LyrArc Article Gist
Higgins cites the IMF and other experts on Greece's debt being unsustainable. He includes a long discussion with Charles Dallara who negotiated in the Brady Plan restructurings for Latin American debt, and for the European banks in 2010-2012 with the EU. Dallara says the issue has become politicized with national parliaments involved making it difficult to tackle the issue of debt reduction. Dallara points out that the Brady plan restructurings were possible because national parliaments were not involved.

LyrArc Article Gist
Washington Post reporter, Alyssa Rosenberg's intervew with Ken Burns of the documentary "The Civil War." Burns offers his own view of race relations in 2015, 150 years after the emancipation.

LyrArc Article Gist
Larsen says the EFSF should get the funding it needs to recapitalize troubled European banks, as the first step to solving the eurozone financial crisis. Banks in Spain and Italy that failed stress tests would get funds to build up their capital. Creditor haircuts should be part of the effort to reduce the debt burden of troubled eurozone countries.

LyrArc Article Gist
For senior executives of financial firms investing in August 2011- following weeks of extreme volatility in the U.S. stock market- is all about capital preservation. Executives interviewed here have moved all their money to high grade bonds and cash. This is happening even as the advisors of financial firms are telling the public to stay in the stock market for the long term, and even as many middle class investors have seen their savings shrink from the crash of 2008. It is the crash of 2008 that has made the executives interviewed here turn highly cautious.

LyrArc Article Gist
The situation in Guangdong province in 2012, with older factories unable to compete with the rising wages, stricter environmental enforcement, and lower export demand. Many Taiwanese manufacturers are closing factories. The growth in Dongguan, a manufacturing hub in Guangdong, is estimated at 3.5% for the first three quarters of 2012, half the overall rate for Guangdong province. A researcher in a Chinese think tank says China's manufacturers are in a kind of "sandwich trap" with competition from Vietnam and India in lower wage production and competition from Germany and the U.S. in higher wage technology intensive products. This is especially true in 2012-2013, now that U.S. and German manufacturers have reduced costs and increased competitiveness.

LyrArc Article Gist
Greece's economy is expected to shrink by 6% in 2012 by many private sector economists in Greece. This means Greece will have a deficit closer to 10% of GDP. Antonio Samaras, leader of the New Democracy Party, is expected to win the elections in Greece to be held by spring 2012. Opinion polls show his party getting 24% of the vote, and Papandreou's Socialists getting 15%, showing how little support any party can gather in Greece. Samaras told the Journal in an interview- the contagion is spreading rapidly, and what he fears is political and social contagion from high unemployment and austerity measures. Samaras says his government would continue with the spending cuts, but also reduce the tax burden on Greek households and businesses, which he views as having worsened the recession in Greece.

LyrArc Article Gist
About 400 million or one in 4 people people smoke in China. State ownership of the tobacco industry only makes this worse. Enforcement of bans on smoking is lax. Experts warn that this would become a major healthcare problem in China.

LyrArc Article Gist
The median household headed by a person 60-62 years of age with a 401(k) account has less than one fourth of what is needed to maintain a standard of living at retirement, according to data from the Federal Reserve and analyzed by the Center for Retirement Research at Boston College for the Wall Street Journal. Including Social Security and any pensions or other savings, the savings are way short of what is needed for retirement. Households used in this data had a median income of $87,700 in 2009. The 85% needed for a decent standard of living upon retirement is $74,545. Social Security would provide an estimated 40% of pre-retiremment income, or $35,080 for that median family, leaving $39,465 that has to come from other sources. The median 401(k) account has $149,400 which would only provide a fixed income each year of $9,073- only one fourth of the $39,465 needed. To generate that $39,465, households have to have $636,673, and only 8% of American households approaching retirement have that amount. Half of the families have other pension income of $26,500 a year, which added to $9,073 in 401(k) income gets the total income up to $35,573. Other studies using different data by the Employee Benefit Research Institute show results that are largely similiar. The Employee Benefit Research Institute, is supported by 401(k) providers. Its estimate of the median person is based on individuals in the 60's who have worked at the same company for more than 30 years. This data shows an estimated median person having about $158,754, not much different from the Fed data. Why is the amount in most Americans 401(k) savings so low? There was a mistaken sense that a 6% annual contribution, with a 3% company match would be enough. Vanguard Group says the current median amount that people contribute is 9%, counting the employer contribution. Now Vanguard is advising people to contribute more, 12 to 15%, including the employer contribution. Other problems for the low savings is that saving started late, or contributions were suspended after a job loss, or medical emergencies, other debt. The stock market collapses of 2000-2002 and 2007-2009, added to the problems, by wiping out a portion of the savings. The low rate of interest on savings for most of the last decade hurt even conservative investors and lowers the kind of retirement account income used by seniors. The way people are coping with this is to work longer, in some cases into the 70's, cutting down on spending for food, travel, and taking greater risks for higher returns, risks that could make the situation worse....

LyrArc Article Gist
Prof. Scott Kennedy of the Research center for Chinese Politics and Business, voices concerns of experts who think that the $585 billion stimulus and the doubling of lending this year, increase in exports by a third last month, all point to an economy that is expanding too quickly. Kennedy says that no one defies economic laws, that eventually endless growth can get get you in trouble. The concern is whether the overexpansion of credit and the size of the stimulus may have led to overreaction in stimulus spending. People's Daily newspaper of China said that China's leaders are moving much faster than leaders of developed nations. But the flip side of this is that in the rush to increase spending there may be a lot of wasteful spending resulting in many bad loans a few years from now.

LyrArc Article Gist
Chinese government data show that inflation was 3.1% in May 2010. The spread of wage increases in manufacturing after a series of strikes at Hon Hai and Honda Motor suggest that price pressures will grow even further. Analysts warn that China's central bank will have to raise interest rates to control the boom in the economy and property markets; that merely reining in credit will not work. They also suggest the need for swifter action in revaluing the yuan. As wage increases spread throughout manufacturing, this will eventually be reflected in higher prices of end products.

LyrArc Article Gist
The American Treasury Secretary who handled the 2008 financial crisis, Henry Paulson, gives the new US financial reform legislation an incomplete grade. His main concern is that the too-big-to fail risk in the US banking system continues, and without clear rules a lot depends on the regulators. He does not see higher capital requirements doing much to ease that problem, and sees another crisis in a few years as inevitable. Former SEC chief, Harvey Pitt, gives it an F for failure or an I for Incomplete. He sees it as a boon for lawyers, because it is not clearly written and leaves so many loopholes, to a degree that is simply astounding. He says it does nothing in the way of preventing another crisis. Does nothing for transparency, nothing for monitoring and action by regulators, all factors that led to the crisis of 2008. Nouriel Roubini gives it a C+, because it does little to fix the reasons why securitization failed and caused the crisis, and in this way will keep credit creation and expansion in a weak state. He sees this financial reform bill as a failed effort that is laying the ground for the next crisis, with little action in the "too-big-to-fail" area, a huge dilution of what former Fed Chairman paul Volcker had advocated in the Volcker rule, and no real impact on the risky trading of derivatives. Bill Gross of PIMCO gives his frank assessment in no uncertain terms. A D+ for this bill. It shows how lobbyists for the banks still control Congress he says. It would have been better to let Paul Volcker take charge completely, than to have the lobbyists dilute the critical reform proposals. Simon Johnson gives it the lowest passing grade at MIT, a B. The only large change he says, is the Kanjorski Amendment, which give federal regulators the authority to breakup the large banks. But he cautions that it may require another crisis for the regulators and Congress to "get it," and do what they should be doing....

LyrArc Article Gist
Changes to China's five year plan to include critical social goals, reduce income inequality, and provide a social safety net. The influence of local governments in distorting central government policy.

LyrArc Article Gist
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....

LyrArc Article Gist
This Reagon Memo from 1980 was written by his advisors George Shultz, Milton Friedman, Paul McCracken and others before his first inauguration in 1980. It provides the new president with prudent advice on policy and methods to deal with soaring inflation and a stagnant economy. Its relevance today lies in the emphasis on charting out a long term plan for growth by encouraging private investment in the economy and providing a sure framework for the private sector to generate expansion.

LyrArc Article Gist
Over 50% of respondents in a Pew Research center survey conducted in December 2014 view with disapproval president Obama's handling of race relations, only 40% approve. This includes a steep drop among African-Americans of 16 points since the previous polling in summer 2014. Obama's statement that change is "hard and incremental" comes up short for many Americans who look for leadership in race relations. A cautious presidency fails to speak up for ideals it espoused, for human rights overseas and building a better future for minorities at home, losing precious opportunities at every turn.

LyrArc Article Gist
Inflation in the eurozone is running at 0.7%, well below the target of 2%. In a opening speech for a 2 day conference organized by the ECB in May 2014, ECB president Draghi said the increase in the value of the euro since 2011 has made commodities like oil cost less in euros, contributing to lower inflation. A key concern referred to in Draghi's speech is the data from Spain and Portugal about the difficulty for business to get loans in Spain and Portugal. About 25% of Spanish businesses and 33% of Portgual's businesses have difficulty getting loans. Even profitable companies have difficulty getting loans. One way the ECB could tackle this is to make cheap loans available to eurozone banks conditional on the money being lent to businesses and not invested in government bonds, as has happened during prior ECB efforts to capitalize banks.