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The Economist magazine points out that the higher reserves in emerging markets (estimated at $7.7 trillion total by The Economist), flexible exchange rates, and smaller current account deficits, make this a different situation compared to 1997. Only countries like Argentina, Turkey, and Thailand pose higher risks because of political uncertainty and failure to adopt the lessons of the 1997 crisis. China, Russia and Brazil have large reserves to cope with the crisis. Emerging markets will have to adapt over time and the gradual tightening anticipated under an employment levels conscious Yellen would give them the time to make the changes needed.

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Japan's new LDP government led by Shinzo Abe approved a stimulus plan of 10.3 trillion yen ($115.7 billion) in Jan 2013. This comes as Japan's current account deficit increased for November to $2.5 billion before seasonal adjustment, reflecting a decline in exports. The Abe administration says this will increase GDP by 2 percentage points from the current forecast of 1.7%.

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WSJ's Leubsdorf looks at the job market in 2015, and the March 2015 employment figures from the Labor Department. March 2015 figures shows seasonally adjusted 126,000 jobs added for the month. The average for each month in the 1st quarter of 2015 based on revised figures is 197,000 jobs added. This is down from the average of 324,000 jobs added each month for the 4th quarter of 2014, and similiar to the 1st quarter of 2014 when economic activity contracted. Economic growth has slowed from the 5% pace in the 3rd quarter of 2014, 2.2% in the 4th quarter, to a projected 1.2% by Macroeconomic Advisers for 1st quarter 2015. Economists see the gains from lower oil prices already having taken place for consumers, but layoffs still taking place in the oil and mining industries. The mining sector lost 30,000 jobs in the 1st quarter 2015, with 11,000 in March 2015. Manufacturing job losses as a result of the strong dollar and lower exports also lie ahead in the next 3 quarters of 2015, suggesting a weaker job picture than earlier anticipated based on 4th quarter 2014 job creation. The unemployment rate remains at 5.5% for March, but the true picture of the labor market is reflected in the unemployment rate that includes people working parttime who want full time jobs, which is at 10.9% for March. The labor force participation rate remains at its low level, going down slightly to 67.8%, and Americans out of work for over 6 months remains high at 29.8% of 8.6 million unemployed for March 2015....

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Robert Reich, a former Labor Secretary, says that instead of "rebalancing" with Chinese consumers buying more American goods and China exporting less to the USA, things are headed in the opposite direction. Why? Because at the macroeconomic level China is devoting more of its country's resources to production capacity. Chinese consumers are taking home a smaller proportion of the total economy. In 2008 personal consumption amounted to 35% of the total economy, whereas in 1998 it was 50%. Capital investment in the same 10 years went up 35% to 44%. Chinese continue to save and these savings are going into infrastructure and manufacturing capacity. There is even a social twist to the savings, with fewer young Chinese women than men parents with boys have to compete in the marraige market and save assets for this. Households are also saving to support more elderly people as population is aging quickly with population policies. All this means that with all the talk (see links to Niall Ferguson and Krugman), the situation will likely roll on in this manner till things reach an impasse, or there is a strong political backlash in the USA which leads to stronger trade actions by the government, or there is a crisis. Meanwhile the trade deficit is headed higher and Chinese foreign reserves will go far above the current $2.3 trillion. And the Europeans will also be getting restless with their trade imbalance, as the euro edges higher and the yuan remians pegged to the dollar, leading to trade distortions. ...

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Jumbo loan mortgages in dollars accounted for 20% of first lien mortgages in 2014, the first time since 2005, and back up from 5.5% in 2009 at the height of the subprime mortgage crisis. This part of the market for homes priced over $417,000 or $ 625,500 in pricier regions, has gained its footing faster than the rest of the market. Sales of existing single family homes between $750,000 and $1 million, were up 21% in June from the prior year, compared to an increase of 12.5% for homes between $100,000 and $250,000, with homes below $100,000 declining by 3%, according to the National Association of Realtors. The jumbo originations are closely correlated with the stock market. The loan performance criteria were tightened after the 2009 crisis leading to requirements of larger down payments and higher FICO credit scores. The strong loan performance is shown in the credit score for May 2015 of 770, and down payment of about 32% for jumbo loan originations, according to CoreLogic. Interest rates are also very close between smaller Fannie conforming mortgage loans and jumbo mortgages, 4.05% compared to 4.07% on jumbo loans. The higher demand is leading to competition between JPMorgan Chase, Wells Fargo and Bank of America in this part of the market. Chase is focussing on this part of the market with the strong loan performance- only 1.9% of jumbo mortgages being late 30 days or more compared to 6.5% for Fannie Freddie conforming loans, according to Black Knight Financial Services. As part of its strategy Chase offers minimum down payments of 15% and credit scores of 680 for single family homes as primary residence, starting August 5, 2015, down from 20% and 740 earlier, for mortgages between $1.5 million and $3 million, a change already made in 2014 for jumbo mortgages upto $1.5 million. Similiar move is made by Chase for lowering down payment on vacation homes and second homes. Wells Fargo also cut the minimum down payment- to 10.1% from 15% for jumbo mortages upto $1 million. ...

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Republican success with the blue collar vote and the failure of Democrats to attract those without a college degree. Republican gains came from areas that were older, less diverse and less educated, says Farnam. Republican support was not as strong on both coasts and in areas with Latino voters.

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CEO Norbert Reithofer who became head of BMW in September is pushing BMW in the direction of more collaborative work with other car companies. He has set as a goal collaborations in the areas of components, drive systems and modules. Daimler's new chief Dieter Zetsche s also rethinking how it approaches its business. One way to develop new technologies and purchase parts and components efficiently is to work with other companies who are striving to do the same things. Both CEO's see their companies as midsize manufacturers in a world of auto manufacturing where Toyota and VW, GM and Ford have the advantage of much larger sales over which to spread their research dollars, or to make efficient purchasing by using volume purchasing. Daimler is encourged by its participation in a combined effort in the area of hybrid technologies with BMW, GM and Chrysler, and the progress made in that area through collaborative effort. This is making both companies rethink their intense rivalry since the 1930's, one based in Stuutgart and the other in Munich. Both companies have good profits and as the environment gets harsher with steel prices rising, with demands from the public for tougher new auto emission and fuel efficiency stadards requiring allocating more dollars for R&D, a strong euro and a struggling US economy. The challenge they face is sustaining this profitability as it becomes more costly to operate in this environment. Both companies have appointed some of their talented executives to profitability teams which are working at developing more collaborative efforts....

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IMF economist Oliver Blanchard, says the euro's depreciation vis-a-vis the dollar "would be a good thing." Because "in a way Europe needs it more than the U.S., and the U.S. could probably offset it in some way." The IMF forecast is for a 0.3% contraction in the eurozone in 2012 and growth at 0.7% in 2013. Blanchard says a drop in the euro exchange rate of 10% would normally boost growth in GDP by 1.4%.

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

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Sudeep Jain provides a discussion of the policy tools India's new central bank chief, Raghuram Rajan, could use to stabilize the rupee. This includes, intervention in financial markets, sovereign bond issue, and further control of liquidity measures. The rupee stands at 61.80 to the U.S. dollar on August 6, 2013, after depreciating in 2012-2013.

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Shift of Toyota Highlander hybrid production from Japan to the U.S. with a $400 million investment in the Princeton, Indiana manufacturing plant. The Princeton plant will make 50,000 of the Highlander hybrid vehicles a year.

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Japan is suffering from deflation, the public debt is a record 883 trillion yen or $9.78 trillion, and Premier Hatoyama was unable reduce spending. Yet the Japanese yen went up by 4% in May 2010. It went up by 11.5% vs the Euro. The causes lie in the weakness of the U.S. and European economies and the huge trade surpluses from Japanese exports, over $28 billion in 2009.

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The tech boom bust since 2000 that has hurt America and Europe and which also laid the foundations for the loss of manufacturing and technology to China, ceding American leadership and critical advantage, is shown here in the WSJ. The role of the finance sector  is explained here. That has added one more factor to the factor of endless wars in the Middle East, where American and European investment in healthcare, education and new infrastructure was somehow diverted away, and much of America's and Europe's resources wasted- or not turned to the benefit of the people of America or Europe.  One financial firm that rode the tech boom to the hilt finds itself with unacceptable losses except in a severe recession. Tiger Global Management was using tens of billions of dollars from pensions, endowments and rich clients riding on some of Silicon Valley's hottest stocks.  With the plunge in tech stock values including startups in which Tiger pushed into aggressively now facing large losses after hyper valuations, Tiger's hedge fund which managed $23 billion at the end of 2021 was down 52% in 2022. Another of its funds that managed $11 billion has lost 62%. WSJ says this wiped out two thirds of the gains Tiger has made in the tech stocks since its founding. In addition large writedowns are expected on its venture funds valued at $64 billion at the end of 2021, says WSJ.  WSJ says cheap money (money somehow diverted from infrastructure and funding manufacturing in China instead of the US now goes by the misnomer cheap money) reshaped Silicon Valley in the last decade, as pension funds, rich investors and celebrities turned to well connected money managers such as Tiger to put money in tech stocks and startups. This WSJ report says compared to Sequoia Capital and an earlier generation of venture companies Tiger Global is simply not interested in management of companies it invests in, taking a broad brush approach, using Bain Capital for research, and trying to haul in a large load of fish like trawlers at sea hoping for some companies to make big gains. Many pension funds such as Calpers California's public pension fund invest in Tiger with a $400 million investment. WSJ also reports that Tiger Global's venture funds do not reflect the realities of the tech business as venture stocks will reflect the drop over 2022 and 2023, including its ByteDance Chinese tech investment which will need larger writedowns. Tiger has also not hesitated to get into cryptocurrency which has loss of about $1.5 trillion dollars. It is of interest to note that Julian Robertson, hedge fund manager of the 2000 period (when Clinton-Bush were US presidents) who ran Tiger Management provided the impetus for Mr. Coleman, then 25 years old, for the start of Tiger Global. Julian Robertson closed his fund in 2000 during the dot com bust. Coleman hired a Blackstone analyst and started on the next cycle of tech with social media platform Facebook now Meta, followed by China's JD.com as investments in a new China boom were started. The end result is that during a period of Middle East wars under Bush and Obama, and building dependence on Russian oil and gas supplies under Schroeder and Merkel, China was the gainer as the US and EU lost much of its manufacturing and technology to China. During this period US and Europe neglected investment in infrastructure that would benefit the people of America in ease of living and quality of life. Just as money was wasted in wars much of the tech investment was wasted. The companies that added value over time were started long before and relied on sales growth and new products that revolutionized their field such as Apple with smartphones that started well before the nineteen eighties, Amazon with logistics and its own style of management, Microsoft from an even earlier era. Tech monopolies Facebook, Google, and others would not be missed much in terms of real progress for the people of America. The cost is many decades of ceding manufacturing and technology advantage to China by US and the EU led by Germany. China 2030 and the war in Ukraine with China's support have shown how fragile the foundations have been with weak political leadership and a finance sector running backwards in terms of America's and Europe's strengths in new infrastructure, better healthcare, services and education for the people of America and Europe. Leaving it to the Biden administration and a new coalition of Greens and Scholz in Germany to begin the task of rebuilding America and Europe on strong foundations, including the dignity of the workers and families, that makes who we are and what we believe in, and why the free world believes in us. ...

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Oil supplies are not expected to go up with Mexicio and Russia's aging fields crimping production, non opec production barely budging with 1% increase this year according to IEA. Indonesia production down by half from its peak. Countries in the middle east like Iran are consuming more and have less available for export. And the Saudis plan to build huge chemical aluminium and other plants as well as cities in the desert, and increase electricity production. This will take up some of the oil production and make less available for export. Militant strikes have shut down over 25% of production of Nigeria's 2.5 million barrels a day of production repeatedly in the last few years. And Saudi Arabia has according to CERA only 2 million barrels a day of spare capacity or 2.3% that it can add, all of the safety cushion in one country according to Daniel Yergin. Yergin sees prices up to $150 barrel based on the supply constraints. The demand side is showing declining consumption in the USA but not by enough to compensate for growing consumption in China by 5% this year, and the increase in consumption in India, Russia, Brazil and other developing countries including Middle East. The reason for continuing consumption increases in the rest of the world is that price impact has been less severe in Europe because of the strong euro and oil priced in US dollars, and in China because Petrochina is required to put price caps so gasoline price increases are not that harsh. And India also cushions the price impact to some extent to protect consumers. And autos are just taking off in large numbers in China, Russia, India, Brazil and other countries. The drop in consumption in the USA has to be large enough to have an impact. And the shift to fuel efficient targets in the new fuel efficiency regulations in the USA are too modest and over a number of years to have any impact in the short term or in the next 1-3 years. In February US oil demand dropped to 19.7 million barrels a day, down 1 million barrels a day from the US average for 2007, but this insufficient conservation to impact price. Even though new cars are shifting to higher fuel efficient small cars the impact on the total fleet is gradual as cars on the road purchased in the last 5-10 years are still on the road. Even as the consumption falls in the US the offset is occurring in the other countries like China, Russia and India. Some of this is due to the euro and some to speculation but the supply constraints are real and demand momentum is still there in China, Middle east, Russia and India to keep offsetting savings elsewhere and keeping supplies tight. The euro increased in value by 2% while oil prices increased by 10% since the 1st week of April so there is more than the weakening dollar and some speculation to this surge, which may be why the normally cautious Yergin says the price rise to $150 is realistic and says, its not just that the genie is out of the bottle, a hundred genies are out of the bottle. That is to say for the immediate future of demand momentum and supply sluggishness which could run 6-24 months, to the Olympics and maybe a year or so from then. This ties in with the thinking behind the Goldman's estimate and CERA's estimate. ...

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The new faces in the Biden administration on economic policy are Janet Yellen, as head of the central bank, the Federal Reserve, and Cecilia Rouse, a Princeton labor economist, as head of the Council of Economic Advisors. In this report WSJ looks at the economic policies of the new administration after Mr. Trump rejected globalization and international trade agreements that were not in America's interest or that hurt American workers.  Informal conversations with experts suggest WSJ says, that globalization is now suspect as a way that benefitted China and other countries including Germany, and hurt the U.S. France, Britain and other countries in Europe that were not strong exporters. This hurt their industries which were eroded by imports resulting in the three decades long destruction of communities across these countries that depended on manufacturing. It has also hurt countries like India that let their markets be dominated by Chinese imports, with a reversal of policy in 2020 with self reliant economy under "Atman Nirbhar" policy as the new goal. Mr. Trump's tactic in this trade war was to fight back to regain America's position in manufacturing with tariffs on imports. The trade deficit had to come down with China just as it had done with Japan decades earlier. This was starting to happen. One problem in bringing down the imports was the increase in the value of the dollar, as Janet Yellen has noted. The new policies will look at what the effective policy will be while keeping this goal in mind.  Both Yellen and Ms. Rouse have spent years studying labor markets and Ms. Rouse is quoted here as saying: " With open trade there are winners and losers. The losers are really losing, and we need to take care of them and take on more nuanced models of international trade as a result." Other experts from the earlier Democratic administrations such as Prof. Frankel at Harvard say that there needs to be increased focus on American workers left behind by trade, technology and unequal education, with more spending on preschool, infrastructure and health. All this suggests that there will be a continuation of U.S. policy in challenging Chinese use of globalization to advance its interests, chastening Americans on the use of the very word globalization which can mean different things to different people based on how they can gain advantage. The word may even be entirely dropped in favor of what the policies are and what they do for the American worker, American communities including small towns, and the American people, spelling each of these out every time supply chains and the global economy is mentioned. The new administration will get an opportunity to show that it too can come up with new ideas and action plan to strengthen American manufacturing and jobs. It will also have to show substantial results as people have lost patience with Democrats and Republicans on the lack of progress in rebuilding America's leadership role in the world economy, and in defending American workers and factories. Clinton, Obama and Bush all offered false promises on trade with China ignoring the damage this had done to American leadership in the world economy. Clinton with support for China's entry into the World Trade Organization, Bush with foreign wars and costly diversions and regulatory failures with banks that led to the 2009 deep recession hurting Americans, and Obama with the lack of will and interest in America's leadership role in the world as the dominant nation in manufacturing,   ...