LyrArc Article Gist
Under a new program to increased spending on healthcare from 1.3% of GDP to 2.5% the Indian government plans to provide free pharmaceuticals at state run hospitals. This is expected to cost $5 billion over 5 years. Initially 350 drugs would be on a list of essential medicines and would be purchased from generics manufacturers in India. Dr. K. Srinath Reddy, heads the committee advising the Indian government on healthcare. He says this will help improve access to medicines for the vast majority of the people. Estimates show 70% of out of pocket medical costs for Indians come from spending on drugs. About 40 million people are pushed into poverty each year because of the high cost of medicines, says Dr. Reddy. He said that in 1984 31% of the medicines at government run hospitals were provided free to admitted patients, dropping to 9% in 2004. For outpatients this dropped from 18% to 5%. The free medicine program would be part of a larger universal health care program to be introduced over the next decade. India's large generics pharmaceutical industry makes the provision of free medicines on a large scale a feasible option in India because of the lower prices, with additional pricing advantages when purchased in larger volumes by the government. This would also have a major impact on the quality of healthcare in the country of 1.2 billion people for a relatively small investment. It also promotes a sense of fairness and equal access because the benefits of decades of modernization have been unevenly distributed and because of widespread poverty....

LyrArc Article Gist
Putin writes to Gayne Young, a high school English teacher from Fredericksbug, Texas, who is a blogger for Outdoor Life. A lengthy interview with Putin is published in Outdoor Life. Putin talks about the period before the Second World War and the Cold War period and says a large number of barriers were unnaturally and artificially forced on the two peoples during this period. He says the two countries and peoples were cruelly kept apart from each other and only now has the relationship assumed a natural pattern where people can communicate and make friends. Young was captivated by an account of Putin's encounter with a blue whale in the summer of 2010. Young asked Putin whether he thought this was dangerous and Putin's response was philosphical and eloquent- human beings are one of the most vulnerable creatures on earth, facing disease, disaster and criminality, he says, as if covering the Russian people's experiences since the Bolshevik revolution right through the period that followed the collapse of the Berlin Wall. He adds that this does not mean one should move back from living life to the fullest, experiencing it to the fullest, which by its very nature is about some level of risk....

LyrArc Article Gist
An index for consumer prices for the U.S. was up only 0.8% for the 12 months of 2014, according to the Bureau of Labor Statistics. This is well below the U.S. central bank's target of 2% inflation. It creates uncertainty about whether the U.S. Fed will raise interest rates in 2015.

LyrArc Article Gist
ChemChina's acquisition of Pirelli's tire business focusses on the more valuable tire consumer unit, Pirelli's technology for premium tires, and increasing growth in Asian markets. The acquisition involves a complex transaction which includes Rosneft of Russia, which owns a major share in Chemfin that has 28% of Pirelli stock. Institutional holders control 47% of the stock, with other holdings by Mediobanca, the Benetton family and retail investors. For Pirelli this is the first step in a journey with a major Chinese investor and a focus on the Chinese consumer market.

LyrArc Article Gist
State based exchanges in New Mexico, Oregon and other states have experienced difficulties setting up and running the exchanges. Many states have turned to the federal government to operate the exchanges.

LyrArc Article Gist
Riza Sarraf is a 30 year old Iranian who assumed Turkish citizenship and married a pop star in the country. His company received a 1.7% commission for physical transfer of gold to Iran as payment for Iran's exports of oil to Turkey till this loophole to sanctions was closed in June 2013.

LyrArc Article Gist
The potential default of Shanghai Chaori Solar Energy Science and Technology Company on a 2012 bond of one billion renminbi, as the company says it cannot make a payment of 89.9 million renminbi or $14.6 million. China's corporate bond market is now the third largest in the world after the U.S. and Japan, according to BIS. The Asian Development Bank figures are total corporate bonds outstanding of 500 billion renminbi in 2005 growing to 8.5 trillion renminbi in 2013 (or about $1.4 trillion).

LyrArc Article Gist
Jakab's discusses the difference betwen the ADP estimate for jobs added and the Labor Department's figures. ADP numbers had a wide divergence with Labor Department figures for 2011-2013. ADP now uses a different methodology to more closely track the government numbers. For the last five months ADP numbers came out lower than government figures by an average of 32,000, says Jakab. ADP estimate of private non-farm jobs growth is 281,000 for June 2014. A WSJ survey of economists shows nonfarm payroll jobs growth for June at 215,000. In 2010-2011 ADP numbers vastly overestimated the number of jobs created.

LyrArc Article Gist
Olivier Blanchard, chief economist of the IMF says that as government borrowing around the world surges, interest rates will go up. Governments borrow by selling bonds to investors, and to attract investors the government competes with stock and corporate bond markets for investor's money, leading to rising yields for investors. As the confidence has returned to corporate bond markets this is already happening. From the end of 2008. the yield on the benchmark 10 year Treasury note has increased by one and ahalf percentage points, rising to 3.54% from 2%, the sharpest upward movement in 15 years. In Germany the yield on German 10 year bonds has also risen, rising to 3.57% from 2.93%. Similiarly British bond yields have risen to 3.78% from 3.41%. Congressional Budget Office estimates are that net government debt for the USA will rise to 65% of GDP at the end of fiscal 2010, from 41% at the end of fiscal 2008. In 2009 and 2010 the US government will sell $5 trillion in new debt, according to Citigroup. A decade from now the government's outstanding debt could equal 82% of GDP, or about $17 trillion. Every one point rise in interest rates costs the Treasury $50 billion annually over a few years, and Kenneth Rogoff estimates that this could reach $170 billion annually if the average yield on 10 year Treasury note goes up to 4.7%, as the Congressional Budget Office estimates. This will dampen the effects of stimulus spending. It is a big issue says Rogoff. A year ago under old policy and assumptions before the financial crisis the Congressional Budget Office projected outstanding debt at $5.3 trillion in 10 years. Now the estimate is $17 trillion, which is triple the old number and an increase of $11 trillion. A recovering economy would make these numbers less relevant. But with struggling industries like autos and banks needing more help from the government, and with consumers having to reduce a mountain of debt, a weak economy for a long time and small growth for a decade would make this a story that won't go away. Rogoff says its like what happened to the subprime borrowers, people assuming that the funding is always going to be there. In 2009 and 2010 Citigroup says, the Euro zone countries will sell nearly 1.6 trillion euros or $2.6 trillion in new debt, and Britain will offer 490 billion pounds or $799 billion in new debt. Over the next decade this would slow Europe's recovery and prolong the downturn. Britain faces a bigger problem in the near term as Britain's governmetn debt equals 55% of GDP, and Standard and Poors estimates it could approach 100% by 2013. South America and Eastern Europe will also face the situation of rising rates. Asian countries like China with lower levels of debt are in a better situation, IMF's Blanchard says....

LyrArc Article Gist
It still takes time to get stimulus projects started.

LyrArc Article Gist
Failure of quant models a second time around. Search fr clues to future from the 1987 and 1998 crisis. Burton Malkiel's sense that there will be more hedge fund blowups but the economy should recover. Whether this will be after a recession or early recovery followed by a recession after other excesses as in the 2 prior crises is still to be played out.