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With Amazon taking customers from specialty retailers on the basis of price questions are raised about the future of Best Buy. Best Buy competed by having tech savy salespeople and moderately lower prices. Borders lost sales to Amazon. Now this is happening in electronics as Amazon increases share. Customers can visit Best Buy to check out electronic goods and then buy on Amazon for the lower price, making Best Buy Amazon's showroom. Amazon's electronics and nonmedia revenue went up by 66% in 2010 to $18 billion. With Sony selling through Costco another advantage is eroding. Even with Circuit City out of the market Best Buy was losing market share (December 2010 figures show) in the key television and computing segments.

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The importance of microsavings in addition to microloans in poor parts of developing countries. In West Africa some businesses charge 40% to take deposits. In poor villages often money that sits around is spent on unnecessary things or gets wasted, especially when the savings can improve the lives of people there. Kristof talks about one family in rural Nicaragua that would spend alarge part of its savings $1.75 on three litre bottle of Coke. With Catholic Relief Services offering a padlocked woodbox in which villagers could put in one dollar or 50 cents, a culture of saving is developing. Now the Machado family buys Cke only once a week and the rest of the time puts the savings of$10 a month in the CRS box.

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Diamond and Kashyap, professors in finance and economics at the University of Chicago, show how the tax on banks proposed by the Obama administration can be executed. It would raise $90 billon over 10 years and offset the $117 billion in losses expected from the TARP program. They say the tax should be made on the size of each bank before the fall of Lehman Brothers so that banks cannot shrink their way out of the tax by engaging in sham accounting transactions. They say the banks have responded to the crisis by engaging in behaviours that have exacerbated the crisis by becoming reluctant to lend, and not renewing loans. Its like having the banks pay for the insurance policy that keeps them from sinking.

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The financial system for mortgages and the legal system are on a collision course say experts. The courts require due process, and one expert discounts reassurances from banks, because it does not go into how easily banks can prove ownership of the underlying mortgages. A legal expert at Georgetown University, sees a scenario in which the whole system comes to a halt, if instead of being lost, it is shown that mortgage documents were not properly transferred during each step of the securitization process. Much of the paperwork was rushed through in a mass production line during the recent wave of foreclosures, because the banks did not have the people and technology in place to deal with it- as pointed out in a Washington Post investigative report.

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Adam Nagourney is Los Angeles Bureau chief of the New York Times. Here he follows California Governor Jerry Brown's efforts to tackle the state's fiscal problems, and talks about his many conversations with Brown. He describes Jerry Brown the man, how he and the state he governed years ago have changed, and the challenges he faces in finding solutions to the state's financial problems. Nagourney and Brown talk about the problems with the political culture in the state, how things have changed- Brown was 36 when he bacame governor in his previous term and is now 73 in this term- how term limits have created their own set of problems with the lack of experienced legislators who can push bills through.

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Defense Secretary Ashton Carter, says the allies and NATO can improve their response to Russian president Putin's intervention in Eastern Europe by developing better intelligence sharing capabilities, and getting partner nations to invest more in their military capabilities. In an interview with an Italian newspaper on a visit to Europe. Carter said ceasefire terms in Ukraine should be implemented, and that the U.S. should exert more pressure on Ukrainian officials whom he blamed for the breakdown. He said about "Operation Atlantic Resolve," military exercizes in Europe, conducted to support Eastern European allies through training, cooperation and increased presence since 2014- "Our exercize and training programs, which are tremendously successful, they're tremendously popular- we need to do more of that, get more allies involved."

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Bolivia's economy showed 6.5% growth in 2013 and the portion of the people in extreme poverty has dropped from 38% in 2005 to 24% in 2013. Policies of president Morales are winning praise for being prudent from the IMF and the World Bank. A greater share of the revenues from natural gas production and high natural gas prices, Bolivia's main export products, has enabled the government to build international reserves to $14 billion. This is half the country's GDP, and the highest ratio of reserves to GDP in the world. Morales has adopted socialist policies and at the same time provided fiscally responsible management, showing the two are not inconsistent and can be adapted to local conditions to build a middle class and improve living conditions.

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BMW's first mass production electric car the i3 will go on sale inthe U.S. in the second quarter of 2014, priced at $41,350. It is a city car with a range of 100 miles from one charge. BMW will launch a i8 in 2014. The i8 is a super sports car with high fuel economy. A electric motor drives the front wheels and a 3 cylinder gasoline engine drives rear wheels. BMW's CEO Reithofer has increased spending on R&D so that it can meet the 30% of automobiles that have to be hybrids or electric vehicles by 2025 for BMW to meet higher European auto emissions standards. R&D spending was up 17% in 2012 to 9.2 billion euros, and capital spending up 42%.

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Opec cuts by 2.2 million barrels a day on December 17, 2008, and forward curve for Nymex crude oil prices which goes up $10 to $50.64 for the May 2009 contract and $70 from late 2012, offers liitle support in terms of higher oil prices. Some of it is explained by costs of storing oil on tankers and some of it by higher credit costs, and prices beyond 6 months do not have as much significance as the situation is uncertain. With Russia needing oil revenues and Iran and Venezuela also in the same situation, it looks increasingly unlikely that the strict reduction in production will hold. And things like higher inventories with a steeper downturn in 2009, can keep prices down for a long time.

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Fuel efficiency standards were left way below the rest of the world, just look at the graph showing Japan and Europe way above the US in fuel efficiency standards, and the US lagging behind badly. Europe and Japan with standards close to 40mpg vs the US below 30 mpg. Any sharp business person can tell one that if there was too big a gap, it would be a cause for serious concern, because the Japanese for instance would also have developed the technologies and manufacturing facilities to support the fuel efficiency standards. There were some serious dangers in falling behind. That is what has happened as the Japanese carmakers have take market share from the US in the American car market.

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Development of new fuel efficient cars, electric cars, new hybrid cars, costs money, and manufacturing facilities to build these cars in large numbers also takes large investments. Not only do the Japanese carmakers have a huge leg up over American carmakers in having development on these technologies started early because of the conservation ethic in Japan's use of energy, but now because of being in much better financial shape than their competitors in te USA they can make the huge investments going forward in the next 10 years. Note the huge costs of development. Honda spends an estimated $1 million on every FCX Clarity, Honda's new hydrogen fuel-cell car, that it makes today. It hopes to get the production costs below $100,000 per car.

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The effects of a health scare about chicken and hormones on China's internet sites is affecting sales of Yum Brands store outlets for Kentucky Fried Chicken (KFC) in China. As most of the stores are company owned compared to 11% in the U.S., this is having an outsized effect on Yum Brands performance. Fast growth in China can be an asset as well as a liability if not carefully handled. Food is an especially difficult field in China with careful management and control of supplies critical. The Chinese public is skeptical about government monitoring and checks of food supplies and pharmaceuticals after years of lax enforcement. Yum Brands has 5400 KFC and Pizza Hut stores in China, 14% of total global store outlets.

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Gretchen Peters, a journalist who has followed the drug trade in Afghanistan and visited some of the locations where drug smullgling is taking place from Afghanistan to the southern coastline of Pakistan to be shipped to Europe and the USA. HE says its not enough to go after the poppy farms, its important to go after the whole network from drug refineries, drug storage places, and drug convoys that take the drugs into Pakistan to be shipped. Its important to catch drug smugglers like Mr Khan who is in jail in NEw York for running alarge smuggling operation. Only in this way can they interrupt and stop the flow of some $400 million that is going from the drug trade into Taliban hands.

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The House-Senate conference report contains $1 billion for the cash for clunkers program. It provides funding through the end of the current fiscal year September 30, 2009. It is expected to result in 250,000 better mileage cars being put on the road. Originally the House had voted in facvor of a $4 billion 2 year program. To qualify older trade-in vehicles must be driveable, insured by the same owner for at least one year prior to the trade-in, have been manufactured in the 1984 model year or later, and have a city-highway combined fuel rating of 18 mpg or less. Vouchers are baed on the mileage of the new vehicle compared with the old and can be worth upto $4500.

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Glaxo made a calculated bet on vaccines in 2004 with the spread of the bird flu H5N1 virus in Asia. THis flu killed half of the people infected. At the time Glaxo was told by the Department of Health and Human Services for its Relenza flu vaccine-"how much can you make and how fast?" It reflected the high level of concern among the public, and the need for governments to respond quickly or be seen negatively by the public. Chief Executive Jean-Pierrre Garnier tapped David Stout to put togethe a team to focus on pandemic flu. New production lines were opened for Relenza in Australia, France and the USA. By 2005 governments in the USA and other countries were placing large orders for Relenza.

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James Grant, the editor of Grant's Interest Rate Observer, tells us what he thinks of the Fed printing up so much money and adding atrillion dollars to its assets since Labor Day. He reminds us what Elihu Root, Republican from New York warned about the dangers of letting the central bank create money at such apace that things can go wrong. Should the central bank take on the role it has of allowing things to go lax with low interest rates at one time as Greenspan did, and the pumping out so much money under Bernanke in this crisis. Grant sees some advantages in the gold standard in that so much credit could not be easily constructed under a strict conversion to gold.

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The euro providing a safe place for countries like Italy during the crisis. For Britain its very asymmetric shock with the collapse of property and markets, financial sector, and consumption, provides it asafety valve through a decline in the value of the pound and lower interest rates. For Greece, Portugal and Spain which saw large increases in wages by 10-20 percentage points, above the 14% rise in unit labor costs in the EU zone between 1999 and 2007 reported in recent ECB monthly Bulletin, the situation is different. In Spain this means the downturn is likely to be more severe as can be seen in unemployment that is already at 13% and expected to reach 15-18% in 2009 by some estimates.

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The Economist points to ways in which the effort in Afghanistan might see success. More troops on the ground to avoid civilian casualties from air attacks and bombings which can antagonizepeople and create more young militants exposed to religious extremist propaganda, huge investment in development, piecemeal arrangements with the local tribes and powerbrokers including the Taliban, help to Pakistan and concentrating its mind on the effort in its frontier areas so close to its capital Islamabad. At the same time building support inside Pakistan for a liberal state that remains Islamic but keeps religion out of the state, and builds alasting peace in South Asia without getting mired in conflicts like Kashmir which it calls "intractable disputes" that may be bypassed for an overall peace.

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George Fisher is the presiding outside member of the Board of Directors. He does not appear at all affected by the magnitude of things going on around General Motors when he answers questions about GM having stayed with trucks for way too long and not invested early in cars and fuel efficiency in a manner which says almost boldly, "so what?" He makes statements one does not expect like the one that "we are absolutely convinced that we have the right team under Rick Wagoner" " and the "Board agrees to a person that" and so on. Can one be absolutely convinced about anything if one is careful and does one say it out loudly, especially in these uncertain and very risky times.

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

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Prof. Cherlin of John Hopkins University's sociology department tells us why it is important to revive the term "working class" in America after it has fallen into disuse. He points out that lumping the "working class" with the middle class, as most political leaders including Obama have done, is a serious mistake. As disparities have increased between college educated Americans and non-college educated Americans with only a diploma or less ( who comprise 54% of the adult population with children under age 18), and as the lifestyles, living standards, and educational opportunities of children have diverged for these two groups, this no longer makes sense. One reason for the disuse was that the term was seen as derogatory at some point in time because of media stereotypes of working class people. Yet only by reviivng the term and facing up to the problems faced by this group can America really address its problems as a society, or as a people. Even economic recovery could be elusive without increasing the consumer spending, and by this the incomes and future prospects of the working class. Underneath this is something more important, which has shaped the lives of people throughout the world in the 20th century and into the 21st- the sense of hope and opportunity, of upward economic and social mobility, especially for children of all classes. ...

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As growth slows in China, the planned hotel expansion in China of international chains continues as before.

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Britain's prime minister survives a vote in parliament called by the camp in her part that opposes a hard Brexit that calls for Britain severing connections with the EU. After she caved in to some demands from the camp that supports a hard Brexit on the issue of EU customs union, others with different views in her party called for a vote in parliament through an amendment. Theresa May survived this vote by just 6 votes following a vote a few days before called by the Brexit hard liner camp in her party which she survived. Britain's electoral Commission ruled that the Vote Leave campaign had violated the law by exceeding the spending limit of 7 million pounds by funnelling 675,000 pounds to BeLeave a pro Brexit youth group. There is now no certainty that a Brexit deal can make it through parliament if it is reached with the EU. A fresh election, or a second referendum on Brexit or terms of Brexit are likely if May's government collapses in 2018.  ...

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Spotify acquires podcasting firms to broaden its appeal and acquire nonmusic content including listening time on radio. Spotify thinks it can bring to nonmusic content podcasts what it has done for music by bringing better curation, customization and recommendation, while developing tools and collecting data for podcasters. Talk enhances the experience of listening to music, says Spotify CEO Daniel EK.  Spotify aims to take some of the two hours people listen to radio globally and make money off of it. Ek says video is a bout $1 trillion market, and music plus radio $100 billion, but he questions whether our eyes are worth 10 times as much as our ears." Adding more monetization opportunities is key. Spotify says it has seen that podcasts command an engaged audience- people who see podcasts spend twice as much time using the service, and tend to stream more live music. They are less likely to cancel subscriptions.  Spotify has 206 million users and 96 million subscribers. Average revenue per user is 4.89 euros as many of Spotify's users come in through family plans and in international markets with lower pricing power. ...