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China's Finance Ministry is having a difficult time controlling local governments using local government financing vehicles to invest in more infrastructure, airports roads and subways. One such city is Wuhan which plans six subway lines, three bridges over the Yangste river and a new airport. Much of the money comes from land sales. The Finance Ministry in a 2013 report pointed to the unreliability of land sales for future borrowing as the property market is slowing, and because it is highly unpopular to requisition land for land sales. This matters because the IMF says debt is growing faster in China than when Japan, South Korea and the U.S. fell into deep recessions at different times between the late 1980's and 2009. Local government debt accounts for one fourth of the increase in China's domestic debt since 2008. New rules by China's bond agency in Dec. 2014 prevents investors from using low grade debt to borrow cash. In the past local governments found a way around the central governments effort to curb growth of debt by restructuring the local government vehicles or some other way, as Wuhan has done. Wuhan Urban is the local government financing vehicle for Wuhan and its debt increased by 20% in 2013. Wuhan's mayor, Tang Liangzhi, is pushing construction to the point where he is known as Mr. Dig, Dig. One reason for China's slowing growth below 6-7% is the need to control the growth of debt. Local government debt in China reached 36% of GDP in 2013, double the figure in 2008, and will increase to 52% of GDP in 2019, according to the IMF. And the increase is not proportionally delivering the same results as before. JP Morgan estimates that over 4 units of borrowing are needed in 2015 for every unit of investment, compared to less than 2 units of borrowing for every unit of investment in 2007. PRC Macro Advisors of Hong Kong says half of the borrowing by financing vehicles goes to pay interest on existing debt in 2014. There are 8000 such local government financing vehicles in China today each competing to build infrastructure in its neighborhood, in the case of Wuhan to build a computing back office for financial companies and as transportation hub, even though its uncertain whether this will be realized or not. The problem is that alternative investments as an opportunity cost are being neglected, the hospital not being built as China's population ages with underinvestment in health care, and the private company with better returns that is unable to find financing. A classic example of crowding out of better return investments as a glut of housing and road/bridge/ airport infrastructure gets built. The central government is wary but faced with slowing growth pushes problems down the road, what experts call a Japan syndrome....

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GE's consolidated tax rate from 2005 to 2009 was 11.6%, including foreign, local and state taxes.

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Senator Rubio, Republican nominee for Secretary of State, is given good points by the Wash. Post for helping negotiate a 2013 bipartisan deal on immigration that passed the Senate but could not pass in the US House of Representatives. And for his willingness to compromise.

On Ukraine and Eastern Europe after the invasion of Ukraine Rubio with Sen. Tim Kaine (D-Virginia) inserted an amendment into 2023 defense authorization bill that prevents any president from withdrawing from NATO unless two thirds of the Senate agrees.

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Mixed race population in America increased to 31 million or 10% in 2024. At one time in the early twentieth century Irish and Italians were considered "Non-white." With assimilation both were considered white. Asians were not allowed to be US citizens till 1952. Gradually things have changed. America is now grappling with the idea of white and non white in a mixed category because of intermarriage between Latinos, White Europeans, Blacks and Asians. Gender, socioeconomic status, education, culture, are more differentiating factors than just race in 2024.

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DeepSeek China displacing OpenAI/Microsoft in the US, and becoming the most downloaded app on Apple iPhone download rankings, doing the same work at 5.6% of the cost, is leading to a national revival sentiment in China.

Deep Seek is based in Zhejiang province. The state website says of Deepseek's achievement-

“We need to believe that the moon in other countries is not necessarily rounder: Whatever others can do, we can also do it and even do it better.” 

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Cerberus Capital will lose its entire stake under the plan announced by the Obama administration. And Fiat will be limited to a 20% stake in Chrysler, down from an earlier figure of 30%. And Fiat will have to repay the $6 billion loan that the Obama administration is willing to make before in can take astake in Chrysler of above 49%. Obama administration official confirmaed that the Cerberus 80% equity stake no longer holds value and that the firm's ownership would come to an end. Only if Fiat and Chrysler reach an agreement in 30 days will Treasury invest $6 billion in Chrysler. The task force requires Chrysler to eliminate the "vast majority" of roughly $9 billion in outstanding secured debt. Cerberus acquired Chrysler from Daimler AG in august 2007 when US vehicle sales were 16 million a year, and did this by having Chrysler borrow heavilyusing its plants and property as collateral. $10 billion of secured debt was raised, and $2.5 billion was paid down of it. With prices of gasoline hitting $4 things collapsed. Chrysler sales fell 40%, and Chrysler was loaned $4 billion by Treasury. Now Chrysler has 30 days of working capital from Treasury till it reaches an agreement with Fiat, and before the government provides an additional $6 billion if the agreements as required by the Obama task force are reached....

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Gerald Seib of the WSJ says president Biden is coming back with new actions to revive the Democratic agenda after a challenging period in the first year. Yesterday's first formal press conference of 2022 gave Biden an opportunity to respond. Why the WSJ, NYT, did not cover on their online edition front pages president Biden's first formal press conference on Jan. 19, after 1 year of the Biden administration, will remain a mystery. With the American press acting this way it did not take much for Germany's DW.com to run the story with the title "Biden's first year weighed down by disappointment," with a thoughtful Biden at the press conference replaced by a picture of Biden staring downwards.  This is only the first year of the Biden administration. Actions are planned to ease the supply chain situation and bottlenecks at ports. Much is made of inflation, Afghanistan, Ukraine, by Republicans assailing the Biden record. President Biden responded to this by asking at the press conference what Republicans are for. On Afghanistan Biden held firm on not investing billions of dollars every week when there is so much need in America and the rest of the world at this time of the pandemic after a failed adventure for 20 years in "a graveyard for empires."  Biden pointed to the bright spots in 2022- vaccination and testing achievements in the face of anti-vax sentiment with 200 million vaccinated, the job creation in the economy with unemployment way down and wage increases by employers, and the $1 trillion in infrastructure spending tackling much needed projects state by state with immediate impact. Rarely has a president faced so many challenges in the first year as Biden pointed out- vaccination drive in the face of the Delta variant and anti-vax sentiment, the Ukraine crisis with a president Truman period like event of the Berlin Wall coming up just potentially around the corner, and efforts to tackle problems left untackled for a generation in infrastructure, for working families and climate change. Scoring on infrastructure spending, one of the three, with the other two for working families and climate change to be tackled in the remaining three years and beyond.  Biden also told the American audience at the press conference that he was reminded of what his father used to tell him- that if all goals are equally important, nothing is important. In saying this he said help for working families through child tax credit, child care assistance, community college education funding, health care costs, climate change investment were priorities for his administration that would be tackled step by step. And he pointed out from the outset of the conference that only one or two senators were blocking the party's plan for children and working families. All 48 other senators were united in the Democratic party behind his plans for workers and families. As were 5 Republican senators who he said he would not disclose because of confidentiality. In that sense president Biden already has the majority he needs in Congress. This is not happening because of the peculiar situation of the 2016 and 2020 elections in the US and also in Europe- the historical problem of administrations of Democrats in US, Social Democrats in Germany, and Labor in Britain having give up on their working class families and middle class roots. Tech revolution and internet has further complicated the situation with economic changes, tech companies not paying taxes normally due, and tech workers shifting to Democrats yet living in a world distant from working class families fracturing social cohesion. This is changing in Germany with Scholz in Germany with the help of the Greens determined to restore the dignity of working class families, for Biden with a similar coalition, and a process underway in Britain as Labor returns to its roots. In essence Biden was saying- the process of unwinding decades of unwise policy that hurt America as a nation and leader of the free world would take time, requiring a patient step by step approach. To bring America closer to its own roots and Jefferson's immortal words of "all men are created equal and endowed by their Creator with certain unalienable Rights, and among these are Life, Liberty, and the pursuit of Happiness." Jefferson went on to say in the Declaration that when government becomes destructive of these ends it is the Right of the People to alter it.   ...

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Robert Gordon of Northwestern University describes the problems in American Education and how this is the first generation which will not do better than its parents in educational attainment. The cost says Gordon comes in lower potential economic growth rates.

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The employment-to-population ratio for people aged 20-24 fell to 60.1% from 67.1% in the last 3 years. Prof. Katz says young people who have not entered the labor force and a large number of people who have applied for disability benefits are problem areas. The unemployment rate of 9.4% does not reflect the people who have given up looking for a job, or those who retired, and those who applied for long-term disability benefits.

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What is Antifa. during the protests this term keeps coming up, yet no one is really sure what it is.  It started in Germany in the 1920's and basically means anti-fascist or in German antifaschistisch. Most Germany parties from the SPD, CDU and the Greens to other parties accept this as a point of view considering Germany's Nazi past.  Yet DW.com asks is it only referring to all those opposed to fascism in Germany or to black clad anarchists and leftists facing police on German streets. The last such confrontation with police happened in Germany in Hamburg during the 2017 G20 summit. A famous scene from that time is pictured in DW.com. There the meaning becomes complex as the Communist Party of Germany (KPD) adopted the phrase and the disinctinve two flag logo for the 1932 election campaign, in Weimar Germany's last free election, which the Nazis could not win fully but with the left parties split emerged as winner. After the formation of the GDR, the German Democratic Republic in East Germany, the interwar KPD party veterans like Walter Ulbricht came to power in GDR. GDR became part of the Soviet bloc countries during the Cold War and used antifascist in a way that was synonymous with anticapitalism. This same movement then langusihed in the Germany of the early post war years under Cologne's former mayor, Korad Adenauer. In the 1970's and 1980's the left movement revived in Hamburg and Berlin, coalescing with a antinuclear movement and widespread protests against president Reagan's stationing of nuclear missiles on German soil aimed at the Soviet Union bloc. After the reunification the protests against coal, for climate change action, and for anti-globalization. There is even an overlap with anti-Zionism. Germany's internal intelligence agency says the antifa movement is the "main field of agitation" for autonomous leftist groups, with some groups supporting "militant actions." Yet when there are broad uncontroversial protests there can be people from all walks of life, not just the anarchist or far left groups.  So that the protests in the U.S. were met with comments of antifa - Saskia Esken of the SPD saying "58 and atifa. Obviously." To which the General Secretary of the CDU said "Against fascism, and for democracy and human rights. Without violence. Obviously, for me. It's sad that the chairwoman of the SPD lacks the strength to differentiate."  To which Esken says it is only a point of view that antifa refers to, not some action. To which the the youth organization of the Angela Merkel CDU/CSU alliance the Junge Union (founded 1947) replied: " 73 and appalled" getting the final word.  Search for a dictionary and you are left with no clear meaning either. DW.com says Germany's duden dictionary only says antifa refers to the " entirety of the movements and ideologies, which oppose fascism and national socialism."    ...

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The close alliance between the CDU and the CSU in Bavaria appears to be unraveling. The immigrants at German borders have dwindled down a trickle, about 11,000 immigrants today compared to the wave of immigrants entering Germany in 2015. The CSU's prime minister in Bavaria Mr. Soder and the Federal Interior minister from the CSU Mr. Seehofer, blame the conflict between the two parties on the 2015 decision by Merkel on immigration. The German ARD broadcaster shows 62% of Germans favor stronger action on immigration. The pressure on the CSU comes from the gains by the anti-immigration party AfD in recent national elections. The CSU hopes that by shifting its own position on immigration to a standoff with the CDU and Merkel's position it can hold off the Afd in the elections in Bavaria in October 2018. The pressure on Merkel comes from members in the CDU and from the SPD leadership, which have accomodated some of the criticism of open immigration to reduce the immigrants at German borders, yet now see the need to meet any challenges to Merkel's authority. This is why the head of the SPD, Ms. Nahles called Mr. Soder's push for a confrontation on the immigration issue as acting "like a bonzai Trump." The CDU party leaders in Bavaria call for a "axis of the willing" joining leaders of the governments in Austria and Hungary. and the newly elected government in Italy to impose immediate controls on immigration at the borders. Merkel says she is open to different points of view within the CDU-CSU alliance, but action should be based on keeping the European Union together, and be taken after EU meetings in Brussels. Will this result in a fall of the government? Angela Merkel has adapted to the changing situation on immigration leading to the small trickle in new immigrants at German borders today. Even if the AfD anti immigration party joins the CSU the percentage of the vote for the AfD is mainly in the eastern part of Germany, and CSU in Bavaria, with 12.6% voting AfD in 2017 elections, and about 7% voting CSU mainly in Bavaria. This compares with the Left at 8.9%, Greens at 9.2%, and SPD at 20.5% for a combined 38.6% of the vote that favor Merkel's new coalition policies. This combined with the 25% of the vote gained by Merkel's CSU party gives it about 64% of the vote and about 489 seats in the 709 seat German parliament. A test of Merkel's authority is not likely to be sustained. By making this a pro-European position Merkel has shifted the issue from one of immigration which is now minimal and one on which Merkel has adapted her policies to a stand on Germany as leader with France of the European Union. At this particularly sensitive time when Germany and France are negotiating with the U.S. on trade and Britain on Brexit, German public opinion is likely to consider the impact of new elections and more uncertainty as not good for Germany. With the SPD, Left, Greens and CSU having 64% of the vote, and the anti immigrant parties CSU, AFD about 20% concentrated in the less economically developed eastern part and in Bavaria, the chances that Merkel's position would be weakened or her authority challenged is very unlikely.   ...

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On Monday August 8, 2010, the Dow Jones Industrial Averages went down by 634 points and closed below 11,000 points. This is not far from the 10,165 level of the DJIA on August 27, 2010. It was on August 27, 2010 that Fed chairman Ben Bernanke made the speech at the Kansas City Fed's Jackson Hole conference about the strategy for a QE II. Its about the time for this years Jackson Hole conference and the gains in the stock market are melting away. The DJIA closed at 12810 by April 29, 2011, then went below 11,000 by August 8, 2011. With higher inflation the Fed's options are limited.

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Donald Trump's campaign and the Republican National Committee raises $64 million in July 2016 through a digital and mailing effort that helps to bring in a large number of small donations- about two thirds of it. The fund raising effort for Trump brings a total of $82 million in July, just short of the $90 million raised by Hillary Clinton that month. Much of the digital fund raising effort was made possible by efforts made by the RNC to improve its mailing lists since the last presidential campaign. Many of the Trump donations are made from the Trump website buttons of $10, $25, $50, and by an offer to match this with Trump's own personal finances. Hillary Clinton is also ramping up her fund raising. Trump now has $74 million on hand, up from $1.5 million at one point, and Hillary Clinton has $102 million. For the Trump campaign that was far less organized than the Clinton campaign, this is an effort to catch up, though this comes quite late in the campaign with only 3 months left; with advertising rates higher, and not enough time to invest in digital and campaign infrastructure.  ...

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The Project on Government Oversight, a nonprofit group, (POGO), put out its report in Feb 2013 on the performance of the S.E.C. in enforcement actions. The report is critical of the revolving door whereby the same lawyers who worked at large banks and financial corporations later join the enforcement agency for short periods, only to rejoin the financial companies after their work at the S.E.C. This weakens the enforcement at the S.E.C. Robert Khuzami worked at Deutsche Bank during the period when some of the problems resulting in charges against Deutsche Bank being filed happened. He was the chief of enforcement at the S.E. C. during a critical period following the 2008 financial crisis, and supported action that let companies "neither admit or deny" in legal settlements. This practice reduced the deterrent effect of enforcement actions to protect the public.