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Andy Grove makes this passionate plea for the dignity of workers in America in 2010. It is worth reading in 2020 what this founder of Intel Corp and pioneering spirit of Silicon Valley has to say. Andy Grove of Intel says there is something seriously wrong when the unemployment rate in the Bay Area is higher than the 9.7% national average for the USA. American companies have added jobs like crazy in Asia, but things are sputtering back home. Hon Hai has 800,000 employees and makes most of the electronic and computer products for American companies. Grove says startups are not the answer, unless they scale up and create jobs the way Intel did starting back in 1968, with a $3 million capital infusion by investors. The move from the first production model to mass production is critical, as companies hire thousands of people. Innovation and scaling up have to go together. He makes his point clearly by pointing out that Apple has 25,000 employees. For every Apple employee there are 10 employees in China working on Apple iMacs, iPods, iPhones. And he adds that the same 10 to 1 relationship applies to other U.S. tech companies. And here Grove asks the tough question by first posing an answer. He says it sounds like- no big deal, we keep the high paying jobs, we keep most of the profits, but what kind of society are we going to have with highly paid professional workers and lots of people unemployed? And he doesn't mention that there are a lot more young people unemployed. He says the US has become very inefficient at creating tech jobs, and it would be a great mistake not to act decisively early on. And adds that the investments in such areas as solar power and electric car batteries have to be made early on to maintain leadership in these areas. Grove faults academics like Alan Blinder and others who say loss of manufacturing jobs and whole industries was no big deal. The U.S. has forgotten the value of manufacturing jobs. He wants to see America focus on jobs and rebuild its industrial base. And less of transferring engineering knowhow and new technologies overseas, technology that can help bring innovation and scaling up of factories at home. In his view individual companies doing their own thing, in a misguided fashion that jobs don't matter, is not the answer to the situation we face. The industrial economies of Asia, China at the present day, have focussed on jobs and technology, and scaled up. Grove reminds readers of the situation in America in 1932, when jobless veterans demonstrating outside the White House in large numbers were dispersed by soldiers with live ammunition and fixed bayonets. This makes him shudder at the very thought of it, and brings back memories of his early years in Hungary, as a young man in 1956. Are we listening? ...

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The changes needed in 2008 for money market funds to provide stability in a crisis situation were not made resulting in the Federal Reserve having to step in again to support money market funds. The Fed setup a new lending facility to support these funds that are offered to retail investors at $1 a share without price fluctuations, and are used as an alternative to savings accounts by individual investors. Former FDIC head Sheila Bair says it is frustrating that we never really fixed this stuff and industry lobbyists did'nt let this happen. These funds are a key short term financing source for many companies including banks. The funds buy the short term commercial paper that company issuers use to finance day to day needs.  One of the changes made in 2008 was that money market funds could charge a redemption fee if there was a huge surge in withdrawals in a market panic leading to their holdings of cash or market equivalents falling below 30% of their portfolio. The SEC also let the funds suspend redemptions in that situation. The result of this is that there were large withdrawals from prime money market funds this week after the coronavirus impact on the economy increased, resulting in 11% drop in assets of prime funds to $546 billion. ...

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The marketing of the iPhone 6 in the U.S., China and global markets helps Apple widen its lead over competitors in 2015. Apple sales were 47.5 million iPhones in the 2nd quarter 2015, increasing by 35% over the prior year quarter. Apple is also gaining sales from buyers switching from Android phones. Apple's iPhone sales now make up 63% of its sales, compared with 53% in the same quarter in 2014. Sales of iPhones increased 59% to $31.37 billion as the average selling price went up by $100 to $662.42. Apple remained above the fray, and actually increased average selling price to $662, as Xiaomi sold quality Android phones at near cost in China hitting Samsung sales and margins hard, and leaving unsold inventory for Samsung in China. Rarely has a company dominated its business in this manner from the standpoint of profits with only about 20% of the market in smartphones. Apple profits in the 2nd quarter were $10.7 billion, increasing from $7.74 billion in the prior year quarter. The iPad unit sales declined by 18% for the 2nd quarter 2015, the sixth quarter of such declines and fewer customers upgrading. The iPad has also not taken off in the workplace. Mac unit sales were up 9%, even though the PC market declined in units by 9.5% globally for the quarter. Apple shares up 39% in 2015, fell by 6.7% over concerns about slowing China sales....

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Research firm Dragonomics says real estate prices fell 4.9% in April from the prior year for nine cities in China. In 2010 prices in these nine cities went up by 21.5%, the increase in 2009 was 10%. Standard Chartered estimates China's second tier cities, such as Dalian and Tianjin, could have 20 months of housing inventory by the end of 2011. Standard Chartered says price declines of 10-20% can be expected. Government data understates the extent of the bubble and the drop in prices say analysts. Beijing real estate consultant, Soufun, confirms the slowdown in price increases, saying its data show average property prices went up by 5.1% in May over the prior year, compared to the jump in prices in 2009 and 2010. Prices of copper and steel are coming down after rapid increases. The price increases in the Chinese real estate market have put housing out of the reach of ordinary couples. In 2006 an average price of a new apartment in Beijing cost $100,000, by 2011 this had gone up to $250,000. It woud take 57 years of saving for an average person to buy the apartment at todays cost. The government's response has been to boost down payments on mortgages for second homes to 60% from 40%, prohibiting state owned enterprises outside the real estate sector from investing in real estate, and raising the reserve requirements of banks....

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New regulations permit foreign investors to invest at least $100 million to setup multibrand retail operations in cities with populations of more than 1 millon people. Foreign multibrand retailers are at this time not permitted to directly invest in domestic retailers selling to consumers. A government panel "the Committee of Secretaries," proposed the change, which now goes to the federal cabinet for approval. The change means international retailers like Wal-Mart can sell to Indian consumers through partnerships with Indian retailers, and can own upto 51% of such local joint ventures. Of the investment at least half must go to setting up back-end infrastructure such as cold storage and laboratories. India has a huge retail market of an estimated $450 billion but much of the retail sector has fragmented smaller operations and mom and pop stores. Tata, Reliance, Bharti, Godrej and other local companies have made an effort to change this and formed alliances with Tesco, Wal-Mart, and other international retailers. One of the pressing needs is the building of back up infrastructure- cold storage, retail facilities, etc. This change means Wal-Mart, Carrefour, Metro AG can now enter the retail market. The prior efforts of these companies were restricted to wholesale stores such as Metro Cash & Carry India Pvt. Ltd, Wal-Mart's technical support for Bharti's retail brand of Easyday stores, and UK based Tesco's back-end support to Trent Ltd's Star Bazaar stores....

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Sales of automobiles in China in July 2012 declined 12.6% from the prior month according to the China Association of Automobile Manufacturers. There are two parts of China's automobile sector, the foreign brands of GM, Toyota, VW, Ford and others, and the Chinese brands. There are 48 Chinese domestic carmakers for 30% of China's automobile market, with sales of 87,500 per brand on average, according to J.D. Powers. Many of these carmakers will not survive even with subsidies from local governments. China's car buyers prefer foreign brands because of the better quality and reliability. Foreign carmakers face an oversupply of cars as GM, Honda, Ford, VW have continued to add capacity. Total automobile manufacturing capacity is about 28.5 million cars and commercial vehicles. This is 9 million more than the expected sales in 2012, according to J.D. Powers. The most recent company adding large capacity is Ford Motor Company, which was relatively late in the Chinese market, and decided to boost capacity from 450,000 in 2011 to 1.2 million in 2015, to make it the largest manufacturing location outside of its home base of Michigan. This creates the prospect of foreign carmakers having to offer larger incentives and discounts to manage inventory and operating with higher levels of unused capacity, reducing profits in future years. Most of the plans to increase capacity were made when China's GDP growth was over 10%, it is now slowing to 7.5%....

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Spain opened the books for regional governments to reassure investors. The figures show the average deficit across 17 regions at 1.24% of GDP at the end of the third quarter, according to the Finance Ministry. Risks include additional spending items in the final quarter and a further drop in tax revenues. Fore several years before the current crisis even when the central government was running a surplus, Spain's local and regional governments ran deficits. Regional governments account for about half of all public spending in Spain, compared to 20% for the central government, with social security accounting for the rest. Catalonia was forced to raise money through patriotic bonds, and Valencia is also following this, as Spain's regional governments have been shut out of international credit markets. Moody's Investor's Service provides a different perspective, as it said in November 2010 that Spain's regions will find it "very challenging" to meet their budget targets for this year and next. Moody's view is that the central government has strong incentives to come to the aid of regional governments should they be shut out of credit markets for an extended period. The Zapatero administration lacks a majority in Congress and depends on regional parties for support. Madrid's municipal government has requested funds to refinance its 7.2 billion euros debt. About 4 billion euros went into putting the capital city's ring road underground. Regional government's will need to refinance 30 billion euros in debt in 2011....

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WIth extensive experience as Chief Investment Officer from 2003 to 2012, Sauter has seen market swings and extreme volatility over a long period of a decade. For the current investment cycle and the pullback in Oct. 2014, he points to the pullback of -16% in spring 2010, and pullback of -18% in summer 2011. In the bigger picture of the chart for this period since 2010 these pullbacks look less significant. There are reasons for a pullback. The conflicts around the world bring more uncertainty for business investment, though Sauter's point about the conflict being more than any period since 1946 may be an overstatement because this includes the period of the Berlin Airlift, Iron Curtain in Eastern Europe, Korean War, Vietnam War, and the twin wars in Iraq and Afghanistan.There are problems in the eurozone economies with near contraction in Germany in the 3rd and 4th quarter. China is slowing down at the same time. The U.S. economy and lower oil prices are the bright side of the picture. Overall the comment by Christine Lagarde during the eurozone crisis in 2012 is still relevant. When asked about the situation then, she suggested adding perspective to what was happening by asking "compared to what?" referring to the situation in 2009, 2010 and 2011. Sauter says investors who remain steady are more likely to be happy some years from now that they remained that way....

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China's leading online retailer with its own warehouses and delivery similiar to Amazon is JD.com. It has 118 warehouses in 39 Chinese cities, and 1045 smaller pickup centers in 500 smaller cities. Its online service and infrastructure to support it has been built carefully since 2006. It can now deliver by 3pm the next day and handles 2 million orders per day. The company raised $1.78 billion on the NASDAQ in the U.S. in 2014. Hong Kong venture capital firm invested $10 million in 2006. As it added new systems and software other investors including Tiger Global, Yuri Milner, and the Waltons invested in the firm. JD focusses on low cost and reliable fast delivery using motorbikes for 20,000 couriers for China's congested traffic in cities. It is a unique combination of Amazon, UPS and Wal-Mart in its innovative way of running its retail operation. Liu is the son of a cargo shipowner from Jiangsu province who studied sociology at Renmin University in Beijing, before starting an electronics store in Beijing's high tech zone Zhongguancun. The online retail idea took off when he setup an online store in 2004. He says a lot has changed since the early days when delivery was slow with many customer complaints, and says logistics is important because of user experience. Because JD charges little for delivery margins are thin, and the company has focussed on growing the user base over profitability....

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Caterpillar Inc. CEO and Chairman, Doug Oberhelman, discussed the acquisition of ERA Mining Machinery Ltd., a maker of roof supports for coal mines, acquired in June 2012 for $700 million. The acquisition was "botched" said Oberhelman, leading to the $580 million writedown for the 4th quarter of 2012 and the 55% drop in profits. Former managers of ERA misled Caterpillar about the condition of the business, and in Obherhelman's words "fabricated documentation to cover their tracks." Caterpillar later found inaccurate inventory data and improper revenue recognition. The move to acquire ERA Machinery was an effort to increase sales of mining equipment in China, the world's largest coal producer. As in the Autonomy acquisition by H-P the diligence in checking accounting and other data failed. Caterpillar lowered its forecast for 2013 based on slower growth in mining and decline in investment by mining companies. Mining companies are seeing management turnover over overextended mining projects that went sour. Revenue for 2013 is forecast at between $60 billion and $68 billion, compared to $65.88 billion in 2012. Analysts see risks in the forecast because mining equipment orders may not accelerate till 2015. Mining equipment forms a bigger part of Caterpillar sales and sales growth than construction machinery- sales of mining equipment increased by 14% to $5.78 billion in the 4th quarter 2012, even as sales of construction machinery declined 25% to $4.03 billion. In the U.S. construction machinery sales declined 17% to $1.45 billion in the 4th quarter 2012....

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The role that Cushing, Oklahoma, and its 9 square miles of storage tanks for crude oil plays in the US oil price levels. How the oil inventories kept rising and new oil tanks kept being added because of the profits in futures from the $6 difference between today's oil price and the oil price some months into the future. Now the situation is in reverse because of the credit crunch their is less borrowed money available for this kind of trading, and suddenly there is a big depletion in oil stocks as some sellers had to sell stocks at Cushing to cover losses and others found it profitable to sell as prices were oil supplied now jumped higher. So there is a big depletion in oil stocks at Cushing and this affects prices of oil futures on the Nymex. In 1983 Cushing was designated by Nymex the New York Mercantile exchange as the official delivery point for its new futures contract on light, sweet crude. This Nymex price now serves as a global benchmark. this is the background behind how Cushing stocks levels in oil tanks has a disporportionate influence on Nymex oil price for futures. So speculative opportuntities for profit in the oil trading and storage combined with changing market conditions are creating a situation the depletion of oil in storage tanks that can create a surge in oil prices to still higher levels, because of lower inventory levels at Cushing....

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Eurozone data shows the GDP growth far outpaced the U.S.. In the first quarter GDP growth was 0.5% from the prior year, the annualized rate at 1.8% compared to 0.7% for the U.S.. European stocks are benefiting from the recovery in the eurozone. A global recovery in inflation is also helping, with political risk fading. Recovery is also taking place in parts of southern Europe, with 3% growth in Spain.

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Gottfried points out that after the IPO, in which it made a 73% gain to $45.10 in the first day above listing price of $26, the market value is $31.7 billion in early Nov 2013. This puts more pressure on Twitter to increase revenues to justify such a high market valuation. Estimates from Pivotal Research show Twitter not reaching $1 billion in operating income till 2018-2019. By basic market capitalization Twitter opened at about 26 times 2014 sales estimates, and 33 times using diluted market value.

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Currency trading surged to $4 trillion in the latest survey of the Bank for International Settlements - a survey that is done every 3 years- trading volume going up 20% from 2007. A surge in investing in emerging markets has increased the volume of currency trading.

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Sheila Bair says she fears the next crisis will start in Washington. Bair points to the need for urgent action along the lines recommended by the Bowles-Simpson Deficit Commission. Areas identified by Bowles-Simpson should be tackled as early as possible, she says - tax subsidies for housing and health care that lead to misallocation of resources, defense spending, special-interest provisions. She points out that the increase in the deficit is a result of the unwillingness of governments over the last two decades to make the hard choices necessary to control the structural deficit. Total federal debt doubled in the last 7 years, to almost $14 trillion, or about $100,000 for every American household. Bair, as Chairman of the FDIC, played a critical role in the efforts to control the US financial crisis of 2008-2009. Relentless federal borrowing she says, undermines the confidence private investors have in US government obligations. The cost for bond investors and others to purchase insurance against a default by the US governmet went up from 2 basis points in January 2007 to 100 basis points in early 2009, and is now at 41 basis points. With 70% of US Treasury obligations held by private investors scheduled to mature in 5 years, a decline in investor confidence would lead to higher government and private borrowing costs. She writes this just as the debt crisis in Ireland is taking place, following the one in Greece, and contagion to Portugal and Spain is feared. Bair fears a similar loss of confidence in US public debt. High and volatile interest rates could lead to losses for financial institutions holding Treasury debt and raise funding costs for depository institutions....

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Twitter, Facebook, Groupon, LinkedIn, Pandora and other names command large valuations. Twitter's curent valuation is estimated at between 8-10 billion dollars. Twitter has sales revenue for 2010 of $45 million, and it had a loss as it invested heavily in data centers and hiring. Estimates of revenue for 2011 are between $100 million and $110 million. Twitter is trying to build its ad revenue with a 20 person sales team headed by Mr Bain, a former Fox Interactive Media president.

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Sale of 10% of Pakistan's largest oil company OGDCL for $813 million to international investors is a sign of confidence in the Pakistan economy and confidence in the whole South Asian region for sustained economic growth in the next 20 years. India's growth rate in the next 5 years is expected to reach 10% - see related piece on this estimate by Finance Minister Chidamabaram.

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Years of frugal living and careful patient investing helped Ronald Read of Brattleboro, Vermont, achieve significant savings accumulation. He worked at a local J.C. Penneys store and at his brother's gas station. At the time he passed away in 2015 he had $8 million in his stock portfolio. He preferred dividend paying stocks and reinvested the dividends in more shares. His largest holdings were in Wells Fargo bank, and in consumer stocks P&G and Colgate Palmolive. He owned 92 stocks in his portfolio.

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Mark Hulbert lists the quality stocks with low P/E ratios, little debt, high return on equity, and long records of earnings growth spanning long periods that limit volatility after the emerging markets crisis of 2014. He adds a cautionary note on the idea of quality stocks by saying P/E ratios matter, that quality stocks at a high price are a bad investment and at extraordinary prices are a extraodinarily bad investment, citing the Nifty Fifty stocks of quality in 1972 that lost value in the stock market slide in 1973. He takes quality stocks Disney, Procter & Gamble, Johnson & Johnson off the list of quality stocks because of high P/E ratios, a critical criteria. Hulbert's list for financial quality companies and their P/E ratios in Jan. 2014: AT&T telecom 9.4, Aflac insurance 9.1, Allstate insurance 10.9, Apple computer and telecom 12.7, Bank of Nova Scotia 11.0, Chevron oil 10.0, Cisco computer hardware 12.2, IBM technology 11.7, Royal Bank of Canada 11.5, Wells Fargo banking 11.5. These P/E ratios compare with the S&P 500 P/E of 17.3....