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Credit Suisse research of loans at 3,550 nonfinancial services companies in India with total borrowing of $385 billion as of March 31, 2011, shows 30% had net debt more than six times current earnings before interest, taxes, depreciation and amortization. This is an increase of 50% in 5 years. Goldman Sachs estimates gross nonperforming loans including restructured debt will climb up to 6% of total loans in the next financial year. This is an increase from the 5% in March 2011. The Reserve Bank of India's stress test report of Dec. 2011 forecasts 5.8% of non-performing assets in a worst case scenario. This is twice the current level. This is largely a result of Indian banks increasing lending after the 2008 global financial crisis, with the worst affected and leveraged sectors being private airlines, construction companies, utilities and real estate developers. At the same time prudent regulation has ensured a capital to risk-weighted assets ratio according to RBI of 13.5% at the end of March 2011. This compares with the same ratio at 14.5% as of March 2010. Additional risks come from declining economic growth. Industrial output in October 2011 was down 5.1% from the prior year. ...

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Audi faced similiar problems of unintended acceleration incidents that Toyota faces today. A "60 Minutes" segment by Ed Bradley in November 1986 showed Audi owners of the Audi 5000 sedan who said the cars suddenly accelerated. That show even showed an Audi 5000 moving on its own which later was shown to be due to an altered transmission for that shot. Even when it was shown in a 1989 government study that blamed driver errors especially because of the close placement of gas and brake pedals. This led to the report's recommendations to move the pedals apart, and install ashift lock mechanism which required a foot on the brake to shift the car into drive. Audi ran newspaper ads showing these findings but consumer fear had set in. It took Audi many years to recover, From 1985 to 1991 Audi U.S. sales dropped 84%, hitting a low of 12,000 annually and not reaching levels from before the crisis till 2000. Audi, a division of Volkswagen, is now expanding in the U.S. but the story has lessons for Toyota. This may explain why Toyota was quick to refute a story in ABC News on the acceleration issue. ...

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Fitch Ratings Agency says that 65-75% of homeowners getting home loan modifications under the Obama administration's Home Affordable Loan Modification Program (HAMP) will default in 12 months. This is because the median ratio of total debt payments to pretax income is about 64% according to a Treasury Department estimate. Many of these homeowners have large credit card and other debt, and little is left for food, clothing and other expenses. By April 2010, 295,000 homeowners had taken loan modifications under HAMP, which provides interest rates of as low as 2%. And another 637,000 homeowners are in trial modifications, which require that homeowners show they can make the lower payments consistently and provide documets to show eligibility. The Obama administration has provided $50 billion for the HAMP program, with financial incentives to loan servicers and mortgage investors to modify loans. Critics say the program would have worked better if the government and HAMP dealt directly with homeowners- as homeowners complain about the long time, upto a year, it takes for loan servicers and mortgage companies to get the loan modified on a long-term basis....

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Even though E-Bay executive Meg Whitman has outspent Jerry Brown by $130 million, much of it her own money, she trails Brown by 8 percentage points in an Oct 20 survey by nonpartisan Public Policy Institute of California. That survey showed Brown leading 44% to 36%. She had a hard line stance on illegal immigration in her ads for the primaries, which changed later in the campaign to attract Latino voters. Her campaign crafted by consultants focussed on three themes- cut government spending, create jobs, and fix education. Brown is a former Governor of the state and current attorney general. Experts attribute the lagging Whitman campaign to voters leery of 2 kinds of politicians- the first is the career politician and the second is longtime corporate executives. In other polls Senator Barbara Boxer is leading Ms Fiorina, former HP executive, 43% to 38%. Because of last minute surges in the polls, a lead of 8 points or more is considered necessary for the governor's campaign, for a candidate to win. Another factor is that Governor Schwarznegger came in with no political experience, and was beset by the state's fiscal troubles, with his poll ratings now at 28%....

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Spain's prime minister Mariano Rajoy, says his government's 2012 budget will reduce its deficit to 5.8% of GDP. This is higher than the 4.4% target that the previous government of Jose Luis Zapatero had committed to. Rajoy took into account the deteriorating economic situation in Spain in setting the new target, especially how this will affect Spain's local economy. Part of the problem is also that the actual 2011 budget deficit was 8.51% of GDP compared to a target of 6%. Rajoy said Spain is still committing to the 3% of GDP target set for 2013 by the EU. In making this decision Rajoy said at a press conference: " This is a sovereign decsion made by Spain, that I am announcing now, to you." Rajoy is basing the new budget on a 4.7% reduction in spending in 2012. The assumptions in the new budget will be for a 1.7% contraction in the Spanish economy, down from the overly optimistic 2.3% forecast for growth of the previous Zapatero government. Spanish Feb. 2012 jobless claims went up to 4.7 million, and unemployment in Spain was at an high of 23.3% in Jan 2012. The 4th quarter contraction for Spain was 0.3%....

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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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In a shift from statements at earlier summits which focussed on fiscal restraint, the Camp David summit continued the "firm committment to fiscal consolidation," yet emphasized jobs and economic growth as "imperative." There is new flexibility to address needs for economic growth and no specific timetables for fiscal balance as in previous summits. Obama had many one to one encounters with the other leaders. He discussed the euro crisis with Cameron while working out on a treadmill, and watched the Champions League soccer final between Chelsea and Bayern Munich with Merkel and Cameron. Each leader of the G-8, Harper of Canada, Monti of Italy, Hollande of France, Medvedev of Russia, Cameron of Britain, Noda of Japan, Merkel of Germany, was assigned a cabin in the rustic wooded setting of Camp David's mountains. A special effort was made to see that Germany's Merkel did not feel isolated in the setting because of the growing sentiment that austerity policies pushed by Germany are not working. On Iran, Obama stated that he was "hopeful that we can resolve this issue in a peaceful fashion that recognizes their sovereignty, but also recognizes their responsibilities."...

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The joint statement after the G-8 summit stated that "our imperative is to promote growth and jobs." It stated the budget deficits need to be addressed but said "spending cuts must "take into account countries' evolving economic conditions and underpin confidence and economy recovery." Germany's Merkel in her remarks said growth and deficit reduction supported each other, that "we have to work on both paths, and the participants have made clear, and I think this is great progress." Opposition Social Democrats in Germany say Ms. Merkel is adept at changing as the situation changes, and it appears Merkel is making the transition away from strict austerity policies she had championed earlier. Especially now with fresh elections in France, Netherlands and Greece, and the election of Francois Hollande on a pro-growth platform, the German position of strict austerity is being increasingly questioned on all sides. French president Hollande met U.S. president Obama at a pre-arranged meeting prior to the summit. Obama and Hollande see the need to reduce high unemployment in the U.S. and Europe by encouraging growth, creating a common interest....

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Chief Justice Roberts let the Obama healthcare law stand arguing that the individual mandate for everyone to carry health insurance acted as a tax, and was on these grounds constitutional. Justice Roberts found middle ground by first rejecting the Obama's administration's argument that asking every American to buy health insurance was legal under the commerce clause, and following this with the a non partisan approach that found the mandate legal under the tax clause. Roberts was guided by the writings of an eminent legal authority, Justice Oliver Wendell Holmes. Roberts referred to this in his opinion saying: "It is well established that if a statute has two possible meanings, one of which violates the constitution, courts should adopt the meaning that does not do so." Legal scholars speculate whether Roberts changed his vote later on or whether the Justice had used the questions in the hearings on the law to explore the idea that the law could be constitutional on different grounds. During the arguments in the hearings Roberts said: "The idea that the mandate is something separate from whether you want to call ita penalty or tax just doesn't seem to make much sense."...

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Spencer Jakab provides this balanced perspective on Buffett's performance as an investor. Breaking the past 25 years into five periods gives a sense of how Buffett has fared in recent years compared to his performance in the early years. In the latest period since 2010 Berkshire stock has outperformed the market by a mere 0.9% annually. In the period 1995-1999 Berkshire performance trailed the S&P 500 significantly, making up for this in the next 5 years. As Berkshire became larger it was harder to generate results of the period around 1975. In that year returns were 129.3%. In 2015 Berkshire had to take big stakes in large companies such as Kraft. Gains for 2009 were 2.7%, 2010 21.4%, and 2011 minus 4.7%. Showing that Buffett's principles and approach remained intact- invest in what you know and be careful to respect what you don't know, invest in companies and their prospects for the long run (an option not easily available to mutual fund managers who are judged yearly), invest in companies generating large cash flows. Yet as Jakab points out performance has gradually declined over the years....

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Alan Blinder, a professor of economics and public affairs at Princeton University, looks at explanations for low productivity growth since 2010, and points to the most likely reason- the lack of technological progress with the kind of impact that the personal computer and other innovations had in the period 1995-2005. Facebook, Google, Amazon and Apple tech innovation has more impact on consumers than on the industrial economy and production. Lower investment since 2010 with the financial crisis could have added to this, but to a smaller degree, says Blinder. Blinder even points to some hours of work being taken up by workers using Facebook, Twitter and other similiar services. The notion strange to Silicon Valley is supported that tech progress, dynamism and entrepreneurship may have actually declined to some extent. Intel's Andy Grove, no stranger to early innovations supported this notion around 2008, saying he saw less innovation of the type he was familiar with, more refinements than breakthroughs by startups in Silicon Valley. Grove was critical of the decline in manufacturing in the U.S., which is likely to have hurt productivity growth....

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Sony announced that it was expecting a loss of 110 billion yen or $1.1 billion for the fiscal year ending March 2014. Sony also announced the sale of the PC Vaio computer business to Japan Industrial Partners, a decision he called "agonizing." Another change is splitting off the television business into a separate subsidiary. The projected full year loss includes $690 million in charges for restructuring the PC and TV business, including job cuts of 1500 in Japan and 3500 overseas by March 2015. Currently the mobile phone and Playstation videogame businesses are operated as separate subsidiaries. TV sales are improving in the 4th quarter 2013, increasing by 40%, and operating loss for TV's is down to $48 million for that quarter. Increases in sales of premium priced ultra high definition TV sets improved margins. For the full year TV business had a loss of 25 billion yen. This is the first sign of a change in the TV business. Playstation sales are expected to hit 5 million by March 2014. Overall Sony showed a net profit of 27 billion yen for the 4th quarter of 2013....

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At a meeting of GM engineers and Continental- which manufactured the Cobalt's diagnostic modules on May 15, 2009- the faulty ignition switch defect was confirmed by repeated verification of data from many car crashes. No evidence shows this was shared with senior managers. GM filed for bankruptcy in June 2009, two weeks later, and this could be the reason as the situation could be chaotic in managerial ranks. It was tnot until Oct 29, 2013, when GM officials met with the supplier Delphi that the issue comes up again. Records for the meeting showed clearly the defective switches were made at a Delphi plant from 2004 to late 2006. A part change had led to the defective switch. It is the period between 2009 to 2013 that GM has no answer for, as public opinion increasingly looks to GM for answers on why it took so long to make the recall. At Toyota the footdragging in managerial ranks caused the problems for the recall. At GM the problem simply disappeared at the lower levels as the company went through a bankruptcy and emerged from bankruptcy under new management....

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The ruble has stabilized by April 1, 2014 following Russian intervention in the Crimea and western sanctions. It reached record lows of 37 to the dollar from a range of 29-33 rubles to the dollar since 2011. To stabilize the ruble the Bank of Russia says it spent about $24 billion in March 2014. The Russian Finance Ministry held its first auction of Treasury bonds on April 2, 2014 with yields increasing to 9% from 8% in February. Finance Minister Anton Siluanov says the ministry will resume daily purchases of foreign currencies of about $100 million- stopped since March 4, 2014- to replenish its sovereign wealth fund. Bank of Russia head, Ms. Nabiullina, says consumer inflation will exceed the target of 5% and economic growth is likely to fall below 1%. The crisis come at a bad time for Russia as it has slowed economic growth when growth had already fallen sharply in 2013. Russia plans to introduce its own payments system to reduce dependence on Visa Inc., and introduce its own credit ratings system as S&P, Moody's lowered its credit ratings....

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Yuka Hayashi describes the remarkable comeback of prime minister Shinzo Abe in Japan, his "Japan is Back," strategy and its personal overtones. He describes a visit- by Japanese known for taking that second or third chance and making it work through difficulties- to the prime ministers residence for discussion on the theme of "the second chance." The premier tells the visitors that Walt Disney would never have been heard of if he had not tried the sixth time after five failures, and not succeeded in Japan, which has a risk and failure averse business environment. Encouraging risk taking to setup new ventures and open up new frontiers and markets is part of the growth strategy for Japan. His personal struggle with ulcerative colitis during the period of his first term as prime minister, and the new drug discoveries that made it possible for him to recover, give Abe a fresh burst of energy this time. His story and Japan's story now coincide. Abe says the mission of the new LDP is to make sure that talent now flows from mature industries to the industries of the future....

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Portugal showed growth in GDP of 1.1% in the second quarter of 2013 from the prior quarter, according to Eurostat. Higher petroleum exports and better prices were part of the reason for the improvement in exports. At the same time Portugal's business leaders and mid sized businesses are improving competitiveness and exports as a way to create growth. Here the NYT's Raphael Minder shows the progress in exporting olive oil at a midsized olive producing farm business in the Alentejo region of Portugal. Morais de Almeida and Miguel de Almeida shifted direction to export to Brazil at this 127 year old olive farm business called Herdade de Manantiz. Manantiz had to use European and Portuguese rural development subsidies for 40% of the cost to put in its first irrigation system, as banks have reduced credit. The Almeida family tapped into family savings for the rest of the funds. This investment of 197,000 euros will help quadruple production at the 529 acre olive farm and generate exports. Brazil took in 524 bottles, and buyers are being contacted in Sweden and Japan for the oil produced from galega olives, unique to Portugal....

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A U.S. drone strike kills Tehreek-e Taliban Pakistan leader Hakimullah Mehsud in the North Waziristan tribal area near the Afghan border on Nov. 2, 2013. It also takes out several of his closest aides. This follows the arrest in Afghanistan of his deputy chief, Latif Mehsud leaving a power vacuum in the TTP. The government of Nawaz Sharif in Pakistan opposes drone strikes publicly because of the unpopularity of the strikes in Pakistan. Yet this week Pakistan interior minister speaking in parliament disclosed that only about 67 civilians had died in drone strikes that killed 2160 militants. Because Mehsud was an extremely violent leader in the TTP and remained a threat to the government and army in Pakistan, this may be seen inside the government and army with relief so that a new chapter can be turned for Pakistan that focuses on development efforts, something that Pakistan prime minister Nawas Sharif was elected to accomplish in his term in office. This may also be a positive step for a peaceful transition in the region following U.S. withdrawal, and for peace talks mediated by Britain's prime minister Cameron between Pakistan and Afghanistan....

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The nuclear deal reached in the 2013 Geneva negotiations between Iran and the EU, U.S., Russia, France, Germany, UK and China, a diplomatic bloc named the P5+1. Iran gets sanctions relief that would bring in an additional $6-7 billion dollars. In return Iran agrees to increased International Atomic Energy Agency inspections of the heavy water reactor in Arak, to not start the facility or lead it with nuclear fuel. Earlier France had pushed for a complete dismantling of that reactor. Iran will cap its uranium enrichment to levels needed only for fuel in a reactor, of 3.5%-5%, and maintain its total low enriched nuclear fuel at the current level of about 6 tons for the six month period in which further negotiations will take place. As the EU representative put it, this provides the time and space to reach a serious deal. It does not ship out and destroy the estimated 19,000 centrifuge machines in Iran to produce nuclear fuel. A sticking point was Iran's insistence that it has a right to develop and use nuclear energy for peaceful purposes, which Iran says is part of the UN Nuclear Nonproliferation Treaty....

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The sequester is the name used for the irrational automatic U.S. government spending cuts of $85 billion that begin March 1, 2013. A lot has been said about whether the sequester originated with the Republicans or President Obama and his advisors. Here veteran reporter Bob Woodward, associate editor of the Washington Post, says the idea of the sequester originated with Jack Lew, White House chief of staff and budget director during the negotiations, and Rob Nabors, chief of congressional relations at the White House. It was first proposed by Lew to Senate Majority Leader Reid at 2.30 pm on July 27, 2011, after being approved by President Obama, according to two senior White House aides who were directly involved. Why is this important? Because President Obama said in the third presidential debate, Oct. 22, 2012, that the sequester was not something he proposed, but something proposed by Congress. Jack Lew stated during the campaign in Florida, that this was rooted in Republican Congressional insistence. Woodward says Republicans also had situations of improper behaviour. The significance of this is that it eroded the little trust that remained between the Republicans and Democrats as they negotiated budget issues....

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The smartphone market is critical for Sony as it makes its way back to profitability in 2013. Sony sees smartphone unit sales growing at 50% in the year ending March 31, 2013, compared to a decline in unit sales of video camcorders of 9%, decline in digital compact cameras of 29%, and decline of televisions of 31%. The Sony-Ericsson joint venture was a world apart from the current Sony Mobile business. Sony Mobile executive vice president, Kaz Tajima, expressed his frustration that Sony was missing opportunities when working at the joint venture. Decisions came slowly as they had to be approved at different levels. Sony Mobile moves quickly on all decisionmaking. Companywide technological capabilities are also quickly available in designing a new product. The Experia Z uses all of Sony's technological capabilities in design, cameras, television and other areas. It now appears that the joint venture was the worst thing that happened to Sony. Sony bought out Ericsson's stake in the venture in 2011. Sony starts with global smartphone market share of about 4.5% and has a lot of catching up to do....

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A new EU bailout on March 25, 2013, provides the Cyprus government with $10 billion, and closes the second largest bank, Cyprus Popular Bank PCL. The depositors at that bank with deposits larger than 100,000 euros will face large losses. Cyprus had a banking sector about 4 times the size of its economy because of low taxes and lax banking laws to attract deposits from Russia. The largest bank, Bank of Cyprus, will be downsized and large depositors there will also take losses. An earlier plan for a tax of 6.87% on all deposits at Cyprus banks was rejected by its parliament. The EU ministers and negotators rejected an alternate plan to nationalize Cyprus pension funds for a bailout. Analysts estimate the impact on Cyprus will be a shrinking of the economy by about 10% in 2013, and 8% in 2014, after this financial crisis and the EU bailout. The size of the banking sector in relation to the economy is similiar to the situation in Iceland which faced a financial crisis earlier. This shows the consequences of small countries depending on inflated financial sectors several times the size of the economy....

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Mexican billionaire Carlos Slim will provide $250 million to New York Times in return for warrants that can be converted into 15.9 million common shares at a strike price of $6.36, close to where the price was last week. The notes carry a interest rate of 14% and are due in 2015. The Sulzbergers control 19% of the company's equity and control the company through super-voting shares. If Slim exercizes the warrants he would control 18% of the company's equity. Times faces a liquidity crisis and the $250 million may not be enough for it to survive as an independent company. The New York Times borrowed heavily in the boom years and it had $1.1 billion of debt at the end of September 2008, and only $46 million in cash. Much of that debt is coming due in the next couple of years. It has a $400 million credit facility that expires in May 2009, $250 million in notes due in 2010, and a $400 million credit facility expiring in 2011. Its stock has fallen 50% already and its debt is rated "junk" by S&P....

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A series of voicemails and emails in court documents now disclosed, show that AstraZeneca tried to suppress findings about diabetes after effects in taking its psychiatric drug Seroquel. In an August 15, 2005, voicemail sent to company salespeople an employee Christine Ney, followed up on a"weight and diabetes sell sheet" they had recently sent. It said that the salespeople should assuage doctors' fears about their patients' weight gains, telling them that the data did not show any causal link between diabetes and the drug. "Our objective is to neutralize customer objections to Seroquel's weight and diabetes profile", Ms Ney said in the voice mail message. She instructed representatives to "refocus the call" away from diabetes to the drug's tolerability. While all this was going on and years before this, Astra Zeneca concealed a drug safety expert's own assessment of Seroquel's relation to diabetes. In a 2000 position paper about the safety of Seroquel sent to Dutch regulatory authorites, an AstraZeneca doctor named Wayne Geller wote that there was a relationship between the drug and diabetes. He wrote " there is reasonable evidence to suggest that Seroquel therapy can cause impaired glucose regulation including diabetes melliutus in certain individuals."...

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The health care system is designed to encourage procedure based specialist practices and discourages the patient understanding education and monitoring that occurs with a well designed preventive family physician practice. As a result a patient only spends 30 minutes ayear on average with family physician compared to one hour in other developed nations. In the USA there has been a steady decline in the level and quality and extent of family care and the close one on one rapport with well trained family physicians who enjoyed their work and understood their patients and kept up with their health conditions and provided good and regular advice on these conditions. There is no money in this care as a result first you provide an environment where a whole range of medical conditions can flourish and expand, and then you hit them with a whole series of tests to rule out specific medical conditions. It is a perfect way to expand the testing and let testing flourish, so it would appear that if someone had wanted to start with a goal of letting testing proliferate unhindered then this would be the perfect way to design it. ...

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Questions about the wisdom of Exxon's moves against Venezuelan oil company Petroleos de Venezuela- taking it to court for taking a majority interest in 4 big oil projects managed previously by large western oil companies. Responding to Venezuelan public concerns about the deterioration in the oil production and development in Venezuela, President Chavez is negotiating with Shell and Total to bring in technical expertise and capital from western oil companies, while working at the same time with Petrobras and other national oil companies from China and Russia to develop its heavy oil assets. With Brazil facing capital needs for its own huge offshore Tupi oil field discovery, the $10 billion that is needed for developing the Carabobo oil field in the Orinoco will have to be financed with other foreign help and expertise. Petroleos Venezuela cannot rely solely on other national oil companies as it had thought it could do before. With things changing in Venezuela, and possibly even a new more friendlier government in future elections, has Exxon found itself on the outside when the European oil companies can build their presence in Venezuela?...