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Lehman used transactions called "window dressing" as a way to show that it was burdened with less debt than a correct accounting would show. This was done through Repo 105 transactions where the bank used repurchase agreements or repos- a form of short term borrowing that lets banks take on more trading risks. Lehman lowered the repo debt at the end of each fiscal quarter. The bankruptcy examiner's report shows that Lehman moved about $50 billion in assets off its balance sheet. Lehman labeled these transactions as securities sales instead of loans, to show investors that it was actually in better shape financially than it was in reality. This was done on a quarterly basis in 2007 and 2008, according to the bankruptcy examiner's report. The New York State Attoney General's office is investigating this and the role of the auditor Ernst and Young in approving this practice, which goes back to 2001.

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U.S. president Trump's 2017 budget is an effort to reshape spending priorities by the Republican party. Apart from Medicare and Social Security all other entitlement programs from the days of Lyndon Johnson's Great Society are subject to cuts. Deep cuts to Medicaid and food stamps, including introducing work requirements. The philosophy behind it is that compassion will now be measured not by how large these programs are but by how much the government can get people "off these programs and back in charge of their lives,"  according to Budget Director Mulvaney.  The cuts are $616 billion to Medicaid and Children's Health programs, $193 billion in cuts to Food Stamps, $143 billion in student loans, $72 billion in disability programs. The overhaul of the Affordable Health Care Act is part of this change. The reallocation would put more money into infrastructure for $200 billion, and in tax cuts, $19 billion in a parental leave program and $29 billion for veterans programs, plus added spending on the military. William Hoagland of the Bipartisan Policy Center, a Republican who worked on budget issues says it will be politically difficult as the cuts to lower income groups come with tax cuts for small businesses and higher income individuals.  Beyond the policy priorities there is an area where both Republicans and Democrats are skeptical of the budget. This is how it impacts the U.S. debt. Under Congressional Budget Office estimates the U.S. debt as a percentage of GDP which rose to about 75% after the Great Recession starting in 2008, is projected to grow to about 85%. In sharp contrast the Trump administration estimates of the Office of Management and Budget are for it to drop to 65% based on rosier estimates of 2% inflation, 3% growth for the decade ahead. Experts say this is unlikely once the Fed raises interest rates and the unemployment rate currently at 4.4% leads to rising inflation, undercutting growth which has remained below 2% for a long period. These concerns are also voiced by Hilsenrath in the WSJ based on the experience of other countries such a Britain that cut corporate taxes without seeing an uptick in economic growth. ...

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Jay Powell and the US Fed have less to worry about from China's increasing demand for oil in 2023 that could keep oil prices high, says this column in WSJ. China says Taplin, has over 50% of oil demand coming from the construction industry, heavy industry and the trucking that backs it up. The construction industry has problems from years of overexpansion, and heavy industry, manufacturing, faces lower demand for Chinese exports from the US and Europe in 2023. This means oil demand will not increase enough to keep oil prices high, says Taplin. This puts the Fed in a better position to tackle inflation, just as the decline in global shipping and spare capacity in shipping, supply chains returning to normal is helping the Fed.

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The European Space Agency's Juice is not alone in exploring the moons around Jupiter by 2031. One year before the Juice reaches the moons around Jupiter, NASA's Europa Clipper Mission will reach Jupiter- in April 2030. That missions launches in October 2024 and follows a Mars-Earth Gravity Assist trajectory. It will make 50 flybys over Europa, one of the moons around Jupiter, some as close as 15 miles. With its massive solar arrays this will be the largest spacecraft developed by NASA for a planetary mission. 

Europa shows evidence of an ocean of liquid water below its icy crust. This is one of the places considered to be the most promising for habitable environments in our solar system.

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Germany's Economy Minister Robert Habeck says Germany has plans to almost completely end Russian energy imports by the end of the year. For this to happen Germany has to make extensive progress in cutting oil imports in a short time. By the end of summer the Russian energy imports will be cut by half. The effort is significant because before the invasion of Ukraine Germany received 50% of its coal, 55% of its gas, and 35% of its oil from Moscow. Coal deliveries will end by the end of autumn. 

Habeck confirmed that current contracts with Russian companies to import energy will not be renewed. He also confirmed that Russian gas deliveries will take longer to be stopped- not till mid-2024.

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One survey in 2021 shows that about 73% of workers in all age groups are feeling burnout since the pandemic started says this BBC report on Work Life. The situation is the worst for young workers in their twenties who have the least work capital and the most work. For these Generation Z workers the burnout rate is higher at 80%. This presents a huge problem for mental health. Across all age groups volume of work is up over 50% with the highest for young inexperienced workers who are pushed to the limit, working late hours and not able to say no. 

This situation shows that so much has happened during the pandemic that mental health is a major priority in 2022 and beyond.

 

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This Washington Post report shows elder cost where you live in the US. Out of 5.9 million Americans over 85 years 50% live with family, including spouses and adult children, 40% live alone including assisted living facilities, and only 8% live in nursing homes. A quarter live in multigenerational homes, and this is common among Asians, with Filipino families tending to live together. In Florida 57% of seniors over 85 years live with family and spouses, and in Texas 31% live in multigenerational households. Hawaii has the highest number of people over 85 years living with their families- 61%. 16% of seniors over 85 years live in nursing homes in South Dakota, highest in the US, and in Louisiana 44% of women seniors over 85 years live alone, according to Census.

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Us stock market gains of 24% in 2023 are seen as a surprise after fears of Fed tightening leading to a downturn. Instead inflation has come down and with government investment in infrastructure and bringing factories back to the US, boosting US manufacturing, the US is building a stronger economy. A related WSJ article has graphs that show over 50% of US households owning stocks so that the gains in stocks since 2020 are now more widely shared in the US population. Along with wage gains and bringing down the cost of living and moderating housing costs it sets the stage for a recovery of America from the free market experiments that followed after Reagan leading to the 2009 financial crisis, neglect of manufacturing and shipping of factories overseas.

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German Heath Minister Karl Lauterbach says vaccine mandates are the only way out of this pandemic. Speaking to German daily Welt he said, gaining immunity through infection was a "dirty vaccination" that made little sense as it would not protect one against a more harmful variant. He saiid that it "would be naive to think that omicron is the end of the pandemic." Omicron would not make one immune to the next viral variant. "No one can guarantee that a variant will not develop soon that is much more dangerous."

Lauterbach says 25 million doses of the Moderna vaccine have been procured that would be enough for 50 million booster shots to be done in the first quarter of 2022.

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Amtrak Biden says is an essential part of the fight to tackle climate change. Rail has 83% less greenhouse emissions than automobiles, and 73% less than plane air travel. It also has the potential to create half a million good jobs. President Biden was known as "Amtrak Joe" because he used Amtrak for decades as America's Senator from Delaware. In this video president Biden speaks at the 50th anniversary of Amtrak in Philadelphia. He says one of the conductors on his daily route estimated Biden has done 1.5 million miles on Amtrak compared to 1.1 million miles on Air Force One. Biden says he has traveled on Amtrak for as long as Amtrak has been in existence- for close to 50 years.

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About a quarter of renter households in America spend about 50% of income on housing, according to Harvard's Joint Center for Housing Studies.The availability of apartments for rent less than $1000 in the Phoenix region of Arizona is nonexistent says this report in WSJ. It forces renters into apartments that are more expensive than they can afford. Rents are up over 30% in recent years. A temporary loss of job or a medical emergency can lead to back rent accumulating and an eviction notice. Eviction notices are rising in sunbelt cities such as Phoenix, Las Vegas. Also in cities such as Minneapolis and Columbus. Higher rents lead to more evictions as tenants fail to ride it out with a job loss or medical emergency.

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The $3 billion proposed by president Biden is the first time in history that money is being allocated to tackle elder homelessness. This WSJ report shows how older boomers holding onto larger homes for retirement and aging in these homes is worsening the supply of housing. Including for younger boomers who are in their 50's and who because housing is less affordable or because of a life event or healthcare costs are facing a high rate of homelessness. WSJ's report says $3 billion is unlikely to get thorough this Republican Congress but it is not enough to tackle the problem -because people should not be destitute in this way such as these younger boomers in America as an advanced developed Nation.

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The British Energy Institute shows how countries are doing in fighting climate change by reducing fossil fuel use. 

Poland is poor at 88% fossil fuels in energy mix. Algeria, Singapore, Bangladesh, Oman at 98%.

In Europe Norway leads at 72% for renewqble energy in the mix. Brazil at 50% keads SOuth America, Nw Zealand 43% and Vietnam at 23% in Asia Pacific. 

Of 6525 coal fired power plants China has 3168, India 845 plants and US 408. Older plants are being retired.

Planned construction of new coal power plants 707 in China, 165 in India, 2 in the US, 23 in eastern Europe, 0 in Northern Europe and 4 in Southern Europe, 0 in Western Europe, Latin America is 6.

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Boeing plans to have a new facility in China complete assembly of its 737 jets by the end of 2018. The finishing center is being built near Shanghai. Boeing's order book is up to 5800 jets at a value of $518 billion. About one fifth are in deliveries planned for China. Inflight entertainment systems, seat systems and other finishing for aircraft will be done at the new facility. Boeing continues to see this a a part of doing business in China even as tensions have increased with China over tariff issues and market access. Boeing says it will continue to assemble 737s at its plant near Seattle, and send some planes for completion to China. Sales to Iran will require following Trump administration guidelines.

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What if car buyers have to pay all cash absent the ability for people with good credit to get loans, a scary development for the auto companies. Analysts say tight credit was a crucial factor in the 27% drop in September sales. About 31% of all nonluxury sales in the last week of September were all cash deals, says Libby chief market analyst JD Powers. And down payments are much higher than before. Abd lease deals are dropping from 16% till late July 2008 to 9% in the last week of September 2008. Whats unprecedented is that buyers with credit scores in the upper 700's are being turned down and that is sure to trigger even more declines in the next few months. And dealerships are closing 600 of 20,770 already losed this year.

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In 2007 the number of businesses initiating liquidation increased by 50% totaling 18, 751 according to the Administrative office of US courts. And 5700 businesses sought Chapter 11 protection to reorganiza an increase of 24% over 2006. Look for more of this happening in 2008. In current credit and economic conditions its hard for some companies to pay off their lenders and the lenders do not want to go through a restructuring process, lenders preferring to get their hands on collateral and doing the liquidation. Its a sign of the times.

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Toyota is reducing senior management positions to 60 from 77. The board of directors will also be smaller, with 11 members instead of the current 27 members. It was felt that the large board did not enable discussion of important issues and slowed down decisionmaking. This is part of the new Business Plan and the new global vision for Toyota. The thrust is on sales in emerging markets which Toyota will target for increasing sales to 50% of the total sales by 2015, up from 40% currently. Sales in developed markets are set to decline to 50% of the total sales by 2015, down from 60% currently. The other push is in the hybrid sales area. Toyota will roll out 10 more hybrid vehicles by 2015, in addition to all electric cars, plug-in hybrids. Toyota will continue to have an all-Japanese board, and will use a committee of outside advisors to stay abreast of opinion in other countries. Akio Toyoda announced these plans recently and did this by himself, as he puts his own ideas to work for setting Toyota's direction....

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The Guardian provides this first account of what happened in the Galwan Valley border between India and China at the Line of Actual Control. It is described as the worst fighting in 60 years. On the high steep ridge lines above the rapidly moving Galwan River a patrol of Indian soldiers encountered Chinese troops in a steep section of a high mountainous region. They believed the PLA Chinese Army had withdrawn from the ridge in line with a June 6 disengagement agreement. The Indian government says that what happened afterwards was pre-meditated ambush by the PLA forces. In the fighting that ensued the Indian commanding officer was pushed from the narrow ridge falling to the gorge below. Reinforcements from the Indian side were called from a post 2 miles away and about 600 men were fighting in near total darkness in high mountain ridge with stones iron rods for upto 6 hours. Following a decades long tradition to avoid escalation of hostilities because of nuclear weapons of both countries the two sides have not used other weapons. Most deaths on both sides were from soldiers falling or being knocked from mountain ridges. The main problem in the conflict is the Line of Actual Control exists but since China's takeover of Tibet in 1950 there is no agreement that has set the official border. The British Simla agreement in 1912 set the border with Tibet in an agreement between Tibet and the British Empire in India, when Tibet was an independent country. China claims that historically going back to Ming and Qing dynasty Tibet was part of its region. For most of its history Tibet was an autonomous region with closer contacts with India because it is close to Nepal and Nepal is very near the Indian Bihar state border.  A new rail link from Raxaul, Bihar in India to Kathmandu is only 137 kilometres, and from Kathmandu to the Tibet border is only 205 kilometres. Fast rail or road links would put Tibet within a few hours by rail or road to Tibet from India. For the entire period the US exists as a nation about 250 years and from the first landing of the colonists on American shores about 1607 Tibet was a mountainous region that was so remote that few people even knew about the country's existence. Beijing and Shanghai are four thousand kilometres away, India much closer to Tibet through Kathmandu, Nepal and India sharing a common culture, and no one thought much about the mountainous borders at 15000- 20,000 feet in the western Himalayas, till China's takeover of Tibet in 1950. India had no clear idea what this meant in 1950- no clear border except for what was agreed between the Tibetan independent government  and the British in 1912 which was set under the British Empire- resulting in a fluid border. And China had no clear idea that this would put in a place it would not want to be thousands of miles from the Yangtse valley region home to most of China's population, in a remote mountain region at heights of 15,000 -20,000 feet, with little to gain. Throughout history since 1000 and earlier Tibet remained a region that acted as a buffer between China's western provinces and India, the high mountains at 15,000- 20,000 feet making it inaccessible. Which is why the Ganges plains and the Yangtse river valley plains contact was made more through the oceans than by land, and the areas developing distinctly different language and cultures. All this changed after 1954 when the Qinghai Tibet highway was built, the closest city on the Chinese side is Xining. Xining to Tibet is a distance of about 2000 kilometres at an average height of 4500 metres or about 14,000 feet.  ...

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Venetians say their city is being invaded by hordes of tourists who live in hotels on Mestre and cross a causeway to come to Venice. Venice gets an estimated 2 million tourists. A new referendum seeks to separate the city administration of Venice from Mestre giving Venice the autonomy to protect the city against floods and overburdening by tourists. Mestre has 3 times the population of Venice and is on dry land so that decisions made in Mestre are not in the interests of Venice.  The referendum is intended to stop cruise ships from coming to Venice at a time when new hotels are coming up in Mestre. The mayor and city administration oppose the referendum creating a situation after the damage caused by floods on November 12 which show how chaotic it is. Seventy two submersible yellow flood gates designed to prevent the flood were tested and could have been made activated on November 12, but no action was taken, causing about $1 billion in damage. The city is offering $5000 as compensation for businesses, but a bakery that sustained close to $77,000 of damage like other businesses is looking to the referendum to change the way the place is governed.  ...

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Daily coronavirus cases dropped to the lowest level since March 30, 2021. Cases on June 19 were at 58,000 and deaths at 1154 for India's population of 1.2 billion people. The only state with cases over 10,000 was Kerala, and close to 9000 was Tamilnadu. Karnataka and Andhra Pradesh were at over 5000. All these states are in southern India. Only Maharashtra with about 9000 cases was in northern India. The positivity rate in Maharashtra state was 3% and in Mumbai 2%.  The Indian government has a clear vaccine policy and it is for vaccine supplies and vaccination drive to be under the federal government. This puts responsibility in one place and makes it possible to achieve the target of vaccinating 1.2 billion people by December 31, 2021, with the federal government putting all the resources it can muster into the effort. The economy is also linked to how the vaccination supply effort and vaccination drive progresses in the next 6 months, so that the goal of vaccination is closely linked to economic recovery and progress for India as a whole. A good monsoon rainy season would also help the rural economy recovery. ...

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Without government aid about 12 million more people would have fallen into poverty in the US during the pandemic in 2020-2021. This is evident from census figures analyzed in the WSJ and NYT. The Supplemental Poverty Measure -which takes into account a broader range of income and expenses including hundreds of billions of dollars of pandemic aid -shows that poverty actually declined, dropping by 2.9% to 9.1%, as a result of government taking action in the US under the Trump and Biden administrations. The $400 billion  dollars of stimulus checks and aid during the Trump and Biden administrations in 2021 have made a real difference in the lives of not just poor Americans but Americans in the middle class and all sections of society. Similar aid was delivered in the European Union and Britain. In India government aid was distributed by depositing money directly into hundreds of millions of bank accounts of poor and marginal income people. Aid included food aid in grains, lentils and vegetables directly provided at subsidized prices or free by the government. Right wing or left wing government designations were meaningless as governments of different persuasions acted decisively to provide direct and timely help in US, Europe, and India. ...

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It took Panasonic 6 years to get its Wuxi factory near Shanghai, China, to near net zero carbon dioxide emissions. It was tough say company executives. Panasonic has a job on its hands. It would take 37 such efforts to neutralize the 2.2 million metric tons of greenhouse gas emissions of the company's operations. When suppliers are included this is only 2% of the 110 million metric tons associated with Panasonic. To get an idea of how much this is- it is the same as  half of Spain's annual emissions, and five times that of Apple Inc. Zeroing out emissions would take till 2030, or beyond, depending on how much pressure there is from customers, investors and government. It is this pressure from all sources that is making the 100 largest corporate emitters to take notice and take action on climate change. Solar panels are only part of the action, every part of company operations has to be examined and changes made including energy saving so that less energy is needed in the first place.  For companies taking such action this report by WSJ on Panasonic Wuxi is a lesson on how it is done, step by step. ...

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U.S. president Trump names Robert Lighthizer, the U.S. Trade Representative, as head of trade negotiations with China, following a weekend summit of G-20 in Buenos Aires where he setup a truce with Chinese president Xi Jinping. The truce means the next round of tariffs on $200 billion of Chinese goods will be suspended. China had hoped Treasury Secretary Mnuchin would head the negotiations. Mnuchin had negotiated with China earlier. Lighthizer has taken a long view on the negotiations wanting to strengthen the U.S. position particularly in relation to protecting U.S. technological edge and preventing transfer of U.S. technology to China. Trade expert Pillsbury of the Hudson Institute says this steers the negotiations from informal under Mnuchin to the legal negotiations under a trade negotiating team of Lighthizer that have set forth the charges against Beijing under U.S. trade law. The outcome sought is a legally binding document that commits China to getting certain results to reduce its trade surplus with U.S. of about $1 billion each day. Mr. Trump called for "level the field" in a message after the G-20 summit. Specific details of about 142 issues in trade were brought up in the talks of Trump with Chinese president Xi in Buenos Aires. ...

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New rules for foreign direct investment in India will allow foreign multibrand retailers to own upto 51% of joint ventures in India. Rules set earlier allowed foreign retailers like Wal-Mart to only setup wholesale joint ventures. The move by the Indian government lets Wal-Mart, Carrefour, Metro Group and other retailers open supermarkets. The rules were also changed to allow 100% ownership for single brand retailers such as Nike stores. Prior rules limited single brand retailers to 51% ownership. This is a major step because of the growth in the Indian retail market, and the small portion of the overall market that is occupied by large retail chains with well developed supply chain management. Technopak Advisors Pvt. Ltd, a consulting firm in New Delhi, estimates that the Indian retail market has sales of about $470 billion a year, with only about 5% of this or $27 billion in modern organized retail operations. In the five year period 2012-2016 sales are expected to grow to $675 billion, with $85 billion coming from organized retail. Companies with operations in India that are expected to expand operations include Bharti Wal-Mart, Tesco which has a agreement with Tata Group's Star Bazaar stores, Germany's Metro Group AG. according to these numbers, even with competition from the organized large stores, smaller stores will still occupy 88% compared to 95% of the retail space in 2016. And the growth in the overall market means that the smaller mom and pop type stores will still have growth from $443 billion today to $590 billion in 2016. A government backed study by ICRIER shows that smaller stores lose about 23% of sales in the first year, but recover quickly in following years because of growth in the overall market. The introduction of modern supply chain management, modern refrigeration methods, and large investments by leading global retailers is likely to change the way food and other products are stored and marketed, a revolutionary change for India where these methods and investments lag far behind the developed world. For this reason this may give major impetus to modernizing the Indian economy....

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Don't let the current holiday season retail sales fool you as they have held up reasonably well. The impact of the mortgage and housing crisis will be felt in a delayed manner. It won't be till 2008 that the impact will really be felt. And the impact is expected to be lasting and deep, could take the rest of 2008, 2009 and into 2010 for this protracted tightening of credit. About $300-400 billion contraction in credit is expected when banks tighten their credit lending because of losses they are taking in the mortgage crisis. This will happen in an environment of falling house prices and consumers will not have access to the $340 billion in cash from home and mortgage equity financing that they took out in 2006, estimate of the Bureau of Economic Analysis. Auto, retail, apparel, and luxury items would be hit the most. On the jobs side not all the jobs will be lost in the USA. The USA imports about $740 billion in consumer goods and autos each year, which is one third of consumer spending excluding food and energy. The lower consumption in auto and apparel would affect exporters in Japan and China and South Korea. But Chinese exports have reached a point that they are causing trade tensions and a call for strengthening the yuan. An increase in American exports and lower imports could help bring down America's trade deficit. This could give China an opportunity to build its domestic market and markets in Asia and Europe so that it is not so dependent on the US market. For the US where the savings rate is near zero this is an opportunity for consumers to build their savings and reduce debt. Europe and India and the Middle East are expected to continue growth and China may see slower but continued growth in 2008 and 2009. In the US industries like aircraft and infrastructure promoting companies that sell to countries like Russia, India Brazil, the Middle East, and China will continue to grow. And because rates are still low large nonfinancial companies still have access to funds for expansion and capital investment. In a global economy the US consumer may be one part of a much larger picture. ...