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The head of one prison guard union in Portugal says things are so bad with spending cuts that he has to take his own toilet paper to work. With spending cuts only one new prison will be built in the Azores, even though Portugal's prisons are very overcrowded and conditions are deteriorating. This provides an unusual insight into a less seen part of life in Portugal with austerity spending cuts.

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The view from Germany on Trump's economic plan and the need for changes by his advisors. DW.com's Wenkel says Trump needs to understand that 80% of job losses in recent years have come from not from globalization, but automation and higher productivity, rationalization. He says higher tariffs on Mexico could backfire.

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Derivatives were touted as ways to manage risk and to help grow amodern economy. But compensation of 370 derivative traders who are the few who know what they put into these complex contracts, so they are the ones who know how t best unwind them, raises anumber of questions. Are derivatives pushed because its highly lucrative for the few traders who write them? Haven't derivatives proved that they can be highly dangerous instruments on the downside, with unlimited risks that are ultimately borne by the taxpayers? Consider that the $165 million is only part of the $450 million in bonuses to 370 employees in the FInancial Products unit at AIG. Of this $55million has already been paid out. And there is an additional $230 million still to be paid out. One of the things that stands out most is how everyone involved with these financial innovations for a modern economy, and the pushing of different financial products, makes a lot of money with risks that are passed on down the line and end up in the taxpayers lap. It has proven that transparency, prudence and safety are tests for financial innovation just as they are for financial markets in general, and that excessive compensation leads to distorted self-interested presentation of the facts of the matter, and ultimately perversion of stable processes in the financial system....

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Years of frugal living and careful patient investing helped Ronald Read of Brattleboro, Vermont, achieve significant savings accumulation. He worked at a local J.C. Penneys store and at his brother's gas station. At the time he passed away in 2015 he had $8 million in his stock portfolio. He preferred dividend paying stocks and reinvested the dividends in more shares. His largest holdings were in Wells Fargo bank, and in consumer stocks P&G and Colgate Palmolive. He owned 92 stocks in his portfolio.

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Mark Hulbert lists the quality stocks with low P/E ratios, little debt, high return on equity, and long records of earnings growth spanning long periods that limit volatility after the emerging markets crisis of 2014. He adds a cautionary note on the idea of quality stocks by saying P/E ratios matter, that quality stocks at a high price are a bad investment and at extraordinary prices are a extraodinarily bad investment, citing the Nifty Fifty stocks of quality in 1972 that lost value in the stock market slide in 1973. He takes quality stocks Disney, Procter & Gamble, Johnson & Johnson off the list of quality stocks because of high P/E ratios, a critical criteria. Hulbert's list for financial quality companies and their P/E ratios in Jan. 2014: AT&T telecom 9.4, Aflac insurance 9.1, Allstate insurance 10.9, Apple computer and telecom 12.7, Bank of Nova Scotia 11.0, Chevron oil 10.0, Cisco computer hardware 12.2, IBM technology 11.7, Royal Bank of Canada 11.5, Wells Fargo banking 11.5. These P/E ratios compare with the S&P 500 P/E of 17.3....

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CERA estimates that while prices of crude went up 100% from 2000 to2007 the capital costs for oil exploration went up by 80%, and there are shortages of engineering and other resources.

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This WSJ editorial says the U.S. Federal Reserve needs a chairman who is politically independent, especially since the Fed has not been politically independent since 2008. It calls Ben Bernanke a political sidekick of Timothy Geithner at Treasury since 2008. A Summers Fed would have become too much influenced by the White House, which would not serve the country well, as new policies will be needed to wind down the loose monetary and fiscal policies, says the editorial.

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The pace of fundraising for the Sanders campaign picks up pace in the 48 hours after the virtual tie with Hillary Clinton in Iowa- raising $3 million in small donations most well below $2700 maximum, and 40% from new donors. The Sanders campaign gains momentum with about 80% of the vote from young people going to Sanders in Iowa.

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Jena McGregor's interview with Ben Horowitz of Silicon Valley. Horowitz says its best to keep the founder as CEO, because its harder to teach a professional CEO to innovate, than it is to teach a founder to be a CEO. Better to take the advice of one football sports team owner to his coach when told about injuries and problems: "Nobody Cares. Just coach your team." Best to focus on the task ahead than to get overburdened by thinking about the hurdles. Many companies make the mistake of overhiring and finding they are in trouble when business falls off. At that time a moment of honesty is essential, even though a trust with the employee has to be broken, one cannot hide or blame the employee- only by saying we screwed up and planned the business the wrong way, can one make an honest effort to recover. Not making the honest assessment and being frank with oneself and colleagues can be fatal for a young company. Andy Grove of Intel, cites this example in his book "Only the Paranoid Survive," - to shift out of the memory chip business and close plants was essential once it was clear the Japanese had an unsurmountable edge, a long term move into microprocessors had to start now for Grove and Intel in 1986. An outsider's impersonal logic and no emotional involvement had to be Grove's mindset, as if he was replacing himself as the new head of the business, going out one door and coming back in. Panasonic's moves in 2013 under CEO Kazuhiro Tsuga to exit the plasma television business and focus on new business opportunities, including electric car batteries, is a recent example. On motivation or purpose: no big vision has to be announced and repeated- it is enough to make being a good company at what you do the end goal, make craftsmanship or doing the work you enjoy and can contribute in the end goal and purpose. The modest and straightforward is enough reason for existence and doing very well. How important is training? A lot, a great deal more than one can imagine. People can be talented but not productive. Companies that have good and extensive training programs can do much better than companies that lack these programs. Managers who can continue this with on the job training are also valuable to build on training programs. Sony's Akio Morita personally interviewed new hires, new engineers joining the company at all levels- it is really the contribution of the thousands of engineers that he personally interviewed that built Sony into a global pioneer in electronics in his time. He says the future of the company is determined by the people the company hires. Goes even further, by saying the fate of the company is in the hands of the youngest recruit on the staff. Horowitz finds Jim Collins as management writer a bit abstract and mushy, he prefers Intel's Andy Grove and his books such as High Output Management, as more specific about how to manage business. One could add "Made In Japan," and Morita to the list....

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Jerome Fons rates the credit rating agencies F for failure, and says its time to leave out ratings language from financial contracts. Its time to rely on good judgement. He is former managing director of Moody's. The system is rife he says with conflicts of interest and the whole system has failed and is still in failing mode. The finacial system he says can function without letter ratings, regulators and investors should consider all the relevant information about an investment including market prices. And he says lets return to the tool we all used before we delegated responsibility to ratings agencis, and this tool is our better judgement of things.

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Experts say CEO's have constituencies in the form of employees, shareholders and customers. This has affected CEO's as they responded to president Trump's comments on the Charlottesville attack.  Even the cautious optimism that CEO's maintained during the early months of the Trump administration- as they sought not to miss out on representation on advisory councils- has now faded. Most CEO's have decided that it is not worth having this voice in advisory councils when they have to be seen as supporting positions on racism and culture they cannot support. One by one the actions by Trump on the travel ban, climate change agreement withdrawal, Charlottesville attack,  has led to a shrinking of support. From non-involvement in Trump's campaign but cautious optimism, to a sense that it is not possible to work with the president without violating deeply held beliefs. Gini Rometty of IBM told employees that dialogue was critical to progress, but that " this group can no longer serve the purpose for which it was formed."  A sense that not much would be accomplished, and the reputational cost for business was too high to make it worth the effort. In the span of 3 days three advisory councils to the president were disbanded. ...

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 Donald trumps economic plan would worsen the country's economy through extravagant borrowing and lower economic growth in the long run. Because it lowers taxes by 15 percent without any paired cuts Trump's plan would worsen the deficit, so that large debt would hurt the economy in the long run. Clinton's plan would increase taxes by 4  percent largely on high incomes so as not to hurt consumer spending, with paired spending to help lower income households. Because Trump's tax cuts benefits go disproportionately to higher incomes the benefits in terms of consumer spending are slight or insignificant. In the current state of weak income gains of the last ten years it would take some time for the middle and working class to recover. Clinton's plan carefully nudges that recovery forward without aggravating the debt, so that as incomes and net worth recovers across broad parts of the population, the U.S. is poised to go forward with strong growth as in the postwar years. Trump's plan frontloads tax benefits to higher incomes at the expense of worsening debt and enlarging future debt. In the process it worsens income disparities already aggravated by the 2008 financial crisis. Reducing the chances of a broad based recovery for all parts of the population, necessary for a strong recovery.                       ...