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Zombrun describes the effect of low interest rates on savings for the bottom half of households in the U.S., the pressure to invest in stocks without the skills and experience of the better educated part of households in the top 20% of households by wealth and income. This resulted in a negative effect, a depletion of savings compared to an increase under a higher interest rates scenario with less pressure to take risks in a volatile stock market. This is the direct cost of the crises in stock and financial markets of 2000 caused by a internet bubble, and the larger crisis of 2008-2009 caused by the bubble in mortgages and housing. The secondary effects of the mortgage price bubble and faulty mortgage securities was in the millions of homeowners who went into foreclosure in 2009-2013, which further depleted wealth and savings of households in the bottom half lacking the experience and skills to navigate this type of housing market. The failure of the Obama administration to stem the foreclosures with practical steps which would have helped not hurt the banking sector, as suggested by FDIC's Sheila Bair and Harvard economist Martin Feldstein in many WSJ op-eds in 2010-2012, added to the erosion of savings and wealth of the bottom half. Minorities in particular were hit hard. A third effect is of communities across America that are feeling the effects of job migration to emerging markets such as China that has been underway as part of the globalization of the last three decades. A fourth effect in the rising cost of education, particularly since 2000, has reduced the opportunities for struggling working class people to enter the middle class and enjoy the higher incomes in precisely the very period when the divergence of incomes between less educated, less killed people and the more educated and better skilled people was taking place. The last two effects were neutral as part of the overall process of emergence of a globalized economy with a premium on more skills and education, requiring action by the government, universities and business for a concerted effort to mitigate in some places the negative effects and enhance in other places the positive effects. The first two effects were man made crises which required managing in constructive and positive ways for the entire American people, taking risks where necessary such as fears about the financial system if foreclosures did not go through. The risks of a long period of extremely low interest rates for savers and the middle as well as working class were poorly understood by the Fed since 2000. A similiar crisis is being faced in Europe with extremely low interest rates. Janet Yellen was only doing the honest thing by acknowledging how far and how different the situation is now compared to the period of three decades following 1945- a question not just of values cherished in America, also of the need for societies to advance through creation of wealth across all sectors of society or regress, as described by Smith in the Wealth of Nations....

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The International Energy Agency lowers its global oil demand forecasts on Dec. 11, 2014, leading to further drop in the price of oil with oil futures in electronic trading for WTI at $58.89 on New York Mercantile Exchange, and Brent crude at $62.83 on ICE in London, for January 2015. The price of WTI U.S. oil dropped to $59.95 on Dec. 11, 2014.

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The U.S. Federal Reserve announced on Dec. 13, 2016, that it would increase its benchmark short term interest rate by 0.25 percentage point, to between 0.50% and 0.75%. The increase will also be reflected in business and household borrowing costs. The Fed also announced its intention to make 0.75% percentage point increase in 2017, possibly in 3 quarter percentage point moves. The Fed's forecast is for the fed-funds rate to reach 2.1% at the end of 2018, and 2.9% at the end of 2019. The Fed's policy is based on a sense of strong labor market with unemployment falling, and says it is based on discussion at a 2 day meeting, and "in view of realized and expected labor-market conditions and inflation." This reflects a view that there is now not that much slack in the labor market, that further improvements could trigger higher inflation. Fed forecasts for inflation are for it to increase from 1.5% in 2016 to 1.9% in 2017 and to the target of 2% in 2018. The unemployment rate of 4.6% in 2016 is forecast to go to 4.5% in 2017 and remain at that level till 2019. Economic growth is forecast at a median annual rate of 1.9% in 2016, 2.1% in 2017, only a slight improvement from last forecast in Sept. 2016. Support for chairwoman Yellen's policy decision was unanimous. See the link on views of NYT's Binyamin Applebaum and Neil Irwin on how Fed rate policy and economic growth under the Trump administration is likely to play out, and Ian Talley's report on impact on exports with a stronger dollar in WSJ. These views also are in line with the Fed's forecasts and policy decision as they reflect the concerns of the Fed about inflation, and also reflect the Fed's view that growth will be close to 2% in 2017-2019, and not the 3-4% stated by Trump and Treasury Secretary Mnuchin. Fed rate policies to keep inflation at about 2% tend to counter stimulus spending by the Trump administration and effect of tax cuts. The size of the stimulus and the tax cuts are also likely to be much smaller than stated because of Republican concerns about the deficit in the U.S. Congress, according to these views. The stronger dollar also has the paradoxical effect of making trade gains more difficult while increasing trade friction in tougher bargaining supported by Trump, making the higher growth targets harder to reach.   ...

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Bill Keller of the NYT points out that getting Syria right means getting over the obsession over what went wrong in Iraq and looking objectively at the situation in Syria. He points to the failure of president Obama in grasping what the Assad regime has done to Syria, the refugees in Jordan, the use of artillery and air raids on civilian population, and inviting the support by fundmentalist Islamic countries such as Saudi Arabia in the absence of U.S. and European support, making delay after delay by president Obama leading to a paralysis in response. Leaving the question for the future which was a worse U.S. response- the hasty action in Iraq or the paralysis in Syria?

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Country Garden is turning into a worse problem than Evergrande. Both housing developer companies are in serious financial problems in China affecting the larger economy. Consider that Country Garden has $286 billion in liabilities and $7 billion in first half losses for 2023. Two years earlier Evergrande went into insolvency over extravagant projects and spending. Country Garden's problems come from a shift away from housing in the country a retreat by investors and buyers. Yet 25% of the economy and the savings of ordinary Chinese are tied up in housing. Local government finances are also strained adding to the debt burden. In the boom years housing created hyper growth, now it is in reverse acting as a drag on the economy.

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Bilateral trade between China and Russia is down 31% for the first half of 2015, and Chinese investment in Russia down by 20%, according to Moscow Carnegie Center. This is a result of the fall in oil prices, declining demand for commodities in China, and the economic downturn in Russia. After the western sanctions on Russia Chinese investors are cautious about making investments. This means Russia's large expectations that this would act as an offset for economic relations with Germany and other western nations is not working out in reality. The contract for the second gas deal for gas from western Siberia, for which a memorandum was signed with China in Nov. 2014, was not signed during Putin's visit to Beijing in September 2015. Experts say the economic environment is not favorable for gas deals with the uncertain economic outlook in China.

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The coronavirus pandemic and the disaster in nursing homes, the chaotic conditions in the first wave, the lack of staff and poor attention to residents during the pandemic, has exposed the major weakness of nursing home care in western countries. Much of this sector is in the hands of private operators seeking a profit.  The staff is paid low wages and lacks the experience and empathy needed for care of older people. During a virus all these factors turn deadly. With some staff sick the other staff is overburdened. If the sick turn up for work they are likely to risk the safety of other staff and the residents. With the incubation period lack of testing there is no way to know. When deaths occur and the nursing homes are sealed from the outside world the deaths happen with no goodbyes as happened in U.S., Britain and Sweden. This has exposed the scandalous and shocking way in which the elderly are treated in today's environment where ridiculous amounts of money are being spent on other things and the the most basic "one's parents" are neglected and allowed to die in horrific manner in a pandemic. The new trend for home care for the elderly is a welcome trend and long overdue as one of the worst aspects of the system in the west is the treatment of elderly parents in nursing homes run for profit. The new technology tools available for monitoring a elderly person at home, and the help of stores such as Best Buy which are serving elderly at home, is making this more and more a choice for the elderly. Even older patients and ones needing significant care can recover and spend time at home in a better environment, a less costly one, as hospital managers and families have learned in 2020. Some hospitals in the U.S. say they never want to go back. That the drive to get every patient home who can be home is the right one for patients and families and for the government paying for the care so that dollars are well spent in quality of care. Home health care companies are working on providing new services for sicker patients recovering at home. Technology helps do better monitoring. Medicare now pays for digital doctor visits and intense hospital type care at home after coronavirus showed this as vitally needed.  Both the Biden and Trump administrations are firmly focused on this issue. Seema Verma as head of Medicare is clear about the need for a national conversation on how we take care of the elderly, of our parents. And Mr. Biden wants to spend $450 billon to make certain that people who need long term care can get the support they need in the home and the community. This report looks at the home health care companies and how they are improving their services. This and telemedicine are two of the major constructive changes coming out of the pandemic, clearing out some of the worst aspects of the old system of living the older years in the western world.  Nothing speaks more about humanity and a human world than the story here of Savanna Hollar, 90 years old and almost blind. She broke her shoulder in August, Her sons decided not to send her to a the rehab facility she went to after a broken hip 3 years earlier. The sons brought her home to recover in the farmhouse near Yadkinville, N.C., where she has lived since 1951. One of her sons himself 63 years says that at a nursing home she would be lonely, scared and afraid to move. The sons hired two people to help her during the day and a rotating system was used for having people help her. At home Mrs. Hollar could enjoy her gray cat, Buddy, her favorite recliner and tomato sandwiches made with produce from her garden. Really, if we can't do this much what good is the U.S.A.? or Britain? or Sweden? or India? ...

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France with about 6 million Muslims and a history of colonial rule in North African Arab countries (Algeria, Tunisia, Morocco, and other countries) faces a challenge of integrating Muslims into French society. Germany with a large population of Turkish origin also faces a similiar challenge. The attack on the satirical weekly Charlie Hebdo for poking fun at Islam, in a manner similiar to its satirical work on Catholicism, leads to the death of 12 journalists, a policeman and a policewoman. Erlanger and Bennhold describe the reaction of people in France. Peter Neumann, director of the International Center for the Study of Radicalization at King's College , London, says about anti-immigrant sentiment increasing in Europe to the point where it is uncoupling working class families from the elites in Europe and reaching into the mainstream of society.

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Interview with Honda CEO Takeo Fukui. In June Honda will rollout a new hydrogenpowered fuel cell vehicle called the FCX Clarity. Its powered with electricity produced by combining hydrogen and oxygen in batterylike fuel cells. Honda will have this vehicle available for lease this summer in California and aims to deliver about 200 of these cars by 2010. Fukui's attitude is refreshing when compared to that of other automakers when answering a question by John Murphy of the WSJ about why try to build a hydrogen car when the stations to power the cars do not exist yet. He tells Murphy if you asked were there any gas stations when Henry Ford came up with the Model T, there weren't any, lets build the cars first and the infrastructure will follow. And Honda is working on the technology that will make it possible to charge hydrogen into fuel-cell vehicles at home . He sees it happening first in California and some other states, and in Japan and Europe. And he sees it taking about 10 years to get some sort of infrastructure in place. Considering the long term nature of the demand side with the gradual inclusion of billions of people in China and India as well as Brazil and Russia into the world economy as well as people in other developing countries this is a solution that takes patient and focused development of technology which Honda is setting out to do. He does not see a safety issue in use of hydrogen vehicles as he is confident Honda can develop the expertise to handle the safety issue for hydrogen. What is his thinking on green vehicles? What happened to the Insight the first hybrid car that Honda introduced? The Insight was never intended to be a mass seller, only to establish Honda's record as having the best record in fuel efficiency. What is Honda doing in this area. Honda does see a problem in this area. Toyota he says developed a green image largely on the back of one car the Prius. Honda will come up in 2009 with a dedicated hybrid vehicle to match the Prius. And Honda is setting the bar high for this Honda hybrid, saying that his feeling that this model will have to overwhelm and overtake the Prius. He goes on to say that this is key for us. Honda he says will take on the challenge and compete with Toyota with its products, its technology, and its racing spirit. This gasoline-electric hybrid will be introduced early next year in the USA, Japan, and Europe, and it will be the first of 4 hybrid models Honda will introduce by 2015. Regarding price the company says it will be "affordable". Honda's goal is to sell 500,000 hybrid vehicles a year. Toyota aims to sell 1 million hybrid vehicles early in the next decade and is working on developing its own hydrogen fuel-cell vehicle. Is Honda developing electric cars? Takeo Fukui thinks the practical feasibility of the electric vehicle is very limited. The two biggest issues in his view being driving distance and recharging time. The FCX Clarity can be recharged in one minute, compared to the several hours for an electric vehicle. In his view the electric vehicles will be uselful only for restricted applications like golf carts. Nissan and General Motors are planning to launch electric vehicles. What is Honda's environmental strategy? Honda being a smaller company has to focus its resources wisely with strategic choices. His focus is on the hybrid as the core product, and after that comes fuel cell and clean diesel as the core products to tackle fuel eficiency and CO2 issues. Takeo has spent more than a decade on Honda's racing teams. He drives a CR-V and enjoys driving up and down the mountains, does not race but does get on Honda's test track once or twice a year. And what has he learned from all the years in racing. When he was fully engaged in the motorcycle racing teams he says the pressure was very high and if they did not do well they got bashed by managers and the media. And actually the results were disappointing for years and the teams kept losing. For hime the series of difficulties and challenges was something that he feels everyone should experience because in some ways he acquired wisdom and creativity to get through these experiences. This is some thing Honda and Fukui will need as they try to develop their own hybrid to take the lead from Toyota and come up with industry leading technology in tackling fuel efficiency and CO2 issues. His own approach to management? Two things he always keeps in mind are take time to keep up good communication with associates at work, and testing Honda's own products with his own hands. What does he think about the auto industry in 2008, is it a turning point? He says it has becom clear in 2008 that a company has to have the technology to deal with carborn dioxide and fuel efficiency issues. And its clear that smaller vehicles are more attractive than larger vehicles. And its possible he says that we may go back from automobiles to motorcycles. In fact in India Honda is promoting motorcycles in a big way, while Tata is developing the Nano for mass market, so Takeo is talking about something that Honda sees happening in some places. ...

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Charlie Hebdo weekly is part of a long tradition of satirical magazines that poke fun at leaders and organized religion including Catholicism and Islam. This dates back to the days of the French Revolution. The magazine received many threats from Islamists. In January 2015 attacks by 3 young terrorists killed 12 journalists, a policeman and a police woman.

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Research from Australian National University shows steadily improving conditions for migrant workers in China. Migrant workers were able to spend more time in cities- an average of 8.9 years. The hukou sysem ensures migrants return to rural areas when they have to raise a family. About 252 million migrant workers work in factories and construction jobs in urban areas. Migrants with children leave them with grandparents back home. Improving the conditions of these workers is important to reduce the wage and income disparities in China and to reduce inequality. About a fifth of the migrant population now has pension and health benefits. Creating a balanced economy with domestic consumer spending making a larger share of GDP also requires improving wages and benefits of migrant workers. Incoming prime minister Li Keqiang says in a statement on a government website: China "must take migrant rural workers and gradually change them into urban residents. This requires that we push forward household registration reform." If done seriously this will create a new kind of China as these migrant workers are integrated into urban society after years of being shunned and ignored by China's educated middle class. Professor Meng's research at Australian National University of migrant workers shows the proportion of migrant workers with unemployment insurance increased from 11% in 2008 to 21% in 2012. The research shows similiar figures for health and pensions. Improving their living standards also make it attractive for more young people from rural areas to migrate to cities increasing urbanization....

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The effects of loose monetary policy in China, and the high inflation, make another spurt in spending- like that after the global crisis in 2008- less likely in the event of another crisis.

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William Booth provides a must read insight into why poorly educated young people attempt to cross the border into the U.S. looking for work and opportunity, and why Mexico fails to provide the elementary and high school educational system it needs to increase growth to create opportunity. Mexico's education system is failing when compared with other countries in the Group of 20. Sixth graders get 562 hours of instructional learning compared to 1,195 in S. Korea, according to Mexicans First, a group working to change the way the educational system works. In recent international exams half of Mexican 15 year old students scores ranked them at lower levels in math and only a little better in reading and reasoning. "De Panzazo" is a popular documentary prepared by Mexicanos Primero on the dire situation in the school system. One of the most striking measures of this failure is that only a quarter of the children graduate from high school. This only pushes more poorly educated people to attempt to cross the border into the U.S. looking for work. It means the Mexican economy is deprived of a highly educated workforce to increase productivity and growth. The middle class tries to get their children educated in private academies. And the nation's employers use special training to improve skills for workers to be able to compete in a global economy. Part of the reason rests, say experts, on the ability of the powerful teachers union with 1.4 million members to block change for teacher selection based on merits and competency, and exams for teachers. Instead teacher positions are sold, with an elementary school position tenured for life selling for $20,000 in Cancun, and a rural village position for $2000, according to Mexicanos Primeros. Even president Calderon owed his election to the support of the teachers union. And the current PAN presidential candidate Vazquez Mota, who was Education Secretary for two and half years could only go part of the way. She got the union to agree to have new teachers selected by having them take exams, made public standardized test scores, and pushed state governors to show employment rolls and whether teachers actually taught in classrooms or worked at union offices. Calderon failed to make changes because he agreed with the union that the union would take the lead on changes not the education ministry, and had the union president's son-in-law, Fernando Gonzalez, as deputy secretary of education. Jorge Castenada, a former foreign minister, says Mota was fired because of union demands. In July 250,000 teachers are required to take competency exams, but the union has asked its members to ignore the exams, and the education ministry will not do much beyond using the exam for diagnostic purposes for teachers who take the exam. The problems at the elementary and high school levels are evident also in other countries such as India and Brazil leaving the real potential of the labor force untapped....

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Analysts fear an oil shock in 2012 similiar to that in 2008. There is similiarity in the situation now and in 2008- as in 2008, the surge in oil prices comes at a time of higher tensions with Iran and shrinking spare capacity. Spare capacity is at 2.5 million barrels a day on average for January and February 2012, according to the Energy Information Administration. This compares with 3.7 millon barrels a day for the same period in 2011. Part of the reason is that global oil demand is increasing in 2012 by 1 million barrels a day, to 89 million barrels a day. Technical and political problems have shutdown another 750,000 barrels a day. The problems begin to kick in during the second half of 2012. The U.S. ban on dealing with the Iranian central bank for oil trades starts in June 2012. According to the International Energy Agency, the EU embargo and U.S. sanctions will take 1 million barrels a day of Iranian crude out of the market. The result will be that demand exceeds supply by the third quarter by 1.1 million barrels a day, according to the U.S. Energy Information Administration. Use of existing reserves in Europe, the U.S. and other countries will make up the gap. The effect will be to put pressure on oil prices. May Brent crude on the ICE Futures Europe exchange was up to $125.81 a barrel, on March 16, 2012, and prices for April delivery were at $107.06 a barrel on the New York Mercantile Exchange....

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Bill Keller compares the situation in 1940 with that of today. He sees isolationist tendencies in the U.S. today similiar to that which prevailed in the U.S. in 1940 when Roosevelt faced the Nazi invasion of Europe.

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Troops who served in Konar province near the Pakistan border saw some of the heaviest fighting in Afghanistan. Here they give their account of what they saw and why there is a big gap in what they saw and what military officers and President Obama are telling Americans. Fort Campbell is spread out over 100,000 acres on the Kentucky-Tennessee border. Tweny thousand troops from this base served in Afghanistan. Brigades of the 101st Airborne Division from Fort Campbell fought some of the toughest battles in the eastern part of Afghanistan even while the surge concentrated troops in the southern part near populated centers. What the troops remember is battles fought in remote valleys where troops came out of nowhere like "ghosts," in areas which were held only for a few months and abandoned with no idea what they had accomplished. This description also fits with the reality of the Taliban being both Pakistani and Afghan in the sense that the borders were defined by the British during colonial times, but the tribes of the Pashtun region are on both sides, in Pakistan and Afghanistan. To subdue the region would be to subdue the Pakistani side and the support they enjoy in large parts of Pakistan, with the large and mountainous terrain making movement difficult. Which is why these troops talk about "ghosts" turning up from nowhere and find the fighting to have lost meaning in terms of purposes it is supposed to accomplish and how this is to be done. The reality of the valleys and hills over a vast mountainous terrain of Afghanistan and Pakistan and the people and fighting there does not fit the speeches made by President Obama on Afghanistan, and say soldiers this gap is widening every day....

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Zardari is asking for $100 billion when Pakistan has in its central bank enough foreign currency reserves for 2 months of imports of oil and food. He also wants to defeat the Taliban and militants and find those responsible for the death of Benazir Bhutto. This interview with Bret Stephens who gives an account of it and his own comments, ends with some remarks by Zardari about wanting to defeat the militant elements that killed Mrs Bhutto in a manner where "not letting them get away with it" referring to those responsible, is something he wishes to do before his own life ends. It suggests that this war is likely to take a new turn as the military in Pakistan takes on the militants and Taliban and as General Petraeus looks for a way to reverse Taliban gains in southern Afghanistan and other parts of the country.

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Bill Keller tells U.S. president Obama that if he is serious about looking at the right path in Egypt he should go back and read his own speech made in May 2011, at the beginning of the Arab Spring. He points out that the Eastern European countries under Soviet supported communist regimes did not evolve into democracies without help and guidance from the western world. It took years of work and is still in progress with the European Union leaders taking on the issues of authoritarian tendencies in Ukraine, Romania, and other countries. Early on the reason why European Union leaders, Germany, the UK, France, Spain and other nations were very sensitive to the issue of genocide in Bosnia and Kosovo, was that their idea of Europe after the horrors of the last major war were for a civilized Europe with no place for leaders like Milosevic. President Clinton joined the effort and the western world was firm in its resolve which continued till the transfer of Milosevic to the Hague Tribunal, and the negotiations for a different Serbia to enter the EU completed only recently, nearly 25 years after the fall of the Berlin Wall. These are long and difficult processes because of history, conflicts, poverty, prejudice, ignorance and demagoguery, but the EU, the U.S. and its partners withstood the test. The Arab world is different but the aspirations for freedom and economic progress are the same, and the U.S. should follow the same values and instincts in the way forward in the Middle East. The path chosen by the military in Egypt of firing on civilians and suppressing all dissenters is not sustainable, says Keller. ...