LyrArc Article Gist
The problem of information providers is linked to the problem of the recipient of the information- the common man in America. For the common man in America these are distant places with strange cultures and manners of living, remote from his everyday existence in an industrialized country. Why should the common man in America care if a small fraction of GNP and a trained military with advanced equipment will be sufficient to deal with situations in remote places. A fast growing economy between 1950- 2000 could also absorb the costs of local conflicts. The reason the common man in America should care is that the economy is expected to grow slowly, so that poor information leading to poor decisions on allocating limited and declining resources for different local conflicts- a war in Iraq costing 1 trillion dollars, and a war in Afghanistan 1 trillion dollars- can compromise future economic security, investment in America and overall defense needs. Especially when money wasted with poor decisions cannot be retrieved or put back in the Treasury, and creates future problems....

LyrArc Article Gist
Apple faces large hurdles in China with models made locally by Huawei and other Chinese companies that offer similar features at a price about one third less. Chinese buyers are also looking for products that are made locally by Chinese companies. As a result Apple's market share in China has declined from 9% in 2015 to 7% in 2016. The future for Apple does not look bright apart from a core group of Apple fans that look for new product launches every year. Social media comments cited here show the comments about the iPhone 7 that say buyers should not pay $159 for Air Pods, the cordless earbuds. With the economic situation changing buyers are careful to pay so much for the iPhone 7, when it looks so much like the iPhone 6. In India Apple iPhone price are much higher and remain a significant hurdle for price conscious buyers.

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The situation in Guangdong province in 2012, with older factories unable to compete with the rising wages, stricter environmental enforcement, and lower export demand. Many Taiwanese manufacturers are closing factories. The growth in Dongguan, a manufacturing hub in Guangdong, is estimated at 3.5% for the first three quarters of 2012, half the overall rate for Guangdong province. A researcher in a Chinese think tank says China's manufacturers are in a kind of "sandwich trap" with competition from Vietnam and India in lower wage production and competition from Germany and the U.S. in higher wage technology intensive products. This is especially true in 2012-2013, now that U.S. and German manufacturers have reduced costs and increased competitiveness.

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China announced that it would make its exchange rate flexible, but also emphasized that it would do so gradually. What this means is that China will have a managed floating exchange rate. China followed a managed floating policy between mid 2005 and mid 2008, with a 21% upward valuation during that period for the yuan. During the 2008 crisis upto now the rate was pegged. The yuan was pegged at 6.83 yuan to the dollar. China is now rebalancing its economy so that it is not overly dependent on exports. The idea is to let domestic wages and domestic consumption pick up the slack in the markets of Europe and the USA. Europe is taking up austerity measures, and the mood in the US is shifting towards concern about growing budget and trade deficits. See the groups for "China wages" and "China workers."

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By offering the prospect of higher returns in a low return environment venture capital firms are raising new funds at the highest rate in 15 years in 2016. Venture Capital firms have raised about $13 billion in the first quarter of 2016 from pension funds, endowment funds, and other sources, with about 50% of the funds going to about 7% of the total number of firms, according to Venture Source- including $2 billion to Accel Partners, other firms are Andreeson, Founders Fund, Kleiner Perkins. The returns for ten years from venture capital are about 11% compared to 6.8% for S&P 500 index, according to Cambridge Associates. Usually the fund capital raising lags behind market downturns. Much of the returns for some of the startups are not reflected in cash inflows with returns being large on paper, and startup financing has increased for firms, resulting in capital shortages and more fund raising in the industry.

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Estimates of the exposure of European banks to Greece's sovereign debt shows BNP Paribas has 5.01 billion euros in exposure to Greek debt, Societe Generale 4.23 billion euros, Deutsche Bank 3.02 billion euros, and HSBC 1.94 billion euros, Credit Agricole 0.85 billion euros, Unicredit 0.80 billion euros, Santander 0.51 billion euros. The exposure of French, German, Italian and Spanish banks in Greece is a critical difficulty in resolving the crisis, as the banks are still in a fragile condition after the global financial crisis of 2008. With the debate on resolution of the crisis focusing on how a three way distribution of the burden should take place between austerity cuts, bondholder and creditors, and taxpayers in Germany and other EU countries, negotiations are finally taking place between each European government and the banks of that country. Three countries where such talks are taking place are Germany, France and the Netherlands. Finance ministry officials in Germany and France met with representatives of the banks and insurers in their country to arrange for the banks to voluntarily take losses on their holdings. The respective holdings of Greece's government debt according to the Bank for International Settlements are: French banks $14 billion, German banks $22.65 billion. Overall exposure to Greece is higher for French banks- at $56.7 billion for French banks and $33.97 billion for German banks. This opens the door to a Brady Plan type solution for the financial crisis in EU countries Greece, Ireland, Portugal and Spain....