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Ann Marlowe has completed her sixth embed with American troops. She is a visiting fellow of the Hudson Institute. Her views from the ground are that without good governance the American effort there seriously risks failing. She is very concerned that the current administration is not taking good governance seriously. There should be alternatives to the Taliban and to the Karzai government which has failed to win public support.

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With a credit led expansion, and credit flowing as rapidly as in 2009, China faces some difficult choices in 2010. Inflation's annual rate rose to 4.4% in October 2010 from 3.6% in September. China's CPI target is 3%. October 2010 saw an additional $89 billion of new loans, and China is floating on a sea of credit. The question is how econmic growth can be maintained once this slows.

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After working on improving schools in large cities like Chicago, Philadelphia and New Orleans, Paul Vallas is working on improving the school system in Bridgeport, Connecticut. Bridgeport is typical of parts of America's industrial areas, which now face shortage of funds and failing schools. Dropout rates in the school system are between 23-45%. And only 10% of tenth graders can read and do math to meet the state standards.

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Instant information, too much information, can bring its own set of problems including making people unable to figure out what information to trust. Here Evan Williams, a co-founder of Twitter, describes the problems and his second thoughts about progress and the internet. His new startup Medium hopes to encourage long form writing, but even this is shorter than the longer form articles that were common in prior decades.

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The NYT editorial says budget reconciliation should kick in if by a certain date in the fall bipartisan agreement is not reached. With budget reconciliation, the term for a expedited processs, health care legislation can pass by a simple majority vote. NYT says bipartisan agreement is a good thing, but more important is effective health care reform. And there is little evidence of Republican cooperation so far on any issue.

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How Norway's sovereign fund operates. It is one of the largest sovereign funds and one of the best run funds with carefully planned arrangements. Only 5% stake can be taken in any one company. No more than 4% of the profits may be used for budgetary spending. The Ministry of Finance makes the guidelines, but the Central Bank actually manages the fund, with a unique arrangement for division of responsibility.

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Wage inflation is slowing down even less than the increase last year. Prices of imports are higher but oil prices are goig lower so this can change. And increase in prices of services is slowing So its not clear whether we are going to see lower inflation or higher inflation. There is a chance though that inflation may be lower and may go down to zero says Mandel of Business Week.

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Credit, getting loans has been faulted for the startling drop in sales in recent months. Not so says Toyota's sales chief. Jim Lentz says the vast majority of Toyota customers can get approved for loans. He says in Toyota's case its not credit but consumer confidence thats the biggest issue. Lentz says a record number of customers are postponing new car purchases. Toyota sales were down 32% in September 2008.

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WSJ opinion pages on the day after the Obama victory speech. Sorensian overkill says Henninger, if Ted Sorensen did some of the writing or the young speechwriter went into overwriting. Asks Henninger "remaking this nation. Calloused hand by calloused hand?" Or "our union can be perfected" or talk of "the despair of the dust bowl and depression across the land." Or says Henninger is Obama given to grandiosity?

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CEO Ryan at CVS/Caremark. An unassuming man with a sharp focus on things, joined CVS right out of pharmacy school at University of Rhode Island. At 29, CVS owner Stan Goldstein gave him the chance to run pharmacy operations for CVS, then a regional drugstore chain in the eastern USA. Over the years CVS has made a number of successful acquisitions, the latest being the acquisition of Longs Drug store chain on the west coast, and it is now one of the largest chains in the USA. It has nearly 7000 stores and more than 50 million users of its CVS loyalty card in the US. As the pharmaceutical business evolved pharmacy benefit management (PBM's) companies like Caremark, Medco, and Express Scripts, came into being to manage burgeoning prescription costs. PBM's work with companies to save money, by filling recurring prescriptionsin 90 day quantities through the mail at reduced per pill cost. Now drug store chains instead of competing with PBM's are either creating or acquiring these larger PBM's. THe result is that a company like CVS which acquired PBM Caremark in 2007 for $27 billion, now has extensive computerized databases with patients information and drug usage histories. Ryan's clear focus is on these IT records as a distinct advantage, if he can use it to help the Obama administration's efforts to control health costs of chronic diseases like diabetes and arthritis, and back or neck pain, high blood pressure, and others, that end up clogging the hospital system and raising health care costs. By using these IT records to flag when a patient is not compliant or taking his medications and call the patient, Ryan can increase drug sales, get more visits into drugstores if the drugs can also be picked up at CVS stores, and increase sales through ancillary purchases during visits. This is now his strategy. It also includes setting up more clinics at stores and at corporate locations that divert the patient flow for small care like sore throats, flu and the like. As this is the way health care costs can be controlled, Ryan sees himself as helping achieve national goals while keeping CVS in the sales and profit picture for the US, even as health care as we know it goes through a complete transformation that removes the waste and unnecessary cost, and improves effectiveness and health. He sees CVS/Caremark right where it wants to be with its large patient drug database from about 1 billion prescriptions it fills each year, and as the largest single buyer and dispenser of prescription drugs in the country. ...

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The 11th Annual State of the News Media Report of the Pew Research Center is optimistic about the future of the news media business and news organizations. The optimism centers on the new investments in the business leading to new hiring for Buzz Feed, Washington Post, and other organizations, the access to news media on the tablets and the smartphones, the new ways and tools used to reach a younger demographic, on line video clips on the digital websites which are drawing users away from the news cable networks with viewership of Fox, CNN and MSNBC declining 11%. Six of 10 adults watch video online and half of them watch news videos. Interactive data presentation is popular. Younger people of highschool or college age get news on Facebook and social media networks, another way of consuming news information. Especially useful are results of the Pew Center's research showing 68% of American adults connect to the internet on tablets or smartphones, and 31% of tablet owners telling Pew they were taking out more time for news information. The tablet is particularly well suited for news information, and as lighter, thinner, easier to hold and fit into a pocket tablets are designed at lower prices, this trend is likely to get stronger....

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Keir Starmer of Labour  in Britain says "From 20 points behind to 20 points ahead in the polls." As Lincoln said you can fool some of the people all the time or all of the people some of the time, but not all of the people all of the time." This has relevance also for America in 2024 as president Biden in his transformative work for America faces the same kind of rumor and doubt Keir Starmer faced for the last two years, much of it pushed by the Tories. Lincoln said this in Clinton, Illinois, in the Lincoln- Douglas debates, September 2, 1858.

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Indian Foreign Secretary Vikram Misri says-

"We intend to be able to cooperate in co-designing the reactors, co-developing them and co-producing them, we feel this will allow us to tackle complications faced in other conventional projects," he said. This approach to build smaller modular reactors because it comes with less cost and which can be reassembled at the usage site is a new field. 

India is putting $1.2 billion in nuclear research.

India sets goal for 100GW of nuclear energy 2047.

Five Indian built nuclear reactors by 2033.

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Signs that the SUV based model for running car companies is cracking. A study from the University of Michigan Transportation Research Institute estimates that profits from large and midsize SUV's for GM, Ford and Daimler Chrysler dropped 40% or $7 billion from 2001 to the end of 2004. These figures track a steady decline in profits from SUV's, as incentives are used to promote sales of SUV's, lowering the whole profit structure a big notch downwards. In 2001, this study found that the per vehicle profit was about $9500. In 2005 thanks to big discounts the margin on SUV's is about $6300. On midsize SUV's like the Ford Explorer or the Chevy TrailBlazer, margins are down even more to $4100 from $7200. Responding to this study GM looks at it differently, it sees declining sales as the main culprit not the margins. Its thinking goes like this- as long as we can keep sales up we can cover our fixed costs including costs to retirees which make up a big part of the picture And it looks at the variable profits which it finds to be much higher than the numbers put out by the Transportation Research Institute. ...

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A new Nuclear Fuel Bank has private funding of $50 million from Warren Buffett, and additional funding from Kuwait, US, the EU, Norway, and the UAE. The total funding so far is $157 million. With this initial funding the International Atomic Agency has setup a global nuclear fuel bank that countries can turn to for developing nuclear power. At this time more countries are turning to nuclear power as a source of energy supplies. The development of nuclear supplies and purifying uranium also lends itself to the making of nuclear weapons. By providing an independent source the IAE agency provides a way to remove the ambiguity present in the development of nuclear energy. As the idea of atomic fuel banks is gaining hold Rusia also has set up a bank. When enriched at lower levels uranium can be used for nuclear energy. When enriched at higher levels this becomes a fuel for making atomic bombs. Which is why nuclear experts want to see the uranium turned into fuel rods as quickly as possible, because it is hard to turn the rods into weapons. This money will be enough to buy 80 tons of fuel- enough for refueling one reactor....

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Two thirds of Americans are becoming pessimistic about the economy. This is one of the results of a Wall Street Journal/NBC poll. This is up from 53% in January. Voters are losing confidence in the idea that the Democrats can come up with better solutions than the Republicans. Only 24% of those polled have positive feelings for the Republican party, with Democrats doing only slightly better. Democratic pollster, Peter Hart- who along with Republican pollster Bill McInturff conducted the survey- calls it the JetBlue election. This description is from the JetBlue flight attendent who ran from the plane after exiting through an emergency chute. There is a sense of severe discomfort and looking for the exit, he says. With 6 in 10 of those polled expressing a loss of confidence in the policies of the Obama administration to improve the economy, including 83% of independents, and a quarter of Democrats. The situation has deteriorated on the confidence level with the war in Afghanistan as well. 68% of those polled say they are less confident now that the war in Afghanistan can be brought to a successful conclusion....

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Shellye Archambeau talks about lessons she learned. She had a unique approach to mentors- find a mentor but do not ask directly whether he will mentor you, instead simply act like he is your mentor, ask questions and cultivate the relationship. This is because most people think mentoring is a committment and will take a lot of time which they consider scarce. Suggestions include: to ask someone have you any thoughts on how...? to get people's idea on doing something. She suggests being sincere and acting on it, and thanking that person, as a great way to get them to respond in the future. Getting people to believe they want to do something is importnt and getting them to believe that it can be done, is a great way to get people inspired to achieve new things. Reducing fear, while all the time being clear about what is expected, produces the best results.Taking risks, venturing out into the unknown, is part of all this because only by getting out and doing new things when you still feel you are not 100% ready, can one learn, grow and create value....

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Much of the cost for Canadian oil sands are fixed costs and once these costs are incurred production increases can take place over decades say Canadian oil sands company executives. CFO Corey Bieber of Candian Natural, says costs at it large Horizone mine are at $37.13 Canadian dollars per barrel in Jan 2015. He expects to cuts costs by at least $10 Canadian dollars per barrel by higher volume production cutting the operating expenses. Increasing production says Bieber does not mean adding people. As a result most of the Canadian oil sands producers can operate at oil well below US$47 a barrel, as low as $30, and are increasing production in 2015. This means Saudis will have to face competition from Canadian oil. It also means the Keystone pipeline will still be needed to transport Candian heavy oil to Gulf Coast refineries in the U.S. Suncor, the largest Canadian oil-sands producer, is increasing capital spending to C$7.2 and output by 11% in 2015. Canadian Natural is increasing production by 7%, and Syncrude Canada Ltd. is planning a 6% increase for 2015....

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Kasman of J.P. Morgan Chase only sees a small upturn in activity, that as he sees it in a world where activity is so depressed that modest changes by business and households give a lift, with unemployment coming down to 9%. Hatzius of Goldman sees unemployment rising in an economy where capacity utilization is extremely low, with unemployment rising to 10.5% even with the best efforts of the government. Hatzius sees a painful defaltion as a serious risk and he points out that the Fed can do less about deflation than it can do about inflation. The one point that both agree on is exports have to give alift to the economy, and both welcome a depreciatipon of the dollar to lift the economy through exports. Hatzius makes the point that the lift to exports is still limited- not enough in exchage rate depreciation of the dollar to help the American economy. And Kasman actually says it now Asia's turn to do their share. We lifted them out of the slump after the 1997 Asian crisis, when their currencies depreciated and exports to the US lifted their economies....

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Deborah Lucas, Finance Professor at the Kellogg School of Management and her views on the bailout plan and alternatives. She does not believe that the markets are near panic and thinks that Congress should move slowly before it passes any legislation. She is glad that the Treasury proposal has failed. She does not think piecemeal guaranteeing of assets is that valuable. In her view they need to do the harder thing, that is to really have a direct discovery process, where they figure out who they are going to shut down, and what its going to cost. Government examiners she says should quickly examine the books of every major financial insitution involved in the crisis, including insurers, pension funds, and banks, determine which are the weakest and which can survive. Ms Lucas points to the Federal Reserve and FDIC actions in the deal for Citigroup to take over Wachovia on Sunday as examples of how the crisis is already being addressed. Her thinking is that the core problem is a crisis of confidence , which can only be resolved with increasing transparency, not a government bailout....

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There is only one way to interpret this. Putin and Russian influence have calmed down the Israel Iran war. DJT opening up discussions and talking to both Russia and China has created a sense in both countries that their vital interests are with the US, China on a trade agreement with the US, and Russia for a settlement of the Ukraine war on terms that it sees as fair. There is the issue of nuclear non-proliferation on which US, Russia, China, India, Germany and the EU, and the rest of the world are in agreement which meant action to end Iran's nuclear program. Putin met with Iranian Foreign Minister and looked for a way to end the war. Putin said: “This gives us a chance to…think together about how it would be possible to get out of this situation,” said Putin. From the point of view of a safer planet Biden's period of not talking to China during the balloon incident, and not talking to Russia with a single minded focus on Ukraine conflict, can be seen as not the way a responsible world power should act. DJT's emphasis to end the wars in the Middle East yet standing firm on Israel's right to exist and the non proliferation of nuclear weapons, and working to end the war on Ukraine by puting pressure on all countries, is proving to be an approach that gives all world powers a chance to reflect truly on their obligations to their peoples and the people of the world. To keep their and the world's sanity and composure while pursuing national aspirations. ...

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US Russia relations improve in 2025. The new national security document of US put out by the DJT Administration says that Russia is not a threat.  It sticks to migration and western identities when facing civilizational erasure over next two decades as key threats to the US. It poses questions for the European Union, Germany and France, yet also offers away out of the "mess" in Ukraine with the Russians saying NATO was too close to their borders as the real issue, and the US not aligning itself with NATO reducing big power tensions including nuclear arsenal expansion. Germany rebuilding the Bundeswehr and it's military offers a rebalancing of the military situation yet is not the long term solution to the Ukraine problem, NATO limiting it's role and the US limiting it's role in NATO offers a solution that preserves the long term interests of Western Europe(Germany, France, Italy, UK, Spain) and preserves world peace and dialogue. It also promotes integration of India and Russia into the world trade and world economy as it diversifies from the dominance of China in world trade and the world economy of the last 20 years of free trade that deindustrialized US and Europe. What this national security document does not say is that China's dominance in world trade and the errors of the US, Europe, Japan, Russia, India in world trading relationships and their economic approach that made this possible is the central issue and calls for diversification of supply channels in the world economy. This shifts the direction of the world in a peaceful direction where the US, Japan and Europe, India can compete in economic growth and trade with China on equal terms. ...

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The Large Institution Supervision Coordination Committee (LISCC) was setup by Fed chairman Bernanke and Fed governor Tarullo, in 2010. The Fed's 200 PhD's, bank examiners and other experts at headquarters are now tapped for the the task of looking at adverse scenarios, checking on assumptions made by the banks in their analysis, requesting data from large banks on their loan and securities portfolios, and asking banks to consider adverse scenarios. Such adverse scenarios include a decline in the U.S. economic growth of 1.5% in 2011, and decline in housing. The Fed checks the banks estimate of its financial position aginst the Fed's own standard and prods the banks to consider new risks. Before the 2008 crisis the Fed's 12 Reserve Banks did the day to day supervision and reported back to Board of Governors, a system that led to a diffusion of responsibility and did not work. Former Fed vice chairman, Alan Blinder, says the bank boards did not exercize responsibility, and "blew it, big time," during the financial crisis. This approach has the effect of acting as a early warning for the banks for things that could go wrong. J.P. Morgan Chase CFO Braunstein made a Feb 15 presentation to show that Chase's stress scenario was more stringent than the Fed's. The current review says Tarullo includes asking banks to do a check before issuing dividends to shareholders, and consider what would happen if the economy is in trouble in the next 9 quarters. According to Fed guidelines issued in November if the bank's plan does not show enough capital to handle economic, regulatory and lending risks, the Fed can challenge the bank's decision....

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Jane Spencer interviews Lenovo CEO, Bill Amelio. Amelio throws light into how a company can best operate in China and reach out to a global market. Consider the way Amelio recruits Chinese talent working in the local language, and how he works with Chinese managers who tend to be more reticent on issues and opinion. Amelio is unique in his approach to hiring Chinese managers and building a bench with deep talent. He has abandoned what he calls the "colonial approach" of hiring with expat executives interviewing in English for managers in emerging markets. He says its a good idea to leave the English filter out to get more talent. Instead he has English language classes for the hired managers to help them improve language skills. Amelio talks about Lenovo's approach to the U.S. and other international markets as it competes with the likes of Acer and Dell. Amelio headed Dell's Asian operations prior to this position. Lenovo is testing ideas for giving low cost access at $100-$150 to people in India and China. The way this works is for Lenovo working with Intel and Microsoft to reduce the cost by 50%. For the bank to have half the ownership and the customer paying for the rest. Customers would buy cards for 10 hours of computing, and buy the computer back from the bank through regular use. Lenovo's strategy is to go after small and medium size businesses and consumers to increase market share in the U.S. and Europe. To do this it is using soccer star Ronaldinho and basketball stars to give Lenovo visibility as a brand. In other areas, Amelio has brought Dell managers to Lenovo to improve the supply chain management, an area Lenovo needed to improve....

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Jason Zweig cites the St. Petersburg Paradox in questioning how much someone should pay for a bet on Facebook shares at the high valuation set for this inital public offering. This riddle asks how much would one pay for playing a game in which one gets $1 for winning the first toss of a coin and the game ends, or $2 if the coin comes up heads the second time, or $4 the next time, $8 next and keep doing this , the payment doubles each time. The point is that the payoff is infinite because at each toss the probability is 50% and 12.5% for the next toss, and one could get to the 30th toss or the 60th toss, with payoff in hundreds of millions. People also could be out of the game when the heads come up and not see the later supposed gains. Because of this experts say the most people should pay for playing is $20. The Facebook offering has infinite potential of this sort, but the reality is that for businesses of this type one can only see a couple of years ahead in terms of growth, with large uncertainties ahead about growth beyond that point. Charles Lee, professor of accounting at Stanford Business School, and former head of equity research at Barclays Global Investors, says its hard to see further than two or three years for this type of company. Another problem is pointed out by Prof. Ritter of the University of Florida. He says the valuation is so high today that even if Facebook followed Google's growth and had a total market value of $190 billon that Google has today in 10 years, the annual return would be around 6.8%....