LyrArc Article Gist
The lower house of the French parliament approved the EU budget discipline treaty that limits deficits to 3% of GDP. It passed with a large majority of 477 votes to 70. About 284 members of the left parties voted for the bill. Sarkozy had pushed for passage of this treaty and Hollande agreed to it in his talks with chancellor Merkel of Germany. At the same time Germany and France agreed on promoting growth measures. The new French budget for 2013 reflects this committment to reducing the deficit to 3%. France's deficit declines from 4.5% in 2012 to 3% in 2013 under the new budget. It does this with shared sacrifices and higher corporate taxes and without sharp cuts in government spending that could hurt the economy.

LyrArc Article Gist
Yields on France's government bonds turned negative on July 9, 2012. As the pool of bonds from haven countries such as Holland and Germany is shrinking, France with its deep and sizable debt market is benefitting. France was able to sell 3.9 billion euros of 13 week Treasury bills at a yield of -0.005 and 2 billion euros of 24 week bills at an average yield of -0.006.

LyrArc Article Gist
Capital Economics, a consultancy, estimates that housing prices will fall by 15% in 2008 in Britain and by 12% in 2009. The mortgage market figures according to the Nationwide Building Society show that only 42,000 loans had been approved to buy homes in May under half th number from 2007 May and below even the trough reached in the early 1990's. An economist at Morgan Stanley estimates that with 15% fall in prices 1.2 million households will be under water or have negative equity in their homes, and with a 20% decline in housing prices this number could reach 2 million , as bad as it was in the worst days of early 1990's. A member of the Bank of England's monetary policy committee thinks the decline in housing starts would be on a much bigger scale than in the early 1990's. The loss of housing investment will lead to a loss of about one percentage point in GDP economic growth in 2008 and in 2009 according to Goldman Sachs. Thre would be a loss of 30-40% of the demand for equipment to setup new homes leading to a loss of 0.2-0.3% of GDP growth. Economic growth will be affected as declining consumer wealth leads to lower consumer spending. A one percetage point loss in consumer spending is expected and this will lower economic growth by half a percentage point of GDP over the next year according to the National Institute of Economic and Social Research. All this comes on top of inflation, rising prices of food and energy, loss of purchasing power. And the central bank cannot lower interest rates if it keeps its eye on inflation as the ECB has done....

LyrArc Article Gist
U.S. president Trump's 2017 budget is an effort to reshape spending priorities by the Republican party. Apart from Medicare and Social Security all other entitlement programs from the days of Lyndon Johnson's Great Society are subject to cuts. Deep cuts to Medicaid and food stamps, including introducing work requirements. The philosophy behind it is that compassion will now be measured not by how large these programs are but by how much the government can get people "off these programs and back in charge of their lives,"  according to Budget Director Mulvaney.  The cuts are $616 billion to Medicaid and Children's Health programs, $193 billion in cuts to Food Stamps, $143 billion in student loans, $72 billion in disability programs. The overhaul of the Affordable Health Care Act is part of this change. The reallocation would put more money into infrastructure for $200 billion, and in tax cuts, $19 billion in a parental leave program and $29 billion for veterans programs, plus added spending on the military. William Hoagland of the Bipartisan Policy Center, a Republican who worked on budget issues says it will be politically difficult as the cuts to lower income groups come with tax cuts for small businesses and higher income individuals.  Beyond the policy priorities there is an area where both Republicans and Democrats are skeptical of the budget. This is how it impacts the U.S. debt. Under Congressional Budget Office estimates the U.S. debt as a percentage of GDP which rose to about 75% after the Great Recession starting in 2008, is projected to grow to about 85%. In sharp contrast the Trump administration estimates of the Office of Management and Budget are for it to drop to 65% based on rosier estimates of 2% inflation, 3% growth for the decade ahead. Experts say this is unlikely once the Fed raises interest rates and the unemployment rate currently at 4.4% leads to rising inflation, undercutting growth which has remained below 2% for a long period. These concerns are also voiced by Hilsenrath in the WSJ based on the experience of other countries such a Britain that cut corporate taxes without seeing an uptick in economic growth. ...

LyrArc Article Gist
In a sign of the changes roiling the pharmaceutical industry the off patent business of American maker Pfizer is based in Shanghai. The generics business of Mylan Pharmaceutical is incorporated in Netherlands and run from Pittsburgh. Pressure is increasing in the generics industry from manufacturers in India and China. Pfizer announced the merger of its Upjohn off patent pharmaceuticals business with Mylan to fight pricing pressures. Pharmaceutical prices in the U.S. are the  highest in the world and generics offer only small relief compared to the government mandated pricing of the same pharma products in India. Generics drugs are also offered at lower prices by distributors who buy in bulk adding to pricing pressures in the U.S. The government rarely intervenes in the negotiated prices as it does in India or in other countries in Europe including Britain.  In fact many asthma patients young and old alike are forced to do without inhalers because of the exorbitant prices set by American manufacturers with scant help from government under Democratic or Republican administrations in the U.S. In this respect middle class customers in India have better access to asthma inhalers as well as hundreds of other medicines basic to healthy living. This has created a greater level of basic equity/fairness in India as well as in Europe in this regard than in the U.S.  In this sense the pricing of basic care medicines in the U.S. adds to the sense of a lack of fairness. To that is added the manner in which the banking and financial industry operated resulting in the financial crisis of 2009 and damage to the bank savings accounts of ordinary Americans hit by unemployment, underemployment, and lower savings accumulation with interest rates kept low to offset the damage done by the banks through bad lending. This is also why an astonishing percentage of Americans like never before in the last 50 years do not have basic funds for spending to manage a health crisis in the family. Just as in times of the Depression in the U.S. industry operates in a way that is oblivious to what ordinary Americans are experiencing only to be excoriated by FDR. ...

LyrArc Article Gist
Morello of the WP describes the situation in Afghanistan with about 10,000 U.S. troops remaining in the country and the Taliban refusing to continue negotiations started earlier. About one in five migrants to Europe are from Afghanistan as more educated people leave the country for better lives overseas. The Taliban is tapping into the discontent in the country with the large number of unemployed following the U.S. withdrawal. Morello says the poverty rate has increased to 49% by 2016.

LyrArc Article Gist
Goldman Sach economists say that technological improvements have increased productivity but this is not reflected in the statistics. Statistical measurement is an issue they say. Economists at JP Morgan Chase say the problem is that many of the technological improvements have not increased productivity in manufacturing, and there is a misallocation of resources to apps such as Uber and new products that do not increase productivity in the economy. Their view is that this is not a measurement issue, the drop in productivity makes sense and is very real. Compared to earlier shifts in technology this one has provided little in the way of serious improvement.

LyrArc Article Gist
Housing prices surge in London in late 2013. Prices increased by 10% in October 2013. The average asking price for a house in London increased by 50,000 pounds to 544,000 pounds in October 2013 at online real estate agency Rightmove website.

LyrArc Article Gist
A complete breakdown in negotiations between the U.S. and Russia happens after Russia continues its bombing campaign in Aleppo. About 275,000 people and 100,000 children are in the war torn area in northern Syria. The U.S. had called on Russia to stop the bombing campaign, but Secretary of State Kerry failed to persuade Russia to commit to a ceasefire. The result has been international criticism of the Russian role in the war, and speculation on what president Putin sees Russia gaining from this intervention in DW.com and other sites. 

LyrArc Article Gist
Moritz Kramer, a managing director at S&P, says Spain, Italy, France and Portugal cannot depend on austerity measures and cuts in spending alone to resolve the eurozone crisis. This is only one aspect of the problem facing the countries in southern Europe. The major reason for the problem is the lack of competitiveness in their economies. Nobel winner Stiglitz also points this out and adds that its important to note that the human and natural resources of Europe are the same and the potential just as good today as before the eurozone financial crisis. He says southern Europe has failed to utilize its human and capital resources and improve its technologies in ways that would make it more competitive with Asian countries. Experts point to the decade it took Germany to address problems created by inflexible labor markets, wage competitiveness, and investments in technology and human resources to get to where it is today.

LyrArc Article Gist
In addition to the efforts by protests to preserve Hong Kong's special autonomous status, there is a protest by students "Occupy Central," similiar to the "Occupy Wall Street" protests. That aspect of the protest is aimed less at Beijing than at the financial establishment in Hong Kong. Because of its role as financial capital in Asia a lot is at stake for the U.S., Britain, and for China itself, in preserving the special role that Hong Kong has enjoyed for two decades since 1997 transfer from Britain. That independent role and separate status is needed for a world financial centre and access to the best human resources.

LyrArc Article Gist
Areddy describes the choices facing China's president Xi Jinping as he faces protests in Hong Kong demanding the resignation of Chief Executive Leung Chun-ying. Protestors are also calling for canceling of a plan to limit nominations for chief executive to a committee loyal to Beijing. Xi Jinping has experience with Hong Kong affairs as he held the portfolio for Hong Kong affairs as part of the leadership when he was vice president. There are precedents where Beijng has changed course, as it sees it important to put memories of Tiananmen protest suppression behind. In 2003 six years after Britain handed Hong Kong to China -under an agreement for "one country, two systems," that granted separate status and system of government to Hong Kong- an anti-subversion law was pulled back. And the unpopular Chief Executive Tung Chee-hwa, a shipping magnate, resigned after 18 months. Beijing has to balance its concern for the "contagion effect" of protests on other parts of China, with the need to maintain the right climate for business and investment in Hong Kong and other financial centres. With slowing growth and limits to overexpanding credit, a crackdown in Hong Kong would further exacerbate problems with the international community, and create tensions in Taiwan about future reintegration with China. China warned foreigners not to interfere, and the American Consulate in Hong Kong stated it "strongly supports Hong Kong's well-established traditions and Basic Law protections of internationally recognized fundamental freedoms, such as freedom of peaceful assembly, freedom of expression and freedom of the press." The British government also pointed to Hong Kong's "fundamental rights and freedoms, including the right to demonstrate," which were in the spirit of the 1997 transfer agreement....