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Robert Doll, equity strategist for Black Rock, the world's largest money manager, says the growing population of the U.S. will drive economic growth in the next decade compared to Japan and Europe. He says that over the next two decades the U.S. work force will grow by 11%, Europe's will decline by 5%, and Japan's will decline by 17%. China's population growth will be only slightly more than that of the U.S. during that period and Doll expects China's growth to slow. He sees America as the best bet in a bad neighborhood. Higher immigration in the U.S. is a huge positive, as he points out economic growth is simply the product of the change in the size of the work force multiplied by its productivity. And America's productivity is good enough compared to other nations, is how Doll sees it. In 1995 the U.S. produced 25% of the world's goods and services, it was still 25% in 2010 says Doll. Other economists have pointed to this and observed a similiar pattern for most of the twentieth century. Doll sees this pattern continuing. India's population will show signficant growth and he sees greater opportunity there for long term investing. Doll sees a decoupling between U.S. stock markets and high unemployment. Most of the large U.S. companies generate a large portion of their sales and profits overseas. He estimates 40% of the business of these companies is overseas. Doll's estimate is for 70% of the incremental earnings growth of the S&P 500 companies coming from overseas markets. He also expects higher inflation with the Fed keeping it from getting out of control, and deficit cutting efforts to cut some trillions over the years. He sees favorable prospects for equities based on the money growth being strong and credit markets being good....

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The WSJ's Laurence Norman talks to Yukiya Amano, head of the UN agency, the International Atomic Energy Agency (IAEA), which has the responsibility of verification and inspection of Iran's nuclear development and facilities. Amano describes the issues raised by a 2011 report which outlined 12 sets of concerns to which Iran has to explain, a condition included in the final nuclear agreement. Iran has to respond by mid-August, IAEA then responds, and does work in Sept and Oct, and submits its report by Dec. 2015. Yamano says he has to fill in all the missing pieces in this jigsaw puzzle to get a full picture of Iran's nuclear development. Iran has denied access to military sites and Mr. Amano couldn't say if he has access to the Parchin military site. A concession that was made in the agreement is the long interval of three weeks before access to a particular site that arouses suspicions-the agreement gives Iran the right to appeal an IAEA request to visit such a site to a special commission. The U.S. and its European allies have a majority on the commission yet three weeks are allowed in which Iran could move material to some other location. For critics the question will be why such a concession was needed if Iran truly has decided not to develop nuclear weapons technologies. The U.S. president's response at a news conference on July 15, 2015, was that with the laws of physics the U.S. monitoring tools would detect nuclear activity at that site. The agreement also gives Iran an earlier than planned lifting of a ban on sales of arms and missiles and missile parts if the IAEA says Iran's nuclear activities are peaceful. Iran could conceivably wait till the ban is lifted and its economy in a much stronger position to withstand any future limited sanctions to pursue nuclear weapons development. This would have delayed development for a few years during which time the hope is that Iran has changed into a more peaceful nation pursuing economic development in its region, yet even if this is the case as as happened with India and Pakistan it could still pursue nuclear weapons development. The alternative is a status quo till a better agreement is reached with the leverage of tight economic sanctions and continuing dialogue during which time Iran continues to get closer to a nuclear weapon, or the use of force to prevent this. Iran added the arms embargo issue during the last weeks of the negotiation in June, a controversial move on Iran's part, as this may have complicated the picture with ballistic missiles technology exports to Iran approved after 8 years in the final agreement, compared to the agreement reached in April 2015 which made no mention of the lifting of the arms embargo. Iran played on the notion that if Zarif returned to Iran without an agreement hardliners including Khamanei would veto any agreement, yet this could just be the Iranian negotiating strategy. U.S. president Obama stated at the July 15, 2015 news conference that it would be hard to hold sanctions for longer. Critics might argue that China was already benefitting from the small easing of sanctions by increasing Iranian oil imports by 30% in 2014, and would have less incentive to withdraw from sanctions, as it is dependent on the U.S. and the EU, major markets for its exports and access to technologies. A WSJ/NBC poll in July shows almost half of the people polled in the U.S. saying they do not know enough to express an opinion, a steady 36% support an agreement, showing that the public has not been educated and taken along during the different steps in the largely secret negotiations....

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The Trump administration's early proposal for NAFTA moves away from campaign pledges to completely renegotiate the treaty, instead taking the approach of working to improve the U.S. trade position in relation to Mexico and Canada. It includes seven objectives for tougher rules for labor and the environment favored by Democrats in Congress, and it also has support from Republicans with its effort to update NAFTA for changes in technology and in other areas since the accord was signed during the Clinton administration. The area in which U.S. and Mexican business are wary is one in which the Trump administration still seeks to keep the option of imposing protective tariffs, and a border-adjusted tax to level playing field for differences in taxes, as well as other measures to protect American jobs and interests. Because any renegotiated NAFTA also has to pass both houses of Congress this proposal took into account the different constituencies and interests for this issue. Robert Lighthizer, trade representative under president Reagan is likely to become the next U.S. Trade Representative and lead negotiator. We first profiled Lighthizer in a group in Lyrarc for pointing to the need for a level playing field in trade. As early as 2010 Lighthizer argued in op-ed articles that globalization and trade practices should ensure a level playing field for the U.S., and was covered in Lyrarc. ...

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This Journal editorial which advises patience, comes on the day after the U.S. Senate voted 79-19 to move forward with a bill on sanctions against China for undervaluation of the yuan. The editorial says the Chinese currency has come down 30% since 2005, and inflation in China is reducing the advantage China gains by keeping its currency valuation low. Over time the editorial suggests China will see a decline in trade surpluses similiar to the experience with Japan, and emphasizes the importance of the two leading trading nations U.S. and Britain not repeating the experience of the 1930's with the Smoot-Hawley retaliatory tariffs legislation. The Journal quotes American economic historian Charles Kindleberger: "When every country turned to protect its national private interest, the world public interest went down the drain, and with it the private interests of all."

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Some manufacturing towns have done worse than others during this period of a surge in Chinese imports. Dunn, North Carolina is one of these towns. It is 40 miles south of Raleigh. In the 10 counties clustered around Raleigh factory employment declined by 40% between 1990 and 2007. Per capita cost of government payments for benefits such as unemployment insurance, food stamps, increased by 74%. Cleveland by contrast was relatively insulated and adapted to the imports by moving into areas of manufacturing that required more technology and complexity. Autor and Hanson studied 722 county clusters throughout the U.S. to discern the impact of the surge in imports and free trade.

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In an interview with the Wall Street Journal Deutschland, Hans Werner Sinn, head of the Ifo Institute in Germany, says Greece's bondholders are overly exaggerating the effects on the eurozone of an exit by Greece. He sees it in the best interests of Greece to improve its competitiveness and return to growth by going back to the drachma. Just to get to the level of Turkey Greece would need to reduce prices by 31%, which is impossible to do within the eurozone without risking a complete breakdown in civil order. The best way to use the 130 billion euro second bailout package is to use it to recapitalize its banking system, says Sinn. Sinn says Portugal's faces the risk of a debt crisis following the crisis in Greece.

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Zweig gives the example of Palm Pilot IPO shares in March 2000, which the parent company 3Com priced at more than 1,350 times net earnings for the Palm shares. He cites George Akerlof, who writes about identity economics, and points to the fact that users of a product can be so fanatically devoted to it so as to drive up the price for an extended period of time. In the case of Palm Pilot its users were fanatically devoted to the product. This appears to be true for Facebook with users who see their identity enhanced as they put up pictures of themselves and share with friends. Over time users may realize that it is their private information that Facebook is using to generate revenue. It also sets up the shares for a sharper reversal over time.

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Christopher Wood points to deflationary trends in Europe and the USA. Bank for International Settlements (BIS) data shows European bank exposure to government debt in Portugal, Italy, Ireland, Greece and Spain at $2.8 trillion at the end of 2009, and a rise in the London interbank offered rate (LIBOR), as further signs of negative trends. The property bubble in China and strong action to tighten and use antispeculation measures have already led to transaction volumes in residential real estate falling rapidly. If Beijing reconsiders further appreciation of the yuan, a trade debate with the U.S. may intensify. All this points to increasing risk of a double dip recession.

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Prof. Calomiris of Columbia University, says the U.S. Federal Reserve should increase the cash reserve requirement for U.S. banks to prevent a surge in inflation. He points out that excesss reserves at banks stand at about $1.5 trillion. He suggests the Fed should take early action to prevent a jump in lending and credit creation- a pattern seen in the past after several years of dampened credit and lending.

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This article in the Economist says the bad loans in the financial system threaten to derail India's rapid growth. It points out that about 17 percent of all loans are estimated to be non-performing. Government plans to set up a bad bank and have bad loans transferred at steep discounted rate to the bad bank are still at an early stage. India weathered the 2008 financial crisis with a financial system in better shape. Since then a surge in lending has led to an increase in the bad loans. Today both banks and corporate firms are facing this problem. The political system and dysfunctional governance with frequent changes for management at state controlled banks are part of the problem.

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Rattner looks with alarm at recent figures showing that of 2.65 million jobs created in the U.S. in 2015, only 30,000 were in manufacturing. He reflects on growth in manufacturing with the recovery in automobile manufacturing between 2009- 2013 - during this period employment in the U.S. auto industry went up by 23 percent to 690,000, and employment in Mexico's auto industry went up by 60 percent to 589,000, showing much faster growth overseas. Manufacturing has also experienced decline in private sector wages of 0.8% since 2009, with auto industry wages down 12.7 percent, says Rattner.

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U.S. president Trump's statement calling for a list of goods for tariffs on $200 billion of Chinese goods leaves China without a clear response and facing new risks. The U.S. exports about $150 billion in goods to China so that China would have to impose penalties to respond at the same level. Placing restrictions on American firms on access to China's market, and imposing other penalties would have the effect of reinforcing the perception of unfair practices targeting American business and lead to hardening of U.S. response.  The U.S. sees itself as being in a better position with the U.S. economy experiencing a growth trend. China with large local government and bank debt faces a difficult situation. President Jinping's policy of reducing the risks of bad debt in the banking system involved sacrificing some growth to stabilize the system. China's GDP growth in 2017 was 6.9%, the target at 6.5%. Future targets and actual growth now look to be much lower.The trade war with the U.S. has the effect of dampening growth leading to calls for the central bank to loosen its monetary stance. In response to Trump's announcement the People's Bank of China pumped $31 billion into the nation's banks. China is studying Japan's response in the 1980's and 1990's when the U.S. took strong action against Japan's growing trade surplus. Japan responded by appreciating its currency and using stimulus to cushion the effect of lower exports on the economy. The stimulus led to the housing bubble and over time a period of low growth and stagnant economy. The large China stimulus in 2008-2009 has compounded the problems in the banking system. Not deleveraging and controlling financial risks in China's banking system because of the trade war would bring a new set of risks. ...

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Neil Irwin of NYT provides some counter intuitive ideas on U.S. Fed interest rate policy. He says it can't be take as a given that the Fed will raise rates in 2017-2018. This depends on how much punch there is in the Trump economic policies for stimulus, and for infrastructure spending, tax cuts. He cites Senate Majority Leader McConnell who said he would like to keep "tax reform revenue neutral." Getting large spending and pushing up the deficit is likely to run up against Republicans in Congress who have for 8 years opposed large spending increases and large deficits. Trump has given few details about his stimulus or infrastructure spending plans. He says the scale of the spending might not match the talk. Irwin cites JP Morgan Chase economists who have kept their forecasts for GDP growth just under 2% for 2017 and 2018. And he points out that even Trump appointees at the Fed might act independently. The Fed might look at being cautious considering that increased trade tensions with China, and the unpredictability of a Trump administration could hurt growth. Irwin does not mention the uncertainty in other areas such as policy towards Russia on which the Republican party and Congress have very different views than Trump, tensions over Taiwan, that can also affect growth. ...

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On Monday August 8, 2010, the Dow Jones Industrial Averages went down by 634 points and closed below 11,000 points. This is not far from the 10,165 level of the DJIA on August 27, 2010. It was on August 27, 2010 that Fed chairman Ben Bernanke made the speech at the Kansas City Fed's Jackson Hole conference about the strategy for a QE II. Its about the time for this years Jackson Hole conference and the gains in the stock market are melting away. The DJIA closed at 12810 by April 29, 2011, then went below 11,000 by August 8, 2011. With higher inflation the Fed's options are limited.

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The yuan has risen 14.5% against the yuan in the last 4 months, according to the Chinese Commerce ministry. Loosening the Chinese currency's peg to the dollar will increase the value of the renminbi even further. And with further declines in the euro expected this would seriously affect Chinese exporters to Europe. This also makes European goods more competitive than American goods in the Chinese market putting the Obama's administration's goal of doubling exports further at risk. The Shanghai stock index declined by 5.1% on Monday May 17, 2010, reflecting these concerns. The Chinese government continues to intervene in currency markets and the renminbi is now at 6.827 renminbi to the dollar.

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David Autor, an economist at the Massachusetts Institute of Technology, says he is quite worried about the steadily declining participation of men 16-64 in the labor force from 85% in the decade after World War II to less than 65% today. This is a blow to the men, their families , government revenues and the economy.

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22 famous investors from professors and judges to hedge fund managers and financial experts describe the best advice they received for investing.

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Many of the companies from the dot com tech bubble of 1999-2000 which were given $1 billion valuations went out of business, including names like Webvan and eToys. The same buble behaviour is evident in 2012 as many companies such as Facebook, Pinterest, Evernote, have $1 billion valuations, similiar to 2000. This is asignal that valuations may have spun out of control. It takes a few deep pocketed investors to raise the valuation of startup internet companies to these untested companies.

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The growth in U.S. GDP was 1.7 % in 2011, yet unemployment dropped by 0.7% in the last 12 months to 8.3% by Feb. 2012. A pickup in hiring is seen in job figures. Christina Romer gives as an explanation to the rise in unemployment in 2009 to 10%, more than expected, and the drop since then, to the overreaction of companies to the financial crisis by laying off workers and freezing hiring- with hiring picking up as conditions return to normal levels. The unemployment rate as defined is also not an accurate measure of the jobs situation, as it reflects only workers who are looking for work, and many workers drop out of the jobs market when they are discouraged especially the long term unemployed. Taking into account people who have dropped out of the labor markets the unemployment rate was 11% in Nov. 2009, according to Luce in the Financial Times- in Ezra Klein, Washington Post 12/12/2011, Wonkbook: Real unemployment rate 11%. Lawrence Katz, Harvard Labor economist also cites this as one of three jobs crises in unemployment today that need to be addressed, the other two being: foreclosures and debt, and the low number of jobs added because of automated manufacturing- in Friedman, NYT, 12/10/11, The Next First 100 Days. Explanations for the low GDP growth as unemployment declines is a likely productivity slowdown. Prof. Robert Gordon of Northwestern University, sees a slowdown in productivity. Worker output for every hour worked, how productivity is measured, increased only 0.4% in 2011 and 0.9% in the last 7 quarters, and is trending downward in the longer term. A more likely explanation is that unemployment is still at higher levels but is understated in unemployment figures....