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Thirty minutes after trading started at the Shanghai Stock Exchange on Jan. 6, 2016, circuit breaker mechanisms were triggered following a decline of 7%. This followed a similiar circuit breaker trigerring on Jan. 4, 2016. This time investor anxiety was over a devaluation of the renminbi by the government. This triggered a drop of 3.5% in Germany's DAX index and 2.2% in the S&P 500 index. Faulty communication and confusing signals to markets by the central bank PBOC, and securities regulator CSRC, also played a part in increasing investor anxiety. Similiar problems were seen in summer 2015.

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As OPEC members met again in June 2015 for the first time since the meeting in November 2014, there is a sense that OPEC no longer exerts the same influence on oil prices. There are 4000 oil companies in the U.S., says one U.S. State Department official, even if OPEC were to cut production the cuts could be matched by shale oil producers in the U.S. quickly increasing output. This is the new reality, say experts. OPEC expects to keep production at the same level of the current production ceiling of 30 million barrels a day in place for the 7th meeting in over 3 years. Algeria and Nigeria, both hurt badly by the drop in oil price, have called for cuts but failed to persuade the Saudis. With Russia unwilling to join a coordinated production cut, there is not much talk about doing this. The Saudis and Iraq have continued to pump more oil, with April 2015 production of 30.84 million barrels a day the highest monthly average since 2012. Other factors also remain in the minds of the Saudis and other producers such as the United Arab Emirates, Kuwait, Qatar- policies on climate change, use of less energy and more from friendlier sources for the same amount of economic output demonstrated by countries such as Germany, advances in technology, energy saving transitions in emerging markets such as China and India....

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A Sept 2012 Census Bureau report shows the median income of a typical U.S. family declined or was flat in almost all states in 2011. Median household income declined in Nevada by 6%, in California by 3.8%. In Arizona and Florida incomes declined by 2.9%. For the U.S. median income declined by 1.3% to $50,502 in 2011. Poverty continues to increase, with California showing 335,760 people falling into annual income levels below $23,021 for a family of four in 2011, giving the state a 16.6% poverty rate.

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The DW.com's Christoph Strack says its a good sign that chancellor Merkel of Germany is opening up and showing emotions. She was decisive in the way she presented herself and what she has learned in the past 12 months since the refugee crisis erupted in summer 2015. She expressed her sense that she had "an absolutely sure feeling" that Germany will emerge out of all this better "than when we went into it." The remarks at Konrad-Adenauer-Haus for thirteen minutes were unusual and open in sharing how she felt. She said she is "fully committed" to making sure that the situation of 2015 never happens again. Don't count Merkel out, says Strack, she is down but not out, because she is going through the weaknesses in her policy, weakness in communication, and reflecting on her mistakes. And she has shown defiance and resolve, as she prepares for 2017, and its for everything she believes in.

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Bill Gross of PIMCO has increased holdings of mortgage backed securities issued mainly by Fannie Mae and Freddie Mac in Pimco's Total Return Fund. Holdings were 38% in Sept. 2011, holdings were 52% in Feb 2012. This bet on mortgage securities has enabled this bond fund to show a return of 2.88% in the 1st quarter of 2012. Mortgage bonds are doing well because of expectations that the Fed will setup another program to buy mortgage bonds because of a weak housing market in the U.S. In 2011 the Total Return Fund performance showed a 4.16% return compared to the Barclays Capital Aggregate Bond Index return of 7.84%. Gross has 37% in Treasurys in Feb. 2012. In 2011 Gross hurt returns by cutting back on Treasurys. He has also reduced exposure to emerging market debt and riskier corporate bonds. Holdings of high yield bonds were reduced by 1% to 3% in February 2012.

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Sir Keir Starmer is elected leader of the Labour Party in Britain with 56% of the vote. Starmer 57 years old, is a human rights lawyer who was director of public prosecutions from 2008 to 2013, and elected Labour leader just 5 years after being elected to parliament. Angela Rayner, shadow education secretary won the deputy leadership race with 52% of the vote. 

The new shadow chancellor is the MP for Oxford East since 2017 Ms. Anneliese Dodds. She is a former academic and member of the European parliament. Jo Stevens the MP from Cardiff East is the new shadow foreign secretary. He resigned from the Corbyn team in 2017 to oppose Brexit.

Corbyn sceptics swept the elections to the National Executive Committee. Starmer supports EU freedom of movement to continue, public ownership of services such as post, rail and energy, and raising income tax on the top 5% of earners.

 

 

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Unemployment reaches 6.2% in Oct. 2014, according to the Australian Bureau of Statistics, and the Australian economy faces the risk of a recession in 2015.

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Blackberry employees reached a peak of over 17,000 in 2011 as the company continued to hire through 2009-2011. It was about 8000 in 2008 the first year of the financial crisis and recession and doubled in 3 years. The employee count is at 12,700 in 2013. The company was hit hard by the introduction of smartphones by Samsung and Apple. Blackberry now plans huge cuts of about 40% by the end of 2013. This shows how quickly the winds can change in the tech business field where disruptions for existing technology are the norm. A niche in the corporate business field was not sufficient to keep Blackberry from shrinking rapidly as businesses shifted to the new smartphone technology from rivals. Failure to anticipate new technologies can lead to irreversible losses. Blackberry shows the way down can be just as fast as the way up and a lost year or a wrong decision can be the difference between success and irreversible failure.

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The ruble has stabilized by April 1, 2014 following Russian intervention in the Crimea and western sanctions. It reached record lows of 37 to the dollar from a range of 29-33 rubles to the dollar since 2011. To stabilize the ruble the Bank of Russia says it spent about $24 billion in March 2014. The Russian Finance Ministry held its first auction of Treasury bonds on April 2, 2014 with yields increasing to 9% from 8% in February. Finance Minister Anton Siluanov says the ministry will resume daily purchases of foreign currencies of about $100 million- stopped since March 4, 2014- to replenish its sovereign wealth fund. Bank of Russia head, Ms. Nabiullina, says consumer inflation will exceed the target of 5% and economic growth is likely to fall below 1%. The crisis come at a bad time for Russia as it has slowed economic growth when growth had already fallen sharply in 2013. Russia plans to introduce its own payments system to reduce dependence on Visa Inc., and introduce its own credit ratings system as S&P, Moody's lowered its credit ratings....

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Following positions heading manufacturing in 2006 and the expansion of Ford's China operations in 2008, Joe Hinrichs is now president of the Americas group in 2014. Hinrichs is responsible for the product launches in 2014-2015, including the new aluminium body F-150 pickup. Hinrichs supported a strategy for expanding SUV sales in China, which helped increase Ford market share to 4.4% in China in 2013. He started at GM after getting an electrical engineering degree from the University of Dayton in 1989. He is one of the younger managers who came up through manufacturing and feel at home in factories, talking to workers telling them why things should be done a certain way, and problem-solving on the factory floor. Apple CEO Tim Cook also started in manufacturing, with roots in Alabama, and joined Apple in 1997 as Apple struggled with quality issues in factories.

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Statistics bureau CBS says unemployment in the Netherlands increased to 6.8% in June 2013. Household spending declined by 1.8% on an annual basis in May, following two years of declines. Fall in house prices since 2008 have led to smaller spending and decline in sales of cars, appliances and household products. As the household sector cuts back, the banks and government are also working to reduce debt and improve finances. The cutbacks are happening at the same time leading to the paradox of thrift, says a professor at Erasmus University in Rotterdam, where all sectors are saving leading to a reduction or collapse of aggregate demand. The government of prime minister Mark Rutte is adhering to financial discipline to meet EU requirement in 2014 and implementation of 6 billion euros in spending cuts by Sept. 2013.

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The July 2017 unemployment rate drops to 4.3% from 4.4% the prior month. The Labor Department reported nonfarm payrolls up by 209,000. One in four of these jobs were in the restaurant business, resulting in more lower paying jobs. Economic growth remains low at 2%.

A better gauge of the jobless situation is the U-6 which includes underemployment and people on parttime jobs looking to work full time, and people who have stopped looking-it is at 8.6% in July, same as the prior month. It was 7.9% in late 2007 before the financial crisis.

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This editorial in the WSJ in June 2016 points out the dangers in the U.S. president Obama not facing up to the threat in the Middle East since 2013 leading to the fall of Mosul,  and in not clearly focussing on the threat since then. This has created divisions inside Europe and the U.S. in internal politics, and is being exacerbated with the rise of far right groups in Europe and by Trump in the U.S. It points out that by not clearly identifying the threat president Obama has given "illiberal" policy a boost. It says Hillary Clinton should be careful to formulate her own position in line with policy that has been pursued since FDR.

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Taiwanese contract manufacturer Hon Hai is moving quickly to address higher costs for workers at its manufacturing sites in coastal regions of China. After extensive media coverage of conditions at Foxconn factories, a number of suicides, and Chinese government policy that encouraged higher wages for workers in foriegn owned plants, Foxconn has moved to sharply increase wages at its plants. By the end of 2011 production in cities in the interior of China- Chengdu, Chongqing, and Wuhan, where costs are one third less- will be 25% of production, up from 10% in 2010. By 2012, this will be up to 50% of Foxconn's production, according to Yuanta Securities of Taipei. Hon Hai is lowering dividends to finance the shift. Fourth quarter 2010 earnings of Hon Hai were $742 million, down 26% over the prior year, even though revenues went up by 56% to $33.1 billon- reflecting the higher costs. Hon Hai's stock is down 20% in the past year on the Taipei stock exchange. Other locations being considered by Hon Hai are Brazil, Turkey and Slovakia. Brazil's President Dilma Roussef, said that Foxconn is considering a $12 billion plan for Brazil. Hon Hai is the only manufacturer of Apple iPads and one of two manufacturers of the iPhone....

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China Investment Corp., China's sovereign wealth fund, and its investment strategies. Efforts to separate investments in China's state banks from CIC. Changes made in 2011 resulted in the formation of CIC International, separate from the Central Huijin unit which is focussed on investments inside China. CIC controls both. CIC was started in 2007 to get better returns on China's foreign exchange reserves which upto that point were mostly in U.S. Treasury securities. At the end of 2010 CIC had assets of $410 billion. China's foreign exchange reserves are about $3.2 trillion. CIC initial funding of $200 billion was allocated with half going to investments overseas, and the rest in China's state banks. A new $30 billion in funding for CIC from the People's Bank of China will go to overseas investment.

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Patrick Soon-Shiong Surgeon, medical businessman and LA Times Owner, bought the LA Times for $500 million in 2018 which is now incurring losses of $48 million. He wants to take the LA Times public with an IPO offering. Soon-Shiong made $6 billion with blood thinner heparin of APP Pharmaceuticals and Abraxis Biosciences chemotherapy drug Abraxane, both firms he founded.

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Events before and after the hacking of emails during the U.S. presidential election of 2017 and contacts with Russia of Republican party leaders and campaign officials for the Trump campaign are discussed in this report by the BBC.

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Denmark's central bank cuts its main interest rate twice in Jan. 2016 as the ECB announces its $1 trillion euro bond purchasing program for 2015-2016. The action is intended to reduce the impact of the ECB program as its currency, the krona, strengthens against the euro. The action is to maintain export competitiveness.

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Antonis Samaras, leader of Greece's New Democracy Party, opposes the tax increases mandated by the E.U.'s June 2011 program for Greece. He supports the spending cuts. The shrinking economy with no hope for recovery under the current plan will only worsen the situation. The Greek economy declined by 4.5% in 2010 and will decline 3% to 4% in 2011, and unemployment is already at 16%, with much higher unemployment among young people. Many experts, and editorials in the Wall Street Journal and the Economist, share this opinion. With the austerity program's cuts and tax increases deeply unpopular among ordinary Greeks Samaras's party is moving ahead of Prime Minister Papandreou's socialist party in public opinion polls. Papandreou is not expectd to complete his term of office which ends in 2013, and a change of government may come by the end of 2011. At that point the E.U. leaders will have to negotiate with Samaras. Samaras says he told German chancellor Merkel- if your plan works I will say I was wrong, but if it doesn't you will need a new plan....

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Chrysler-Fiat's efforts to ramp up Jeep's global sales in 2012-2014. Plans to build 120,000 Jeeps annually in St. Petersburg. Chrysler CEO Marchionne sees Jeep as Chrysler's global brand. The problem with sales in Russian and Chinese markets is price, because of high import duties. In Russia this can add upto $22,000 to price, and in China $37,000. This put Jeep prices in Russia at about $86,000 for a Grand Cherokee, forcing it to compete with luxury SUV's like Land Rover. Production locally in Russia and China should make Jeep prices competitive. For covering the international market Chrysler's plan is to build 6 Jeep models with new designs for a sleeker appearance as a lifestyle vehicle. In the past the Jeep was seen largely as a off-road SUV in emerging markets rather than a lifestyle vehicle.

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Indian Finance Minister Sitharaman gives the following remarks in parliament on the White Paper presented to the 18th Lok Sabha in January 2024, describing the dire condition of the Indian economy by 2013 with mismanagement and "big ticket" corruption. India's Finance Minister Sitharaman describes the situation in three key areas by 2013 that left the economy of India in a fragile state, with projects stalled, development delayed, and capital investment not taking place. She gives as 3 main points of focus- the state of affairs at Defense Ministry, at the Environment Ministry, and for Energy supplies. At the outset she says PM Modi had suggested the need for such White Paper by 2015 so that future generations would know what had happened in India that failed the country at a time when China had already joined the community of developed nations. The issues go back to the coal scandal when coal auctions had to be cancelled by the Supreme Court for irregularities, the misuse of state owned banks leading to a large increase in non performing loans, and the mismanaged Commonwealth Games under government before 2014.  Sitharaman told parliament this had the effect of national security being compromised, Environment as a Ministry becoming a bottleneck, and the leadership failing the country. In the military there was a critical shortage of ammunition and equipment. She cites the Defense Minister at the time having the attitude that independent India has had a policy for many years not to develop the border areas, as an undeveloped border was better than a developed border. She also says Ministry stated that 92% of the Defense Budget was used up and major acquisitions have to wait for the military. Following this Sitharaman cited the scandals of that period and leakages of funds that weakend the country and failed its people. She compared capital expenditures today of 6.22 lakh crores in 2024 thre times the number in 2013 of 2.53 crores. HAL now makes Tejas jets and helicopters in Made in India production. At the Environment Ministry the delays that were 86 days reached a high of 316 days by 2013 for approval of development projects, with 355 projects pending, the nation brought to a standstill with the effects of the coal supplies to thermal power plants being wholly inadequate and Coal India in poor shape. The root of this was said Sitharaman- what everyone in Indian business knew, the term "genteel facts," as the cost of business going up. She cites the changes since then of aiming for Balance and Development- Transparency, Online Green Clearance, Standardized Environment Impact Studies, A new Department of Climate change, International Solar Alliance 2015, Mission Life 2022, Green Hydrogen, Namami Gange, Rooftop Solar. India set ambitious goals at the last Climate change Conference.    ...

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Equity markets in Europe and the U.S. are likely to see some of the 62 trillion yen, or $630 billion, which the Bank of Japan plans to add to holdings of banks and households in two years 2013-2014. A senior advisor to Deutsche Bank, Thomas Mayer, says equities of Germany, France and Britain are likey to see interest from Japanese investors, as are bonds and equities of the U.S. Japanese companies such as Toyota and consumer product companies such as Sony and Panasonic will now be able to better compete on price against their S. Korean, American and European competitors.

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The top 1% of billers get 17.5% of the payments from the U.S. Medicare program for 2012, according to the Medicare agency's reports. The Medicare agency released data with details of payments to 950,000 doctors, medical providers, certain health care companies, the second year this information is being released. This covers $90 billion of payments. Astonishing as it may sound the transparency comes late, after large increases in medical costs and the increasing U.S. deficit. It happened only after the long and persistent effort by the Wall Street Journal to overturn a 1979 ruling that required such records to be kept secret. By intervening in that suit in 2011, the WSJ's parent company Dow Jones was able to convince a judge about the need for transparency, leading to reversal of the injunction in May 2013. The WSJ and the media has used this information to monitor the waste and fraud in the Medicare system, a vital role only the media can perform to protect the public interest.