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LyrArc brings in selected articles from many of the world's top publications.

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New York Times Original article ›
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The IMF's latest economic report says there is a very real risk that Greece's debt crisis could spread. "Contagion to the euro area, and then onwards to emerging Europe, remains a tangible downside risk," the report says. Sentiment in the financial markets is for Greece restructuring its debt, possibly as soon as late 2011. Increasingly the concern focusses on Greece never being able to pay back the $464 billion in debt, as a result pushing losses onto bondholders and banks in Europe. The IMF's director for Western hemisphere, Nicolas Eyzaguirre, said Latin America is in danger of going into a full blown economic crisis if the situation is not managed correctly with overheating in their economies. Speaking at a conference of central bankers in Rio de Janeiro, he said the Latin American region could see major weakness in currencies with an external shock such as drop in commodities prices or increase in U.S. interest rates. He said Brazil "should rein in the economy through an array of measures to avoid excessive exuberance, or it could end in tears."...
New York Times Original article ›
Wall Street Journal Original article ›

Why Nations Fail

New York Times Original article ›
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Friedman reviews Acemoglu and Robinson's new book, "Why Nations Fail." Acemoglu says that nations fail when wealth and opportunities are concentrated in the hands of few people, that a condition for societies to succeed is to create opportunities for more people. For this to happen it is important to create inclusive political and economic institutions. This is an important insight, but for Western society this is an insight as old as Adam Smith when he pointed out the importance of this aspect of western societies after the feudal period in his "Wealth of Nations." For Smith it was the failure to create inclusive societies that led to the gradual unravelling of societies in the river valleys of the Yangste and the Ganges, in China and India, of increasing poverty and the gradual disappearance of what constituted the middle class in India and China. Chapter 8 titled "Of Wages and Labor" in the "Wealth of Nations" makes specific reference to this.
WSJ Original article ›
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The rise of Japan was a major challenge for president Reagan in the 1980's in the way president Trump is confronting the rise of China. The Reagan administration obtained the concessions it needed from Japan. The negotiator for the U.S. side during the Reagan years - Robert Lighthizer. Lighthizer is using his experience in winning concessions from Japan in his role as top trade negotiator with China.  As the WSJ points out Japan ceased to be a threat to the U.S. faster than anyone thought possible. 

But there is one problem even if this happens the warning is that the imbalances with Japan simply transferred over time to China. The warning is for America's tendency to spend money it does not have, and for how long.

New York Times Original article ›
Wall Street Journal Original article ›
Economist Original article ›
Wall Street Journal Original article ›
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Government agencies such as the Export Import Bank charge airlines for their guarantees. The new agreement reached through the OECD in Paris, replaces the fixed fees with charges that follow prevailing interest rates. The previous subsidy deal in 2007 has been updated in this way. Airlines use the export credit financing to lower their cost of borrowing and increase their access to loans. Participating governments, including the US, the EU, Japan, Canada and Brazil, aim to approve the deal by Jan 20, 2011. Russia's Sukhoi Superjet 100 and the ARJ21 regional jetliner in China, will be exempt from the new rules.
New York Times Original article ›
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Nestor Kirchner was a not so well known governor of the Patagonian province of Santa Cruz when he won the elections in the first round by only 22% of the vote in 2003. He steered Argentina out of the financial crisis in 2003 and Argentina has seen high growth rates with booming agricultural exports to China throughout the decade. In 2007 his wife Christina Kirchner was elected president and Nestor Kirchner assumed the leadership of the governing Peronist party. After initial difficulties and low ratings Christina Kirchner's ratings improved to over 40% in 2010 as growth rates approached 9.5%.
Wall Street Journal Original article ›
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Nasdaq OMX Group CEO, Robert Greifeld, says Janet Yellen and the U.S. Fed Open Market Committee should exercize caution in increasing interest rates in 2014. He cites the heavy risk for long term investor outlook and psychology of the Fed moving too quickly in increasing interest rates, because of the steep drop in oil prices, the crash of the ruble, slowdown in Europe, deflationary trends in the eurozone and Japan, and slow growth in China. The Fed now has more room for taking a cautious approach says Greifeld, as wage growth is tepid, the dollar is strong, and oil prices are down significantly.

The Emperor Has No Lungs

Wall Street Journal Original article ›
LyrArc Article Gist
The concentration of particles less than 2.5 microns in diameter reached 700- 886 micrograms per square meter in Beijing in Jan 2013, 500 is routine. The World Health Organization says a level of 25 micrograms per square meter is safe, above 300 poses risks calling for one to stay indoors. This is the high cost of rapid motorization of China and lack of strict pollution control laws and enforcement for industry. The pace of car sales in the last ten years was extremely fast and unprecedented in comparison to Europe, the U.S. and Japan in a similiar period of development.
Wall Street Journal Original article ›
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Apple's 5% smartphone market share in India lags behind Sony at 9% and Samsung at 40% for 4th quarter 2012, according to Canalys. India is expected to become the third largest market for smartphones after China and the U.S. A major problem for Apple is India's multilayered distribution network, says Apple CEO Cook. Government rules require Apple to source 30% of parts in India to be able to open its own store network. Apple is also working on lower priced smartphones for the Indian market closer to Samsung's starting price of $111 for Galaxy smartphones in India.
Economist Original article ›
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Increased bank lending in China with lending going up by 20% in January 2009, suggest that state owned banks are following instructions to increase lending from the government. As bank and household balance sheets are healthy and domestic debt has fallen relative to GDP in recent years, the bank lending situation appears healthy. Medium and long term lending has increased strongly. The central bank plans to finance only 30% of the stimulus spending of $585 billion infrastructure package, banks will provide much of the rest. According to ING analyst Condon, transport infrastructure spending was up 61% over ayear earlier in December.
Wall Street Journal Original article ›
LyrArc Article Gist
Different estimates on how quickly and how much additional oil would come into world oil markets if sanctions are lifted. The time estimates range from quickly to 6 months for additional new supplies into world oil markets. Estimates of how much production can be added range from 500,000-800,000 barrels a day from private estimates to 1 million additional barrels a day from Iran's oil company, if sanctions are lifted. UK foreign secretary, Philip Hammond, says "there is still a long way to go if we are going to get there." He told a parliamentary committee that the nonnegotiable part is a window of one year advance notice if Iran were to break out and go for a nuclear weapon, which would be based on technical expert opinion of how long it would take Iran to build a nuclear weapon using its knowhow and materials at that Mr Zanganeh took over as oil minister after the election of Rouhani as president 18 months ago. Zanganeh calls the effect of sanctions and the mismanagement of the previous government as "a catastrophe," and he has tried to instill anew discipline in the oil sector. Iran currently produces about 1-1.2 million barrels a day under sanctions, half of earlier levels before sanctions were tightened in 2012 because of the nuclear weapons development issues....
Wall Street Journal Original article ›
Economist Original article ›
WSJ Original article ›
LyrArc Article Gist
Much of what is written here about Xi Jinping pursuing Chinese socialist vision was known since he became president in 2013 when China's Communist party was losing its appeal, and efforts were made to seize power within the communist party by a leader in the western province of Chongqing. Bo Xi Lai attempted to take advantage of the situation with appeals to the working class and without any genuine commitment beyond a power grab. It was well known that Xi Jinping is a son of one of the veterans of the Communist party under Mao, Xi Zhongxun, unlike leaders who followed premier Deng Xiaoping such as Jiang Zemin. Zemin was a relatively unknown figure who was in university during the crucial period of 1947-49 when Mao came to power in mainland China. It would not be correct to say that little was known about Xi's own ideas about socialism as the long term answer to China's problems. Xi also came in as president at a time when the Communist party was losing its appeal to working class people after three administrations that followed premier Den Xiaoping. These three administrations followed a form of state capitalism that allowed companies to pollute the environment, compete without any regulations, and allowed to operate without any controls as long as they pursued growth aggressively and expanded the economy.There was an effort by Communist party regional leader in western Chinese province of Chongqing, Bo Xi Lai, to use this as an opportunity to grab power in China. During his first year as president Xi had to resolve this issue by having a court trial after revelations of corruption and misuse of power by Bo Xi Lai.  Xi's father Zhongxun's role in the revolutionary movement offers clues to Xi's own convictions and faith in the party. Zhongxun was a communist soldier who set up the revolutionary base areas in Shanxi-Gansu northwest border region of China that provided a refuge for Mao's army following the Long March. Other clues come from Zhongxun's role as head of propaganda during the period after 1944 and in 1952. Xi's family background particularly on his mother's side shows a fervent commitment to Chinese socialist vision during the chaotic years when the Japanese invaded China and Chiang Kai-Shek's nationalist forces failed to defend China's sovereignty. One reason Xi has been less understood is that little attention is paid to Xi's mother, Qi Xin who was highly educated and fervently believed in Chinese socialism and nationalist spirit during the Japanese invasion in 1938. In fact Qi Xin had to leave middle school after the Japanese took over Beijing. She joined the Counter Japanese Political and Military University to continue education and in 1941 attended the Central Party school. She met Xi's father Zhongxun in 1944. In 1953 she enrolled in the Marx School of Communism, and it was her position at the school that offered her husband added protection during the Cultural Revolution that affected Deng Xiaoping and others. With such a history in the 1930's, 1940's, and 1950's it is likely that Xi was profoundly influenced by his father's role in the revolutionary movement, and his mother's faith in socialism with national spirit as the way to protect against the foreign invasions. It would now appear that by the time Xi joined the Politburo in 2003 there was no question about the future course China would take given the role of his parents, and the events of 1938 the fall of Beijing, his mother having to flee, and the events that followed. Xi showed resilience during the period of the Great Proletarian Revolution when he was sent to the villages at a time when he would be studying in school and college. He was sent to an agricultural commune in largely rural Shanxi province where he worked as a manual laborer alongside other people and developed a relationship with the local farmers. Unlike other leaders during that period which could even be said about premier Deng Xiaoping in 1989, Xi took a different lesson from this experience largely because his father and mother were committed to the socialist vision for the long run. His father was still not fully rehabilitated by premier Chou en-lai when Xi was allowed to enter Beijing's Tsinghua University in 1975. He studied chemical engineering at Tsinghua graduating in 1979. Upon graduation he worked as a assistant for 3 years to a vice premier who was minister of defense. He then left Beijing for Hebei province to work as a deputy secretary of the provincial CCP. He was made Mayor of Xiamen, then governor of Fujian province in 1999 where he tackled environmental conservation before moving to Zheziang province. His father passed away in 2002 and it would appear that he was carefully trained in different provinces instead of staying in Beijing, for a position of national leadership. Xi got his break in 2007 when the upper leadership of Shanghai city was tainted in a wide ranging pension fund scheme. He was made party secretary for Shanghai. This was the position Jiang Zemin had held before he succeeded premier Deng Xiaoping. In only a few months in October 2007 Xi was made one of the 8 Politburo members, ready to succeed Hu Jintao as president. Xi's perception of being sent to the villages and making it to university education was that it was part of the long run socialist struggle, with pain that his father had also endured as simply a phase in which things would be right in the end. Xi's mother comes across as a resilient figure and one who had herself gone through the struggles of the 1930's and aided her husband on one occasion. Some of this resilience could have been passed on to the son. Xi's wife is a zealous participant in Chinese dance and music performances that created enthusiasm for the Chinese socialist revolution from the 1930's period. In his conversations  with colleagues in the party, in culture and temperament, Xi has been forthright about this background and his style of work.  Xi is unlike premier Deng and the presidents who succeeded him such as Hu Jintao mentored by a former mayor of Shanghai Jiang Zemin who came to power in 1989. Xi is more in line with the leaders around Mao like his father in his outlook and thinking, with a cautious temperament that comes from years going through ups and downs of political struggles. He is once said to have responded with dismay about being in a top position in the government knowing how precarious this had been for his father. The education at Tsinghua, his engineering background, and his easy familiarity with farmers in the provinces, mean that he understands China and its history well enough to have the confidence to shape Chinese policies in a way that none of his predecessors had except Mao, premier Chou-en-lai, Liu Shao Chi and a few veterans from that time in the 1930's. That Xi waited patiently for so long to gradually assert his ideas about socialist vision for China may be the surprising part of his behaviour till 2021.  It may be that he wanted to make the changes only after he could persuade party leaders and colleagues of his vision and long run goals. And because the Chinese economy had grown so large that it would take time to steer the ship in a different direction for the long term. In most of the negotiations with president Trump he cautiously let trade negotiators handle the situation, all the time learning about how to tackle problems of China's relationship with US and Europe. US president Biden also has a vision that is veering towards a socialist perspective in terms of bringing gains of progress to workers and families. So does Mr. Trump, Mr. Boris Johnson in UK, and Social Democrat's Scholz in Germany. It is both economic and political as Mr. Xi is quoted as saying in this WSJ report. The necessities of such action are both economic, social and politically driven as capitalism has veered way off course.  In this report it is mentioned that Soho China 40% stake was taken by a large capital markets firm in New York in the hope of large gains, as Soho China developer was a tycoon who wanted to leave China. Seeing it as not favorable to his company following events in Hong Kong. This behaviour of capital markets groups in New York and tech companies in Silicon Valley, driven by profits and not aware of the social and economic problems of working class American families is a problem in the US and in Europe. It is also what has driven so many large tech companies to expand manufacturing operations in China, that hurt US manufacturing capabilities and American workers jobs- an issue raised by president Trump and taken up by president Biden. Biden has already moved to make Intel Corporation change its plans and invest in American manufacturing technologies in a quietly implemented U turn. US president Biden is left with the unenviable job of solving this huge problem during the pandemic. He has also committed to a somewhat socialistic vision with a $3.5 trillion plan for workers and families, as has vice chancellor Scholz in Germany with his own version of programs, after the failures of unregulated forms of capitalism. Scholz goes so far as to say his mission is to show that there is really no such thing as a self-made man, that it is help from society, his fellow citizens, and government, that makes it possible for him to do his work. In a sense the world is shifting away from Reagan forms of capitalism without regulation after seeing disastrous results during the pandemic. Not just China. Some form of government guidance and regulations are now seen as essential in China, the US, UK, Germany and India for a better society and a better, healthier life, and for opportunity for all in each country.   ...
Wall Street Journal Original article ›
BBC News Original article ›
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Laurence Peter of the BBC News describes a meeting of EU leaders in December 2016. The new Europa building with its space egg shape will be the location of the next summit in 2016, adding to a sense of history that the EU idea has witnessed since the 1950's, even optimism about far it has come at a time of a few setbacks.  He points out that Theresa May was not without persons to talk to at the meeting, though some video clips showed her looking lonely. EU president Martin Schulz said he was emotional seeing students crying after the Brexit vote, but that it was time to find solutions and not be emotional today. Lunch was offered at the meeting by Spain and Portugal, to mark the 30 years since they joined. People forget how much the European Community meant to the two countries after decades of suffering under fascist dictatorships- it meant new hope and an opportunity to set things right. Problems facing the EU today include, the frustration at the carnage in Aleppo, Syria, how to deal with Britain and Brexit, setting up an asylum system that will work, dealing with Ukraine and Russia without making the situation worse, and remaining concerns about the Greece debt crisis. ...
Wall Street Journal Original article ›
Wall Street Journal Original article ›

Ford Bets on Fancy Pickups

Wall Street Journal Original article ›
LyrArc Article Gist
Ford Motor's reliance on the redesigned F-150 and other large pickup trucks for its higher profits in 2015. The price tag on these vehicles keeps rising, with some pickups sold at about $50,000 and having interior leather seating, amenities resembling luxury cars in 2015. Higher fuel efficiency engines, body redesigned with lighter materials including aluminium, other innovations, combined with the lower price of gas, lower interest rates for financing, have led to a resurgence in these larger vehicles.
WSJ Original article ›
LyrArc Article Gist
Angola's recent election gives the country a new president Joao Lourenco. Since independence Angola is governed by the MPLA led by Jose Dos Santos. Lourenco was selected by Dos Santos to help Angola navigate a difficult period when oil prices have fallen. Dos Santos remains a key figure in Angola- his daughter heads the oil company that generates 95% of Angola's export revenues, and his son heads the sovereign wealth fund. Lourenco's wife is an executive director of the World Bank, and helped negotiate a loan from the IMF for $1.4 billion in 2009. Lorenco is a low key figure who started by joining the MPLA in the struggle for independence at the age of 20, and is seen as a person Mr. Santos is appointing as he considers retirement.

Wall Street Journal Original article ›

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