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The Christian Democrats (CDP) under Angela Merkel received only 23% of the vote in the 2011 Berlin elections. The Free Democrat party (FDP) with 2% of the vote did not reach the 5% threshhold for seats in the Berlin legislature. This was the fifth time the FDP failed to win enough votes to get seats in the regional parliaments. This endangers the CDP-FDP coalition. The FDP campaigned against Merkel's policy of financial support for Greece. The Social Democrats support the euro currency union and issuance of euro bonds, which suggests voters are not choosing parties based on opposition to bailouts of troubled European Union countries. The Social Democrats-Green coalition will have a majority in the state legislature, as the Greens won 18% of the vote. The Pirate party of internet free-speech activists and leftist voters dissatisfied with existing parties were expected to win 9% of the vote, which is a first for regional parliaments for a party of this type. Some of this vote could have increased the Greens vote....

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The CEO of Abbott Labs which makes baby formula milk under different brands apologizes to the US public for the problems at its Sturgis, Michigan plant that led to the decision to shut down production at the plant. A deadly bacteria was found at the plant and Abbot Labs decided to close it down, leading to a shortage of baby formula in the US. US president Biden had supplies flown in from Germany to make up for the loss in supplies, brining in 15% of daily needs in the US. More flights are expected. The Sturgis, Michigan plant will reopen in June with a doubling of production capacity.

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The latest news from Catalonia ahead of the Dec. 21, 2017 election shows a hugely divided region in Catalonia, as prime minister Rajoy of Spain campaigns in Barcelona. The head of the left wing ERC party which is likely to win the largest share of the vote according to a poll in newspaper La Vanguardia was arrested along with fired ministers in the Puigdemont government. This time unlike the 2015 election ERC party says it will not join Mr. Puigdemont in a single pro independence bloc. Mr. Puigdemont is in exile in Brussels after declaring independence for Catalonia. Barcelona's mayor Ada Palau who won in 2015 on a platform showing support for people who suffered after the financial crisis and real estate meltdown, says she does not support the independence movement. Palau says Mr. Puigedemont and others "tricked the population for their own interests." She is critical of the way prime minister Rajoy handled the crisis including invoking Article 155 to dismiss the elected government for new elections. Palau has broken the pact with the Socialist Party. This shows a fragmented and divided population when it comes to independence. This BBC report says about half of Catalans today do not support independence for a complete break with Spain. ...

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Proposed ideas being considered at the EU headquarters in Brussels include the European bailout fund, the European Financial Stability Facility (EFSF), being made a bank with funding from the European Central Bank. The EFSF would be able to buy the bonds of Spain and Italy in primary and secondary markets alongside private buyers. As an alternative the ECB would be able to buy Spanish and Italian bonds directly. Here the problem is keeping private investors in the market given the large financial needs of Spain and Italy. In the restructuring of Greece's government bonds the ECB took the position that it would subordinate the claims of private investors in Greece's government bonds and not take loss. Concerns of private investors could be addressed by the eurozone governments giving an explicit indemnity to the ECB to cover any losses suffered in the purchase of Spanish and Italian bonds. Both steps, the direct purchase of Spain's and Italy's bonds by the ECB or through the EFSF would mean doing something that is not in the ECB's charter- the financing of government debt- and would be done cautiously and only in a crisis situation. The caution would also be motivated by the need to ensure there is action to improve the competitiveness of Spain, Italy and other eurozone countries through specific measures, and no backtracking bygovernments....

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Sony has lost its focus, it is in so many lines of business, that its brand identity has been lost. Especially in Japan where it is in cosmetics, massage, mailorder shopping club, insurance, finance, robots etc. It has 1000 subsidiaries and affiliates worldwide, of which a third are unrelated to its core electronics business. How does this hurt? It hurts because management is distracted, and when top management is distracted then its not focussing on customers, changing business trends, creativity in its business pioneering new products. In a big company this problem is just magnified by the bureaucracy that develops. Problems similiar to the ones faced by IBM and General Motors. The analysts and Howard Stringer talk about restoring the Sony premium. What is a premium, its not just the brand, its the innovation or something special behind the brand that enables it to command the premium. Stringer probably understands that its the innovative edge that Sony as lost. See the other piece "Howard Stringer, Sony's Road Warrior" by Siklos and Fackler in the Sunday NYT, May 30, 2006 with Stringer shown in a large picture imagining him as a Sumo wrestler. An unforgettable picture. In that piece it becomes clear that Stringer is keenly aware about Sony's and Japan's weakness in software which is increasingly driving success in products when combined innovatively with new bold concepts. He says there that Sony takes great pride in its hardware, and this is true of Japanese creative spirit in innovative and miniature gadgetry, but its capabilities in software are very modest. As one action step Stringer has hired Tim Schaaf , a senior Apple executive to lead that effort at Sony. The other part, getting the focus back by focussing on customers of electronic products is evident in this piece. Ryoji Chubachi, head of electronics and co-head of Sony with Stringer, regularly visits large retailers to offer incentives for making Sony products more visible, something the prior management failed to do. The prior management failed to focus on customers, and thought it beneath their highflying ways. One of the decisions by Chubachi in TV's is to price HDTV sets close to the price of Panasonic, Samsung and Sharp at large retailers in Japan. This makes sense to gain market leader status, as it shows Sony is living in the real world and taking decisions appropriate and relevant to a premium free environment in television sets. You a manufacturer cannot imagine a premium, a premium is a perception in the minds of customers and most likely reflects a perception of uniqueness, creativity, fashion and some other attribute, which can include engineering. Sony's philosophy has stated in Akio Morita's book "Made in Japan", was to be a pioneer, to walk the untrodden ways, break new ground. One aspect of this in comparison to Matsushita, Sharp and other competitors, was going to be its individuality, something Morita borrowed from his days in the US, because it is typically American and sort of unJapanese in a way. Though this is a generalization and many American companies merely follow and some Japanese companies have their own way of doing things even if it is thought of as being very Japanese like, witness Toyota in its Aichi prefecture surroundings. In this light the surveys show Sony significantly deteriorating in "conspicuous individuality." The New York Times cites a survey from BP Nikkei Consulting in Tokyo that the number of consumers saying that Sony showed "conspicuous individuality dropped to about 25% from about 40% the year before. ...

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The Panic of 1907, the run on the bank for the Knickerbocker Trust Company, and its collapse. The intervention of JP Morgan that year came too late for Charles Barney, the President of Knickerbocker Trust, who shot himself and died after 4 hours. In the preceding years Knickerbocker went through rapid growth in deposits, and in 1903 Barney even had a huge Corinthian columned structure of Vermont marble, and a lavish banking room inside built at Fifth Avenue and 34th Street. See the pictures of that structure. It shows how things end up with rampant expansion. Growth, rampant expansion, flamboyant display, excess, crisis, panic, disaster and rescue. A cycle that repeats itself as new generations have no recollection of what had happened before, and no sense of history. With the expansion a sense of exhilaration and selfcongratulation makes way for abandonment of caution, excess, paving the way for disaster. And this hits those involved in the excess as the AIG's and the Citigroups, but also those who have gone to sleep like the GM's, and those who have some exposure like GE with its GE Capital business. What is different in today's economy, and true of the 1930's, is the global nature of this when the excesses are of a global nature, and the countries are intertwined. In this sense the current period involves Asian economies also, in addition to the European and American economies that was true in 1930's. The contrast with today is that a year later by October 1908 the panic had ended, and depositors of the Knickerbocker and other banks had received their money in full. A recovery was on the way. This was isolated to the US economy and to the banks. The global crisis of the 1930's was 23 years away. In 1997 the Asian economies like S. Korea, Thailand and Indonesia suffered a banking crisis, before this there was a finacial crisis in Mexico, and around this time a financial crisis in Russia. There were smaller crises like the LTCM crisis in the US but most were localized like the 1907 Panic. Now 11 years after the 1997 crisis in Asia, we have a global crisis and it is multifaceted, affecting banks, but also consumers and export driven economies in Europe and Asia with spillover effects. ...

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How the French health care system works. France comes in first and the USA 37th in aWHO health care ranking. THe difference in deaths from respiratory disease is half that in the USA, and lower rates of death from heart disease and diabetes. IT has more hospital beds and doctors per capita than the USA. 65% of French people are satisfied with their health system compared to 40% in the USA, and yet France spends 10.7% of GDP on health care and the USA spends 16% for poorer results. THe French system is more generous to its seniors. Unlike Medicare there are no deductibles, just modest co-payments that are often dismissed for chronically ill. And diabetes and critical surgeries are covered 100%. French also buy supplemental insurance like Medigap for extra expenses like dental and eyglasses. Cancer patients are treated free of charge. Avastin treatments costing $48,000 a year are provided at no charge. France's PMI or Protection Maternelle et Infantile, is rated highly. It is anetwork of thousands of healthcare facilities, that ensure that every mother and child in the country receives basic preventive care. Mothers even receive afinancial incentive for attending their pre and post natal visits. France makes this care affordable by reibursing doctors at a much lower rate. The average yearly net income for doctors is around $55,000, about athird of what doctors in the USA make. But French doctors don't have to pay back huge student loans as medical school is paid for by the state and malpractice insurance premiums are only a tiny fraction of that in the USA. And again the French government pays two thirds of the social security tax for most French physicians- which is typically 40% of income. So the $55,000, is more like $92,000 taking that into account and more like $110,000 when student loans and malpractice is taken into account at US levels. Specialists who have 4 or more years experience can charge what they want, but as one gastroenterologist says, there in an unspoken and undefined limit to what you can cahrge or what is socially acceptable. Yet even in France there is inflation in health care costs that the government deals with through price controls and more spending. The French national insurance system is running increased deficits each year and this is now $13.5 billion, and it has led to higher taxes for employers and workers. ...

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Experts say this is the worst economic crisis since the Great Depression and it has gradually accelerated since October 2007 from a gradually unfolding housing crisis into a full blown credit markets crisis with the lack of transparency in mortgage securitization and the loss of confidence in the credit markets as mortgage securities values collapsed. The worst is still ahead as home prices have only fallen to a small extent so far and experts expect another 20% drop in prices this year and 2009. In the face of this crisis Immelt can be faulted for not using caution in his promises to the analyst community but to be so unforgiving for GE shares to fall 13% in one day and calls for breaking up the company or frustration at GE's inability to overcome what were clearly extremely unusual financial and real estate market conditions that may be a first in 40 years, is clearly overdone. Jack Welch who said he would be shocked beyond belief and shoot Immelt if he doesn't make what he promises now is also expressing some of that frustration, but beyond this is the inability to grasp the true extent of the situation in the markets that Welch never experienced first hand as he demanded and got his managers to deliver on results quarter after quarter or be fired for credibility problems ,because Welch's batting averages reflected a stretch of years where there were no crises of the magnitude of what Immelt is facing today. Upon further reflection Welch still stands by Immelt saying that this business about breaking up GE and Immelt's in trouble is crazy. And Immelt is building GE around the growth engines of the next big success stories in the growth engines of the future in Asia and the Middle East and emerging market countries of infrastructure, energy, aviation, health and environment, which would also be supported by the smaller but still significant growth of industrialized countries. And these things take time to put together a collection of winning businesses to be well positioned for future growth. Can GE accelerate sales or are there any shortcuts? Immelt doe not think so. Can he change things in a "severe and protracted" economic downturn as the Fed put it last month? Its beyond even large companies like GE....

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The shift away from Iranian oil with U.S. pressure and sanctions, and higher oil prices, could pose challenges for the Indian macroeconomic outlook in 2020.

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Did Kirsten Tatlow points out the different perceptions of China's anti-corruption initiative in a country with deeply rooted corruption. China's ranking dropped to 104th of 175 countries ranked for corruption in Transparency International's Corruption Index for 2014. The current campaign under Xi Jinping is lacking because it is partial, opaque and politically driven say researchers at Transparency International. For it to be effective it has to be done in a transparent manner, and with stronger laws for bribery, whistleblower protection, asset declarations, according to the researchers. China dropped 20 places since 2013. China's score declined by 4 points to 36. Denmark is highest at 92. Turkey dropped by 5 points. Norway, Finland, Sweden and New Zealand, are at the top of the list. Transparency International points out that free speech, accountable government an independent judiciary are essential to tackle corruption. These are not sufficient however as the example of India shows. A culture of corruption or lack of transparency and effective laws can enable corruption to grow even in countries with genuine democratic process. Democratic process does provides remedies through a change in administration as happened in India with the decisive defeat of the corruption scandal affected Congress government....

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Comments about Edward Whitacre, who put AT&T together after becomng CEO of Southwestern Bell, and built the new business around cellular, wireless and internet services once the long distance market collapsed. Says board member and leader Kent Kresa, of Henderson and Whitacre, "they are both open to the ideas and opinions of others. I think there will be a good dialogue." Says a colleague Haskell Monroe, on the AT&T board, " he faces the facts, he looks for the truth and he is a person who takes responsibility for his decisions." Says Gerald Myers, a University of Michigan professor and former chairman of American Motors Corp, "he is'nt a loveableguy. He's not going to be your friend. He is blunt, but he is so often right that you accept the abuse."

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Steve Rattner, Obama's senior auto advisor, was the one who suggested Mr Whitacre for this position , and felt he would be the right choice to bring fresh thinking to GM. Steve Rattner knew Whitacre, and after board leader Kresa met with him 3 weeks ago he felt that he would be an excellent choice to bring back public confidence in GM.

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Claire Cain Miller points to the high cost of child care in the U.S. and the benefits to society from providing affordable child care. It has a high impact on women's employment and incomes, and ability to pursue opportunities in education and career. The effect on children especially for low income families is enormous. Average cost for child care in the U.S. is by one estimate $16,514. The higher the quality of care in early years the better the outcomes are for children in education, careers, income, and later in life.

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How Subaru is going to market to 20-34 age group using Japanese themes and Japanese culture. The car for which these advertising commercials use Japanese themes is the 2008 Impreza WRX which competes with is Volkswagen GTI anf Mazdaspeed 3.

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Pfizer's Jarvik campaign for Lipitor cost $258 million and is now cancelled after misleading claims and representing Jarvik as a credible spokesperson for Lipitor when he is neither a cardiologist or an inventor of the artificial heart. Another missstep by Pfizer.

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The issue of high youth unemployment. The bulge in demographics and the emphasis on increasing the number of college graduates without increasing the jobs available, or providing apprenticeship type training and degrees in areas where jobs can be created, has created a major problem in the Middle East. High youth unemployment in the US, Spain and the UK also poses serious problems. Former primer Minister Giuliano Amato of Italy recently told Corriere della Serra: "The older generations have eaten the future of the younger ones." Older workers tend to hold onto their jobs as long as possible as retirement ages are being raised, and they have negotiated higher retirement pensions. In Spain the younger part time workers and immigrant workers are the first to be laid off and unemployment is highest in this group, which is also why the high unemployment has not attracted as much attention there. Younger workers will eventually have to support a higher proportion of these workers in retirement because of the demographics. The shift to higher parttime employment and employment at low wages has also created a class of workers who have no future, as their incomes are low, and are easily laid off. This shift has been taking place in the US, Europe and Japan over the last decade. Germany has fared better because of its long tradition of apprenticeship training, and employers working directly with young students at universities to provide on the job training. The financial crisis of 2008 in the US slowed down many industries and created a shift in industries creating jobs, the result was a larger mismatch of skills of job seekers and new jobs created. One way to address this is more on the job training and working directly with employers, and assistance to community colleges to fill education gaps. ...

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Explores the possible consequences of $100 Oil. 1. More difficulties for GM and Ford and Chrysler. 2. Ben Bernanke has a difficult choice, increase interest rates to curb inflation or lower rates to stimulate an economy thats slowing down considerably. 3. Ethanol gets a big boost. 4. Middle East funded resistance or terrorist groups get a boost fro oil money. 5. Oil at $100 is not enough to cause a resession according to one estimate, Standard and Poor's Chief Economist David Wyss, it could lower growth from 2.5% to 1% in 2007. 6. Hybrids get a boost. Honda does better with the Civic and the new Fit. Toyota's hybrids get a new boost. 7. Oil Company profits go even higher. Does this boost funding for exploration to a higher level than currently remains a question both for national oil companies and private oil companies.

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Spiegel Online's interview with Emmanuel Macron, on the TGV 8434 train from Bordeaux to Paris. He is joined by Mrs. Macron. Macron says he is aware that he does not have a bloc of core support like Ms. Le Pen, yet he says this means he will try that much harder for voters on the right and the left. He says their is no political renewal in the political class in France and that it remains closed. He says particular attention must be paid to rural France outside big cities like Bordeaux, Lyon, Marseille and Paris, where people have had a different encounter with globalization. On the European Union he sees the need to revitalize it by having a closer union focussed on countries that are interested in this. He sees the need for a joint finance minister and permanent head of Euro Group. This might be a smaller EU without countries such as Britain, and others who are not interested in a closer union. He does not agree with the idea that any member state of the EU can stop other member states from proceeding. Macron does not believe in moving to the right as in the Dutch election because he says people are "not idiots" and in France this has not worked for Nicholas Sarkozy, which has some truth to it as authenticity (and humility) matters to French voters. A personal approach worked for Fillon early on till the scandal over payments he received. Macron brings to this personal approach and relative youthfulness, his sense that he must appeal to all segments, rural and urban, educated and less educated, and at the same time be true to core values such as preserving the European Union, and authenticity in terms of views on Algeria. He also says he is aware he faces risks but that this is something he believes in deeply.   Macron has not hesitated to express his views on topics such as Algeria, calling it a crime against humanity, and later elaborating on what he meant. Macron says his movement En Marche is different in style and manner from the closed nature of French politics. He believes in transparency, term limits, and removing conflicts of interest in French politics, as a way to make a fresh start. The first round of voting is on April 23, 2017, followed by a second round of voting between two candidates.  ...

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Laurence Peter of the BBC News describes a meeting of EU leaders in December 2016. The new Europa building with its space egg shape will be the location of the next summit in 2016, adding to a sense of history that the EU idea has witnessed since the 1950's, even optimism about far it has come at a time of a few setbacks.  He points out that Theresa May was not without persons to talk to at the meeting, though some video clips showed her looking lonely. EU president Martin Schulz said he was emotional seeing students crying after the Brexit vote, but that it was time to find solutions and not be emotional today. Lunch was offered at the meeting by Spain and Portugal, to mark the 30 years since they joined. People forget how much the European Community meant to the two countries after decades of suffering under fascist dictatorships- it meant new hope and an opportunity to set things right. Problems facing the EU today include, the frustration at the carnage in Aleppo, Syria, how to deal with Britain and Brexit, setting up an asylum system that will work, dealing with Ukraine and Russia without making the situation worse, and remaining concerns about the Greece debt crisis. ...

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Mexican billionaire Carlos Slim will provide $250 million to New York Times in return for warrants that can be converted into 15.9 million common shares at a strike price of $6.36, close to where the price was last week. The notes carry a interest rate of 14% and are due in 2015. The Sulzbergers control 19% of the company's equity and control the company through super-voting shares. If Slim exercizes the warrants he would control 18% of the company's equity. Times faces a liquidity crisis and the $250 million may not be enough for it to survive as an independent company. The New York Times borrowed heavily in the boom years and it had $1.1 billion of debt at the end of September 2008, and only $46 million in cash. Much of that debt is coming due in the next couple of years. It has a $400 million credit facility that expires in May 2009, $250 million in notes due in 2010, and a $400 million credit facility expiring in 2011. Its stock has fallen 50% already and its debt is rated "junk" by S&P....

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Some of the flaws in China's development model are shown by the Economist. Over half of the economy is dominatd by state run enterprises. And the remainder is also heavily influenced by local government and officials from the government. Financing goes through state run banks which lend to state run enterprises, and only a small fraction of lending goes to small businesses. These busineses are not actively looking to support innovation and new products. The other weakness that the Economist correctly points out, is that by contrast even in the 1960's, about 10 years into Japan's postwar development, quality control was a big thing with companies in Japan. The Deming Prize was seen as the most prestigious prize for Japanese companies, and Japanese engineers tried to learn everything they could about quality control to make Made in Japan mean high quality. They succeeded by the 1980's in making this happen, with leading global brands like Sony, Matsushita, Panasonic, Toyota, Honda, Canon and a host of other brands. If 1980 in China, is where Japan was in 1950, now about 30 years later there is nothing like what was seen happen in Japan in the area of quality and global brands. The area in which the freewheeling culture of capitalism has been most successful is the economic zone, a 2 hour drive between Guanghou and Shenzen. It manufactures mostly low tech goods like toys and apparel and shoes, and these manufacturing facilities are of low quality, with poor conditions for labor. With the efforts by the government to move to higher value added and high tech products these businesses came under pressure by mid 2007, with new labor laws, more enforcement, pollution control laws and resulting higher costs. As they felt the impact by mid 2008 from the higher costs, some businesses disappeared. Then another and even bigger problem hit these businesses. The global economic crisis, the shortage of credit in western countries to sustain import orders, and the rapid fall off of demand from highly indebted consumers in the USA, has led to closure of most of these businesses. The rapidity with which many of these businesses closed is amazing, as row after row of these buildings are now empty in the Guangzhou-Shenzen area. Another development is happening in Taiwanese firms like Hon Hai, that with little disclosure, make IPods, laptops, PC's, and other electronic products in the same area. At one point this firm employed 250,000 people in a industrial city sized factory campus. Now it is shifting production to places like Vietnam. Now Taiwanese reports say that the workforce of Hon Hai in Shenzen area will drop to 100,000. Other Taiwanese firms are also shifting production to other countries. Climate change and the heavily polluting industries that are widespread in China is one of the other flaws in the Chinese development model. Another is the lack of energy efficiency in these industries. With all these changes exposing the deeper flaws in the model China has used for development for the last 30 years, this a time for change in the way economic development takes place in China. ...

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Professors Cole and Ohanian of the University of Pennsylvania and UCLA, provide a new interpretation of FDR's economic policies during the period 1932-1934 and the period 1937-1941, based on their research. This suggests conclusions different from that of Obama advisor, Christina Romer, and Fed chairman, Bernanke about that period. Changes in economic policies under the Roosevelt administration that helped bring wages in line with productivity, reduced strikes, and gradual elimination of the undistributed profits tax, improved incentives for business investment during 1938-1939. Cole and Ohanian, say that by 1941, before the U.S. entered the war, close to half of the increase in nonmilitary hours worked in the U.S. between 1939 and the peak of the war, had already been achieved. And this was primarily the result of the changes in FDR's policies in 1938. They say a similiar opportunity is presented by the proposals of the Bowles-Simpson commission on deficit reduction, by lowering the corporate income tax through simplification of the tax code and reducing or eliminating most tax expenditures. Improving the incentives for business to hire and invest through this and other steps is likely to do more for the economy than the steps tried so far since 2009....

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After the Phase 1 trade deal with China led to cancellation of new tariffs on computers, mobile phones and the remaining products imported from China, tariffs are still in place on $370 billion of imports from China. President Trump says China agreed to import $32 billion of agricultural goods, with the figures reaching $50 billion in 2020. The prior high was $26 billion in 2012. This comes as a big relief for the agricultural farm sector which had 24% more bankruptcies in 2019. Farmers are now more likely to vote for president Trump as they did in the last election. In addition China agreed to buy $200 billion more of American goods over the next 2 years. This combined with the USMCA agreement to replace NAFTA, for North American trade, is good news for president Trump and for the U.S. economy for 2% annual growth. The S&P stock index went up by 29% in 2019. The big concession by China is its agreement to agree to penalties if it does not keep up its part of the bargain.  Intellectual property protection remains a challenge and Mr. Trump may have decided to take a tactical success and shore up his base of farmers and small business people before taking up these issues in the future. China for its part may have decided to make a tactical move of its own as it has nothing to lose in importing more farm products from the U.S. in exchange for being able to continue to make the computers, iPhones and tech products it manufactures, just like before. China has not conceded much in terms of its goals set  in "Made in China 2025." Both sides are taking a much needed pause to consolidate their positions, as the fundamental differences remain to be tackled. Huawei and Chinese technology issue remains as before with the U.S. wary of China's technological gains in 5G telecom equipment and keen on building and protecting America's technological advantage in future trade relations. ...