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Amazon abandoned its plans to locate its Headquarters in New York City after growing opposition to $3 billion in taxincentives offered to Amazon to move to New York's Long Island region. The growing opposition in the New York State Senate and pro-union comments by New York Mayor De Blasio led to Amazon taking a quick decision to withdraw. In the past Amazon has come under criticism for its opposition to unions and for its lower wages.

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Preliminary results show the SPD Social Democrats leading in Germany. The SPD had 25.7% of the vote, ahead of Merkel's CDU at 24.1%. This is the worst showing for the CDU in German elections. The environmentalist Greens Party came in at 14.8% of the vote. The pro-business FDP Free Democrats came in at 11.5%, the far right AfD at 10.3%, and the socialist Left party at 4.9%. Parties calling for big infrastructure investments in Germany with tax increases emerged as big winners reflecting the public mood in Germany after CDU led coalitions with SPD for the last eight years focused on the eurozone crisis and opened migration into Germany, while neglecting much needed investment in broken infrastructure. Both the SPD and Greens are calling for big investments and taking on additional borrowing to do so. They now have a combined 42% of the vote, and 47% when combined with the socialist Left. The Afd with 10% remains mainly a fringe party - and primarily a result of Merkel's decision to open migration from war torn Arab countries which she later reversed, and from from the CDU's failure to tackle social and economic problems of eastern Germany.    ...

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This editorial in the Economist says Spain's economy has recovered to pre crisis levels by 2018 with growth at 3 percent. It says Spain had a bigger crisis than Italy and took stronger measures under prime minister Rajoy to fix problems in its banking system, address the housing crisis, and unemployment. Italy's steps by comparison were timid and faltering. Mr. Rajoy had his problems including corruption scandals in his party and a poor handling of the Catalan drive for independence. Yet Spain owes muchas gracias to Rajoy for his leadership in bringing Spain out of the housing and economic crisis, and for running the country for two and a half years after losing his majority in parliament.  Another difference with Italy is the generally favorable attitude to immigration for all parties. Of the newer parties Ciudadanos remains at the centre and the Podemos party remains to the left in politics, as part of the populist changes in Spain during the economic crisis. The new government of Pedro Sanchez has a positive attitude to immigrants and to women, with the largest number of women in the cabinet of any European country. ...

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The aggressive effort of the US central bank, the Federal Reserve, to increase interest rates to dampen inflation will have an effect on Asian currencies and trade. The Japanese yen lost 14% of its value and the Korean won 8%, Chinese yuan 5% since the beginning of 2022. This is a result of the widening gap between interest rates in the US and Japan where the interest rates have not been increased due to mild inflation.  Asian trade is done in US dollars and exports to the US are invoiced in dollars. Citigroup says about three quarters of trade in Asia-Pacific is invoiced in dollars. Weaker currencies would translate into higher effective prices for imported commodities - energy and food. This pushes up domestic inflation and hurts manufacturing.   Add to this a shift in the US demand from goods into services in 2022 and there is weaker external demand for the economies of Asia. This will exacerbate the slowdown in Asian economies. Many countries such as South Korea and Thailand have increased their external borrowing in dollars. Debt service ratio was 21% in South Korea and 14.5% in Thailand, according to Bank for International Settlements. Years of low rates allowed governments in Asia to borrow more without incurring high interest bills. Now that situation is changing quickly and will result in difficulties for South Korea and Thailand says this report in WSJ. In the last 10 years Asian economies excluding China increased debt to GDP ratios by 15 percentage points, according to Gavekal. The result might not be debt crises as in Sri Lanka but painful slowdowns in economy with combination of loss in external demand from the US and higher inflation, higher interest bills. ...

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Shehbaz Sharif 70,  is the younger brother of a three term prime minister of Pakistan Nawaz Sharif. He ran Punjab province, the country's largest state when his brother was prime minister. In this way he brings substantial experience to the problems of the economy that now face many developing economies such as Pakistan.  First on the agenda is to normalize relations with the US, rebuild ties with India, and restart negotiations with the International Monetary Fund. Pakistan faces severe inflation of 14% and devaluing currency that makes imports costlier as the foreign currency reserves have dropped to alarming levels of $24 billion when annual import needs are at about $56 billion. This has a direct impact on cost of living, standards of living and on industry. Shehbaz Sharif understands the situation and has said restoring the economy "will take effort, effort and more effort." A similar statement has been made by Mr. Modi in Hindi "sab ka viokas, sab ka prayas" which also mean effort, effort and more effort, which all of South Asia and Bay of Bengal, and South East Asian countries needs considering the impact of Covid pandemic, and now inflation from the war in Europe hitting food supplies. The situation is grim in other parts of South Asia- in Myanmar, in Sri Lanka, in Thailand, Malaysia, Vietnam, Indonesia. The popular sentiment is also shifting as seen in the Indian part of the old British Punjab province. Mostly Sikh this part of old Punjab state in India made a complete change bringing in a new party Aadmi to improve the economy and provide good governance. In this situation all governments are expected to deliver on good governance and the economy.   ...

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China's manufacturing sector contracts in June with the PMI index dropping below 50 - to 49.0.  Exports were also coming in lower. Experts say the increase in interest rates by the US is reducing imports of Chinese goods into the US. This comes as local governments are strained in their finances by $900 billion, and a budding revolt is taking place from property buyers with developers in financial trouble, as reported in the WSJ. Psychological hurdles now loom in the loss of confidence in the public in the property sector, loss of confidence of foreign investors with many constraints in operating, mental health issues for the population in many cities with the covid lockdowns.   The growth has slowed to 0.4% and there is now a realization dawning that there was overdependence both on property sector and foreign investment that set up new factories offshored from the US and Europe that alienated the public in these countries. Unlike wih the situation of Japan in the sixties and seventies for modernizing its economy growth of the scale China was pushed into by misguided and self interested  business interests in the US including its investment banks and local government officials in China without restraint by the central government in Beijing, ultimately led to trade friction and permanent damage to US China friendly relations. Communities in the US and the EU simply could not cope with the hyper growth from hyper shift of factories from the home countries to China that pushed this hyper growth. The property sector played the same role in the domestic front with too big a burden carried by it resulting in hyper growth. This did not have to happen. It happened because of a lack of understanding that this would have consequences in the longer run which is now showing up. ...

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Food inflation is affecting a wide range of countries not just poor countries. Even in the US where on average only 7% of the income of households goes to food, for poor and lower income households this can go up to over 30%. In Turkey with a high inflation rate of 80% in June over prior year, the problems of food inflation are severe. Turkey, Egypt, Tunisia and other Arab countries get most of their wheat from Ukraine and Russia through Black Sea ports. Across Asia the situation varies with less food inflation in countries that are self sufficient in food production such as China, India and Vietnam, to countries such as Sri Lanka where inflation is severe and takes up most of the budget for ordinary families. Lebanon is an extreme example with the collapse of its economy and 332% inflation with food inflation severe. Ethiopians spend about 45% of income on food. Somalia faces drought conditions and severe food shortages. This part of Africa is the most fragile and most prone to breakdown. Being self sufficient in food was an important goal for countries that faced famine in the past such as China and India- this has produced good results. Even in Europe small countries that make their own food with agriculture getting importance such as France and Switzerland the benefits are immense. Switzerland food inflation is as low as 1.5% lowest in the world. Where as in Africa this importance of agriculture has been neglected the consequences are seen today. In Latin America Argentina and Brazil are exporters of soyabeans and other food. This helps insulate them from the worst effects of the food crisis.     ...

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The Nordstream gas supplies pipeline which runs 760 miles from northwest Russia under the Baltic Sea to Germany will go into maintenance for 10 days. Russia says that a turbine that is being repaired in Canada could delay resumption of the pipeline that is already down to 40% of its pre Ukraine war supply.  Germany says Russia may turn off the Nordstream pipeline completely in response to more western sanctions. Russia could attribute it to maintenance issues. Germany's manufacturing companies that depend on the gas supplies are already scrambling for other sources. Some like Uniper SE one of Europe's largest utilities are turning to the German government for aid as it turns to the spot market for supplies at much higher prices. France's EDF SA is losing billions of euros under a government imposed price cap on electricity prices. It will be nationalized. Yara fertilizer company with 15 production sites in Europe uses Russian gas to make ammonia for fertilizer. Now it is turning to other sources for ammonia, a key ingredient for nitrogen fertilizer.  WSJ gives examples of many more companies in industries in Germany from glass making to coating steel in melted zinc using furnaces powered by gas, that are affected. Two VW power plants in Wolfsburg will shift back to coal after spending 400 million euros in a conversion to natural gas. The list goes on and on. There is the need to conserve natural gas and LNG supplies to heat and power homes for the winter. Thermostats will be turned down to 62 degrees in many places in Germany, hot showers will be shortened, and every effort made for conservation, and even this may not be enough. ...

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The kind of Nation America will be is already being determined in America's classrooms. The share of students chronically absent from US schools has jumped from about 15% before the pandemic in 2018 to 26% in 2023. In the richest districts from 10% to 19%, in the poorest districts from 19% and  to 32%. Losing about a third of children K-12 in schools for absenteeism is a huge learning loss to the Nation. Missing more than 10% of classes counts as chronically absent, the data is from 40 states in the US K-12. Majority White went from 13% to 22%, Majority Non White went from 17% to 32%. Analysis of data from American Enterprise Institute. This has real implications for learning loss and student behavior. Even school districts which opened earlier in the pandemic are affected to same degree with absenteeism doubling in Victoria, Texas school district. In this report NYT has a place where you can enter the school district name for instance entering Dearborn School District in Michigan and it shows the absenteeism has gone from 10% to 26% in this district and this means it has close to tripled. In adjoining Dearborn Heights it went from 25% to 44%. In New York City this goes from 25% pre pandemic to 36%. Compare this with the richest districts in the Nation when we entered Scarsdale we found absenteeism up from 4% to 7%, next Piedmont in California 6% to 9%. Irvine Unified relatively affluent 5% to 12%. What this means is that across the board there is learning loss and in addition the disparities are also growing from the wealthiest to the middle income and the larger population districts such as New York, and the diverse Dearborn, MI.  ...

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The survival of the failed Kim regime has cost millions of lives for the people of North Korea. Yet the international politics of the countries has focussed on other issues: the South Koreans wanted to avoid the burden of taking on the people of North Korea as West Germans did for the East Germans after the collapse of the Berlin Wall, China wanted to avoid a reunified pro-western neighbor to the south and the potential influx of refugees across the border, Japan and the U.S. were focussed on the nuclear threat from N. Korea. The result is a failed state and an uncertain future for the people of North Korea.

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The Tunisian revollution was middle class, un-Islamic and pro-western. The people in the streets of Cairo are young, connected, non-ideological and pragmatic. They are looking for an end to despotic regimes. This is the way Cohen describes the demonstrators after his visit to Tunis. Egypt's opposition leader El-Baradei tells Cohen's colleagues Kirkpatrick and Slackman that he is pretty sure that an elected government in Egypt woulld be a moderate one. The policies of a community activist from the south side of Chicago, who as US President fails to take a clear stand in favor of freedom from repression and economic freedom for people in the Arab world.

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The boost to investor perceptions for India with Modi's election, and to Indonesia with Widodo's election are major changes in the second half of 2014. The first half saw the dented confidence in Argentina, Venezuela, Turkey and South Africa. To this can be added Russia with Putin's response in Ukraine and western sanctions. China with Jinping's response to pro-democracy protests in Hong Kong for restoration of the pledge of free elections by 2017, appears to be losing investor confidence, especially with investors seeing this as adopting the Putin Way. This is happening with a gradual movement towards restoration of trade relations with Iran.

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Shoppers are buying less this year with more money going to travel and entertainment. Retail sales are expected to be flat or at 2-3% growth compared to 5% last year and 9% and 12% in 2021 and 2020. Expect discounts in pre Thanksgiving and pre Christmas sales, says this report in WSJ.

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Noam Scheiber of NYT provides this illuminating account of how the changes in employment affected Hispanic Americans since 2004. About 500,000 jobs were created in the U.S. construction industry in 2014. Of this 315,000 jobs went to Hispanics with the highest number in California, Florida, Texas and Illinois, which have large Hispanic population. This has enabled Hispanic employment to reach the pre-recession levels in 2015 before this happens for blacks and whites, according to the Economic Report of the President. The drop in immigrants from Mexico crossing the border as economic conditions deteriorated in the U.S. in 2009-2012, and the stricter enforcement, has resulted in native born Americans benefitting most from the jobs created. Hispanics took the biggest hit following the recession in 2009-2012, with a loss of 700,000 jobs for the 3 million Hispanics employed in construction. During the 2004-2007 construction boom Pew Research shows 1.6 million jobs going to immigrants, of which 800,000 went to native born Hispanics, before the collapse in construction in 2009. This time the recovery is benefitting native born Americans most....

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The pandemic brings together companies in three countries U.S, Italy and France with the merger of Fiat Chrysler with PSA. Fiat Chrysler is owned by the company Exor owned by the Agnelli family in Italy. PSA is owned by the Peugeot family in France. In addition the government of France and Dongfeng Motors in China have stakes in PSA.  During the 2008-2009 crisis Chrysler merged with Fiat with the help of the Obama administration which pursued a policy of promoting small cars. Instead the merger saved jobs but led to the PR effort for small Fiat cars and the focus on the Jeep Cherokee and SUV's like the Dodge Ram. Today one hardly ever hears about small Fiats from Fiat Chrysler that was the basis for government help on the merger. 

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The local elections in Britain in 2019 show voter dissatisfaction with the mainparties. Both Conservatives and he Labour party each took 28% share of the vote. The big winners were the centrist Liberal Democrats with 19% of the vote. The Greens party also was a winner in the vote. About 8400 seats were up for election in this vote. Conservative party lost 1300 seats. The Labour Party disappointed because it was expected to win more seats as Conservatives did well in the last election in 2015, by winning 81 seats. The Liberal Dems and the Greens won 850 seats between them.  The stridently pro-Brexit Nigel Farage Independence Party did not put up candidates and a anti-Brexit party called ChangeUK also did not have candidates. Both will field candidates in the European elections causing the main parties to lose even more of their support that has dropped to 28%. This means Labour party leaders Corbyn and McDonnell might continue negotiations with Theresa May on Brexit plan. But as Rachel Sylvester reports in The Times today with May lacking support from her Conservative Party, her tenure as prime minister uncertain, there is little incentive for Labour leaders to go against the wishes of a majority of Labour MP's, voters, and members who are against Brexit. Corbyn also want to focus coming elections on austerity not Brexit. So this is not on Labour's agenda. Sylvester says a confirmatory referendum is looking like the only way out of the mess.    ...

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U.S. president Trump delivers a forceful speech at the UN General Assembly. He says the U.S. would take strong action against North Korea, and called both Iran and North Korea "rogue nations." President Bush first used the language of "rogue nations" for North Korea and Iran in a speech at West Point Military Academy in June 2002. In that speech Bush also said he reserved the right for pre-emptive action. This was followed by the invasion of Iraq. Trump also said the U.S. was "prepared to take further action" on Venezuela. French president Macron offered his own view, that the door for dialogue was open with North Korea. Prime minister Netanyahu of Israel affirmed Trump's statements on Iran calling Iran's access to nuclear weapons dangerous.  Fifteen years after Bush's speech the situation has not changed. In some ways it has deteriorated with the war in Syria, and continuing war in Iraq, the refugee crisis, and the ballistic missile testing by North Korea. ...

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News on several fronts in June 2009. On housing, a month to month improvement but still stuggling compared to a year ago levels. The Commerce Department said that an increase in multifamily units led to housing starts jumping 17% in May from April to a 532,000 annual rate. Compared to ayear ago level housing starts was down 45% from May 2008. There were 10 times more homes for sale in April as sold that month, with the typical ratio at 6. With layoff, tight credit and rising mortgage rates laying aheavy hand on these markets, even as developers cut prices deeply to clear unsold homes. On Manufacturing. Industrial production fell 1.1% in May from April, according to the Federal Reserve. Capacity utilization fell to 68.3%. See the graph for the steep drop for auto and auto parts manufacturing. On inflation. The producer price index showed its largest decline in 60 years, according to a Labor Department report. The PPI was down 5% from one year ago, the biggest decline since 1949. It went up from April to May by 0.2%. Part of this was rising oil prices. The core PPI which excludes food and energy dropped 0.1% in May from April. Rising oil prices, a falling US dollar and stabilization in the economy are reducing defaltion risk. At the same time the sign that inflation is not taking root are clearly evident in the slack that is building up with the drop in the capacity utilization rate to 68%, and further declines expected as the auto industry shrinks in 2009, with the huge overcapacity worldwide in that industry. ...

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Negotiations between European leaders, especially Germany's Merkel and the Obama administration on climate change at G8 meeting. The U.S. and Europe try to work out differences. The U.S. is vague about some language such as the starting year against which emissions reductions will be measured, and has resisted the European pressure to set strong goals over the next 10 years. Europe wants 1990, while the USA, Australia and Japan prefer 2005. Europe wants to see language in aformal document that is being developed for the G-8 meeting, which also includes developing countries, for limiting the rise in global temperatures to 2 degrees celsius, or 3.6 degrees Fahrenheit, above pre-industrial levels.

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Romney emphasizes that he supports some of the popular parts of the Obama Healthcare Law such as coverage for people with pre-existing conditions. He tells voters he got everybody in his state insured. He also says there will not be a huge cut in taxes that would worsen the deficit. He would close loopholes and deductions to offset any deductions as shown by his advisor Harvard economist Martin Feldstein. The idea is to get a message across that will resonate with women, minorities, the middle class, workers, and business- the 100%, something he is able to do with some credibility having come from Massachusetts, a liberal state in the eastern United States.

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A study by Dr. McCormick of the Harvard Medical School and professors at the City University of New York School of Public Health at Hunter College, shows that the anticipated savings from conversion to medical records may not materialize to the extent expected. This study of data from 1100 doctors of 28,000 patient visits shows that with access to digital records doctors actually increased the number of tests ordered- from 12.9% of visits without digital records to 18% of visits with digital records. For more advanced tests such as MRI and CT scan the rate was 70% higher. Dr. McCormick says this may be because the new digital technology may have made it easier to order tests.