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Compared to the Fed, Treasury and and American regulators hands off approach as the bubble in mortgages and in financial markets developed, China took some steps to restrain the real estate bubble in China. Starting in 2004 Beijing officials tried to limit speculation in real estate by administrative measures like setting quotas on how much real estate lending each bank could do. In August 20007 bank regulators began requiring larger down payments for second and third homes, and banks began charging linterest rates upto 3% points higher for those homes than for first home buyers. And other things make the Chinese market for mortgages quite different. About half of all chinese buy their homes with outright all cash. And down payments are 30% for first time buyers and 40% for buyers who are getting a second home. And male borrowers term of mortgage ends by law a age 60 and 55 for women whichmeans they build up equity in the home quickly and are less likely to walk away from a home. As far as the banks are concerned no securitization of mortgages has ocurred and banks hold a higher percentage of cash with capital equal to 12 to 14% of assets, compared to international regulatory standards of 8%. Prices have fallen by a third inplaces like Shenzen, and the central bank asked commerical banks to reduce mortgage rates and help borrowers with lower down payments, with the hope that this would stabilize home prices. However with the credit crisis economists expect further decline in home prices....

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What looks appalling is how far the public attitudes as reflected in diverse and many sources here is different from the complacent attitude of the Consumer Product Safety Commission that 3 times the level of lead in paint is permissible when its on bibs. Clearly the Consumer product Safety Commission has missed its watchdog role by a mile when consumer advocates and others find it quite unacceptable to be exposed to this amount of lead.

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The name change from Matsushita to Panasonic will help the company promote its brand in sales overseas especially in the developing countries. Matsushita was founded around 1917 by Konosuke Matsushita to make a device to be used for light bulbs. Matsushita will start making flat panel TV's at a new factory in 2009. Its sales have been sluggish so far hence the need to promote one brand name worldwide similiar to the Sony brand name.

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John Harwood's interview with Govenor Rick Perry. Harwood asks Perry tough questions about his 20% flat tax, spending cuts and the deficit (response: the only way to get the country working again is to reduce the tax burden across the board and create the incentives to invest), raising the retirement age for Social Security (response: will discuss this one with Congress), views on regulation (response: regulators did not do their job, nothing wrong with the old regulatory system). Perry saying that this is the way America has always worked- by creating the incentives to invest. Perry say he is for a bold plan not something that will trim things at the edges as Romney would do.

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The RBI, India's central bank, raised its interest rate by half a percentage point moving it up to 7.25% to fight inflation. The RBI's inflation target is 6%. Inflation is currently running at a headline inflation rate of 8.98% for March 2011. The RBI governor, Duvvuri Subbarao, says the bank's policy is for giving precedence to controlling inflation even if this means lowering the growth rate. RBI estimates are for the economy to grow at 8% in the current fiscal year compared to 8.6% in the last fiscal year.

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About 50% of the workforce in Los Angeles earns less than $15 an hour, by some estimates. The Los Angeles City Council voted 14-1 in May 2015 to increase the minimum wage to $15 over 5 years.

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With voter turn out at 72% in Finland's election the National Coalition party headed by Petteri Orpo gets 20.8% of the vote, the far right nation first Finns party 20.1% and the SDP 19.9%. The NCP party will form a new government in coalition with one of the two other parties. The NCP supports Ukraine in its war with Russia and also its joining NATO. It advocates less spending on unemployment and housing benefits. The Finns party is for less non EU country immigration. Boosting the economy and creating new jobs is also part of the new government's program.

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Discount airline Azul carried 2.2 millon passengers in its first year. It was founded by David Neeleman of Jet Blue Airways. Azul operates out of Campinas, a city near Sao Paulo, with 14 Embraer jetliners covering 16 cities. Plans are to add 4 desinatios in 2010, and increase the fleet to 21 by end of 2010 and 33 by end of 2011, according to Neelman. Azul now has about 4% market share in Brazil with plane occupancy at 80%.

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This report from Brazil is of major relevance to India in its growth efforts, and for aging societies such as China. In many ways showing the price countries and the people pay when growth is mismanaged. A major crisis is hitting countries such as Brazil as fewer young people and young workers support an aging population of retirees. This is to be seen in the money allocated in Brazil's budget- only 3% goes to infrastructure, 3% to education, health gets 7%, and retirement system takes up as much as 43% of the budget. Increasing retirement obligations are nearly bankrupting the Rio de Janeiro state government.  At the core of this crisis is a steadily aging population that is happening now faster than in the developed world. Also part of this is the fact that fertility rates have dropped rapidly in Brazil, the rest of Latin America, and in China. It took just 27 years in Brazil and 11 years in China for fertility rates to drop from 6 to below 3, creating a situation where there are fewer young people to join the workforce as retirees live longer and the retired population increases. This report shows that it took 82 years for the fertility rates to drop from 6 to 2 in the U.S. so that the U.S. had a longer period in which to build up infrastructure.  Only 50% of Brazil's sewage is treated, and sanitation systems need investment. The average adult has about 8 years of schooling. An unfunded and unfundable social security system means infrastructure, health and public services such as transportation will remain unfunded for years to come. China's policymakers have done far better by building infrastructure rapidly yet face the same squeeze of aging population lower fertility rates as China's modernization continues. India needs to learn from such failures and successes in framing its own policies. Unrealistic giveaways or promises such as Brazil's retirement age of 55 and poor priorities of soccer stadiums in the northeast over sanitation, health, education, have a steep price. Good intentions are not enough as the Workers Party in Brazil granted pensions to farmers and informal workers without generating the sustained growth needed for funding the pension system, with $3 billion paid in and $36 going out for this added benefit.    ...

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Democrats working to challenge the big cuts planned by Republicans in federal, state and local spending on everything from education to essential services.

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A look at the daily life of ordinary Iranians closeup by the NYT's Kristof in Iran. A picture different from that presented about Iran in the daily media about ayatollahs and nuclear weapons.

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The government's rescue of Fannie Mae and Freddie Mac has so far cost $145.9 billon. According to the Congressional Budget Office its eventual cost could reach $389 billion. The federal government has put the companies on conservatorship and has a 79.9% stake in the companies. The federal governmet also provides a guarantee that investors will be repaid. By buying loans from banks and other companies that originate loans, Fannie and Freddie were ostensibly in the business of promoting home ownership. The implicit governmet guarantee of Fannie and Freddie's activities in the housing market had the potential to create a huge government liability if the activities are not run well, and this is exactly what happened. By pushing hard for increasing home ownership to unsustainable levels - setting a target in 2001 of creating six million homeowners by 2014 for instance way beyond what was sustainable for the finances of prospective homeowners- it only fueled speculation, easy money and a bubble in housing in the U.S. As investors get paid with the government guarantee, it is Fannie and Freddie that is ending up with ownership of foreclosed homes- one every 90 seconds in the the first quarter of 2010, according to an estimate. The two companies owned 168,000 homes in March 2010....

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Angela Merkel said that contact tracing was "above all else" in importance in tracking down infection chains. Apps would not work in Germany because tracking movements and recording information is a sensitive subject in Germany with its history of communism and fascism. Germany still did it but very early on adopted a low tech way that so far is working. Staff from provincial administrations have shifted to do contact tracing work as other work is slow or suspended. Volunteers also have taken up the work. Germany's goal is 5 contact tracers for every 25,000 people- or about 16,000 for a population of 83 million. All the contact tracers have is the phone and a central database of information on the desktop computer as shown here in this report in the Washington Post. There is no advanced technology or software.  Most important say experts is social skills - to talk to people in a way that makes them feel comfortable to share information about how they are and their contacts in a very informal friendly setting, that even includes some humor. Here a contact tracer in Reinikendorf describes the work she is doing and a typical day. There are about 75 contact tracers for 260,0000 people in her area. When she calls someone she notes down what contacts they have had and puts them in Category 1,  2 , or 3 depending on the need for quarantine. The calling is mainly about asking the contact about his or her movements. A contact for more than 15 minutes is Category 1, less than 15 minutes Category 2. The whole conversation is for 10 minutes. Then someone from the health department will call the person contacted everyday. Reickendorf began building up contact tracing in March after an outbreak in a kindergarten was too much for the usual number of health officials to handle. The German trace and quarantine approach, home grown, low tech,  and based on what resources are available, the most important thing being start immediately, has its flaws. Yet it has worked to limit infections and deaths.  In about 65% of cases health authorites have no idea how a person was infected. Asymptomatic carriers are not detected. In some area the resources are limited.  This effort has helped control the virus first cluster in Bavaria at a car part manufacturer. Sixteen people had tested positive and hundreds were quarantined. The German approach is that testing is fine but if you are in quarantine testing is not going to make a difference in spreading. Testing with a negative result is also not helping as it could be that its too early for the infection to register because of the incubation period. ...

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After the German election the next election in France in 2022 will provide new direction for Europe. As in Germany with Olaf Scolz of the Social Democrats, in France an alternative is emerging with Xavier Bertrand of the Les Republicains. Like Scholz Bertrand was Labor Minister working to tackle difficult problems of increasing employment in the French economy going back a decade. In recent elections the party French president Emmanuel Macron created as a member of Francois Hollande's government has floundered. Macron hastily put together the En Marche in Amiens on April 16, 2017, when he was minister of Economy, Industry and Digital Affairs in the government of president Hollande. During the eight year period in which the centre right Christian Democrats CDU and center left Social Democrats SPD had ruled in a coalition government in Germany some version of centrist politics and government had also prevailed in France. After the Sarkozy years 2007-2012 under the centre right Les Republicains party  France turning to the centre left Socialists under Francois Hollande. As a young minister 39 years Macron lacked experience, and the initial enthusiasm that helped him win the 2017 presidential election is now missing. As in Germany voters are looking for change not just in slogans but in substance in a new Trans Atlantic partnership of US, Germany and France to tackle the may problems that were neglected in the last two decades of changing administrations in US and France and the Merkel administration in Germany- problems of social cohesion, of income inequality, division of country into rural and urban, eastern and western in Germany, southern and northern in the US, neglect of infrastructure, and failure to invest in the future.  France is now turning to the Les Republicains party in recent elections, and away from Le Pen's far right party and Macron's party.  Both Macron and Le Pen did very poorly in recent regional elections. This report in FR24 points out that the candidate for the Les Republicains party will be chosen at a convention, and not at a primary as happened in 2017 leading to the elimination of former Republicains president Nicholas Sarkozy. The president of the Haute France regional council Xavier Bertrand is the leading candidate from the regional election results. Bertrand was Sarkozy's minister of Labor and Solidarity from 2007 to 2009, and Minister of Labor, Employment and Health in 2009. Today Olaf Scholz, winner of the German elections in September 2021 was also Minister of Labor- in the Social Democrats/ Greens government under Gerhard Schroeder 1998 to 2005. Voters now realize that it is important to value experience, stability, combined with humility and a determination to get things done, compared to charismatic leaders with little to show in results, and tangible improvements in the quality of life, in national renewal.      ...

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The complex landscape Bernanke faces both in the global picture and in productivity growth so he has to weigh his options and their likely consequences as he sees them from the best available information, very carefully. The Asian economy and the European economy are on a stronger footing and Bernanke has to keep interest rate here not too far apart from rates elsewhere in the global economy for its impact on the dollar and inflation. And productivity growth could be slowing.

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GE's earnings shock is leading experts to believe that it was the easy acess to cheap and abundant capital that created the gains in earnings and stock prices that we have seen so far With tighter credit conditions and the era of cheap and abundant capital things ane now expected to look much different as tight credit leads to shrinking capital spending. This suggests stock prices throughout the economy in the USA and in the global economy as well will be affected.

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This WSJ report shows how the debt ceiling negotiation were conducted and the process that made it possible to reach an agreement since the State of the Union address by president Biden on February 7, 2023. It started with Biden getting unanimity right on the floor of Congress during his speech about protecting Medicare and Social Security. The Republican strategy was to pass the legislation on spending that did not specify where cuts were to be made yet used 2022 spending levels with a 1% increase. The deal was to be for three years and passed the spending bill with an increase inthe debt ceiling. Till that time the Democrats decided to not enter negotiations.  Biden and McCarthy then had to choose who would represent their side in the long negotiation process that lay ahead till June 5. Progressive Democrats called for invoking the 14th Amendment that allows the government to continue functioning and pay its bills. Biden chose not to take that route. Respect for the other side, a prepared script are an important point in negotiations. To get results something even more important is essential flexibility and a plan, Plan B. Trust began to develop between McCarthy and Biden. Biden and McCarthy did not any time engage in acrimonious description of the other side. At one point when Biden was in Hiroshima for the G7 meetings Ricchetti on the Biden side and Graves on the Republican side began to feel the frustration. Biden decided to fly home early from Hiroshima. He was constantly in touch with his negotiators Steve Ricchetti, a trusted aide, and a cabinet official the Budget Director Shalanda Young. Graves a long time trusted adviser of McCarthy headed the negotiations for McCarthy.  Shalanda Young and Garrett Graves are both from Louisiana and Graves says he used to work out with Young's dad in the same area. This had a positive effect. It also reduced the tensions in the negotiations so that it could be said this was the calmest negotiation from either side that has been seen in the US  for a long time and bodes well for America's future and for its people, far beyond any concessions made by either party.  Biden made clear at the outset what he could accept without leaving it hidden- he would agree to some work requirements, he would not agree to work requirements for Medicaid. Others in the Democratic party conveyed how distraught they were with efforts to impose stringent requirements for federal food aid during a cost of living crisis when the Republican positions ruled out any new taxes on the wealthiest Americans. In the end Republicans agreed to keep spending limits for 2023 for two more years into 2025 when they would be increased by 1%. Democrats offered to cut (Income Tax) Internal Revenue Service (IRS) spending to increase IRS staffing from $80 billion to $70 billion. Biden said "nobody got everything they wanted." It would have to be passed in Congress with the support of moderate Democrats and moderate Republicans, with members holding extreme positions among Republicans and Democrats opposing. The two parties coming together after a long time to meet the real challenges ahead for the American people. ...

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After denying clearances for development projects for three decades, the Indian Supreme Court green bench of Justices Gavai and Vikram Nath clears 118 development projects already delayed for 5 years for pending litigation. 118 projects were cleared, including 15 held up for 10 years, based on the "sustainable development" idea that takes a look at the bigger picture, the aspirations of youth, and the bigger possibilities for renewables and environment with a bigger economy. It shows how India which at one time in 1990 had about the same GDP as China, has today one fifth the GDP of China, and with it lacks the same scale of investment for renewable energy and climate change action that China has because of China's larger economy. In this sense the whole country of 1.2 billion Indians, including hundreds of millions of farmers and urban residents, the Supreme Court and India's institutions, have suffered more than the one lost decade the prime minister referred to in the Budget session of parliament. It is more like three decades since China pushed ahead after 1990. China having suffered from the Japanese invasion and civil war for three decades in the 1920-49 period and three decades of drift in economic direction following 1949. India faced its own period of failed governance that matches the failures in China by 1990. The SC bench stated- "The Supreme Court is flooded with applications after applications, seeking permissions to construct primary schools, public health centers, anganwadi centers, an other public utility buildings in remote areas. Himachal Pradesh is constrained to approach the Supreme Court even for seeking permission to connect villages in remote areas by roads. Needless to state, the citizens residing in the remote areas cannot be deprived of the developmental activities that are being done in other parts of the country."  The Supreme Court called it ridiculous that the states were required to rush to the Supreme Court to do the minimal developmental activities.  That the Supreme Court and other institutions have taken so long to say and do this is itself one of the reasons India has fallen behind China. It will need to accelerate its efforts, in the way that the rest of the country and the world is doing to create an environment in which development can meet the aspirations of the Indian people. Efforts for climate change action can take place at the same time with bigger investment capabilities from the larger economy and advanced technological capabilities. The two can and do go together, a point missed for far too long.  An approach even the US has grasped and is doing under president Biden. The US has gone through its own period of failed governance for four decades of neglect of manufacturing and infrastructure that president Biden talked about in his State of the Union address to the US Congress last week.  Biden now sees the problem itself as an opportunity to get it right. So can India.   ...

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Russia invades Ukraine on multiple fronts, across Belarus, across its western border with Ukraine, on the pre dawn hours of February 24, 2022. Russian foreign minister Lavrov says "tense and detailed discussions" with US and NATO are still taking place. In talks with the US, president Putin of Russia had demanded that Ukraine commit to not joining NATO. The US insisted that this was upto Ukraine and that the territorial integrity of Ukraine had to be respected. Interventions by Macron of France and other leaders failed to bring the two sides closer. The US and Europe with a reluctant Germany looked at sanctions as a deterrent. This proved to be wrong. Mr. Putin has a passionate view of Ukraine and Kviv's historical role in the formation of the Russian state, evident in his televised address only 48 hours before the actual invasion. Ukraine has shifted between Poland and the Baltic states, Germany on one side and Russia on the other in its thousand year old history. The shift away from Bolsheviks and Communists under the Soviet Union after 1990 changed the relationship of Ukraine with its neighbors once again as Ukraine became closer to Poland and the Baltics, and Germany. Germany remains reluctant to revert to the relationship with Russia that led to 2 World Wars. During the leadership of Willy Brandt and successive German SPD leaders, as well as with Konrad Adenauer and CDU leaders, the goal was to build a good relationship with Russia. Merkel of the CDU went as far as accepting dependence on Russia for 40% of its gas supplies, after shifted out of nuclear energy and supporting a new Nordstream undersea pipeline for gas supplies.  The early reaction on DW.com and German television was one of shock as no one really expected that this would lead to a full scale invasion. Scholz of the SPD the new chancellor in 2022 was not active in forging anew consensus allowing NATO's Stoltenberg who is a former Norwegian prime minister 2005-2013 to frame the response of Europe. Norway's role in European security was marginal for most of the twentieth century. Other events had detracted from bringing active German and American participation in coming up with a framework of dialogue to address concerns of both sides and still build a common ground for peace- Afghanistan, the pandemic in its third year, China's deteriorating one sided trade relationship with America that hurt American workers and manufacturing. As a result China and Germany were essentially absent in building the framework for peace. Afghanistan hasty withdrawal made it harder for president Biden to come up with new approaches to build a common framework. President Macron made some faltering efforts on the fringes even as president Putin focused on the US response and its intentions with NATO on European soil, and declared that it was directly US Russia negotiations that needed to work. With this the whole framework of relations since the presidency of Reagan and the relations with Russia and China come to a close. And a new framework needs to be constructed that draws in India already or soon to be the most populous nation in the world, in an effort to build an enduring new framework. The voices of Eastern Europe need to be heard, yet balanced with the voices from India, China, Germany, Russia, and other countries in Asia, Latin America and Africa that are affected by world events. ...