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Moody's Investor's Service downgrades China's credit rating to A1 from Aa3. Moody's predicts a slowdown in growth for China. GDP growth for 1st quarter 2017 was 6.9%. Total debt has grown from 149% of gross domestic product in 2008, to 213% in 2013, and is now 253%, according to JP Morgan. The problem is that ever higher levels of credit have supported growth and more of this is coming from the shadow banking sector. Higher levels of debt in future years from the already high levels will weigh heavily on growth, leading to an eventual slowdown in the economy's growth rate.

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Estimates of the exposure of European banks to Greece's sovereign debt shows BNP Paribas has 5.01 billion euros in exposure to Greek debt, Societe Generale 4.23 billion euros, Deutsche Bank 3.02 billion euros, and HSBC 1.94 billion euros, Credit Agricole 0.85 billion euros, Unicredit 0.80 billion euros, Santander 0.51 billion euros. The exposure of French, German, Italian and Spanish banks in Greece is a critical difficulty in resolving the crisis, as the banks are still in a fragile condition after the global financial crisis of 2008. With the debate on resolution of the crisis focusing on how a three way distribution of the burden should take place between austerity cuts, bondholder and creditors, and taxpayers in Germany and other EU countries, negotiations are finally taking place between each European government and the banks of that country. Three countries where such talks are taking place are Germany, France and the Netherlands. Finance ministry officials in Germany and France met with representatives of the banks and insurers in their country to arrange for the banks to voluntarily take losses on their holdings. The respective holdings of Greece's government debt according to the Bank for International Settlements are: French banks $14 billion, German banks $22.65 billion. Overall exposure to Greece is higher for French banks- at $56.7 billion for French banks and $33.97 billion for German banks. This opens the door to a Brady Plan type solution for the financial crisis in EU countries Greece, Ireland, Portugal and Spain....

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For the first time the U.S. focuses on the huge trade deficit with China in a serious way. The trade negotiating team led by Robert Lighthizer has set forth its negotiating terms.  1. China must reduce its trade deficit with the U.S. by $100 billion in the first 12 months. In the next 12 months it must reduce its deficit by another $100 billion. In 2 years the trade deficit the U.S. has with China must come down by $200 billion. The issue is no longer just the tariffs on steel, it is about the core issue of balance in  trade. 2. The U.S. says subsidies to state industries in the "Made in China 2025" program must stop. Here the focus is on gaining an unfair technological advantage with a combination of U.S. technology imports and subsidies to state advanced manufacturing industries to erode over time the U.S. technological lead.  3.  China is expected to cut its tariffs by about two thirds on imported products so that the tariffs match that of the U.S. This is the first serious negotiation the U.S. has conducted with China on the core issue of the trade surplus which is growing with a stronger dollar not declining. The surplus approaches $1 billion each day for about $365 billion a year, unsustainable from any perspective. The vital issue of the erosion of the U.S. technological advantage under the Made in China 2025 has turned this issue into one in which the U.S. is unlikely to back down. Especially now that Mr. Lighthizer is leading the  negotiations and has the confidence of the president of the U.S. Lighthizer is a veteran of negotiations from an earlier period -under the Reagan administration in a similar situation with another national competitor- then it was the Japanese. A relentless negotiator as the U.S. seeks to reverse a trade imbalance of stupendous proportions neglected by previous administrations.           ...

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How quickly things can change - Italy is now growing faster than Germany or France. The construction industry is booming with energy efficient home renovation. The superbonus 110 is a payment by the Italian government for energy efficient housing improvements. The government pays 65% of the cost to homeowners making better energy efficient renovations plus 10%. As introduced by the Five Star movement government it was 100% plus additional 10%. Giorgia Meloni's government lowered it to 65% from 75% in 2023. This has boosted the construction industry in Italy and revived Italy's growth where it is growing faster than France and Germany. Germany is seeing about 0.3% growth compared to 0.7% predicted by OECD for Italy in 2024. Giorgia Meloni the new Italian prime minister, after Mario Draghi a central banking official, has continued Draghi's policies and provided a measure of stability and leadership to the government.  Much of the capital comes from the $216 billion or $200 billion euros that will be given to Italy from the COVID Recovery Fund. Italy is the largest recipient. ...

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Timothy Geithner as New York Fed Chairman was a key person in the rescue of Bear Stearns. In an interview with the WSJ he recounts events and defends his actions on March 14 in a conference call at 5am in the morning with Ben Bernanke, Kohn, and other regulators and staffers and Treasury Secretary Paulson. By 7 am a decision was made choosing from 2 options not to do it, let Bear Stearns fail, and Fed would make an infusion of liquidity into the banking system to reduce the impact, or make a loan to to give time for Bear Stearns to make a merger. Mr Bernanke did the head count and all top officials agreed to the loan option. At 7.30 the morning of March 14 about $80 billion in short term loans would come due. If Bear Stearns went into bankruptcy protection lenders would get back collateral instead of cash and might sell the collateral en masse and pull back trillions of dollars of similiar loans to other investment banks. Also Bear Stearns had trading positions with 5000 other firms so the ripples would extend throughout the banking system. At issue in a Bear Stearns collapse with no Fed loan- a full blown run on Bear Stearns had begun on March 13 with customers and lenders pulling out billions of dollars. The man- Geithner does not have a PhD in economics and has never been a banker or trader, the background of previous chairmen of the New York Fed. He joined Treasury Department in 1988 and was an assistant to first Treasury Secretary Rubin and then his successor Sommers. Geithner was active in the rescue of Mexico, Indonesia and Korea in the Asian and Latin American banking crises. He was appointed to his position at the New York Fed in 2003, so he has 15 years of experience dealing with international banking crises. The criticism- has come from a colleague at the Fed Vincent Reinhart on the oped pages of the Washington Post, and from former Fed chairman Paul Volcker in a speech to the New York Economic Club. Geithner has asked to speak at the same club to give his account and his defense of his action. Note that Bernanke and Paulson and Kohn were in on this decision and voted in favor of it and there appears to be a consensus that all in the conference call supported it. Geithner kind of put it all together and so he is defending it. Geithner's contribution- Geithner pulled in the other players in the financial markets into close communication with the Fed. He assembled an informal advisory group including Rubin, Summers, Greenspan, Volcker, former New York Fed Chairman Corrigan and investment banker Pete Peterson. He would also phone them individually asking : what should we think about an issue? What are the best 3 arguments for or against? What do smart people think? He also initiated a series of dinners at the NY Fed's executive dining room in which 5 or 6 senior executives from a major investment firm would meet his own top people. He also calls CEO's of important banks and investment firms every week in a crisis situation to ask- Whats changed? Whats better? Whats worse? What worries you? And after the credit crisis in August ,Geithner joined Bernanke in a small group that included Fed vice chairman Donald Kohn and Kevin Warsh, a Fed governor, investment banker and White House aide. ...

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Ford's plans for expansion at its manufacturing location in Chongqing, China, in 2012, will make this its largest manufacturing base outside of Michigan. An investment of $600 million for plant expansion will increase production capacity in Chongqing to 770,000 in 2014, from 350,000 today. The project has received government approval. Ford plans to introduce 15 new models in China by 2015, including a redesigned Ford Focus, which the Chongqing plant began producing in 2012. Ford plans to double the number of dealers by 2015 from 400 today. Ford sold 519,000 vehicles in China for 2011, a 7% growth from 2010. The market saw astounding growth of 46% and 32% in 2009 and 2010, but is rapidly decelerating with only 2% growth in 2012. Total sales in China were 18 million vehicles in 2011, making it the largest automobile market in the world.

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The latest Covid 19 vaccine introduced in September 2023 has a very low uptake in the US, at about 18%. The JN.1 Covid variant is for which this vaccine is effective is now making up about 50% of the cases of Covid in the US. It was at 7% in November. It is very transmissable and masks are now advised.The Covid related hospitalizations are up 10% to 26,000 in the fourth week of December. Symptoms of this variant are cough, fever, body aches, and fatigue that last for 3-4 days, says this NYT report.

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Carney breaks down Fannie Mae's 2013 earnings figures of $84 billion to show that this is due to unusual factors- such as low interest rates that it gets to access capital from the government, and the reversal of a write-down of deferred-tax assets. $45.4 billon is from the reversal of a writedown of deferred tax assets, $14.6 billion to gains not easily repeated, and about $12 billion because Fannie was able to borrow at 2.06%. (Mortgage securities generated interest income of $22.12 billion. The mortgage guarantee business generated about $12.3 billion which is a result of the 2012 change to the bailout agreement terms) He sees Fannie's core earnings that it could keep generating at about $12 billion. The additional reserve capital requirement that it would face as a systemically important or "too big to fail" financial institution at about $100 billion, making it about 8 years for it reach the reserve capital requirement. The situation at Fannie Mae is not as rosy as the 2013 earnings figures suggest. ...

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As the push for biodiversity increases the idea of passive rewilding or letting nature and its chaotic way take its course is getting increased acceptance. It allows natural processes to restore themselves and do the work. A certain amount of chaos is accepted as forests reclaim territory, different species come back and fires, floods return. This is seen in the Peneda-Geres National Park in the northern mountains of Portugal. Here Mr. Pereira at the University of Leipzig Center for Biodiversity Research says it is about letting wildlife return, letting fires, floods return and most importantly letting plants and animals move around.

The issues of biodiversity and restoring landscapes to the ways of nature are the topic of discussion at the UN COP 15 summit this week in Kunming, China. Pereira's idea is that if you love something, just set it free, for a biodiversity setting to take shape.

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While Italy's budget deficit of 5.3% of GDP in 2009 is relatively healthy, its public debt as a percentage of GDP is rising and forecast to be 118%. The growth in tax revenues is negligible because Italy has seen only 0.54% annual average growth in GDP in the past decade, so its much harder to manage the debt. As the interest on debt exceeds the rate of growth, debt keeps rising all the time, say experts. This makes it harder for Italy to borrow in capital markets, a 9.5 billion bond offer in April 2010 drew onlly 9.78 billion euros in bids. The debt financing is helped by the Italian households having a high savings rate of 15%, and holding 25% of Italy's bonds.

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The opposition in China and South Korea to Japan's release of slightly radioactive water into the sea stems from a distrust of Japanese data that supported by the International Atomic Energy Agency says the discharge does not affect public health. By next March 2% of the accumulated water will be released. In all 1.2 million tons are planned to be released over 30 years starting August 24, 2023. That water contains small quantities of radioactive tritium which Japan says is less than what Chinese nuclear plants release into the sea. TEPCO which manages the Fukushima plant decommissioning says it will post the data on release and level of radioactive material on its website with comparison to the levels seen as not affecting health that WHO has set.

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After taking the recent writedowns Bankia should have setu provisions for losses on real estate bad loans equal to 48.9% of its real estate portfolio. The Spanish government said on May 25, 2012 that it would inject 19 billion euros to recapitalize Bankia. Yet this raises more questions about the rest of the banking system and the need to set aside adequate reserves for bad real estate loans. Extrapolating from the writedowns at Bankia for real estate losses, about 45 billion euros would be needed for the other Spanish banks, according to UBS. And this raises the question of how the government would raise the money to recapitalize the banking system, as Spain's borrowing rate on its 10 year bonds has increased to 6.45% in May 2012. If Spain provides government bonds to banks the markdown on the bonds would still need to be shown separately, and a large figure would be a sign of increasing riskiness to bond investors.

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After heated debate Governor Christie and leaders of the democratic party in the legislature agree on changes to New Jersey's public employee retirement and health benefits and pension system. New Jersey's pension system has unfunded liabilities of $54 billon and some estimates forecast that it will run out of money to pay pensions by 2018. The retirement age for new workers is now set at 65 not 62, pension contributions go up to 7.5% from 5.5% for state workers and to 10% from 8.5% for public safety officers. A major change is to delay annual cost of living adjustments till the pension fund returns to a stable financial footing. The absence of this change would have meant reducing retirees pension value by 30% in the next ten years. After the plan is 80% funded a new employee-employer pension governing board will modify the contribution rates and pension rules based on advice from actuaries. On health benefits the changes are for workers earning more to pay a larger share of premiums- so that a worker earning $60,000 would pay 27%, and a worker earning $95,000 would pay 35%. This particular change is phased in over 4 years and saves $300 million....

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After the 2008 election of president Obama rural whites left the Democratic Party, Following the election of president Trump educated suburbanites left the Republican Party. These two trends have accelerated as seen in the 2018 U.S. Congressional elections. Democrats won in and around major cities, and Republicans won in rural and small town America. Democrats won 27 GOP Republican COngressional seats to win the majority. Republicans added 2 seats to their Senate majority.  The electorate is sharply divided in terms of education in a way that is regressive and not good for America, and in a way that has never happened before. Republicans share of of House districts with lowest shares of college education bachelors degrees increased from 44% in 1998 to 60% in 2018. Democrats share of House districts with the highest share of Bachelors degrees went up from 50% in 1998 to 81% in 2018. Much of the Democrats support from educated suburbanites comes from lopsided support from educated women. The result is that the Republican Party is trading faster growing counties for slower growing smaller counties and now has a base of older voters. The Democrats have to find a leader who can rally support from this new combination of educated suburbanites, younger voters, and minorities. And big issues are at stake. About 77% of people in recent polls now support a national health care insurance like than in the UK and Canada. Poor reading skills and reading comprehension in school tests show a need for greater investment  in education. Infrastructure investment is a big priority for a decade that has yet to be tackled directly. Of the 50 new Democrats in the House of Representatives 24 campaigned on a promise for a national health insurance like that in Canada or UK. The focus on economic issues would move the Democratic Party back to where it was in all the post war years till the distractions from cultural issues  in the last decade shifted its focus from its historical base support of working class voters. ...

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Latin America has made a huge turnaround through successful vaccination drives. Today more people are vaccinated as a percentage of the population in Latin America at 62% than in the US at 56% or Europe at 60%, according to Our World in Data project at Oxford University. There is little resistance to vaccines in Latin America after successful vaccine campaigns against yellow fever and other diseases. During the first year of the pandemic Latin America had one third of the deaths in the world with 8% of the population. Deaths after vaccination drives have dropped to 8%.  Brazil with 617,000 deaths from coronavirus was second only to the US with 800,000 deaths. Brazil is now back to normal after a successful vaccination drive that has 66% of the population fully vaccinated, and 80% with one dose, some of the highest rates in the world, according to Our World in Data at Oxford University. In Colombia with 50 million population about 50% of people are fully vaccinated. Cases have dropped from 30,000 in June to 2000 a day and deaths from 700 daily that month to 50 a day in December 2021. In Buenos Aires, Argentina's capital, 83% of three million population are fully vaccinated, 14% have received a booster. Buenos Aires city health minister says Argentine society has an affinity for vaccination campaigns. "They rapidly accepted receiving them," he says. Yet from the point of view of new variants emerging there is a different situation in rural areas. In industrial states such as Sao Paulo 78% are fully vaccinated, yet less than 40% are fully vaccinated in poor Amazon state of Roraima.   We make it a point to honor the brave reporters in these countries who provide the reports in the WSJ, as we did earlier for NYT Stephanie Nolan's reports from South Africa and Zambia about frontline workers against Omicron in Africa.  Luciana Magalhaes in Sao Paulo, Jenny Carolina Gonzalez in Bogota, and Sylvina Frydlewsky in Buenos Aires and Kejal Vyas writing this report from San Salvador. ...

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The C-295 aircraft manufacturing in Vadodara, Gujarat is part of a broader development of the Indian aircraft industry. Boeing, Lockheed and Airbus all have manufacturing operations in India. Other sites for the aircraft industry are in Bengaluru and Hyderabad. In the next 10 years India will need over 2000 new passenger and cargo aircraft.

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A $12 million euro loan taken out in 2014 by Marie Le Pen's party from a Russian bank that was transferred to a Russian military aircraft parts maker is the subject of much debate in the French presidential election. It was brought up by Mr. Macron in the recent televised debate with Le Pen.

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The BBC looks at Germany's scramble for energy in 2022. Germany is now doing everything for a winter without Russian gas- that means coal, LNG, new supplies from Qatar and the US. EU wants 15% cut in consumption, more efficient use and less use of energy. And boosting investments in renewable energy.

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Jhulan Goswami's remarkable career in women's cricket as a fast bowler for India is the subject of this report in BBC Sports. Her last game was at Lord's against England on September 24.  With Mithali Raj she represents the best of Indian women's cricket.

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This is one of 18 "bouquinistes" in Paris who sell second hand books in iconic green bookshops in the streets of Paris, in a tradition that dates back centuries. Residents of Mumbai see second hand and new booksellers on the streets as an iconic part of Mumbai going back to the last century.

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Germany's train drivers union GDL is in talks with Deutsche Bahn for wage increases of $606 per month with an inflation bonus, and a 35 hour week instead of 38 hour week. The Deutsche Bahn management has offered a 11% raise and inflation bonus. Last week GDL staged a warning 20 hour strike.

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Most of the US wind energy comes from Texas, Iowa, Kansas in the central region of the country. Wind makes up about 10% of energy in the US and 7% in the world. Solar adds another 5%. There is a long way to go. Nordic countries such as Denmark have made significant advances.

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Germany's state development bank KfW has signed a memorandum of understanding with German energy company RWE AG to build a new LNG terminal at the northern port city of Brunsbuttel. Netherlands infrastructure group Gasunie will operate the new LNG terminal. The Nordstream 2 $11 billion project is now set aside and Germany plans to use the LNG terminals and other sources outside of Russia. Germany commissioned its gas market trading hub to buy LNG of 1.5 billion euros. 

Germany will now fast track another LNG terminal on the North Sea at Wilhelmshaven. That terminal would be operational in 3 years. 

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Toyota's new startup Woven Planet was supposed to create a startup to produce the software that run's cars for today, and do this within a company that produces 10 million cars using tested quality control and factory efficiency methods. It has not worked as shown in this report in WSJ. Deadlines for the software were put off till 2027 and Toyota was falling behind. Toyota had planned a separate city near Mount Fuji for the company and separate cultural setting. This has not happened and Toyota is now integrating the software startup into its own operations bringing forward deadlines to 2025.

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Lessons from an Italian family about staying fit and getting exercize during the lockdown within the home. The father is part of a running team in Rome. He has spent 18 days with his wife and teenage son at home already, as Italy remains in quarantine. He can't run the Rome marathon so he and his friends divide the 42 kilometres so that each person runs 1 kilometre at home. Other advice- plan your day carefully, stay in different rooms so its easier to spend a whole day, and the next day and the next together. do some hobbies, exercize to stay fit.