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Southwest Airlines CEO Kelly says studies have shown passengers just want to know if their flight is going to go and at what time. So he stresses these things, because travel is not perfect and its how his airline handles these situations that matters. He says its not a reach to say that Southwest is getting the 5% of revenues that is the max he thinks you can get from baggage fees, by simply not charging as passengers hate these fees. He wants to use new technology to manage fares better. Asked about things getting bette, green shoots of recovery, he isnt optimistic. He says Southwest has to be prepared for a lot of uncertainty and instability, and operate with an abundance of caution. He goes on to say what he sees as different in this downturn. Saying he wishes that steroids were legal, because the speed at which we identify issues , study them and make decisions is unlike anything he has experienced before. In Southwest's culture this is the difference between furloughing employees, grounding planes, and reducing flights and running as close to normal as possible. The cushion is gone now, and he has to manage risk much more carefully. This is good advice for other executives....

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"Who are the Taliban? They are the local people," says one Afghan from Marja. Another man Hamza says he will not let foreign forces raid his house. Their is fear and resentment of night raids for antinarcotics purposes. A local leader in Panjwai, west of Kandahar, says people lay mines for the Taliban only to feed their families, and says 80% of insurgents are local people driven to fight out of poverty and despair. Offered another way to lead their lives only 2% would support the Taliban. A leader in the provincial council at Helmand says people do not trust the government as it has not kept its promises in the past, so that even if they are defeated militarily and security is 100% it will take time to restore trust. This confirms earlier reports of the deep unpopularity of the Karzai government. All this reporter Carlotta Gall of the NYT finds out on the ground, in the southern provinces of Helmand and Kandahar, as the USA launches an offensive to push the Taliban back towards Pakistan. In recent years the Taliban has established control over most of Helmand and Kandahar provinces , and many villagers prefer to be left alone without foreign forces causing bombing and fighting. ...

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The WSJ study reported by Carrick Mollenkamp and Mark Whitehouse in the Journal on May 29, 2008, set off the investigation into the lowballing of the London Interbank Offered Rate or LIBOR by the 16 bank panel reporting the rate daily to the British Bankers Association. The rate is critical in setting the interest rate on trillions of dollars in transactions worldwide for securities, home and auto loans, derivatives and swaps. The apparent motive being to prevent negative perceptions of a bank's health if one bank was borrowing at a higher rate than its peers during the financial crisis of 2008-2009. banks doing the most lowballing for the LIBOR rate such as Citigroup, HBOS, were already perceived in financial markets to have higher risk during the financial crisis, divergence in LIBOR rates would reinforce these perceptions. Investigations later showed other banks such as UBS manipulated the rate they reported and influenced other banks to do so to increase trading profits. UBS settled charges for $1.5 billion and Barlays for $450 million. UBS was seen as an egregious offender as the practice was in the words of the Financial Services Authority, the UK regulator, quite "routine and widespread" at UBS....

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Fears that nuclear facilities that are spread out thoughout the country of Pakistan could fall into Taliban hands. Especially one scenario in which the nuclear facility is moved and an insider tips off the Taliban, later it is taken by Taliban as it is being transported. Even as the terrorism increases in Pakistan, the country is continuing to produce more plutonium and more nuclear reactors. An estimated 70 to 100 nuclear weapons are located in Pakistan. Americans gave $100 million for securing these facilities and for security, but have no idea where that money went. And when it comes to the nuclear facilities the USA has no idea where they are, and is facing a dead end of "don't worry" from Pakistani military officials, increasing the concern from the Americans, as the same assurances were made about the sale of nuclear technology by Pakistani scientists in the black market. These claims turned out to be true. This time the US is not about to take any chances, and the Pakistani military is loath to disclose more information about the location of nuclear facilities, because the US may blow them up if the Taliban are seen as a threat to those facilities....

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The market shares of Hyundai, Kia, and VW have received a boost as the Detroit carmakers struggle. Kia and Hyundai have moved their market share from 5 in 2008 to 7.3% today, up by 2.3%. Hyundai had difficulty getting brand name recognition for quality and performance in prior years, but it has persevered. KIa and yundai spend more on incentives, $3200 in 2009 compared to $2000 in 2008 to attract first time buyers. To take into account the economc conditions Hyundai was the first to come up with the Hyundai Assurance Plan, which allows buywers who finance their purchase to return the cars if they lose their jobs. Once these buyers try the Korea cars the ope is that they will see that the quality is on par with the Americans and the Japannese for a lower price, or even exceeds them. The Korean carmakers have worked hard on improving quality. In 2009 Hyundai won the North American Car of the Year award at the Detroit Auto Show for the Genesis luxury car. VW is also gaining market share this year. VW's market share is up to 2% from 1.5% in 2008. Aggressive marketing of the Jetta has moved its sales by 8.3% in May. Some of this market share is coming from Japanese carmakers....

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On December 17 Kenneth Lewis CEO of Bank of America arranged a urgent meeting with Treasury's Paulson and the Fed's Bernanke to discuss unexpected losses in the billions at Merrill. Paulson and Bernanke persuaded Lewis not to scrap the deal and offered a $138 billion package not to scrap the deal. The deal then closed at $24 billion. Was it abad idea not to disclose the bad news immediately? It certainly proved to be the just that. In five trading days Bank of America's market capitalization dropped 45% wiping out a much bigger sum than the Merrill deal. Lewis says that the government was firm in its view that serious systemic harm would result if Bank of America did not close on the deal. Law suits from shareholders could result from this but says one legal expert a legal doctrine could emerge that in anational economic emergency companies are absolved from governance actions harmful to shareholders like nondisclosure of critical information. Which only shows how complicated situations can get once everythings spins out of control starting from the basic fact of bad opaque assets on the company's books, taking any form of rational action and behaviour with it with a million unpredictables....

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South Korea which is dependent on exports for nearly half of economic output took a massive hit with January's economic news that exports fell by 32.8% in January 2009 compared to a year ago. The information appeared on the website of the Korea Customs service, and the Ministry of Knowledge Economy released this information also. The government reported that industrial production fell by 18.6% in December 2008. A large proportion of South Korea's exports are semifinished goods like televisions, cellphones, cars and other products that are finished with final assembly in China's factories, and then exported to other countries. So these numbers in South Korean exports will show up in figures from Chinese exports in the coming months and may be just as steep. This begs the question, what will happen with the export model in countries like South Korea and China and countries like Germany that are heavily dependent on exports to China. If as reported in today's WSJ Americans are now becoming thrifty, spending less and saving more, with this showing up in the statistics- and in habits like shoe repair with a story on the growing shoe repair business in today's WSJ- where will this take export dependent economies?...

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GM announces loss for 2008 is $30.9 billion and loss for the fourth qurter is $9.6 billion. The company also said it may not be able to meet its auditors going concern requirements. GM burned through $5.2 billion in cash in the fourth quarter, and $19 billion in 2009. This puts the cumulative net loss to $82 billion since CEO Wagoner began restructuring in 2009. Its obvious now that notwithstanding the media attention it got and what was said by key players, not much was done and the dangers in continuing existing strategy on fuel efficiency, and on too optimistic assumptions about what could happen to car sales, and on acquiescing to union demands on benefits that no company could sustain if economic conditions turned for the worse. All this has played out and in dramatic fashion in the last 6 months. Astonishingly the Board and GM are going down with the ship, the same management and the same board are in place, proving again that capitalism does not necessarily follow rules of pay for performance, except when things are looking good when management skills are not really tested. The banks have proved this in ample measure in recent months....

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The FDIC had $19 billion in its fund that insures consumer's deposits at the end of 2008. A bill in Congress by Christopher Dodd, the Senate Banking Committee chairman, gives the FDIC access to $500 billion till the end of 2010 if the Fed, the President and Treasury secretary support that, and $100 billion without that approval. The FDIC proposed raising the fees banks pay into the deposit insurance fund to buildup the fund, that has been depleted by bank bailouts like the one at IndyMac which cost $10 billion. But banks protested because it comes at a time when bank's are already in a bad condition. Under a 1991 law the FDIC can borrow from the Treasury amaximum of $30 billion. The access to $500 billion is meant to let the FDIC act as another source of funds to address systemic risks that arise in the future, in addition to the $700 billion already approved by Congress for that purpose. In an interview Sheila Bair, head of the FDIC, said that a change in the law would "ease the mechanics of how seamlessly we can access our lines of" funding. I'm the kind of person who likes to be prepared for all contingencies."...

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Kenneth Lewis got Bank of America out of the business of subprime lending in 2001. He is the CEO of Bank of America. What is his insight into what is going on today. He sees default risks not depending on credit scores but on other factors such as how much equity homeowners have in their homes. Eveni if its an expensive home over $500,000 there are home owners who have refinanced it and obtained mortgages for much larger amounts in one case upto $800,000, and with hardly any equity in the home. For such a homeowner its easy to walk away from the property and let the lender take the home. Such homeowners would first payoff and be current on credit cards and auto loans and still default and walk away from the home in the current situation. This is what Bank of America is observing. There is a change in social attitudes where its OK to walk away from a home when you don't have much equity in it, and financially it may make sense to get ones finances back in shape. So the old idea about home ownership don't hold good anymore even for people with better credit scores. With this happening banks are likely to tighen credit standards for credit worthy borrowers. ...

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Mervy King, Governor of the Bank of England and his position on the recent mortgage crises, rate cuts , moral hazard in the UK economy. Debate about his standing on principle and having to take action anyway as the crisis deepens as at Northern Rock. His approach contrasted with Bernanke's approach to reduce the damage and still focus on inflation. The issues where a principled stand may not be educated enough in the interests of the whole economy, and all the people in society who may be damaged by a principled approach if a crisis has devastating effects on unemployment, investment and confidence; even though some of those who helped build the crisis are helped along the way. Is the idea of a bailout and moral hazard taken at the surface too simplistic in the modern world with the economic fate of all mankind intertwined with the US economy and the other industrialized and leading economies of the world. Is it impossible to punish a few without punishing the whole? Are their other ways those involved would be chastised such as the CEO's of financial institutions losing their jobs, companies losing their reputation, being disciplined as new CEO's like Pandit at Citigroup and Thain at Merrill Lynch provide new leadership? ...

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Key members of Congress like Barney Frank, Treasury Secretary Paulson and key officials at the Fed had discussions over the weekend in advance of a critical auction of debt by Freddie that could affect confidence in the company and unsettle financial markets. As part of the confidence building process Treasury announced that it plans to seek approval from Congress for a temporary increase in a longstanding Treasury line of credit for Freddie Mac and Fannie Mae. Treasury also said that it would seek temporary authority to buy equity in either company to ensure that both companies have sufficient capital. The plan also has a provision giving the Fed a "consultative role" in the process of setting capital requirement for the two companies and other "prudential standards". Meantime the Fed's Board of Governors met Sunday in Washington and voted to grant the New York Fed authority to lend to Fannie and Freddie. This effectively gives the two companies access to the Fed's discount window if there were to be a short term funding crisis at the two companies. In this process Treasury's plan is to expand the Fed's authority and supervisory role in the financial markets to prevent any future financial crisis in which the Fed would have to intervene. ...

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How the government under Secretary Paulson's plan will restructure and financially support Fannie and Freddie while gradually winding them down. Secretary Paulson says that it would be a grave error if we did not use this time to permanently address the structural issues presented by the G.S.E.'s a reference to them as government sponsored enterprises. Government support said Paulson has to be explicit or nonexistent.To wind them down the plan calls for reducing their portfolios by 10% a year. In return for $1 billion in senior preferred stock from each company to the government which pay an interest rate of 10% at least the government is committing $100 billion to each company to cover future losses. The government also receives warrants that allows it to to buy upto 80% of the stock of each company at a nominal price of less than $1 a share. Beginning in 2010 both companies will pay a quarterly fee to the government in return for financial help. Senator McCain had some words for the people running the companies: "its an example of cronyism, special interests and lobbyists. A quasi governmental organization where the executives were making hundreds of some billion dollars a year, while things were going downhill, going to hell in a handbasket." ...

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After OPEC says in a joint decision that it will stick to strictly followin quotas set earlier this year which would mean a modest drop in production, Saudi officials spread the word that they will continue to pump out as much oil as the world needs. So what is the end result? The Saudis are saying they went along yet they will continue to pump oil like before. Part of the reason is the Saudi belief in their own argument that with high prices the world economy would be further affected resuklting in a possible collapse of demand and of prices something it seeks to avoid and is in everybody's interest. This makes sense if one looks at the deep financial crisis facing the US and which has ripples around the world, most recently in financial mmarkets the collapse of Fannie Mae and Freddie and the possible collapse or sale of Lehman Brothers. And as U.S. elections are up in a few weeks the Saudis do not want to anything that can be interpreted one way or the other, and also a wait and see attitude because a lot of information about the US and world economy is not yet in....

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Labor seeing a decline in unionized workers from 20% in 1980 in the private sector to 7.5% today according to the Labor Department, wants legislation embodied in the Employee Free Choice Act to help increase the number of unionized workers. Without the required 60 votes in the Senate to resist filibuster and reluctant to pick a big fight with the Chambers of Commerice and National Manufacturers Association and the business lobby on this issue early in the term, makes the Obama administration unlikely to push this issue too hard. The Employee Free Choice bill would give unions and not companies as under current law, the choice of having workers vote for a union by signing cards instead of through a secret ballot election. Card signing is preferred by unions because it can be done without an employer's knowledge. With secret ballot elections companies typically have months to mount an opposition. The bill also authorizes an arbitrator to impose a first contract ifa union fails to reach agreement with a company by 120 days following the union's formation. Under current law if the two sides don't reach a contract within a year, the union typically loses its right to be the exclusive bargaining agent for the workers....

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GM and Ford are burning cash at a rapid rate. And the Energy Department says it is unlikely that any of the $25 billion in loans already approved for fuel eficiency retooling of plants will be disbursed by the end of 2008. GM used up $6.9 billion in cash in the third quarter of 2008 leaving cash reserves at $16.2 billion. It needs $11-$14 billion to fund ongoing operations. Ford burned through $7.7 billion in cash in the third quarter of 2008, leaving it with $18.9 billion. Both companies cannot fund salaries and ongoing operations if the market continues to collapse the way it did in the third quarter 2008 with losses of 30-45% in sales. Government support is the only way to fund operations but instead of the $50 billion initially talked about for lifesupport by the government the numbers will run into much more and even then there is no limit to what may be needed. Chrysler is in much worse shape, because it depends on the US market entirely for sales, and is the weakest of the three Detroit carmakers. It is privately owned so figures are hidden, one can guess that big numbers are involved for Chrysler being rescued or merged or taken over by the government....

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With gas prices at $1.98 a gallon and crude at $55 a barrel in November and falling further are Americans going to need some special incentives or a gas tax not to go back to low fuel efficency or large vehicles? With about $1 trillion dollars of consumer debt in credit cards, auto and other loans and student loans, zero savings rate, and heavily in debt, and millions under water on their mortgages, the incentive is in the need to use the savings from lower gasoline bills to paydown debt. There is also the shift to parttime workers in the workforce a long term structural change similar to Japan after the economy became stagnant there. Parttime work means lower incomes and uncertain future and need to spend carefully. All these things will likely make the shift to higher fuel economy permanent, including legislative mandates, and new management at the automakers committed to serious conservation and the environment if government aid money brings new management at GM. And public habits are changing in how much and where they drive in pickups and SUV's, many using smaller cars and letting the SUV sit on the driveway for 2 or 3 car families....

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Frederick Taylor's engineering time standards for each activity are back now in retailing with H.B. Maynard now called OWO a company that devises engineered labor standardsfor every activity in the cashier line, from greeting to scanning and bagging. The idea is to monitor performance based on these standards. OWO says its methods can cut costs for labor by 5% to 15%. Stores like Limited, Gap, ToyR Us, TJX, Nike, Meijer supermarkets and others use them. If a cashiers falls below 95% of the standard he is watched by a manager and then he receives counselling, after which he may be transferred to a lowerpaying job or fired. Those who cannot handle the stress leave after a year or so on the job. Has OWO considered the impact on older customers who may simply decide not to shop at Meijer as cashiers may end up rushing them. Has it considred the impact on customers who now may not be looked in the eye with a friendly face. There is less talk between cashiers and it can speed up the line but wait there are fewer cashiers now so the waiting time may not change much as the whole idea is to cut labor costs by 5-10%. ...

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Douglas Tompkins co-founded outdoor clothing company North Face and women's dresses company Espirit. He started North Face as a small shop selling high end European climbing and camping equipment in San Francisco. He sold the company in 1969 and later started Espirit. A 1968 trip to Patagonia led to the movie "Mountain of Storms," and a life long commitment to preserving the Patagonia wilderness. A book by Sessions and Devall "Deep Ecology: Living As If Nature Mattered," had a profound influence on Tompkins. For $600,000 Tompkins bought 40,000 acres of land in Patagonia as part of apreservation project Parque Pumalin, which would grow to 700,000 acres of pristine wilderness. Tompkins married Kristine McDivitt, a former CEO of outdoor clothing firm, Patagonia, and the couple dedicated their life to Patagonia through their foundation the Conservation Land Trust. Often misunderstood by skeptical Chileans, and opposed by salmon farming interests, Tompkins set forth his views citing a line from Abraham Lincoln- "Laws change, people die, the land remains." He died kayaking on a lake in Patagonia in 2015. A new generation of Chileans, Argentinians, and others can now appreciate his work in the national parks he helped establish like the work of Teddy Roosevelt in the U.S. a century ago....

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Cohan says the average investor will be left holding the bag, once Wall Street realizes the Facebook valuation has been overhyped to suit insider investors and Goldman Sachs.

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In this WSJ report a top American Defense Department official before resigning says- "I have no problem with feeding China or trading with China. I have a problem with arming China." Advanced or sensitive manufacturing technology is still being approved for export to China says this report in WSJ, even as the US perceives this to be a national security threat. Experts say the Commerce Department report approval process needs overhaul and the US needs close coordination with the European Union on this process. Of the total US $124 billion in exports to China in 2020 only half of one percent needed a license Commerce Department data reviewed by WSJ shows. Of that small fraction of one half percent Commerce Department approved 2562  applications or 94%. This even includes array of semiconductors, aerospace components, artificial intelligence technologies that could be added to China's military. This means that even towards the end of the Trump administration with its talk about national security threats, through the four years 2016-2020, nothing much happened in this important field.  The difficulty that the Trump administration faced and America faces is putting company and business interests first or American security interests and retaining competitive technological advantage interests first. American administrations and business have consistently failed to follow what plain ordinary Americans understand by America first. Even when it is clearly evident that America is handing over sensitive advanced technologies with very little in return, and creating out of nowhere competition that poses serious risks for the national interest, business and administrations operate indifferent to the national interest. Even right into the period when this is making the world a riskier and more dangerous place.   This is the state of affairs today, and the situation is not about Congressmen visiting Taiwan or ships going through the seas in that region, or international law. All that is American policy  and is well known and well understood. What is missing is the right action and the right determination behind other action that is sending a different message at the same time -that the US is oblivious to its own interests. That administrations, even those such as the recent Republican one under Mr. Trump, see a higher priority in following American business wherever it goes in pursuit of individual company interests alone, even if it does not accord with the national interest. Lobbying groups distort what policy should be in the public interest and in the interest of both countries, leading to a breakdown in the whole process itself whenever governments surrender their role of protecting the public interest.  Outshoring manufacturing was bad economically at the level of communities across the US, leading to divisions that weakened the country in the last decade, it was also bad for the economy of the country with loss of the best manufacturing jobs, beyond what economists in their ignorance of the big picture sought to show was the consumer- often the same person who lost a job or stopped seeking work- paying less. It was bad also for China as it created the hyper growth that rapidly contaminated land, air and water and created an inherently unstable relationship in trade with destruction of jobs at a pace that America had not faced with Japan and with which it could not cope. Could a pace that worked for both nations have worked? At the root is the notion that business knows best even if it is in plain sight to every plain American that the country's most advanced technologies are being shipped out. Governments do not fulfill their responsibilities and fail when they fail to tell business what rules are in the public interest, as it was never in the first role of business to protect the public interest. That the European Union has simply followed the US in this has created a problem for both the US and the European Union of deviating from what plain Americans or Europeans see as abundantly clear.  Even in plain dollars and cents business and economists fail to grasp the true cost for the whole country or whole people compared to the benefit for an individual or an individual company. The cost of wars even small wars can be be trillions of dollars which are borne by the whole country or people, and most of it by the middle and less economically well off classes in a country. Creating a belligerent competitor in world affairs and the risk of conflict and war is to lose trillions of dollars when the benefit to an individual, groups, or individual companies is no more but a tiny fraction of that trillion dollar cost, not including what all the plain people pay in human lives. It is not that anyone benefits as the people in the belligerent competitor country follow the same pattern of loss that would happen in the US. One should ask is it not a loss for China also? The example of Imperialist Japan is not so far off in time for Americans or Asians including the Chinese and Japanese people who suffered so greatly to forget. Business remains oblivious to the public interest not just for America but for the world, individual companies do not see it as their role beyond that of pursuing individual company interest. Is it not then for the government to set the rules. Is it alright for government to not fulfill its responsibilities? Even when this pushes the world faster to into conflicts as technologies take the place of exercise of wisdom in conflict, and even when there are unmet challenges such as climate change that affect the whole planet.  ...

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How new parking meters use the ubiquity of cell phone to text message the user if the meter needs to be attended with extra payment. They are being used in San Francisco, Niagara Falls, Vancouver, and are developed by a company called Photo Violation.

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The Agnipath scheme for Indian Army, Navy and Air Force is explained here in The Indian Express. The scheme is for 45,000 to 50,000 people between about 18 and 21 years to be hired each year. These trainees will be kept for 4 years, and only 25% of those in training will be selected to continue for another 15 years. The recruits will receive between Rs 30,000 and 40,000 a month. 30% of this will be retained for benefits trainees will receive.  The idea behind it is to lower the average of soldiers in the armed services from 32 years to 26 years to reflect India's youthful population and to help those returning to the job market to find jobs in business or as entrepreneurs starting new business with government help. The experience gained in the armed services is seen as also becoming attractive to businesses that are hiring good disciplined employees. The circulation of people joining the services also makes the army a leaner force of about 1.3 million and keeps the cost of pensions at reasonable levels. With India's rapid growth in coming years the trainees leaving after 4 years will have better job opportunities and can contribute to the economic development of the country in many ways. Upon leaving the armed services the trainees will get about Rs. 1.2 million as a package to make a new start in the economy. If there was a death then Rs 1 crore would be given by the government. The government will offer skill certificates and bridge courses so that the quality of trainees remains high and this would provide a skilled workforce for the economy during a period of high growth. A modern armed services like that of India constantly being filled with next generation technology should be able to offer these new recruits the skills and training in advanced electronics, computers, and other technical fields with field training to supplement courses, and the motivation to excel, that would be valuable to many companies. This is the idea behind Agnipath. It is also a tested path as the US armed services also provides this kind of training and many people who have joined and left the US armed services have performed at high levels in American companies in technical and managerial positions. Another feature is "All India All Class" which will make it open to all caste, all region, all religion, and free up the armed services from the current situation of regiments having a caste and region bias. This is a constructive and well thought through aspect of the plan. ...