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Russia Presses Ahead With Plan for Gas Pipeline to Turkey - NYTimes.com - 0 views

  • Russia Presses Ahead With Plan for Gas Pipeline to Turkey
  • But in recent weeks, the Russian state-owned company Gazprom has shown signs that it is serious about proceeding with what it calls Turkish Stream.
  • Gazprom’s chief executive recently made it clear that Turkey is its new focus — and that if Europe wants more Russian gas then it will need to find its own way to tap into it.
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  • Another potential sticking point is Turkey itself. For one thing, the country obtains about 60 percent of its gas from Russia, a dependence the government is not necessarily eager to increase.
  • Industry analysts estimate that the cost of Turkish Stream would be about $10 billion for Gazprom, which so far has spent an estimated $4.7 billion on the Black Sea project.
  • Mr. Putin already publicly offered a 6 percent reduction to Turkey. But Ankara, which pays substantially more for Russian gas than Germany does, is pressing for a better deal.
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Why the euro crisis still isn't over, in 1 chart - The Washington Post - 0 views

  • Why the euro crisis still isn’t over, in 1 chart
  • So why hasn't Europe gotten a real — or any — recovery? Well, it's the debt, stupid.
  • Every euro that the private sector spends on paying back what it owes is a euro that gets sucked out of the economy.
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Waiting for the Markets to Blink - NYTimes.com - 0 views

  • “You get these occasional disconnects and start asking who’s right and who’s wrong,” said Daniel Morris, global investment strategist at TIAA-CREF.
  • “We think the equity market is right,” he said. “If that’s the case, bond yields are too low.”
  • “We’re constructive about the future and think all this intervention is going to work, but how much is priced in” to the stock market? So much, in his view, that “we’ve been selling into the strength,” he said.
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  • “Do you believe that things are going to get better? If you do, you don’t want to be in Treasuries at 2.5 percent,” he said. “Some things don’t make sense to me. It’s frustrating.”
  • He says it doesn’t make sense that the stock market has held up as well as it has amid the Fed’s debt purchases and its policy of maintaining short-term interest rates near zero, a measure taken in a crisis that is supposed to be over.
  • “How do you know there has been an economic recovery and the patient is breathing normally when it’s in an oxygen tent?”
  • For all of 2013, gross domestic product increased by 1.9 percent, compared with 2.8 percent for 2012.
  • Orders and shipments of durable goods
  • were flat in 2013, and housing has weakened. February was the eighth consecutive month of declines in pending home sales, leaving them down 10.2 percent from 12 months earlier.
  • “It will be extremely difficult for the U.S. economy to escape its Great Recession hangover with this poor profits backdrop,” Mr. Edwards wrote. “Indeed it leaves the economy extremely vulnerable to adverse shocks,” like declining growth in Asia.
  • “We’re keeping a very close eye on China,” Ms. Patterson said. “If there are signs that it’s slowing more than we expect, that would hurt our view of emerging markets and worsen the outlook for developed markets due to contagion” because of the increasing importance of China in the global economy.
  • American real estate companies and European banks, for instance — but he is keeping 13 percent of his fund in cash because of a dearth of attractive investment choices.
  • Mr. Morris finds a wider array of opportunities. He likes shares of consumer-discretionary companies, which provide the products and services that people want but do not need. The sector includes businesses as diverse as hotels, carmakers and clothing stores.
  • the industrial sector, which includes manufacturers of business equipment. Another preferred segment is banks; he expects them to flourish as interest rates rise and the gap widens between what they charge in interest and what they pay.
  • Mr. Morris encourages stock investors to buy American.
  • “You can’t just unwind quantitative easing, with all of its distortions, and achieve stability without some pain along the way,” he warned. “What that pain is, when it happens, that’s where the uncertainties lie. The margin to maneuver is getting less and less with the passage of time.”
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Profits Vanish in Venezuela After Currency Devaluation - NYTimes.com - 0 views

  • Profits Vanish in Venezuela After Currency Devaluation
  • The country’s high inflation — currently around 60 percent a year — has also meant that the prices in bolívares that companies charge for many goods and services have risen sharply.
  • Now companies are feeling the pain from a series of currency devaluations over the last year and a half. Photo
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  • But the rosy outlook changed in late March, when Brink’s started calculating its sales using the recently created exchange rate of about 50 bolívares to the dollar
  • Further complicating the picture, the Venezuelan government has not allowed companies to repatriate profits for the last five years.
  • Companies have ways of chipping away at the locked-up profits, including charging higher fees to Venezuelan subsidiaries for goods and services provided by the parent corporation. But many foreign companies are stuck holding vast troves of bolívares that shrink in value each time there is a devaluation.
  • Procter & Gamble said in April that it had the equivalent of about $900 million in cash in this country and that it was taking a $275 million write-down as a result of applying the government’s intermediate exchange rate to its Venezuelan balance sheet. Colgate-Palmolive wrote down $174 million, while Ford wrote down about $316 million.
  • “All the companies knew there would be a loss because everyone knew there wouldn’t be dollars” available at the fixed exchange rate, said an executive with an American company in Venezuela who spoke on the condition of anonymity. “We were trapped because the law here did not give you a way out.”
  • The government has also failed to pay companies the hard currency it had promised them for imports bought on credit from suppliers, and in many cases suppliers are now refusing to ship more goods to Venezuela until they receive payment.
  • Stores are often out of basic products such as dish soap or corn flour. DirecTV has stopped taking on new customers because it cannot get the dollars to import more dish antennas.
  • Without dollars, car companies cannot import the parts needed to assemble vehicles; Ford and Toyota were forced to temporarily close their factories.
  • In yet another reflection of the currency restrictions, the government has refused to let airlines operating in Venezuela trade the bolívares they receive for ticket sales and other services here for dollars. The International Air Transport Association says that the airlines have more than $4 billion in revenues held up in the country, based on the government’s base exchange rate at the time the tickets were sold.
  • American Airlines says that it is owed $750 million by the country’s government.
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Blueprints for Taming the Climate Crisis - NYTimes.com - 0 views

  • Blueprints for Taming the Climate Crisis
  • Within about 15 years every new car sold in the United States will be electric. In fact, by midcentury more than half of the American economy will run on electricity. Up to 60 percent of power might come from nuclear sources. And coal’s footprint will shrink drastically, perhaps even disappear from the power supply.
  • “This will require a heroic cooperative effort,” said Jeffrey D. Sachs, the Columbia University economist who directs the Sustainable Development Solutions Network at the United Nations,
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  • The teams, one in each of the 15 countries, looked at what would be necessary to keep the atmosphere from warming more than 2 degrees Celsius, 3.6 degrees Fahrenheit, above the preindustrial average of the late 19th century, a target that most of the world committed to at the climate summit meeting in Copenhagen five years ago.
  • To do so, CO2 emissions from industry and energy use would have to fall to at most 1.6 tons a year for every person on the planet by midcentury.
  • That is less than a tenth of annual American emissions per person today and less than a third of the world average
  • Lacking any understanding of the feasibility of the exercise, governments postured and jockeyed over which country should be responsible for what
  • This is not achievable by going after low-hanging fruit, such as replacing coal with natural gas in power plants.
  • The decarbonization paths rely on aggressive assumptions about our ability to deploy new technologies on a commercial scale economically.
  • Russia, for instance, hit the target. But Oleg Lugovoy of the Environmental Defense Fund, who worked on the Russian plan, observed that “if we don’t have carbon capture and storage we would have to reconsider.”
  • it does not do away with the main hitch that has stumped progress for decades: How much will this all cost and who will pay for it?
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Work Like a German - NYTimes.com - 0 views

  • Work Like a German
  • In the German job-share model (known as “Kurzarbeit”), if an employer cuts an employee’s hours so that income is reduced by more than 10 percent, the government compensates workers for a large portion of wages lost. This enables companies to cut costs during downturns without having to lay workers off.
  • For the long-term unemployed who take significantly lower-paying jobs (typically, at minimum-wage levels), the unemployment benefits could offer stop-loss insurance to put a floor under their losses.
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  • The new program should also subsidize employers to provide paid sick days, family leave and child care support — measures that are especially important for disadvantaged women in the work force.
  • Taking another page from the German system — this time, its apprenticeship program — training should include both internships and postgraduate job placements.
  • Once workers go on the Disability Insurance rolls, it has proved very hard to get them off; all the while, their skills and contacts in the workplace atrophy. In the fiscal year 2013, the program is estimated to have cost a record $144 billion.
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Michael Spence explores the causes of partial and stalled economic recoveries. - Projec... - 0 views

  • Indeed, recent data suggest that more than half of the acceleration in US growth is occurring on the tradable side, even though it accounts for only about one-third of the economy. And that contribution is probably an underestimate, because income generated on the tradable supply side produces income that becomes demand on the non-tradable side – a multiplier effect that crosses the tradable/non-tradable boundary.
  • the main problem is that public-sector investment remains well below growth-sustaining levels. The hard part of fully realizing potential growth is shifting the composition of domestic demand from consumption to investment without adding leverage. That means paying for it on the public-sector side, via taxes and a reduction in household consumption (and in wealth accumulation).
  • But such adjustments cannot happen in a monetary union, so unit labor costs are slowly re-converging via a protracted process of flat nominal wage growth and slowly declining real wages (a process that would be quicker with higher inflation in Germany and Northern Europe).
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Where Apple Products Are Born: A Rare Glimpse Inside Foxconn's Factory Gates | Re/code - 0 views

  • Where Apple Products Are Born: A Rare Glimpse Inside Foxconn’s Factory Gates
  • The 1.4 mile-square Longhua complex, with its 140,000 employees, speaks to Shenzhen’s identity as a global manufacturing hub. The city, once a fishing village in the Pearl River Delta region, was designated as a special economic zone in 1980. Its population swelled from 30,000 to more than 10 million as rural workers migrated to the fast-growing city in search of opportunity.
  • Though Woo notes, by way of context, that 12 suicides per one million employees is lower than the U.S. suicide rate of 13 per 100,000
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  • It’s a nod to the average age of the Foxconn employee, which is 18 to 25
  • Woo said some 1.5 million students have completed their trade education at the school since 2007.
  • Foxconn has raised its base wage from a reported $153 a month to a starting salary of $306 for a 40-hour week — with pay increasing to $402 after a three-month probationary period.
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