LyrArc Article Gist
Questions and Answers about Islamic State on the BBC website give a short and simple look at Islamic State or ISIS in Syria and Iraq, its origins and how it developed upto the Iraqi government's efforts to retake Mosul in northern Iraq in Dec. 2016.

LyrArc Article Gist
Jon Gertner makes several critical points about the importance of supporting and investing in manufacturing. The U.S. private sector in new industries such as alternative energy, and electric cars is competing not just with the private sector in Germany, S. Korea or Japan. It is competing with the governments of these countries which are investing heavily to build innovation and jobs in their home countries. Innovation, design and manufacturing are woven together in these new industries in a manner that is different from the iPhone/ iPad/ Search algorithms /Facebook software type industries dominated by names such as Apple, Google and Facebook. The software industries are the opposite of jobs intensive industries with Facebook having 2000 employees and Google having 29,000 employees. By comparison the lithium battery industry could generate over 62,000 jobs in the next 10 years, and the electric car industry as a whole with its supplier networks could generate much larger numbers of jobs. Because of the advanced technology involved these are good well paying jobs. The finance industry in the U.S. is attracted to the quick returns in the software related fields, leaving a gap for the American government to fill a role nurturing these industries. This would be similiar to the manner that the German and Japanese governments do working with their own private sector. The private sector in the U.S. needs only the early nurturing and can operate on its own by innovating its way to competitiveness in manufacturing and cost after the early years. Because of missteps in failing to support manufacturing in the U.S., the U.S. may have to import some of the technology from countries such as Japan and S.Korea to make up for these missteps. This is happening in the lithium ion battery manufacturing technology and facilities, which experts say is being successfully imported from these countries to the U.S.. The Obama administration has provided $2.5 billion dollars from the stimulus investments to support projects of 30 companies operating in the advanced battery technology field. This includes companies such as A123 Systems and LG Chem Power in Michigan. As a result of these efforts the Department of Energy estimates that by 2015 the U.S. will have the capacity to manufacture 40% of the world production of lithium batteries for the autombile industry. In 2009 the U.S. had capacity to manufacture 2% of the batteries....

LyrArc Article Gist
Is this a sign of things to come, after all the Japanese economy has seen sagging consumption for years with a two tier economy with full time workers and parttime workers with no benefits. The parttime labor force increased from 4.13 to 4.79 million according to the Labor Department and its the highest since 1993. Now people are doing this not by choice but for economic reasons. And employers like Kroger are doing this so that they can hire more parttimers with no benefits and pay benefits to fewer employees. There are also computerized scheduling systems for parttimers that are becoming popular with retail stores that use a lot of partimers.

LyrArc Article Gist
The German and French positions on solutions to the eurozone debt crisis are in conflict. As a result the negotiations between France's Sarkozy and Germany's Merkel are deadlocked. The basic differences revolve around three basic issues. Germany wants to see a lasting solution in which Greece debt is restructured so that banks and other creditors that loaned money to Greece voluntarily take losses so that Greece's debt can be reduced to a sustainable level of no more than 50% of what it is now. France, the ECB and the French banks do not want to restructure Greek debt in this manner beyond the 21% reduction in value of debt under the July 2011 agreement. The voluntary reduction in Greek debt by the banks would prevent a default by Greece and unsettling of the financial markets. France fears market contagion from the restructuring of Greece debt that would place pressure on French banks as the value of the Greek, Spanish and Italian sovereign debt French banks hold declines in value. That would require a major recapitalization of French banks and additional cuts to the French budget. Additional twists to the negotiations are that Sarkozy is unpopular in France with elections six months away. For this reason Sarkozy would prefer to recapitalize after 9 months. A way to get around the need for more deficit cutting (austerity measures) in France, is for the European Financial Stability Fund to be able to borrow money from the European Central bank. The ECB can print euros in that situation. Germany's chancellor Merkel has to consider German public opinion and experts from the German central bank, who are adamantly against using the ECB to print money and Germany committing itself to bankrolling most of the effort. Germany wants France to use its own money to recapitalize French banks, with Germany only responsible for recapitalizing its banks. Merkel told her parliamentary caucus in Berlin that "the path is closed for using the European Central Bank to ease liquidity problems." Because of Germany's insistence on financial soundness for any solution, France being in the more difficult financial position and Sarkozy facing elections willing to come up with a short term fix, and the unwillingness of French and German banks to take the losses necessary for a lasting solution, the Germans see a real solution taking a long time. ...

LyrArc Article Gist
German chancellor, Angela Merkel, appeals to members of the Christian Democratic Party to support the European project at a party convention in Leipzig on November 14, 2011. "We live in times of epic change. Our political compass has not changed. But the context is constantly changing," said Merkel. The 2 day convention used the motto: "For Europe. For Germany." Her message was that it will take years of hard work to fix the crisis and yet this has created an opportunity to put the European project on a sounder footing. Finance Minister Schauble put it succintly as he supported Merkel's appeal: "We now need to build the political union in Europe we never managed to build in the 90's." This comes as changes are taking place in Europe with new unity governments being formed in Greece by Mario Monti, a former EU commissioner, and in Greece by Papdemos, another EU official. And it comes as a head of Italy's central bank, Mario Draghi, who had pushed for stricter controls on spending by the Italian government, is now the head of the European Central Bank. Merkel also hit on the theme of a stricter financial union, and the need for courage to change the treaty underlying the European monetary union to allow strong, automatic sanctions for violations of the treaty. She also emphasized that the government had ruled out issuance of eurobonds that makes the EU as a whole responsible for the debt of individual countries. On that point she said: "Everywhere we look we find behaviour that cannot go on for long. Everywhere people are living as if there is no tomorrow."...

LyrArc Article Gist
Robert Putnam a 79 year old Professor of Public Policy at Harvard answers the question what is happening now- when everything seems to be stalling and solutions offered by parties of centre, right and left are all failing to deliver for improving lives of poor white people, black people, middle class white people. Failing to deliver on health care for all, on access to medicines, access to infrastructure, on access to public services. He sees this as a result of the over focus on "I' and on the concentration of wealth in the hands of a few people in the financial world or in Silicon Valley without concern for the needs of the country or the people.  Putnam compares this to the period of the 1870's onwards in America. when for several decades the emphasis was on selfish pursuit of money and wealth with everyone focussed on individual gain. It was only after this period brought America as a nation and the people of America into hard times people was the whole culture of "I" and overfocus on individual gain questioned and repudiated. The period of "we" began with Theodore Roosevelt breaking up the monopolies and Franklin Roosevelt fighting for a New Deal for American workers and the people of the United States. Putnam sees this happening again and America at a crucial juncture of repudiating the existing culture and values in the same way as it did in the past. The change in culture in America is part of a wider trend that includes all English speaking countries Britain, Canada, Australia and India. In all these countries the shift is towards rebuilding the culture that brings opportunities and hope to the working class and middle class, to rural areas, through a new vision for infrastructure, public services, healthcare and education. Putnam brings long experience studying the development of America starting with the book "Bowling Alone" published in 2000 which described the trend to rampant and unrestricted individualism in public and business life. In 2015 Putnam's "Our Kids" covered the issue of declining upward mobility and  failing to give opportunity for young people to make improvement in their social and economic aspects of their lives. The three books have extensive research and look at a lot of data making them academic of nature but they also serve a useful purpose. Any intuitive grasp of the situation also leads one to think in the same direction that the past carries lessons for the future, that there is a better way out, and that this situation cannot go on for much longer without damaging the nation and the people, not just America, but other English speaking nations Britain, Canada, Australia and India that share the same problems of lack of development, lack of infrastructure and services, and neglect of the common man, of everyman.   ...

LyrArc Article Gist
Research on agricultural production and improving and protecting rice, wheat and other food crops has suffered in the last decade as budgets for research have been cut. The USA is in the middle of cutting its $59.5 million annual support for a global research network by 75%. This includes the funding for the International Rice Research Institute in the Philippines which has suffered from budget cuts for years. Its amazing that this Institute is the world's main repository of rice seeds as well as genetic and other information about rice, the staple food in Asian and many other countries. This includes the International Maize and Wheat Improvement Center in Mexico. Agricultural experts have warned about this neglect for many years but have been ignored as the pace of industrialization took off in many developing countries and agricultural production was taken for granted. With the current crisis in agricultural production one would expect this cutting of research aid to be reversed, as President Bush asked Congress on May 1, 2008, for an extra $770 million to pay for food aid and to help improve agricultural productivity in developing countries. Its ironic that growth of food supplies has suffered just when incomes are improving in the developing countries leading to greater demand for beter food and nutrition and resulting in soaring food prices which cuts into that very effort to improve the nutrition and diets in the developing countries. ...

LyrArc Article Gist
Not only have directors at companies like Washington Mutual, Countrywide Financial and Fannie Mae not taken responsibility for the crisis. They have simply moved on to other boardrooms says Gretchen Morgenson of the NYT. These direcotrs did little when these companies were leveraged and made dubious loans or risky investments. Says Paul Hodgson of the Corporate Library, "these directors have avoided the corporate limelight as far as blame is concerned." Companies like Sunoco, the oil company, Paccar, a truck manufacturer, and Tetra Tech each have directors from these failed companies. Thomas Gerrity, a professor of managemet at Wharton is one of the outside directors at Fannie Mae who is now at Sunoco. Robert Parry, a former president of the Federal reserve bank of San Francisco, was adirector at Countrywide from 2004 to 2008. Parry is on the board at Paccar. Says Frederick Rowe, president of Invesotrs for Director Accountability, a nonprofit shareholder advocacy group, the board member gets $475,000 a year, he plays golf with the CEO, he is apersonal friend, goes to nice places for board meetings, and he is just not going to one word that would jeopardize his position on the board. In the case of GM the board held together in one voice right up to the bankruptcy with a director who was a former CEO of Eastman Kodak and the lead person on the board, insisting that management had done everything right, all the way up to the end. These directors had to be fired once the government took an ownership interest in GM, and before this they survived just about everything, including tens of thousands of jobs lost in Michigan, and the devastation of communities and people around the state. Gretchen points out that the director dysfunction is because its almost impossible to have adirector fired for sleepwalking through the job or simply rubberstamping the maagement's decisions. Shareholders have to launch an expensive proxy fight to oust a director. Currently proposed changes by the SEC to allow those who have at least a stake of 1% in a big company to put up their own nomiees are not effective steps say shareholder advocates. John Gillespie, co-author of "Money for Nothing," a forthcoming book on board failures with David Zweig, says the problem lies in the culture of the boards which determines how directors behave. Solutions he suggests are instituting term limits for directors and separating the positions of board chairman and chief executive....

LyrArc Article Gist
Heathrow was built haphazardly as traffic increased since its opening in 1946, with a capacity to handle 45 million passengers at its 4 terminals it was congested and handled 68 million annually. The building of Terminal 5 will ease congestion and increase capacity by 45% making a big difference for British Airways which will operate out of T5 and a big difference in baggage handling ( a million bags weren't ready for passengers at destination in 2006), in the lounges and lounge environments for waiting passengers 2500 at a time) ., and after an annex is built by 2010 passengers will not have to be taken by bus to waiting planes. other airports like Schipol with 4 runways compared to Heathrow's 2 and built with a better layout and plan, and airports in Asia of Singapore Airlines and in the Middle East at Doha are upgrading so BA will only be doing what places are doing. Because the terminal hangups have been costly for British Airways leading to a shrinking of about 20% of its flight network, as it concentrated more on upscale customers, and lost passengers to more efficient airlines., ithe cost will likely be paid off quickly for BA. Demand. is so high at Heathrow that a pair of takeoff and landing spots can cost as much as $50 million and would be going up as Star Alliance and Skyteam member airlines move ito BA's old facilities. Considering the losses from th inefficient setup at the old terminal BA's estimate that T5 savings would cover its cost of 330 million pounds ($660 million) to equip the new building in in the next 10 years may even be understated. Of this 62 million pounds was spent on the new lounges. BA leases the T5 Terminal from Heathrow's BAA owned by Spain's Ferrovial SA, which spent $4.3 billion to build T5. ...

LyrArc Article Gist
"It may be that this iron curtain is small, unimportant and justified, but it is a bad sign." Howard Buffett took a stand in the House of Representatives against the VOA broadcasts being used inside the US in 1947.  Warren Buffett is the son of Congressman Howard Buffett of Omaha, Nebraska, who was on the Board of Education of Omaha, started a small stock brokerage firm, and ran for US Congress in 1942, reelected twice and in 1950. He also ran Howard Taft's Republican presidential campaign in 1952. Looking at Buffett in the FDR-Truman years- one sees a young Buffett in contrast to Warren Buffet's silence on the 2008 financial crisis, raising serious issues- about the Truman doctrine in 1947 on the floor of Congress, was Acheson falling dominoes analogy a dangerous one?  It worked in Turkey-Greece with $400 million in aid in 1947 but was Acheson/Truman using a dangerous analogy of dominoes that would later hurt the US in French colonial Indochina wars, and in the reference to protecting oil resources in Middle east in Iran, Iraq and Saudi to lead to wars that exist to this day in 2024? Wars DJT and Biden have both opposed in contrast to Reagan, Bush, and Obama. There is a huge contrast between the father Howard Buffett, descendent of Huguenot ancestors from 1600 New York, and the finance professional Warren Buffett who went to Columbia University in 1951-52 as student of Prof. Graham with 70 years in finance during which financial crises destabilized the US with Buffett not taking a stand. One hedge fund manager say it is pure nepotism to pass on the company Berkshire to Warren's son Howie. But he is not surprised- who else would be sure to keep the company headquarters in Omaha, keep things simple invested in index funds and much of it in a few companies leaving the investing to managers chosen by Warren, with Howie's job to make sure his father's principles remain. Howie is Warren Buffett's 70 year old son, who Buffett 90 years is setting up as his successor as chairman who will not do investing leaving it to managers, yet be able to change CEO's. Howie worked for a few years at See Candy, a Berkshire owned company before becoming corporate VP at ADM food producer, followed by working on his own farm in Decatur, Illinois which he enjoyed doing. At ADM Howie left after an anti trust investigation began, in which the company was charged with $100 antitrust fines for price fixing says the WSJ. What is Berkshire Hathaway? It is a trillion dollars of investment funds invested in a few companies under name Berkshire Hathaway, using some of the basic ideas of Benjamin Graham, a pioneer in careful investing, adopted by Warren. Where has Buffett put his money? Berkshire top ten investments are- about $90 billion in Apple, $70 billion split between Bank of America and American Express, $30 billion in Coca Cola, and $30 billion split between 2 oil companies Chevron and Occidental. He has not invested in pharmaceuticals or in renewable energy- in just a piece of America.This has generated a compound interest of about 14% over 3-5 years and about 12% over 10 years. He holds 30% of his investments in cash or fixed, mostly cash at this time. And holds the remaining 70% in stocks. ...

LyrArc Article Gist
Average return on U.S. IPO's for 2011 is a loss of 18% for institutional investors getting in on day one according to Dealogic analysis of 23 IPO's. For small investors the losses are 34%.

LyrArc Article Gist
Felipe Caldron, Mexico's new President, addressed one of Mexico's biggest problems low tax revenue by getting passed through the legislature a tax bill that will increase tax revenues from 11% of gross domestic product to 13.5 % of GDP. This will be done by a corporate tax that taxes sales rather than profits starting at 16.5% in 2008 and rising to 17.5% in 2010. The original proposal Calderon requested would have taken this to 19%. The bill cuts taxes on Pemex which will give it an additional $3 billion a year as it is falling behind in new reserves added from exploration and drilling that would replace ones being depleted leading to a decline in output. And the tax bill imposes a tax of 2.5% on cash deposits above $2200 to attempt to collect some taxes from the underground economy which employs about a quarter of the workforce. In addition it imposes a gasoline tax of 5.5% that will go to the state governors for local spending needs. The deal was negotiated by giving the opposition reforms in the electoral process including replacing all commissioners of the Federal Election Institute, and bans radio and television advertising for candidates. Calderon wanted to increase the taxe revenue to 14% of GDP, this would increase it to 13.5%. Considering the previous administrations failure to get any legislation through Congress while Pemex production slipped, and tax revenues were some of the lowest in the world due to widespread evasion (see a similiar problem and tax reforms in the Philippines recently), this is a breakthrough. But Pemex has to turn the corner, and lags way behind Petrobras in Brazil in terms of progress in exploration and new reserves. Revenues from the oil company largely help fund state spending in Mexico. However reforms that free up the state energy sector as Brazil has done (see the recent article on Petrobras in wsj ) some years back are still for the future. How much will this help. Its a modest beginning from a low point under the Vicent Fox administration. The additional $10 billion it generates next year will go to fill the gap in declining tax revenues from state oil company Pemex, and rising health and pension committments of the state....

LyrArc Article Gist
Freeman contrasts the speeches given by Obama and Trump, one in Cairo after becoming president, and the other in Riyadh. Freeman says Obama did not give enough credit to American leadership and progress on women's rights, and was not critical of Iran during a period in which sectarian strife has led to the situation in Syria and Iraq. 

LyrArc Article Gist
Krugman points out that the prevailing bias in the US distorts the facts about Europe's performance. Frankfurt, London and Paris he says are just as lively and modern as New York and Chicago. They are not poor and backward. When you factor out population growth in the USA, since 1980 per capita real GDP which is what affects living standards has grown in America at about the same rate as the 15 European Union countries: 1.95 percent in the USA vs. 1.83 percent for the EU. And for the 25-54 years working age group unemployment in the EU 15 countries in 2008 was 80% of adults (83% in France), which is about the same as in the USA. The French and Germans work fewer hours but output per hour is close to American levels.

LyrArc Article Gist
There are serious issues facing crude oil production from Alberta tar sands which stem from environmental concerns, and the captal intensive, energy intensive, nature of production from tar sands. According to a recent RAND study energy production from tar sands causes 10-30% more greenhouse gas emissions. Add to that destruction of boreal forest, destruction of bird life, and the contamination of water supplies from the lake size tailings ponds used to store spent water from oil sands projects. Large amounts of steam are needed to separate the dirt from the oil in the tar sands. According to Environmental Defence about 4 billion litres of contaminated water leaked from these tailings ponds and this seepage is polluting rivers in Northern Canada. The technology for trapping and storing the carbon dioxide from the production process is still in the research stage. The other hurdle facing the tar sands development is the price of crude which is around $49 a barrel. While some older tar sands plants can operate even at $30 a barrel, newer operations need $60 or $70 per barrel for acceptable returns, according to Prof. Leach, a professor of environmental economics at the University of Alberta. For these reasons Canadian tar sands production which is now at 1.2 million barrels a day is not likely to go much higher or approach the 3.5 million barrels a day predicted for 2015. Petro-Canada said it would suspend 23.8 billion dollars of expansions in Alberta to tar sands projects, and Canadian Natural Resources is cutting its capital spending in half. ...

LyrArc Article Gist
Experts in the U.S. say the U.S. made a mistake in not supporting the idea of a new financial institution to meet the urgent needs of development and infrastructure financing of Asia's developing countries. India, Australia, S. Korea, Britain, Germany, France and Italy are joining as founding members in 2015. China has offered leadership in providing resources for the new bank. Jane Perlez says China is looking for the best talent worldwide to help write the charter for the bank and to run it. It is a project pushed forward by China's president Jinping, and was discussed at the 2013 G-20 meeeting in Moscow as a critical part of the agenda. Laurence Brahm, who supported Chinese premier Zhu Rongji in 2001 for entry into the WTO, says it is natural for China to look for ways to use its extra capacity in steel, concrete and pipes to build projects in other parts of Asia, which would mutually benefit China and the region. Paul Haenle of the Carnegie-Tsinghua Center in Beijing, says the U.S. lack of support is shortsighted, as the existing U.S. sponsored institutions World Bank and the Asian Development Bank are sorely lacking the resources to deal with the huge infrastructure challenges in Asia. China's Finance Ministry is looking for the best talent worldwide to write the charter and run the bank. Natalie Lichtenstein, a lawyer with 30 years experience working at the World Bank will write the bank's founding charter. ...

LyrArc Article Gist
A new study by the Washington Post and the Kaiser Family Foundation shows partisan politics will affect the new president in the U.S. in 2013, to the point of making it difficult to govern.