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This analysis in the South China Morning Post shows that some of the nuclear options China has in a trade war with the U.S. are not as effective as they appear. Selling off China's huge Treasury holdings would lead to a situation where there are no buyers on the other side. It says private sector bond buyers would run a mile, and the lack of buyers, actions by the U.S. government freezing these assets could render them effectively worthless. The bond yields would jump but only for a short period as the Federal Reserve would step in to buy bonds, and yields would stabilize with the actions of central banks of U.S., Europe and Japan. A dent in the dollar would only make Chinese goods more costly in the U.S. exactly what U.S. tariffs are trying to achieve. A 10% devaluation of the yuan would have the effect of creating expectation of further devaluation, and lead to capital outflows from China on a large scale. A small devaluation in 2015 led to a large outflow. This would lead to a significant loss in foreign exchange reserves for China.  In this way China's deterrent would be less effective than it appears. ...

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When Amory Houghton was CEO in 1964 of Corning Glass, the company made the glass used to encase TV tubes. The company lost this market to cheaper Japanese imports. It was the shift to tiny strands of glass that replaced copper wire as away to transmit voice and data, that saved Corning.  He had to cut employees by one thirds in the beginning but soon was back to a new business. As Houghton says it was back on his own turf, with its own patents and scientific expertise.   After running the company till 1983 he considered becoming a missionary in Zimbabwe in the Episcopal Church, but decided instead to run for Congress as Amo his nickname, for the southern part of New York state. The company that made lightbulbs for Thomas Edison in the 19th century, shifted first to glass to encase TV tubes, and then in another change turned to fibre optics in the 20th and early 21st century. A change made possible when company management looked different than it is today, with humbler people and CEO's closer to the rank and file than today. ...

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Taiwanese engineer, William Wang, who earlier ran a failed computer monitor company Princeton Graphics, started Vizio in 2003 in Irvine, California. He started Vizio as a low priced brand with a focus on high tech HD sets and a supply chain in Taiwan to make HD sets at lower prices. He negotiated agreements with Foxconn and AmTran Technology giving them equity stakes in Vizio. Costco provided shelf space for the early HD sets. Vizio still manages to make 4% in operating margins on $2 billon in revenue with an efficient supply chain. Wang's insight was that televisions would go the way of PC's where lower prices were the norm. Sony Electronics U.S. Division chief, Stan Glasgow, says it is harder to charge premium prices as technology and improving quality rapidly converge in the television industry, similiar to what is happening in PC's. The story of Vizio at the low end, and S. Korean manufacturer Samsung at the high end, is also the story of the decline of Japanese companies in the television business. In 2010 after seven years Vizio passed Sony to become the second largest television brand in the U.S., with sales of 6 million LCD TV's. This is up from 3.6 million in 2008, according to research firm iSuppli....

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The WSJ's Jon Ostrower's intervew with Ray Conner, head of the commercial airplanes division of Boeing. Conner says the era of moon shot type projects is over at Boeing. The Dreamliner project cost $50 billion and ran into repeated delays, with a supply system not ready for the complexity of the project, manufacturing issues, cost overruns, labor issues, and battery failure leading to emergency landing of a ANA Dreamliner in Jan. 2013 leading to grounding of many ANA and JAL aircraft. Boeing's CEO McInerney and Conner see the experience as a lesson for Boeing on the risks of such large projects when airlines are not willing to spend more for revolutionary improvements. Conner cites the example of the incremental improvements in the iPhone since its introduction, with the cost to the consumer not changing much with each new model, as one Boeing would like to follow. Manufacturing improvements are critical to the new model with design needing to include manufacturing process at the outset, reducing complexity, increasing simplicity and improving reliability, as critical goals. As part of this effort Boeing has hired Toyota managers to bring better manufacturing practices, and the focus is now on incremental change and improvement throughout the Boeing organization....

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Simon Denyer's interview with Vinod Rai, the Comptroller and Auditor General of India. Rai has persisted in uncovering corruption in India. He was appointed by prime minister Manmohan Singh from India's Finance ministry five years ago, and runs an organization with 63,000 employees with accountants in all Indian states. Reports by his agency have uncovered giving away of natural resources and telecom licenses worth billions of dollars. He describes the amounts involved as huge and attributes the increase in accountability of politicians and ministers to active citizens groups. The Indian media and Supreme Court have supported efforts to increase accountability. The CAG has constitutional protection. Rai sees the CAG's role as examining government spending to uncover irregularities and make it accountable to parliament. India is rare in this respect compared to China, Russia and other emerging market countries because of its vibrant media and democracy. A 2010 report uncovered corruption in giving away mobile phone network licenses and a 2012 report uncovered allocation of coal land without a competitive auction, with loss in government revenues estimated at $30 billion. The reports showed prime minister Singh aware of the irregularities but unable or unwilling to call for transparency and proper process. Rai's six year term expires in May 2013. ...

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The economic crisis in Turkey in 2022 wiped out half of the value of the lira. Inflation surged. The war in Ukraine hurt Turkey as it is dependent on Ukraine for grain supplies. The surge in fuel prices and the weaker currency meant higher inflation and more of its scarce foreign reserves going to imports of oil and gas. Net foreign reserves dropped to $6 billion in July, coming back up to $26 billion by December 2022.  President Erdogan maintained close relations with Russia to have access to  Russian oil and gas. Turkey has increased exports to Russia by 45% including clothing, household appliances and electronics. Russia is considering postponement of $20 billion owed for natural gas imports. And Russia transferred $5 billion to Turkey in July for a nuclear plant, with $10 billion expected later on. This helps cover the more than $100 billion the Turkish central bank used in 2022 to support the currency Lira. Erdogan's foreign policy has been to act as an intermediary in a UN negotiation for opening the Black Sea shipments of grain from Ukraine and fertilizer exports from Russia. This helps Arab countries in North Africa including Egypt which depend on Ukraine for vital grain supplies.  Everything Erdogan does says a former foreign minister is designed to push up his poll ratings which have risen about 5 percentage points from a low of about 39% in January of 2022 to about 44%. Inflation at 57% in Jan 2023 is still hurting ordinary people in Turkey and the outcome of the May 2023 election after 20 years of Erdogan in power is uncertain.  ...

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The meeting planned between Xi and Biden is important for stable US China relations after the Trump administration angry rhetoric, the Covid pandemic, and when imbalances in the poorly managed trade relationship with the entire supply chain shifted to China with millions of its American jobs has shaken working class communities in the US. China's and Xi's views on Hong Kong and Taiwan have also affected the relations. After the Ukraine war this will be the first meeting between the two leaders, and follows a visit by German chancellor Scholz to Beijing. Under Bush America appeared to be distracted by middle east wars, under Obama and Trump America appeared weak or angry but not resolute. Under Biden America appears resolute and sure of itself. This makes a difference for US China relations. Following the Ukraine war both the US and Germany, and China, appear to have grasped the dangers of nuclear threats such as were made in recent weeks. India has also shown its serious concerns about wars for territorial gains, and the world community of nations has expressed this through the words and actions of UN Secretary General Antonio Guterres speaking for Europe, and the rest of the world.  Under Biden America seeks decent Competition with China and not conflict, and this is in the interest of both countries and of all the countries in the world. Neither China or America represent the largest share of the world's peoples, and in a world of advanced technologies other regions such as India, Europe, South East Asia and Japan, have just as great a determination and influence to seek a mutually beneficial peaceful coexistence in the interests of all the peoples of the world including the continents of Africa and Latin America. ...

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Dropping wheat and corn prices will reduce the effect on increase in inflation for food prices. A recently signed agreement for UN and Turkey to supervise exports of Ukrainian grain to world markets is showing up in declining futures prices for corn and wheat that will show up in lower food prices. A large harvest for wheat and other foodgrains in Russia and Ukraine is also having an impact. Slower economic growth in China from frequent lockdowns and the ailing property sector, could bring oil prices down from the highs. The shift to renewable energy taking on a huge impetus from recently passed legislation in the US Congress for $369 billion investment and similar moves in Europe with a 15% required reduction under new EU rules could have the same effect of pushing down fossil fuel prices from their highs. This suggests Fed chairman Powell's sense that the economy would improve in the second half is consistent with international developments. The war in Ukraine could also have a possibility of coming to a close in coming months with Russian gains in the east and Ukraine recovering lost land around the Black Sea in the south. Decades of fighting in Ukraine may have obscured the fact that the eastern parts of Ukraine voted in pro Russian governments in the past and the western parts of Ukraine have voted in pro EU governments. The war could end with a settlement around these new boundaries. This would also enhance president Biden's foreign and domestic policy achievements and help the US focus on climate change actions, building new supply chains, rebuilding its manufacturing, its leadership in science and technology, its alliances with EU, and with Japan and India in the Indo-Pacific. ...

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Addressing the UN General Assembly in a virtual setting Mr. Trump tells delegates that China should be held accountable for certain actions in letting the coronavirus pandemic spread. He included the denial by China of human to human transmission very early before Feb-March, and its allowing Chinese flights to go overseas when it had completely banned flights domestically. He said flights were allowed to leave China after the virus spread from Wuhan even after Mr. Trump banned flights from China to the U.S. This spread the virus from China to Europe and to America.  Mr. Trump says the WHO is controlled by China. And this happened after foundations such as the Bill and Melinda Gates foundation and other foundations partly replaced the strong role played by the U.S. government at the world health agency during the post war period maintaining strong U.S. and European oversight in the earlier period. The lack of cooperation by China to let American experts into Wuhan immediately in January played a role in delaying the U.S. getting a first hand look at the coronavirus at the epicentre. Instead a 2-3 week delay left the U.S. Europe and India unprepared for the speed and havoc caused.  The only way to tackle the coronavirus was with speed and that speedy response was doubly needed because Europe and the U.S. had no recent experience with epidemics. Even India and rest of Asia, Latin America, Africa have no experience with this type of transmission and spread making time absolutely critical.  This speed was affected because China and the WHO acted as stumbling blocks in this view of what happened. The result was that in past pandemics were fought together, this pandemic was fought on a country by country basis, a bad precedent. ...

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The Guardian sends its reporters along with UN special envoy on poverty Australian Prof. Alston as he spends two weeks in the world's richest country looking at poverty in urban areas.  They look at some of the 55,000 homeless people in Los Angeles, homelessness exacerbated by the tech boom in California that has sent housing costs skyrocketing. LA saw homeless people increase by 25% in 2017. The safety net is not being reinforced as the Trump administration cuts many social safety net programs. Next they visit the Tenderloin district in San Francisco where homeless people can be found at St Boniface Church sleeping in the pews. As the Guardian points out the cuts to social programs disproportionately hurt people of color who make up 39% of the homeless in the U.S. This report looks at the incongruity between the tax cuts that are likely to hurt poor whites who supported the Trump administration, as well as hurt the social protections that are part of today's democracies across the western world. This is most evident when one looks at the European Union. They were put in there in Europe for a reason- fairness is good for all classes, and most of all it protects democracies. Authoritarian regimes arise out of social dislocation from wars, or from lack of social protections and ineptitude of elites. Which is why a Lincoln or a Theodore Roosevelt from the Republican party supported fairness and social protections as much as FDR and Truman from the Democratic Party. The view expressed in this report in the Guardian is that the U.S. may have moved in the wrong direction under the Reagan and Clinton administrations creating the "me first" culture that prevails in the U.S. today. ...

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People of America reflect on what has the most promise for our future?  Critics have focused so much on delivery on one night to forget what was actually said. The president's message to Congress and the American People of last week is all there for everyone to read. It states what was said in the State of the Union in January 2024 on the floor of Congress with vigor not seen since the days of FDR in 1932. Critics could read the actual text of what Biden said in the debate, and they did nothing of that acting in ways that only the uneducated would do and manipulating information about the president's health in dishonorable ways. Polling is an uncertain business and may be all wrong depending onthe sample and what questions are asked. This was proven true in last week's results of the French election. Where are the people relying on polls who predicted RN National Rally on top when it ended up in third place. The pundits have not reflected on the meaning of the French election and the British election where parties that made cost of living action, fighting for working families, and infrastructure investment coming out on top. Who is going to fight for and take climate change action and going delinquent on climate change is that an answer the American people will make? Who has done the most for climate change action, health care and education? How does the US compete with China without investing at home a fight which president has fought with economic theory from the Reagan/Friedman era that let American industry wither while China took the lead in industry after industry?  ...

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Nagourney and Dougherty of the NYT give this report on the housing crisis in California by 2017 with the median cost of a home skyrocketing to twice the figure for the U.S. This price is now $500,000. The result is longer commutes even for people with incomes over $150,000 a year, stretching to as much as 2 hours one way. It means people lacking housing stay in vans with improvised kitchens and other sleeping arrangements. Not enough homes are being built because of strict zoning and planning regulations that are kept in place by neighborhood groups, effectively excluding outsiders. Now its not just the coastal areas that are affected but the whole state. Governor Brown of California tried to pass a measure in 2016 that would push communities to build more affordable housing, and ran into opposition from local officials and environmentalists. Now the opinion in the state is changing with younger people denied a chance at decent housing at the forefront and some elected officials such as the Mayor of Los Angeles, Mr. Eric Garcetti. A new bill in the state legislature would make it harder for cities that are falling behind in building housing to lose the right for City Council to hold back on approval of new construction, effectively bypassing it. California's law capping property taxes after Proposition 13 was passed in 1978 has also held back construction. Other factors are the building of new offices for  companies in the tech boom around San Francisco without a corresponding effort to build new homes for these new office workers. California was slow to respond to housing needs for young people, with only 311,000 housing units built since 2006. ...

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Jack Healy, who the NYT says writes about the rapidly changing politics and climate of the American southwest, provides this report from the border town of Nogales, Arizona, on the border with Mexico. In this desolate isolated border region America's future is being decided- Biden being the only Democrat since Harry Truman in 1948 to take Arizona and by just 10,000 votes. There near Nogales the border wall Trump built ends abruptly at the Kelly ranch in a picture shown in this report. Rural Santa Cruz County is except for migrants a solitary and quiet place along the border. Mr. Kelly moved here in 2002 and runs more of a hobby ranch unlike the bigger cattle ranches in the area. Migrants make their way through this part of the border and the Kelly ranch. In the most recent episode a migrant is shot and Mr. Kelly reports the shooting to police. Healy looks at the lives of the rancher and the migrant to give a snapshot picture of what life is really like on the border. And the different sides of the story seen from the rancher's and migrant's situation.  A border area where in a vast dry mesquite region ranchers on the Arizona side live alongside Mexico with people facing high unemployment where people are looking for work and choose to take the risks of crossing the border illegally. Crossings that are made at points on the border wall that end in canyons and riverbeds where migrants and their smugglers make their way. It affects the lives of the ranchers and the migrants in many ways. Ranchers who are in isolated areas- the Kelley ranch is 170 acres- feel isolated and vulnerable as they see a threat in the network of smugglers sending migrants across the border. This is also where the future of America is being decided. After the overconcentration of manufacturing in China, there is the border with Mexico, two regions that have little to do with each other but determine politics and emotions in the US about workers, about migrants and about borders. By understanding both sides of the story president Biden became the first president since Harry Truman to win Arizona in the presidential election of 2021. He won it by just 10,000 votes with a recount showing about 360 more votes. Without Arizona and Georgia both won by Harry Truman in 1948 Biden could not have begun the process of tackling the major issues facing America in 2021. Keeping uppermost workers and families, keeping uppermost the people of America as Truman had done in 1948.     ...

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People in Japan are living longer healthier lives. So much so that people are working well into their 70's. In Nagano, Japan, people say that those in their 40's and 50's are like a child with a runny nose, and people in their 60's and 70's are in the prime of their careers. In this WSJ report, 38 years old Norohiro Aizawa is a part time farmer, who says he plans to work into his 70's like many farmers in Japan. Today his father in his early 70's is active and in charge. Sachiko Kobayashi runs a crafts business, has a job making box lunches, and a garden full of pumpkins and radishes. She is 65 and gets up at 3 am. In Nagano she is called by the term pre-elderly, not elderly. For elderly she has a long way to go. Japan has 29% of the population in under over 65 years group, Europe 21% and US 17%. Yet something else is happening. People are just taking better care of themselves and their health, and living, working longer. A 70 year old today in Nagano is in health status like a 60 year old one or two generations ago. Perceptions of what is elderly have changed.    Japan's White Paper on the Elderly in 2021 shows studies suggesting that many in the 65-74 year group do not share traits associated with the term elderly.  Only 6% require care by others. Half of 65-69 year olds hold jobs, and a third of those in their early 70's also hold jobs. Life expectancy in Japan stretches into the late 80's for women, and early 80's for men. This is almost 5-8 years more than countries like the UK with a strong national health service. In April 2021 a revised Employment Law took effect, telling big employers to offer work to workers until age 70, up from previously government sanctioned retirement age of 65 years. Government says it is meant to protect the right of people to work longer. There is even a term called late-elderly.  Oshima 82 of Nagano, leads a volunteer group that shoots video of community festivals and works late into the night, and is cited in this WSJ story as saying that even if people called him late elderly, his response is oh yeah? I don't care. It is all about living a full life, terms don't matter at all when one stays healthy.   ...

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Microsoft's Satya Nadella got his start at age 24 at Bing search engine. He is now 56 years. During this period he worked with both Bill Gates and Steve Ballmer who succeeded Gates at Microsoft. He is now remaking the Bing Search engine by using AI. This has happened since 2018 when he met Altman at the Sun Valley Tech conference in Idaho. He invested $1 billion in Altman's OpenAI, and has recently brought in Suleyman of Inflection who is a competitor of  Altman's OpenAI into Microsoft with the idea of setting up an internal AI business as well. To do this he has invested $10 billion in advanced AI chips that he has bought from chipmakers which have reduced the capital available for Microsoft's other businesses. This WSJ report by Dotan and Jin says Altman started his venture because he did not want to let AI to be led by Google silently developing its own version and doing leapfrog over competitors. A At this point in 2024 Google, Facebook and Amazon are building their own AI talent and making large investments in the chips that support AI. It is rapidly becoming an oligopoly of a few tech companies that makes deals among themselves for strategic advantage and protect themselves from public or government regulatory scrutiny. The controversy surrounding the firing and rehiring of Altman at OpenAI has brought new scrutiny from the FTC. The monopolistic behaviour of tech companies and their splitting the tech market among themselves as Google and Apple have done show the need for government action to prevent a repeat of this in AI. And to take action to break up existing monopolies in Search engines and in the Internet as Theodore Roosevelt did at the turn of the century for the oil business, breaking up Rockefeller's Standard Oil and Esso. Only when that happens can the true potential of the Internet be realized for Education, Health and other fields. Who can say that the iPad or iPhone or Google's Search engine has increased global literacy or American literacy? By freeing up these technologies- that belong to the people of America and the world- for education, health and other fields of human development mankind can advance once again. By regulating provide the ground rules for good use instead of the current danger of the Internet acting in ways to reduce public knowledge to levels that cannot sustain democratic process, and create stratified society where each group only sees what it has seen before and does not explore the world or knowledge in all its variety, all its ability to surprise us with new discoveries. ...

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Ron Bloom is an investment banker who went to work for the Steelworkers Union, and helped to restructure the steel industry, at the same time he has helped ensure that workers were fairly represented and had the expertise to match the steel companies in negotiations.

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Juan Montes of the WSJ describes the problems facing states in Mexico as the governors have accumulated power, debt has risen rapidly, and accountability of state officials is at a new low. Half of the states with elections in 2016 have doubled their debt in 6 years, according to government data. The federal audit office points to irregularities in $13 billion of federal funds transferred to states. Elections in states in 2016 shows public discontent with poor governance, corruption, and the lack of rule of law. This is leading to a close election in Veracruz with the PAN and PRD parties challenging the PRI in the state.

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Sharply lower consumer spending is hurting Apple sales in China. Apple cut sales and issued a sales warning in January 2019. This follows Apple's sharp slowdown in India with its uncompetitive pricing.

Retail sales growth in China- which bounced back in previous downturns- dropped to the lowest level in 15 years in November 2018. Auto sales are down with the sharpest drop in 7 years- the first annual drop in sales since 1990. Fears of a housing bubble have led to restrictions on home purchases for speculation which have not been lifted. Income tax reduction has not increased spending. GDP growth for the fourth quarter dropped to 6.4%.

Further signs of a sharp pullback are seen in the drop in consumption tax revenue falling by 61% in October and 71% in November 2018. The consumption tax is placed on cars, gasoline and luxury goods, and is paid by the companies making the products.

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The Tunisian revollution was middle class, un-Islamic and pro-western. The people in the streets of Cairo are young, connected, non-ideological and pragmatic. They are looking for an end to despotic regimes. This is the way Cohen describes the demonstrators after his visit to Tunis. Egypt's opposition leader El-Baradei tells Cohen's colleagues Kirkpatrick and Slackman that he is pretty sure that an elected government in Egypt woulld be a moderate one. The policies of a community activist from the south side of Chicago, who as US President fails to take a clear stand in favor of freedom from repression and economic freedom for people in the Arab world.

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Richard Barrett, former head of overseas counter terrorism operations of Britain and now head of the UN AlQuaeda and Taliban monitoring group, in aspeech to the Washington Institute of Near East Policy, says Al Quaeda is a diminishing threat because a new generation of Muslims who have little recollection of the events and are less interested in religion. And CIA officials say they are having greater success penetrating Al Quaeda, because of vastly improved intelligence capabilities. In terms of intelligence and capabilities, the technical colllection, intercepts are much better, and overhead surveillance is much better. The human intelligence is much better and they have fewer competent people.

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Trump wins 32% of the vote in the South Carolina primary, to 22% for Cruz, 22% for Rubio, with Bush, Kasich and Carson winning over 7% each. Jeb Bush ended his campaign after the disastrous result in South Carolina. Trump showed support among independents and evangelical Christians. Undecided voters at the last minute voted for Rubio and Cruz.

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It may come as a surprise to know that there are as many new Saudi Arabian students in the U.S. as there are from Japan. Saudi Arabia sent 22,704 students to the U.S. in 2010-2011, according to the Institute of International Education. A big factor is the King's scholarship program which draws from all segments of the Saudi society. This is likely to have an impact on the modernization of Saudi Arabia.

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The impact of labor laws that were once designed to offer job protection to workers are now having a pervasive and pernicious effect on Italy's economy. The world has changed too with globalization, making the inefficiencies of labor laws that freeze the labor markets- protecting existing jobs and at the same time making it difficult to create new ones, diminishing job mobility to an extreme level- lead to lack of competitiveness and economic stagnation. Most Italian businesses remain small because of the fear of hiring new employees who cannot be laidoff as in other countries. With manufacturing competitiveness growing in emerging markets, Italy is losing markets and job growth potential to places in Poland and China. Foreign direct investment as a percentage of GDP is the lowest of any country in Europe except Greece, according to the United Nations Conference on Trade and Development. The system also lacks fairness because it divides the labor market into three tiers. According to Italy's National Institute for Statistics, the labor force of 27 million people is divided into three groups. The first group of 15 million, of older workers, has stable jobs with generous benefits. A younger group of 8 million works in a freelance capacity with rolled over short term contracts, and few benefits. An additional 4 million work in the underground economy. Because of the way the system is structured there is considerable resistance to change, especially from the older workers who work in a stable system, even though the system offers younger workers in the second tier few opportunities. What started in 1947 with a constitution that protected the rights of labor at a time of difficult industrial relations in Europe and the U.S., with the added fear of change during today's period of economic crisis, is now holding back economic renewal in Italy....