LyrArc Article Gist
The New York Public Library on 42nd Street in New York and its $50 million exterior renovation. This is part of the library's centennial celebration.

LyrArc Article Gist
The May 6 episode of the stock market plunge of 900 points in the U.S. and then recovering had the effect of rattling investors nerves especially retirees. The impact of this episode is recorded in the experience of one Charles Schwab broker office in Englewood, Colorado. By the end of that day this broker had 50 calls on his answering machine from a fifth of his clients, all seeking to know what happened. Charles Schwab, who helped launch a period of individual investing in the U.S. after 1982 by cutting fees and going after the average investor, (along with others like Jack Bogle of Vanguard Funds), is also on edge. He says he has not seen anything like this since his early days. Schwab confirms Yale Prof. Shiller who says (see link) that his index for markets shows a lot of nervousness. Saying that 98% of people are still very concerned, coming after the May 6 incident, and the Greece and eurozone crisis that impacted US stock markets. One other factor he points out is the constant flow of headlines that suggest certain business people engaged in fradulent practices, something that fuels a lack of trust. Charles Schwab ponders from his office across the San Francisco Bay Bridge, whether words like safety and soundness mean anything anymore. Another factor of concern, Bogle points out, is that institutional investors now own 70% of American corporations, up from 35% in 1975. And the advantage has veered sharply in their direction as institutions, hedge funds, and investment banks trade on their own account, with wealth moving in that direction. This leaves the individual investor and especially the retiree or those about to retire in a severe predicament....

LyrArc Article Gist
In China since 1981 the poorest people making below $1.25 a day fell to 207 million in 2005 from 835 million in 1981. In India the number of people below $1.25 a day increased to 455 million in 2005 from 420 million people in 1981. The share of the people in poverty fell to 42 percent from 60 percent during the same period. Corresponding figures for East Asia including China show a drop from 80% of the people in poverty in 1981 dropping to 18% in 2005. The proportion of people living below the $1.25 a day poverty line worldwide fell over the nerarly 25 year period from 1981 to 2005 from 52% in 1981 to 26% in 2005. In subSaharan Africa, now the poorest region half or 50% of the people live under the poverty line of $1.25 a day in 2005 almost where it was in 1981. In absolute numbers the region had 380 million people living below the poverty line in 2005 compared to 200 million people in 1981. Note that the World Bank this year changed the poverty line from $1 to $1.25 a day, to make allowance for the inflation that is hitting the poorer countries. Is China a rich nation after the Olympics? Some parts of China, the coastal regions and the regions around big cities like Shanghai and Beijing are relatively affluent with pockets of poorer people but in the rest of the country there is poverty as defined perhaps in terms of deep poverty, poverty, poor middle class without health insurance or any kind of savings for emergencies. With 200 million people in 2005 below the poverty line a question could be asked how many people in China below say $2.00 a day which could be seen as being poor at a time when inflation in food and fuel costs has been significant in developing countries. If its somewhere in the range of 300 and 400 million people in China this explains why in relative terms China would identify with India and the rest of the developing countries and it also explains its stand in the WTO trade talks acting as a developing country protecting the rights of agriculture and farmers within China. And it also explains the reasons why China sees a long transition before it ceases to be a poor developing country and why there is real concern that these 300-400 million people as well as others adversely affected by the rapid industrialization and exercize of state authority, corruption and increasing gaps between rich and poor, adverse effects on environment, that these people adversely affected are listened to and accomodated in the interests of stable progress and fairness. Much of recent history has shown that countries open to foreign trade have done better given the right conditions and careful policy measures. China opened up around 1981, and India around 1991. Also progress and gains are more significant in infrastructure building and in poverty reduction in the latter phases of development as the synergies increase, capital pool increases, and the development accelerates, this shows why China's gains look significant compared to India's at this point in time. In ten years or fifteen years a better assessment could be made and then some points may favor China and some India, and the results will be a result of different history, experiences and problems faced and routes taken because of prior developments in each region and varying complexity. ...

LyrArc Article Gist
Campaign committee cash in hand end of January 2024, according to this report in WSJ- for Biden $56 million, Trump $30.5 million, Haley $13 million. Haley says she will stay in the race after Saturday South Carolina primary and into the rest of the primaries and has donor support.

LyrArc Article Gist
Northwest to respond to higher fuel costs by cutting flights 5% and raising fares and fuel surcharge. For flights to Japan the fuel surcharge goes from $140 to $160. Second checked bag is $25 and 3bags checked is $100. Fees for bags over 50 pounds double to $50. Northwest will take 15-20 planes out of service after the summer travel season. And international flights will go up. For Northwest the higher fuel tab since May 2006 projections is $1.7 billion in higher fuel costs. Aloha Airgroup, Champion Air and ATA airlines will close according to announcements this week.

LyrArc Article Gist
The title may not reflect the content of this report on Admiral Giroir who heads the U.S. coronavirus testing effort. He is a pediatrician who worked for hospitals in Texas before heading a vaccine project at Texas A&M University.  Internal politics led to his resigning from the effort to build a vaccine development capability with pharmaceutical companies at Texas A&M. Most of the rest of this report shows a physician who is determined to pursue big projects such as the one he is tackling today. President Trump appointed him to lead FDA, and to be the Assistant Secretary of the Department of Health and Human Services. With the missteps of Secretary Azar testing suffered in the early months of the crisis as reported in the WSJ. Adm. Giroir has taken a leading role since  this period. He also heads the U.S. Public Health Service Commissioned Corps of 6200 staff playing a vital role. On March 13 he was asked to lead the effort in testing.  He comes to this role with experience in the field of vaccines realizing that "the challenges are not just biological but engineering." New technology would be needed to make massive amounts of vaccine. His idea is that transformational efforts are needed. His idea for a billion dose per month facility in Texas did not work, yet he worked on it for about 5 years from 2010 to 2015 at Texas A&M University, at one point being the vice chancellor. He was selected by Texas Governor Perry as chairman of the task force in Texas in 2014 to oversee the effort to fight the Ebola virus. He now is in a position to bring all his experience and aspirations to tackle the coronavirus, cutting through much of the red tape and bureaucracy, and pulling together the effort combining science of pharmaceutical companies with the technology of manufacturing billions of vaccine doses in a record time. Today he sees capacity for testing reaching 40-50 million tests a month by September 2020.   ...

LyrArc Article Gist
China's government is taking up stakes in private companies with large debt and needing financing. Private enterprises have less access to cheap bank loans and other types of financing than state owned firms, and are squeezed by China's efforts to reduce pollution and overcapacity. The tariffs war with the U.S. has also hurt the economy and taking stakes in private companies is way to ensure business stability for China. Its an effort to keep employment stable in the private sector that has 60% of the jobs. Zhejiang Great Southeast Company is a plastics packaging company with founder Huang selling his entire 29.5% stake in the company to state owned Zhuji Water Group Co for $168 million. He did this to repay holding company loans for which he pledged two thirds of Zhejiang Company shares. Beijing stepped in to ensure there is no sharp rise in unemployment. In the first 6 months of 2019 Beijing took 47 such stakes, according to Fitch Ratings, with 52 stakes taken for all of 2018.  The purchase of stakes includes state run companies and investment vehicles of local governments. Even this does not reflect the whole effort of China to ensure no sharp increase in unemployment. From October 2018 local authorities and state linked entities put together about $100 billion of "relief funds" very quickly, estimates from TF Securities. These funds are for passive investments, state owned enterprises normally take on a hands-on role in running the companies. Oxford Economics estimate is that China's private sector provides about 60% of all urban jobs in 2017, increasing from 36% in 2010. Researchers say China stepped in in this way after failing to get banks to lend more to the private sector. The tight supervision to reduce risk of supervisory agencies has made it harder for private companies to get loans. Shadow banking and trust loans was an early target, and stock market selloff hurt entrepreneurs who used shares as collateral for loans. ...

LyrArc Article Gist
France's rail strike goes into its second day with large stations such as the Gare de Lyon deserted, stations empty, platforms deserted and millions of travelers unable to get to work. French unions are testing the French government's effort to change the generous benefits granted in a different era for rail and other workers. Workers at SNCF France's rail system can retire in their fifties even as workers now live longer lives, as early as at age 52.  Workers are hired for life. Pensions are given at the highest salaries and housing is subsidized. SNCF is $68 billion in debt. Costs are much higher to run the system than in Germany. The unions are intent on preserving these benefits from a different period.  This issue came up in the election debates about how the pension system can be put on a good basis with proper funding. Macron has taken a firm stand and the centrist parties in parliament see this as a symbolic fight to changing the future of French society and the economy. The reforms will raise age for pensions, and affects only future hires not the current ones. Yet the unions have chosen to fight this.  Everything depends on how the public and commuters see this. One sign of the changes this time compared to successful strikes by unions in the nineties is that the percentage of employees of SNCF declined on the second day from 33 percent to 29 percent. Polls show a small majority of the French sees the strike as unjustified and Macron's popularity ratings going up slightly. The prestige of the labor union CGT and its strategy is also at risk. Macron's view is that overprotected entities in the French system- the "Statutory Society" referring to the Statute of Railway Workers from a different era- block changes in social and economic life that would increase social mobility. This and France's future is being put to the test.   ...

LyrArc Article Gist
Prime minister Renzi of Italy resigns after defeat in a referendum to change the constitution. Renzi had said he would resign if there was a "no" vote on constitutional changes to make it possible to pass further reforms. The results show the "yes" vote with about 41% of the vote, and 59% saying "no." About 65% of 47 million registered voters voted. The referendum called for cutting the size of the upper house Senate eliminating some constitutional bodies, and increasing powers at the federal level. Renzi may have made the mistake of making the vote for or against constitutional change a vote for his democratic left party, and not understanding the depth of public skepticism of established parties. Parties such as 5 Star M5S  have appealed to a public skeptical of how economic reforms would help bring more prosperity to the middle class, and a desire to try out new options. Virginia Raggi of M5S was elected mayor of Rome recently and Renzi's referendum move similar to the way prime minister Cameron moved for a referendum on an old issue of euroskeptisim, may have failed to grasp grassroots changes. The irony is that in 2014 elections to the European parliament Renzi's democratic left party won 40% of the vote and was seen at the time as a success, and the same size vote in the referendum is seen as a failure. In a referendum all other parties votes are added together from right to left parties and new parties. In the Brexit vote the Labor party "no" vote including Labor voters who never voted added to the votes of Brexit supporters and the newer UKIP party giving Brexit the slight edge needed. The singular feature of the trend is that working class voters are combining with right leaning voters to upset established parties, in the midwestern U.S., in the north of England, and in the north of France. In the medium to long run this means the left parties are likely to move to realign themselves with their base of support. ...

LyrArc Article Gist
Russia stated at a meeting of OPEC oil producers that it would not accept cuts in oil production to stabilize the oil market. The coronavirus effects on the world economy have resulted in a sharp decline in demand for oil. This lack of an agreement among oil producers is leading to a steep drop of 30% in oil prices on March 9, 2020. The Russian position in talks was that it was too early for deep cuts considering that the  true impact of the coronavirus on the world economy was unknown, and that the loss of 1 million bbd from Libya had already reduced production. Experts say the Russians wanted to stabilize oil prices around $50 a barrel and the Saudis a bit higher. Under the OPEC agreement Russia would have to reduce its production by 1.5 million barrels per day (bbd), in addition to 2.1 million bbd from previous cuts that would be extended to March, which it found unacceptable. The impact of the double whammy of continued increase in coronavirus cases around the world and the drop in oil prices as a reflection of business confidence was also felt in world stock markets.  Russia's budget is less sensitive to oil prices than the Saudis. The Saudis need somewhere near $80 per barrel to breakeven. Analysts say Russia does not want to lose market share to American shale oil companies which do not have output cuts and benefit from lower oil prices. Shale oil companies in the U.S. are struggling in the present situation of low prices as many of them need $65 a barrel in price to breakeven. About 208 shale oil companies in the U.S. made bankruptcy filings since 2015.  The oil importing countries with increasing oil imports such as India will benefit from the drop in oil prices. Japan and other oil importing countries in Europe, Africa and Asia will also benefit as Russia and the Saudis go all out to increase production. ...

LyrArc Article Gist
Iran plans an ambitious $50 billion investment program to expand oil and gas output in the next 4 years. About half of that coming from Iran and the rest from outside oil companies. Iran expects to earn $54 billion in oil exports in 2006 vs. $47 billion in 2005. Iranian production represents 5% of global supply, about 4 million barrels a day. Only about 2.5 million of this is available for export. Iran has 2 problems in oil use and production. Gasoline use is growing at about 10% a year. And oil production is declining by about 5-6% a year from existing fields. The investment program over the next 4 years would increase production from new fields by about 1.3 billion barrels, but with existing fields generating less each year this will only generate about 500,000 barrels of additional output beeyond the 4million barrels today. And with domestic use growing rapidly and new refinery capacity being added to meet domestic demand of 500,000 barrels a day even this would leave no more for export than the current level of 2.5 million barrels a day, or probably less with growing gasoline use inside Iran. These are Iranian Oil Minister Vaziri Hamaneh's numbers. What this means is that with economic sanctions the whole global supply picture and the world price of crude oil would be seriously affected by economic sanctions in the next 4 years, as the 2.5 million barrels a day export number would be reduced by the increase in domestic consumption of gasoline by 10% a year, and the decline in existing fields of 5-6% a year. In the short term two year horizon this adds upto loss of some 700,000 barrels a day, about 400,000 from decline in existing oil fields and 300,000 in increased domestic use, which are no longer available for export. Hamaneh pointed to the investment as evidence of Iran's good intentions as a supplier in an interview with te Wall Street Journal. He says Iran sees the importance of preserving its credibility as a reliable supplier. It does not want to cause hardship to consumers around the world. Another reason for the pragmatic position taken by Hamaneh is that Iran depends on oil exports for 40-50% of government revenue....

LyrArc Article Gist
Madeleine Brennan is the principal of a junior high school in Brooklyn Heights, New York. She is the oldest principal in the U.S., and has been a teacher since 1946. Her philosophy on education: have consistent rules and consequences, a full school calendar, and having to love the children you teach to really be able to work with them. Her thoughts on retiring and working age- its all about loving what you do and doing it for a lifetime.

LyrArc Article Gist
Alexandra Stevenson provides this exceptional account summarizing the reasoning in the minds of Argentine negotiators and holdout bondholders over a debt dispute remaining from the 2001 Argentine debt crisis and default. Over a decade later the repercussions of Argentina's 2001 debt crisis and default are still taking new twists ant turns. Holdout bondholders won in U.S. courts and Judge Griesa ordered Argentina to make full payment demanded by holdout bondholders. Argentina responded by depositing $539 million in Bank of New York Mellon as instalment payment to exchange bondholders. Judge Griesa responded by ruling that if Bank of New York Mellon made the payment it would be in contempt of court. Griesa also called for court mediated negotiations between Argentina and the holdout bondholders to come up with an agreement. Argentina and hedge fund holdouts negotiated in July 2014 but talks faltered. Legal experts say that if Argentina makes an agreement with holdout bondholders led by NML Capital which is asking for $1.5 billion, the risk is that the exchange bondholders could also ask for better terms. After the 2001 crisis following which Argentina defaulted on its debt, agreements were reached for bondholders to be paid about 25 cents on the dollar. Not all bondholders agreed, the bondholders who agreed are called the exhange bondholders, and the ones holding out holdout bondholders. From the Argentine government's point of view the risk of reaching agreement with the holdouts suing Argentina is that the other holdout bondholders not represented in the lawsuit could also ask for the same terms, and Argentina would have to pay all the holdouts costing it $15 billion. Risks if Argentina allows it to go into default are that exchange bondholders would come together to pressure the Argentine government to make a full payment of their discounted bonds quickly. This would cost Argentina payment of as much as $28.7 billion, according to JPMorgan estimates, under the right to "accelerate" payment if Argentina is considered as having missed a July 30, 2014 payment deadline. Legal experts say Argentina has to weigh this risk, which may or may not occur depending on the exchange bondholders taking such action, against the risk of having to pay out $15 billion to all the holdouts. Paying all holdouts would be politically very unpopular in Argentina, posing political risks for the socialist Peronist Kirchner government, already facing difficulties with the trade unions and the stronger opposition from centrist parties in Buenos Aires province. Default would affect Argentine access to capital markets, which is already highly restricted. Yet because Argentina has made the payment to Bank of New York Mellon, blocked by Judge Griesa, the nature of this default would be different. A worse case scenario for Argentina's Kirchner government is reopening negotiations with exchange bondholders for higher payment on debt than the 25 cents on the dollar already agreed to. Argentina faces an acute cash shortage with international reserves of only about $29.5 billion in May 2014, and a slowing agricultural export dependent economy. This is why the prospect of a technical default is being treated with relative calm in Buenos Aires....

LyrArc Article Gist
Xiaomi is China's leading brand. It is very different from other companies in China and America. It is tightly controlled by its founder Lei Jun who has built a loyal following for the brand  through fan clubs and creating an enthusiastic following. Because the firm is run by founder Lei Jun it can make quick decisions to enter a market. Lei Jun was a computer science student in Wuhan in 1987 as China opened up to the world.  By 2017- in three years from being zero in the Indian market place in 2014- Xiaomi had become the largest smartphone company in India. The company was launched in 2010. Profit margins are thin about 1% in a very competitive pricing market.  Metrics are based on revenue per user of $9 per user from an installed base of 190 million smartphone users, spending 54 minutes a day using Xiaomi's app, game and other services, or 20% of the phone use time. Revenue per user comes from advertising, and from commissions on the apps and games it sells to its user base. In 2015 Xiaomi had a loss, in 2016 sales dropped, in 2017 new products led to a resurgence in the market with sales increasing 68%. As Xiaomi goes into its IPO, experts say much of the $10 billion from the IPO could go into reinvestment as Xiaomi reinvents itself and moves into other internet business. ...

LyrArc Article Gist
About $229 billion, three fourth of Greece's debt, is now held by the European Central Bank, the IMF and the European Commission. This is taxpayer money and the governments are making sure that they get back bailout loans in the form of interest payments. About two thirds of the $177 billion given to Greece as bailout loans since May 2010 actually came back to the ECB, IMF, and the EC, in the form of interest. The ECB is keen on recovering taxpayer money. The money route has been setup with an escrow account in Greece for bailout loans so that interest payments get paid, and this money cannot be used for any other purpose. Banking experts say this is a practice in risk management, and with Greece's poor record in finances the controls have been put in place to recover money the ECB invested in Greek bonds in an effort to calm nervous financial markets and now gets about 10% in annual interest payment. Under earlier debt restructuring for private creditors to Greece a haircut of over 50% on Greek bonds was taken, with the ECB insisting on receiving full payment. If Greece were to repudiate the loans under a new elected government losses would have to be taken by the ECB, IMF, and EC, and by private creditors. The ECB has Greek bonds in the range of $44 billion to $69 billion, and the European Financial Stability Facility $88 billion, by some estimates. Greece's exit from the euro would result in losses on these bonds .for the ECB and the EFSF, ultimately European taxpayers. It would also make the new bonds to private creditors under the restructuring of little value which is why European banks would not favor that outcome. Greece's tax receipts at some point, possibly 2013, would exceed basic operating expenses of the government, at which point a future Greek government might decide to exit the euro and stop interest payments on debt in its best interest....

LyrArc Article Gist
The business model where hedge funds take in short term money from investors for a 2% fee and a fifth of profits, and invest it in longer term bets and sometimes illiquid situations, is breaking down. This happened to the investment banks and ended with the collapse of Lehman and Bear Stearns. With losses approaching 20%, many illiquid investments, and investors asking for their money, this model may lead to a rapid shrinking of the hedge fund industry, which now has about $2 trillion of investor money.