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The Economist points out that China's total debt of government, corporate and households has grown by about 100% of GDP since 2008. The 2009 crisis led to rapid increase in debt. It is now about 250% of GDP, according to the Economist. Slower growth of below 7% risks reducing China's ability to service this debt. About half of this debt is owed by state owned companies and property developers. China can use its sovereign reserves to continue supporting bank and state owned companies. Investor's are pricing bank shares to reflect about 10% of this debt as bad debt even though government estimates are much lower. The reserves provided China time to fix the banking system since 2008, yet the debt keeps growing and China has failed to take strong action in the last 6 years. Complacency is a problem, and the incentives for local governments to continue prior practices that increase debt continue. As Krugman and other experts have pointed out at some point the rules of finance will apply to China as they have for other countries that faced a debt crisis- Japan in the late 1980's, South Korea and other Aisan countries in 1997, and the U.S. in 2008. Even without a crisis through deft managemen and use of reserves China risks zombifying the economy as old loans are backed up by new loans, with the further risk of misallocation of capital or poor use of capital. This lowers productivity of capital and hurts development. With poor statistics such as the figure of 1% of debt being bad debt cited here, the problems of complacency can be magnified, as there is less reason for a strong response....

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Bank of America plans to sell its $8 billion stake in China Construction Bank. Bank of America will post a $3.3 billion gain on the sale of these shares. This lowers Bank of America's stake in China Construction Bank to 5% from 10%. Buyers include Temasek Holdings of Singapore. Bank of America's new CEO Brian Moynhan is trying to sell noncore assets to bring the bank closer to meeting new reserve capital requirements set by the Federal Reserve. These steps include selling its consumer credit card unit in Canada, and plans to sell other non-U.S. credit card units. Warren Buffett recently made a $5 billion investment in Bank of America. Restructuring of consumer units will lead to job reductions of 10,000. Earlier this year the bank made 6000 job reductions.

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According to a report from China's Environment Ministry for the first half of 2013, only 4 cities met the acceptable air quality standards. The national grade 2 standard in China is for 35 micrograms per cubic meter for levels of airborne particulate matter smaller than 2.5 micrograms in diameter. WHO standard is for 25 micrograms per cubic meter in a 24 hour period. The 4 cities with acceptable air qualty out of 74 cities monitored by the Environment Ministry are Lhasa in Tibet, island city Haikou, coastal town Zhoushan, and Pearl River Delta city of Huizhou.

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The Cleveland address and question answer session on July 10, 2011, showed Janet Yellen at her best. She was applauded several times for her answers especially for her emphasis on clarity. One question was about the use of the term"quantitative easing," couldn't the Fed have found a better word? Yellen pointed out that the Fed at the time used "buying of long term assets" as the phrase for that activity, after the media referred to it as "quantitative easing." That term stuck and the Fed ended up accepting the use of the term to refer to the Bernanke Fed's program. Yellen also said the buying of long term assets was intended to raise long term rates, and was different from the effort in Japan of buying short term assets that failed to stimulate the Japanese economy. Throughout Yellen was entirely comfortable making clear what she had in mind. At one point she was asked about the IMF director Lagarde's statement that the U.S. is better off not raising rates in 2015, because of the uncertain economic outlook in Europe, China and other places. Yellen's response was that this was one more view that she considered along with the views of several other Fed governors who had different views and reading of the economic situation. She emphasized that the increase in the rates will be very gradual, a position very consistent with her earlier statements, and this made the long tem path of interest rates more important said Yellen, than the particular time when the Fed first raised rates. For her clarity, empathy, and sound grasp of the economic situation, few Fed chairman have come close to Yellen, as was evident in the audience's grateful response. ...

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A new survey of senior lending officers of 45 emerging market banks by the Institute of International Finance is similiar to surveys done by central banks in U.S., Europe and Japan. The IIF is an asssociation of large global banks. The IIF's chief economist says the survey shows strong demand for loans in these countries. Emerging market banks are becoming cautious, but its difficult considering the strong demand for loans. In China and Brazil, banking authorites are trying to cool the huge increase in loans as asset bubbles are developing. The IIF's first survey shows strong demand for loans aross the board, especially in Brazil. Similiar information from Turkey shows strong loan demand. An index of loan demand for consumer loans in emerging markets- with a score of 50 indicating expansion of loan demand and below 50 contracting loan demand- is at 64.1. Similiar indexes for the U.S. are at 50.1, for Europe 49.8, Japan 48.5, according to the recent surveys by central banks. While 56% of emerging market banks say corporate loan demand has grown in the 1st quarter 2011- the similiar number for the U.S. is 35% in the Fed survey, and 28% for Europe in the ECB survey. The IIF survey looked at the bank's lending practices and found banks in emerging Asia were tightening standards while banks in Eastern Europe, Latin America and the Middle East were lowering the standards. 25% of emerging market banks tightened corporate lending standards, 16% relaxed standards, and the remainder left things as they were. A similiar Fed survey for the U.S. showed no banks tightening corporate lending standards, and 16% relaxing standards. And an ECB survey shows more banks tightening standards than relaxing them....

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Lee Cheuk-yan, chairman of the pro-democracy Labor Party, describes the 17 year old Wong and young people in high schools to a crowd in Hong Kong in this way- these are very young faces, the old men in Hong Kong including many in the elite who dared not to speak up for Hong Kong's cherished traditions and rights out of caution will die, but these young people will carry on. Wong started the group Scholarism as an internet based movement to fight the 2012 "patriotic classes" plan of the Communist Party and Hong Kong Chief Executive Leung Chun-ying. That movement took hold in Hong Kong and the government had to shelve the plan. This time he is fighting for universal suffrage in Hong Kong in 2017 with the right to elect its own leaders without prescreening by the Communist Party. This is in the spirit of the Basic Law, former Hong Kong Governor Chris Patten tells the BBC. Patten helped negotiate the transfer agreement for Hong Kong and handled the transfer in 1997. In August 2014 China changed this intent leading to protest demonstrations. Wong is of Protestant parents who helped stir in him a sense of opposing social injustice. Beyond Hong Kong there is something else at work- a sense that the new leaders in Beijing are choosing the Putin Way that sees these demonstrations as inspired by foreign forces and treating all NGO's as foreign agents. In a larger sense the old leaders are living in a past world of territorial gains and keeping tight grip on power, when the world is now interdependent economically and politically, with change requiring new approaches to problems. The presence of 15 year old high school students and very young generation suggests no such foreign interference, as most of these students are very young....

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A steady decline in the price of Brent crude from $115 to $92 in the period from June to October 2014. Slow or no economic growth in Europe, and declining growth in China was the main reason. A cut in oil price by Saudi Arabia in September with lack of coordination in OPEC to control supplies when prices are declining, and increasing supplies from the U.S., provided additional basis for price declines. This price decline comes as large energy companies invested heavily in mega-projects to bring more oil supplies when prices were up to $128 by mid-2012. Consulting company EY estimate is that there are 163 such mega projects worth $1.1 trillion underway, most behind schedule and over budget. The projects were based on oil prices being over $100. Oil field development costs are increasing rapidly. Douglas Westwood, a consulting firm, estimate is that productivity of upstream capital spending has fallen by a factor of 5 since 2000, declining by 5% a year, as oilfield equipment and services demand exceeds supply. Greater technological sophistication also adds to cost such as Shell's Nobel Bully platform for deep sea drilling. See link- Noble Bully. Oil majors are now cutting spending, and some planned big projects are on hold. About $300 billion in assets may be up for sale. Shell plans to cut spending by 20% in 2014, Exxon and Chevron 5-6%. Shale oil projects in America need about $57 to be profitable with an internal rate of return of 10%, by one estimate. Yet this is an average and does not reflect differing producer costs. This estimate does not reflect the high cost producers, some of whom need closer to $110....

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WSJ report shows that on the morning of the 90 Day Pause in Tariffs announcement discussions took place with the Swiss prime minister, with Treasury Secretary Scott Bessent, and watching Fox News interview of JP Morgan Chase's Jamie Dimon. Seeing the turmoil in financial markets and bond markets, US president DJT made the decision to give time to make the agreements with about 50 countries, and time for financial markets to understand the president's  policy and goals to reformulate the world trading system into one that offers a level playing field. The chart showing the Tariffs of 67% by China and US 34% imposed tariff in the Rose Garden on April 2, 2025, was say reports the result of the influence on the president of the advice of Peter Navarro.  Treasury Secretary Scott Bessent's expertise is in financial markets as a protege of Soros, Navarro's is world trade. Bessent stepped in when financial markets appeared to reflect the uncertainty and convinced the president that the 90 day pause would be the best way to implement the policy on trade. There is a vigorous debate in the administration about how to get a level playing field for trade, and get the job done without disruptions in financial markets or a recession induced by uncertainty. On April 10 as part of the effort to talk to the American people US president DJT opened up his Cabinet meeting to the media and had Bessent, Borghum, RFK Jr and Marco Rubio talk about their plans and policies. Proper implementation, gaining confidence of the people of America and financial markets, is now as important as the goals and policies in the next 90 days. Getting the trade deals with the European Union, Japan, South Korea, Taiwan, Britain and India would go a long way to reassure financial markets and set the right tone for the future.   ...

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The huge risks the misallocated stimulus capital from real estate speculation poses for the Chinese economy. China's government rapidly expanded lending after the 2008 global financial crisis. One estimate is that about 10 trillion yuan in new loans were made in 2009, over twice the amount of 2008, expanding the loan portfolio and money supply by one third. A major problem is vacant homes as Chinese put their money in second homes as an investment. Chinese are not investing in the stock market because of the volatility, and with the low yields in bonds and banks money is going into real estate. According to a Morgan Stanley economist, about 25-30% of private commercial and housing space is vacant. This happens just as middle class Chinese are being priced out of the housing market. Prices went up by 12% in the housing market this year according to the China National Bureau of Statistics. Couples wanting to leave their parent's homes find it difficult to do so. It was the topic for a Chinese TV series "Dwelling Narrowness." ...

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The Economist points to a second hit from bad debt in the post 2008 stimulus binge of spending in China. This is after an earlier hit, that was absorbed as a result of high growth rates and high savings. About $420 billion was injected into 5 state owned banks since 1998, according to one estimate, as a result of the first hit to China's banks from bad debt. In this second round of bad debt, covered in more detail by David Barboza in the New York Times, and merely alluded to here, many bad loans to infrastructure projects were rushed through by local governments. The Economist considers this one of the successes of the state directed banking system, that loans were quickly made and projects started in the post 2008 crisis period; and expresses the view that this hit will be absorbed just like the last hit. However the more detailed account by David Barboza and in Business Week, points to the working of a system of incentives gone astray in a capitalist system without the necessary controls or regulation. Local governments used investment companies to take on loans, which were then used to prepare properties to be auctioned off at a profit and speculative prices to state owned companies in different industrial sectors. This is part of rampant speculation in China in real estate markets. Can China with its high savings and growth absorb a second hit? This depends on the magnitude of the hit and the size of the bad debt, which depends on how long this speculative market continues to operate, and how bad debt is hidden in the books. The difference this time is that large state owned companies in different industrial sectors are engaged in this speculation. The other difference is that the high growth rates in China depend on continued large trade deficits with the USA and Western Europe, something which is not likely to continue for long, as consumers in Europe and the USA with high debt are becoming cautious spenders. This suggests that China, like the US with the mortgage crisis, faces the same effects of unregulated or uncontrolled speculative behaviours, that can endanger the banking system....

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Mossberg says look for 500 gigabytes of storage, 4 gigabytes of memory, an i3 to i5 or i7 Intel processor, in buying a PC or laptop. He suggests waiting till fall 2012 for the new Windows 8, and summer 2012 for the newer PC's designed to use Windows 8. This will be a big change from before, because Windows 8 is designed to use the touch feature of tablets. Ultrabooks are a bit pricier, making PC's and laptops the lower cost option. Laptop makers are trying to increase margins on the machines. Mac's also will get a newer operating system called Mountain Lion by the fall.

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The Economist looks at real estate markets in the U.S., Canada, Britain, Germany, Hong Kong, India and other countries in May 2013. It looks at price to disposable income and price to rent ratios and sees if these ratios are higher than historical averages to determine if prices are based on sound foundations. Canada's real estate market looks set to face problems of a bubble bursting. The U.S. recovery is seen to be based on firm foundations. Property prices are undervalued in Germany and set to rise.

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Investment strategies of China Investment Corp., China's sovereign wealth fund. WSJ's Lingling Wei's interview with Wang Jianxi, executive vice president and chief risk officer at China Investment Corp., in March 2012.

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Australia exceeded China in total revenue for GE by $100 million, with $5.8 billion in revenues. GE now sees resource rich countries providing revenue growth of 25% in the next 2 years compared to 10-15% for China and India. The Ichthys $34 billion LNG project by Total SA and Inpex of Japan alone generated $1.1 billion in contracts for gas turbines, compressors and underwater production systems. The Gorgon project of Chevron on the northwest coast of Australia generated $1.3 billion in revenue.

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Efforts by homebuyers in China to evade government restrictions designed to control rising prices.

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China's perception of the US as a declining power is a miscalculation, yet it appears to influence Chinese policy in 2010-2011.