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A major shift in foreign investment may be taking place as the 2014 St. Petersburg International Economic Forum takes place in May 2014. Russian policy in Ukraine and tensions with the U.S. and Germany could lead to a shift in investment to other emerging market countries. China's tensions with Japan could lead to a similiar shift of Japanese foreign investment. At the same time India has elected a new government with an absolute majority and an overwhelming mandate from young people to accelerate development. The new government under the BJP party's Modi has a decade of experience attracting foreign investment in western India. Indonesia, Vietnam, Africa and other emerging market countries, could benefit from the shift in investment. Investment could also return to the home countries with lower labor costs in Southern Europe, lower labor/energy/transport costs in North America. For Russia the debate at the St Petersburg Economic Forum was about pursuing one of three policy paths with some riskier than others, or some combination also risky and uncertain- depending on state banks and oil windfall funds, increasing ties with Asian countries, continuing on the current path with lower foreign investment and continued capital outflows. The failure to use the time wisely to diversify the oil based economy which could have been better accomplished in an economy not overly dependent on crony capitalism and centralized economy, both current characteristics, will affect future progress. A key weakness for Russia compared to China is the centralization under one person Putin, more so in the third term. In China the two man team Keqiang and Jinping is part of a larger team chosen by consensus and negotiation and part of a rotational scheme. It has senior leaders who initiated the changes to a market driven economy in the nineties determined to see China on track....

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The cultural identity of the Nation that has existed since the founders Washington and Jefferson, and since it's second beginning Lincoln and then TR and FDR,  was seen to be at risk in 2024, yet no party has put forward the need for Cultural Literacy as a Nation as part of national classroom education, a plea by E.D.Hirsch Jr. of University of Virginia, and others, from the 1980's onwards. Kash Patel is a public defender from New York, who worked in the NSC staff in the first Trump term. He is of Gujarati East Africa origin who studied at University of Richmond for history and Pace University for his JD. He actively defended DJT in what is known as the Nunes memo for the Mueller investigation into links with Russia. He also faced opposition after Defense Secretary Esper was replaced and he served as assistant to the new Defense Secretary, in appointment to the FBI, by then Attorney General William Barr. Kash Patel actively campaigned for DJT during the 2024 campaign. In addition to cost of living crisis for middle and working class families, unease about migration and the lack of Democrats sensitivity and urgency to serious issues raised by fentanyl flows and migrants crossing the border, the pressure on Border Patrol, were major issues in western, southern and midwestern states, leading to a Republicans gaining the White House, the Senate and the House in 2024.  The cultural identity of the Nation that has existed since the founders Washington and Jefferson, and since it's second beginning Lincoln and then TR and FDR,  was seen to be at risk, yet no party has put forward the need for Cultural Literacy as a Nation as part of national classroom education, a plea by E. D. Hirsch Jr. of University of Virginia, and others, from the 1980's onwards. Other issues were transgender and the dilution of morals and religion in the national life since the European settlement of the continent, the sense of losing identity as a Nation.  ...

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China's tariffs on US products could be called self-respect tariffs as US exports to China are small compared to China's $1 trillion surplus a year. $143 billion mainly oilseeds and grains! US business not willing to rely on US labor created the outshoring that built Chinese industrial growth, shipping out technology in the process, that created this situation. Consultants to Apple at the time such as myself bringing Total Quality of Management from Japan to the US, could see the failure of production quality at the Colorado Springs plant just before Steve Jobs returned to the company in 1998. About 20-25% of PC product was defective on the production lines seen with my own eyes. Looking back I believe it was not just the workers but the managers and engineering that needed to guide and motivate the workers with new ways to build in quality control. These were the days when Apple's Steve Jobs hired Tim Cook to revamp production and ship it to China. American workers got blamed. Yet as Jim Carlton shows in "Apple the Inside Story of Intrigue, Egomania, and Business Blunders," by 1996 a new German CEO Michael Spindler 1993-1996 had driven the company to the ground. The struggle with Microsoft gave Jobs an idea- by shifting production to a low cost location he could make the high margins to outinvest all competitors with new products-ipods, iphones, ipads. There is nothing wrong with American workers and their craftsmanship. Timeline- Steve Jobs returns to Apple 1997-1998 Tim Cook is hired from Compaq to revamp manufacturing in 1998 1999-2000 - the strategy is made to shift all of the production to China. Jobs could generate the margins and quality to challenge Microsoft, and profits to invest in new products 2020 -   the weakness of the strategy is apparent with supply side shock for chips and computers with the pandemic stopping shipping 2024 - after taking small steps to shift production to India does little to shift back to America 2025- Apple facing serious tariffs and the country's mood shifting to Make in the USA tells the new US president DJT it will invest $500 billion to shift production back to America. ...

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The next mission for ISRO is the one next year, a joint space flight with NASA to the International Space Station. This will take Indian astronauts into space for the first time. Following this there will be a followup to Chandrayan 3 called LUPEX with the Japanese Space Agency JAXA in 2024-2025 for lunar exploration of the dark side of the moon that does not face the sun. For this the lander will be from ISRO, the Rover and spacecraft from JAXA. Gangayan mission will put Indian astronauts in space on Indian spacecraft next. The sample return mission is next in the Chandrayan missions similar to Chang'e 5 for China in 2020 bringing a sample of lunar rocks back to the earth.

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Brings together Intel, tapping into its server technology and the One Laptop Per Child Project of Mr. Negroponte at MIT Media Lab. Advanced Micro Device joined up in 2005. The price of a PC has been brought down to $100 by the One Laptop Per Child Foundation. How much impact will the project now have, now that a number of backers have joined the effort? Two competing approaches, how has that been resolved? Intel based on training teachers, One Laptop based on self learning in groups, Intel using Windows, One Laptop using open source, one controlled by Intel and Microsoft and less price sensitive and the other more chance to bring price down as its open to any manufacturer or software developer thats right for the goals of One Laptop.

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New rules for foreign direct investment in India will allow foreign multibrand retailers to own upto 51% of joint ventures in India. Rules set earlier allowed foreign retailers like Wal-Mart to only setup wholesale joint ventures. The move by the Indian government lets Wal-Mart, Carrefour, Metro Group and other retailers open supermarkets. The rules were also changed to allow 100% ownership for single brand retailers such as Nike stores. Prior rules limited single brand retailers to 51% ownership. This is a major step because of the growth in the Indian retail market, and the small portion of the overall market that is occupied by large retail chains with well developed supply chain management. Technopak Advisors Pvt. Ltd, a consulting firm in New Delhi, estimates that the Indian retail market has sales of about $470 billion a year, with only about 5% of this or $27 billion in modern organized retail operations. In the five year period 2012-2016 sales are expected to grow to $675 billion, with $85 billion coming from organized retail. Companies with operations in India that are expected to expand operations include Bharti Wal-Mart, Tesco which has a agreement with Tata Group's Star Bazaar stores, Germany's Metro Group AG. according to these numbers, even with competition from the organized large stores, smaller stores will still occupy 88% compared to 95% of the retail space in 2016. And the growth in the overall market means that the smaller mom and pop type stores will still have growth from $443 billion today to $590 billion in 2016. A government backed study by ICRIER shows that smaller stores lose about 23% of sales in the first year, but recover quickly in following years because of growth in the overall market. The introduction of modern supply chain management, modern refrigeration methods, and large investments by leading global retailers is likely to change the way food and other products are stored and marketed, a revolutionary change for India where these methods and investments lag far behind the developed world. For this reason this may give major impetus to modernizing the Indian economy....

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The yuan has gained 16% since the peg to the dollar ended in 2005. For years China has resisted letting its currency appreciate significantly, why the change of heart now? Its seen as a positive thing by China's leaders to let the yuan appreciate and its now part of Chinese policymaking. First it helps keep inflation down, keeps the rising prices of imports energy, commodities, and food under control as they are denominated in USA dollars. Second it sends a signal to manufacturers to move up to more sophisticated value added products that are not sensitive to pricing and can accomodate a stronger yuan, because its precisely the manufacturers who operate on thin margins and make lower end products who will go close down. They also cost the economy in terms of higher pollution and damage to the environment in a way that higher tech products do not. And China wants to undo or limit the damage to its environment. Third by lowering rebates or eliminating rebates and letting the curtrency appreciate its changing the emphasis from exports to domestic markets and domestic consumption. This combined with new laws on wages and benefits is designed to promote domestic consumption which can better carry the burden of economic growth than exports because of the slowing down of the developed western economies especially the USA which is going through what may be a severe and protracted downturn. It also helps that China need no longer be portrayed as taking advantage of free trade through huge surpluses. Its constructive as it will help rebalance the world trading system as the USA can improve its trade deficit and China can accelerate its growth by importing more western machinery and technology and not have to depend on precarious export markets for economic growth that it badly depends on to improve the living conditions of hundreds of millions of its people. By building a large middle class of consumers china can continue growth using its domestic markets at a pace that is still very healthy and not likely to build inflationary pressures which may be a welcome thing....

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Microsoft CEO Brad Smith is taking a different approach with regulators than tech rivals Apple and Google. In this report by WSJ he says that tech is now in the same situation that the financial companies were after the financial misdeeds of 2008 which caused a global financial crisis. Banks had to adapt to the regulation that followed. Tech says Brad Smith will have to do the same after missteps of its own. Better for Microsoft to work proactively with regulators than to stall regulation is Smith'e view.

To do this Smith brings 30 years of experience working with Microsoft and seven as president. During this time he had extensive interface with regulators and government, so that he brings more experience in this field than his peers at Google or Apple. 

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Chryslers plans to trim the product line to eliminate models that compete with other Chrysler models in the same product segment. To look at new models that made small changes over previous models during the late stages of Daimler's efforts to turnaround Chrysler, the Sebring and the Avenger, the Jeep Grand Cherokee, Dodge Durango and the Jeep Commander, for example. The Sebring may be eliminated or redone seriously. Models like the midsize SUV JZ are eliminated. Slower selling models that eat up resources nevertheless like the Pacifica wagon, Dodge Magnum wagon and the PT Cruiser convertible also may be eliinated in this review by Jim Press and Nardelli, formerly of Toyota and GE respectively. Also being addresssed is the shrinking of Chrysler dealerships and the elimination of certain models may help in this process of trimming the dealership network and refocussing it on a newer product line.

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The WSJ's Monica Langley provides insights into Donald Trump's campaign strategies, some of them right out of his book "The Art of the Deal." His target voter is from a think big strategy to get voters across a broad spectrum using the slogan "Make America Great Again," with a knack of tapping into a deep well of voter frustration with the political establishment. How to get attention in the media is the next step Trump tackled by using social media to the fullest - using Twitter often, making statements that attract attention such as the ones on China, Mexico, Senator McCain and Muslims that tap into failure of political correctness to address voter frustration on trade and jobs, immigration and terrorism. The Trump campaign has 14 million followers on Twitter, and 50 million "engagement" accounts on Facebook- that cost very little. Social media is to Trump in 2016 what community networking on the PC dashboard was to Obama in 2008. As the WSJ pointed out in an editorial, the splitting of the Republican vote among many candidates, and the failure of candidates to grasp the nature of the unconventional campaign waged by Trump- descending into attacks based on target groups of voters on every candidate except Trump- created the opportunity Trump has grasped with his knack for improvising along the way. Commonsense campaigning without sophisticated strategies, improvising often along the way, using the available medium of social media at little cost to get the message and slogan across, helped Trump make the deal with voters to upset the political establishment. The Sanders campaign is also based on careful repetition of the same slogan and facts about inequality and lobbyists, over and over again, offering strong action on health care and college tution just as Trump offers strong action on China trade, immigration with the idea of the wall, and barring entry of Muslims for terrorism till "we figure out what's happening." The difference being that Trump thinks big and targets the entire electorate of his party's voters in the primaries from the beginning, and a broad based campaign on many issues. Underestimating your opponent carries many risks in politics, never more so than when you are out of touch or not listening to voter frustration, and fail to speak up to it....

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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....

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The dollars situation may not be as bad as it looks. There are signs that the dollar is strengthening against the British pound and the Australian dollar and other important currencies. And the weaker dollar is already working to reduce imbalances in America's trade deficit. There are two aspects of the dollar's role, one is as a means of international exchange and the other as a store of value. For the first reserves of any country need to be highly convertible and America offers highly liquid markets and this has not changed. As a store of value the dollar has lost some of it value especially against the euro. But the reason that the dollar should not see a sudden drop in value is because the largest holders of dollar reserves China with $1.4 trillion and Japan with $1 trillion would stand to lose by shifting out of dollars significantly at atime when the dollar was so undervalued besides hurting their export markets if it affected the US economy. And though the euro looks good in the short term, over the longer term Europe's aging societies may see lower growth and the future may look different once the USA has corrected some of it imbalances which is precisely what the weaker dollar accomplishes as the US exports start humming. Seen against the historical background the USA has periodically gone through this situation with dollar weakness in 1977-79, 1985-88, 1993-95. In 1985 the dollar went to 81 Japanese yen and there was concern about its reserve currency status at the time. However the dollar has weathered these storms. And there is always the option for a country to peg its currency not to one currency alone but to a combination of the dollar and the euro. This was the case before 1914 when 3 currencies the British Pound, the French Franc and the German Mark were used. In the post 1918 environment the dollar replaced the German mark alongside the Pound and the Franc. The Persian Gulf countries have this option so they can use their own monetary policy to control inflation by pegging not just to the dollar but to a basket of currencies as Kuwait has done. See the link to the Persian Gulf countries handling of this currency issue in WSJ, November 20th and Nov 1, 2007....

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In a new first China's Chang'e-4 probe is about to touch down Jan 3rd on the dark side of the moon, and dispatch a rover in a vast crater to explore the moon. China is using this as the first step in setting up a planned lunar base by 2030. This happens as president Trump revives the U.S. space program after it languished under the Clinton, Bush and Obama administrations restricting to unmanned space exploration.

China National Space Administration is the best funded space agency in the world after U.S.'s NASA. Some experts say NASA has lost its focus falling victim to shifting political agendas. An earlier funded program to return astronauts to the moon by NASA was cancelled in 2010 during the Obama administration. This is now jolting the Trump administration into action to revive the programs whose goals are now harder to achieve for the moon program dates in 2023.

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How a new energy and environment panel created at the urging of democratic leaders and Speaker Nancy Pelosi is taking a stand on climate change and fuel economy standards for automakers. Democratic Rep Ed Markey of Massachusetts heads this panel. He is having to overcome opposition from Michigan Rep Jon Dingell who heads the Energy and Commerce Committee and who represents the interests of automakers in Congress. Right now the Senate has already passed legislation for a increase of fuel ecomomy to 35 mpg for all cars and light trucks with bipartisan support. Mr. Dingell is holding out in the House, by calling for economy wide legislation for climate change and for looking at the consequences of the Senate legislation more closely, moves that would put off any change for 1-3 years. Will Ed Markey be able to insert fuel economy standards into the energy bill that is now before the House?

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What were the stories in the Economist magazine that were the most read stories of 2019? Not on president Trump. On Malaysia, China under Jinping, and exodus from San Francisco and Silicon Valley. The most read article was on the newly elected president of Brazil, Jair Bolsonaro. The mismanagement of the economy particularly extravagant state spending on the Olympics and soccer stadiums for the World Cup at the expense of basic sanitation services, bus and transport services, health services, led to the result of a majority of Brazilians rejecting the Workers Party and its leader former president Lula. Unfortunately most of the media including the Economist did not draw attention to this gap. During a period in which income from mining with export of iron ore, and soyabeans to China, enabled Brazil to live beyond its means, there was no effort to draw attention to glaring gaps in development of public services such as sanitation, bus services and transport, lack of building infrastructure other than to support mining. Glaring gaps in education and health services made the situation worse. The second most read piece in the Economist  was on March 10th- Malaysia's PM is about to steal an election. Here the Economist magazine joined the Wall Street Journal which originally broke the story on the 1MDB fund and irregularities in Malaysia where a development fund was misused by the government. Najib actually lost that election and the WSJ covered the story of the developments that followed in which Malaysia's new governemnt led by a returning former prime minister in his nineties Mahathir Mohammed, ousted his own protege Mr. Najib.  The third most read piece in the Economist magazine was - How the West got China Wrong.  Unfortunately the Economist magazine and most of the media covered China in the two decade long boom years without covering the other emerging story as well in which Mr. Lighthizer (now president Trump's top trade adviser) and others questioned the huge unsustainable trade surpluses in U.S. trade with China. With the economy facing huge downside risks and rising trade tensions with the U.S. Chinese president Jinping's move to remove the limit on terms in office in the Constitution was considered a shift from the notion that China was likely to turn into a democracy. Mr. Jinping had already completed his first term in office and the anti-corruption campaign, managing the economic boom for a soft landing, was carried out with the central leadership of the party, after the destabilization evident in the early part of Xi Jinping's first term. Much of China's path was predictable and rational behaviour in its national interest, what was not clearly defined or defended was the way the U.S. could sustain the trade deficits that had reached a billion dollars a day. Leading to Mr. Trump seizing on this as an election issue to form a bloc of voters separate from the two main parties, the Republicans and the Democrats. The fifth most read piece was on Oct 11, 2018- the next recession. It pointed out that with low interest rates central banks in the U.S. and Europe and America could not cope effectively with a recession. The sixth most read piece was on June 29, 2018- Bullshit jobs and the yoke of managerial feudalism. It cited Prof. David Graeber of the London School of Economics, who wrote a short essay that went viral on the prevalence of work that had no social or economic reason to exist, work he called "bullshit jobs". Graeber said people want to feel they are transforming the world around them in a way that is leading to a positive difference. No. 7, 8, 9, were on Bitcoin, Netflix and programming language Python. No. 10 most read was on Aug. 30, 2018- Why startups are leaving Silicon Valley. It showed that in 2017 more people left the county of San Francisco than entered. The main reason the cost of living was burdensome and out of control. As Amazon shifts attention to India and Brazil, and Apple pulls back from India, social media companies coming under fire for disinformation, this period of Tech is making way for a shift in a new direction. A direction that focuses on people's lives, wages, spending on much needed infrastructure and services. ...

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David Brooks of NYT povides this exceptional essay on a long neglected question. If so much of the politics today is about different communities that are alienated from each  other, what is it about these communities that makes this happen, and how did this come about? After decades of integrating communities and building the economy after the second world war through a strong middle class, what has happened now to see all that progress reverse itself. Rural America and the less educated voted in one way and the urban areas voted in the opposite way, one feeling neglected and the other becoming more segregated in cultural outlook, education, and work. Brooks cites a new book by Richard Reeves of the Brookings Institution called the "Dream Hoarders." The book shows two structural barriers that divide America. One is the residential zoning restrictions, housing and construction rules that keep the less educated away from the opportunities and schools in cities such as Portland, San Francisco and New York. The second structural barrier is the college admissions game that favors the parents and children of the better educated classes. The immigrant communities who come from families that are struggling hard to get into the middle class and upper class work hard to get an edge. As a result about 70 percent of the students in the top 200 competitive schools in America are from the top 25% in the income distribution.  Other barriers are formed by the extent of investment parents in one group put into their children, estimated at 300% by Brooks compared to a flat line for the other group. This accelerated investment leaves the other group far behind. Social barriers form to prevent the kind of interactions one would find normal in an open democratic society. Brooks say the cultural differences show up in the language and product selections, in food and other choices. Just take a typical Brooklyite and someone from western New York state. It is not the intent of one group to look upon this as a desired result. It is their indifference to what is happening that is alarming for a free, open and democratic society. It is their lack of understanding about the implications for life in a free, open, democratic society, of segregating themselves from the vast expanse of humanity around them. It is their lack of knowledge of the history of this continent built on the idea of education and opportunities for all from the time of Benjamin Franklin in Pennsylvania and the early settlers, the idea of out of many one- E Pluribus Unum. Yet out of this crisis something good can emerge if a way is found, and leadership is needed in the right direction with the right ideas, consistent with the ideals that guided the best leaders from its past. What resentment, alienation and wrong direction cannot do, courage, perseverance and right direction can do.     ...

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Von Mark Schieritz of Germany's Zeit Online describes the changes underway following the election campaigns in the U.S., and France, and the Brexit vote in Britain, all signalling the discontent of people left behind by the tech, capitalism, trade and globalization changes of the last two decades. The appeal of one time fringe politicians using racist slogans and divisive rhetoric to appeal to those left behind, appealing to people lacking intergenerational mobility, and without much hope for a better future, is a serious concern. People who are gullible enough, lack college education, or racially isolated so that they are not likely to look carefully at what is being offered in terms of programs and change of competing parties, and likely to overlook the hard and difficult road for corrective course of action, because of anger and pentup fears. Schieritz cites as part of this change the unanimously approved conclusion in its final declaration at the G-20 meeting in Chengdu, China- "The benefits of growth need to be shared more broadly within and among countries to promote inclusiveness." Yet this can be a sort of "too little, too late."  Bankers who are cited in an email going around Wall Street lack credibility with groups on Main Street, to people adversely affected by tech, trade and globalization changes that have been persistently ignored for over a decade, close to two decades. More convincing is the tone of Theresa May, the British prime minister's first statement outside 10 Downing Street- who spoke of the "burning injustices" and her determination to make this a top priority of her government. Still more convincing are the programs to invest $275 billion over 10 years in infrastructure put forward by the leading candidate in the U.S. presidential election of 2016, to provide easier access to public universities and colleges to those left behind, as a sure way to create new jobs and address intergenerational mobility. In fact every leading candidate had made the loss of upward mobility their central plank already in 2015, long before Trump and Sanders started their campaign. The real hope lies in western leaders Merkel, May, and Clinton, all keenly aware students of changes, all women by the way who have sensed the injustice and have the ability to come up with something new and promising for the future, after learning the lessons of the past. ...

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GM will invest $3 billion in electric car production in Michigan. The Orion Assembly plant near Detroit  will produce electric pickup trucks- renovation costing $2 billion and bringing 1500 jobs. A new battery cell factory near Lansing would bring $2 billion in investment in 50-50 joint partnership with LG Energy Solutions creating 1200 jobs. Ford is investing in other states, with $11 billion investment in building 3 battery plants- 2 in Kentucky, one in Tennessee near Memphis. Tesla is investing in Austin, Texas. GM says it is revamping existing factories to save $10 billion through 2030. The new GM investments are part of $35 billion in spending on electric cars through 2025.  For the US as a whole these investments change the look of the auto industry from one that in the past put factories in China and Mexico for gas and diesel vehicles. The shift to electric is now being taken as an opportunity by the Biden administration to encourage auto companies to make a new beginning and speedily build the future electric car base in the homeland itself. So that American workers and families come first in the great American tradition. ...

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Mike Pompeo, U.S. Secretary of State meets with Tory group of MP's that want to see other issues relating to China tackled following exclusion of Huawei from UK 5G networks, and suspension of the extradition treaty with Hong Kong. This includes 120,000 Chinese students attending British universities and many students involved in advanced scientific research. Both Labour party leaders and Conservative party leaders support taking action to protect British interests relating to sharing sensitive technology, and national security. The U.S. is moving forward with a decoupling of economic relations with China on issues of sensitive technology, transfer of technology,  ownership of American tech companies, manufacturing jobs and regaining industrial strength, and on trade that transfers wealth from America to China. Britain is having to restructure its relations with China based on the general trend in U.S. China relations. China is the UK's 6th destination for exports of goods and services, only 3.6%. U.S. is far larger about 14%. The UK also has one third of its investments overseas going to the U.S. The U.S. has total investments in the UK of 758 billion dollars in 2018, showing that Britain's relationship with the U.S. is very close. ...

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Zweig, Light and Pleven reflect on the experience of the last 5 years in the stock market. Investors who went through severe anxiety for higher investment allocation in stocks in 2009 now feel the opposite for low investment allocation in stocks. What does one make of this, and what have we learned, is the question posed. One lesson is that investors should be wary of relying too much on predictions. At one point predictions of Goldman Sachs and other bank economists was for the S&P at 1250 at the end of 2012, when it was 1421 in April 2012. The eurozone crisis and the sluggish U.S. job growth, debt overhang, were major factors in their assessment. The eurozone recovered faster than expected and the Iranian nuclear crisis risks were reduced through negotiations. QE 1, QE 2, QE 3 by the U.S. Fed under Bernanke provided support to the market. Banks recovered faster than expected with help from the Fed. Another lesson is that this can happen with higher volatility, 900 point drops occured in May 2010 and there were drops in April 2012 and other dates. Zweig gives April 2011 as a date for the start of a 5 month bear market, citing Oct 4, 2011 as another date with the market dropping 21% from the April 2011 peak. Another lesson is that performance statistics can play tricks, a month or a year can make a big difference. If 2013 is not included the statistics look very different, if 5 years go back to Feb 2009 when there was a 11% decline instead of March 2009 when there was a 9% improvement the numbers change quite a bit. Another lesson is that macroeconomic news played a major part in the story of the stock market in 2009-2014 and continues today, with continuing support and vigilance from the U.S. Fed and the ECB. The bad news from the eurozone throughout 2011 and into 2012, and sluggish job markets in the U.S., took a positive turn in 2013. The U.S economy is improving and the eurozone is returning to growth gradually in 2014. Because of different timing in their recovery P/E ratios are higher in the U.S., than in Europe....

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Renault's low cost entry cars which were originally designed with emerging markets in mind, are now popular in France and other countries in Europe. Renault gets 30% of its market share, up from 15% in 2006, from low cost cars like the Logan, which cost conscious buyers buy for around $10,000, instead of buying a used car. This has helped Renault at a time when other segments are not doing so well, and when Peugeot had to arrrange a 1 billion euro emergency capital increase. The profit margin on these low cost cars is 6%, compared to 2-3% profit margin on other Renault models. Renault manufactures the cars under the Renault label or the Dacia lavel depending on where they are sold, and uses a factory in Romania. Renault's model is to set the margin first and then ask suppliers such as LG and others to try to come up with a low cost design that meets its margin requirement. This eliminates features that add cost and may be dispensed with for the customer in mind. It requires a fresh approach. Cutting edge is replaced by working with parts designed for older models that cost less. Renault also used the experience gained in the Romanian factory where some of the tasks are done manually instead of using robots, and waste is reduced. The process has taken time because the Dacia Romanian factory was acquired under a previous CEO Louis Schweitzer in the late 1990's, and the first Dacia Logan was made in the Romanian factory at Pitesti, near Bucharest, in 2004. The reliability of the Dacia made cars is well established, say experts. On the sales side the Logan is sold on a no discount basis with fixed price. Dealers are told no discounts are permitted. Total sales of these cars reached 814,000 in 2011 and are expected to cross 1 million in 2012. This is similiar to the achievement of Toyota with its low cost multipurpose vehicles for emerging markets, which is expected to cross 1 million in 2012. The difference is that Renault has achieved this with European buyers in a bold strategy. Tata Motors which pioneered the effort to build low cost small cars with its $2000 vehicle is planning its own entry in Europe, the Pixel as a low cost city-car in European markets in 2015. And Renault is moving further down in cost than the Logan, as its next step, with such a car manufactured in India by Nissan-Renault and regional partners....

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Car sales in Germany are up 40% from ayear ago. This is not about to happen in the USA. The cash for clunkers program in Germany is broad and less complicated.In Germany eligible cars have to 9 years old and the subsidy covered the purchase of any new car, regardless of size and fuel efficiency. In the US the program just signed by President Obama covers a narrow profile of customers. In the US customers who benefitare economically challenged and in the midst of adeep recession. Cars can't be over 25 years old, and can't have a combined highway and city fuel economy rating of more than 18 miles per gallon as calculated by EPA. To get the full $4500 credit customers must buy either a new truck or sport utility rated 5mpg higher than the clunker or scrapped vehicle, or a passenger car rated at least 10 mpg higher.And the credit is given instead of the trade in value, so if the trade in value is higher it doesn't help. The German government is giving away upto $4500 but it started out with 1.5 billion euros to get 600,000 clunkers off the road, but because of the popularity of the program has expanded it to 5 billion euros for 2 million cars and extended it to end of 2009. The US program only has $1 billion for 250,000 cars or one eight of what the Germans are doing for amuch larger car market. Because of the dire shape Detroit and much of the midwest is in, because of the slump in the auto industry, this may be a mistake and a missed opportunity to do what the Europeans are doing, and get an even bigger impact. The American car market and industry is taking a severe blow from the deep recession. Because of the depressed region the impact of a real clunkers for cash program that targets a broader profile, with bigger financing and designed to give a boost to the market, could make a real difference. At this point it is more of a program designed to help people turn in their gas guzzling trucks for passenger cars, and those driving a $200 car are not likely to be the kind of customer who goes out and buys a new car say dealers. See the link to Alan Blinder's stimulus proposal in July 29, 2008, that suggested a $20 billion program even before the current crisis. The present program has only $1 billion....

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David Brooks of the NYT describes the approach taken by British prime minister David Cameron and his Conservative Party government to help the working class poor in Britain, and tackle the social roots of poverty. He says an American adaptation similar to this is badly needed in the Republican Party, with the candidates in the election providing solutions from an old rulebook. Only after Trump's popularity with appeals to less educated older Americans has the Republican leadership responded, with Speaker Ryan helping organize a forum on poverty under the Jack Kemp Foundation- emphasis was placed on education, work, opportunity and accountability for anti-poverty programs in the discussion moderated by Ryan and Senator Tim Scott. Less attention was paid to the other social aspects mentioned here by Brooks, and cited by Cameron when he described the inadequacy of traditional solutions from the right and left of the political spectrum. Cameron outlined the principles of his anti-poverty plans called "Life Chances Strategy," in a speech on Jan. 11, 2016, in north London, with the entrie transcript on the gov.uk website. Cameron acknowledged in the speech that social issues including single parent families, and other social problems such as long term unemployment, can make it harder for some people to use self-reliance and personal responsibility in a growing economy as a way to grasp opportunities. Cameron proposes a combination of economic, social and job growth strategies. His second term plans include 30 hours a week of free childcare for 3 and 4 year olds so both parents can work, parental maternity leave, expansion of Troubled Families Program, in addition to the introduction of National Living Wage, tax cuts, universal credit. In tackling social aspects of the problem Cameron cited the need for development in the early years of childhood, the huge importance of family, social connections and experiences, informal mentors, cultural experiences, broadenend horizons, that enable young people to acquire language skills, character and resilience. Second term projects include expanding reach of high performing schools to deprived areas, emphasis on core English, math, science, history, geography Ebacc skills, a 1 billion pound investment in the National Citizens Service by 2021, a plan to transform housing estates including rebuilding from scratch, additional 1 billion pounds to provide mental health treatment including treatment within 2 weeks in homes and communities. Throughout Cameron's "Life Chances strategy" is aimed at tackling not just the material dimensions of poverty, but also what he describes is broken in Britain- "the paucity of opportunity."...

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Tom Rees the head of the Orniston Academies Trust with 35000 pupils in the UK says the status quo is unacceptable. In France a government report says restrict internet enabled phones to children over 13  years and to social media 16 years. This is the headline in today's The Guardian. Tom Rees says- We are seeing huge and real concerns around mental health, post-pandemic. These are not just self-reported, we’re also seeing real concerns about self-harm, attempted suicide, A&E admissions – these are facts from across the world involving young people and adolescents. “We’re seeing a clear correlation between that and mobile phone and social media use, in particular. Not all mobile phone use is equal and the relationship between that and adolescent mental health, we think, is overwhelming. “There is a responsibility for society to respond, and a responsibility for schools to make it harder for children to access inappropriate content through the school day and restrict the draw of social media.” ...

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There are similarities in the Republican and Democratic party platforms in 2016. One area of agreement is in the reinstatement of Glass Steagall Act. That legislation made in the Depression period to separate commercial banking from investment banking was changed  when president Clinton made changes in a deal with Senators Phil Gramm and Jim Leach in 1999. The too big to fail problems of banks and the problems of investment banks during the 2008 financial crisis are attributed to the lack of Glass Steagall protections for financial stability and safety. The result is that in the post 2016 environment banks can expect a tougher regulatory environment. Another are is in trade where both parties are expected to take tougher positions to protect U.S. interests. The Republican platform calls for "better negotiated trade agreemets that put America first."