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Nouriel Roubini has proven correct on global financial issues. He said in an interview on the sidelines of a symposium in Malaysia, that China needs to revalue its currency for its own sake. China will see a growth collapse in the next 2-3 years if it fails to do so. His point is that China can still maintain growth by shifting to domestic consumption and less infrastructure spending and exports. In his view growth should not be affected if China exports less and consumes more. He points to the decrease in consumption as a share of GDP from 45% to 36% in the last ten years- this ratio is 70% in the USA. A cheap yuan keeps foreign goods unaffordable and protects state owned companies which also get cheap credit, as keeping the yuan low requires China to keep interest rates artificially low. What this does is make a massive transfer of income from the household sector to the state owned companies, just at the time when China needs to do the very opposite of this. And compounding the problem is that the 25% of China's GDP that is made up of retained earnings of mostly state owned companies, goes into real estate and production facilities. See the link to David Barboza in the New York Times who points to the wasteful spending and real estate speculation by state owned companies. Roubini cites the automobile sector where capacity has doubled in the last year to 20 million, when the domestic market increased by 50% to 10 million vehicles. The stimulus only increased the effect of surplus capacity and misallocation of investment, with highways to nowhere and brand new airports that are three quarters empty. The Chinese leadership is beginning to grasp this, but the state owned companies and other interests who benefit fromm the old model, may make it difficult to reverse the trends. A lot is at stake in this, as it affects the U.S., as well as countries dependent on China's imports such as Australia, Canada, Brazil and Germany. ...

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Meredith Whitney and her comments on the municipal bond market and potential defaults worth hundreds of billion of dollars. She said in a "60 Minutes" interview that she expected a series of municipal bond defaults. "You could see 50 sizable defaults, 50 to 100 sizable defaults, more. This will amount to hundreds of billions of dollars worth of defaults," said Whitney. Other analysts have questioned her dire forecast. Most of the problems in municipal bonds are fairly well know say analysts, however these comments have only accelerated the trend, and more than $14 billion came out between Dec 22 and Feb 2. In other words her comments drove a rush to the exits, which is seen as irresponsible by some analysts.

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Socialist Party in Spain increases its share of the vote to 29%, and emerges as the largest party to form a government with the socialist leaning Podemos party in 2019 elections. It does this by returning to its labour base and working class roots. It pitches a platform of worker's rights, higher taxes on wealthy, environmental roots, issues important to its social democratic roots. The WSJ cites a 57 year old employee of Spain's health service Antonio Benitez, living in Andalusia who says people have a hard time making ends meet, and its about time socialist parties speak of the main pillars of being socialist, without all the deviations to the centre. As free market thinking entered the mindset of leaders in the UK such as Tony Blair and Gerhard Scroder in Germany, Clinton in the U.S., the shift began towards economic efficiency in the tradeoff with equality and social justice. This was aggravated by the effects of international trade and technology in worsening income disparities and unsettling communities in traditional manufacturing. This trend is now being reversed as Socialist parties or Labour allied parties in the UK, Spain,and increasingly in the U.S., take a new position different from the past. A political scientist at the Free University of Amsterdam says its like these parties got hit on the head and now decided to go back to core values around equality, reducing disparities, social justice and the environment. Jeremy Corbyn of the Labour Party in Britain increased Labour's vote in the 2017 elections to 40% up from 30% in 2015. Italy's Socialists won 41% of the vote in 2014 European elections, moved to the centrist positions that made firing workers easier, pension overhauls raising retirement age, leading to losing half its support with 21% ahead of European elections in 2019. Pedro Sanchez of Spain raised the minimum wage by 22% before winning the 2019 elections compared to his predecessor Socialist premier Zapatero who is reported to have said "cutting taxes is left wing." Now workers rights and higher taxes on corporation are on the agenda.  ...

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The shift from non-conventional polluting single cylinder engine contraptions used by poorer Chinese called "Inkfish" to conventional fuel efficient engines will reduce oil consumption in China even as more cars are on the road. This explains the paradox of Chinese vehicle sales being up by 77% year over year in the first quarter of 2010, and still gasoline demand went up by only 3%. Kack Perkowski, founder of Chinese auto-parts manufacturer Asimco Technologies, says the shift from the low tech "inkfish" type vehicles to fuel efficient small cars popular with the Chinese and encouraged by government policies to reduce oil consumption is a big factor in this development. Perkowski says 50 million engines are manufactured in China each year and if you subtract the 13.6 million cars, trucks and buses sold in China last year, another 36 million low tech highly fuel inefficient engines including "inkfish" engines were sold. China's car buyers are very price conscious and prefer smaller cars. Smaller cars are also well suited to the crowded roads in the coastal cities. And the Chinese government wants to keep oil consumption down so it is pushing buyers in the direction of smaller engines with tax breaks. The Chinese governmet is expected to announce subsidies for plug-in hybrids worth about one third of the sticker price. The motives are environmental and energy security related, but also have the intent of enabling China's car manufacturers to gain experience and leadership in newer electric car technologies. Bottom line: some experts including Deutsche Bank's Sankey view China's oil demand growing much slower, at about 2.6% a year over the next 15 years. This would mean oil demand tapering off at 13-14 million barrels of oil per day by 2025, much higher than the 9.1 million bpd in 2010, but growth curbed by fuel efficient engines and increasing fuel efficency of the Chinese vehicle population....

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Remember the pictures of all the bicyclists in cities in China, now there are cars instead, and that we assumed was progress. But crammed as we are into small urban areas, and with so many people in the planet and so many with aspirations for a better life in China, India, Brazil and Russia and other countries, this does not point to a sustainable future. We need bicycles back and a new kind of automobile that is sustainable on the streetsof urban areas. So here we are in New York City and commercial buildings like the Rockefeller Center operated by Tishman Meyer following old rules prohibiting bicycles, looking down on bicyles, and seeing bicycles as affecting safety in the building. So cyclists are on their own. The city has about 5000 bicycle racks, and will add 1200 by 2009, and expects to add 37 bike shelters each for 8-9 bikes by the end of the year at transit hubs. The number of bike racks are inadequate as nearly 131,000 people ride bicycles daily in New York City according to Transportation Alternatives. The city has plans to add 200 miles of new bicycle lanes but mparking is a huge problem. Parking on the street is also risky because of bike thieves in New York City. So new solutions have to be found and it would be nice if building had an area on the ground floor with a separate access for cyclists or a way to go to underground parking through a separate acess and directly park and take elevators just as one does for underground car parking. This would be really commuter friendly but till then its the shop owner who lets youpark there or a friend who has a business and an area where he lets you park your bike and so on, everybody having to be creative. But make no mistake bicycles matter for clean air, the environment, for congestion, for people, for healthy living, and to create a good living environment in urban areas....

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A report of the Transportation Department shows that over the past 8 months Americans have reduced their driving by more than 40 billion miles. Higer gasoline prices led to Americans driving less. In April 2008 Americans drove 1.8% less miles than the year earlier April, and in May this increased to 3.7% fewer miles than a year earlier. And this trend is not going to change or go back as as happened previously. So its a permanent feature of the new landscape according to experts. Everythng the kinds of cars people drive (smaller and fuel efficient), where people live (closer to work, and in closer proximity), the way they drive (less and use bicycles and small Smart vehicles also), and the way they use alternative transport ( frequent use of mass transit and better quality of mass transit with new investment), all tis is about to change permanently. The way the USA funds road and bridge repair and maintenance and new road and bridge construction is through gasoline taxes at the federal level (18.4 cents a gallon) and state taxes. With reduced driving there is less money available to fund these road projects. But this happens at a bad time because existing road and bridge infrastructure is crumbling. About 25% of the country's bridges are in bad shape or obsolete or structurally deficient and one in seven miles of roads are in bad shape according to the National Surface Transportation Policy and Revenue Study Commission, and most people can see this when they drive around intheir cities. And big increases in the cost of asphalt and other construction materials are only compounding the problem. The Commission says it will cost $225 billion a year to tackle national transportation infrastructure needs. Worse still only 40% of this is getting funded. So a huge gap in funding looms and Congress is being pushed to come up with funding solutions as states struggle to deal with the problem....

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Home Secretary Yvette Cooper predicts "swift justice" for rioters on British streets. She tells Sky News: “So we should be clear, there will be people who were thinking they were going on their summer holidays this week, and instead they will face a knock on the door from the police.”

On BBC Radio 4’s Today Cooper said: “We have seen truly appalling criminal violence and thuggery in some of our cities and towns – it is a total disgrace. These people do not speak for Britain.”

Police she said would follow the “full range of prosecutions and penalties” including prison sentences, long-term tagging and travel bans, she said, adding: “Keir Starmer has made clear he is prepared to take whatever action is needed to keep streets safe.”

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Friedrich Drumpf left Germany at the age of 16, coming to the U.S. in 1885. He came back to Germany to find a wife after running restaurants in California during the time of the Gold Rush. When he tried to return to hsi home town because of his wife was homesick he was expelled a s a draft dodger for missing military service. Kallstadt is a wine producing region. Drumpf was tenacious and keen on getting ahead, a trait that marked his son Fred Trump who built state financed housing in the FDR period in New York, and his on Donald Trump who went into luxury housing. Biographer Gwenda Blair says all members of the family were good at finding loopholes, saving money, and shared the family culture of knowing who the audience is that they are targeting. This is why says Bair that Trump is at ease in being a onetime Democrat, now Republican, sometime liberal and sometimes conservative, and can appeal to people in different ways that would be impossible for most politicians, even people on opposite sides for different reasons. Gwenda Blair is author of two books on the Trump family. "Trumps- Three Generations That Built an Empire," and "Donald Trump: Master Apprentice."     ...

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Donald Trump is seen as a polarizing person in Kallstadt, Germany, the home of his dad Fred Trump's father. There are very few signs of the family in the town. The media frenzy is not something the locals like.

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The new Indian government priorities were offered in an address to the first session of parliament after recent elections. The Modi government will speed up investment projects, infrastructure development of rail and road networks, and setup industrial regions for competitive global manufacturing hubs to create jobs. For the poor and rural areas hygiene will be a new focus with plans to put toilets in every home. Education will by enhanced by connecting all Indian schools to the internet.

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A landmark ruling and a huge win for consumers and for the country, as the Supreme Court says states can enforce fair-lending laws and other consumer protection measures against the largest banks in the USA. The Suprem COurt said that the rules issued by the federal banking regulators like the Comptroller of the Currency under the NationalBank Act - a law passed in 1864- could not block sfforts by the states to enforce their laws. For the country its a win because the lack of enforcement of state laws only allowed abuses in the subprime area to continue and helped create the subprime mortgage crisis. The case began with letters by the New York Attorney General Eliot Spitzer in 2005 to several national banks including CItigroup, JP Morgan Chase and Wells Fargo inquiring about lending practices to minorites. The letters referred to "troubling" disparities that suggested black and Hispanic borrowers were being charged disproportionately higher interest rates on mortgages compared to whites. THe letters asked for information "in lieu of subpoena." Protection of minorities and the weak in American society is part of the moral fabric of America and that it had eroded in recent years is evident in the manner the banking sector responded. A banking trade group and the Office of the Comptroller of the Currency brought a lawsuit to block the New York Attorney General's request saying that the National Bank Act nd rules issued by the Bush administration in 2004 gave that type of authority to comptroller and prohibited such efforts by the states. And then afederal district court ruled against the states, aand the U.S. Court of Appeals for the Second Circuit Court affirmed that decision. These are instances where the system failed to protect the weak even with the laws that states had on their books. Justice Scalia voted in favor with a 5-4 vote to allow states to enforce consumer protection laws, even though his written opinion was based on an interpretation of what "visitorial powers" of a federal regulator were, and not about the importance of fair lending in the proper functioning of the American economy. Justices Roberts, Alito, Kennedy and Thomas voted against....

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Rauhala cites an email from Apple CEO, Tim Cook, saying updates he gets about performance in China every morning show strong growth for Apple's business for July and August. China's retail sales are up 10.4% for the first 7 months of 2015, according to the National Bureau of Statistics. The services sector as a whole showed growth of 8.4% in the first half of 2015, and it now makes up 49.5% of GDP, according to government statistics. Overall economic growth is about 4-5%, as the 7% official figure is considered overstated. Zhao Longkai, the executive director of the Beijing Univerisity Guanghua School of Management, says the retail sector should not be affected that much because losses are largely limited to a small number of wealthy investors, though some ordinary retail investors are affected, with overall stock market participation quite low compared to the U.S. and Europe. This and other expert opinion points to a situation of slower growth and debt overhang from the last stimulus, but not a strong connection between the stock market and the economy. The government's credibilty is affected by the failed intervention in July and this time during the sharp declines on August 24-25 the government is letting the market finds its own level, believing it will be better for markets and let them stabilize. ...

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Matthew Kaminski gives his assessment of Angela Merkel's years in office. He cites a former German chancellor Helmut Schmidt's words: "People who have a vision should go see a doctor." She is no Konrad Adenauer or even Helmut Kohl. A scientist by training she is dispassionate, intelligent, diligent and takes the time to understand the details of the financial situation from her advisors, then sorting out the situation in her own mind. She gets less credit for bold action than she deserves because of her down to earth manner.She gave banks no option as bondholders to share losses in late night meetings at EU headquarters, called the president of Italy and secured a change in government after Berlusconi lost the confidence of the EU. In the current impasses between the Bundesbank and the ECB's Draghi over sovereign bond purchases with Jens Weidmann, Germany's representative at the ECB, supporting Mario Draghi's position, she has navigated the fine line between the German public's reluctance to take on the debts of its neighbors in the eurozone and the need for lowering the borrowing costs of Italy and Spain to save the euro. After the visionaries from Adenauer to Monet, todays eurozone leaders are focussed more on the nuts and bolts of making this idea of Europe work, requiring the skills and ability to learn and grow that she has demonstrated....

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Stephen Moore of the WSJ interviews Grover Norquist, head of the advocacy group Americans for Tax Reform. Republicans in Congress and other Republican leaders have signed on to the "no new taxes pledge" promoted by Norquist. There is increasing pressure on Norquist as the media, White House, and executives on Wall Street call for flexible positions from both sides on taxes and spending cuts. Norquist insists that not much has changed. He says that the increase in taxes on the rich is only symbolic and has to be followed up with increasing taxes on the middle class. He cites a Rasmussen poll that shows 75% of Americans believe this. Norquist is convinced that the Democrats with their spending plans are out to take the U.S. in the direction of European economies, the tax increase on the rich would be followed up with a energy tax or a value added tax to pay for unrestrained spending. His solution is for Republicans to pass a bill that extends the current tax rates past January after roughing it through the tax cliff date. Even the sequester option is better than increasing taxes says Norquist, letting the Defense Department make the cuts where appropriate. Norquist does not favor the option of reducing tax loopholes and deductions as a way to increase taxes as proposed by Simpson Bowles commission and Ryan-Romney in the election campaign. ...

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A Nikkei poll shows only 36% of people in Japan support a reinterpretation of Article 9 of the Japanese Constitution to allow "collective self defense," and 51% disapprove. Prime minister Abe cites the need for "thorough debate," and legislative moves in this area will be held back, to gain support for reforms in the agriculture and other sectors. Abe appears to have lost some goodwill for reform measures to launch the Third Arrow. In an address to the Australian parliament in English Abe made a committment to the principle underlying Article 9 by saying- "This vow that Japan made after the war is still fully alive today." He also stated that Japan woud never let the horrors of World War II be repeated. Japan and Australia have agreed to share military equipment, and Japan has a role in developing a submarine fleet for the Australian navy of 30 billion Australian dollars (US $28.1 billion). At about this time in Beijing U.S. leaders for the foreign and finance ministries, Lew and Kerry, met for the Strategic and Economic Dialogue sixth round in Beijing's Diaoyutai State guest house. China's president Jinping, probably aware of the waves created by its own assertive stance in the region and the response of neighbors and Japan, said that the Pacific was large enough to accomodate both the U.S. and China....

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Glassman cites Ronald Reagan who once said economists are people who look at things in practice and then see if they can prove this in theory. He co-authored a book on "Dow 36,000" in 1999. What happened and why? He correctly says the Dow is up to 12,000- and this only after Fed chairman Bernanke's $600 billion quanitative easing on top of low to zero interest rate policies after the 2008 crisis- in the 12 years since. So what happened? Glassman says what he did not account for is the huge decline in the prospects for the U.S. economy, with Congressional Budget Office estimates of 2% growth over the next 70 years, compared to the 3.5% growth in the first 50 years of the 20th century. A lot goes go into this, including the debt buildup, the lack of investment in human capital and K-12 education. The other is the huge volatility in stock returns, and the "discontinuous" risks stemming from things like the home price crash, terrorist 9/11 attack and other such developments. He says he is tired of telling investors to hold on in the face of such huge volatility and uncertainty. He advises a cautious strategy, a pull back from stocks to reduce the downside on returns and a smaller allocation to stocks....

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The Economist cites estimates from the Bank of England showing Britain's national output peaking at 1.5 trillion pounds in 2007 and not likely to return to that level till 2015. It points to fears of a lost decade. Meanwhile debt is rising from 600 billion pounds in 2008 to 1.1 trillion in 2012, making reducing the debt to GDP ratio by 2017 even more difficult. Lower growth affects tax revenues even as social benefit costs increase. Part of the problem is that from 2009-2010 to 2011-2012 public sector net investment declined from 48.5 billion pounds to 28 billion pounds. The Economist suggests Chancellor Osborne take up an additional investment in infrastructure of 28 billion pounds, even borrowing 14 billion pounds in the bond markets if needed, as a prudent step to revive growth. Small improvements in rail, roads and bridges could make up for a lack of large projects. Other suggestions include expanding the "funding for lending" scheme with banks to get capital to small business, finding more savings in the National Health Service, and changing the way Britain taxes development land that remains undeveloped. Britain, now joins, Portugal, Spain, France and Italy, in the failure of austerity measures alone creating a return to economic growth and lower deficits. In 2013 improving competitiveness and boosting economic growth become critical following years of austerity measures....

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Ajami makes the point that opinions and attitudes -after the Obama efforts to improve America's standing in the Muslim world - havent changed much since the Bush days. He cites the Pew Global Attitudes Survey for 2009- In Turkey after the Obama Anakra visit favorable rating is only 14%, 69% are unreconciled. In Egypt 27% have favorable view 70% do not, in Pakistan unfavorables actally went up from 63% to 68%. He also points to the situation in Iran where the protester for the fraud in the election of Ahmadinejad did not receive much supprt from Obama, as the Obama administration decided to engage with Ahmadinejad to achieve nuclear settlement. In effect the rhetoric from Obama has not been matched with courage of convicitions , and lacks the courage to turn a new chapter by breaking from the past not just with talk but in real policy changes. And says Ajami the Arabs havve stopped listening to the rhetoric as little has been accomplished by way of change. At the same time false expectations may have been aroused because the Cairo speech was made at the University with the aging Mubarak at Obama's side, and beyond addressing these students the feeling clearly must be that the US would simply continue its policies of supporting old regimes that tolerate no dissent of any kind such as Mubarak's. ...

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Comparative effectiveness research will be conducted to evaluate what is the best treatment for any ailment or disease or health problem under the $1.1 billion allocated for this in the Stimulus Plan. What are the alternative methods of treatment, what is the effectiveness of each treatment, what are the comparative costs and so on. Is it better to treat neck pain with surgery or acombination ofphysical therapy, exercize and medications? If there is ablockage of arteries in the lower leg and leg pain, how does drugs and watchful waiting compare with surgery? For chronic heart failure how does home monitoring of blood pressure and weight and exercise in addition to medications provide an alternative route as opposed to just medications. Dr Fisher of Dartmouth Medical School cites these as examples of questions that can be asked in comparitive effectiveness research. The money will be available to the Health and Human Services Department and will be used over several years. About 15 federal employees will form a council to coordinate the research and advise President Obama and Congress on how to use the money. In 2007 the US spent $2.2 trillion, or 16% of GDP, on health care, and the Congressional Budget Office says it will grow to 25% of GDP at the rate its growing by 2025 if left to its own devices. ...

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This report in The Times points out that the world of work is changing as employers reduce office space and shift workers to work from home with some limited time spent in the office environment to link up with colleagues. This report cites a survey that shows 45% of companies are saying they do not need 70% of office space.  The Times has been published for one year with employees not coming into the office. The Reach which publishes the Daily Mirror and Daily Express in UK has cut office space and 75% of employees in future will work full time from home. Banks are also making that move- HSBC is getting rid of 40% of global office space, Lloyds Bank is getting rid of 20% of office space. With these changes comes the question when did this idea of working out large offices start? It started in 1906 with the Larkin Administration Building in New York. It was based on the ideas of Frederick Taylor's scientific management ideas and was designed by Frank Lloyd Wright to recreate something like a factory floor. Later by 1970 office spaces shifted to privacy with cubicles and private offices. It then went through another transformation with a shift to open offices as in Japan in the period around 2000 which is making a comeback today. This time open offices with social distancing space for a smaller number of people coming in for a short time to the office. Simon Nixon says employers should not simply look for savings as the main motivation but at the broader picture- wellness of employees, guiding employees on how to structure work and space at home, associations in this field should also provide guidance and get involved in the transformation of office space. Productivity goes with wellness, and happy employees who have kept wellness in mind will be more productive asset for the employers. Lyrarc recommends office workers read articles on the German approach to office work called "Feierabend," which sets clearly demarcated lines between work and recreational activities that renew one for work the next day. Feierabend literally means "end of the day" in German and a specific time say 5.00 pm cuts off the days work and sets time aside for breaking away from work to take a bike ride or a walk in the garden for instance.   ...

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Its time for trains says Stuart Braun in DW.com, with all the flight cancellations and hardships of plane travel these days. Don't forget he says that trains make up only a tiny 0.4% of the total transport carbon emissions in European Union- planes produce 10 times that- and provide a better alternative to flying. 

Right now only 7% of passenger transport is by train. A lot needs to be done including making travel seamless across Europe. Banning short haul flights is one way. High speed trains connecting all European cities is another. The 150 busiest flight routes across Europe can be done by trains. Studies show 81 million passengers could shift to trains with high speed rail connections making the time comparable to flying including airport travel and waiting time. Train companies and infrastructure is too nationalistic to meet the challenge of climate change and action is needed immediately.

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Researchers at Kyoto University and Hokkaido University present their analysis at the advisory panel to the Health Ministry in Japan on the Delta variant on June 23. The research by Prof. Hiroshi and Prof. Kimihito shows the Delta variant from India is 1.95 times more transmissible than the original virus.

The group of researchers examined PCR tests from Japan and an international database for their analysis. Based on data from Japan the researchers looked at the Delta variant is projected to account for more than half of new cases in Japan by July 12. By the time the Tokyo Olympics open on July 23 this variant is projected to account for 69% of new cases.  The researchers say the recent lifting of the emergency restrictions in Tokyo and other cities as well as the high transmissibility of the new variant is likely to increase risks from infections in future.

 

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How opinion has changed in France since the time of British and Allied bombing of France's rail and other infrastructure that the Germans used in World War II occupation of France. By the end of the war 50,000 French people had been killed in the bombings and large parts of some smaller cities destroyed. The story of these bombings and the survivors has not been told. Churchill was warned about the risk of turning the French away from the Allies and to favor the Soviets as the bombing progressed. By 1964 De Gaulle chose another landing in Provence that the Free French Army had actively taken part in for celebrations instead of D-Day. About 60% of French at the time in 1964 were favorable to the Soviets. Today this has changed as Biden visits Normandy for D-Day and the EU's future is intertwined with that of the US.