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A conversation by Louise Story of the NYT with Judge Rakoff who oversees the Bof America settlement with the SEC case. In an interview he reveals his thinking behind his rejection of the SEC settlement with a $33 fine. He says that when he joined the securities fraud unit of the Southern District of New York as a young attorney, prosecutors placed greater accountability on individual executives at companies, and charges tended to be filed against the executives rather than the companies. Rakoff says that the feeling behind this was that if a crime is committed it is important to find out who are the persons who made the wrongful decisions and why. So he asks why did the B of A executives behave the way they did, and why did the SEC behave the way it did. And says Rakoff, in his mind its the individuals who made these decisions that lacked ethical value should pay a higher fine and be held accountable.

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The new price of the Leaf is $35,200 for the 2012 model year as more features were made standard by Nissan. The Leaf will now cost $27,700 after a $7,500 federal tax credit in the U.S. The higher price also reflects the stronger yen as the Leaf is made in Japan. Every Leaf is sold from a waiting list, with sales in only some states- including Arizona, California, Hawaii, Oregon, Tennessee, Texas and Washington. Nissan's marketing chief, Brian Carolin, says about 1000 vehicles a month will be sold for the remainder of 2011. The average customer of the Leaf drives the car with an all electric range of 75 miles, for 30 miles each day and charges it for 3 hours a day. Average household income is $140,000. The 2012 standard model comes with a cold weather package, heated seats, battery warmer and steering wheel, and a fast charging arrangement that gets it recharged in 30 minutes, instead of the 8 hours.

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The solitary side of Obama's nature, which leads to an insular presidency, without the frequent contact with other political leaders and the public. Kornblut calls it the schmooze deficit. One Democratic leader says Obama is daisdainful of things that make people feel connected to him. In numerous interviews lawmakers from both parties complained of arms-length treatment. Earlier reports also show a leader who does not go outside his close inner circle to understand what is happening in the country. Obama is not known for making social encounters outside the ones scheduled or to make spontaneous calls. Some of this solitary nature comes across in this autobiography, "Dreams From My Father." In that memoir Obama writes that if the talk began to wander, or cross the border into familiarity, he would soon find reason to excuse himself. And that he had grown too comfortable in his solitude, the safest place he knew.

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China's vice premier, Li Keqiang, wil visit Spain Jan 4-6, 2011. In an editorial page article for El Pais, Li wrote that China will continue to purchase Spain's public debt in the future. China is a large buyer of Spain's sovereign debt, owning about 10% of the total foreign holdings. Spain's central government will need to raise 170 billion euros in 2011, and its regional governments an additional 30 billion euros. Natixis expects 824 billion of eurozone government bonds to be auctioned in 2011. For China the eurozone is its largest market and it is concerned abou the impact of a eurozone crisis on imports from China. A declining euro would make Chinese exports less competitive and costlier in European markets. And China is wary of the impact on its export industries at a time when its economy is trying to make a soft landing, and strains are showing with an asset bubble in real estate, too much bank lending and high inflation.

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The real author of a favorite quote of Martin Luther King Jr. was from Theodore Parker, an abolitionist, Unitarian preacher, who died in 1860 on the eve of the civil war. It was the work of people like Parker which made it possible for Lincoln to sign the Emancipation proclamation. Parker wrote in 1853: "I do not pretend to understand the moral universe; the arc is a long one.... But from what I see I am sure it bends towards justice." He also wrote, says researcher and author Jamie Stiehm, the words: "A democracy-- that is a government of all the people, by all the people, for all the people." Dr King loved to paraphrase Parker by saying- "How long? Not long. Not long, because the arc of the moral universe is a long one, but it bends towards justice." Stiehm says Obama attributes it to King, but King made it clear that he was borrowing from a fellow preacher, and Lincoln's contemporary, named Theodore Parker.

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The restructuring underway at Pfizer. Experts view the cut in R&D budgets, when more new drugs are needed, with skepticism. Pfizer and other drug manufacturers believe they can make up for this by working closer with universities. Pfizer is reducing the size of its Groton, Connecticut R&D facility and is moving research operations closer to universities in Boston and Cambridge, England. R&D budgets will be cut 30%, from $9.4 billon to $6.5- $7 billion. The emphasis now is to develop a new model for drug development by focussing on a few promising areas, collaborate closely with universities, and fill gaps with acquisitions, as a more efficient way to develop new drugs. In this new approach the infant nutrition business, even with its high growth rates, did not fit in. Cash from the operations sold to Nestle will be used to make share buybacks and be returned to shareholders. Other drug companies from Novartis to Bristol Myers are trying this approach.

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Krugman on the ECB President Trichet's support for austerity programs in European countries facing debt crises, and the loan programs for Ireland, Portugal and Greece that require large cuts in spending. The austerity programs lead to lower growth in these countries, further reducing their ability to repay these loans. The reluctance of the German government and other European leaders to consider debt restructuring even though it appears Greece is unlikely to be ever able to repay the loans extended, shows that EU has not grasped the reality of the situation. ECB officials warned against any restructuring effort in late May 2011, saying that if a restructuring were to take place the ECB would not accept the Greek bonds as collateral for ECB loans. This leaves many to question the ECB's thinking. And to question the German government's resistance to provide aid for troubled European economies even though the current rescue programs were made to protect German banks from losses in loans made to these countries....

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Greece gets strong demand for its bond offering in April 2014. A sale of 3 billion euros of bonds maturing in 2019 attracted 20 billion euros in demand. The yield on the 5 year bond was 4.95%. This is the first longer term bond sale since 2010. The yields on bonds issued during the depths of the eurozone crisis for investors had yields close to 20%. This is a huge turning point for Greece's recovery, and shows tangible progress for the efforts of the Samaras government to stabilize Greece's finances and restore growth. With yields on 10 year U.S. Treasury debt at record lows of 2.64% in April 2014, this brings Greek bond yields to within a little over 2 percentage points of U.S. Treasuries, something that would have been unthinkable only one year ago at this time. It also helps stabilize the entire eurozone, after years of turmoil and riots in Greece created the possibility of Greece's return to the drachma.

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This NYT editorial says the Pfizer bid to acquire Astra Zeneca is an inversion, a tax maneouvre using openings in U.S. and British tax laws that allows an American company to incorporate in London by acquiring a British company. In effect Pfizer beomes a subsidiary of the British company. This reduces taxes owed even though business takes place at Pfizer as before. NYT says 25 companies have adopted inversions since 2008. The top corporate tax rate in Britain at 20% is lower thant the top rate of 35% in the U.S. Additional tax maoeuvres could make it easier for income shifting to tax havens, and make it possible to free up cash held in foreign countries without the need to first repatriate it to the U.S. The problem is that such maneouvres are taking place at a time of large U.S. deficits, and deep cuts in public services and government investment in R&D, infrastructure, education, that would lead to future economic growth.

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U.S. bank Wells Fargo is paying $175 million in a settlement with the Justice Department for "systemic discrimination" in mortgage lending to Blacks and Hispanics. The lawsuit was originally filed by the city of Baltimore over violations of fair lending laws. The Justice Department started its own investigation following the lawsuit. The Justice Department said 4500 black and Hispanic homeowners in the Baltimore and Washington region were targets of loans at unfavorable rates and excessie fees. Federal officials described this as a pattern of unfair lending practices that spanned 36 states and 34,000 minority customers over 5 years. As part of the settlement Wells Fargo is providing $50 million to Washington, Baltimore and six other metropolitan regions to help residents make down payments on new homes. Separately Wells Fargo in its settlement with the city of Baltimore, will provide $3 million in homeowner assistance to residents, and make $125 million in lower cost loans to low and moderate income people for the next 5 years....

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Tesco's decision to exit the U.S. market in Dec. 2012. Tesco's U.S. plan was made after research showing buyers would favor smaller stores than large supermarkets, and more fresh products. Tesco made its entry in the U.S. market in 2007 in Nevada, California and Arizona in areas with new housing projects. When the mortgage crisis hit in 2008, foreclosures and the recession affected these areas where new stores were opened. Some of the ideas were lost in the implementation. The format that worked in Britain failed to takeoff in the U.S. Many stores were located in area where people were used to driving longer distances and could find a larger store with more selection a few minutes away. American buyers preferred to shop for name brands with more selections, Tesco carried more house brands. Experts say Tesco failed to establish a clear proposition to buyers. Tesco faces a loss of 1 billion pounds on the U.S. venture.

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Reserve bank of India's Governor Dr. V.Y. Reddy, who was a strong regulaor and did not allow mortgage securitizations, derivatives, and increased the reserves banks had to hold in case things went wrong. He had strict rules for bank lending in the real estate industry even as a real estate bubble developed in India, all of which is keeping India's banking system in good shape as it faces the global credit crisis. Criticized at the time by bank executives for his strict no nonsense rules, he is now regarded highly by Bank CEO's in India. One of this no nonsense rules was that banks had to hold on to loans they made on their books as banks all over the world have always done in the past, because it made good sense as banks were likely to police themselves for loans they were responsible for. Vague and possibly dangerous experimentation in the name of productive change was frowned upon and the tried and tested rules were followed.

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Statements in the past including Senator Corker's about president Trump lacking "the stability" and "some of the competence" needed for the office of the president of the United States, have lingered since the campaign and his election. Michael Wolff in his new book which was less concerned about facts than engagement cited people in the White House circle saying the president lacked competence and did not read reports made for him. President Trump has responded to this by saying that he is a "very stable genius." The administration's supporters have reacted strongly in favor of the president pointing to his policy initiatives on taxes, changes in policy for North Korea and Iran, and plans for infrastructure, saying one has to look at the actions not the twitter stories.

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A anti-corruption campaign in Saudi Arabia that led to settlements reaching $106 billion and a series of prosecutions in 2017, as reported in the WSJ. The government says this was done to ensure transparency, and a better business environment.  The effort was unusual compared to anti-corruption efforts in other countries such as China because it was conducted with the use of the Ritz Carlton and the settlements made with the most affluent Saudis, as covered in the WSJ. It happened as the Saudi government needed to raise funds including through sale in IPO of state assets such as the Saudi oil company Aramco. The Aramco IPO did not take place. Saudis lost oil revenue with the collapse of negotiations to set oil prices, and the lack of cooperation from Russia. 

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Criticism in China of president Xi Jinping mounts as the tariff war with the U.S. Trump administration escalates. The recent vote in the People's Congress abolishing term limits also comes under criticism.

Some of the criticism comes from the view that president Jinping adopted too high profile a role for China with the "Made in China 2025" and other policy that suggested China was trying to supplant the U.S. These critics suggest China should have adopted a low profile in such matters. Under previous administrations China preferred to act in a cooperative way. The issue about artificial islands in the South China Sea aggravated sensibilities of western nations without adding much to China's security, being another issue that disturbed U.S. relations with China.

 

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South Korean president Moon Jae-in sees his popularity drop from a high of 83% with the outreach efforts to North Korea, to 60% by July 2018 with concern about the economy. Presdent Moon-Jae-in made a campaign pledge for $9 minimum wage by 2020. Recently the minimum wage was increased by about 11% for 2019 after a 16% increase for 2018. Job growth slowed from 836,000 in first 6 months of 2018 compared to 2.15 million for the prior year.

Critics say the increase affects mom and pop small business and results in slower job growth. Youth unemployment is at 9%.

Moon's 83% approval rating is still unusual for South Korea. The opposition conservative party has only 14% approval rating and the previous democratically elected presidents left office with 30% approval.

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Gerald Seib of the WSJ says don't be shocked at the resignation of Mattis at Defense after the withdrawal decisions on Afghanistan and Syria by president Trump, the shutdown of the government in Washington D.C. over Mr. Trump's demandsfor $5 billion to build the border wall with Mexico on grounds of security. As president Trump prepares his reelection bid he is going back to his own sense of what the public and his support base want. The border wall issue was popular with his supporters, and by withdrawing troops from Afghanistan Trump is lowering the troops number to below that when president Obama left office, for a war that is unpopular in the country. Mattis is looking at it from the perspective of sacrifices made in Afghanistan by U.S. soldiers. 

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The work of key Ministries in India is tracked by the Hindusthan Times in March 2018 showing the progress of the Modi government. At the Defense Ministry  a major effort is underway to promote the defense sector to reduce the defense imports of $100 billion over the last decade, and to make this a major jobs generating sector. The Foreign Ministry is pursuing the China-India dialogue, and efforts to tackle the trade deficit with China of $51 billion. The Ministry of Education is working on giving universities autonomy from the Universities Grant Commission so that first tier universities can plan their own development, hire faculty and plan for the future without UGC approval. Jawaharlal Nehru University and the University of Hyderabad, first tier institutions have autonomy from UGC under this effort. 

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Spain's economic recovery is creating jobs and growth has returned after the financial crisis yet Spain's middle class has suffered a decline. Today across Europe only 60% can call themselves middle class, compared to 50%, and this decline can be seen in Spain where the middle class remains vulnerable and the quality of jobs created is nowhere near what it used to be.

Just like in the U.S. this reverses two decades of expansion and growth.

Europe's safety nets have offered protection in the past but this is also affected by deficit reduction policies required by the European Union. The loss of middle income jobs, weakened social protections, and skill mismatches have reduced economic mobility and widened economic inequality. Automation and globalization have made things worse.

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Krugman points to the need for action on revaluation of the yuan, and sees the vote in the House of Representatives sponsored by Sander Levin as a necessary step to get China to act. He sees China as dragging its feet on this issue for many years, and the need to keep the heat on US policy makers, who have acted very passively on this issue. He describes the US policymakers as being infuriatingly, incredibly passive in the light of the Chinese inaction and stalling on currency appreciation. China he says denies manipulating the exchange rate, even as $2.4 trillion foreign currency was purchased by China. Krugman says China is not letting what is a natural process to unfold that would help the world economy as a whole to recover. Its manipulation of the exchange rate, is in effect subsidizing its exports at the expense of other countries like the US. See the link to Roubini, who shows how this is bad for China. Roubini says China will see a growth collapse in 2-3 years, if it does not change direction and let the yuan appreciate. He says it is in effect a large transfer of income from Chinese households to Chinese state owned companies which is dangerous because of increasing misallocation of resources and real estate speculation. See David Barboza for information on the real estate speculation of these Chinese state owned companies. When all this information is added up, it shows China's serious need to act. This would make possible a transition to a new model of development that relies on domestic consumption, and bettter allocation of resources and investment. ...

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A Yale scholar's view of the Obama presidency based on what he sees as a presidency struggling for compromise and consensus.

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The popularity of networking services such as Angel List, which matches startups with investors, has made financing more accessible. Other developments that assist startups is the increase in capital that is being invested, the new category of "F" shares, and the interest by investors in letting founders run the company to achieve their vision.

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U.S. president Obama does not plan to make some of the changes recommended by the presidential panel reviewing NSA surveillance and spying policies. Separation of the NSA and Cyber Command leadership was one, and the other was having phone records of Americans be held by a third party or phone companies and not the NSA.

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Portugal raised 3 billion euros in a 10 year bond sale at 5.67% in May 2013. Portugal had orders of 10.2 billion euros from investors. This is a significant step forward for Portugal to return to bond markets. Portugal's ratings are Ba3 from Moody's, BB from Standard & Poors Investors Services and BB+ from Fitch Ratings.

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Obama's town hall meeting with Turkish students. In answering aquestion on world peace he said something significant. "It will require young people never to stereotype, assume the worse about other people,. Learning to stand in someone else's shoes to see through their eyes, that's how peace begins, and its upto you to make that happen."