LyrArc Article Gist
For opportunistic politics the Evan Newmark Mean Street USA Meanie awards go to Obama, Budget director Orszag who joined Citigroup, Rep. Charlie Rangel, Michael Bloomberg. For the stuff that is going on in Wall Street Goldman Sachs, Steve Rattner in the pay to play pension scandal, high frequency traders on Wall Street in the May 6 Flash Crash, Blackstone CEO Steve Schwarzman and private equity's benefitting from tax loopholes. For Main Street Meanies the awards go to Bowles -Simpson and their leaving out cuts in Medicare benefits as they show extraordinary concern for the deficit, bond investors who will blame Wall Street and Obama for losses in bond funds in 2011, and the Americans living rent free in foreclosed homes as the robo-signing problems continue.

LyrArc Article Gist
Ajami cites his own memories of Egypt's Gamal Abdul Nasser, who had a way with crowds and rhetoric in the Arab world, as giving him an insight into the way Barack Obama found his way into the American imagination as a popular leader in 2008. He points out that the coalition of black people who put their faith in him as one of their own, of white educated professionals who liked his cool image, of Hispanics who had hope for better immigration policies, and working class Americans who set aside reservations of elitism to give their support, was put together on the basis of hope and charisma and the uncanny ability of Obama to let himself be seen as all things to all people. Because of the way it was put together it was bound to come apart, particularly for a candidate without enough experience, says Ajami. The aloofness of the president, reliance on Congressional leaders Reid and Pelosi, and relying on a very small circle of advisors whose eyes were focussed on reelection, made this more so. He cites as one example, the controversial decision on Syria's chemical weapons made on a walk with chief of staff Dennis McDonough. Ajami gives a picture of how Obama may be seen from the outside, especially in the Arab and Muslim world- from Turkey and Egypt to Saudi Arabia- a sense of illusions. A European and particularly a German perspective also may have similiar sense of illusions about having gone for the ride and believing the image put out by image handlers. The lack of sensitivity to German sentiments about the tapping of chancellor Merkel's mobile phone- herself a former East German resident of the Soviet backed GDR- bringing this out. A similiar sense seems to have taken hold in Brazil, after Brazilian president Rousseff cancelled a trip because of lack of sensitivity to the tapping of her phone, as she is a survivor of brutal dictatorships in Brazil. This is ironically a full circle, as happens in these situations of euphoria encouraged by politicians inevitably followed by disillusionment, because Turkey, Germany and Brazil were some of the countries where enthusiasm for the new president was highest. More so because president Lula of Brazil, Merkel of Germany,and Erdogan of Turkey were leaders Obama seemed to relate to the most. This acts as a cautionary note for the future....

LyrArc Article Gist
The basic outlines of new health care legislation takes shape as Senators Dodd and Kenedy come up with a plan that scales down subsidies to low-income people to buy insurance. Attached to their revised outline is a budget office analysis thatprojects the plan costing $611 billion over 10 years and with expected changes from the Senate Finance Committee would cover 97 percent of all Americans. And earlier plan received much criticism because the Congressional Budget Office estimated its cost at $1 trillion over 10 years and left 37 million Americans uninsured. In addition there is the revised Medicaid expansions for aid to the poor that would add a couple of humndred billion dollars to the total tab. The administration's goal is to keep the cost down to $1 trillion over 10 years. The legislation as it stands includes the public option which is designed to control insurance costs. Mr. Obama said this week that "the public option would keep insurance companies honest." Employer mandated insurance is part of the Kennedy-Dodd legislation proposal. Employers with 25 or more workerswould have to provide coverage or pay the government an annual fee of $750 for each full-time worker and $375 for each part-time worker. The government pays the startup costs for the public insurance option as a loan to be repaid, and premiums would make the option self-sufficient....

LyrArc Article Gist
China is exceptional in the speed with which it is moving on infrastructure projects. And this bodes well for American exporters like Caterpillar which is seein g big jump in excavator sales, and for China which may see thre fourths of the 6.5% increase in GDP in 2009 coming from infrastructure building. Fortunately there is still a need for alot of infrastructure development in China. Typical is the approval and start of work on the $930 million Xiangshan Island Bridge which will extend over the East China Sea and through mountain tunnels. Caterpillar CEO James Owen says of approval and start of construction as fast, "its something like nine months in the USA versus 9 weeks " in China. China has agood pipeline of projects and alot of planning work has been done for many years. For Xiangshan Island Bridge this goes back to1994. Liu Cijun completed a PhD dissertation in 1999 on bridge wind resistance, and the Ningbo native is now Chief Engineer for the project. Preparatory work on the bridge goes back to 2004 and the stone cutting ceremony in 2006. In August the bridge's feasibility report won approval from aplanning agency in Beijing, and in December approval by the Ministry of Transportation. Construction started in just 11 days after the Chinese government approved the project. China's investment in infrastructure has jumped by 102% in the 1st quarter of 2009 from a year earlier, according tho the National Bureau of Statistics. By comparison Washington has distributed $69 billion of its $787 billion in stimulus fundsto states and localities, which have spent $14 billion according to the WSJ....

LyrArc Article Gist
Each year the amount of forestedd land that is cleared- mainly for cattle needing pasture land- releases the equivalent of greenhouse gas emissions of 600 million cars. Since 1961 methane gas emissions from cattle has increased significantly. This is one of the findings in a report published by 100 climate change experts for a UN body. Loss of peatlands in places like Indonesia is also a problem.  A half a billion people already live in desert. And land is being lost a hundred times faster than it is forming due to changes in weather patterns.  People migrate when weather fails as has happened for central American farmers migrating to the U.S. creating social and political problems in North America. A major issue in climate change is agriculture.  Increasing the productivity of land, reducing food wasted, persuading more people to eat healthy vegetables and less meat, reducing land lost to desertification, erosion and seas, are all actions that can be taken now say these 100 experts from 52 countries meeting in Geneva. The IPCC or Intergovernmental Panel for Climate Change does these reports to give people some idea of what actions to take to reduce the impact of warming that threatens livelihoods of millions especially in Africa and India, as well as other parts of Asia and Latin America. Developed countries are likely to feel the impact from migration which is dividing their societies politically and socially. As one expert from Aberdeen puts it people don't just stay where they are when drought conditions hit their areas, they migrate. ...

LyrArc Article Gist
The really small cars like the HOnda FIt and the Toyota Yaris and the GM Aveo are piling up on dealer lots as the price of gasoline drops to $2 a gallon from last summer's $4 a gallon. At February end 2009 Honda had 22191 Fits on dealer lots enough to last 125 days at the current sales rate, and Toyota had enough Yaris subcompacts to last 175 days at the current sales rate, according to Autodata Corp. Chrysler has a 205 day supply of the Dodge Caliber, and GM 427 days of Aveo cars. Honda Civics are also piling up. Price shifts and shifts in consumer attention and buying behaviour makes it difficult to plan ahead. The American carmakers have shifted plants to smaller and midsize cars after seeing the disastrous drop in the sales of larger vehicles in the third and fourth quarters of 2008. Now government policy is to mandate fuel efficiency standards, there is talk of agasoline tax, and even the current numbers shows ashift away from the SUV's and larger vehicles of the past. Ford's sales analyst Pipas says that over the 5 months ending February 2009 sales of small cars totaled 718,000. This was down 28% over the same period in 2008, but small cars grew to 18.4% of the total market, up 2.1 points from the year earlier period. Part of this is that overall the market has declined much more than 28%. This also shows that policy in an industry-government partnership will have to show the way that is best for the US, to ensure that oil prices don't go up the way they did, when consumption at the pump was excesssive and fuel standards lax. This should also be done in a partnership with other countries like China and India to ensure that technologies are available worldwide to reduce fuel consumption and promote fuel efficiency, as keeping consumption per passenger for each mile travelled as low as possible will take pressure off the oil price. It would make automobile transportation feasible for a rapidly urbanizing Asia, and by reducing the pressure on price that urbanization and motorization in Asia would bring, help moderate oil prices for western countries. ...

LyrArc Article Gist
Sacramento is the first city going through an amazing transformation from a city with urban sprawl to a city with its own plan that is trying to bring residents closer without sprawl, and planning the layout from scratch so that residents can live without the long commutes and can bike to work or use other transportation. It has a socalled Blueprint which was developed by a coalition of ordinary citizens, politicians, developers and environmentalists. Behind this Blueprint is the dedication, the insight, ability at effective persuasion of Mr. McKeever Sacramento leading advocate for the Blueprint, using a model which showed what Sacramento would look like un the future and the impact on traffic, job growth and pollution depending on which way the houses were built, nearer jobs or distant from jobs. McKeever took this database, software and computer to townhall type get togethers in which people tweaked the models to see what impact it would have on pollution and traffic, even letting them play with it all day in a kind of display of grassroots democracy at work. He also showed how this would help developers by providing additional business of a different type than their typical lots and typical urban sprawl type construction of individual homes. By spreading their business they would do better if one type of housing suffered. This is what has happened in the current downturn and the housing demand and values of housing have done much better where they followed the Blueprint as this took account of higher gasoline prices and the bad effects of urban sprawl. Now neighbors can talk to each other walk down to where the community places like restaurants, library etc are. It has a feeling of community. Between 2003 and 2007 the number of projects with apartments condominiums and townhouses for sale in the region increased by 533%, while the number of subdivisions with homes on lots bigger than 5500 square feet fell by 21%, according to housing-research firm Hanley Wood Market Intelligence....

LyrArc Article Gist
Phased retirement is becoming a popular option for many Americans nearing retirement. An example is a employee taking 25% less income for 13 weeks of additional time off to spend more time with a reitred spouse, for vacation, and for trying out new locations for retirement. It gives working Americans an opportunity to gradually adopt a more relaxed lifestyle, to better understand what it would be like in retirement. This option also has the advantage of using good health to add some working years and improve the retirement portfolio, with less demands of work.

LyrArc Article Gist
Budget pressures have taken an inordinate toll on the army, bringing troop levels and modernization below the levels needed for the U.S. Army to act in concert with its partners in the Armed Forces to maintain readiness and act as a deterrent. This is the conclusion of retiring Army Chief Gen. Raymond T. Odierno. It is now falling to 450,000 in Army forces. By reducing deterrance the cuts cost ultimately in American leves as new conflicts arise. He cites the example of losses in 1943 in North Africa and at the beginning of the Korean War. It is not enough to wish the world as we would wish it to be, says Odierno, we have to accept it the way it is, says Odierno.

LyrArc Article Gist
Instead of going through layers of executives before speaking to the CEO, quality chiefs at Toyota now speak directly with the CEO. Mr. St. Angelo who heads the Quality group at Toyota for the American region met directly recently with Mr Akio Toyoda. There are in all 6 Quality chiefs for six regions worldwide. Akio's questioning during a Congressional investigation appears to be a turning point and he is determined to shake things up. He choked up at the National Press Club in Washington while thanking employees and dealers for their support. See the links to Akio Toyoda for Akio's education and experience in the U.S., which may have better prepared him for this challenge than his more parochial mindset predecessors who lacked this type of background.

LyrArc Article Gist
Subaru's new marketing campaign "True Love" tries to broaden the car's appeal to customers outside the northeast and Colorado. In the past the car's four wheel drive and performance in snow driving made it popular in states with winter snow conditions. Subaru is now making an effort to sell in southern and western states, appealing to customers who want higher fuel efficiency and improved safety. Subaru has 2.3% of the American market, but its sales are higher in a few states. with a 11% market share in Vermont. Subaru sales have grown rapidly and increased during the recession. Sales increased 41% between 2008-2010 with the popularity of a new version of the Outback wagon. In 2010 Subaru increased sales by 22% to 263,820 cars.

LyrArc Article Gist
Rattner calls his own contact with GM's culture a revelation of what went really wrong at the automaker before the bankruptcy. He refers to the "nods" and the "salutes," the superficial power point presentations, and failed leadership, calling it hugely disappointing and stunning in its scope and extent. The greatest damage is done to GM's employees, its partners and customers, and to America, with the collapse of values and culture at a key manufacturing company. Did Akerson and Whittaker, CEO's brought in from the outside after the bankruptcy, get a grip on this and make changes, or was their period at the company too short to make an impact. The period since the recalls has not convinced the American public that GM is now a different company.

LyrArc Article Gist
Development of new fuel efficient cars, electric cars, new hybrid cars, costs money, and manufacturing facilities to build these cars in large numbers also takes large investments. Not only do the Japanese carmakers have a huge leg up over American carmakers in having development on these technologies started early because of the conservation ethic in Japan's use of energy, but now because of being in much better financial shape than their competitors in te USA they can make the huge investments going forward in the next 10 years. Note the huge costs of development. Honda spends an estimated $1 million on every FCX Clarity, Honda's new hydrogen fuel-cell car, that it makes today. It hopes to get the production costs below $100,000 per car.

LyrArc Article Gist
Before this deal Kuwait with 7.6% was the largest single shareholder in Daimler. Now a Abu Dhabi investment firm Aabar Investments PJSC plans to put in $2.65 billion for a 9.6% stake in Daimler. The largest shareholder in Aabar, which is listed on the Abu Dhabi Securties Exchange, is International Petroleum Investment Company. IPIC is owned by the Emirate of Abu Dhabi. Daimler is doing this deal by issuing 96.4 million shares at price of 20.27 euros ashare. On March 20, 2009, Daimler shares closed at 21.34 euros in Frankfurt.

LyrArc Article Gist
How the American invasion in Afghanistan and Iraq has not produced good results. See related article on the mess it has created for the US in the Middle East.

LyrArc Article Gist
U.S. president Obama says at a rally in Philadelphia that Donald Trump is a fradulent champion of the working class, saying that Trump is simply exploiting the populist mood, that for 70 years he has shown no concern for working class people. Obama told the crowd he understood the public's mood for change and that he himself had benefitted from it. Yet he said that it did not add up. Obama said: "This guy is suddenly going to be your champion? I mean, he spent most of his life trying to stay as far away from working people as he could, and now this guy is going to be the champion of the working people. Huh." "I mean he wasn't going to let you in his golf course. He wasn't going to let you buy in his condo. And now suddenly this guy is going to be your champion." 

LyrArc Article Gist
What is happening here appears to be that the whole American system of government as it operates today has some serious weaknesses, which if exposed in a critical situation- and with some life threatening situation for an industry group- can subvert the whole system and the economic life of the country. The serious weaknesses are the lobbying of Congress that is legal, and the financing of Congressmen and Senators election campaigns by industry groups which is legal. The life threatening situation for an industry group are the accounting rules and nuances that require that the banking and financial industry that holds these mortgage home loans, if they change one loan to lower payments in one geographic area, have to then show the lowered value of that loan in their books on all other loans of that type in that geographic area. Without this the banks and financial institutions were already or close to insolvent with losses of over $1 trillion. With that accounting change the industry losses would make large parts of the industry insolvent. This becomes incentive enough to fight loan modifications at all costs for the industry, and explains why Hope for Homeowners has generated only 25 loan modifications when it was advertised to generate 400,000. This creates a once in a lifetime or once in a hundred year chance of the whole system of democratic government working to destroy the economic life of the country. How? By providing a big enough reason for the banking and financial industry to fight loan modifications almost to the death, against even their better judgement when in late 2008 and January 2009 this would mean suicide for the economic life of the country, and the chance that they would both go down into the depths, the industry and the boat that is the American economy. This is what this story tells us, all key Congressmen and Senators were taken into their fold by the lobbying groups with large donations to their election funds, both Republican and Democrat, Shelby, Frank, Dodd, Durbin, and their aides. After Hope for Homeowners program failed, the new Hope Now program was again designed with the connivance of lawmakers in both parties by the banking industry representatives. It was designed so it would largely fail by not doing enough to keep homeowners in their homes. The industry faced with a life threatening situation did the wrong thing. Instead of saying lets get the government to help to change the accounting rule, and advocating that the government join the industry to share the losses and go out aggressively to restructure the loans in a three way loss sharing arrangement with homeowners, government and the industry, the industry instead decided to stick its head in the sand and let nobody do anything period. To do this it had to create the illusion that somehow the problem would fix itself with housing recovering on its own. In addition to the donations many Republicans like Preston, Secretary of HUD with oversight of FHA, and others in the Bush administration, may have had the mistaken notion that somehow the housing industry would recover without much help, that the economy was basically still healthy, that the crisis was not as bad as it appeared, that freemarket principles were still the best guide, and that toxic assets of banks and foreclosures were two entirely different things, with foreclosures for those who had borrowed recklessly not a bad thing....

LyrArc Article Gist
The story of the Vanguard 500 Index Fund's founding in 1976, and the inspiration from Nobel Laureate economist Paul Samuelson, is told by founder John Bogle. On August 31, 1976, the first index mutual fund, First Index Investment Trust was born. It was launched by Bogle at Vanguard. The idea he put forth was that passive index management could outperform active management with its fees, load, commission and other costs. The IPO target was $150 million, but the underwiritng resulted only in $11.3 million. The underwriters suggested cancelling the deal, saying that this was not enough to own all 500 stocks in the S&P 500 Index. Bogle's response was just the opposite- he now had the world's first index mutual fund. Here Bogle talks about the early inspiration. His senior thesis at Priceton University in 1951, in which Bogle broached the idea that mutual funds could not say they were superior to market averages, received support from Samuelson. This was followed by the article 23 years later by Samuelson in "Challenge to Judgement," an article in the Journal of Portfolio Management in summer 1974, that stated: "that some large foundation set up an in-house portfolio that tracks the S&P 500 Index." Bogle took up the challenge and offered well diversified funds at minimal costs, with a focus on the long term investment. Writing in Newsweek in August 1976, Samuelson said that his prayer had been answered. Bogle describes how his inital encounter working with Samuelson's "Economics: An Introductory Analysis," was difficult. He barely made a C-. In 1993 Samuelson offered to write the foreword on Bogle's first book- "Bogle on Mutual Funds." The relationship lasted 61 years!...

LyrArc Article Gist
With use of the software technologies and cloud computing Athenahealth hopes to revolutionize the medical records of physician practices. Here Joseph Rago of the WSJ talks to Jonathan Bush, CEO of Athenahealth. Bush says the way things are done now in healthcare there is no choice and choosers, and ther is not thing like a market in health care and people in Washington DC don't understand remotely why a market might be remotely useful. The deep problem in American health care he says is that no one knows the actual value of the services doctors give, not even the doctors, and the complexity of the method of payments keeps everything hidden, as doctor's clerical staff bills your treatment to insurance companies picked by your employer, and pays the doctor through money taken from premiums or foregone wages. Athena designed a program to digitize records and automate billing and is moving into clincal record keeping. It now has 15,000 physicians in 43 states using its program as avirtual office and growth at 30%....

LyrArc Article Gist
A Wall Street Journal/NBC poll conducted in September 2010 shows a big change in public opinion in the US towards outsourcing of production and on free trade agreements. Poll respondents were asked "Do you think free-trade agreements have helped or hurt the US?" The response in 1999 was close to 30% for those who said hurt and those saying helped. By 2005 the curves diverged seriously with more people saying that it hurt and fewer saying it helped. In 2010 this swing is sharp with about 50% saying it hurts the US and only about 10% saying it helps. When asked "Do you agree or disagree that outsourcing of production and manufacturing work to foreign countries is a reason the U.S. economy is struggling and more people are not being hired?" the response is overwhelmingly agreeing that this is bad for the U.S. job situation. The answers are the same across party affiliation, in fact higher for Republicans than Democrats 90% to 84%, higher by income level with 93% for those making over $75,000 agreeing and 86% for those making less than 75,000 agreeing, 93% of professionals and managers agree compared to 89% white collar and 83% blue collar agreeing. This shows all segments of society agree that that the manner in which free trade and outsourcing of production is taking place is not helping the U.S., and this time the highly educated segments are leading the way. Bill McInturff, the Republican pollster who helped do the survey points to the big change in the way well educated and upper income people perceive free trade agreements. In 1999 only 24% of this group making over $75,000 said free trade hurt the U.S., now 50% of this group says it hurts the US. This is sure to lead to big changes in U.S. trade and currency issues with China and other countries. ...

LyrArc Article Gist
The PRI party defeated the ruling PAN (conservative nNational Action Party) of Presidetn Calderon in midterm elections. PRI won five of six governorships and won 237 seats to the PAN's 143. Mexico is facing its worst economic crisis since 1995 with the devaluation of the peso and American loan assistance. THis time it is aflow-through of the American economic crisis, adrop in exports, a collapse of the auto sector, and drop in remittances from Mexican workers in the USA as well as tourism. The GDP of Mexico dropped 5.9% in 1st qusrter 2009. Unemployment and underemployment have doubled leaving one in six Mexicans without ajob. Poverty also has risen in this situation. Meanwhile a stalemate in the legislature has led to stagnation in terms of addressing critical areas of education, investing in the petroleum sector. And monopolies and oligopolies in a range of industries from tecommunications to cement trim GDP growth by 1% according to Guillermo Ortiz, central bank governor. Oil revenues are dropping, and proven reserves now are equal only to 13 years of current output. And public spending on infrastructure is declining. Disillusionment with the political system is growing, so much so that 5.4% of the ballots were spoiled in response to a campaign by political activists fed up with corruption and paralysis in the political system....

LyrArc Article Gist
Faced with the prospects of severe hardship in poorer countries, the World Bank gives a realistic forecast for 2009 that shows the world economy shrinking in 2009. It says the neeeds of poorer countries are likely to overwhelm what the IMF and the World Bank can do. And called for seting up a"vulnerability fund". Even if the World Bank tripled its lending in 2009, it would only reach $35 billion. The combined gap the emerging market countries face it says, is at least $270 billion and upto $700 billion in the next 2 years.

LyrArc Article Gist
In this report November 29, 2019 Jeanna Smialek in the NYT raises the cautionary flag on the Randy Quarles  period as Fed's vice chair of supervision. The Fed and FDIC report issued April 29th 2023, puts the fault for the lax supervision of Silicon Valley Bank on the culture that sees the less regulation the better.  Smialek shows the meetings Randy Quarles had including with a former employer Davis Polk Wardwell- Republican Senators 29, Democratic Senators 17  Davis Polk  law firm 22,                     Daniel Tarullo his predecessor 0 Goldman Sachs 24, JP Morgan Chase 22                   Daniel Tarullo his predecessor had this to say about Quarles role at Fed- It is he said "A kind of low intensity deregulation, consisting of an accumulation of non-headline grabbing changes and an opaque relaxation of regulatory vigor." To which Quarles reply is- "The argument that it is a drip-by-drip erosion: the quantification of that, they can't really demonstrate any quantifiable reduction in the overall resilience of the industry." The Silicon Valley Bank and Signature Bank crisis could have damaged the US banking system, and the capacity of the US to make the huge needed investments in the country, without the strong action of the Biden administration. It showed the very erosion of banking supervision that Smialek pointed out in the NYT in 2019. The costs of a weakening of the banking system and the US capacity to invest in the country are borne by the American people, by workers and families in the US. Which is why the Biden administration acted quickly and decisively to limit the ripples from this crisis.       ...