LyrArc Article Gist
A provision in tax code letting companies expense investments in US including R&D in 5 years expired in 2022. For budget reasons it was not renewed. The DJT Big Beautiful Bill lets US companies expense R&D in 1 year compared to the 15 years in overseas investments. This is leading to a surge in R&D investment and hiring by companies. Fed's Powell sees this as one of the big positive factors for the US economy in 2025-2028.

The change lowers cost of hiring by 20-25% and this means more engineers and other people are going to be hired.

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Germany leads in balcony solar installation- 1 million installed in 2023-2025 ($200 to $1200 solar modules installed on baconies. The boom is the largest in Europe for solar balcony installations. Japan is sending a delegation to learn from Germany. Renewables overtook coal for first time worldwide. In Germany the cost of this electricity from soalr balcony installs is half that of electricity from the grid. Berlin University Applied Sciences says it pays for itself in 4-7 years, after that the electricity has no cost. Solar modules life is 30 years, batteries life is 7-10 years. With 4 modules about half the needs for electricity for a household can be met.

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Rishi Sunak, Britain's finance minister, defends the increase in the corporate tax rate to 25%, saying the increased receipts from corporate tax in recent years were because of cyclical recovery of corporate profits which took a hit in the financial crisis. He says that the cuts in the rate by George Osborne, former Tory finance minister, have not led to increased business investment. Osborne cut taxes to 20% from 29%, lowest in G20 countries and Hammond who succeeded Osborne as finance minister cut the rate to 19%. At 25% the corporate tax will still be the lowest in the G7 countries. France, Japan and Germany have corporate tax rate of 30-31%. Higher taxes would help finance needs for government investment in infrastructure and health services, public services, and tackle the financial situation arising out of the pandemic support. The last time taxes were raised was in 1973. This also shows that the UK and the rest of the world is looking at the mixed results shown from cutting taxes. Business investment has not resulted from the business tax cuts in the way that would support creating job growth, some of the investment only supporting automation. The investment in infrastructure is lacking from the business sector leading to the need for government to use taxes for renewal in updating infrastructure. The rise of China with new infrastructure has only shown the problems with simply cutting taxes in the hope that job growth, economic growth, infrastructure growth would happen as hoped. This is why the Tories under Boris Johnson are trying a new approach to get the job done. ...

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The Biden vaccination target of 70% of American adults at least partially vaccinated with one dose by July 4, 2021 remains elusive as vaccination rates have dropped. From a high of 2 million a day vaccinations have dropped to 400,000 a day during the first week of June 2021. Vaccination skepticism particularly in the south and western part of the US is making it harder to vaccinate the rest of the US population. This poses increasing risks as the new variants of the virus such as the Delta variant found in India, and now the most widely prevalent strain of virus in the UK, remain a serious problem. The unvaccinated population in the US is too large for any degree of safety in numbers vaccinated. Consider that at the press briefing given by the White House on June 3, 2021, only 28 states out of 51 states have fully vaccinated 50% or more of their population. There is a large variation between different states with states in the south such as Mississippi as low as 34% at least one dose and a similar situation in Alabama. In Arkansas, Georgia, Carolinas, and Louisiana  it is higher at about 50% with at least one dose. Even these figures are deceiving as in some parishes in Louisiana only 20% have even one dose. Studies show that only after the second dose are enough antibodies released to protect well against coronavirus. This is why vaccine experts at Baylor College of Medicine cited in NYT foresee a second wave in the southern US because of the South so underachieving in the case of vaccination.  ...

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This editorial Board opinion piece in the WSJ gives exceptional insights into major issues facing Germany, the cost of electricity generated from renewables, failure to meet climate change emissions targets set by the government, and the difficulty of forming a new coalition government with conflicting goals of the Greens vs the CDU and the FDP.  By one estimate it cost households and business about $125 billion extra in higher electricity bills for 2000-2015 to subsidize renewable energy from solar and wind. Utilities are required to buy renewable at above market rates, especially since the energy revolution called Energiewende was launched by chancellor Merkel in 2010. German electricity prices are about 36 cents per kilowatt hour compared to 13 cents in America. The 2011 decision following the Fukushima disaster to phase out nuclear power by 2022 made the effort to meet renewables targets of 40% by 2020 compared to 1990 -exceeding the 20% for the EU- even harder. Germany sees a 30% target for 2020 as reachable.   Even though renewables can generate 50% of required energy supplies, only 30% of the supplies are utilized as the renewables are generated mostly in the north of the country and there is a lack of transmission lines to bring it to the industrial south. The dirty secret says the WSJ editorial board for the renewable story in Germany is that a lot of coal is used in dirty coal plants to meet electricity needs when wind and solar energy are not available. Cheaper coal not natural gas is preferred for such generation as daytime peak use that recoups more expensive gas cost is managed with renewables. Leading to the situation that Germany generates only 9% of energy from natural gas compared to 30% in the U.S.. The further Germany has gone in renewables has also led to the paradox of increased dependence on coal. Getting to the new Jamaica coalition being planned between the CDU and the FDP and the Greens. The problem is that the Greens want to see the 20 most polluting coal plants closed, the CDU and the FDP are willing to close only ten coal polluting plants. The WSJ's opinion is that voters chose the AfD right wing party with 13% of the vote because of the platform promise to shut down Merkel's Energiewende policy.   ...

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A nuclear plant in a war zone with repeated shelling? This is taken up in this debate video of 44 minutes in FR24 which you can click on. The world has not seen this since the start of nuclear energy from plants in the 1950's. Calder Hall the first UK nuclear power station and the first in western Europe started in 1956. Eisenhower opened the first US nuclear power station Shippingport on the Ohio river in Pennsylvania, 50 kilometres from Pittsburgh in 1958 as part of the Atoms for Peace Program. The US built 54 nuclear plants that are operating today in 2022 generating 50% of the renewable energy in use today in the US. The question is what does the unthinkable conducted by the Russians and Ukrainians, by weaponizing a nuclear plant do to public perception of the safety of the Atoms for Peace Program initiated by president Eisenhower in 1954? What does this damaging of public safety perceptions after Fukushima do to the Atoms for Peace type of programs in China India, and European Union that are part of the emissions cutting programs in the world? These are serious questions at a time when climate change is not simply a word but means floods, fires, drought, and declining food production all over the world from Spain to Pakistan, from Germany to China. China and India are affected. China has 53 nuclear plants in 2021 with 50 GW and plans to double this by 2030. India has 22 nuclear plants  with 8 GW in 2021 and plans to triple this to 22 GW by 2030. How will climate change be tackled with public safety perceptions affected with another nuclear accident like that in Fukushima arising from shelling of the Zaporizhzhia nuclear plant. As the president of the UN Security Council Zhang Jun of China clearly stated at the UN SC meeting last week that China opposed use of the Zaporizhzhia nuclear plant by Russia (or Ukraine) in any way that could lead to damaging nuclear safety leading to an unintended accident. China only gets about 5% of its energy from nuclear, India about 3%, and this will need to increase multiple times to tackle climate change. France gets 70% of its energy from nuclear, the US 20%, by comparison. Nuclear energy safety and clear rules to prevent weaponizing of nuclear plant zones is essential and a solution like that developed for the food grain shipments from Odessa through Black Sea to the Mediterranean has to be arranged quickly. ...

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Impact of Iran War on European economy- Germany's growth 1.3% and 1.7% growth in 2026 and 2027 down to 0.6% and 0.9%.  With inflation at 2.8% and 2.9% from 2.0% and 2.3%. This is the consensus of all forecasts including Ifo Institute and Kiel Institute, which also see prices coming down in the second half, the Iran war impact mostly first half only. Clearly Germany will be able to ride out the Iran crisis and oil at $120 in April 2026. A big part of this is that there is a trillion dollars in investment that Germany's Merz has initiated and this makes a huge difference. France is self sufficient in energy with its reliance on nuclear energy. Germany imports only 6% of its energy from the Hormuz straits which means supplies will be available just that prices will be higher. Germany also can accelerate its renewable energy shift which would pay dividends in the future. Germany also practices conservation of energy better than most countries, similar to Japan, getting the same GNP with lower and lower energy needs. If the US were to do what Germany and Japan have done in energy conservation there would be no need for Hormuz, US could supply Japan with energy. ...

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A hard fought election in Brazil between Mr. Bolsanaro and an ex-president Lula da Silva. Voting is compulsory in Brazil for all those who are literate and between age of 18 and 70 years. There are 156 million registered voters. President and members of Chamber of Deputies are elected for a four year term. Elections also take place for 27 governors for 26 states and one federal district. If no candidate in elections for president or governors gets 50% of the vote the vote heads to a runoff on October 30 between the top two candidates. Bolsanaro is supported by evangelical Christians in a Catholic country, rural landowners, and business people. He was a deputy or member of parliament for the state of Rio de Janeiro for 27 years, who won on a law and order and anti-corruption platform in 2018. Lula da Silva is a former trade union leader who was president from 2003 to 2010. He was popular during a commodity boom in Brazil's soyabean and iron ore export boom to China that financed social support programs. A corruption scandal affected his successor from the Worker's Party leading to the change in government after the collapse of the commodities boom. After he was given a jail sentence under the Bolsanaro government he was released by the Supreme court decision in 2019 that declared there was a lack of due process in his conviction. Mr. Bolsanaro also as a program to benefit poor families that is called Auxilio Brazil to replacve Lula's Bolsa Familia. Payments to 18 million recipients were increased in August and a monthly stipend was added for taxi and truck drivers by Bolsanaro. The competing interests and the pandemic with the high toll of around 685,000 deaths have created a highly contested election. ...

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Le Monde gives a detailed look at the origins of the RN and Marie Le Pen in her father's party the Front Nationale that had it's origins in France's War in Algeria. It's first success was in town councils in the south east Cote de Azur where former French Algerians had settled in large numbers. Jean Le Pen was the son of a fisherman in the Brittany region who lost is life hitting a mine during the war in Occupied France. He was a teenager at the time and is shown here as a ward of the state. He tried to enlist in the War in Vietnam but got there just after Dien Bien Phu and worked in Saigon for a newspaper Caravelle. He returned to France and joined a paratrooper unit in the French Air Force during the Algerian War and became an opponent of De Gaulle's policy in Algeria to decolonize the region. He inherited the fortune of a French cement manufacturer who supported his party FN. Chirac and Sarkozy become his opponents. For 20 years after this he is shown to win anywhere between 2% and 10% in European and French presidential elections. His daughter Marie Le Pen and her supporters decided to rebrand the party as Reassemblement Nationale RN and win as much as 15-20% and more recently 30% of the vote in presidential and EU elections. The fatigue with Macron leads to a surge in RN support in small towns and rural France. Marie changes her stance on the EU willing to support the EU. ...

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President Trump's poll ratings decline in the states of Michigan, Pennsylvania and Wisconsin. There just 78,000 more votes made him president, even after being behind 3 million votes in the nation overall, because of America's unique voting system by state. In these states the number of Americans proud or embarrassed of the president shows a decline in support. Only a third of adults express approval and about 40% express strong disapproval, 60% saying it leaves them embarrassed. Polling was done by Marist. 

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Most Ameicans 60 plus years plan to stay in their bigger homes and not downsize surveys show. These older Ameicans occupy 28% of these homes. Millenials families with children occupy only 14% of homes with 3+ bedrooms. Boomers don't want to give up their lower rate mortgages. They own about 50% of $32 trillion home equity in the US. The result is to make housing supply for families with children tighter than it would otherwise have been.

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Jens Hansegard interviews IKEA China head, Gillian Drakeford. Drakeford an employee of IKEA since 1988, has run the Chinese operations since 2003. She talks about how IKEA approaches the Chinese market. IKEA's Chinese sales in 2011 fiscal year ending Aug 30, were 4.9 billion RMB, 20% larger than in 2010, with 20% growth seen so far in 2012. Its plans are to open in 2nd tier cities with opening stores in Chongqing, and Wuhan. It has opened stores in Chengdu and Tianjin. The way IKEA opens stores is in partnering with its IKEA Centre Group which owns and manages shopping centres. In Wuxi, Beijing and Wuhan it will open stores with shopping centres of this type. The IKEA customer is 25-35 years in age with relatively higher incomes and education who finds a westernized lifestyle appealing. Space is a constraint, and there is the added factor of more stuff needing to be stored with more products available. A multigenerational family may live on 70-90 square metres. IKEA's challenge is to show how to deal with limited space, keep lowering prices to remain competitive with local competitors who are catching up to new retailing trends of IKEA type stores. Because Chinese middle class means much lower incomes than in the EU, the key is to meet affordability goals, and keep lowering prices for value. IKEA's "Lack" table has come down from 120 yuan to 39 yuan, and since 2000 it has cut prices on average by 60%. IKEA uses China's microblogging site Weibo to reach customers- where it puts up announcements and customers ask for tips, suggestions and put up their own pictures....

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Daniel Zhang takes over as CEO from Jonathan Lu in May 2014. Jack Ma, executive chairman, says a post 70's generation is now taking over at the company. Alibaba revenues increased to $2.77 billion, with per share earnings before stock grants increasing by 7% to 48 cents per share, and earnings after stock grants declining 49% to $463 million or 18 cents a share. 2015 1st quarter results showed mobile transactions making up 51%, up from 27% a year earlier. Active users on mobile platforms were 289 million in March 2015, increasing from 163 million the prior year. The mobile monetization rate is decreasing to 1.73%- this is the metric of how much in transaction value becomes company revenue. Share price went up 10% to $88.15 from $80 in pre-market trading on May 7, 2015. Its IPO offering price was $68, and the high reached was $120.

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Macron started out in the Socialist Party in Amiens, France. After going to elite schooling he joins the Socialist Party ministry of Francois Hollande. As Minister of the Economy he rises rapidly to replace Hollande with his own party called the Movement that he sets up and within a year wins presidential elections. The rapid rise, the lack of his Movement party having much experience and put together quickly with new younger people, his aloof presidency, and a lack of connection with the problems brought on by the deindustrialisation of France as production shifts to China, the problems of lack of work and cost of living in smaller towns in France, lead to Macron's loss of popularity. His party won only 10% of the vote in EU elections and 20% in the first round of Assembly elections in 2024. He is now allied with Sarkozy's Les Republicains, the very party he sought to replace by calling it old school and no longer relevant.  A small faction of the Les Republicains shifts out to ally with the National Rally of Le Pen and together the 2 parties seek a majority or near majority in the Assembly to take the prime minister position under Macron. The result would be a too young at 28 years Bardella as PM and the Socialist Alliance a close second in the National Assembly. Macron would have to come to terms with the Socialists he had abandoned to run the country and appoint Oliver Faure as prime minister if a second round gives his Movement and the Socialists over 50% of the vote. ...

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Pfizer coronavirus vaccine is shown to be 90% effective in results from Phase 3 trials. The findings come from a preliminary look at the first 94 infections in a group of 44,000 people in the trial. The vast majority of the cases received a control instead of vaccine. A vaccine is considered effective if it works on 50% of cases. The Pfizer vaccine is based on an experimental "mRNa" technology.

Britain has ordered 5 million till the end of 2020 and another 20 million for 2021. In total Pfizer plans to make a billion doses of the vaccine by 2021.

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Italy faces tighter restrictions and a national lockdown at Easter for the coronavirus, Italians who were the first to go into lockdown on March 10, 2020, now think they will be the last to exit lockdowns. The mood in Europe is of frustration with the slow vaccination drive and the failure to procure enough vaccine supplies and to approve vaccines in time. The US and Britain have vaccination drives that are moving rapidly leading to a reduction in cases and deaths. In Europe new cases are rising since mid February 2021, and there is the spread of the new variant first detected in the UK.  The variants make up 70% of new cases in France says Health Minister Olivier Veran. ICU's in France are 80% full. Elections in France in 2022 and in Germany in September 2021 are leading to government reluctance to impose tighter restrictions. The government strategy is now being questioned. Only 30% of Germans now have confidence in chancellor Merkel's ability to make competent decisions. The CDU's partner in the government, the SDU socialists have even less trust with SDU getting less than 10%. There are signs of a third wave of coronavirus in Germany resulting from variants of the virus, slow vaccinations, and reopenings. ...

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As Kamala Harris offers $25,000 to home buyers to make it more affordable and sets up a $40 million Innovation fund to build more homes, sets a target of 3 million homes to be built, housing and cost of renting or owning is front and center of attention in 2024. Dougherty and Davis of NYT look at the US housing shortage and rising rents for apartments and homes. A look at Kalamazoo, Michigan, as a sort of microcosm of the US housing situation. Around the time of the 2009 financial crisis and aftermath when vacant homes on streets in many cities were being bulldozed and when there was more housing than people needed the seeds were being planted for today's shortage of homes. There was less interest from builders, there were restrictions on mortgages and higher down payments, capital was harder to get for builders, adding up to fewer homes being built. US demand was for 1.6 million units of housing, the supply was about 1.1 million over the next decade after 2009 leading to the buildup of a shortage of 5 million home supply. Covid changed some patters of housing behaviour. More people work from home with remote work. Then by 2022 mortgage rates were up making housing less affordable just when owners of apartments raised rents by 20-30 percent. In Kalamazoo up by 40%. ...

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A study by the Pew Hispanic Center shows 46% of Hispanics 18-24 years with a high school diploma were enrolled in college in 2011, increasing from 37% in 2008. The number of Hispanics enrolled increased from 1.3 million in 2008 to 2.1 million in 2011. The high school graduation rate for Hispanics 18-24 years increased to 76%, having gone up to 70% in 2000 from 60% in the 1990's. The high school completion rate is 85% nationally and 81% for blacks. More Hispanics are likely to go to community colleges than 4 year colleges. College enrollment for whites by comparison is 51%, Asians 67%, and blacks 45%, of all Americans 18-24 years of age with high school diploma.

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Under a deal made between Partido Popular of prime minister Mariano Rajoy and the Ciudadanos party in Spain, the ruling party agreed to back measures to tackle corruption and ensure an independent judiciary. Public officials being investigated for corruption will be suspended from office. Selection will be done by members of the judiciary for 12 of the 20 board members previously elected by parliament that appoints judges and prosecutors. Wage subsidies are introduced for low income families and cuts in public spending for health and education are restored under the agreement,  which includes a program of 150 measures. The combined vote of the two parties get it to 169- 137 for the Partido Popular and 32 for Ciudadanos- and with the aid of a Canary Islands party to 170. The Ciudadanos party will not participate in the Partido Popular government but will vote in its favor. This is still short of the 176 votes needed in the 350 seat parliament. Rajoy could have a second term only if the Socialist party allows some members to abstain. As this is uncertain Spain faces the prospect of an election in December 2016. ...

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A fascinating look in DW.com at pictures of an iceberg 158 kilometres long and 48 kilometres wide, on its way to hit the British territory of South Georgia in the South Atlantic. The island of South Georgia is known for large populations of penguins and seals, albatrosses, and humpback as well as blue whales. Prior to its splitting up the iceberg was even larger about the size of Luxembourg. The iceberg is a few hundred metres thick. The iceberg has already travelled for 1600 kilometres, and will reach South Georgia in 10-20 days.

Antarctica is the most southern region in the world, with 99% covered with ice some 5000 metres thick, 1.3 times size of Europe. Lowest temperature at -99 degrees centigrade, windspeeds can reach 155 mph. On it there are 4000 scientists in summer on research stations of 30 countries.

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Said, Kent and Faucon describe the meetings and maneouvring between oil producers that led to the decision to not cut production at the November 2014 OPEC meetings in Vienna. This led to a drop in Brent crude down to below $70 by Dec. 2014, with Russia, Iran and Venezuela losing, countries such as India, and motorists benefitting from lower oil prices.

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At the end of 2008 China's crude steel making capacity was 660 million tons, but production was only about 500 million tons. The draft plan for steel industry for phaseout of backward production capacity onlyphases out 25 million tons. Capacity for automobile production is 12 million but only 9.37 million were sold in 2008. The government plan encourages mergers but not much thought has bee given to reducing capacity. About 30% of aluminium capacity is idle, 20% of cement capacity, and 70% of semiconductor production is idle. Some of this overcapacity may have to be written off at this rate says a World Bank specialist. The Stimulus spending of $585 billion would help utilize some of this capacity but the concern is that once its clear that 10% growth rates each year are a thing of the past there will still be alot of unneeded capacity that will have to be written off at great expense.

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Only about 20% of Ugandans have access to electricity according to Uganda Bureau of Statistics. About 10% of GDP is from tourism. The efforts to place a 380 MW electricity hydropower project near the Murchison Falls along the Nile tries to balance these two important needs. To maintain tourism and still increase electricity to improve the lives of the Ugandan people.

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For the 100,000 employees of Vodafone the pandemic has lessons for creativity, flexibility and innovating in work habits. In 2 weeks 95% of the employees worked remotely. Now Vodafone experts say that individual projects and tasks make up 60% of work which can be done remotely. Only 40% of tasks require working in a team setting with other people. The 60% done individually can be done in a remote setting making it necessary to to adopt a flexible approach for best results. Here Nick Read, Vodafone CEO, says because of London's unique setting and exceptional access to the talent pool this will always be a good office location as a central office. Yet the new concept is for hubs all over the country so that Vodafone can tap into talent across the nation in diverse parts of the UK. Mr. Read looks at the views of employees and says this period has shown enhanced productivity with remote working. The additional challenge of balancing family and work can create some stress, and Vodafone has taken some steps to tackle this. It provides guidance to employees on how to handle work in a remote setting, limits meetings to 20 minutes with long separation between meetings. Vodafone is now designing offices in European locations based on what it has learned during the pandemic. In the Netherlands it is splitting the office and remote work 50-50 based on Vodafone's new understanding of the value of remote work. The expansion of the work day as employees handle other tasks, has to be handled well with some structure. The German idea of Feierabend, or end of working day, calling for a set time to disconnect the work day and do something else cycling, exercizing, something fun and relaxing to disconnect, is shown in Lyrarc. Other articles on working remotely in Lyrarc show that limiting intense concentration work to 4-5 hours is a good way to be at your best in productive work. This is because an 8 hour work day at the office has many distractions, meetings and interactions. The office work day has much shorter stretches of concentrated work than we think. ...

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 President Trump says China is backing off in negotiations to address U.S. demands for a fair relationship on trade. He says the U.S. will increase tariffs from 10% imposed in September 2018 to 25% on $200 billion of Chinese goods starting May 10, 2019. China has put tariffs of 10% on $60 billion of American goods exported to China responding to the American tariffs in last September.  The U.S. says since China joined the World Trade Organization in 2001 with the approval of president Clinton it has unfairly benefited in trade with the U.S., leading to closure of factories and loss of jobs in the U.S. with state subsidized Chinese exports to the U.S. contrary to the spirit of the WTO and its rules. China has made promises to correct this and not kept them says the U.S. side in negotiations led by Robert Lighthizer. The tariffs moves are a tactic of president Trump to get China to relent and make fundamental changes in the way it exports to the U.S.  So far the Chinese response has been tit for tat. But this can change. As this report points out what is already known that China benefits far more and exports far more to the U.S. than the U.S. does to China. The $60 billion of American goods exports on which China placed tariffs represent two fifths of China's imports from U.S. With smaller exports from the U.S. to China, China has not much leverage in trade negotiations in this kind of tit for tat retaliation. It hurts China's exporters and economy much more than it does U.S. consumers. The increase in prices for U.S. consumers are also not expected to be significant, according to this report in the NYT, if China increase tariffs further. Aware of this and China's belief that past administrations have not responded is a guide to what the Trump administration can or will do, has convinced president Trump that there is no other way to get a fair trading relationship that respects U.S. interests, its jobs and workers. As Robert Lighthizer who leads the U.S. negotiating team faced this type of response from the Japanese when he negotiated with them (shoving off U.S. demands to reduce Japan's trade surplus in the eighties before accepting them), the U.S. thinks this strategy will work again. In any case it sees no alternatives to achieve its goal of a fair and balanced trading relationship. The U.S. international trade deficit in goods was up to $891 billion in February 2019 even after the tariffs on Chinese goods in September, showing that it will take a lot more to turn this as well as other trading relationships around.   ...