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How will deflation in the USA affect jobs in China? Not just Roubini talks about a deep recession. Kenneth Rogoff, an economist who has argued with Stiglitz's view of things during other banking and financial crises in Asia in the nineties and has been an optimist about things compared to Roubini's serious concerns, is now talking about a lost decade. Early on a lot was said of and made of the housing crisis in Sweden, where with strong government intervention and decisive action to capitalize and take stakes in banks, things were back to normal in a few years. One thing that Sweden did not face was a global slowdown and global systemic effects of credit crises worldwide so it now looks like a different situation. Here you have a series of things happening at the same time, housing price collapse, foreclosures, higher unemployment, no savings and high debt for consumers and banks foreshadowing possible collapse in consumer spending, and declines in capital spending, tight or no credit for small and larger business, global slowdown including China and India slowing exports significantly for the developed countries of USA, Europe and Japan. Interest rates near zero in the USA and Japan and trillion dollars already committed in the USA for bailouts and assistance, even before the ful force of the economic downturn has hit and this is the beginning of the downturn. ...

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The situation in Boise, Idaho. Home to many electronics and high tech companies like Micron Technology, Boise has weathered many downturns with unemployment rates well below the national average. This time things are not looking at all like previous downturns, as the unemployment rate in Boise climbed to 6% from 2.7%- it has already approached the national average of 6.7%, and is climbing. This suggests that high tech is also being affected seriously. Unemployment is expected to reach 8% in 2010, about the same as the national average forecast according to Moody's Economy.com. Goldman Sachs forecast is for the 2009 savings rate to be between 6% to 10% by 2009. Families like the Capps and Muirs that have young children or children in teenage years, are now serious savers, as profiled in this description. Down to getting their meat from a calf grown on a family farm in the Rocky mountain region where Boise is located, cutting their own wood in the mountains, buying 11 dozen eggs and freezing the insides of the eggs, buying on deals like $8 winter coats at Old Navy's store, bulk purchases of sugar and staples, growing and canning vegetables, handcrotcheting hats and scarfs for sale on Craigslist and local bazaars. All this from Mrs and Mr Muir including starting a Moneysavers Club, an email group of 30 people. The Muirs are a young family with their first child 5 years ago, who have stable employment, with Mr Muir working as a grape researcher for the state Dept of Agriculture, and his wife a dental assistant. But having taken 2 mortgages to buy their $144,000 home because they could not afford the 20% down payment. The wife's 401K of $3000 going for insulation and fence , and the husband's 401 K savings down to $13,000- reduced to half by the stock market. Suggesting poor decisions on housing debt with low savings for a couple in their thirties. The Capp couple in its forties has also low savings, having $40,000 in student loans, and credit card debt of $11,000 just paid off by using the $10,000 severance package for Mr Capp. The Capps are economizing on everything from skiing to using washable rags instead of paper towels. He worked as a field service engineer for Electroglass, a semiconductor equipment manufacturer based in San Jose which fired two thirds of its field service engineers, including Capp. They also used a $25,000 line of credit on their home to buy a used Toyota 4Runner. Considering their economizing skills, their responding to the downturn by paring down debt as quickly as possible, the information of Mrs Muir's skills at saving, the Capps continuing to use their 253,000 miles Toyota Corolla- these are families that were not crazy spenders, but just families that did not take saving seriously. The Capps made $65,000 from Mr Capps salary and $10,000 from Mrs Capps work at a mental health clinic (after getting a BS in psychology), yet their $2700 in savings suggests no effort was made to save for a rainy day. What this saving and economizing means is that restaurants are closing in large numbers in Boise. Retail stores, including electronics and clothing, are shuttering, All this is leading to higher unemployment, leading to saving measures like those used by the Capps and the Muirs. Meanwhile the numbers for savings accounts at Home Federal Bancorp in Boise, Idaho, a $725 million bank with 15 area branches, shows savings accounts up 26% in December from the previous year. And says the banks consumer banking head, the balances are increasing even as the unemployment rate is going up. Which suggests that Rodriguez and Goldman Sachs may be right (seee link) that the savings rate may reach 10%, and even higher, from what is happening in Boise. Views on currency valuation and the dollar as indicated in the analysis of the article about Rodriguez /Grantham/Scheiff, WSJ, January 2, 2009, may have to be separated from the analysis of what is happening in savings, as the weakening of the dollar relates also to the weakening of other economies and currencies. This steep upturn in saving is likely to affect Chinese exports severely and the Chinese economy. This also affect the German economy, as China imports less from Germany, especially its midsized manufacturers. See links. What is happening on saving, on the other hand, is very real, and happening before our very eyes....

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Because of anti Bush and anti american feeling every crank politicain or simply gangs fighting turf wars and even bandits or thieves can call themselves Taliban. Also the Wahabist religion of militants is not the religion in the Sind and Punjab 2 main provinces of Pakistan. And some of these areas like the Northwest frontier province and the areas bordering Afghanistan like Afghanistan itself have an independent streak and don't take well to any foreigner be it the Russians, the Pakistanis (Punjabis and Sindhis) and to the Americans or going back to the colonial era the British. Its convenient and a easy label for a lazy media that hasnt done its homework, and for politicians who lack the education and disposition to do their own homework or a cultural barrier that makes this difficult to call all this one label Taliban, or some other label, but its dangerous as the manner of dealing with this may be quite different given a correct understanding of whats happening. When turned over to the American people living in a modern world or to modern world Europeans for response to these labels there is only the gut instinct of them versus us the core feeling of something different and alien which is hostile. As this writer points out the Pakistani people themselves by and large are simply like people everywhere, may just be looking for better lives like the rest of us, and are not keen on the militants though they may carry anti Bush feelings. And the Pakistani people resentment for the USA not because of some innate or inherent hostility but because they feel left out of the modern world and its benefits of development like infrastructure, hospitals and basic services, just like most of the developing countries, which have alternated between hostility and friendship towards the USA, just as the USA has alternated between truly benevolent policy towards the developing world and policy thats more in tune to a prior colonial period of its partners in Europe like the British and the French. And in this sense the Pakistani people desire for economic progress may not be automatically construed as expressed through the politicians as they are corrupt and selfserving. Its a complex state of affairs sure but its not made easier but made more complicated by lazy man's labels without understanding the situation on the ground first hand and doing one's homework. ...

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Oracle's account of the meeting of Mark Hurd and the M&A head at Oracle with Mike Lynch of Autonomy and his banker Frank Quattrone. After the meeting in which slides were presented to shop Autonomy to Oracle, Oracle stated that Autonomy's then market value of $6 billion was "extremely overpriced." In the end H-P ignored these warning signals and paid over $10 billion for Autonomy. Mike Lynch denied he had shopped the company to Oracle.

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NYT Writers Who Show Who We Are series- on Wallace Stegner by A.O. Scott, who chronicled the lives in the West. A favorite of  El Paso born Justice Sandra Day O'Connor. We cite O'Connor because of her individualistic nature and her citing of her favorite passage of Stegner, having herself grown up on a ranch on the New Mexico-Arizona border under a great sky, a big empty space. That exposure, Stegner wrote in that passage makes a man or woman realize how small he or she is in the wide empty expanse, the big country also tells him who he or she is.  We show this as Sandra Day O'Connor like Amy Barrett of Indiana reflects the kind of individualism that Stegner celebrated in the wide open prairies or the western states of Utah, New Mexico, Arizona and California. And with this convictions of their own women who made their own opinions for the Court based on their understanding of the Nation and the Constitution created by Jefferson, Madison, Washington and others. ...

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Indian PM Modi at G-7 Talks in Kananaskis Alberta, Canada June 15-17, 2025. Canadian Foreign Minister Anita Anand will meet Indian Foreign Minister Jaishankar at the talks with Canadian prime minister Carney. Who is Anita Anand? It is said about her grandfather V.A. Sundaram that he passionately fought the British Empire but had a strong interest in English culture and literature. He sent his children to British Universities while helping build with his mentor Mandan Mohan Malaviya, the Banaras Hindu University, and working with Gandhiji for Indian Independence during the Round Table Conference of 1931 in London. Sundaram's son immigrated to Nova Scotia, and his granddaughter is now the Foreign Minister of Canada after having held posts of head of the Treasury Board, Internal Trade, Defense, Procurement during Covid, and is Member of Parliament from Oakville, Ontario. There are 2 million Canadians of Indian descent in Canada, and some like Geeta Anand have connections to the India's and Gandhiji's struggle for Independence against the British Empire. India today with Britain leads the British Commonwealth of Nations.  ...

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Greg Ip of WSJ points out that DJT's tariffs are not fully understood. DJT did not use tariffs in the way he is doing now in his first term. Today Congress understands that it is a negotiating tactic when the US is at a disadvantage with other nations using non tariff and hidden barriers. Mostly all countries except China will accept the tariffs and it generates $240 billion a year to finance US resurgence. In the past US spent years of negotiating to get agreements with recalcitrant countries like Japan or China or the EU. The US just doesn't have that kind of time when it has lost its manufacturing, its shipbuilding, its shipping and ports. The average tariff under Biden was 3%. It now is about 13.4%. DJT strategy is to simply hit all imports with a 10-15% tariff across the board as price for access to the US market and for its defense and military protection- this means EU, Japan, South Korea,Taiwan, India cannot retaliate.  ...

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How GM is trying to change its image by investing in cars that are something new and different like a self navigating car that drives itself.

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South Korea which is dependent on exports for nearly half of economic output took a massive hit with January's economic news that exports fell by 32.8% in January 2009 compared to a year ago. The information appeared on the website of the Korea Customs service, and the Ministry of Knowledge Economy released this information also. The government reported that industrial production fell by 18.6% in December 2008. A large proportion of South Korea's exports are semifinished goods like televisions, cellphones, cars and other products that are finished with final assembly in China's factories, and then exported to other countries. So these numbers in South Korean exports will show up in figures from Chinese exports in the coming months and may be just as steep. This begs the question, what will happen with the export model in countries like South Korea and China and countries like Germany that are heavily dependent on exports to China. If as reported in today's WSJ Americans are now becoming thrifty, spending less and saving more, with this showing up in the statistics- and in habits like shoe repair with a story on the growing shoe repair business in today's WSJ- where will this take export dependent economies?...

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In a first at Davos World Economic Forum, China's president Xi Jinping uses the 2017 meeting to give a one hour long spirited defense of the world trading system, critical of U.S. president elect Trump's protectionist views without naming him. Xi pointed out that "no one will be winners in a trade war." And went on to add that restricting world trade was like "locking oneself in a dark room, keeping out wind and rain from outside but also light and air." For the first time Jinping stated that China would take the U.S. role of defending the world trading system from attack as needed. On climate change Xi defended the Paris accords, and gave China's commitment to pursue changes regardless of what the U.S. under president Trump does. This follows Chancellor Merkel of Germany's statements on the issue critical of the views of president elect Trump, and taking the lead to defend the world trading system. Xi also pointed out that many of the ills that led to voter discontent in the West were not really from the freeing up of trade but from the pursuit of excessive profit with the financial crisis of 2008.   ...

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The story of all the important characters in what seems almost like a play, how they acted and how the events unfolded, how they reacted to the events, and how things went a certain way. Characters like Christopher Bancroft who liked to stay aloof from the family in an almost patriarchal way and in the end finding himself undone by dissenting younger family members who he had ignored perhaps insulted. Characters like Lipton and Elefante. How did Elefante bring in Lipton when Lipton had represented Murdoch in transferring his corporte base to the US from Australia, one wonders. In the end despite his show of support for the family he is the one who votes key trusts of the family Murdoch's way. He also hired Merrill who recommended looking at Murdoch's offer because of Thomson's interest in Reuter's plc, and Dow Jones need for scale. In a global news gathering process and need for a global mindset already Zannino's plan not to invest in the Asian and European editions because of shortage of funds shows how the Journal was declining. The lack of clear direction and leadership would have lead to something like this happening sooner or later but the way it finally brought an end to a century of the Bancroft family's control and the manner in which Murdoch patiently waited for Dow Jones to be brought under News Corporation, for all the family's talk about ideals ending with asking for Dow Jones to assume lawyer and investment banking advisory fees in exchange for agreement, is a story about corporate dynasties rise and fall just like the royal dynasties of previous centuries. ...

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Reinhart is saying something similiar to what Krugman said earlier, and Peter Eavis said in the Heard on the Street column on March 24, 2009. The Geithner plan is similiar to the Paulson plan. It is trying to get private investors to buy up toxic assets by offering incentives. But the pricing issue like before is left vague and unanswered. And its success looks increasingly doubtful as the is not only the problem of confidence and illiquidity that these plans are confronting, but something more structural and basic about how much these toxic assets are worh and whether it makes sense to bid for them and at what price so that ooooooone is protected on the downside. Reinhart points out that the stress tests are also there, and it may just be that the government is waiting for public support to build for taking on the losses involved in getting rid of toxic assets, and is right now going the longer circuitous route. At some point the government may decide the time is right to sort out the banking institutions finances through the stress tests, make the tough decisions for banks that are not healthy by government takeover, and deal with the toxic assets as owner of these failed banks....

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The Times looks at local elections in Britain this week, and a swing to the Labor party of 700 seats given Labor's 15 point lead over the Conservatives. This is a dry run for the general elections that Keir Starmer is preparing for, as Britain ripped by crises like the rest of Europe and the US, faces another once in a generation period to decide what kind of a society to create for the future. The blue wall refers to former Labor party supporting constituencies that voted for Boris Johnson in the mistaken assumption that the  Conservatives could deliver for British workers and families. A similar situation exists in the US as president Biden seeks to gain traditional Democratic states such as Pennsylvania and the midwestern states such as Wisconsin, southern states such as Georgia, and western states such as Arizona.

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Lack of ammunition on the Ukrainian side. Russia losing huge numbers of casualties as a large part of its army is committed to the war. The sense of a war no side can win. Dysfunctional aspects of foreign policies in Europe that will cost $138 billion to $750 billion to fix by rebuilding damage in Ukraine, money that could have been used in the absence of the conflict to support the action against climate change and in development needs after the pandemic devastated economies of many countries. No country has surplus money after the pandemic- NYT reports today that China is struggling to meet the high health costs of the elderly during the pandemic. India has huge needs in transport, logistics, housing, healthcare. Both India and China lack a system of social security like that of the US and EU countries. 

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The German response to the Russian invasion of Ukraine is to increase its spending on defense to over 2% of GDP.  An emotional Scholz told an extraordinary session of the German parliament - We have to ask ourselves: "What capacities does Putin's Russia have? And which capacities do we need to counter his threats?" "Putin wants to establish a Russian Empire... the question is... whether we can summon the strength to set boundaries to warmongers like Putin," said Scholz. Scholz said he would immediately invest 100 billion euros or $113 billion in weaponry. Mr. Scholz also announced concrete arms procurements including the decision to buy state-of-the art drones from Israel and F-35 warplanes from the US, which he said would be used to amplify NATO's nuclear deterrent against Russia. 

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Four million elderly women live alone in Japan. For some like For Chikako Tanaka in Aichi prefecture in central Japan who is 85 years old, social isolation is a real problem. She had no pension and lived on her savings till the savings ran out, with no one to visit her as her dementia progressed. Chikako was an unlikely person to go to prison for shoplifting because she dresses with care and looks different, yet this was the only way out of social isolation. In prison for the first time in years her 85th birthday was celebrated. 

Physiotherapists help women prisoners over 70 years with rehabilitation, walking skills and balancing exercizes. Prison services help women to integrate back into society when they return, with service centers in each neighborhood when they return.  

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A US Senate Committee bipartisan investigation will look into MPT, Medical Properties Trust, a large hospital landlord, and the private equity dealings in hospitals, says this report in WSJ. This WSJ report by Melanie Evans and Jonathan Weil looks into Steward, a for profit company that was created by Cerberus Capital Management in 2010 when it bought a chain of struggling non profit Catholic hospitals in Boston. For the Carney hospital in Massachusetts Steward paid $12.5 million and MPT put in $263 million in 2018 to buy the Carney hospital buildings which it then rented back to Carney, according to this WSJ report. Steward now owns 31 hospitals in 8 states including 8 in Florida some of which are shown here in a deep cash crunch. The state of Massachusetts has now sent nine monitors to each of the hospitals in Massachusetts.

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Mr. Boris Johnson resigns as member of parliament on June 8, 2023, with criticism of the Rishi Sunak Tory government. The Guardian shows the years in office 2019- 2022 of the man who took Britain out of the European Union, and his years in office during the pandemic. From 2016 to 2018 he was Foreign Secretary.  He was preceded by David Cameron of the Conservatives who setup a coalition government in 2010 with austerity policies till 2016, much of whose latter years as prime minister were overshadowed by Mr. Johnson leading the Brexit faction in the party and as Mayor of London. In 2023 with Britain under a cost of living crisis and in financial stress after the austerity years, this period looks like a lost decade for Britain- with the failure of its leaders under the Tories.

 

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Nineteen year old Belgian Zara Rutherford becomes the youngest woman to fly solo roundtrip around the world. Her parents are avid pilots and she learned to fly at the age of 14. She took off in a microlight plane Shark Aero on Aug 18 and landed after 52,000 kilometres of flying in Flanders on Jan. 20. She went through UK, Greenland, Americas, Siberia, Southeast Asia, India, Saudi Arabia and Europe. In that journey she went through freezing temperatures over Siberia, smog in India and wildfires over the US northwest.

She plans to study electrical engineering and would like to see more girls taking interest in science and engineering, and in flying planes.

Her approach was bold and straightforward. It was a trip that she thought was- impossible, expensive, complicated, dangerous, a logistical nightmare, so she never thought about it twice. 

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NYT's Homan who traveled 640 miles across Colorado and Woolf look at the reelection bid of a 33 year old owner of a restaurant and bar in the small town of Rifle in Colorado, Lauren Boebert. She represents the Trump centric activists at the state and county organizations who differ from other parts of the Republican party including more conventional Republicans like Jeff Hurd who graduated from Notre Dame and is a lawyer in Grand Junction. Hurd is challenging Boebert in the Republican primary. Boebert won the Congressional seat from Colorado's Third District over Adam Frisch by a mere 546 votes. After controversy regarding her behavior at Beetlejuice theatre Boebert is seen as lagging behind the Democrat's Adam Frisch, a Aspen councilman who ran out of funds in the last election yet is well financed this time.

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The US added 167,000 jobs in July 2023 from a month earlier, according to the Labor Department, less than 200,000 anticipated. Higher population numbers and higher labor force participation rates offset the increasing  number of retired people in the US. More people added to the population from immigration and more younger people participating in prime age under 54. This means the US is where it would like to be with the Fed not having to increase rates that much in coming months, says Justin Lahart of WSJ. The Labor Department increased its estimates of population by 867,000, and the labour force participation for prime age is up to 84%. These are good signals for the US economy, that there is room for more jobs growth and income growth with an unemployment rate at 3.5%, and less need for increasing interest rates by the Fed.

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Bars and restaurants filled with people just increases the risk. Consider that on one day June 20, 500,000 people went to bars in Los Angeles county the day after they reopened, as reported in the WSJ. This is similar to what happened in soccer stadiums in Lombardy, Italy, spreading the virus like wildfire. Experts say social distancing is easier to do in office locations and at work, than at bars, restaurants inside, and at soccer stadiums, or large gatherings of any sort. In just one situation 138 new cases were traced to a bar in East Lansing. Michigan.

Most of the restlessness about the lockdown was about not being able to get to work after weeks inside. And getting outside to a park for exercize was always safer because it was easier to keep social distancing in these places.

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Kingsley Coman walked through the doors of PSG's Academy when he was 8 years old, and walked out 10 years later unwanted scored the only goal of the Champions league final in Lisbon between Paris PSG club and Munich Bayern club. A kid from the banlieus, the suburbs of immigrants around Paris undoing the billion dollar club of Paris PSG. People in Paris were astounded and a bit angry. The coach of Bayern Munich Mr. Flick is also a student of Zidane the French coach of Real Madrid in his approach of emphasizing home grown talent and younger players who are promising rather than depend on big names like Neymar or Messi.

Alphonso Davies is a immigrant from Ghana, and other younger young players such as Kimmich were the key additions to the talent of Muller for Bayern.

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This BBC report looks at the hundreds of thousands of jobs being created by Biden through clean energy investments and manufacturing across the US,  including in Republican held states. This is changing the economy in places like Dalton, Georgia offering new hope for the future after decades of neglect under Republican and Democratic administrations of Bush, Obama and Trump. It is only president Biden who has turned things around on infrastructure and manufacturing in America, and done something about it. With trillions of dollars in investment in infrastructure, clean energy and manufacturing this will change the face of America. Biden said this in the debate, yet most media people don't get it, and have their heads stuck in the past unable to see the great changes that are happening in America for the first time, changes that will shape the decades ahead.

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Scientist Kim Mishra at the Swiss Federal Institute of Technology has come up with a method to make chocolate not just from the cocoa seeds discarding the pulp, husk and juice as is done today. This is wasteful. The new method uses the cocoa pulp, the husk and the juice as a way to make chocolate without sugar and use the whole fruit. This will reduce the impact on the climate with more chocolate production and less deforestation for new cocoa planted in South American countries as an addition to production in African countries like Ghana. It will also benefit cocoa farmers in Africa and Guatemala by increasing their income. This report looks at the colonial past of chocolate production by companies such as Lindt as Swiss producers worked with French and British colonies to expand production in the late 19th century.