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Chinese bio tech hubs around Shanghai started by biotech engineers from China trained in the US returning to China are giving the US competition. These biotech companies in China are coming up with drugs for lung cancer and other fields at a fraction of the cost. This happened in AI with DeepSeek doing what ChatGPT does at 10% of the cost.

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Spencer Jakab provides this balanced perspective on Buffett's performance as an investor. Breaking the past 25 years into five periods gives a sense of how Buffett has fared in recent years compared to his performance in the early years. In the latest period since 2010 Berkshire stock has outperformed the market by a mere 0.9% annually. In the period 1995-1999 Berkshire performance trailed the S&P 500 significantly, making up for this in the next 5 years. As Berkshire became larger it was harder to generate results of the period around 1975. In that year returns were 129.3%. In 2015 Berkshire had to take big stakes in large companies such as Kraft. Gains for 2009 were 2.7%, 2010 21.4%, and 2011 minus 4.7%. Showing that Buffett's principles and approach remained intact- invest in what you know and be careful to respect what you don't know, invest in companies and their prospects for the long run (an option not easily available to mutual fund managers who are judged yearly), invest in companies generating large cash flows. Yet as Jakab points out performance has gradually declined over the years....

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Walmart sold three of its overseas store operations in the last 2 months, some at a loss as it decides to focus on e-commerce. Walmart exited operations in Japan keeping a 15% stake and selling the rest of the operation to other companies. Walmart sold Asda Group Ltd. in UK at a non-cash after tax loss of $2 billion and operations in Argentina at a non-cash aftertax loss of $1 billion. In 2018 Walmart sold its operations in Brazil at a loss.

It has been hard for Walmart to use the same strategies that it used in the U.S. to achieve dominant position by squeezing out inefficiencies in supply chain and getting the best price from suppliers.  In Japan its subsidiary Seiyu required infusion of $2 billion in 2008 without generating any income in recent years. 

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Spain's cabinet announced new changes to labor laws to provide incentives to business to hire. Spain has some of the most restrictive labor laws in Europe and high unemployment. The unemployment rate reached 23% in December 2011, and about half of the people under 26 are unemployed. The cost of downsizing is so high in Spain that Spain's representative on the executive committe of the European Central Bank, Jose Manuel Gonzalez-Paramo, says companies prefer to close rather than downsize. The World Bank has singled out the labor laws as one of the main reasons for Spain's rising unemployment rate. New rules will reduce severance payments to 33 days per year of employment from 45 days. Severance packages will be reduced to a maximum of 24 months from 48 months. To encourage companies to hire permanent workers and depend less on temporary workers the new rules say employers must switch temporary workers to permanent contracts after two instead of three years. As an incentive for companies with a maximum of 50 employees to hire young people the rules give a 3000 euros corporate tax break for each new person hired under age 30. If the hired person was jobless he can still collect 25% of previous unemployment benefits for a limited period with 50% of the unemployment benefits going to the employer. Companies having losses for three consecutive quarters are allowed to pay less in severance payments- only 20 days per year of employment. Companies will now find it easier to leave collective bargaining agreements and make deals with their own staff. Luis Garicano, a professor at the London School of Economics, says this is a good step forward. He finds missing from the new rules subsidies to train young and unemployed people given the high dropout rates in Spanish schools. The government approved the rules by decree, but they will be discussed in the Spanish parliament. The government of prime minister Mariano Rajoy was recently elected with an overwhelming majority in parliament. This makes making major changes different from the process in Italy where a consensus has to be established....

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Getting savy employers to pay attention and getting employees to have a better sense of who they are, provides the topic of this article in the WSJ. It shows that different types of employee behaviour can be seen after two years of the pandemic, and employers need to pay attention to their needs.  There are ambitious employees and work to live types. Work to live advocates have put lifestyle and health as priorities learning from the pandemic. The great resignation and employers facing worker shortages have given them an opportunity to look for more flexibility in work life situations. Related to work to live type are double duty professionals of which women form the larger part. During the pandemic women took on more responsibilities for children with lockdowns and school closures. This also meant a more stressful life. All of these types of employees are now in the workplace. Employers can get better results by paying careful attention to worker needs. The types are not exclusive as double duty professionals also have the drive and the resilience to match ambitious employees in tackling new positions and responsibilities. The double duty professionals also share the aspirations of work to live advocates for a better work life balance that gives rest and relaxation, home and family, the importance it deserves for a full and complete life. There is one more type which is also part of the workplace that is entirely different. It is the disoriented new employee who has been left alone to find out about new responsibilities at work virtually without the necessary human contact. Related to this type is the desperate to connect type which is the type that has lived in relative isolation during the pandemic and is now hungering for human contact. There is also one more type closer to retirement that is the zest for life type that can be very productive in the workplace because of its experience and talent if given the chance. This type is not just there for the paycheck or career progress. Here the zest for life means the desire to connect with others and learn new things. Companies and management can accomplish more and be more responsive to needs of their employees by understanding these types and their different needs. Dorie Clark ,who teaches executive education at Duke and Columbia University ,says this is important for companies to retain talented employees and get the most out of them by understanding early on what motivates them. ...

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US jobs reports May June 2025 revisions suggest slowdown.14000, 19000,  and 73000 US job gains May June and July 2025 suggest slowdown in the economy. Layoffs are low but hiring is slowing as companies tackle uncertainty. Number of people unemployed 27 weeks increases from 1.65 to 1.83 million in July 2025. Healthcare and social assistance added jobs. Government layoffs were 12000. Unemployment rate increases from 4.1% to 4.2% in July 2025.

In 2024 166,000 jobs were needed for unemployment rate to be steady, now just 86,000 jobs because immigration has dropped to new lows. This is important to note for rest of 2025 to 2030.

Also jobs reports are seeing downward revision because smaller companies tend to send in data late to the Labor Department in the current uncertainty.

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Christian Ude, the mayor of Munich from the Social Democrats party, says the Christian Social Union's (CSU) hold on power in Bavaria is likely to be challenged in coming elections. One of the reasons for this is that people are moving to Munich from all over Germany because many companies are hiring. Siemens, Audi, BMW and many Mittelstand companies are based in Munich, and unemployment is the lowest in Germany. The CSU, a partner in Merkel's coalition government, is particularly critical of measures to aid Greece, and steps taken by the ECB to buy the bonds of Spain and Italy to reduce borrowing costs, making it difficult for Merkel to provide flexibility in her negotiations with other eurozone countries.

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The pandemic brings together companies in three countries U.S, Italy and France with the merger of Fiat Chrysler with PSA. Fiat Chrysler is owned by the company Exor owned by the Agnelli family in Italy. PSA is owned by the Peugeot family in France. In addition the government of France and Dongfeng Motors in China have stakes in PSA.  During the 2008-2009 crisis Chrysler merged with Fiat with the help of the Obama administration which pursued a policy of promoting small cars. Instead the merger saved jobs but led to the PR effort for small Fiat cars and the focus on the Jeep Cherokee and SUV's like the Dodge Ram. Today one hardly ever hears about small Fiats from Fiat Chrysler that was the basis for government help on the merger. 

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Akio Toyoda of Toyota Motors resisted making a full scale commitment to EV's leading to Toyota falling behind in EV technology, ceding leadership to Chinese, American and German companies. This report in WSJ looks at how this happened. Toyota vehicle sales are declining and VW has overtaken Toyota. Toyoda failed to make a commitment to a date for going all electric and this has led to criticism of his management of the company and seen as resistance to the climate transition to EV's in the automobile industry putting behind the period of fossil fuel driven cars. Toyoda is the grandson of Kiichiro the founder of the company when it was in textiles in the 1920's. He says the the role of CEO is very lonely and very hard, as his early years were spent without the team spirit seen at the top and he was closer to the grassroots. He is now chairman and has given the decisions of the transition to EV's to the new CEO, Mr. Koji Sato.

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Many of the one million veterans get their care at VA hospitals. Between 2018-2021 Medicare paid insurance companies $44 billion for Medicare Advantage plans that many of the 1 million veterans covered did not use as they went to VA hospitals for care, according to this story in the WSJ. During that time VA paid $46 billion for veterans care.

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President Macron abolishes the elite school ENA, Ecole Nationale d'Administration, which with the Sciences Po university functions as the training ground for people serving in the government. Macron graduated from the school in 2004. Many French leaders graduated from the ENA. Macron wants to replace it with Public Service Institute that draws people from different backgrounds after complaints about elitism in France's public and private sectors. Charles De Gaulle established ENA in 1945 to train French leaders after the failures of the Vichy regime in World War II. 

The French people now see no need for an elite institution today, as most of the country's leading universities are quite capable of training the engineers, scientists, and administrative leaders needed to run French companies and the French government, and could do better in bringing diverse backgrounds and abilities.

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The fragility of the financial system is cited as one of the risks for China by Standard & Poors, and by the IMF in 2014. After 2008 total debt including government, corporate and household jumped by 100% to reach 250% by 2014, according to the Economist. The complacency, poor statistics showing bad debt at low levels, the tendency for local governments to continue old practices, dependence on the state to pick up the tab when companies run into losses, or for bad debt at banks, papering over bad loans with new loans, and corruption with close connections between state owned companies and the state, create a situation in which this problem continues to grow.

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Companies in the U.S. and Europe that made internet surveillance technology available to the Gaddafi regime in Libya, according to the Wall Street Journal. This was used to suppress the democracy protests in Libya.

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Studies have shown that the root causes of the obesity epidemic are lack of education and cultural lift in the food intake and lifestyle of Americans, Europeans, with just moderate adjustments in the food and in exercize routines yielding as much or more than the 15%-30% improvement from weight loss drugs that when withdrawn for the low income demographic leads to further deterioration. For men these simple improvements also lead to improvements in the prostate and a healthier happier lifestyle reducing significantly the number one cause of cancer for men.  Yet pharmaceutical companies and the healthcare industrial complex in the US continues on its course like a mighty Mississippi roaring America into oblivion. This report says companies that dominated the weight loss industry are now facing knockoffs that wipe out a large part of the market of a Danish maker of weight loss drugs, with the panic facing obesity hit America hitting the healthcare complex that cares little about lifestyle education. ...

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Difficulties facing China from an overheating economy, a property bubble in many cities,, and a 22.5% jump in March in the broadest measure of money supply being the latest signs of trouble. The government announcement will show the economy growth at 12% rate in the 1st quarter of 2010 vs. 8.7% in 2009. The problem is that China may have acted too aggressively when the central bank increased money supply and state-owned banks in China's centralized banking system were ordered to jack up the lending. The $586 billion stimulus sent even more money to construction and energy companies. Without effective steps and fast the Chinese economy could run into serious problems.

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At this time following the Brexit vote $1 trades for 82 pence. This is a sharp drop in the value of the British pound. With it tech companies Dell, Microsoft, HP, and Apple are raising their prices sharply. Apple prices are up about 25% as a result of Brexit and fall in value of sterling. The price of Apple apps now reflects the falling value of the pound. Not only Britain is affected. In India the app which cost $0.99 now costs 80 rupees in India from 60 rupees previously, a 33% increase. In Turkey the increase is 30%. It all goes to show that as the Bank of England's GOvernor Carney has pointed out that Brexit comes at a price, a price that the British public were not alerted on at the time of the vote with the temporary crises of refugees influx and internal squabbles inside Labor and Tories deciding the vote.

 

 

 

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As the virus toll mounts Japan's prime minister Abe announces a nationwide emergency on April 15. He delayed action to avoid effects on the economy of a lockdown. Japan is shifting to taking stronger action after seeing infections double every 8 days to reach 9000. Abe says person to person contact has to go down by 80%. The measures are not a lockdown as in the UK and are voluntary. Total deaths are 136 in Japan. A Kyodo News poll shows about 80% of the public thinks the moves comes too late. 

Schools are shut and companies have closed operations. Flights were restricted and visitors to Japan dropped 93% in March. These voluntary actions as well as a cultural advantage in people used to wearing face masks, is likely to help Japan through this health crisis. The emergency will cover a holiday period, and is through May 6. The government will give every household $1000 as a way to offset income lost.

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Merck's decision to organize R&D using four innovation hubs in Boston, San Francisco, London and Shanghai. Merck currently lacks a large R&D presence in London and it has commercial operations in Shanghai. Experts say innovation centers enable drug companies to take advantage of academic research at an early stage. Pfizer and other companies are also pursuing a similiar strategy. The new head of R&D at Merck, Dr, Perlmutter plans to shrink staff and focus on promising areas such as immunoterapies for treating cancer and vaccines. Perlmutter comes from Amgen and is bringing people who he worked with at Amgen. The focus is also shifting to tapping the new science behind dieseases.

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The German Chambers of Commerce and Industry President Heinrich Driftmann told reporters in Berlin that the new government should overhaul the tax code and improve credit access for companies. The German chamber wants to see changes to the corporate and inheritance taxes. He said that even if it was considered taboo companies needed more flexibility in the labor market. Merkel has promised labor unions that keeping social protections will be a priority in her administration. Economists say it will be difficult to cut taxes because unemployment will rise to 11% in 2011 as Germany's economy contracts 5% this year, and this will mean less tax revenues and increasing costs for social spending.

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Efforts to develop the next generation Ukrainian aircraft industry from its current moribund state by discarding the old Soviet model. Attracting new foreign investment alongside state investment, modern management, preserving intellectual property rights, and looking for contracts across Europe, is critical for future development. Ukraine has a history of technology development and design in the aircraft industry, which makes this industry a good candidate for export revenues. The first mass produced helicopter was made in the U.S. and used a Sikorsky design in 1936. Igor Sikorsky is from Kiev, Ukraine, and immigrated to the U.S. in 1919, as Soviets took control of Russia. His son was a vice president of United Technologies Sikorsky helicopter division. (Wikipedia). MacFarquhar describes this industry in its new form at its early beginnings- a decade from now the industry under good management could provide large export revenues. Many of the old Soviet auto plants also developed in this direction with investments and technology from companies such as Renault, GM and others, helping revive the industry. There are no spheres of influence in modern industry- Ukraine, Russia, Europe, and the U.S., all benefit from openness to new technology and investment, which improve the economy and living standards. ...

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China reduces US share of exports to 15% from 18% -yet with Vietnam made Chinese goods added in it is 21%. 15.8 million job loss for China from US fentanyl tariffs 2025 from one estimate. Chinese businesses are already feeling this, says WSJ. Exports represent 13% of China's GDP and China had redoubled its export effort after the property bubble burst. There are 2 drags on growth property crash and exports tariffs. China has less room for stimulus in 2025 and the government is focusing on bottom line thinking to prepare for hard times. Already companies are cutting shifts and laying off 10-30% of workers in garment, toys and other basic industries. President Xi is preparing for a long struggle reminiscent of how Mao led China to fight the US forces under Gen. McArthur in the 1950's Korean War, says the WSJ. In the past the state subsidy system worked to take huge share of new industries such as semiconductors, smartphones, solar, electric cars. This will be harder now with less money available to invest and drive out competition, and with the US and EU making their own products boosting their industrial and manufacturing base. ...

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Companies in the U.S. automibile market are again increasing their dependence on incentives to promote sales. GM's average incentive per vehicle was $3,732 in February 2011, according to Credit Suisse, up 13% from 2010.

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Adam Bryant talks to 4 women executives about the problems women face in taking up higher management positions. One of the problems addressed directly and at length by the head of Pfizer Nutrition, Amy Schulman, is what she calls "the dutiful daughter," doing what is expected of you. This is also described as a serious problem for women executives in Asia by Riva Gold, where women not having 100% of the skills for a higher management job will step back, whereas men with only 50% of the skills step forward. Schulman says women have to be well prepared and have a good grasp of the subject matter, have acquired experience, and having done that they need to make their voice heard. Any anxieties about not getting it just right, or asking the question about whether "she belongs" need to be left behind. The leaders of companies need to create the environment in which biases and assumptions about women in the workplace do not hinder getting a mix of different voices in the corporation, which can only benefit from that diversity of people and styles. Another point she makes is that women have to spend their political capital, to stand up for colleagues and the team where appropriate, for principles that are significant, to be build credibility and win credit. ...

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New legislation would permit Pemex to sign contracts with foreign oil companies for services but only on a fee or cash basis and no production sharing arrangements. Smaller or state owned oil companies may show interest as the majors have not signed up for these new arrangements.