy. ...
New York Times Original article ›
LyrArc Article Gist
The inflation rate in the eurozone showed a decline of 0.2% in December 2014, showing the first signs of deflation. This is the first sign of deflation since 2009. The unemployment rate for the eurozone remained at 11.5% in November, with the rate in Germany improving to 6.4% in Dec. from 6.5% in Nov., but unemployment reaching 13.4% in Italy. Dutch finance minister Jeroen Dijsselbloem, points to low energy prices, and core inflation data showing that excluding energy and food prices the core inflation rate increased to 0.8% in Dec. 2014 compared to 0.7% in November 2014.
Wall Street Journal Original article ›
LyrArc Article Gist
The Nuclear Safety Commission of Japan, one of two safety regulators in Japan, met in October 2010. At that meeting a presentation by Takanori Tanaka, head of the government supported Nuclear Power Engineering Center, advocated new technologies that would reduce risk in the event of earthquakes and tsunamis. The presentation focussed on new plants and did not go into retrofitting old plants with new backup solutions for cooling in the event of electrical failure. A recent article by Hitachi researchers brought up the idea of isolation condensers which could provide temporary power supplies in the event of electrical failure. One such device was on No. 1 reactor at Fukushima (built in 1971), and worked after the quake but later failed. The views of nuclear engineers at Hitachi discussed here show that cost remains a constraint in the design of nuclear reactor cooling systems, and redundancy with several layers of diverse backup systems for cooling are not being pushed by companies building the reactors. See the group articles for G.E.'s Mark 1 system which show cost and easier to build were factors behind the smaller containment systems favored for that design. Fukushima plant uses the Mark 1 reactors. Without independent safety regulation that does not rely on the companies for analysis and solutions, regulation risks becoming too dependent on companies for coming up with the strong safety precautions that are absolutely essential. These safety precautions can succumb to cost pressures....
Wall Street Journal Original article ›
LyrArc Article Gist
The Nuclear Regulatory Commission's inspector general points to significant flaws in reporting of equipment problems at U.S. nuclear plants. There is ambiguity in the reporting requirements, with one section Part 21 of the reporting law requiring reporting defects that can cause a loss of safety functions, and another section requiring reporting only the actual loss of safety functions. As a result 28% of the nuclear plants are not reporting safety defects in equipmment unless this leads to an actual breakdown. This represents an unacceptable level of risk for nuclear plant operations, and the inspector general calls for increasing the margin of safety. In fact the NRC is aware of these lapses in reporting since 2009. NRC has identified 24 such instances between Dec 2009 and Sept 2010, and yet no penalties have been assessed or corrective action taken to make the law clear about the reporting requirements. The lack of a good reporting system complicates things further, because early indentification of defects and defect resolution for equipment problems is critical to effective quality assurance for nuclear operators. Safety defect spotted at one plant could come up in other plants. For this reason the Inspector General's report calls this "a substantial safety hazard."...
DW.COM Original article ›
LyrArc Article Gist
German perceptions of Mikhail Gorbachev are shown here in DW.com. He is revered in Germany because of Gorbachev's efforts to end Soviet rule in East German state called the GDR, leading to the fall of the Berlin Wall. Gorbachev supported German reunification but did not do this is in a way that ensured that ordinary Russians and citizens of the GDR could make the transition to democratic processes in a smooth way. He also failed to grasp that economic transition could be difficult and would require extensive aid and grants from the west, and that safeguards and protections for retired pensioners and vulnerable sections of society needed to be in place. The following is a reflection of the background in political government and economy of the events in Europe leading to the war in Ukraine.  As a result Gorbachev's instincts were right by first 1956 as a student, and then 1979 as government official about the need for democratic processes to realize the real potential of Russia, just as has happened in many countries that lacked these processes for change in government- Japan, Germany, South Korea, India, Brazil and many countries in Asia and Latin America. But not realizing that these countries made the transition with considerable American and British assistance. Even where there was no direct assistance indirectly the British setup the first limited Swaraj or free rule in India, with elections and elected assemblies in Indian states in the 1930's, following the pattern in Dominion states Australia and Canada. Mohandas Gandhi negotiated within these processes for rights of South African Indians and Colored people, gaining experience, including study of British law.  A son of poor farmers in the agricultural region of North Caucasus, in Stavropol, it is relevant today that his maternal grand parents were from Chernihiv in Ukraine. He came to power in 1980 after entering the Politburo that year. These were the waning years of Leonid Brezhnev, president of the Soviet Union who followed Nikita Khrushchev (1953- 1964). Khrushchev was from eastern Ukrainian region near Donetsk. Leonid Brezhnev was a protege of Krushchev since 1931, from Kamianske, Ukraine.   Gorbachev was influenced by Khrushchev's speech that denounced Stalin in 1956 in favor of a freer and more open society. Khrushchev, became first secretary of the Communist party in 1953 after the death of Stalin and set the pace of post war Soviet society from 1950 to 1964. He removed the fear of the dictatorship of the proleteriat working class, increasingly dictatorial under Lenin, and blatantly arbitrary under his successor to make Soviet Union a freer society.  Yet his tendency to make decisions on his own without consulting others, and the failure of agriculture in the Soviet Union including food shortages led to his replacement by his protege Brezhnev. Brezhnev's whole career was built under Krushchev in Ukraine, in the army in Ukraine, and as a political leader in the Soviet 18th Army that entered Prague in 1945 defeating the Nazis. Why is this relevant? Gorbachev was educated at Moscow State University when the Soviet Union was in the Sputnik era, and felt at the time that it could reach the 1950's standard of living in the US- very different from the earlier leaders. Yet he may have been too much of an optimist and not hands on in understanding the working of a modern economy as large as Russia and the interests of different groups of society that had to be be balanced and protected. His understanding of the US and of how the US and British economies had evolved was limited or nonexistent. The isolation of the Soviet period may have compounded this. The Russian state in the Soviet Union could not simply unwind the power of the state and its intervention and everything would come out right of its own accord.   Leonid Brezhnev, the Ukrainian Russian who succeeded Krushchev from 1964 to 1979 let the system of Soviet rule remain as it was, in the Great Stagnation, leading to lethargy, lack of innovation, and a weak economy with military expansion. Gorbachev tried to regenerate the system by opening it up, but failed to see that there was a risk that it could come apart quickly as it did in just 4 years after he became president in 1985. Only the centralized power of the state had kept the Russian state together from the Tsarist period through the Communist period. The risks of this Gorbachev failed to grasp. What if it happened too quickly without a safety net for the people who could not make the transition. What lawlessness and failure of the rule of law could happen. The US and Britain had evolved their democracies over centuries. Wars were fought in the US and Britain over rights and responsibilities of kings and parliaments. In the US Lincoln fought the civil war not just for emancipation but to ensure safeguards for free white men on the farms so that Labor did not get disabilities placed on them by Capital (entrenched forces of Capital of which the southern plantation economy was only one aspect.)  Japan and Germany were set up as democratic states through American power and constitutional frameworks with Marshall Plans or agreement to take in unlimited imports from Japan. This bad scenario happened in Russia because Gorbachev failed to set the conditions first and work patiently to achieve them including introducing limited  elections and parliamentary processes first in Russia.  Leaders such as Yeltsin who succeeded Gorbachev in 1989, winning the elections that followed, failed to provide a safety net for the vulnerable in the 1980's. Unemployment increased rapidly, life expectancy dropped in Russia, and the economy failed in the early years after 1980. A Marshall Plan like that offered to Germany could have helped but Gorbachev's failure may have been his failure to provide this transition by arranging for West Germany and the US to support a planned transition, a kind of Marshall Plan of Aid, and maintaining a gradual move to democracy as the country was given time to learn institutions of American and British parliamentary democracy. No such Marshall Plan was negotiated for a smooth transition over inevitable obstacles, no safeguards were put in place for illegal efforts to control the state by rogue elements and to seize assets of state companies, no efforts to first introduce limited elections and parliamentary processes for learning democratic process in Russia, and the people of Russia were left with a memory of the this period as a bad lawless period from 1989 to 2005.  Leading to the situation today under Putin of aspiring to the Soviet period as a kind of period that had offered Russia the world recognition it had lost. And this had happened even though the Russian economy had recovered and the standard of living had risen under Putin. Putin's career spanned the period as a Russian official in Dresden, Germany Democratic Republic or Soviet period East Germany to working in the St Petersburg City Council under Yeltsin. He personally witnessed the fall of the Berlin Wall and the fall of the German Democratic Republic from Dresden and Gorbachev's refusal to build a transition period for the changes so that it would not be traumatic for the GDR. Even after reunification these traumas remain in some segments of the older population in East Germany that saw themselves as neglected and support extreme right wing parties in eastern German states by 2020- considering the Soviet period as one in which their lives were less neglected.  After three terms as president Putin with his own traumas from that period in Dresden, and with a mother lost in the period after the Nazi invasion of Russia, a father who survived the Battle of Stalingrad, saw the period of lawless behaviour in the collapse of the Soviet Union as the"greatest geopolitical disaster of the century."  Putin and people around him made missteps and miscalculations launching a war in Ukraine, leading to the situation today- jeopardizing hard won gains for the Russian economy. By 2022 Russian standards of living had risen and the economy was in the best shape it had been in the modern period since the Industrial Revolution. Yet largely exposed because of the dependence on oil and gas during a period of climate change and focus on building future economies free of fossil fuels.  Putin in his own peculiar logic may have seen this as the only opportunity in 2022 before deliinking from fossil fuel reduced the importance of the Russian fuel dependent economy to make some territorial readjusments in Ukraine with a quick war taking Kviv. That turned into a massive miscalculation with the emergence of nationalist fervor in western Ukraine spreading to the whole country of 40 million people. In the future to 2030 with phasing out of the fossil fuel economy, Russia without the connections to the US and European Union's technology and resources it had during Putin's three terms, and facing strict sanctions from US and EU, faces a difficult future. This has cautionary lessons for all countries- the US that read too much into the fall of the Berlin wall and indulged in a losing proposition with free markets that damaged its infrastructure and manufacturing with shifts to China, China understanding of how it to was dependent on the world economy for its future development, India that had to navigate a difficult period and what lessons to draw for building a bigger economy, the EU realizing the failure of its policies of depending on Russia for energy and China for manufacturing with fragile supply chains,  and Russia that there were twists and turns and the need for safeguards and experience building democratic processes before these processes would work for the economy, its people and for Russia as a nation. ...
Wall Street Journal Original article ›
LyrArc Article Gist
A Wall Street Journal report -after interviews with former TEPCO engineers and executives- throws more light on the failure of power and cooling at certain reactors in Fukushima Daiichi that led to the nuclear meltdown. The difference not grasped at the time turned out to be the critical difference between the reactors where electricity to cool the reactors worked and where the the electricity failed. Of the 10 nuclear reactors at Fukushima, only the 4 with the earlier Mark 1 design failed. These reactors were the earliest reactors installed by G.E. beginning in the 1970's. The Mark 1 reactors were serviced by an American engineering firm called Ebasco. Ebasco designed the reactor buildings really small so that they would be compact and economical. Because of the small size of the reactor buildings the generators providing the electricity supplies to the Mark 1 reactors could not be installed inside the reactor buildings made of fortified concrete and were installed in buildings outside lacking similiar protection. These outhoused generator buildings could not withstand the tsunami, resulting in the loss of power and cooling for these reactors, and leading eventually to the meltdown. The reactors with the Mark II and later designs were installed along with the generators in the same fortified concrete buildings, and these survived the tsunami without disruption in power supplies and cooling. This critical difference was noted by older TEPCO executives who were intervewed, but nothing was done about this because of the added cost of making the major modifications that would be needed. The regulatory system also failed to catch the problems with the original blueprints and design for housing the reactors and generators for cooling reactors. In 2001 the original 30 year operating permit for the Fukushima Daiichi nuclear reactor was renewed, and again in 2011 for another ten year period. Japan's Nuclear and Industrial Safety Agency is part of the industry ministry, and not kept separate and independent from the nuclear industry, a structural flaw. The ministry considered its job to be promoting nuclear power, and increasing nuclear power from 30% in 2010 to 50% of Japan's electricity output. One inspection official says fundamental design and construction of the reactors from a 30-40 year old design were never looked at in safety reviews by regulators approving the extensions. He even goes to the point of saying that the reviews focussed on things like pipes and fittings, missing entirely the safety of the outhouse buildings housing the generators. One of the top TEPCO engineers says this difference stood out like a sore thumb when did a walk through during inspections. He failed to get the support from fellow engineers and Tepco executives for changes that would add to the cost....

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