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Germany's aging rail system, the Deutsche Bahn, will get a makeover with a 86 billion euro inverstment over 10 years. FOr years it has suffered from delays, broken bridges, older trains, and lack of modernization. As the economy slows down infrastructure investment which has suffered from the Tech years, is now back in popularity with the public mood shifting across Europe and the U.S. A current five year plan budgeted just 5.6 billion euros per year and is replaced with a ten year plan with 86 billion euros so that it sends a signal for the economy, but more importantly creates planning security for investments, and makes building sites cheaper to run. As a sign of the times trains running 6 minutes were considered as "on time" in recent years. Merkel's CDU was not pursuing infrastructure investment during the austerity decade 2008-2018. As finances are being cleaned up in Europe and the U.S. and the banking mess clears, the shrinking of banks such as Deutsche Bank as a vivid and educational example, and the mood of the public shifts away from the flashy Tech years, there is a sense of the value in the public mind of the investments in infrastructure that benefit all, that prevailed in the post war years. ...

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Speaking in Santiago, Chile, Philadelphia Fed president Charles Plosser, pointed to the limits and hazards of excessive use of monetary policy by the US Fed. The Fed, Plosser said, cannot reverse the sharp decline in house prices when the economy has significantly overinvested in housing. The Journal editorial states that though its never been stated as such, the Fed's current easy money policy is intended to reflate the housing and job markets. Plosser said the excessive faith and reliance on monetary policy can undermine the recovery by "distorting price signals and thus resource allocations, adding to instablity."

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Japanese firms have $2.65 trillion in excess reserves as of June 30, 2014, according to the Ministry of Finance. Yet slow growth and falling prices in the last decade have made Japanese companies overly cautious in increasing wages. A declining yen makes imports more costly. Real wages were up for only 4 months during the Abe administration in 2013-2014. The first increase in the national sales tax in April 2014 to reduce the large deficit has also hit consumers, leading to a recession in the third quarter of 2014. Prime minister Abe made an effort in 2013 to get companies to increase wages, but results were modest in Spring 2014 as smaller companies held back. At the time prime minister Abe promised to do his part by reducing corporate taxes and implement pro-growth strategies, expecting companies to adjust wages upward. Analysts now say tightening labor markets are likely to create a situation where businesses will have to raise wages. A Bank of Japan survey of business sentiment in Dec. 2014 shows the number of firms seeing a shortage of workers is at the highest proportion since 1992. Declining oil prices will reduce Japan's fuel import bill by 9.6 trillion yen in 2015, and give more money to consumers offsetting the effects of the increase in the consumption tax to 8%....

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The OECD countries in Europe including Germany, France, Denmark, Italy, spend on average $14,000 on childcare. The US spends astonishingly only $500 per toddler, about 4% of what advanced countries in Europe spend.The Biden plan is to change that. On the floor of the US Congress Senate minority leader McConnell protests against what he calls extravagant spending by the US in the Biden plan for families and workers.

In our selection of reports in world media we show the effect on women during the pandemic taking on childcare responsibilities with schools closed because of coronavirus. The impact has been a catastrophe for women leading to increase in mental health problems as culture and other reasons lead to women taking on 60-70% of child care and household chores. Women with careers are not able to join the workforce because of childcare shortages, losing income and feeling overburdened.

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A former cricketer who helped Pakistan win the World Cup, is elected prime minister of Pakistan, His party leads in the 2018 elections with 120 seats, the party of Mr. Sharif with its base in the Punjab wins 60 seats, and the party of the Bhuttos with its base in Sind province wins 40 seats. Imran Khan has the support of the military in Pakistan.

Mr. Sharif was ousted as prime minister before the election on corruption charges first revealed in the Panama Papers. 

Pakistan faces challenges of managing its economic relationship with China with debt repayments to China for infrastructure projects leading to a planned IMF bailout in 2019. The relationship with India remains strained over Kashmir, and leads to a situation in which the military runs external affairs of the country. The economic and political issues need to be untangled so that Pakistan and the rest of South Asia can divert resources from defense to economic development.

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The problems in the commercial real estate bad loans that make it too hard for the government to rescue. An adjustment here could slow the economy in the years ahead and expose banks to big losses in the $3.4 trillion outstanding commercial real estate debt. Big banks benefitted from the gvernmet TARP program, and after the stress tests raised funds. But big banks held only 29% of the $1.84 trillion commercial real estate debt on bank balance sheets in the 2nd quarter of 2009, according to Foresight Analytics. Smaller banks with $1 billion to $10 billion of assets had $450 billion in commercial real estate exposure in the second quarter equivalent to 330% of Tier 1 capital. For the largest banks that ratio was much less at 99%, according to Foresight. And the smaller banks did not get stresstested the way the larger banks did and so wer not able to raise enough equity. Governmet plans to deal with this coming crisis are to hopwe that real estae prices recover. a recovery of 10% could cut those loans underwater to 37% from 68%. And regulators issued guidelines to encourage banks to restructure, not foreclose on problem commercial mortgages. But even if prices rise banks would want to pare exposure not refinance these loans. Meanwhile the $700 billin market in bonds backed by commercial real estate loans is moribund....

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Pearlstein says American Airlines (AMR) management had hoped to reduce employees count by 13,000, reduce benefits for employees and retirees and reform work rules by going through bankruptcy in the manner of other airlines such as Delta and Northwest. As it turns out AMR's unions and US Airways have made their own deal and come up with labor agreements that are likely to result in a merger deal with AMR with 1.2 billion in savings from synergies, instead of relying on labor savings for $800 million as AMR management had planned. This is because US Airways CEO, Doug Parker, sees increased savings and revenue from a new combined airline and a better hands on management team. Part of the reason is also the the way the combined airline provides additional feeder traffic from smaller cities to hubs in the east coast and midwest markets and in the Miami routes to South America. The Pension Benefit Guarantee Corporation also tacitly sees the benefit of a stronger airline so that its funds are not depleted further by having to support AMR's underfunded pension plan. The creditors have also realized what all this means by increasing the value of AMR bonds to 50 cents on the dollar from 30 cents on the dollar....

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American journalist Bob Schieffer spent 46 years with CBS. He was host of the news show on CBS "Face the Nation" for 24 years. Schieffer says he made the biggest impression on the American public only in the last 12 years since turning 65. During these 12 years he moderated several presidential debates, put CBS at the highest level of viewership as other leading journalists retired, and published a best selling memoir, "This Just In." Things were not expected to turn out this way. In 2003 Mr. Schieffer found out he had bladder cancer, and he says ever since he saw things differently- everything appeared as a temporary assignment. In 2005 he announced he would retire in 2007, when he was 70. Each year after that CBS persuaded him to stay. He replaced Dan Rather for "CBS Evening News" in 2005, and gave it solid ratings till he stepped down in 2007. Schieffer is the same person he was many years ago for people who remember him from CBS since 1982, as the chief Washington correspondent. It is this power of experience, of being always there, that attracts viewers who want to hear about what Bob Schieffer finds important, with an authentic voice asking the right questions....

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The Swedish government is seeing the 3 Baltic countries as part of its own economic region, and is treating them as part of the home region. It plans to do whatever it can to help them. The recapitalization effort for Swedish banks that made a large amount of loans to these countries, is similiar to the one that Sweden conducted for its banks in the 1990's, after a real estate bust. Swedish banks loans to the 3 Baltic countries amount to about 20% of Sweden's GDP. According to Danske Bank the loans could cost Sweden 2 to 6% of its GDP over several years. In 2009 the economies of the Baltic countries could contract 6 to 10%. Already Sweden has approved a rescue package of $173 billion, or 1.5 trillion kronor, to guarantee issues of Swedish bank debt, with some of it used to recapitalize banks with heavy losses. It contributed 1 billion euros to the 7.85 billion euro rescue package for Latvia made by the IMF, and traded $1.1 billion woth of Estonian kroons for Swedish kronor to help stabilize the Estonian currency. Swedbank and Nordea Bank are taking part in the recapitalization, while the SEB Bank of the Wallenberg family has so far managed on its own....

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NIgeria needs $60 billion betwen 2008 to 2012 to fund oil development costs, its share of the funding of joint projects with international oil companies. But the Nigerian state oil company needs to borrow half that amount. And credit markes are tight and will remain so for a long time so where will it find the money to fund shortfalls. Nigerian foreign minister said last week that production was just 1.5 million barrels a day. Observers pegged production at 2 million barrels a day. Violence in the Niger Delta is raising production costs ant CEO of Amni Nigerian oil company says costs are 250 percent higher than offshore counting security costs and kidnapping insurance for employees. Other problems with west african production are the high costs of developing the offshore fields and their rapid depletion rates as international oil companies seek to recoup their costs quickly. So even as new drilling takes place in offshore fields in Angola and Guinea the outlook is not so good. Consultancy John Mckenzie sees production declining by 2013. And PFC Energy estimates sees production peak at 7.1 million barrels a day in 2014 from current 5.8 million barrels. In the past African production has made up for declines in places like Russia and Mexico, now this is less likely. ...

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The Yucatan Rail Project being moved forward by Lopez Obrador in Mexico is shown here in the WSJ. It moved forward during the pandemic years 2020 and 2021 and connects the Yucatan cities by rail. Yucatan cities  including Campeche and Merida bring about 8% of the country's exports and 10% of the country's GDP. Modern rail at 99 mph would connect the cities in the Yucatan to increase industry and tourism to develop the south east of the country. This is similar to the projects on the Brahmaputra river in the northeastern parts of India that are being opened up by new infrastructure rail and bridges for industry and tourism. Both the Yucatan and India's northeast are parts of the country that have much potential and have investment needs that were not realized in the past by previous administrations. The environmental impact in the northeast part of India and for the bullet train in the western region from Mumbai to Ahmedabad were held up by environmental concerns. A similar situation has happened for the Yucatan Rail Project. Even when enough trees were to be planted to help Mumbai residents for its Metro construction also shown in WSJ, he project was held up for political reasons. The bullet train project after its delay for political reasons will now cost nearly double that it would have cost before. It is supported by Japanese aid at very favourable financial terms that pay for the project, including direct government aid and Japan's rail technology. It is now moving ahead in 2022.  Infrastructure plays a key role in developing economies such as India and Mexico, yet it requires resolute conviction and perseverance as much of the political setup as shown in Mexico leads to leakage of funds meant for infrastructure and very little being done at great cost to the ease of living of ordinary people. In Mumbai and other cities in India. The same is true for Mexico which at this time of the pandemic needs to bolster its spirits and move ahead with much needed development work to help people in all parts of the country. With the Yucatan Rail Project Mexico can move to the next phase with wind farms on the Yucatan out to sea, and solar energy projects that could with new technology be transmitted to other parts of Mexico and to the US. It is important to keep trying and persevere on these new projects and look to a brighter future. For Mexico US relations better living conditions in Mexico also relieves the burden of illegal immigration and problems related to it in neighborly relations. Mexican officials should increase contacts with Indian officials working on the projects in the Assam region and  along the Brahmaputra river, in Indian states in the northeast, to exchange ideas and notes to gain from each other's experiences in integrating regions that were previously not integrated into the Indian and Mexican economies. This is a topic to be added to the G-20 topics to be discussed at the next meeting in Bali, Indonesia, on November 15-16, 2022. For Mexico it is an opportunity to also widen its infrastructure work to learn from what India is doing in solar and wind energy and build collaborative efforts. ...

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Florida's House of Representatives passed a bill in March that reduces the number of weeks of unemployment benefits from the standard 26 weeks to 20 weeks. A similar law was passed in Michigan recently. Both states have unemployment rates exceeding 10%.

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Jared Bernstein of the Economic Policy Institute points to trade barriers reducing competition and free trade that should raise an outcry when free trade and competition advocates focus alone on the Trump steel tariffs. He points to estimates that show $90 billion in additional costs to Americans from the barriers that prevent Americans from paying world market prices for surgeries and medical treatment, prices similar to what is paid in advanced countries like Germany, Britain and France. A bigger barrier in pharmaceuticals prices being sheltered from market competition worldwide costs a huge $370 billion in additional costs to Americans. These two costs in healthcare would help Americans by a magnitude compared to tax cuts that do not work for average Americans with the business tax cut going more into share buybacks than into increasing wages or capital investment in 2018.  Bernstein points to Neil Irwin's column in the NYT that flags statements such as Senator Mike Lee, Republican, that the steel tariffs are a huge job killing tax hike, as being misleading. Bernstein says two actions were never taken that would have used benefits of free trade to help affected communities that lost jobs in industries such as steel and textiles, other industries affected by foreign competition.  He lists these steps as sectoral employment training, apprenticeships ,and job creation efforts in the worst affected areas. Basically no one really knows what is good trade policy, the textbook concepts and theories are out of date when countries can subsidize particular industries such as steel and dump products into the American market. At a press conference on CSPAN with the Swedish prime minister Mr. Trump stated that China was exporting more than what is officially shown as there are transshipments from other countries, some of them with no steel mills.  As Mr. Trump stated at that press conference he was elected partly because of the worst affected communities- in places such as Michigan and other states in the midwestern U.S.- that suffered from unfair trade. Bernstein admonishes the economists and politicians, media, for the headlines that are misleading in showing that bad trade policy is being pursued and trade wars are being started. This deserves attention because the Trump administration and advisors such as Lighthizer who served in the Reagan administration seek fair trade, and the Commerce Secretary Wilbur Ross successfully pushed for NAFTA trade deal renegotiation not the outright rejection of NAFTA that was mentioned in the election campaign. Ironically no one is helped by this trade rhetoric and misleading headlines. In fact the strengthening of the U.S. currency as the huge trade surplus of China goes into U.S. assets, and with the election of Mr. Trump, gives foreign competitors a continued advantage. And in fact Japan, South Korea, China, had a mild response to the tariffs as reported, because these countries are aware of global overcapacity created especially by China which produces 50% of the world's steel, and as China shifts to higher technologically value added products closing many older steel mills. ...

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The management of the sovereign debt of different countries. The use of auctions to get lower rates. Shift of a larger proportion of financing to longer term bonds, to reduce rollover risk. The U..as reduced its dependence on short term debt maturing in 12 months, from 45% to 30%.

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It used to be in the past that growing more food would address the problem of malnourishment. After years of decline of malnourished people BBC shows that the trend is reversing and there will be 821 million malnourished people in coming years. The reason for this is that of the thousands of crops that were known to humankind from its beginnings we are down to about 100 and about 40% of people on the planet rely mainly on 3 crops- rice, wheat and corn. The result is a lack of necessary micro nutrients in today's diet. What we plant, what we eat matters, changes in agriculture have a significant bearing on the quality of our lives, and concern all of us.

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Thomas Bach is a German fencing athlete who won the Olympic Gold medal. He is from Wurzburg, Germany and was elected in 2013, in office as International Olympic Committee president till 2025. In the new election in 2025 Bach supported Coventry of Zimbabwe, a winner of the gold medal in swimming for the job, over a candidate from Spain whose father Samaranch held the same job, and COE a candidate from Britain. Other candidates were from Japan and France. The process of voting and the people voting is not representative of the world's people. As countries such as Germany and Spain are dominant. Britain and France, China and India have never elected a representative from their country as IOC president in the 20th century or the 21st. IOC presidents are there for long periods, as long as 20 years. Avery Brundage of the US was IOC president from 1952-1972  for 20 years followed by Morris of Ireland for 7 years. Following this in 1980 another 20 year term for a Spanish businessman Antonio Samaranch, whose son tried to run in 2025. In 2001 12 years for a Belgian Jacques Rogge, followed by another 12 years for German Thomas Bach.  In 20th century no one from France or Greece, no one from India or China has been elected IOC president and the election process is an insider's affair, even thought the games are watched in China, India and other parts of the world by hundreds of millions of people. ...

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About 80% of Ballmer's money ($150 billion -former Microsoft CEO) is in Microsoft stock and 20% in index funds. He tried investing in stocks, Colgate Palmolive at advice of Jim Cramer a college buddy. Then tried diversifying. Tried money managers and found it difficult to find ones that outperform. So he dumped them all. His approach was shaped by Warren Buffet who says put it in S&P shaped index fund. He says-  Keep it Simple. Keep it Simple. We are financially blessed. What I seek says Ballmer is not to have anxiety, not to have to spend a lot of time, where we are blessed enough if we make 7%, the standard S&P return in the long run. He had luck listening to the right people and his loyalty to the company.  When Balmer left office as CEO in 2014 Microsoft market capitalization was $300 million. Ten years later it is $3 trillion with work on cloud computing and AI. Microsoft gained 29%  each year in that period including dividends, the S&P 13% with dividends, endowments 8%. As investor non-investor Ballmer now exceeds $150 billion and is No. 9. Most investments are in one trick ponies Google for example or in two trick ponies Apple, Amazon or Microsoft. One trick pony means they milk it, and milk it, and milk it. Three trick ponies not many you can find. ...

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Polls just days before the French presidential election show independent candidate Macron getting about 60% of the 18-24 year age group. There is discontent in this age group because of high unemployment. The unemployment rate is 24% for people below age 25, higher than 18% before the financial crisis of 2008, compared to 7% in Germany for this age group. For people 25 to 29 years it is 14%. This is why Marie Le Pen has appeal in economically struggling northern towns. Yet most French people are finding it difficult to take on an agenda as radical as Le Pen's that takes France out of the eurozone. In the final debate just 24 hours before the vote Le Pen entered into a discussion about leaving the eurozone but showed she had no clear idea of what this would mean for France. She described Brexit as an example and Macron shot back that Britain was never in the eurozone to begin with, and it appeared that Le Pen was just hoping that it would all work out, without a clear grasp of the facts. She had no response to Macron on how an exit could create panic in the markets and lower the value of savings of ordinary French people by about 20%. On pensions she stated that 60 was the age for retirement under her plan opening herself up to the criticism that she had no clear idea of the facts as Macron pointed out- that it would mean lower benefits or higher payments into the retirement system. This may be why even some young people who see the banking experience of Macron as a liability, may be offset by others who see this as a possible asset because of the need for some valuable experience in an independent candidate, as described by Dalton.    ...

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Abrams and De Acosta, Bellman of the WSJ look at growth and modernization in India in comparison with China and other countries. GDP per capita would take 10 years to reach the stage at which spending power of the people equals that in China today. At one point in 1980 China and South Korea were closer in GDP per capita than India. It is only now that India is accelerating towards the scale and depth of modernization done in China.  India's growth rate of over 7% is likely to surge after some of the problems in bad loans in the banking sector are cleared up. A wave of technological advances would help accelerate growth. Ease of doing business and foreign investment are on upward trend, for absorbing new technology from advanced countries. A shift to very low prices for data use with rapid development of 4G services is one of the recent achievements. Manufacturing growth remains a challenge to be tackled to create the jobs needed.  Revamping tax structures such as GST and shifting the economy towards use of electronic cash has increased revenues needed to invest in infrastructure, health and education.  As much of the potential for future growth comes from people at the lower income levels, improving social indicators such as sanitation, cleanliness, farmer incomes, universal bank accounts, universal access to health care, are steps that lay the foundation for the future. ...

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The European Union is making good use of the crisis in Ukraine to ramp up its shift to renewable energy. This WSJ report shows charts of where the EU is focusing its efforts from conservation, heat pumps, hydrogen, to wind and solar. Wind and solar show massive increases by 2030. By 2030 the European Union plans to increase wind and solar energy from 20 billion cubic metres to 170 billion cubic metres according to estimates from The European Commission shown in this graph by WSJ.

By the end of 2022 two thirds of Russian natural gas imports to the EU will have been replaced and by 2030 all of such imports will be replaced. 

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The message to the US from Jackson, Mississippi which shut off its water for fears from aging infrastructure is that the US needs to replace its aging pipes and pumps. Short term patches are not the solution and don't work. Half of the 1600 miles of water main that distribute water through New Orleans are over 80 years old. In Santa Cruz, California, a single pipe goes from the reservoir to the city, with no backup. President Biden has allocated $55 billion for safe drinking water- the actual need is $1 trillion says the American Water Works Association. This WSJ report looks at the problem in different parts of the US.

 

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With the lack of action from House Speaker Mike Johnson on a bill for $61 billion in Ukraine aid bill which passed in the Senate  France, Germany and Britain are speeding up their defense supplies manufacturing and making larger investments with a coordinated effort with other EU nations. The problem say former NATO officials is the lack of investment in spare facilities. Rheinmetall is working on the German side and French defense firms are contributing to increased defense manufacturing.The European Defense Agency's deputy chief executive says production will require sustained investment ant finalized contracts. The European Defense Agency says EU nations have invested $52 billion in 2022 on defense gear.

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Did you know 7% of all carbon emissions today come from cement production. In the cement production process 90% of the carbon emissions come from using fossil fuels to heat up the limestone and clay to 2700 degrees to produce clinker. Cemex is workoing with Swiss company Synhelion to use solar energy to do this by 20230.  Heidelberg Materials is working to  add carbon capture to the process at its Brevik, Norway plant, then store it in the seabed near Bergen in liquefied CO2 form. This will absorb the carbon emissions to meet a goal of 8% of carbon emissions to be stored globally by 2030. 

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Delta Airlines is switching its frequent flyer program entirely to spending on its American Express Card. No miles for flights. Delta gets an astounding $7 billion from American Express from sales of miles, ancillary fees and brand fees. Its goal is $10 billion which would be what it made from tickets for flights in 2022. Delta's CEO says it may have gone too far with these changes which are unpopular with its flyer base except for the high end flyers who disliked crowded lounges. Were there other ways to tackle that problem? Delta appears to have shifted attention to a small fraction of its customers.

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Most of the provinces vote in favor of Milei including Cordoba and Mendoza, Salta and SantaFe. Only Buenos Aires province and two other provinces vote in favor of Sergio Massa, the Peronist candidate. Milei wins by 56% to Massa's 46%. The election is affected by the Peronist party president Fernandez's failure to control inflation that has reached 140%. La Nacion points out that most voters are angry at the political and economic reality, and are not voting for an ideology. In April 2020 one US dollar was worth 80 pesos, in 2023 it is 1000 pesos. Argentine has a chronic problem- repeated bouts of high inflation over 4 decades.