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The incoming executive director of the European Banking Authority, Adam Farkas, voices concerns about the stress tests of European banks in 2010, and would like to use more rigorous criteria for 2011 stress tests. "I would personally opt for a stricter approach," he said in testimony at the European parliament in Brussels.The stress tests for 2011 are already being watered down by the EBA in response to pressure from governments. The stress tests use macroeconomic criteria for growth and unemployment that are benign. And tests are not taking into account a scenario in which European sovereign bond holdings of European banks decline in value due to defaults in some countries. The result is likely to be a loss of credibility in the stress tests. Under worst case scenarios for Greece, and some other countries, their economies would do better in 2011 than in 2010, and improve on 2011 in 2012. The UK Financial Services Authority tests use an unemployment rate of 12.4%, in contrast to the 10.6% rate for the U.K. used by EBA in its worst case scenario. The actual unemployment rate in the UK was 8% for the 3 months to Jan 2011, according to the UK National Statistics Office....

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A thin Republican majority in the single digits, many elected with an investigative mood, and 3 newcomers from New York who are moderates to be targeted at the outset by Democrats will make the House ungovernable says this analysis in the NYT of the US Congress midterms of 2022. 

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500 modern Vande Bharat trains at a cost of about $6.5 billion are expected to be part of India's Budget for 2023. This is part of the effort to modernize India's rail system used by tens of millions of people under a modernized system of mobility.

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As long as free and fair presidential elections do not happen migration from Venezuela will continue said this report from CSIS in 2023. a clear warning to the US, to Latin America and the world. This is relevant to the actions taken by the Republican party and by DJT to make the immigration an issue in 2024 elections and as shown alongside in the action by DJT to revoke the Chevron license because of Venezuela's failure to take in deportees quickly and the failure of the Maduro regime to allow free and fair elections to let Venezuelans decide their future.  Eight million Venezuelans have left the country because of mismanaging the economy, runaway inflation, repression, and failure to honor free and fair elections. Taking the 2015 population of 30 million this is about 25% of the population with millions fleeing to Colombia, Peru and the US. "If no indication of regime change seems in sight and the 2024 presidential elections are not free or fair, upticks in migration should be expected, as Venezuelans will continue to leave the country in search of better opportunities. Therefore, it is critical not to overlook this migrant crisis nor normalize it, as it is evidence of the persistence of the democratic and economic breakdown in this country, which continues to be a threat to the stability of the region and the world." (CSIS, Nov. 27, 2023) ...

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China chooses periodic blockades or air-sea coordinated exercizes around Taiwan's 12 mile waters as a strategy to respond to US Indo-Pacific strategy of keeping lanes of sea traffic and navigation on oceans open to all nations. This is seen as less risky than an outright invasion. Military exercises in August 2022 are seen as preparing for such a strategy.  The US is the destination for $541 billion and Europe $521 billion in products Made in China in 2021, which make China the manufacturing powerhouse in the world. Without the export of $1 trillion in Chinese products thousands of factories and millions of Chinese workers would remain idle. It is unbelievable that China is risking so much with its Taiwan policy with no idea of what the consequences would be years from now. It took China three decades after the gradual opening by 1990 and a willingness on the part of American and European governments and business to give up much of their own manufacturing leading to loss of jobs in communities across both America and Europe and much pain from this loss, for China to get to $1 trillion in exports. This situation may never come back as the supply chains shift and jobs return home and to countries that are becoming competitive in infrastructure and capabilities in Asia. Such competition between nations is not unknown as it was with Imperial Japan in the Pacific just 100 years back. The US maintains its position as keeping navigation on the oceans of the world open and rule of law, and it is on these foundations that China was able to get the strong manufacturing and exporting position it has now that no nation has enjoyed in history to this extent. Only the British come close in the nineteenth century. So much of China's progress in the twentieth century was a result of cooperation and support from America, from the first university Tsinghua in Beiijing, to the war against imperialist forces of Japan, to the rebuilding of China's manufacturing and technological competitiveness with American business cooperation. ...

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A second term Trump-Vance will face uphill risks and a mess in economics from a Trumpian Republican party and Congress, says WSJ. WSJ Editorial Board says a second Trump term is not without risks. Tariffs cost 1.1% in annual growth in the Trump first term says WSJ, and it did have an impact on inflation. It would have had greater impact on inflation with the supply chain crisis of Biden's first term, had this supply chain crisis happened in Trump's first term. A second term Trump-Vance support tariffs as high as 60% on Chinese imports which would have a bigger effect on inflation and economic growth than of the first term. The key difference is that with tax cuts a basic rule for Republican policies Trump-Vance second term would not invest in infrastructure the way Mr. Biden has done and Biden will do so in a second term. As a result the economic growth is likely to be greater and inflation smaller under a Biden administration. Trillions of dollars in investment in the economy and infrastructure under Biden in a second term will be missing in a Trump-Vance tax cuts administration policy. And with it hundreds of thousand of jobs created each quarter will be missing in Trump-Vance second term. Add to this the level of clarity of stable economic policy under a Biden second term and contrast it with some of the chaos in economic policy of a Trump-Vance second term. The basic contradiction between tax cuts policy and the nation's need for infrastructure spending/rebuilding under a Republican under Trump administration will not go away, present a huge stumbling block. Chaotic policy could come from Project 2025 that says consider abolishing the US central bank Federal Reserve. This kind of erratic and unwise policy proposals are clearly not happening under Biden and Yellen. Another key difference is the cost to the economy of delays of several years in doing nothing for climate in Trump-Vance 2024-2028. Severe effects on climate if nothing is done could cause acceleration of climate negative costs which a future economy under Democrats would face, in reality the Nation would face. America's Business has taken a short term approach to climate change, when the time comes to pay the costs of short term thinking it assumes it is somebody else's problem- this happened with supply chain concentration in China the burden falling on the middle and lower classes, it would happen again with missing climate change action under Trump-Vance second term. ...

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A warmer than expected winter and lower inflation is helping European stocks in Jan 2023, says this report in the WSJ. European indexes are also not weighed down by the decline in tech stocks as in the US. Germany's DAX and France's CAC have risen by 16% compared to 6.9% in the US for last 3 months.

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China's GDP declines by 6.8% in the first quarter 2020 year over year, and 9.8% from the previous quarter, the first such decline since 1992, even going as far back as 1976 with the passing of the Mao era. It is not power production or coal consumption which have returned to prior levels. It is the demand from the U.S. and Europe, other countries which are in lockdowns. Estimates are that 80 million people in a population of 900 million working age people lost their jobs, with another 10 million expected to be lost, about 10% of the total. Global trade companies are hardest hit.  Consumers inside China are reducing spending. Some are using only the small government issued vouchers designed to get people to go out and spend.  The Trump administration plans to bring back some of the production lost to China in essential areas such as public health and security back to the U.S. The supply chains are already shifting to other countries from U.S. tariffs. As a result some estimates show zero growth in 2020 for China. Financial instability and prior leveraging concerns remain to prevent any serious stimulus. By contrast the U.S. is cushioning the impact with $2 trillion aid package benefitting from a strong dollar and healthy economy before the virus. ...

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Tech heavy S&P 500- for the largest tech companies- gains are now reversing after a rally based on potential for AI. Nvidia with its AI potential alone was 30% of the gain in S&P 500 at one time. The change in the election situation in July 2024 may be one of the causes. Smaller companies in the Russell 5000 are doing better. It is not clear if this is a trend. 

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Green Mountain's share price fell 48% on May 3, 2012. It has fallen 75% since fall 2011 after climbing fivefold in the last three years. The situation has changed for Green Mountain, the maker of the Keurig single cup coffee product, with two of its patents on K- cup coffee expiring and Starbucks plans to launch a high end espresso brewer. Green Mountain, based in Waterbury, Vermont, acquired Keurig Inc. in June 2006 for $100 million. Its Keurig single cup brewers and K cup coffee packs have taken the largest market share, with Kraft Foods Tassimo product struggling. Green Mountain continues to grow, with sales of Keurig brewers and accessories increasing by 21% and K- cup sales up by 59% in first quarter of 2012. Profits were up 42%. Investors and hedge funds are short selling the stock, or waiting for the price to decline, and a quarter of the shares traded are being "shorted," according to FactSet.

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The caretaker government of prime minister Mark Rutte in the Netherlands will commit to following austerity plans in its Stability Program report to the European Union. Elections are now set for September 12, 2012. The government was able to get the support of two smaller left-leaning parties to austerity plans. Opposition parties have questioned the policies and said they will reverse them if elected. Rutte's Liberal party and Jaeger's Christian Democrats, with the help of the Christenunie, D66, and Groenlinks, now hold a slim 2 seat majority in the 150 seat Dutch parliament. The Freedom party that had previously supported Rutte withdrew support for austerity policies that it said would hurt pensioners. The moves help avert a credit ratings drop by the credit ratings agencies leading to a loss of the Dutch triple A credit rating. The measures will increase the sales tax from 19% to 21%, make health care spending cuts and impose a pay freeze on civil servants. Savings achieved will be 11 billion euros. Rutte described his actions as: "the government's respose to the acute crisis in confidence in the financial markets." Earlier in the week Fitch Ratings had threatened to lower the Netherlands credit rating. The measures will reduce the Dutch deficit to 3% in 2013 from 4.5% in 2012 to meet EU fiscal compact rules. The changes to the health system are part of changes advocated by the OECD and the IMF because of surging health care costs for an aging Dutch population. There is concern about the sales tax increase because of its effect on consumer spending, and recent comments by S&P managing directors and others in financial markets emphasize the need for economic growth, as austerity measures by itself are inadequate solutions....

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The French British collaboration effort will bring a new vaccine to the global effort against coronavirus. This vaccine was expected in February 21. It will be ready by the third quarter of 2021 just as vaccine supplies are being ramped up. The Sanofi Pasteur unit and GSK Glaxo SmithKline are the two companies in this vaccine venture. This vaccine will address the problem of new mutations of the virus in the British and South African versions and can be stored at normal temperatures. 
 

The new vaccines will boost supplies just when the situation is bleak for vaccine supplies in Latin America and Africa, South East Asia, places left out in the vaccine race in advanced countries and in India. Britain has ordered 60 million doses. 

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Tankersley points to the broken links between economic growth and growth in jobs and incomes since 1989, which have created a shrinking U.S. middle class. In the postwar period before 1989, a one percent increase in economic growth generated a six tenths of one percent increase in jobs growth during economic recoveries. During the 1992 recovery under George Bush this was down to 0.4%. In the 2001 recovery under George W. Bush this dropped to 0.2%, during the current recovery under Obama this is at 0.3%. Income growth also showed a similiar pattern. Median household incomes declined from 1990-1992 and from 2002-2004, after adjusting for inflation, even with economic growth of 6% during this period. For the 2009-2011 recovery period the economic growth was about 4% yet real median incomes increased barely at 0.5%. By contrast from 1982 to 1984 with economic growth of 11%, real median incomes went up by 5%. The result workers median wages are lower now in the beginning of 2013, after inflation adjustment, than at the end of 2003, and real household income lower in 2011 than in 1989, says Tankersley. Why were the recoveries of 1990 and 2001 for the most part jobless? U.S. Federal Reserve studies show employers mindset had changed, instead of hiring back laid off workers during recoveries, employers did not add many jobs. Automation in factories requiring fewer workers, global outsourcing and supply chains, manufacturing overseas, lack of union-management cooperation on wages and jobs in industries such as the auto industry, increase in temp workers, all played a part in creating fewer and fewer good paying jobs. Some of this is playing out worldwide. In Japan the economic recovery has also come with similiar costs- moving jobs overseas for the auto and electronics industries, increase in temporary worker jobs with lower pay and benefits to about one third of all jobs, and depressed consumer spending as a result lowering the economic growth potential. Even the recent German economic recovery has come with an increase in lower paying temporary jobs and driven by exports to Asia. For the U.S. the situation was worsened by three additional factors- housing foreclosures and the hit to savings from the 2008 financial crisis, high cost of college tution and resulting debt, and the high cost of medical care. The Obama administration's effort to increase the minimum wage would help the poor, but do little to address the broken links between economic growth and jobs growth/income growth. The push for college education does not address affordability and neglects jobs training. Most of the questions raised by the changing patterns remain unanswered, which may be why Obama calls this a generation's task, not that of one administration....

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Indian rating agency Crisil says expeditious settlement of stressed assets in India's banking system is needed for the private sector to play its part in the country's infrastructure development. In the last 4 years much of the effort in infrastructure was undertaken by the government. Crisil CEO Ashu Suyash, says Rupees 50 lakh crore needs to be allocated for capital investment in infrastructure for the 5 year period 2018- 2022. About Rupees 3000 crore investment per day is required. In addition to improving the banking system, other actions needed are new private-public partnership efforts, front ending of projects, and a deepening of the infrastructure financing system. Infrastructure investments have suffered from lack of investment in India and this should be a top priority for the government, say experts. This includes tapping into pension and insurance funds under new arrangements. The central government has announced a 7 lakh crore investment plan to build 83,000 kilometres of highways by 2022. Crisil has developed an "investability index" to track and measure the attractiveness of such projects.   ...

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New cases per day in U.S. drop to 35,000 and in India to 55,000 for August 17, 2020. India increased testing to 900,000 per day. Most of these tests are RtP PCR tests with some antigen tests. ICMR's goal is to reach 1 million tests per day. The positivity rate has dropped to 8.62% with the increased testing. There are about 1400 labs in India doing testing.

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Where did the numbers in the US president DJT's charts come from wjen shown in the Rose Garden on Liberation Day April 2 2025? The number for example 68% for China comes from a ratio- deficit by country divided by total imports to US.  The numerator reflects the US concern about trade deficits. It is exports minus imports for China in this instance. In 2024 China's exports were $438 billion to the US. It's imports were $143 billion. The difference is the surplus or deficit China has with the US. China's surplus is $295 billion. China's surplus is also America's deficit with China when turned around and seen from the viewpoint of America. The denominator reflects the US concern about how much it is importing from each country- this is how much it is not making inside America and which it has to get from another country. The more that it imports from another country the less it makes at home. If labor in the US gets too costly and is not cooperative to make well designed reliable products more factories close and are build outside in another country. This has consequences- serious consequences over time as it spreads to different industries. FOr the first time in history. A foreign nation makes practically everything and US acts only as a consuming nation- this means the workers jobs and incomes in the US are destroyed. It is often a sign of serious decline in the Nation. $295 billion/$438 billion is 67%. This is the China number shown on DJT's chart in the Rose Garden. The tariff and non tariff barriers and currency manipulation that China conducts in trade with US is measured in this way as an estimate, much higher than actual tariffs which is why US products don't get the treatment they deserve in China's market.   ...

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Are there costs or are there savings from the Obama health care bill? Does it affect jobs and how? The Congressional Budget Office says the health care law will save $230 billion in ten years based on a whole set of calculations and assumptions. Commonsense and basic math leads others to question how spending $930 billion on insuring 32 million Americans could end up with significant savings. The different view argues that the Budget Office erred in making some calculations, by counting $70 billion in premiums from long term care because they would be used to pay benefits later, omitted $115 billion in spending to adminster the law, and omitted $208 billion needed to prevent scheduled reductions in Medicare payments to doctors. The money needed on the Stimulus, on two wars in Iraq and Afghanistan, and the uncertain prospects of the US economy in the longer term till debt and other issues are resolved, injects the critical element of difficult choices and priorities. If state and local budgets are severely strained in 2011-2012 would that require federal help and will there be other needs that will have to be met by the federal government that are critical such as another unexpected downturn, or a resolution of unresolved bad debt at the large US banks There is also a sense that the health care law does not do enough to reduce the cost of health care that will be needed over the next decade so that other priorities are not neglected. Both parties are not up to the task in this respect for running the country's finances withot using the numbers to tell different stories....

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Under the DJT administration in contrast to the Biden approach US has improved relations with Russia, and is regularly sending envoys to Russia to ensure both sides are on good talking terms. 

Russia's Dmitry Peskov plays down rhetoric and calls US submarines "on duty anyway" and dismisses idea of escalation August 4, 2025. He says- "Very complex, very sensitive issues are being discussed, which, of course, many perceive very emotionally." 

"We are always happy to see Mr Witkoff in Moscow... We consider such contact important, meaningful and useful." Peskov says that Witkoff and Putin may meet.

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Germany has 60.4 million people who can vote in the upcoming September 26 parliamentary elections. Of this more than half are over age 50 years. This is part of a demographic change in Germany with falling population, more deaths than births in the country. As a result German voting population is getting older and smaller, 1.3 million smaller this time than in the last election. In 1987 23% of voters were under age 30 years, in 2021 this is down to 15%. For older voters in 1987 26% of voters were over age 60 years, in 2021 this is up to 38%. Older voters also have higher turnout of about 81% compared to voters age 21 to 24 years at 67% turnout. Older voters had a strong party affiliation early in their life says one polling expert for Infratest. Older voters tend to vote mostly for SPD or CDU the two main parties. The far right and far left parties have support in East Germany's 12.5 million population out of 82.5 million in Germany. CDU gets its vote from workers with higher than median income, and SPD from voters at the median income. Greens are supported by higher income groups.   ...

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Issues raised by the huge mismatch between revenues and investment for AI. $400 billion estimated investment by 5 Tech firms in 2025 alone with revenue of about $40 billion and huge uncertainty about when AI will produce returns. Articles seen this week of November 17 in the WSJ and NYT on this issue, podcasts, discussions in other media outlets. Could this lead to a dot com bubble type economic crisis? Could that lead to a recession? Alongside these articles another article in the WSJ on Nov 17 shows the benefits small firms get by using AI, benefits which are on the fringes of their business, not essential but with some experimenting firm owners/managers able to tweak AI information for use in business. Nothing significant which firms will pay much money for. The uncertainty is a major factor. Should geopolitics trump all these concerns? Is the competition with China require this scale of investment, and is China following a more utilitarian approach as reported in a WSJ article this month, of investing in AI in a utilitarian way targeting its use in improving manufacturing, improving infrastructure, and not wildly throwing money at experimental uses that are unlikely to yield much result. In geopolitical sense would the country that not only promoted AI but used it efficiently and cost effectively, used it in ways that promote the overall public good, get the WIN. In short it behooves everyone of us to ask hard questions of AI, to dehype the hype, to look for the public good that comes out of this from it's efficient use. To ask the tough questions when $400 billion generates only $40 billion in 2025 and the $3 trillion planned investment over 5 years is half unfunded, is it going to crowd out energy needs for homes and business, push renewable energy targets back, crowd out essential investments in the crumbling aging infrastructure of the US and Europe, crowd out essential investments in education, healthcare, pharmaceuticals, and manufacturing, that hold better promise for our People. Will it also put retirees at risk when corporate bonds from retirees money fund the unfunded portion of AI? This means making the political dimension not about migration, settling the illegal migration issue that was meant to be settled a long time back, or about cultural issues that have little day to day impact on our lives which are about groceries, childcare, housing that are non ideological. Making the political dimension not about remote countries that one knows little about except when it affects public safety and health as with fentanyl. Capital allocation decisions to the vital needs of America can then be free of politically induced error, so that it can be subjected to the test of how best it serves the public interest and the people of the Nation. ...

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One cocoa pod gives enough cocoa for one chocolate bar. Cocoa farms in Ghana and Ivory Coast are the world's largest producers of cocoa. Production declined in 2024 by about 25% in the two countries from bad weather with rain in the dry season and not enough rain in the west season. To protect farmers both West African countries decided to give farmers a fixed price for their cocoa. With surging prices farmers do not get to benefit from the higher price. Government fertilizer support is lacking.

With buyers in Europe insisting that no trees get cut on forested land for new farming, farmers are restricted to their old plots and have to take out old trees which costs more. As a result of these factors cocoa farms are shifting to other crops including palm oil in Ghana.

Other countries in West Africa including Cameroon and Nigeria are also producing cocoa. Outside of this region Ecuador and Brazil also produce cocoa.

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Areas in the "too big to fail" part of Dodd-Frank U.S. financial reform legislation where work remains to be done to prevent a future crisis include: the creation of living wills by the largest banks so that they can be dismantled in an orderly fashion, and the designation of which banks are systemic risks by the Financial Oversight Stability Council. The FDIC and the Federal Reserve have yet to finalize the rules for creating "living wills" for large banks. The rules are expected to be finalized by fall 2011. The FOSC is working on the designations and what criteria to use for selecting the non-bank firms that pose systemic risks. Progress has been made at the FDIC by finishing several rules for implementing a new system to wind down a large failing bank. The FDIC is hiring staff for a new office that focusses specifically on large complex financial firms. Fed Governor Daniel Tarullo has led the effort for higher capital reserve requirements for U.S. banks, requirements that would be closer to 14% for capital reserves. In an editorial on June 16, 2011, the Wall Street Journal said that if the Federal Reserve is serious about controlling systemic risk then it should support capital reserve requirements of 14%....

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Letters to the Editor from a Congressman (for 18 years), a Quantum Lab at Duke, and a South Carolinan with Wedemayer's example in WSJ on Chinese students at US universities. Most agree that American students deserve the same opportunities. And the Duke Quantum lab seems to say Americans are not also part of the best and brightest and so do not deserve the same opportunities, looking only at his own lab in 2025 not America as a whole, and ignoring the history of science and invention since 1600 where European and American scientists built the Modern World. 

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By preventing serious illness in patients two pills for coronavirus from Pfizer and Merck can change the course of this pandemic. Pfizer will give a royalty free license to Medicines Patent Pool, an organization backed by the United Nations for its coronavirus pill. Merck has also given a royalty free license to Medicines Patent Pool for it pill. This organization will then grant a license for the manufacture of the coronavirus pills to poor developing countries. India is included in the list of countries yet China, Russia and Brazil are excluded for the Pfizer license.  Merck has given Indian generics manufacturers approval to make the pill. This will provide supplies of the pill to 105 developing countries, South Africa will also make the pill to provide it at $10 a course in Africa. Pfizer will begin manufacturing of large quantities in 2022 with 50 million planned for 2022 and 21 million in the first half of 2022. Pfizer pill will be made available in 95 countries. The Merck pill is called Molnupiravir. Pfizer pill is called Paxlovid with 30 pills taken over the course of 5 days. Pfizer pill is effective in studies when given to people who had not been vaccinated. It has to be given within 3-4 days of getting coronavirus confirmed through a test which makes testing critical for its use. ...

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Britain's economy shrank by 0.5% in the last quarter of 2010, according to Office for National Statistics. Unemployment went up to 7.9% and 2.5 million jobless. Inflation up from 3.3% in the year to November, to 3.7% in December 2010. Mervyn King, governor of Bank of England, says inflation will go up to 4-5% in 2011. The austerity plan is only now beginning to go into effect and creates a difficult year. The VAT, a consumption tax, goes up to 20% from 17.5% on Jan 4th, and public spending cuts go into effect in April. With consumption depressed, higher investment and exports are the two areas supporting growth. There is a risk that the Bank of England will have to raise interest rates, as it left interest rates at 0.5% in December 2010. Under these conditions not much of a recovery can be expected in 2011-2012.