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Prices for WTI crude dropped below $50 in January 2015. Higher inventories weighed on oil prices and Saudi Arabia added to the pressure by cutting the price of crude sold in the U.S.

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Jeremy Corbyn is reelected leader of the Labor Party with the support of young people. He is seen here from the European viewpoint as a disaster for Britain. The parliamentary group of the Labor Party opposes Corbyn, and is critical of him for not supporting the Brexit no vote the way he should have. Corbyn did not come out strongly in favor of staying in the EU, giving it a 7.5 out of 10 score when asked how he would rate the EU. Only a fifth of British voters support the idea of Corbyn as prime minister. He is good at bringing people's concerns for attention at prime minister's questions, rides a bicycle to work, and is honest about his convictions. Yet this is not enough to be effective as a leader of the opposition who lacks the support of his party's members in parliament. Corbyn has also dropped people with different opinions from the leadership in the Labor party in a nasty fight with people who disagree with him, which is bad for the Labor Party. This has weakened Labor to the point where it cannot function as an effective Opposition Party, especially now that Britain enters Brexit negotiations and needs an opposition to act as a check on the government's policies. The Economist magazine in London shares these concerns in an editorial. ...

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Uncertainty in China's stock market with the ban on stock selling by large institutional investors. Goldman Sachs estimates that $184 billion in shares could be put up for sale if the ban was unambiguously lifted. The price swings on the market would be accentuated say analysts because of a decline in trading volume.

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The drop in oil prices and the credit crunch is driving a push for mergers in the oil industry. Suncor Energy of Canda is acquiring Petro-Canada for about $15 billion in stock,bringing together two of Canada's oil sands and oil companies. To do the deal Suncor will giv each Petro-Canada shareholder 1,28 shares of the combined company for each share of Petro-Canda. Suncor will shareholders will end up owning 60% of the new company and Petro-Canada shareholders 40%. Suncor founded in 1953 is the second largest oil sands producer. It posted profit of $4.1 billion on sales of $24.3 billion, debt load of $5.8 billion and has market value of $23.4 billion. Petro-Canada was established by the government of Canada in 1975 and in involved in exploration, production and distribution of oil and natural gas, with operations in Canda, Trinidad and Tobago, and Syria. The government reduced its stake to 19% in 2004. Petro-Canda had operating profit of $7 billion on $22.2 billion in sales, and $2.7 billion debt, with market value of $11.6 billion on the Toronto Stock Exchange. Its stock has suffered a larger decline, and shareholders like the Ontario Teachers Pension Fund, which owns 3.3% of Petro-Canada, was looking for ways to get more value out of the company with pressure to sell some of its assets or the whole company. Both companies have cut spending by a third, amid falling oil prices....

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Analysts say Abbott has paid a steep price for India's Piramal Health Care. Abbott is buying the Indian drug company for $3.72 billion, which is 48% above Piramal's market cap. Going by Piramal sales of $500 million a year , this is 7 times expected sales. Daiichi Sankyo paid 4 times sales for Ranbaxy in 2008. Analysts say this will give Abbott a 7% market share in India's branded generics market. Yet this market is highly fragmented with the top 20 makers having 60% of the market and many small companies.

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Online sales of razors are growing rapidly, having doubled to $263 million in the 12 months through May 2015, according to Slice Intelligence. This is about 8% of the market of $3 billion. P&G Gillette division is responding by offering better prices online to compete with competitors such as Dollar Shave Club. Dollar Shave Club has about 2 million customers paying about $1 to $9 every 2 months for blades. Gillette's claim is that its Fusion ProGlide blades cost $5 a month, based on changing cartridges only once a month for 3-4 shaves per week. Gillette dominates retail sales because of its relationships with retailers, its displays inside stores, and its packaging. The online competition changes the way blades are sold, bringing better prices to customers used to paying high prices for baldes sold with "new and improved" labels.

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Groupon, the online coupon service, showed a net loss of $2.98 million for the third quarter of 2012. Revenue growth from gross billings increased by only 5% in the third quarter with slow growth in Europe. Shares of Groupon closed on Nov. 8, 2012 at $3.92, down from the $20 IPO price of Nov. 2011.

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A detailed account of how the Treasury under Secretary Paulson and the Fed under Bernanke worked through the evening of Friday and through Saturday and Sunday, to come up with a plan -coordinated with the heads of Fannie Mae and Freddie Mac and House Financial Services Committee Chairman Barney Frank- to support Fannie Mae and Freddie Mac before both companies ran into serious difficulties. The stock of both companies had been on a serious downward decline in the past 4 trading sessions with Fannie Mae shares losing 45% of their value and Freddie Mac losing 47% of their value. Also rumors in the financial markets on Friday had affected their share prices. Secretary Paulson felt it necessary to send a clear signal to the markets by making an announcement at 6pm Sunday that Treasury would get congressional approval to increase significantly the credit line at Treasury for the 2 companies, and also get approval for Treasury to take equity stakes in the 2 companies. Meantime the Fed Governors met over the weekend and made the decision to open the Fed's discount window to lend to the 2 companies....

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Gome's share price fell 21% on March 27, 2012. The company is facing strong competition from online sellers. Its profits declined by 6% in 2011. China is seeing an upsurge for online retailers such as 360Buy.com and Taobao. Gome's internal estimates are for internet sales of home appliances to be 1 in 3 by 2016, up from 1 in 10 in 2010. Gome is in a similiar position as Best Buy in the U.S. which competes with Amazon.com and other online sellers. To compete Gome is promoting its own online shopping operations.

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Where changes are being made that make America stronger business leaders wholeheartedly support and value the president's work and the people on his team working on it. Brad Smith of Microsoft says of Biden on cybersecurity "he has done more in his presidency than any president ever." CEO's of auto companies (Stellantis, GM, Ford) and Intel CEO Geisinger value the investment the government is making for climate change transition and investments in rebuilding semiconductor manufacturing to level the playing field with China, something the US Chamber of Commerce never advocated. It is the policy officer of the US Chamber of Commerce who uses the word "complicated" because the positions taken by the US Chamber of Commerce are at odds with what the American people need, or are demanding of the president. If one is talking about large oil companies, so called Tech companies such as Google and Apple that are not paying their fair share of taxes, and Pharma companies that are charging exorbitant prices, the president is only doing what is best for the American people. One could see this in the recent Senate hearings with Big Pharma companies ,when out of sheer frustration the senior Republican senator Mike Braun of Indiana warned the Pharma companies, that they were following a path that he other Republicans could no longer support. Banks faced tighter regulation because of banking crises including the 2009 crisis caused by the banks that hurt workers and middle class. Business relations with the Biden administration are being shaped then by a new vision for America and the American people, to point to a brighter future, not to pull back to the past. ...

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The World Vaccine Summit raises about $7 billion to immunize about 300 million children for polio, diphtheria and measles, over 5 years. Prime minister Boris Johnson who opened the summit called it "the greatest shared endeavour of our times." Bill Gates donated $1.6 billion and Britain pledged 1.65 billion pounds over 5 years, making Britain the largest donor. Mr. Trump also addressed the summit in virtual manner- "we will work hard, we will work strong... good luck, let's get the answer." Mr. Johnson called for renewing "the collective resolve."  Specifically he stated: " Just as we have great military alliances like NATO.... where countries collaborate on building their collective military defence, so we now need that sam spirit of collaboration and collective defense agains the common enemy of disease." Referring to failure of early warning systems for coronavirus with crucial weeks between Jan 6 to Feb 16 lost for the West with lack of international cooperation- "It will require a new international effort to cooperate on the surveillance and sharing of information- data is king- that can underpin a global alert system, so we can rapidly identify any future outbreak. And that will mean a rapid scale-up of our global capacity to respond."  ...

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The DJIA average reaches 14296 on March 6, 2013, with a 7706 point rally since the 2008 financial crisis. Four blue chip stocks alone account for close to one third of the 7706 point rally- IBM, Caterpillar, 3M and Chevron. A 1% rise in IBM with a share price of $206 moves the DJIA average by 16 points because the DJIA is a price weighted average. The IBM contribution is about 1000 points to the 7706 point rally and Caterpillar about 500 points. Chevron and 3M each about 400 points. Boeing Caterpillar and Chevron were the largest contributors to the rally between 2003 and 2007. During the subsequent decline Boeing, Caterpillar and 3M were the biggest contributors. Bank of America contributed much less to the rally, but the DJIA took a big hit losing 388 points because of the debacle at Bank of America in 2008. The DJIA is a price weighted index so that the larger the price of a stock the larger its contribution. The S&P 500 Index by contrast is weighted by the capitalization of the companies in the index. IBM has the largest weighting in the DJIA of 11%....

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The Economist quotes experts saying that drug innovations would not be affected by price controls on drugs. Pricing reforms can accomplish the reverse, spur innovation by doing as Britain and Germany are doing- pioneering comparitive reviews of drugs effectiveness and cost-benefit analyses aimed at reimbursing firms for new drugs based on their performance. Sanford Bernstein, a financial advisory firm, says in its study that a 20% reduction in what Medicare pays for drugs would not kill off innovation, it would reduce earnings per share of big pharma firms by 3-8%. As drug research is now done in many countries, and its a globalized industry, innovation is not likely to be automatically affected by price reductions in one country like the USA, according to Alna Garber of Stanford University and Patricia Danzon of Wharton Business School.

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Senay Boztas writes from Amsterdam, Netherlands, that the strict lockdown in the Netherlands is a result of a badly handled coronavirus policy response. The Dutch experience is offered as a lesson other countries can learn from. It too long to form a government after Dutch elections in March, 271 days so that it took too long to have a policy response. When a policy response was made it faltered badly with too relaxed a lifting of restrictions without essential distancing and mask use. Restrictions at super spreader events at night clubs and stadiums were lifted all at once. The government failed to develop a policy of anticipating the next wave from variants by planning early for a booster campaign. (Israel is already into its fourth booster shot as reported in NYT).  The result is that instead of a calibrated response, because infections make up 15% of tests, Netherlands is in a sharp lockdown. A policy of prime minister Rutte that put too much into the idea of freedoms with different meanings in the west calling Holland a "slightly anarchistic country that doesn't need a preachy government," rejected vaccine mandate of any kind as in France and Austria for public transport and restaurants.   ...

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Western nations including Europe, Canada, Japan and South Korea, are members of the International Enerrgy Agency, which has 1.5 billion barrels in reserve. The IEA will release oil from its reserves to support president Biden's plan to release 180 million barrels over the next 6 months. OPEC that includes Russia plans to increase production by only about 432,000 barrels a day.  During the Trump administration Saudi Arabia and Russia were at odds on production levels leading to Russia increasing production to higher levels than OPEC would allow. This led to a temporary collapse of oil prices to levels as low as $30. To help the US oil fracking industry which could not operate at these low prices president Trump brought the two sides together into what is now OPEC+. The Biden administration has ties with both Iran and Saudis, and aims to revive the Iran nuclear deal, withdrew support for Saudi air strikes on Yemeni Iran backed Huthi rebels. In this geopolitical situation Saudis are reluctant to respond to US calls to increase production as they have done in the past. With climate change and the COP26 agenda in Glasgow there is a plan to shift away from fossil fuels such as coal and oil that are supplied by OPEC and Australia. This means that a shift away from Russian or Saudi oil is also a shift towards renewable energy such as wind and solar which is needed to combat climate change. The Ukraine war and efforts to wean Europe away from Russia sourced energy will accelerate the changes needed to tackle climate change, even though the US fracking industry will step in to increase production at oil prices at $100+ in 2022. After 2023-2024 the push for conservation and renewable energy from today's crisis and Glasgow COP26 commitments, sharp slowdown in China and renewable focused India is likely to bring down oil prices to reasonable levels for a transition period to renewable energy. ...

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How short sellers target Citigroup and work havoc with its share price losing half its value in afew days. The need for reinstating the uptick rule but a mystery that no action has been taken. And Paulson scores himself as a ten from 1 to 10 in a question from Alan Murray at the WSJ CEO Council, even as lack of comprehensive action on foreclosure prevention, the failure to reinstate the uptick rule, and time lost in the debate in Congress and afterwards over buying up toxic assets, remain a mystery.

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Jared Bernstein of the Economic Policy Institute points to trade barriers reducing competition and free trade that should raise an outcry when free trade and competition advocates focus alone on the Trump steel tariffs. He points to estimates that show $90 billion in additional costs to Americans from the barriers that prevent Americans from paying world market prices for surgeries and medical treatment, prices similar to what is paid in advanced countries like Germany, Britain and France. A bigger barrier in pharmaceuticals prices being sheltered from market competition worldwide costs a huge $370 billion in additional costs to Americans. These two costs in healthcare would help Americans by a magnitude compared to tax cuts that do not work for average Americans with the business tax cut going more into share buybacks than into increasing wages or capital investment in 2018.  Bernstein points to Neil Irwin's column in the NYT that flags statements such as Senator Mike Lee, Republican, that the steel tariffs are a huge job killing tax hike, as being misleading. Bernstein says two actions were never taken that would have used benefits of free trade to help affected communities that lost jobs in industries such as steel and textiles, other industries affected by foreign competition.  He lists these steps as sectoral employment training, apprenticeships ,and job creation efforts in the worst affected areas. Basically no one really knows what is good trade policy, the textbook concepts and theories are out of date when countries can subsidize particular industries such as steel and dump products into the American market. At a press conference on CSPAN with the Swedish prime minister Mr. Trump stated that China was exporting more than what is officially shown as there are transshipments from other countries, some of them with no steel mills.  As Mr. Trump stated at that press conference he was elected partly because of the worst affected communities- in places such as Michigan and other states in the midwestern U.S.- that suffered from unfair trade. Bernstein admonishes the economists and politicians, media, for the headlines that are misleading in showing that bad trade policy is being pursued and trade wars are being started. This deserves attention because the Trump administration and advisors such as Lighthizer who served in the Reagan administration seek fair trade, and the Commerce Secretary Wilbur Ross successfully pushed for NAFTA trade deal renegotiation not the outright rejection of NAFTA that was mentioned in the election campaign. Ironically no one is helped by this trade rhetoric and misleading headlines. In fact the strengthening of the U.S. currency as the huge trade surplus of China goes into U.S. assets, and with the election of Mr. Trump, gives foreign competitors a continued advantage. And in fact Japan, South Korea, China, had a mild response to the tariffs as reported, because these countries are aware of global overcapacity created especially by China which produces 50% of the world's steel, and as China shifts to higher technologically value added products closing many older steel mills. ...

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On the competition in the Chinese car market. Its especially fierce in the small car market where prices and margins are falling. Microcars with engines smaller than 1 litre sales increased by only 7% through August.Subcompacts sales went up by only 4% according to JD Powers. With 80 brands in the market margins are falling from15% in 2006 to about 9% in first half 2007 according to JD Powers. The situation is better in the larger cars. Compacts sales are up 46% and midsize sedans up by 35% (JD Powers). VW saw sales in China up by 30% in first 9 months of 2007, and market share increased from 15% to 18% widening the lead over GM which is No.2 at 9.8%. Toyota's Camry ($26000 to $36000)and the Crown luxury( $43000) sales went up by 40%. Cherry, Honda and Toyota are all at about 8% market share for No. 3 position. Prices of compact and mid sized sedans have dropped so they are a better value now and are attracting many buyers in the better offpart of the middle class.

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The Chinese market is shifting to more economical cars and to price conscious customers in China's growing middle cllass typicall making about $13000 a year. With the constant pressure to provide more value and better price China's local carmakers are willing to work with slim margins. The Chinese car makers are gaining market share and will continue to gain share in a very competitive price conscious market. In just one year from 2006 to the first 7 months of 2007 the Chineses carmakers increased their share from 26.4% to 30.6%. The Chinese carmakers include smaller makers in addition to the companies Cherry and Geely and these smaller carmakers are also gaining share. The Chinese companies are offering better equiped cars, more fashion and styling, and better prices. one example is a Hyundai Santa Fe SUV selling for $18500 versus a Hover SUV made by Great Wall Motor Company. The Hover SUV selling for $14500 than the comparable Santa Fe which this customer drove through the mountainous border of Sichuan with Tibet. See the article by Fairclough in wsj August 25-26, 2007 of a Cherry A1 compact driven through the Silk road 1700 miles trip in the westernmost province of Xingiang. What this also means for foreign carmakers is that there have to be price cuts to move product. GM took off 27% off the price of its Chevy Sail stationwagon and Hyundai cut prices by as much as 13%. ...

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Von Mark Schieritz of Germany's Zeit Online describes the changes underway following the election campaigns in the U.S., and France, and the Brexit vote in Britain, all signalling the discontent of people left behind by the tech, capitalism, trade and globalization changes of the last two decades. The appeal of one time fringe politicians using racist slogans and divisive rhetoric to appeal to those left behind, appealing to people lacking intergenerational mobility, and without much hope for a better future, is a serious concern. People who are gullible enough, lack college education, or racially isolated so that they are not likely to look carefully at what is being offered in terms of programs and change of competing parties, and likely to overlook the hard and difficult road for corrective course of action, because of anger and pentup fears. Schieritz cites as part of this change the unanimously approved conclusion in its final declaration at the G-20 meeting in Chengdu, China- "The benefits of growth need to be shared more broadly within and among countries to promote inclusiveness." Yet this can be a sort of "too little, too late."  Bankers who are cited in an email going around Wall Street lack credibility with groups on Main Street, to people adversely affected by tech, trade and globalization changes that have been persistently ignored for over a decade, close to two decades. More convincing is the tone of Theresa May, the British prime minister's first statement outside 10 Downing Street- who spoke of the "burning injustices" and her determination to make this a top priority of her government. Still more convincing are the programs to invest $275 billion over 10 years in infrastructure put forward by the leading candidate in the U.S. presidential election of 2016, to provide easier access to public universities and colleges to those left behind, as a sure way to create new jobs and address intergenerational mobility. In fact every leading candidate had made the loss of upward mobility their central plank already in 2015, long before Trump and Sanders started their campaign. The real hope lies in western leaders Merkel, May, and Clinton, all keenly aware students of changes, all women by the way who have sensed the injustice and have the ability to come up with something new and promising for the future, after learning the lessons of the past. ...

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Tesco has a loss in market share in the UK going from 31.6% in 2007 to 28.9% in June 2014, according to Kantar Worldpanel. Profit margins of 6% a few years ago have dropped to an expected 4% in 2014, according to Bernstein. Tesco is losing out to more competitive discount retailers such as Aldi and Lindl. For larger spending shoppers Tesco does not have the same appeal as rival chain Waitrose. CEO Philip Clarke, who took over in 2011, resigned in July 2014. Dave Lewis, executive at Unilever, will replace Clarke. Tesco's share price has dropped by 30% since March 2011, when Mr. Clarke became CEO. Lewis is expected to come up with a new strategy. Tesco does not have the cost structure to compete with the discount retailers such as Aldi, which should lead to a different approach. The current approach of only making Tesco marginally better to compete with established discounters is not working.

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A former chairman of the Council of Economic Advisers, Martin Feldstein, says a recession is likely in the U.S. as interest rates rise. He sees interest rates on 10 year Treasury  notes rising from about 3% to 5%, as the Fed pushes the short term rate from today's 2% to a projected 3.4% in 2020. As short term interest rates go up he sees equity prices reflecting historic P/E ratios for stocks. This would lead to a significant drop in share prices and drop in consumer spending, drop in business investment, and a drop in GDP of 2%. 

Because of huge deficits as publicly held federal debt rises from 75% to 100% by 2020, there is less room for fiscal intervention and help through public spending, and with short term rates at around 3% less room to cut rates. This means, says Feldstein, that a new recession would last longer.