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The social media site Twitter frequently loses money and took on $13 billion in debt says this report in the NYT. Musk faces financial challenges a he takes over the company, and this report says the company would be unlikely to invest and simply be paying the bills. Twitter it says, has not made a profit for 8 of its past 10 years. 

Twitter's interest expense alone would grow from $50 million to $1 billion with the new debt. Company operations generated about $630 million in cash flow to fund operations. Twitter had $6 billion in cash before the buyout and a large part of this would have gone to close the acquisition. All the financial resources of the company will now go to service the debt. About $1.2 billion in marketing expenses mostly salaries are likely to be cut. And layoffs of a significant fraction of the total employees may be a way to conserve capital to service the added debt, this report shows.

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Krugman says China's inflation is raising labor costs in China, and in this way gradually reducing the undervaluation of the yuan vs the dollar. But he cautions this would take a long time, 4-5 years. The U.S. faces the costs of high unemployment close to 10% today, and this requires serious efforts now to reduce the undervaluation. It alone will not solve America's problems. It is one of a number of actions that need to be taken and not put off again.

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Strikers at a Honda transmission factory in Hoshan, 100 miles northwest of Hong Kong are asking for raises of $117 or 800 renminbi in cash above the $132 a month or 900 renminbi that they are now paid. About 950 of 1900 workers at the plant are trainees, young people from vocational schools or high schools earn $132 a month. Older employees earn upto 1500 renminbi or $220 a month. The significance of this strike is that the Chinese government is tacitly encouraging the strike as it begins making moves to increase domestic consumption and make the economy less dependent on exports. This requires consumer's having larger purchasing power and higher wages. It also means that China will not remain the low cost manufacturer for manufacture goods makers around the world for very long. Consider the size of the increase and the policy change of the government and this implies a significant shift by China.

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The pressures on Apple to reduce prices and margins in 2016 with the slowdown in sales. Apple also has to deal with the impact of a stronger dollar with a large part of sales coming from overseas.

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The general elections of 2015 show a nation divided, with Labor strong in the north of England and the Midlands, the conservatives in the south of England, the SNP in Scotland, and the UKIP competing for votes with Labor in the north of England. The election also raised questions about seats and representation in the voting system when SNP gained 56 seats with 1.5 million votes, half the votes cast for UKIP, and UKIP gaining only 1 seat. The Conservatives won a majority of the seats, 330 seats with a third of the popular votes. Voters distrusted both the Conservatives and the Labor party but distrusted Labor more, says Malik, and decided to stay with the Conservatives. Malik reminds readers that as late as 1992, Conservatives won a third of the popular vote in Scotland, and close to half of the votes till the 1950's. Now there is only one Conservative member of parliament from Scotland. Labor suffered a severe defeat in its base in Scotland with the SNP gaining 56 of 59 seats. Labor also lost the seat that was previously held by former prime minister Gordon Brown. On the EU the election promise of prime minister Cameron to hold a referendum on Britain staying in the EU in 2017, creates more uncertainty. David Cameron put the situation in the right words- " I want to reclaim the mantle that we should never have lost, the mantle of one nation, one United Kingdom....

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U.S. president Obama is critical of the role played by the media in the 2016 election campaign in a keynote speech at a journalism dinner for the Toner Prize for Excellence in Political Reporting. Obama said lately " I spend a lot of time reflecting on how this system- how this crazy system of self-government works. How we can make it work. And this is as important to making it work as anything. People getting information they can trust and that has substance and truth and facts behind it." He added that "what we are seeing right now does corrode our democracy and our society. When our elected officials and political campaigns become entirely untethered to reason and facts and analysis, when it doesn't matter what is true or not, that makes it impossible for us to make decisions on behalf of future generations." On the way Donald Trump's campaign has lowered the level of public debate Obama had this to say- referring indirectly to the NYT report of over $1.9 billion of free television coverage given to Donald Trump by the media- the country, "would be better servedif billions of dollars in free media came with serious accountability, especially when the politicians issue unworkable plans or make promises they can't keep.. and there are reporters here who know they can't keep them." The wall between the U.S. and Mexico to be built with Mexico's financing, the deportation of millions of illegal immigrants, the 45% tariff on imports from China, reducing support for NATO, are some of the campaign themes used to appeal to disaffected voters by Mr. Trump in the election, which are some of the puzzling ways in which the election campaign for 2016 has evolved- without proper media scrutiny, and what some critics say panders to ratings at a time of shrinking television staffs and budgets. ...

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Spain's Opposition PP party wins 7 million votes compared to Socialists in government winning 6.3 million. PP party won an absolute majority in the Madrid area which means it does not depend on the far right Vox party. Spain's prime minister Pedro Sanchez and Socialist leader calls for a snap general election on July 23.

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Dutch New Amsterdam with 1500 inhabitants become British New York in 1664. It is later retaken by the Dutch and exchanged for Suriname in the West Indies. From a neglected outpost for the Dutch it becomes a center for trade under the growing British Empire. The city inherits the Dutch spirit of tolerance, diversity and aggressive free trading.

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In a decline in living standards for 9 months since March 2016, the longest stretch since 1975, UK household disposable income declined again in 2017. UK household's disposable income fell 1.4% on the quarter in the first 3 months of 2017, according to the Office of National Statistics. This decline for the third quarter in succession comes from weak wage growth, rising prices, and higher taxes. This also shows that Brexit has certainly not helped the British economy, and provides further evidence that it is hurting the British economy. With increasing uncertainty after the parliamentary elections, a weak government, serious questions about Brexit, further weakening of the annualized growth of 0.9% at this point is not ruled out by experts. One evidence about Brexit's impact- the steep decline in the value of the British pound since the June 23, 2016 Brexit referendum has accelerated inflation in May to 2.9%, significantly surpassing any slight growth in wages. This leaves Britain worse off than before, with the future uncertain under Brexit talks.  ...

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The Public Private Investment Program announced by Treasury Secretary Geithner finally gets underway in October 2009. Black Rock, a group led by the Wellington Company and a group led by Alliance Bernstein are private participants in the effort to get private participation to rid banks of bad loan assets. Five of nine money management firms selected by Treasury to buy toxic mortgage related securities have raised the minimum of $500 million from investors each, to qualify for matching government loans. In total the program will allow money management firms to buy up $12 billion in bad assets. THe IMF estimated last week that financial institutions around the world have still on their books $2.8 trillion in troubled mortgages and securities. Only half of that amount has been booked in losses, which leaves $1.4 trillion still to be resolved. $12 billion is less than 1% of this, which begs the question how will this make a difference? Treasury only hopes that this will restart trading in bad assets and help establish market prices for these assets. If unemployment worsens and the economy sees a sudden relapse in the near future this $1.4 trillion in bad assets will continue to create serious problems for financial instituions and the international financial system....

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The Seagreen wind farm in the windy North Sea waters off Scotland begins production this week. It is a 3 billion pound project of SSE Renewables and TotalEnergies of France located 17 miles off the Angus Coast of eastern Scotland. Production is 1.1 gigawatts of electricity in the first phase enough to power 1 million homes. It is the world's deepest fixed bottom windfarm- the deepest foundation to be installed in December will be 59 metres below sea level. 

Its location near the old oil and gas capital of Aberdeen, Scotland, shows how the renewable energies acceleration is giving a new life to the region. Seagreen uses new renewables technology because of the rocky difficult conditions in the North Sea. SSE Renewables is a London based company that has $12.5 billion in investments in renewable energy.

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Angela Merkel's handling of the coronavirus crisis wins praise from world leaders and leaders in Germany. Public opinion from Argentina and New Zealand to Britain and the U.S. gives her a lot of credit for the way she has tackled the situation. She now has the highest approval ratings in Germany since 2017, after a period of 2 years during which her popularity waned with the migrant crisis.  Much of her period in office was consumed by crises- the eurozone financial crisis, the migrant crisis, and now the coronavirus crisis. She brings her style of a scientist rationally looking at the situation, her experience, and her willingness to take bold positions under much criticism. Today even one of the premiers in Thuringia from the socialist Left party praises Merkel for being "pleasantly calm and goal oriented, particularly evident in the well structured video and telephone conferences." He says he prefers a leader "a quiet scientist" rather than "pompous men who as populists, dangerously ignore the facts of the danger." Merkel now assumes the 6 month presidency of the Council of the European Union on July 1.  Germany faces the future in rebuilding its economy, in rebuilding its infrastructure and public services, for now Merkel provides the leadership needed for this time. As Andreas Nick, vice president of the Parliamentary Assembly of the Council of Europe puts it she is "always analytically scrutinizing and carefully weighing up, soberly Protestant and refreshingly unpretentious, a trained scientist with life experience in the downfall of an all too self-confident ideological system."   ...

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The rarely mentioned origins of the U.S. Medicare reform proposal of Rep. Paul Ryan and Rep. Ron Wyden, which includes work done at the Hoover Institution and liberal think tanks, in a debate subject to distortions on all sides.

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Germany holds the presidency of the G-20 in 2017. This provides chancellor Merkel an opportunity to provide German leadership on many issues. The ministerial conferences will lead to the summit in Hamburg in July 2017. Concern about the incoming Trump administration views on trade in international circles gives Germany and China a larger role in the meetings for 2017. Germany plans to put more focus on the real causes of migration and flight from poor countries and war zones.

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Mark Landler of the NYT looks at presidents TR, FDR, Reagan, Carter, and other presidents, and compares their moral leadership with the situation under president Trump after the Charlottesville car attack. Landler says of president Trump that his reluctance to pass moral judgement is a genuine part of president Trump's beliefs. This is also why Trump has not seen the actions of some world leaders in moral terms, including Putin in Syria. Yet as is seen from the time of Jefferson and Lincoln, U.S. presidents have adopted a moral tone. This has not changed since then. The presidency is seen as a place that puts forward the best ideals of the country. Even though leaders have not always lived up to these ideals-  Landler cites the internment of Japanese in World War II by FDR, the failure of Obama to set up humanitarian safe zones for refugees in Syria, Nixon's and Clinton's personal moral failures. Yet the idea always has remained that this was part of the president's moral role and duty- to set the tone for the whole country, not to reject the idea of moral judgement itself as immaterial and not relevant, as president Trump has done. It may be a time for the country as a whole to reflect and move back to where it was, recovering what it has lost by grasping the significance of this moral idea. To do this by building literacy, tolerance, and fairness into all its actions, making this a part of the foundation of national character.        ...

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David Gelles interviews heads of companies in his column for the New York Times called Corner Office. Here he talks about CEO's frquently bringing up the topic of meditation in his interviews. Gelles practices meditation and mindfulness since his college years when he spent junior year in India at Buddhist monasteries and retreats as part of the Antioch Buddhist Studies Program. He is also the author of columns in the NYT on meditation and mindfulness.  The head of Salesforce, Marc Benioff, tells Gelles that meditation practice helps him step back and listen deeply with a beginners mind aware of the present moment. Benioff has set up meditation rooms in Salesforce Tower in San Francisco, and invites Buddhist monks to his house.  After a skiing accident in 2004 Marc Bertolini, head of insurance company Aetna recovered using meditation practice. He setup mindfulness classes at Aetna and says this has changed the corporate culture for the better with efforts for improvement and people coming up to him with new ideas.  Designer Eileen Fisher practices meditation and this has helped her in business as she set goals to improve factory conditions for clothing workers in China. The head of Hyatt Hotels says mindfulness is helpful in bringing empathy in relations through the practice of being in the present. He made mindfulness the key part of the company's Wellness programs. Google, Ford and McKinsey now offer meditation programs in the office. Similar trends are taking place in Europe. When asked about a company's responsibility to society, Benioff of Salesforce says his company is part of the whole that includes society, that we are all connected and part of the one.     ...

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The new government of prime minister Enrico Letta in Italy suspended the summer instalment of the tax on primary residences which was unpopular in Italy. The new government plans to overhaul the tax code this summer to change the way it impacts real estate. This was one of the tax measures taken by the Monti administration. 1 billion euros will go to a wage supplement program, so that companies can retain employees during the economic downturn. Another program to provide business incentives for hiring is being considered. The new government committed itself to bring down the deficit in Italy to under 3% in 2013, which would help keep Italian borrowing costs down.

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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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Prakash and Ghosh in the Hindusthan Times remind readers that even though India has ambitious plans for renewable energy much remains to be done in shifting to clean coal technologies. An estimated 80% of India's coal plants use obsolete technologies, making this an obvious area for improvement. India plans to make solar the source of 100GW of 175GW it plans to generate in renewable energy by 2022. Yet it must not be forgotten that coal is a dominant source for the foreseeable future and shifting to clean coal technologies is an area that should get top priority from the government. Today India is the third largest in terms of carbon emissions after the U.S and China.

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EIA figures show U.S. stockpiles of crude oil, refined fuels and other petroleum products increasing to 1.149 billion barrels in the week ending Jan 2, 2015, excluding the strategic petroleum reserve. This is the highest ever since 1990, except for June 2013. Brent crude drops below $50 a barrel.

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This article in the Economist points out that 84% of Britons want the 3.5 million existing immigrants to stay in Britain, even though the government of Theresa May has not given a clear commitment. May wants a reciprocal commitment for 1.2 million Britons living abroad in the EU. In 2015 330,000 immigrants came to Britain, with close to half from the EU. The Conservative government has not been able to reduce the number- a result for the most part from 10 Eastern European countries entering the EU in 2004 and 2007, says the Economist. Brexit negotiations are not likely to lead to results in migration partly because of the long negotiations with the European Union needed for changes. Other issues are that the food processing, farming and hospitality industries need low cost labor from Eastern Europe.

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Germany's growth rate for GDP in 2016 was 1.9% compared to 2015. This is the highest growth rate in half a decade, and better than 2015 when the growth in GDP was 1.7%. Fiscal surplus was 0.6% of GDP in 2016. Germany's Economics and Technology Ministry says the economy is improving because of the positive labor situation, rising incomes and consumer spending. Real estate boom is also helping growth, and also the state spending including on refugees accomodation. Exports have surged and the economy has recovered from the Brexit effect. Exports surged to 1.1 trillion euros in 11 months of 2016.

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Thomas Hoenig was Governor of the Kansas City Federal Reserve Bank for 20 years. Here he talks about the dangers of "too big to fail" with Gretchen Morgenson of the New York Times. He is due to retire at the age of 65 in 2011. Hoeinig has stood for conservative safe financial practices for U.S. financial institutions throughout his 20 year old career, and cautioned against extending the government safety net for banks that engage in risky financial activities including derivatives trading. And essential element of safe financial practice and part of necessary market discipline, he has pointed consistently, is the fear that taking on risky activities or acting recklessly has a price- creditors can take out their funds if they see a banks as unsafe, and the financial institution may have to be broken up or closed. He joins Alan Meltzer in his criticism of Federal Reserve policies under first Greenspan and then Bernanke that take on the job of stimulating the economy and creating jobs through a very loose monetary policy after the collapse of a bubble. Hoenig sees the role of the Fed in such situations as a neutral player. The reason say Meltzer and Hoenig is that the Fed has not given enough thought and attention to the long term consequences of its policies. What were the consequences of the low rate policies in 2003 asks Hoenig? It promoted another bubble and the mortgage meltdown of 2008. What were the consequences of QE II asks Meltzer in an op-ed piece in the Wall Street Journal on August 11, 2011, "The Folly of Economic Short-Termism?" It has failed to revive the economy or reduce unemployment. Hoenig also points to questions of fairness and equity that arise when banks are treated differently and farmers, seniors and other groups are asked to make sacrifices....