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The story of Brazil's sugarcane plantation industry, and also of its ethanol producing region. A detailed account of the people who own these plantations and why they are reluctant to sell. The difficulties of getting into the sugarcane planation industry in brazil with its small owners and fragmented nature, and use of labor that violates Brazilian laws and international standards. These sgar cane plantations are located next to the mills because of the available infrastructure, and family owned sometimes handed down for generations, even hundreds of years, as Brazil was once a portuguese colony and a location for the slave trade which provided labor to the plantations. Note that most of the plantations use poorly paid labor and most of the work is done by hand, with the owners living in large ranchlike fazendas. Its probably another world for international investors not used to such a landscape. There are labor and environmental liabilities in owning some of these mills. Then most of these mills do not keep reliable accounting books and have tax and debt issues which cannot be easily resolved in Brazil's slow legal system. There are about 210 companies running 368 sugar and ethanol mills. The five largest companies generate only 17% os sales gives some idea of the fragmentation in the industry. There is also the perception that if large foreign companies like the ADM, Australia's CSR, Germany's Sudzucker AG, or even India's Bajaj Hindusthan, or others gain control over Brazil's ethanol industry Brazil's sugar producing regions would benefit less than if they get loans from large Brazilian or international banks and consolidate and modernize themselves, leading to political pressures in this direction. One such example is given here, one valuable sugar mill Vale de Rosario has been pursued by Bunge with an offer of $640 million for outright ownership, but Vale de rosario's board rejected the offer. Cargill looked at the possiblilty of owning 30% but was also turned away. Attempts at consolidation by Cosan, Brazil's largest sugar manufacturer, which made agreements with relatives owning 50.2 % of the shares in the company which has about a 100 relative clan with shares in the company over generations, also failed. The Biagi and Franco families which run the company made use of a defense under the cooperative's bylaws which allows the smallest shareholder to have 30 days to equal any takeover offer. The Biagis offered their own Santa Elisa mill to secure a $675 million credit line from Brazil's largest private bank Bradesco which was then used to buy out relatives who wanted the money. Now the Vale de Rosario and Santa Elisa mills have merged and are looking for international financing for the new company Santelisa Vale, which becomes the second largest after Cosan. Goldman Sachs plans to invest 200 million in Santelisa Vale.What this shows is the extraordinary lengths these family owned mills would go to to preserve their independent ways of operating and hand over to the next generation. Another difficulty is that industry experts are hard to recruit from these family owned companies as they have spent alifetime working there and remain loyal. With allthese obstacles the logic that the foreign companies can use Brazil to supply the world with ethanol from sugarcane does not take hold. Some of the attraction of sugarcane is that it contributes less to global warming than corn as a source for ethanol because sugarcane absorbs some of the CO2 when it is replanted. With a 51 cent per gallon tax credit subsidy on USA corn based ethanol and a 50 cent tariff on Brazilian ethanol imported into the USA, corn based ethanol can sustain in the US especially with the current high price of gasoline. Brazillian ethanol is more efficient to make from sugarcane and can be made to compete with gasoline even if gasoline prices drop. Instead there may be more years of unstable supply of ethanol from Brazil ahead which is what the Japanese in their negotiations for a supply of ethanol from Brazil have discovered since seeking such an agreeement since 2001. In the 1980's Brazilian sugar producers chasing high sugar prices lowered production of ethanol and left drivers without ethanol at the pumps. One company that is looking at another solution is Brenco, Brazilian Renewable Energy Company, a startup company backed by Ron Burkle and Vinod Khosla. It plans to put up its own green field sugar cane fields away from Sao Paulo state where the Brazilian sugar cane industry is presently concentrated. But this will take six year before the fields are ready for ethanol production. Henri Reichstul, a former head of Petroleo brasileiro, Brazil's national oil company, now leads Brenco. ...

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It makes for good political rhetoric, but in reality the flow of money goes both ways. A lot of investments are made by American companies overseas. This time the flow of oil money because of high oil prices, from the USA and Europe to the Middle East is being recycled back to the USA in the form of investments in the US through small equity stakes in companies and more so through purchases of capital equipment and services to build Saudi infrastructure projects. The $500 billion investment plan over several years in Saudi Arabia is to build everything from new cities, aluminium plants, electricity generation plants and chemicals and plastics plants. The fears and rhetoric are overblown, as the USA also invests overseas with holdings according to the Treasury department of $6 trillion of foreign stock and debt. The acceleration of foreign investment in the US is to be seen in the numbers, as the dollar gets weaker, and its more advantageous for Canadians and Euuropeans to invest here. Last year $414 billion of foreign investors money went into buying stakes in American companies and building factories and purchasing stock, according to Thomson Financial. Thats up 90% from 2006 and represented one fourth of all announced deals. This year in just 2 weeks foreign investors poured $22.6 billion in just the first 2 weeks of January, and that represents one half of all deals. Shows how quickly the picture is changing. One way of looking at it is that Americans buy a lot of foreign goods and the money Americans use to pay for a lot of imports is now being returned to the USA in the form of foreign investments. Note that foreign investment is desirable because it brings new ideas and technology and new management methods to the host country from other countries. These foreign investors in many cases are able to make these investments overseas because they are good at what they do, having them in the host country benefits the host country and shakes up competition in the particular industry in the host country that is receiving the investment. This is why economies once relatively unfavorable to foreign investors like Japan and S. Korea are now passionately seeking foreign investment to make their economies thrive through the exchange and inflow of new ideas and ways of doing things. The same can be and is true for the USA. The other aspect is that most of the investment is still from countries like Canada, Germany, Japan, S. Korea which are big free trade partners of the USA. Manufacturing investment is heavily skewed to European and Japanese companies. Foreign multinational investment (Sony, Toyota etc) grew to $43.3 billion in 2007 from $39.2 billion in 2006 according to OCO Monitor, and will accelerate significantly as companies like VW and other German companies find it cheaper to build in the USA and shift more manufacturing here. To get an idea why the rhetoric is overblown Canada spent the most in buying American companies, $65 billion in 2007, according to Thomson Financial. Russia spent $572 million and India $3.3 billion. How will this improve the chances of the USA making it out of this recession? Five million American work for foreign companies in the USA. Of these one third are manufacturing jobs. These jobs pay about 30% more than jobs in American owned companies. Figures from Treasury Department. There will be more of these jobs as companies like VW build plants here. Roubini Economics estimates that an infusion of about $300-400 billion is needed for the USA to overcome the effects of the current mortgage and credit crisis. $414 billion was invested in the USA by foreign investors according to Thomson Financial in 2007, going up from something like $200 billion in 2006. If this pace continues becasue of some of the same underlying reasons as the weaker dollar, stronger economies overseas, then $200 billion additional investments this year would add that much to a stimulus package of $150 billion by one estimate, to provide a boost of somewhere around $350 billion. In the range of the needed boost. Companies like IBM and GE which have significant investments in India and China and investments in software or infrastructure industries that are growing rapidly or Caterpillar with growth in construction overseas, may keep growing through this downturn. This recession may hit selectively and differently, not be a complete hit to the USA economy, and could prevent it from going beyond 2009 with recovery in 2010. ...

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Brooks says no to the current health reform bill as most experts say it does little to control the bulging healthcare cost curve which will take it from 17% of GDP to 22% and beyond. He goes over the pros and cons. Passing this gets little done for health care reform in a fundamental way that is so badly needed today. Says Brooks the system today is rotten to the bone with opaque pricing and insane incentives, with consumers insulated from the costs of their decisions, this won't change with the current health care bill. In fact he says according to the chief actuary for Medicare it will cause health care spending to grow faster. At this rate we will be giving more money to insurance companies and programs that have great social value like expanded preschool and other needs that America has will be shoved aside. In coming years as the population of America ages there will be growing needs for health care. With no increase in supply, and the perverse incentives still in place, prices will continue to grow rapidly without the focus on efficiencies that is badly needed. Brooks points out that its not the politics is the chief obstacle to reform as most people say, but the reverse is the truth, unless one gets the fundamental incentives right politics will be terrible forever. ...

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A strong U.S. jobs report in July with 255,000 new jobs, unemployment at 4.9%, provides positive sentiment going forward. The Federal Reserve is likely to be wary of raising rates because businesses are hiring but are not making the investments needed to spur economic growth, which remains at about 1%. The labor force participation rate is now at 62.8%. The measure of unemployment and underemployment shows a better picture of how different age groups are faring including the 25-54 years age group- this is at 9.7% in July 2016, it was 9.6% in June 2016. This measure shows those working part time because they cannot find a full time job. The market today is stronger for those with the right job skills, but not across the spectrum for all Americans, only setting the stage for further progress and increasing investment as confidence improves.

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The WSJ cites several surveys showing Hillary Clinton's large lead among voters less than 35 years is declining. This is the reason WSJ says that the overall lead of Clinton among all voters has declined to about 2-4 points. In Michigan for example a Detroit Free Press survey showing a 24 point lead for Clinton declines to 7 points among voters under 35 years, and causes a overall 11 point lead to fall to 4 points. Some of the support has gone to third party candidate Gary Johnson. In the 2012 election president Obama won the votes of about 60% of voters under 30 years, an important part of Obama's coalition. Of the 66 million votes cast 22% were from voters under 30 years age. As a result First Lady Michelle Obama will campaign on a college campus in Virgina. Senator Bernie Sanders will also campaign to attract the younger voters that made his campaign so strong, and Elizabeth Warren will speak at two Ohio universities in coming days. Sanders will stress the importance of Clinton's proposal for debt free college and funding more programs with higher taxes on the wealthiest Americans, and ask young voters to look further than mere personality to what they can expect to improve the lives of students and young people. This is happening 6 weeks before the election. A look back at 2012 about 7 weeks prior to the election in Lyrarc shows Obama with a 6 point lead, but only even with Romney when it came to handling of the economy because of the long recession. This shows how each election presents its own different set of circumstances and challenges. ...

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An indepth look at Mexico, its assets, its huge potential and what is holding Mexico back. It ranks much higher than Brazil in many respects- higher investment as a fraction of its GDP, technical education, an easier place to do business, less regulation, better management talent, more industrialized. In 2010 Mexico had $400 billion of business with the U.S. With rising Chinese wages Mexico is an attractive place for foreign investment, with a hardworking and educated workforce. Mexico suffered badly during the 2008 recession in the U.S. It is trying to reduce its dependence on exports to the U.S in key areas such as the automotive industry. Exports to the U.S. by the automotive industry are now 65% of the total, and the auto industry association in Mexico is working to bring this figure to 50% by exporting to Latin America and Europe. Economic growth was 5.4% in 2010, and expected to be 4-5% in 2011. Drug violence may have reduced the growth by one percentage point according to some estimates. The think tank, Mexican Institute for Competitiveness, estimates that economic growth would be 2.5% percentage points higher if labor market and competition laws are changed, and the oil industry is opened up to foreign investment as happened in Brazil. A study by OECD and the Federal Competition Commission (CFC) of Mexico has shown that 31% of Mexican household spending goes to products operating in high price monopolistic or oligopolistic markets. The bottom ten percent spend even higher proportion of incomes, around 38%, for products supplied in such markets. This includes pharmaceuticals, airline travel, banking, and electricity. Taking on these cartels is a difficult task. The CFC is beginning to take the first steps in this direction, in what will be a long road to fair prices for Mexican consumers. Banking was opened to Wal-Mart. The collapse of Mexicana was an opportunity to auction landing slots to other airlines. An auction system has been developed by CFC for drugs. A new competition law sets penalties for collusion in pricing, with upto 10 years in jail. And Carlos Slim's telephone monopoly was fined $1 billion for its telecom monopoly practices. In 2009 the Calderon government shut down Luz y Fuerza, a state electricity company costing the governmment $3 billion in subsidies for an highly inefficient operation. ...

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Biden sees his plan for American workers and families put together in the $3.5 trillion spending package that covers child care, education, healthcare, services, climate change proposals, infrastructure building, as a way to show that democratic governments can work for the people. After two decades when American workers and families were largely put aside in the nation's priorities during a tech driven and capital markets driven expansion that benefited large corporations, America is returning to its core concept of government by the people, for the people, of the people. White House officials say this is to be seen even in the program he put forward in his upset victory many years ago for the US Senate from Delaware. Because economic strength of America depends on a strong middle class, and strong working class, strong families, and underpins the world leadership role of America, even Republicans and hesitant Democrats, cannot give in to the current situation of doing nothing or too little for workers and families which weakens America. And at a time when its leadership role in Asia and Latin America, Africa is sorely needed. The size of the package in $3.5 trillion is because too little was done in the past in the mistaken acceptance of Reagan policies of no government role in the economy- surrendering this role of guidance entirely to the capital markets driven from New York, London, and Silicon Valley. The rise of China today, and also of Japan and South Korea, and of India as it plans for 2030 shows that government guidance of the economy is needed in global competition. Trade entirely driven by capital markets, without a role for government to emphasize national priorities in spending can lead to disastrous results such as we see today where manufacturing even in critical fields such as healthcare, semiconductor driven technology, entire parts of the economic structure are ceded to China and supply chains outside the US. German elections are also leading in the same direction with Social Democrats emphasizing national priorities in child care, education, healthcare, and delivery of social services, building of infrastructure. And the Greens emphasizing climate change. Merkel in Germany and in the European Union, her predecessor Schroeder, pursued policies of no government role in emphasizing and articulating national priorities, in a way that past US presidents have done, resulting in the CDU falling to 20% support in the September German elections. Across all parts of the world, from India, China, to Europe and the US, the focus is on government voicing the national priorities  and allocating funding instead of capital markets driven from London, New York and Silicon Valley, or capital markets in Shanghai or Mumbai, as the pandemic runs into its second year. ...

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This is an indepth article on Donald Trump's financial holdings, looking at the debt that Trump has built up in his real estate dealings, by Susanne Craig of the NYT. To get a detailed look of this the NYT inquiry into the holdings engaged RedVision Systems, a national property information firm to search publicly available data. Much of Trump's business is shrouded in mystery. But it is well known that Trump has used debt to build his business in a way that is not considered good practice in business, having led to three bankruptcies. Trump says he "is the king of debt." And "he loves debt." The recovery of real estate values during a rescue effort for the country's financial system also helped Trump tackle debt in a way that was not available to other entrepreneurs who suffered from the oil price collapse- one of them McClendon also used debt aggressively and his business collapsed leading to suicidal car crash. You can love excessive debt only if the government supports you with some sort of financial guarnatee misplaced, or you are lucky to get away with it- just ask McClendon. The irony is that the rescue of the financial system led to the low interest rates that hurt savings of the middle and working class, and the lack of help to Main Street in the home foreclosure crisis also hurt the same people disproportionately. The Obama administration policies in this regard rescued the very same business interests such as the New York real commercial estate symbolized by Trump, that are now appealing to those hurt as president Obama worked to let the financial system recover. The intention was never to support excessively overleveraged banks or overleveraged real estate built on debt, but in reality this is what happened. A nation cannot run its financial affairs in this manner of overleveraging to extract high profits that an investment bank such as Lehman or Goldman Sachs does, or a real estate company such as Trump's does- if regulators let them do this. Normally after the financial crisis of such dimensions that it shook the world economy in 2008-2009 leading to fears of a collapse as happened in the 1930's, the same faces would not still be there. But this is a strange period or a transition period where things are being sorted out, and the same faces Blankfein at Goldman Sachs and Trump in New York commercial real estate are with us.  And though the bashing of Goldman Sachs connection to Clinton is evident in the campaigns of Trump and Sanders, the bashing of Trump real estate and finance companies with its overleveraging and bankruptcies is evident in the campaign of Clinton against one posing as a representative of the working class. John Paulson who benefitted by shorting mortgage securities that caused the financial crisis of 2008 is on Trump's top economic advisory team, including the hedge funds and financial interests on Wall Street that Trump is saying support Clinton. No one, not the NYT or WSJ, can answer this, its just the paradox of today's situation. Hillary Clinton can say she has learned her lesson, with her Methodist upbringing and her own supporters such as Robert Reich and others, and break with the past especially as it in no way contributes to her success as president, not one bit. In fact rebuilding the middle class and infrastructure require entirely different connections and views on life, a different imagination.  Trump has billions of dollars and a real estate business that is so complex that even the NYT and property information firms can only say that in the end it is shrouded in mystery. Companies owned by Trump says the NYT from this inquiry have debt of $650 million. Other Trump business activities through 3 passive partnerships owe an additional $2 billion. It is a lot easier for Hillary Clinton to put the speech fees behind her as they have little to do with what she is as a Methodist and a proponent of improving women's lives, than it is for Donald Trump- for whom his business is everything that he is including his art of the deal- to reject who he is. ...

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Patricia Kowsmann provides this picture of life in a town on Portugal's northern coast, Viana do Castelo, with a population of 87,000, as Portugal struggles to make a recovery. Viana do Castelo has shipyards and companies making metal bridges for highways. The money losing state owned shipyard was privatized and sold to Martifer SGPS SA to run till 2031. 600 workers at the shipyard were laid off. The new company plans to rehire 400 workers by 2016 but jobs will not be permanent. Companies making the bridges now sell to former Portuguese colonies of Angola, Mozambique, Brazil. 200,000 people have left the country to look for jobs or higer education, including the mayor's daughter in London. Exports are up and now make up 40% of Portugal's GDP, up from 27% in 2009. The economic growth is 0.9% in 2014, after declining 6% 2011-2013. Portugal accepted the last instalment of the bailout loan of 78 billion euros in 2014. It will auction 1.25 billion euros of bonds on July 22, 2015. Unemployment is now declining dropping to 14% from a high of 17%, and higher than the pre crisis level of 11%. Here in this coastal town the mayor Jose Maria Costa cut public employee salaries 15%, and also cut sports and cultural programs. Two food centers provide free lunch and dinner, and half of the 4000 children in school get subsidies for food and transport. A shipyard worker Antonio Gomes Barbosa 64, is one of the laid off workers. His son's architecture company closed and he left Portugal for Angola. Some of his co-workers now work at a shipyard in neighboring Spain....

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A study by Bank of Japan's Research and Statistics Department in the Feb. 2013 Bank of Japan Review paper titled "About the Real Effective Exchange Rate," shows how Japan maintained international price competitiveness during the period of the strong yen at 80 to the dollar. It found that with deflation the cost inputs of labor, factory equipment and materials in Japan were reduced, even as the price in overseas markets for finished products went up. It found that while the yen went up against the dollar in nominal terms, in price adjusted terms accounting for deflation it has actually fallen. Nomura economist Kiuchi says the Japanese yen had to go to 54 to the dollar before it matched the level of the 1995 priceadjusted high of 79 to the dollar.

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Austin, Texas and growth in "middle skill" jobs which offers ways to increase jobs growth in the U.S. in 2012-2015.

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Romney and Santorum in a tie, with Romney winning by just 8 votes in Iowa's Republican caucuses. Romney got 23.6%, Santorum 23.5%, Ron Paul 21%, Gingrich 13% and Perry 10%. Romney received almost the same number of votes he won in 2008.

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Ali Sethi, a novelist, questions the simple minded theory that all that matters in South Asia is the Hindu-Muslim divide and with it the idea of a separate Muslim state. He points to this as far from the daily reality of caste, landholding classes, education and the lack of it, sectarianism within the religion, and other differences. And in many ways these outweigh the overly simplified idea of two religions and different states.

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Saying that these countries had significantly cut imports from Iran, the U.S. government gave exemptions from the sanctions on Iran to 10 European countries and Japan. Exemptions were given to Belgium, Britain, Czech Republic, France, Germany, Greece, Italy, the Netherlands, Poland and Spain. This leaves 11 countries facing possible sanctions including China, India and S. Korea, with negotiations underway with these three major importers. The sanctions law passed by the U.S. Congress gives the government room to avoid damage to global oil markets and U.S. allies.

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The weaker dollar has given a boost to U.S. exports. The dollar has dropped by 9.1% compared to the prior year against a broad basket of currencies. U.S. exports have provided 1.4 percentage points of the 3.0% annualized growth since the 3rd quarter of 2009. The U.S. dollar is now 5% away from its all time low in March 2008, when tracked using the dollar index. Before the 2008 crisis the dollar had over a six year period lost about 40% of its value. Low interest rates in the U.S. and concerns about the deficit have contributed to the dollar's decline in value. While the decline helps boost exports, it also increases the price of oil in dollar terms and increases inflation. A Gallup poll in April showed 42% of Americans had no confidence in the Fed's policies for the economy, and 43% had no faith in Treasury Secretary Geithner. The decline is taking place even as Japan is recovering from the earthquake, and Greece is likely to have to restructure its debt obligations with European banks taking losses....