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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. ...

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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. ...

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Japan's governing LDP party wins over two thirds of the seats in parliament in a snap election called one year before the end of the term in office. Prime minister Abe's popularity by summer 2017 dropped to about 30%, and yet with a divided opposition he managed to win the election with a large majority. The opposition led by the Democratic Party and Tokyo Governor Mrs Koike fragmented with the formation of new parties, Yuriko Koike's Party of Hope, and the Consitutional Democratic Party. Mrs. Koike failed to keep the opposition united with some missteps including asking for a loyalty pledge from candidates. This election win makes it possible for Abe to get a third term as leader of the LDP and eventually becoming the prime minister with the longest term in office. Abe had a poor start during his first effort as prime minister when he resigned in less than a year. This is a comeback for Shinzo Abe from that difficult period. Yet the constitutional changes to support Japan's Self Defense Forces with the growing threat from North Korea are not getting the same level of support. Opinion remains divided on that issue.  One aspect of this election is that very few women candidates are running for parliament. In contrast to the election in Britain with more women running for office and getting elected, in Japan's 2017 snap election less than 10% of candidates elected are women. ...

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France restricts domestic flights to destinations that can be reached by 2 hours by train after extensive debate in the National Assembly on ways to implement climate change rules. Air France argued that this would affect jobs at the airline during the pandemic. Macron's climate commission had recommended a time of 4 hours by train. Other opinion was that the earlier four hour restriction would restrict access for people in the distant Massif Central mountainous regions of France. The flights from Orly airport south of Paris will use the new rule so flights to Bordeaux or Nantes from Paris will no longer operate. Paris to Nice with 6 hours train ride, and Toulouse with 4 hours will not be affected. Connecting flights from Charles De Gaulle airport will not be affected. Austria has a 30 euro tax passed by a Conservative-Greens coalition that is placed on flights over 217 miles. No flights to destinations that can be reached in 3 hours by train. Netherlands is also working on similar rules, such as does it make sense for a flight Amsterdam to Brussels that is a distance of 93 miles. That Brussels flight is now banned. ...

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How opinion has changed in France since the time of British and Allied bombing of France's rail and other infrastructure that the Germans used in World War II occupation of France. By the end of the war 50,000 French people had been killed in the bombings and large parts of some smaller cities destroyed. The story of these bombings and the survivors has not been told. Churchill was warned about the risk of turning the French away from the Allies and to favor the Soviets as the bombing progressed. By 1964 De Gaulle chose another landing in Provence that the Free French Army had actively taken part in for celebrations instead of D-Day. About 60% of French at the time in 1964 were favorable to the Soviets. Today this has changed as Biden visits Normandy for D-Day and the EU's future is intertwined with that of the US.

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DJT deportation sweep in Chicago. DJT's model is Operation Wetback deportation of Eisenhower administration in 1954 after the Truman administration had appointed a commission in 1952 to investigate the issues from large scale illegal migration. Truman appointed the commission as he objected to racial quotas against Asians. The US Congress passed the Immigration and Nationality Act of 1952, vetoed by Truman, the veto was overridden in the US Congress.  Operation Wetback of Eisenhower in 1954, conducted by Lt. Gen. Joseph Swing, and Attorney General Herbert Brownell, returned about 1.2 million migrants from Mexico who had crossed the US Border back to Mexico by ship or by road into the interior of Mexico. From 1942 for each year the immigration enforcement increased from 12000 in 1942 to 727,000 in 1952, the last year of the Truman administration. This is a pattern similar to what was seen in 2014-2024 under Obama-Trump-Biden. ...

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Indonesia, Philippines and Turkey will take a Sinovac vaccine from China even though it has results of effectiveness of just above the 50% threshhold of WHO. A late stage trial shows 51% effectiveness of this vaccine. This is lower than the 78% rate the trial's organizers had earlier reported, says WSJ.

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The UN deputy special representative for Afghanistan, Peter Galbraith- and the highest American official there who was also an advisor to Richard Holbrooke, the US representative for South Asia- resigned over differences with his Norwegian boss the Un Representative over the Afghan elections. The issue was whether to take a softer stand on the elections or to confront the Karzai government with evidence of fraud in the elections.

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Patrick Buisson, a key Sarkozy adviser, who helped him win the presidential election in 2007, says Marie LePen's chances in the 2017 election are dimmer than people realize. Her Front National is popular in the north of France with working class people who formerly voted in favor of the Communist or Left parties. In the south of France in areas like Nice her niece Marion is popular with people who have social views on the right on abortion, and gay marraige. The problem is reconciling these 2 blocs of voters and the way Le Pen appears to have moderated her views on social issues. The opposing candidate from the Right parties formerly led by Sarkozy is Francois Fillon, actually prime minister for the full term of 5 years under Sarkozy. Fillon's views are closer to the FN voters in the south and opposes gay marraige and abortion, and has a strong foothold with Catholic voters in traditionally Catholic France. It is this split that hurts LePen who had hoped to run against Bordeaux mayor LeJuppe. The left parties are in disarray and likely not to be a factor. Another difference is that the voters in the south of FN do not see it the same way as FN voters in the north on issues of increasing the size of the state. Voters in southern France do not favor increasing the size of the state as Le Pen has promised and opposed by Fillon. Fillon has plans to cut France's large state employees by 600,000. France has a large state owned sector of companies and increasing the work week to 48 hours, reducing the state sector size to help private companies with incentives is seen as a way to increase productivity and grow the economy, plans supported by Fillon. A major problem for Marie LePen is her family name of Le Pen which Buisson says people in France associate with her father Jean LePen, and extremist positions. Buisson thinks Marie LePen will never be able to shake off this image in the second round of the election as she loses some of her right wing Catholic support to Fillon, and fails to attract enough working class voters in the north of France because of the family name. ...

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Jack Welch has nothing but respect for the way Paulson and Bernanke handled the weekend crisis when Bear Stearns collapsed. They had courage, good communication and inventive ways of responding.

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The EU is taking steps to defuse tensions over transport of goods to Kaliningrad through Lithuania. Earlier Lithuania had blocked goods  going to the city from Lithuania.This city is on the Baltic Sea situated between Poland and Lithuania. It is the former German city of Konigsberg that was given to Russia after World War II.

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In the UK, Spain and Italy the impact of Covid 19 was largest with GDP falling 10%, less in France at 7.5% and smaller in Germany, Norway, Sweden and Denmark at 5%. Countries that tended to implement social restrictions when hospital admissions were low had smaller GDP losses, says this study from Insitut Pasteur. 

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An account by Journal reporters based on over 25 interviews with eurozone policymakers shows how the central players in the eurozone drama acted to defend their national interests during the period April to July 2011. On one side France's president Sarkozy, Frenchman Claude Trichet at the European Central Bank, arguing in favor of the banks not to take bondholder losses or haircuts on loans made to Greece. On the other side the Bundesbanks Axel Weber, and Jens Weidman, Jurgen Stark and German Finance Minister Schauble. The Germans argued strongly for bondholder losses to take responsibility for bad loan decisions by French and German banks. French banks had committed more loans to Greece than German banks and had more at stake. German public opinion was strongly against German taxpayers paying for the losses, making German politicians insistent that European banks take losses on their bad loan decisions, or Germany would not support additional loans to Greece. Throughout April to July the two sides were locked in an impasse. The French feared losses for their banks and a Lehman Brothers bankruptcy style situation. The Germans at the Bundesbank and the Finance Ministry were equally insistent. A July 2011 summit meeting did not settle the issue. The events not covered here from the July to the December summit of eurozone leaders resulted in bondholders taking 50% haircut on loans to Greece, reducing the debt burden in Greece after austerity measures led to popular protests. The French pushed hard for the ECB or the EFSF to be allowed to make large purchases of bonds of troubled eurozone countries in an effort to protect Spain and Italy from contagion through higher bond yields. The Netherlands and Finland supported Germany's position. German bankers Weber, Weidman at the Bundesbank and Finance Minister Schauble opposed large scale buying by the ECB of Italy's and Spain's bonds and Chancellor Merkel said about a common eurobond that "this is not going to happen." Governments changed in Greece, Italy, and Spain by Dec. 2011, which committed to austerity programs and spending cuts. Italian Mario Draghi was appointed with German support as new head of the ECB. In late December 2011 Draghi launched the Long Term Financing Operation for lending unlimited amounts at 1% for three year loans to European banks and relaxing the terms to accept government bonds and other debt as collateral for loans. The effect of this was to provide a large infusion of liquidity into the banking system in Europe and drastically bring down the yields on bonds issued by Italy and Spain....

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Not only have directors at companies like Washington Mutual, Countrywide Financial and Fannie Mae not taken responsibility for the crisis. They have simply moved on to other boardrooms says Gretchen Morgenson of the NYT. These direcotrs did little when these companies were leveraged and made dubious loans or risky investments. Says Paul Hodgson of the Corporate Library, "these directors have avoided the corporate limelight as far as blame is concerned." Companies like Sunoco, the oil company, Paccar, a truck manufacturer, and Tetra Tech each have directors from these failed companies. Thomas Gerrity, a professor of managemet at Wharton is one of the outside directors at Fannie Mae who is now at Sunoco. Robert Parry, a former president of the Federal reserve bank of San Francisco, was adirector at Countrywide from 2004 to 2008. Parry is on the board at Paccar. Says Frederick Rowe, president of Invesotrs for Director Accountability, a nonprofit shareholder advocacy group, the board member gets $475,000 a year, he plays golf with the CEO, he is apersonal friend, goes to nice places for board meetings, and he is just not going to one word that would jeopardize his position on the board. In the case of GM the board held together in one voice right up to the bankruptcy with a director who was a former CEO of Eastman Kodak and the lead person on the board, insisting that management had done everything right, all the way up to the end. These directors had to be fired once the government took an ownership interest in GM, and before this they survived just about everything, including tens of thousands of jobs lost in Michigan, and the devastation of communities and people around the state. Gretchen points out that the director dysfunction is because its almost impossible to have adirector fired for sleepwalking through the job or simply rubberstamping the maagement's decisions. Shareholders have to launch an expensive proxy fight to oust a director. Currently proposed changes by the SEC to allow those who have at least a stake of 1% in a big company to put up their own nomiees are not effective steps say shareholder advocates. John Gillespie, co-author of "Money for Nothing," a forthcoming book on board failures with David Zweig, says the problem lies in the culture of the boards which determines how directors behave. Solutions he suggests are instituting term limits for directors and separating the positions of board chairman and chief executive....

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In this interview with Varoufakis, the Greece finance minister in the negotiations with the European Union and the IMF in 2015, Suzy Hansen provides a detailed account of Varoufakis's view on the Greece bailouts and a sense of looming failure in the negotiations. Varoufakis says he was willing to make concessions by holding off on action on the minimum wage, but cannot make concessions on paying out pensions to the elderly. Varoufakis concedes he is not a good negotiator or a politician, and negotiating skills were critical for Greece to tap into the goodwill in the eurozone's southern region to win a package that would give the Greek economy a chance to grow. Additional handicaps may be his outlook which was shaped in his younger years by the "junta years" when Greece was ruled by a military dictatorship, and a family history relating to Greece's civil war between royalists and communists. In this interview he compares himself to Margaret Thatcher, who he says should not be held responsible for the state corporatism following the war, remarks that may show a finance minister out of touch with the present situation. There is no lack of criticism of the way some of the bailout actions took place to protect French and German banks in 2011 and 2012- in fact some of the strongest criticism, well formulated, was on the editorial pages of the Wall Street Journal. Yet Varoufakis had a special responsibility to build on the goodwill generated after years of austerity, and the efforts of the Samaras administration to work with the EU. On both counts he appears to have failed as he realizes that the 4 months of uncertainty ending in a total lack of communication between both sides, has cost Greece by worsening the economy. Posturing and personality, compounded by inexperience, may have distracted from the real work of serious negotiations. The IMF chief Christine Lagarde had emphasized at the outset the need for Greece to fix its tax system with high degree of tax evasion, an issue on which Syriza could have acted quickly. Some of the period before the elections was used to prepare the EU for negotiations with Syriza, and Syriza needed to be prepared on this issue. Yet no action was taken on a plan to tackle this issue- on the grounds, says Varoufakis, of lack of time. He only rationalizes this when he says it is only a short term cost for the long term future of young people. ...

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Should Arthur Levinson and some of the team he has assembled at Genentech leave it will be a big loss for Roche, as it was his team that helped bring a series of new drugs to the market such as Avastin, Herceptin, and Rituxan to bring Genentech sales from $1 billion in 1999 to $9 billion in 2007. As drug companies buy biotechs in large numbers, with $70 billion in deals this year almost twice the toal for 2007, the question remains whether the drug companies have succeeded in retaining talent as consolidation yields cost savings but does not improve drug discovery. Drug companies are struggling with this, and a couple of models have emerged for keeping minds engaged in scientific discovery satisfied that they have the freedom to operate as they always have and work with the teams they have assembled, similiar to the work style and in the similiar culture as before. Almost like walking into the offices they use as if its like before. J&J has come up with a hub and spoke model to acquire companies and then leave them alone- preserving their management teams, unique cultures and brands. Centocor was bought in 1999 by J&J and 10 of the top executives stayed on and developed Remicade, a drug for inflammatory disease that has sales of $3.3 billion. Glaxo has developed a new structure under new CEO Andrew Witty, which breaks up the primary research labs into "discovery performance units" or DPUs, which also include new biotech startups. In April Glaxo acquired Sitris, a Cambridge, Massachusetts startup. The company had come up with a new science for tackling heart disease, diabetes and other diseases associated with aging. Harvard trained scientist and CEO, Christoph Westphal, went with Glaxo turning down other companies because the independence of the DPU appealed to him. Each DPU has a 3 year budget and this also appealed to Westphal. He could walk into the labs, says Westphal as if nothing had changed. Is Roche making a mistake in acquiring Genentech when it could have left it alone. Are the consolidation savings worth it if some of the discovery team at Genentech leaves and there is the feeling that the culture will change, and if Levinson feels that he was not consulted about Roche's move. These are questions that remain even when Roche's CEO, Severin, says he does not want to change things at Genentech because Roche's actions will speak louder than its words. ...

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As of Dece 27, 2007 the yuan had risen by 6.7% in 2007 and analysts expect the yuan to appreciate another 7-8% in 2008, for a gradual appreciation of the yuan.

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WSJ reports DJT action on tariffs and Fed's new forecast of slight uptick in 2025 inflation to 2.7% from 2.5%, on growth slowing to 1.7% in 2025. Fed's head Powell says- “That’s really due to the tariffs coming in,” Slowing inflation  “is probably delayed for the time being.” The tariff action is based on reciprocal tariffs, "we charge them what they charge us," and is based on the principle of fairness in world trade that was carelessly sacrificed by previous US administrations under Clinton, Bush and Obama. DJT and Trade Representative Lighthizer highlighted the issue of unfair trade and created a consensus around this issue for creating a level playing field with American action on tariffs that was accepted by the Biden led Democratic adminstration to rebuild American Manufacturing. What happened under previous presidents was ignominous for America and these administrations as they allowed the loss of whole industries first in lower technologies and then in advanced technologies as foreign countries used hidden subsidies. America's textbook economists at Ivy League universities and previous administrations used economic theory that had little connection with reality to allow shipping manufacturing overseas, destroying communities and towns with loss of jobs and public services across the US. ...

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On Canada's Justin Trudeau- looking back at his 10 years 2015-2025 mostly inherited the work of his father. He tackled Covid, improved childcare, tackled the renegotiation of trade with Republicans in the US, but lacked the major achievement of the 1970's of Pierre Trudeau setting up Canada as an independent state. The Washington Post looks at the political career of Justin Trudeau. He is the son of former prime minister Pierre Trudeau, a politician from Quebec, who was prime minister from 1968 to 1984 except for one year in 1979-1980. During that period Pierre Trudeau a lawyer practicing labour law in Montreal and educated at the University of Montreal had three significant accomplishments. Canada Act of 1982 passed into law by Queen Elizabeth and the British Parliament, set up Canada as a sovereign state. Prior to this only the British Parliament could amend the Canadian Constitution under the Dominion Act of 1867 under Queen Victoria. As a Quebeker Pierre Trudeau succeeded highly respected Lester Pearson as head of the Liberal Party, and held off the Party Quebecois's effort for separatism in the early 1980's. By 1981 the Canadian Supreme Court 9-0 rejected the Party Quebecois bills that conflicted with the Charter of Rights set up under the Canada Act which protected minorities in Quebec having education in English.   ...

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US antiship missiles Nmesis are placed in the Philippines islands to protect parts of the Pacific region in 2025. During the period of US engaged in wars in the Middle East under Bush and then Obama, the US Navy lost time and China built up its Navy. The lack of foresight of US business and focus on profits of firms like Apple shipping manufacturing to China meant loss of the manufacturing knowhow as other companies followed Apple for 2 decades. The result is that it takes long lead times for the US to build the ships the US Navy needs, a repeat of the situation the US faced with Japan by 1935 when the US was focused on tackling the Great Depression under FDR. At that time at a Naval Conference in London in 1934 the Japanese walked out rejecting the Washington Naval Agreement of 1924-25 that limited Japan to 60% of the US and British Navies ships tonnage. By 1941 the Japanese Navy was its main reason for its efforts to control Asia. FDR who had been Secretary of the Navy was not far behind so that America launched its own efforts in 1937- in an 18 month period 1942-1943 the US destroyed the Japanese Navy and protected China, India, from the worst Japanese Kwantung army elements that ran the government leading to 14 million lives lost in China. ...