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Effects of the pandemic on U.S. and global business, the U.S. and global economy from the WSJ.

Imagine 700 of 763 aircraft, most of Lufthansa's planes parked. Lufthansa is in pause mode, having reduced its capacity by 94%. Most passenger airlines have become cargo airlines.

New car registrations in France have fallen 72%. Nissan Renault is not selling anything, and there are no revenues say company representatives.

100,000 sailors on cargo ships are at sea with no hope for landing as shipping comes to a standstill.

Workers on New York's power grid spend the night on trailers in parking lots and in confined spaces with no more than 6 persons on a team. If one got sick he could infect others, and cause a personnel shortage.

 

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This WSJ editorial says only now are European leaders realizing the errors made in leaving the Middle East to its own problems, and not intervening where necessay. It says the risks of not intervening are often higher than of intervening as is being proven in this situation after years of inaction and withdrawal in the Middle East. It points to the difficulties experienced by the Bush administration in turning things around in Iraq, but says by the end of the Bush administration in 2008 things were gradually returning to normal in Baghdad. With the withdrawal from Iraq and no action in Syria under the Obama administration policies of withdrawal from the Middle East, the entire region is unravelling. Europeans and Americans would prefer that what happens in North Africa remains there, says the Journal, but that is not the way it has worked out -with millions of refugees now making their way first to Turkey, Jordan and now to border countries Serbia, Hungary, Greece, overwhelming their resources. Germany's acceptance of 800,000 refugees is a great effort but it too faces the challenge of doing this without creating more anti-immigrant sentiment....

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Expectations of lower inflation in the U.S. for 2012. The Commerce Department showed inflation slowing with consumer prices up 2.5% over the prior year in November, down from 2.7% in October and 2.9% in September. The Labor Department's consumer price index went up by 0.8% annual rate in the last 3 months. Increase in labor costs are also mild. Hourly wages of private sector U.S. workers were up 1.8% in November 2011 over the prior year. Commodity demand in emerging markets is slowing with lower growth, which reduces pressure on commodity prices. The consumer price index is expected to rise by 1.2% in 2012, according to J.P. Morgan economists. The Federal Reserve in its recent statement after a Dec. 13 meeting stated it expects inflation at below 2%.

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The risk premium for investors in the U.S. stock market is about 5.4%. The risk premium is the higher return investors expect above the return on less risky government bonds to assume risks of a volatile stock market.This is the finding of researchers Fernando Duarte and Carlo Rosa at the New York Federal Reserve. It is the weighted average of 29 models used to calculate the average over the last 50 years. This is close to what it was after the bear market of the mid 70's and when shares were in a slump in 2009, and suggests a positive outlook for stocks. A separate indicator is the cyclically adjusted price earnings ratio of the American stock market developed by Robert Shiller of Yale, which averages profits over 10 years. This is at 23.2 in May 2013, and above the historical average, suggesting the U.S. market gains may not be too much higher from this point. Inflation is low, and commodity prices are lower which gives central banks in the U.S. and the eurozone more room flexibility in monetary policy. Japan's central bank is increasing the money supply to fight deflation and other central banks are cutting rates. This adds to the positive picture for U.S. share prices and stock market....

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Plastic use has increased with the tripling in parcels delivered in the last 4 years, up to 64 billion parcels. As much as 93% of the growth in trash in major cities in China in 2018 comes from this one source- an astonishing 850,000 tons of plastic waste in 2018 from the e-commerce and delivery sector. Food deliveries and Alibaba online deliveries add to plastic waste. The government is cracking down with new rules from the Environment Ministry. By the end of 2020 non biodegradable plastic bags will largely be banned from cities, and single use straws banned in restaurants across China.  This ban will extend to all cities and towns by 2022 and to markets selling fresh produce by 2025. Restaurants will have to cut use of plastic by 30% by 2025. In 2018 China stopped taking imports of plastic waste. China is beginning to realize the costs of letting single use plastic grow. The last regulation was in 2008 banning the giving of free plastic bags at retail markets and banning production of super thin bags. It has taken the sudden jump in use in package delivery and in food delivery for the government to finally act. Experts say China uses too much plastic. India has taken strong action against single use plastic in 2019 under the leadership of prime minister Modi. ...

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France produced 3.1 million tons of plastic waste, with 2.1 million tons being in packaging. A new environment protection law by president Macron requires supermarkets and other stores to use refill stations for packaging so that unpackaged goods can be sold. This is a legal obligation under the law to cut plastic waste.

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German retailer Arcandor filed for bankruptcy after the government rejectd arequest for a loan guarantee for $650 million euros. Arcandor's Karstadt departmetn stores are in most downtown shopping areas in Germany. Faced with aloan repayment of 710 million euros, Arcandor was in talks to merge with its competitor Metro which has theKaufhof department stores. Karstadt has 89 stores in Germany and 43,000 employees. The rejection by Chancellor Merkel has some political risk and Merkel is counting on the public opinion against bailouts to withstand the fallout from the increase in the unemployed. The government setup a115 billion euros rescue fund in March, but this is meant to help only those companies that ran into difficulties from the financial crisis not from management misdeeds or mistakes.

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Kenzaburo Oe in his writings reflected the anti-nuclear Japan of post World War II. That period also saw the emergence of China as a major economy. China's activity in the South China Sea, North Korea's ballistic missile program, created the situation where Japanese Defense Forces are now seen very differently as part of the US, India, Australia Quad alliance to ensure peace in the Asia-Pacific region.

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This WSJ editorial says this will be a long war. As in the early stages NATO training made a difference for Ukraine's defense this should continue with America's complete and rapid support so that the immense destruction that is taking place can be prevented. It says moral denunciations are not going to make a difference, that timely support on the ground is needed.

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This report in The Guardian shows the growing mental health issues in China with about 400 million people in lockdown. The pandemic, aging of society, children leaving older parents for big cities, loneliness and isolation for older people, and rapid changes in society as China industrialized, are resulting in growing mental health issues for the people. There is an acute shortage of mental health professionals to deal with the crisis.

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Plans of the Biden administration to bring back workers to the workforce in 2023 by increasing worker benefits. The place seen where America is lacking is participation of younger women in the workforce and older people who chose to retire during Covid. Increasing child care and benefits for child care is one line of action. Other approaches are being explored by Brian Deese of Biden's National Economic Council.

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Neom, infrastructure development the size of Massachusetts in Saudi Arabia, is a futuristic vision of the Saudi prince Mohammad bin Salman. It includes a75 mile long Mirror line project that is shown here in the WSJ. The cost of the project is about 1 trillion dollars. The Saudi prince sees this as away to diversify the economy away from oil using oil revenues that are high at today's prices.

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Property sales are estimated to fall by 28-33% in China, twice as earlier forecast by S&P Global Ratings. This is a steep decline that will affect the Chinese economy so dependent on construction. This week there were reports of property buyers in 100 cities getting together to withhold payments on unfinished apartments. Property developers depend on these payments as they have severe liquidity problems and need cash for operations.

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The Guardian sees Sunak's dry economic instincts as hopelessly inappropriate for the times with not enough help reaching needy families. It also sees Liz Truss's distrust of the state and public sector at a time when collective solidarity and solutions are needed as unhelpful. Truss is seen as trying to having it both ways in the way Boris Johnson did, cutting taxes as well as boosting spending on infrastructure.

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The Rs 6 per litre incentive to dairy producers in Karnataka has increased milk production in the state. This has led to Nandini and another cooperative based in Anand, Gujarat, Amul Dairy, to makeup 60% of all procurement by dairy farm cooperatives in India. Price of milk is about Rs 50-60 per litre, About Rs 240 per gallon, equivalent to about $3 a gallon similar to the price in the US.

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Letters to the WSJ ask the question -why are these thousands of good old boys given carte blanche, given a sort of impunity,  for immoral even criminal behaviour involving women? Readers ask is this the right response or must society move forward and hold all leaders to a higher standard. Other readers compare this to the election with candidate Goldwater which pulled down the whole Republican party.

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The huge challenges faced by a nation of 1.2 billion people and its border relations with China are the subject of this interview with the Australian Envoy to India. He says India faces some unique challenges but shares the same values of all the democracies in the region and in the world. He says rhetoric is one thing and practical action is another, saying that the QUAD is moving at that level.

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Deals made with Qatar, Norway, and Poland are helping Germany achieve energy independence. Economy minister Habeck has worked hard to negotiate these deals and bring new leadership to the energy ministry after decades of neglect of Germany's energy independence by chancellor Merkel and Mr. Schroeder who preceded Merkel. This WSJ report shows how Habeck reversed decades of neglect in a few months to establish the foundations of German energy independence.

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Both the Democratic and Republican parties are in danger of splitting as reader comments to this analysis in The Times shows. The progressive wing of the Democratic Party has little in common with the rest of the party. The Republican party has shifted to take on the working class base of the traditional Democratic party creating a confusing array of interests in each party with no particular sense of loyalty.

 

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The high mobility small footprint and precision strike of the High Mobility Artillery Rocket System or HIMARS is shown here in the WSJ. It was supplies to Ukraine to defend itself and has stalled a Russian invasion in Donbas region, and led to retreat of Russian forces in the east Kharkiv region and in the south Kherson region war fronts. Additional 18 Himars are being given by US to Ukraine.

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German chancellor Scholz and Economy Minister Habeck are on a visit to Canada to negotiate new deals for LNG and hydrogen supply chains. Canada is seen as a resource rich economy with stable supplies and a democracy firmly within the western alliance, that is also a key supplier of energy. Germany is looking for new resources after Habeck's trips to negotiate deals with Qatar and other Gulf countries.

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China has made an astonishing turn away from covid restrictions. Yet this comes after three years that hurt growth which will affect the recovery says this column in WSJ. China is looking for 5% growth in 2023. Problems in the way are a public affected by the lockdowns, a covid surge, housing that will take time to recover, and diversification by Foxconn and other companies away from China to India, Vietnam.

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Czech Republic Interior Minister Vit Rakusan says that the country has taken in over a half a million Czech refugees without overburdening or crashing our health and education systems. 100,000 have jobs in the labor market using admission mechanisms for this purpose and 50,000 children are in Czech schools. This puts the country at the forefront in taking in Ukraine refugees and integrating them in relation to its population.

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The entire administrative setup in India through 700 district collectors will participate in the Good Governance campaign in India. Every district collector will present one good governance practice and one successfully addressed public grievance on www.pgportal.gov.in/ggw. All administrative heads at the chief secretary level are involved, including central ministries and departments, state governments, departments of personnel and training, in an effort to create a new culture of good governance practice in India.