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In this look at China's One Belt One Road Inititative, DW.com analyst Siegfried Wolf is critical of the way it was put together. It has no institutional structure, and is mostly based on bilateral not multilateral arrangement, and lacks transparency. He says its will complicate geopolitics in the region. This is already evident with Japanese foreign minister Kono calling for Japan, Australia, India and the U.S. to come up with an alternative to OBOR. Wolf says the EU has concerns about corruption, exclusion of regions inside countries such as Pakistan in economic arrangements, and seeks free trade guarantees. His biggest criticism of the Silk Road Initiative is that being based on Chinese loans it will pose a severe challenge in terms of debt buildup for weaker economies. This was already evident with the effort to convert part of about $6 billion in loans to Sri Lanka, through a $1.12 billion lease to China of the port of Hambantota. Wolf says many of the projects inside OBOR were already planned before it was setup, and now put under OBOR as part of president Jinping's initiative.  ...

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People in Japan know the decluttering movement, to simplify one's life by getting rid of things one really doesn't need, as "danshari." The word "danshari" is taken from 3 Japanese characters meaning "refuse," "dispose" and "separate." Hideko Yamashita's book on danshari is a bestseller in Japan. She says it is a way to get rid of what is contaminating one's life, just like the way one does Buddhist meditation or practices Zen Buddhism to unclutter one's mind. Religion teaches one to keep the minimum that adds meaning and joy to one's life. This is the opposite of the tendency in the postwar years to collect and hoard things. To not be wasteful or "mottainai" was a good thing then, and before the war when there was scarcity of consumer goods during Japan's early development phase. Now with a consumer society things have changed, just as in the U.S. and Europe, decluttering makes sense in a consumer society where one is under constant pressure from advertising to buy things. ...

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Spain's domestic airline Spanair cancelled all flights and filed for bankruptcy protection. The government of Catalonia owns 85.6% of Spanair, Scandinavian airline SAS owns 10.9%. The Catalan government tried to keep Spanair running as long as possible as part of its plan to develop Barcelona's El Prat airport as a regional hub. This is the third Spanish airline to shut down after Air Comet and Air Madrid. Its competitors were Vueling Airlines, run by Air Iberia, U.K.'s EasyJet and Ireland's Ryanair.

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Baer describes the role played by Jeb Bush at Lehman, the sensitive moments when Lehman was near collapse and Lehman executives suggested Dick Fuld, the CEO, should talk to his brother George W Bush, the U.S. president. According to Baer this call was never made because of the odd position it would place the two brothers in. Jeb Bush made a trip to Mexico City to meet Carlos Slim, a telecom billionaire, seeking investment prior to Lehman's collapse. Bush was paid $1.3 million annually for his work at Lehman, and after Lehman was acquired by Barclay's bank $2 million annually. Bush worked under Steve Lessing, a key fund raiser for his brother George W. Bush, at Lehman and Barclay's. The work involved talking to clients including healthcare companies Cigna, insurance company MetLife, and other clients. About half of Bush's time was spent working at the bank as an adviser, not an employee. The only other candidate for president in 2016 who worked at Wall Street, Ohio governor John Kasich, also worked at Lehman from 2001 to 2008. Kasich was reportedly paid $182,000 and a bonus of $432,000 as managing director at the investment banking division, less than Jeb Bush but working full time. When Jeb Bush graduated from the University of Texas in 1974 he worked at Texas Commerce Bank, founded by James Baker III, a close friend of his father George H.W. Bush. He worked there from 1974 to 1980, in the international division looking at country risks in Latin America. Both Jeb Bush and Kasich face the prospect of facing difficult questions about their time at Lehman Brothers, because of the 2008 financial crisis and aggressive leveraged expansion at the bank leading to its collapse....

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Germany has shown that low tech contact tracing efforts work- no apps needed, a phone, a desktop computer with a centralized database, and most important the human relations skills of the person doing the calls. The  sensitivity to the situation facing each person being called, being able to talk to the person in the language they speak in a multilingual environment such as California, is shown here. A 40 person team operates in San Francisco consisting of public health officials, clinicians, medical students and librarians. They call the contacts of people with coronavirus, arrange tests, and as needed send packages of food and medicines to hotel rooms or homes. Every call is expected to last 15 minutes but all sorts of questions are handled.  English and Spanish are used. Here one of the persons doing the contact tracing says she does not use apps, just an open source software used in the fight against Ebola. Definitely low tech, no waiting, get going is the message to every city in the world. She says apps software such as what Google and Apple are putting out can tell you whether the person went to some place, but cannot tell you more about that person, cannot tell you about problems the person is having being tested, and how they are having difficulty providing for families. One of the big lessons from Germany and efforts such as this one in San Francisco, and in other places such as Paris, Singapore, Taiwan, is that there is a complex nature to contact tracing that cannot be solved by tech. In fact the best thing to do is to get started immediately, with a phone and a database on a computer, as long as you have a person who has the motivation and skills, empathy with people, a lot can be done. Waiting for apps is a dangerous waste of time is shown by the low tech German experience, and the experience in other places. Most important is starting immediately. The example shown here of working with migrant workers in contact tracing shows in the most vulnerable places it is these human relations skills that count, that no tech app can do. It requires detective skills to find out and get people to share their history of movements and contacts for 14 days . In Singapore crowded dormitories house 300,000 of 1.4 million migrant workers. Singapore using an app also but its use is secondary. Apps don't work in many situations but fail in the most critical situations such as these dormitories and other eccentric or atypical situations such as faced by South Korea with religious groups and gay communities, elderly people in Europe, that generate the worst dangers of spread and need to be cluster isolated quickly. Human contact tracing has a history of being an effective method and was used in China and South Korea during the 2003 SARS epidemic. More countries need to adopt the method used in Asia and in Germany, particularly Britain, the U.S., France and India. It is OK that Britain's NHS and India's national government with Aarogya Setu app have put out their own apps which balance privacy concerns with the need to act immediately and cover the entire country, but the hard slog of human contact tracing teams in each district is indispensable. This is why the former Health minister in Britain calls it Britain's national mission to do this. Speed is key- putting together teams across the country in every district from skilled volunteers or government workers, and pulling together the phone and a centralized database on a computer as basic equipment. The fact that this is easily doable and people with human skills needed can always be recruited as they have been in Germany- from public officials in local government who are less busy in lockdowns, medical students, clinicians, volunteers, people from different professions- makes it inexcusable not to learn from others experience and get going. Just Do It. You want to reopen business, professions, offices and public services- Just Do It, it makes this possible. You want to prevent spread of the virus- Just Do It, it makes this possible. You want to limit damage to the economy and get the recovery going- Just Do It, it makes this possible. People of all shades of opinion can agree on this- its the only thing that works, even when there is a lack of enough proper accurate testing. ...

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A very relevant comment about the media coverage on Putin's negotiations in Beijing for supplying natural gas to China, by a reader of the WSJ, Frank Peel. He points out China and Russia do not share the same goals and Putin talked about the Chinese as tough negotiators after signing the deal. The price as a "commercial secret" is because its years, could be 5, before gas actually flows to China from Siberian fields. Russia, is a smaller oil based economy- having failed to make the transition to a diversified economy- and very susceptible to the economic conditions in Europe and the U.S., as the 2008 crisis showed with very steep drops in output. President Obama has also pointed to this. Russia also shares with Argentina the tendency for elites- in the case of Russia a newly created oligarchy of business interests under Putin and his predecessor- to shift capital out of the country, making it even more susceptible to loss of value of the currency, the ruble. Devaluation of the ruble experienced under Yeltsin was severely traumatic for Russia, and the head of Russia's central bank went on state television recently to reassure ordinary Russians that this would not happen. The rainy day sovereign fund of over $400 billion acts as a cushion for shocks in short periods, but sustained loss of foreign investment would damage prospects for future improvements in standards of living or economic growth....

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Kamal Ahmwed says in this BBC report that the WTO has belatedly recognized that the losses from world trade for workers in industries that are hurt can be significant, and public sentiment matters especially when there is unfair trade. He visits a small Pennsylvania steel town of 40,000 where the population declined to 7000 after closure of steel mills. This is why the WTO now recognizes that the gains from fee trade are "often uneven," and "may have led to rising inequality." 

Even if the overall gains from free trade are significant as Kamal Ahmed points out the downside and losses are still smaller but significant, and concentrated in certain regions such as the midwestern U.S. or eastern U.S. can lead to public anger that led to the change in administration in the U.S. in 2017.

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Michael Birnbaum, the Post, Moscow bureau chief talks to experts and politicians in Moscow about the economic situation as the ruble declines by 36% since July, with the fall in oil prices accelerating its fall and reducing the impact of central bank intervention in slowing the decline. He cites a Putin interview with Tass news agency in Nov. which he says a tieup is possible between the U.S. and Saudi Arabia to bring down oil prices as a way to strengthen the effect of sanctions in changing Russian policy. Russian Finance minister Anton Siluanov says lost oil revenue impact is about $90 to $100 billion a year, added to the cost of sanctions at $40 billion. Significant capital flight also adds to the overall cost. Russian companies borrowing in dollars have large debt payments due that will need to be supported by the Russian government, an added cost. This will put the Russian economy in recession in 2015. The central bank expects inflaion at 10% in 2015. Large losses of this magnitude will be harder to sustain and deplete international reserves of $429 billion as of Oct. 2014. The thinking of ordinary Russians is reflected in an independent Levada Center opinion poll showing 61% of Russians expecting a decline in living standards and economic crisis in the near future. The man most responsible for stabilizing Russia's finances, former finance minister Alexei Kudrin, who had profound public disagreements with president Medvedev over increases in the military budget, warned of an economic crisis following the parliamentary and presidential elections. A major weakness of the Putin-Medvedev second and third terms is the failure to use higher oil revenues to expand the tech sector and other industries to diversify Russian exports away from oil. ...

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German automobile companies have made some bad bets on China sales. Sales in China have collapsed for Porsche as Chinese are buying local Chinese products and local Chinese autos are competitive. NYT reports on Porsche and the bad bet on China sales, then as tariffs hit serious problems.

Oliver Blume Porsche CEO says-

"Our market in China has literally collapsed. U.S. import tariffs are weighing on our business.”

“We already faced massive headwinds last year — now we are experiencing a violent storm."

Audi, Mercedes and BMW have been caught in a storm by making most of their US sold cars in Germany. The warnings from the first DJT term were ignores as they were by Apple in the US which continued to make in China. These companies are now facing problems of acting within a short time to take action to build in America to avoid tariffs.

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Cracks are appearing in Japan's manufacturing model in recent years. Kobe Steel, Mitsubishi Materials and Subaru Corp have admitted to manipulating quality inspections. Takata Corp, maker of airbags is a case study in what can go wrong, as the company declared bankruptcy after failing to tackle safety problems and supplying defective airbags. The case is all the more astounding as airbags are designed for ensuring the safety of automobile passengers, a key feature of every automobile.  The situation is one of failure of management to take the right actions. This also happened with Toyota as management missteps worsened the issues related to faulty acceleration of vehicles, leading to media focus on Toyota in the U.S. Japan is not unique in this area of management failures as VW's actions in the diesel emissions case have clearly shown. Pressures to cut costs are part of the problem as this report shows. In Japanese companies quality checking staff employees are the targets of cost cutting layoffs resulting in the faulty step of outsourcing quality checks, which is contrary to what the country's pioneers sought to do when they adopted American Total Quality methods in the 1960's. This creates opportunities for China today, and for India in the future if it is able to capitalize on the opportunities in manufacturing desperately needed for job creation.    ...

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The 2018 election in Mexico brings to power a party called The Movement for National Regeneration or Morena created in 2014 by Manuel Lopez Obrador, after he left the PRD. Obrador ran on the PRD ticket for president in the last two elections. Obrador won with 53% of the vote, about 30% above the vote gained by the next leading rival.  Elections for the lower house of parliament showed a steep drop from 204 seats to 45 seats for the PRI party which was in power under president Nieto. The next leading party PAN which ran the government before the Nieto term in office, and the centre left PRD, were badly weakened. PRD now has 21 members in lower house of parliament compared to 53 before. So deep were losses for the opposition parties such as PRI and PAN which alternately ran the government, and particularly the PRI which dominated Mexican politics since 1950, that experts see Mr. Obrador as replacing the PRI's dominance of politics with the centre left Morena. Morena's rise is a result of work at the grass roots level in Mexico just when the PRI was discredited for corruption and failure to maintain the rule of law. PRI candidate for president Antonio Meade was a U.S. trained former finance, foreign and social development minister who lacks grass roots activism support base. ...

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Mahathir Mohamed 92, wins the 2018 general elections in Malaysia with a commanding majority, leading to the fall of the government of prime minister Najib Razak. Razak led the United Malay National Organization UMNO after Mahathir Mohamed's departure from politics.  Unlike Mahathir, Najib was not fluent in Malay, was educated at top British schools and unable to connect freely with the Malay popular base. His main connnection was through his father Tun Abdul Razak who was the second prime minister of Malaysia. The United Malay National Organization serves the interests of the Malay people in the country. After decades in government the party has deteriorated and is now steeped in patronage, with the corruption in the Najib government leading to the 1MDB money laundering scandal. This led to the return of Mahathir Mohamed to politics to cleanup the government.  For several years the Najib government was seen as acting with impunity following the 1MDB revelations of corruption which were investigated by prosecutors in Malaysia and the Justice Department in the U.S. The Attorney General of Malaysia was fired for his investigation by Najib Razak, leading to the return of Mahathir Mohamed to politics and the elections of 2018. The investigations into the 1MDB scandal are now likely to proceed as this has aroused popular sentiment in Malaysia for clean government. ...

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A seven member panel formed by Toyota to look into Toyota's recall problems made its recommendations recently. The panel's report says Toyota was not good at responding to criticism from outside. Company executives looked at complaints about sudden acceleration defensively or skeptically, and viewed regulators in an "adversarial" manner. The NHTSA also has come under criticism in investigations, because to some extent Toyota's close connections with the NHTSA made it possible for the company to drags its feet in responding to complaints. Edmunds.com CEO, Jeremy Anwyl, says Toyota has a stable and predictable way of doing things and this does not work well in a crisis, leaving Toyota uniquely vulnerable to this. The insularity of executives in Japan because of the lack of non-Japanese on the Board. and in other important positions, magnifies the problems when they are rooted in a crosscultural environment. Such complaints in the U.S. media are viewed differently than in Japan. The report also pointed out that safety and quality are two different things - that processes that improve quality will not necessarily produce safe vehicles. By putting safety under quality and making everyone responsible for quality, no specific executives were assigned responsibility for safety. One of the lessons learned from the recall crisis is that specific responsibility needs to be assigned for safety, and the person in charge has to report directly to the President and top managers. One of the panel members, Brian O'Neil, a former president of the Insurance Institute for Highway Saferty, says the old adage is true in this case- when everyone is responsible, no one is responsible....

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The relationship from college years at Amherst College in the U.S. of Greek political leaders Antonis Samaras and George Papandreou. The efforts to setup a national unity government that failed. The increasing support for the opposition New Democracy Party led by Samaras- with 16% unemployment- and the prospect of new elections. Samaras supports spending cuts. He also favors tax cuts, and a flat tax rate of 15% on business. Greece has a long history of tax evasion and distrust of central authority going back to centuries of Turkish rule. Samaras believes that the lower tax rate of 15% would help change the Greek cultural trait of evading taxes becaue it would be on the honor of people to pay such a basic tax. EU leaders are skeptical that lower taxes are the right policy to reduce the deficit. This adds to the political uncertainty as the new government would have to implement the measures agreed to between the current Greek government and the EU leaders. A similiar situation existed in Portugal but the recent elections there, participation of the opposition party in talks, and the newly elected government conducting its own negotiations, has removed that element of uncertainty which exists in Greece. ...

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Questions about whether the emerging market countries are looking ahead at a period of lower growth in the next decade. If the slowdown in 2013 is structural then these countries have to to make changes in economic policies that will help them return to higher rates of growth. If the slowdown is cyclical then this is temporary and emerging market countries will return to higher growth rates. Countries such as Brazil, Mexico and India need to improve infrastructure and educational systems, and invest in research and development to generate more growth. Turkey and India depend on foreign capital, which puts limits to growth, creating a need to boost domestic savings and investment for long term growth. Lower rate of about 7% compared to the 9-10% of the last decade in China are because the wave of investment in construction and infrastructure building through huge state investments is now slowing, says Peter Aslund of the Peterson Institute of International Economics. It is a positive prospect for China, according to Kalpana Kochhar, a deputy director of IMF, because of the asset bubbles developing in real estate. It is seen positively by China's new government as it tackles problems created by a rush to industrialization of widespread pollution of the environment, and lack of balanced development without attention paid to healthcare, worker wages and social security. Stephen Schwartz of BBVA bank, says urbanizaton will drive further gains, especially in India, which has lagged behind the gains made in China and is likely to follow the rapid urbanization seen in China. New elections in India in 2014 are likely to lead to more growth oriented government policies. A pause in the U.S. Federal Reserve's policy of withdrawing economic stimulus gives emerging markets, especially India, and opportunity to come up with new economic policies to restore growth....

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The Fifth U.S. Circuit Court of Appeals granted a U.S. administration request staying the effect of a lower court ruling, giving the government the $3.6 billion in U.S. Defense Department funds to build a border wall. This money goes towards the goal of building 500 miles of the wall by the end of 2020. In a 2-1 decision the court majority cited a Supreme Court order from July 2019 that gave the Trump administration the go ahead to use military funds for border wall construction.

The $3.6 billion is part of a $6.7 billion plan of spending under an emergency declaration by president Trump on grounds of border security. So far 100 miles of border wall have replaced flimsier construction barriers that existed. The government now needs to convince private land owners along large stretches of the border along the Rio Grande and other areas to give up their land for the wall. 

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There is a 40% drop in migrant flows through Mexico from Guatemala to the U.S. This follows action by Mexican authorites at its border with Guatemala after Mexico signed an agreement with the U.S. to control flow of migrants from Guatemala.

A recent poll by the Reforma newspaper shows 55% of Mexicans are in favor of deporting illegal immigrants, and most agree they are a burden on Mexico.  Mr. Lopez Obrador reversed an earlier policy of allowing transit of migrants from Guatemala to avoid new tariffs by president Trump on Mexican goods. Since then relations have improved between the U.S. and Mexico, and Mexico also agreed to labor protections and higher wages to protect its status as a regional hub for North America for auto production. 

The result of the deploying of the new National Guard set up by Mexico at the border with Guatemala is to dissuade migrants from making the journey.

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House rules of order from the U.S. House of Representatives would have as presiding officer at the Republican National Convention, Speaker Paul Ryan. Efforts to change this were pushed back at a RNC meeting in Florida. Trump's representatives Manafort and Ben Carson attempted to repair damaged relations between the Republican National Committee, its chairman Vince Preibus, and Trump, at that meeting. The Manafort argument was that Trump's flaws were of personality not character, which would be easier to fix than that facing Hillary Clinton, yet many RNC members were skeptical of this. A April 2016 WSJ/NBC poll shows Hillary Clinton leading Trump 50% to 39%, by 11 points- the surprising finding is that the poll also shows 56% of both candidates support comes from voters anxious to avoid the alternative candidate.

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VW bonds take a big hit following the emissions scandal. The annual cost of insuring 10 million euros of VW debt against default for five years is 214,000 euros. VW's cash flow after dividends is estimated at 5 billion euros by Fitch in 2016-2017. What is happening to VW goes beyond the emissions scandal. The overly easy environment for corporate borrowing with the loose monetary policy in Europe and the U.S. has made it easy for corporate borrowers to raise money at really low rates. This environment is about to change with VW being the beginning of a shift. In January 2015 VW raised 1 billion euros, with a 15 year bond and interest rate of 1.625%. This bond has dropped in price to 85.6% of face value.

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Prospects for the global economy in 2016- debt to GDP ratios high in Turkey, Brazil and China lead to problems and slowing growth. India an exception in emerging markets with growth rate above 7%, benefitting from increasing foreign investment and halving of oil prices. U.S. recovers slowly, and the eurozone emerges from the debt crisis with need for further quantitative easing by the European Central Bank. Russia recovers gradually after a steep devaluation of the ruble. Ironically just when a slow recovery is taking place in 2015-2016, the private sector governance improvements, and serious tackling of debt problems, lead one to conclude that prospects for the long term are better today than in 2005 when the optimism was not well grounded because of weak governance and debt buildup.

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Bank of America plans to sell its $8 billion stake in China Construction Bank. Bank of America will post a $3.3 billion gain on the sale of these shares. This lowers Bank of America's stake in China Construction Bank to 5% from 10%. Buyers include Temasek Holdings of Singapore. Bank of America's new CEO Brian Moynhan is trying to sell noncore assets to bring the bank closer to meeting new reserve capital requirements set by the Federal Reserve. These steps include selling its consumer credit card unit in Canada, and plans to sell other non-U.S. credit card units. Warren Buffett recently made a $5 billion investment in Bank of America. Restructuring of consumer units will lead to job reductions of 10,000. Earlier this year the bank made 6000 job reductions.

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Julie Jargon's interview with Green Mountain Coffee's CEO Larry Blanford. Green Mountain has grown rapidly after it acquired the Keurig brand of single serve coffee makers in 2006. He says K-Cups and single serve coffee is popular because of the broad choice it offers users to have different types of coffee during different times of the day without having to open three or four different bags of coffe that would go stale. On the threat posed by Starbucks single serve coffee machines to be introduced in fall 2012, Blanford says it is basically a espresso single-serve system and does not compete directly with the filtered coffee products from Green Mountain. Espresso is a small part of the U.S. coffee business. He sees growth moderating to 15-20% from the 70% in recent years.

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About the family's ownership of the New York Times for many generations, Sulzberger would say that nepotism works. Sulzberger transformed and renewed the Times from what it was in the sixties before turning the paper over to management by his son in the nineties. The Times has been a family operation since being bought by Sulzberger's grandfather Adolph Ochs in 1896. Most of the newspapers in the U.S. are no longer run by the families that once owned them. The merits of a well run family operation are to be seen not just in the newspaper business. One of the most famous global brands is Toyota- which has returned to its family roots after a crisis and was in the postwar years led by Soichiro Toyoda and now by his son Akio Toyoda.

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The Labor Department reports that nonfarm payrolls increased by 200,000 in December 2011, based on its employer survey. Private sector jobs added were 212,000, while the government sector lost 12,000 jobs. A survey of U.S. households showed the unemployment rate declined to 8.5% in December 2011. Overall 1.6 million jobs were added in 2011, taking nonfarm payrolls to 131.9 million in Dec. 2011. This is 6.1 million lower than the figure in Jan. 2008, when the recession started. An estimated 125,000 jobs are needed each month to keep the unemployment rate stable because of the increasing population. The household survey shows 13.1 million people unemployed in December 2011. American workers hourly earnings went up by 4 cents in Dec. to $23.24. Wages are up 2.1% for 2011, lower than reported inflation of 3.4%.

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Ford's new 2013 Fusion model was radically redesigned to compete with the redesigned midsize Camry, and expected redesigns of the Honda Accord, Nissan Altima, the VW Passat and the Chevy Malibu. Ford hopes to gain market share with the Fusion after making only a small gain in market share of one tenth of a point in 2011, compared to half a percentage point for GM and 1.3 percentage points for Chrysler. VW Passat sales doubled in the last quarter of 2011 compared to all of 2010, showing increased competition in this segment. The new Fusion was designed at Ford's design center in Cologne, Germany, where the Focus was designed. Ford is shifting responsibility for car design to Europe and keeping pickup truck and SUV design in the U.S.