LyrArc Article Gist
Malaysia's debt to GDP ratio increased to 242% in mid-2012 from 192% in 2008 according to McKinsey. As export growth has slowed the Malaysian government is relying on credit expansion to consumers and large capital projects such as the planned subway project in Kuala Lumpur to sustain growth. Similiar credit expansion is seen in other Asian countries- Thailand, Vietnam, Singapore, Hong Kong. The period 2008 to 2013 has seen a rapid acceleration in credit expansion in these countries and especially in China. China's debt to GDP ratio increased to 183% in mid 2012 from 153% in 2008, according to McKinsey. Nomura Holding's economist Zhiwei Zhang, and other economists say it is above 200% when government data on "shadow banking" lending institutions such as trust companies is included. IMF economist Giovanni Dell'Ariccia has studied of debt expansion and credit booms since the 1970's. He and other economists at the IMF have found that credit booms- the rapid increase in credit to GDP ratios- end up in crises one third of the time, result in below par growth in another third of the time, and only in one third of the time does growth continue at the high pace. Alex Frangos talks to government officials in Kuala Lumpur who do not take seriously the high vacancy rate for office buildings in the capital of about 20% even as new office towers are being built. Bob Davis gives the example of government owned Hunan Expressway company in China which has a huge road building program and doubled its 2009 debt levels. Another state owned company in shipping China Cosco Holdings increased total debt from 85 billion yuan in 2009 to 123 billion yuan in 2012. As export growth slowed in China in 2009 credit expansion is driving growth. The normal restraints of the market are absent in China's state owned companies. Charlene Chu, senior director of Fitch Ratings Inc in Beijing, says 2012 demonstrated that the Chinese government cannot slow credit growth without risking a decline in growth. China's GDP growth in the 1st quarter of 2013 slowed to 7.7% from 7.9% in the 4th quarter of 2012. This poses a serious problem for China. China has never experienced the kinds of problems seen in Asia after the 1997 banking crisis, in the eurozone today, and in the U.S. following the financial crisis of 2008, making government officials prone to complacency about the risks....

LyrArc Article Gist
Lim Chow Kiat, chief investment officer of GIC Pte. Ltd, Singapore's sovereign wealth fund, says he sees returns on financial assets in developed markets being much lower in future years, including possible negative returns, because of a sharp runup in recent years and changing monetary policy. He sees more opportunities in emerging markets because of younger populations and opportunities from overhauls to economic structures and behaviour. He says he will still look for opportunties in developed country companies that have significant international expansion. GIC invested $1 billion in Indian online retailer Flipkart recently, $680 million in Bank of the Philippine Island, and $1.3 billion in the Time Warner Center building in New York along with Abu Dhabi Investment Authority.

LyrArc Article Gist
The UN Report on Afghanistan's opium growing areas and harvest for 2008. The sucess in the north but the drought and poverty and hunger there after other crops are not doing so well. The failure in the insurgent areas in the south where opium growing in Helmand province makes it the larges opium growing country if it were so in the world says the report. See the link to A narcotics officer from the USA who wrote about this in the New York Times and the failure of the Karzai government to support eradication efforts because some of the Karzai regimes supporters are also engaged in opium farming as well as the insurgents.

LyrArc Article Gist
The Independent Panel Report on the Flint, Michigan, contaminated water crisis says the Department of Environmental Quality in the state "failed in its fundamental responsibility" to enforce drinking water safety regulations. It also says the Governor Mr. Snyder should have acted when the senior staff memebers at the governor's office asked him to do so.The EPA is faulted for prolonging the crisis by delays in enforcing drinking water standards. The problem began with the emergency manager appointed by the governor acting to make cost cutting moves for a city in financial trouble. The Panel Report puts the responsibility for overseeing the emergency manager role on the state government and the Governor.

LyrArc Article Gist
David Stockman, Director of the Office of Management and Budget under President Reagan tells Tom Keene that the first step to deficit reduction is to means test the 2 milllion to 5 million or 10 million people who are very affluent, and have the benefits of some part of this population eliminated entirely. The next step he suggests is for spending much less on defense. A defense budget at $800 billion he says does not make sense today, because it is 35% larger in real terms than the budget when Reagan was President and the U.S. faced the Soviet Union. The U.S. does not need to be the world's policeman.

LyrArc Article Gist
Pena Nieto, the new president of Mexico, says that this is a new generation and a different PRI party from the one in the past. His focus is to learn from efforts made by countries such as China, Brazil and India in modernization and reducing poverty, so that Mexico can fulfill its potential. His goal will be to avoid ideological positions and patronage, and achieve measurable progress against poverty in Mexico. He cites the Mexico's Office of National Statistics figures showing Mexico's growth rate at 1.7% for 2000-2010, and the lack of reforms in the energy sector, labor markets, education and social security.

LyrArc Article Gist
China's GDP growth rate slowed to 7% in the 1st quarter of 2015, compared to 7.3% in the 4th quarter of 2014. China's Office of National Statistics reported industrial production growth at 5.65% year over year in March 2015, and fixed asset investment in the 1st quarter at 13.5%. The statistics agency reported unemployment at stable level of 5.1% for the 1st quarter 2015. Experts say the low unemployment is the one positive sign in the economy, easing pressures on economic policymakers to take action considering the high debt levels in the economy. As a result China can pursue selective monetary easing efforts and smaller, selective, better targeted stimulus.

LyrArc Article Gist
Trevor Manuel, as head of the national planning commission, may have even more authority -as he oversees all economic policy on behalf of the President- than in his previous position as finance minister of South Africa. President Zuma knows that he is not a person fond of policy details and long reports, and he may be wisely creating this position in the President's office so that he could delegate this important work to Trevor Manuel. The head of the tax department, Mr Gordhan, becomes finance minister. Asked what his priorities would be, Zuma in his characterstic manner joked , " My rooibos tea, honey and lemon."

LyrArc Article Gist
One Laptop Could only bring the price down to $188. And Intel has a Classmate for $230. Microsoft offers a version of its Windows software and a small version of Office plus educational programs for $3. What this does is keep One Laptop from bringing Linux and AMD competitors of Intel and Microsoft out of the developing countries markets throughout the world. Intel and Microsoft definitely responded to the threat and countries in the developing world see the Intel Microsoft machines as definitely a winner over the One Laptop machine which is now floundering. It did help to bring about this change and in this sense Negroponte succeeded.

LyrArc Article Gist
Bangladesh prime minister Sheikh Hasina wins a third consecutive term in office, winning 288 seats in parliament. Sheikh Hasina's Awami League was challenged in this election by a coalition of parties after her main opponent Khaleda Zia was jailed earlier in 2018 for corruption and was barred from running in the election. Hasina is the daughter of independence leader Mujibur Rahman. Khaleda Zia is the widow of a military commander who founded the BNP party. Both have alternated in office- with Hasina in office for the last decade having run Bangladesh focusing on development and economic growth that was about 6% each year over the decade.

LyrArc Article Gist
Jair Bolsonaro, a former army officer, is expected to win by a large margin in the runoff election in Brazil against Fernando Haddad of the Brazil Workers Party. Crime, corruption including the Car Wash scandal involving the state oil company and politicians, a deep recession with the fall of commodity prices, have led to a shift in Brazil away from the Workers Party. Polls from Datafolha show about 60% of the vote in runoff going to Bolsanaro. About 30% of supporters say they are voting for something new after the deep recession and failure in providing government services with no money in the budget for adequate spending on infrastructure and services, education and health.  Both the centrist PSDB and the Workers Party that came in following the shift to civilian rule from military dictatorship in the mid-80's failed to win a significant part of the vote. The conservative PSL party only had 5 seats in the outgoing 313 seat house showing the deep dissatisfaction with the existing Congress and politicians in Brazil. Crime is a big issue with 64,000 deaths in Brazil in the last year, with failures in government services, including a failure to tackle a yellow fever epidemic over 2 years, are other issues that have led to the change in the mood of the voters in Brazil. ...

LyrArc Article Gist
How to deal with Bush era tax cuts is a big issue dividing Democrats and Republicans in the U.S. If no deal is reached by Jan 1. taxes on the average middle income family would increase by $2000 in 2013. Median inflation adjusted income declined 8.9% to $50,054 in 2011 from $54,999 in 1999, and economic mobility has fallen. The Democrat's position is for Bush tax cuts to apply to incomes below $250,000. Peter Orszag of the Congressional Budget Office and Jared Bernstein point out that while this makes the tax code move in a progressive direction it also creates handicaps in providing a sufficient revenue base to support middle class spending programs down the road. According to the Tax Polcy Center, if Congress is unable to reach agreement and all tax increases go into effect Jan 1, taxpayers in the bottom 20% of income distribution would see a $412 increase in taxes compared to an increase of $633,000 for the top 0.1%. New York Mayor Bloomberg has supported eliminating the Bush tax cuts for all groups, saying there is no free lunch. Alan Krueger, head of the White House Council of Economic Advisors, says the trends caused by globalization and skill-biased technological change which have increased inequality are likely to continue or accelerate. ...

LyrArc Article Gist
President Trump outlines a plan for Afghanistan that increases the U.S. troop presence from about 8500 with an addition of 4000 more troops and advisors, in addition to a counter terrorism force. To war weary public in the U.S. he says: "I share your frustration over a foreign policy that has spent too much time, energy, money- and most importantly, lives- trying to rebuild countries in our own image instead of pursuing our security interests above all other considerations." About his criticism of the war when president Obama was in office as a huge costly waste of resources Trump said: My original instinct was to pull out, and historically I like to follow my instincts... I heard that decisions are much different when you sit behind the desk at the Oval Office." After resisting the advice of his own advisers Trump decided to fire Bannon who had supported use of American private security contractors for the war in Afghanistan, and used parts of the media to question national security advisor McMaster's views on this. Gen. Mattis, completed a strategy review that showed the mistake of creating a vacuum would repeat the situation of Iraq where president Obama withdrew forces in 2011, leading to a sequence of negative events- with Russia, Iran and Islamic State moving into the vacuum, making American intervention in the war necessary, increase in terrorist incidents worldwide, and a flood of refugees into Europe. Ironically clearing the path for an outsider's bid for the White House, with Brexit in which refugee fears and uncontrolled immigration played a part, and the news of terrorism and the war in Syria-Iraq creating a sense of insecurity. A key difference in the Trump approach with Obama's approach is that "conditions on the ground, not arbitrary timetables will guide our actions from now on," in line with Trump's criticism of Obama's approach. The military in the U.S. has long maintained that the best approach would have been to insist on U.S. presence in negotiations with the Iraqi government under the sectarian prime minister Nouri Maliki. Gen. Mattis was head of Central Command under the Obama administration and must have pushed the view of the military to president Obama to no avail. Failure to do so led to the growth of Shiite militias and the alienation of Sunnis in Mosul, leading to the fall of Mosul to Islamic State thus creating the current crisis. Gen. Mattis and Lt. Gen McMaster are intimately aware of the problem and must have convinced Trump that this is what really happened, that a repeat would waste the sacrifices of American soldiers in the twin wars. Trump gave this as his reason when he said in his televised speech to the nation- essentially a criticism of Bush that he expanded the conflict too quickly, and Obama exiting too quickly to create a void. Trump call his policy "principled realism."  The roots of the crisis are in the India-Pakistan conflict. Like the conflict in South East Asia the conflict in South Asia extending from Iran to India and Pakistan, may take a generation to overcome. A rapprochement between India and Pakistan, beginning with trade and economic relations, is not only in America's interest, it also provides the basis for a realistic American withdrawal. ...

LyrArc Article Gist
Ariel Mckenzie is the daughter of  Boeing machinist who told his daughter to join Boeing as generations of Boeing workers in the Seattle area have done. Not anymore. Airel says she can't tell her 15 year old daughter that it can provide a good life today with wages falling behind soaring costs in the Seattle area. Note that the new contract states the 437 billion dollars of planes backlog Boeing has will not be made in non union plants in the South, most will be made in the Seattle area home to Boeing since it's founding. How does Boeing see this happening without a wage deal that workers are not happy with, when since 1997 the workers were being treated as a transaction and losing out. Boeing workers say the new contract has no bonus program and does not restore fixed benefit pensions which were replaced by 401 K's . The housing prices index in the Seattle area for last decade rose 128% and average price of a home in Seattle is $835,000. Average worker pay in 2024 is $75,000 and fallen far behind costs of living. It's all been downhill say veteran Boeing workers after the 1997 merger with McDonnell Douglas and the shift of corporate offices to Chicago. ...

LyrArc Article Gist
Donald Trump remains far behind Hillary Clinton in preparation for a general election in fall 2016, and behind where Mitt Romney was at this stage of the campaign in 2012. Part of the problem is his unconventional campaign based on personality and minimal grassroots structure, which is only now being organized with field offices, large staff, and campaign experts, getting a late start, and the campaign supporters not accepting the change. Trump has about $36 million from his personal finances, and $11 million raised from donations. Hillary Clinton has spent $26 million on 1100 organization staffers and firms providing digital, strategy, and voter data services, compared to $7 million spent by Trump for 200 staffers through March 2016, and Romney's $17 million spent at this point in the campaign. Romney advisor Stevens is skeptical about the Trump capabilities for the campaign that is expected. A NYT report says a Hillary super PAC is already preparing its advertising strategy and booking television time for $125 million in April 2016....

LyrArc Article Gist
The Trump administration is moving away from strict bank regulation by chipping away at some of the restrictions and agencies that conducted banking supervision in the past. This report in the NYT describes action taken by the Office of the Comptroller of the Currrency and interim leader Keith Noreika that weakens regulation. The 2008 financial crisis led to stricter regulation of banks and Fed supervision which is being diluted.

LyrArc Article Gist
Sheila Bair leaves behind a much stronger FDIC. William Isaac, a former FDIC chairman says she has had a positive effect on the agency by raising its profile and energy level. Under the Dodd-Frank financial reform legislation FDIC now has the powers to take over large complex financial institutions that are in serious trouble. Mr Gruenberg, who succeeds Ms Bair, has worked closely with her at FDIC. Jim Wigand, heads the new Office of Complex Financial institutions at the FDIC. One of the powers given by the legislation is for FDIC to have its examiners at financial firms to go over operations, providing backup supervision to the Federal Reserve and the Office of the Comptroller of the Currency. According to FDIC officials analysts should be in place at financial firms the FDIC oversees during the next 12 months. The FDIC is also working on a rule requiring banks with assets larger than $50 billion and other large nonbank financial firms to provide a "living will," a plan that would help regulators speedily and cleanly wind down a firm in a future financial crisis. In March 2011 the FDIC approved a draft rule requiring firms to submit these plans, along with regular updates and reports on the firms' current credit exposure. Ms. Bair says the proposal will be completed in August. Bair has also put in place FDIC managers with considerable experience who can continue the work of strengthening the regulatory system she started in 2006. In her work at FDIC Bair has performed a remarkable public service at a difficult time in the nation's history....

LyrArc Article Gist
"Kurzarbeit" job preservation programs incorporate an idea that workers make up for less pay when a company is doing well by being paid and on the job when a company is doing poorly, leading to job preservation benefitting the employee and skills preservation benefitting the company. In 2013 in the throes of the eurozone crisis France passed a labor reform law and committed to improving competitiveness by adopting some ideas from its close neighbor and partner in the eurozone experiment, Germany. But experts say little has changed. France's unemployment is at a high of 10.4% in the third quarter 2014, according to the French statistics office Insee, with little prospect of economic growth in 2015. What happened? A report commissioned by the French and German governments from economists Jean Pisani-Ferry and Henrik Enderlein, says job preservation agreements in France are too strict and ineffective. Half a million more people are without jobs in Dec. 2014 compared to May 2012 when president Hollande took office. Insolvencies in France are 35% higher in 2014 than the average between 2003-2007, for Germany 31% lower, according to credit insurer Euler Hermes. Just in the 12 months to Sept 30, 63,000 companies in France were declared insolvent. Job preservation agreements have failed because other changes in the legal system are needed. Currently a company must prove to an employee council why it is reducing wages in a downturn. A small group of employees can still reject the agreement and ask for severance packages, leading to layoffs. The reforms were done in piecemeal fashion, say economists Jean Pisani-Ferry and Henrik Enderlein....

LyrArc Article Gist
The squeeze on consumers and consumer spending in Britain as wage growth cannot keep up with the consumer price index from 2007 to 2013. A widening gap between average wages and the consumer price index. Basic items such as potatoes, milk, butter, ham, eggs, apples, pork and other food items have gone up much faster in price compared to wages. From 2007 to 2013 basic food staples such as butter are up 99%, potatoes 148%, apples 56%, ham and eggs 50%, milk 31%, pork sausage 37%. Gasoline up 40%. The gap between average wages and the consumer price index has steadily increased since 2010 when Cameron and the Conservatives took office and the austerity measures were introduced to cut the deficit. Upto that time wages kept up with the consumer price index except for a period during the 2008 financial crisis, according to information from the UK Office of National Statistics. Government figures show wages up 1.1% for the 2nd quarter of 2013, much less than half the rate of inflation of 2.8% in July. The household saving ratio is forecast to drop from 7% in 2012 to 3.5% in 2013, and Britons are dipping into savings to pay for basics, according to the National Institute for Economic and Social Research. The House of Commons library compiled data shows average hourly wages down by 5.5% in real terms in Britain since mid-2010. Weak consumer spending hurts economic recovery and hopes of cutting the deficit. In the Bank of England's minutes for the August meeting policy makers said consumption growth cannot occur without increase in household incomes. ...

LyrArc Article Gist
A look at the views of candidates running in the U.S. presidential election of 2016 on mass incarceration. Benie Sanders, Democratic Senator from Vermont, says the situation worsened for incarceration during the Clinton years when a policy of building prisons and increasing law enforcement was adopted. The 2.2 million persons in prison today are double that for the years before the early 1990's, said Sanders. Under president Clinton the 1994 Violent Crime Control and Law Enforcement Act was passed creating tougher penalties for drug offenders, and putting $30.2 billion for more police officers and new prisons. Hillary Clinton called for putting "an end to the era of mass incarceration." Adding in other remarks that missing African-American men means "missing husbands, missing fathers, and missing brothers."

LyrArc Article Gist
Joe Biden says in the Wash. Post Jan 6, that what happened on this day Jan 6 2021- that "we cannot allow the truth to be lost."

"Four years later, leaving office, I am determined to do everything I can to respect the peaceful transfer of power and restore the traditions we have long respected in America. The election will be certified peacefully. I have invited the incoming president to the White House on the morning of Jan. 20, and I will be present for his inauguration that afternoon.But on this day, we cannot forget. This is what we owe those who founded this nation, those who have fought for it and died for it.And we should commit to remembering Jan. 6, 2021, every year. To remember it as a day when our democracy was put to the test and prevailed. To remember that democracy — even in America — is never guaranteed."

LyrArc Article Gist
The small freshwater fish the 'delta smelt' is one of the reasons why water from Northern California cannot be brought into southern California to fight the wildfires, says DJT during a meeting in California on the wildfires relief efforts.

On his first day in the Oval Office, of the 26 executive orders signed by DJT we see an order on the delta smelt fish endangered species environmental laws- "Putting People Before Fish: Stopping Radical Environmentalism to Provide Water to Southern California." The water in the San Joaquin Valley agricultural region of California comes from the rivers in the San Joaquin and Sacramento areas that flows into the sea. The effort to protect this fish means less water to agricultural farms in this part of northern California that helps feed the Nation, allowing this water to flow into the sea instead of to the other needs in the state.