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Gretchen Morgenson of the Times distills key insights from 633 page report by the Financial Crisis Inquiry Commission. Morgenson points to the role of the Federal Reserve in Washington and New York in being as she describes it, defiantly inert and uninterested in controlling the mortgage bubble even when it had grown to enormous proportions.The problem now is that the same Fed has received more regulatory powers under the Dodd-Frank law. The same Fed repeatedly did not exert its authority on predatory lending. Page 94 of the report cites a total of only three institutions referred to prosecutors by the Fed from 2000 to 2006. Page 164 shows why there have been so few prosecutions for mortgage fraud from the bursting of the mortgage bubble. William Black, a former fraud investigator and professor at the University of Missouri-Kansas City School of Law, says the FBI has received virtually no assistance from the regulators, the banking regulators and the thrift regulators. The report contains some outrageous comments by one of the key players in fueling the mortgage bubble, Angelo Mozilo of Countrywide Financial. Morgenson describes him as a lender that roped unsuspecting borrowers into poisonous loans. Mozilo says in an interview on page 105 that his company prevented "social unrest" by providing loans to 25 million borrowers, many from minority groups. Never mind that this wave of poisonous loans has clogged the arteries of the nation's financial system, and resulted in foreclosures for millions of homeowners, creating a troubled housing market that hobbles the economy. Neil Barofsky, special inspector general of the Troubled Asset Relief Program, sees further bailouts ahead. He said in a report to Congress in late January 2011: "Unless and until an institution like Citigroup is either broken up, so that it is no longer a threat to the financial system, or a structure put in place that it will be left to suffer the full consequences of its own folly, the prospect of more bailouts willl potentially fuel more bad behaviour with potentially disastrous results." ...

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S. Korea's household debt is now 155% of GDP, according to the OECD. For the last ten years the household debt is growing at 13 percent, double the rate of GDP growth. Korea was not affected to the same extent as other countries by the 2008 financial crisis. As a result household debt continues to grow rapidly. The household debt to disposable income reached 140% in the U.S. before the 2008 financial crisis, according to the IMF. Spain reached a level of 130% before the crisis, according to the McKinsey Global Institute. The Financial Services Commission in S. Korea has taken steps to control this- by imposing limits on bank lending, tighter credit checks by banks, and incentives for shifting to fixed rate mortgages. About 95% of mortgages in S. Korea are adjustable rate mortgages. Housing loan rules in S. Korea require loans to not exceed half of the value of the house, and annual payments of principal and interest cannot exceed 40% of the owners income. This effectively insulates the banks from the effects of a housing bubble. One of the effect of the 1997 financial crisis in S. Korea when it turned to the IMF for assistance, is the relaxing of controls on interest rates to encourage spending in a country that encouraged saving. The result is the growth of a nonbank sector which is not subject to central government regulation by the Financial Supervisory Service. The non-banks are regulated only by local governments and can charge upto 39% compared to 4-6% at banks. Non-banks are also allowed to turn in their licenses and operate charging even higher rates. Each year about a 1000 nonbanks from 18,500 such banks in 2007 are joining the black market according to the Consumer Loan Finance Association, showing the size of the problem of black market lending to low income borrowers. S. Korea has mostly relied on growing GDP to control the situation, but slowing growth could lead to unsustainable levels of household debt....

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The issues China faces as it plans the next phase of massive urbanization. Urbanization is a major priority of prime minister Li Keqiang, which was also the focus of his postgraduate work in his student days. In the early 1980's about 20% of China was urbanized, this has changed over three decades to where the figure is 47%, plus 17% for workers working in the cities but classified as rural, a total of 64%. China's plan is to fully integrate 70% of the population or 900 millon into cities by 2025. In 2013 only 35% of the population has a urban residency permit, or hukou. The permit is needed for residents to register their children in local schools or qualify for medical programs in urban locations. One of the problems is the huge cost of doing this which it is feared could lead to inflation and higher debt levels. Currently local governments bear these costs using land sales, and central government transfer payments, but without added financing and unable to issue their own bonds, the local governments strictly limit the use of local school and health services to their own residents keeping out rural newcomers. Local government taking over farmer plots, often without enough compensation is highly unpopular in China. Other problems are- providing a steady stream of earnings for new urban residents from farms, if no employment can be found. So they can sustain themselves- especially as they get past 40 years of age when factory employment is harder to find. The government planners see the larger urban population as a way to shift from a largely export based economy and slowing growth, to a consumption based economy. But critics say the risk is that for this to happen new residents from the farming villages have to find jobs, something the government will have difficulty accomplishing. A permanent underclass of unemployed and other financially strapped citydwellers living around major cities, as has happened with the progress of urbanization in Brazil and Mexico, is something the government would want to avoid. ...

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Japan's energy efficient industry is a role model for the western world and for India and China. For years Japan has had a national consensus on consuming less energy an industry has focused on developing energy efficent technologies and investing in it even when oil prices were low. Japan wants to now contribute to the world in this area at the G8 summit on the island of Hokkaido. According to the International Energy Agency in Paris, Japan consumes half as much energy per dollar worth of economic activity as the European Union or the United States, and one-eighth as much as India or China in 2005. According to the Japanese Economic Ministry data corporate Japan has kept its energy consumption annually at a billion barrels of oil since the early 1970's even as the country's economy doubled in size during the 1970's and 1980's. The Japanese steel industry invested $45 billion dollars between 1972 to 2006 in developing energy saving technologies, according to the Japan Iron and Steel Federation. By capturing heat and gases that go into waste JFE Steel at its Keihin mill on Tokyo Bay uses it to power generators that produce 90% of the plant's electricity. The Japanese government is now pushing an initiative that sets Japan's level of energy conservation as targets of global industries. For instance the group leader of JFE's climate change policy group says that by adopting Japanese conservation technologies the global steel industry could reduce carbon emissions by 300 million tons a year. The sector approach advocated by Japan means setting the same numerical goals for all companies in an industry, regardless of location. At next week's summit meeting Japan willl back an initiative that sets its conservation induced energy levels as the new standards for global industries. This will also promote the sale and use of Japanese energy saving technologies around the world....

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ECB study put out in April 2013 shows household wealth and income in eurozone countries based on 2009-2010 data for 60,000 households throughout the eurozone. The household wealth in southern European countries is higher than that in Germany. The study shows why ordinary Germans oppose bailouts for banks, Greece, and eurozone countries that experienced a boom in the 2000-2010 period, a period in which German workers took small pay raises to improve German competitiveness. Germans also see Portugal and Ireland in a different light compared to Greece, Cyprus, Italy and Spain where real estate speculation, lax accounting, tax evasion and favored treatment of certain groups, has created or aggravated the debt problems. Wealth is defined as total assets, including real estate, vehicles, bank deposits, investments and pensions, minus liabilities for mortgages, credit card debt and loans. By this measure German households had an average of 200,000 euros in wealth, and lower than this in Finland and Netherlands. At the median or midpoint German households had 50,000 euros, the lowest in the eurozone, for Greece the median was 102,000 euros. The impact of home ownership is significant in the report, as home ownership is lower in Germany than in Southern European countries, and mortgage interest is not considered favorably in German tax laws. The decline in value of homes after 2010 is also not reflected. Another indicator for comparitive wellbeing is income, and this is shown in figures released in March 2013 from the European Statistics Agency for GDP per capita. For Germany per capita GDP was 29,000 euros in 2010. The average GDP per capita for the eurozone is about 24,000 euros. By this measure Greece is at 21,000 euros, 24,000 euros for Italy and for Spain. Germany being 18-19% above Spain and Italy. If Germans, Dutch, Finns and Austrians are less well off then the argument favors having the banks, creditors, and including depositors, in a burdensharing arrangement for bailout of troubled eurozone economies. ...

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After a long year of uncertainty this is what it comes down to. The new turnaround plan developed by CEO Fritz Henderson and the government's auto task force will leave the government owning more than half of GM. Under this plan GM will get an additional $11.6 billion in loans from Treasury, on top of the $15.4 billion already received. THer government will get half of the ownership of the company in payment for half of these two loans. And GM will use stock instead of cash to pay off half of the $20.4 billion it owes a United Auto Workers fund to cover retiree health care. That transaction will leave 39% of GM in the hands of the UAW. This happens just as another agreement was reached to leave the UAW with 55% ownership of restructured Chrysler, and FIat SpA getting 35%, with the US government and lenders owning the rest. What happens to bondholders? They were told to swap $27 billion of unsecured debt for a 10% company stake. GM and the government give bondholders little choice, if they do not do so GM's Fritz Henderson says GM will file for bankruptcy. In 2011 hourly workers will be less than 40,000. Market share will shrink to 18% in 2014 from 22% in 2008. The number of dealers will drop to 3605 by 2011, down 42% from 2008, and GM will kill the Pontiac brand. Much of the company will have disappeared, showing how market forces are at work in our system in destroying companies, and leaving them as a fragment of what they once were, if management gets complacent and makes a series of errors. Its a big development and shows the savy shown by the government auto task force's leaders in setting up the arrangements. A smaller GM will emerge. But this is an understatement if ever there was one. Here is a company that had close to 200,000 workers in 2000, with hourly workers close to 150,000. See the graph. ...

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BW's report says Housing will go back to normal by 2012. This is a better case scenario. But there are serious downside risks and unknowns. A study done by Rogoff and Reinhart shows that it takes about 6 years or longer before things return to normal after a serious crisis. This could mean 2012 is the earliest things could return to normal. And this assumes that housing demand remains at about 1.5 million homes a year as in the past, and with only about half a million homes being built now as developers scale back the difference of 1 million homes would cut into the inventory to bring demand and supply back into balance. But changing demographics with an aging population and different needs, new frugality with buyers renting for longer, and the perception that homes are not a investment, slowing immigration, all factors that could change the nature of the market and demand in housing, could lead to things dragging out for longer. BW has assumed a more optimistic level of GDP numbers from Moody's Economy.com estimates made in May 2009, with GDP declining 3% in 2009, growing 1.4% in 2010, 4.7% in 2011, and 5.8% in 2012. These estimates are on soft ground because no one really knows for sure what will happen in anumber of areas in the years ahead. In terms of deflation and inflation in the years ahead, capacity utilization is at 68% but a look at the declines in manufacturing show that some of it will be a permanent loss as in the auto manufacturing base, export markets depend on how economies in Asia and other countries are performing, a new frugality and different consumer behaviour because of debt levels at 100% of GDP could permanently lower demand to levels different from that in the past. The regional nature of the recovery in housing will still be very much present, as areas with surging population growth and areas where housing price rises were modest, from Nashville to Austin, do a lot better than California and Florida....

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Crude oil or crude world. This book by Peter Maas "Crude World: The Violent Twilight of Oil," shows how places like Nigeria and Equatorial Guinea suffer from the lack of infrastructure and jobs, as the oil industry does not create many jobs and the companies and the ruling classes in these countries are the main beneficiaries. Nigeria's anticorruption official, Nuh Ribadu, is cited in the WSJ, with an estimate of $380 billion of $400 billion in oil revenues in Nigeria over 3 decades being wasted through corruption and misuse of funds, with little money going into infrastructure and jobs. Manufacturing in China, Vietnam, and Malaysia for basic consumer products from textiles to shoes, creates jobs even at low wages, making the people in these countries better off as wages rise. Oil on the other hand creates few jobs and companies do not move upscale manufacturing tech products in the next stage of manufacturing, leaving the people as worse off as before. The margins are thin in manufacturing, whereas much of the oil revenue can be deposited in accounts of influential individuals. Mouwad in the NYT points out 93% of profits go to the government in Nigeria, only 7% to western oil companies. Even in countries which have tried to root out corruption through socialist experiments such as Venezuela and religious parties such as in Iran, the failure to integrate with the globalized economy and extremist policies leads to lack of development and backwardness. This shows that the best way to develop is through emphasis on education, science and technology, building a culture that thrives on modernization and technological advancement over several decades, even if this means starting with basics and continually moving forwards into higher technologies. Japan, South Korea and China moved from shoes and textiles to iPads and smartphones, Japan starting in the 60's, S. Korea in the 80's and China in the 90's. ...

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Full Yield is a startup in Boston that is trying to help address the nation's obesity problem by introducing healthier foods and meals in cafeterias. It plans to introduce a line of Full Yield branded food made from fresh items and natural ingredients for sale in corporate cafeterias and prepared food sections of local supermarkets. It is based on a simple idea that if you eat healthier food you will be healthier. A study in the Jan-Feb issue of journal Health Affairs says 75% of the $2.5 trillion in health care spending deals with obesity, Type 2 diabetes, heart disease and cancer. And how much of this traceable to obesity and bad eating habits, smoking and lack of exercize? This study says most of the cases are preventable by changing these behaviours. Dr. Kenneth Horpe, chairman of the department of health policy and management at Rollins School of Public Health, Emory University, shows that if trends continue U.S. annual health care costs related to obesity would reach $344 billion by 2018, which is 20% of total health care spending. In 2009 it accounts for 9%. Thorpe says if even the 1987 levels of obesity were reached it would free up enough money to cover the uninsured population today. For American companies the problem has grown to alarming proportions and yet no nationwide coordinated plan bringing together companies, government, universities, public interest organizations, and other groups exists in the U.S. The CEO of U.S. grocery chain Safeway, Steven Burd, says Safeway was spending $1 billion to cover health care insurance for workers by 2005, with costs rising 10% a year- this meant putting out twice in health care insurance than Safeway's earnings and hitting another $500 million by 2010. Between 2004-2009 the costs of insurance surged 31%, making this the fastest growing single corporate expense, according to Towers Perrin. This reduces incomes of workers as companies pass on part of the extra cost, and reduces the profits that can be put back in new investment for economic growth....

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The mood in the UK is becoming less receptive to foreigners as job losses mount and the economy declines. For a long period under Labor administrations openness to foreign investment served Britain well. From 2004 to 2007 foreign investment accounted for 7.4% of UK's GDP compared with 1.4% in the USA and 1.6% in Germany. Immigration tripled under Labor governments. Now the mood is shifting as job losses mount. Unemployment which was 4.7% in 2005, was 6.3% in the 4th quarter of 2008. Estimates by IHS Global Insight, a forecasting firm, shows that unemployment could reach 10.5% by early 2011. Government figures indicate that the number of British workers in the country went down by 234,000 to 27 million in the last quarter of 2008. The number of foreign workers went up by 175,000 to 2.4 million. About 104,000 jobs were lost in the 4th quarter of 2008. During the period from 1995 to today manufacturing accounts for a smaller portion of the British economy, going from 21% to 14%. In this new climate French owner Total SA faced strikes at it Immingham oil refinery for not hiring British workers for an expansion at the refinery. It offered to set aside 102 of 200 temporary construction jobs for British workers. And public anger is evident about things that earlier would have aroused passing interest. One example was for a plan to sell part of the British postal service with the Dutch or the Danish as buyers. Another an award by the government to the Japanese of acontract to build and operate a fleet of high speed trains. And immigration is emerging as the third biggest ocncern of in the country, according to a survey by Ipsos MORI, after the economy and crime, the fourth being unemployment. Actually immigration and unemployment are strongly related, and both are related to the economy, all issues related to the steep downturn, especially to the collapse of the financial industry in London....

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Mexico's domestic car market is weak, most of the cars are manufactured for export. From 2000 to 2008 the domestic car market in Brazil grew by 80% to 2.67 million vehicles, and in Argentina by 79% to 610,713 vehicles. Sales went up in 2008 by 14% in Brazil and by 8% in Argentina. Whereas in Mexico domestic sales fell 6.8% during 2008 to 1.03 million vehicles. Sales for 2009 in the domestic market are expected to fall by 20%. And auto exports from Mexico fell dramatically in Jan-Feb 2009 dropping by 52% to 89,242 units over same period last year. Auto exports generate a $15 billion surplus for Mexico so there is concern about this sharp drop. Auto exports rose 3% in 2008 to 1.7 million units, and 79% of 2008 domestic production of 2.1 million units went to exports. One in 74 people were sold a car in Brazil in 2008, and 1 in 66 in Argentina, whereas in Mexico it is one in 107 people. And Mexico's minimum wage of 55 pesos is $3.85 per day, the lowest of the 3 countries. The low paying jobs and poor income distribution in Mexico is a reason for this. Under Nafta Mexico also allows the import of cars from the USA which are over 10 years old. Mexico imported 909,000 vehicles in 2009. To keep the Mexican auto industry from sinking the government is considering assistance to the domestic manufacturers, dealers, and car loan companies, a total of 9.5 billion pesos, as well as sales incentives for buyers. But domestic sales are relatively smaller and the market weak to make up for the huge loss in exports judging by the Jan-Feb 2009 numbers off 52%. A lot is at risk with the domestic car industry generating 24% of manufacturing exports, 16% of manufacturing, and with more than a million workers directly or indirectly associated with the industry. Already GM and VW have announced layoffs. ...

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Is the market in S. Korea reflecting the bursting of the housing bubble in the USA, or is it simply a result of the Roh government's new taxes and rules for real estate such as the capital gains taxes of a shigh as 60% and the restriction on loan size so that monthly payments do not exceed 40% of monthly income. If its the new rules then it must be true that the crisis in the USA must have made the pause from the Roh measures give the market time to reflect. One factor is the oversupply from the building boom especially since the new housing had become increasingly unaffordable to average South Koreans at 100 time average income a 3 bedroom apartment cost $2 million in Seoul. A real estate Professor at Konkuk University estimates that about 1 million units will come onto the market by 2013. 2013 thats because the construction has continued even as sales have come to a near halt. Apartment prices have gone up 3% in 2008 compared to 93% in the last 5 years according to Kookmin Bank. What does this mean for the other Asian markets such as China, India and other Asia. Its not just speculation thats disappearing, but is there a sense that the market for Asian goods in the USA, especially for export powerhouses in Asia such as South Korea, is taking a hit from the credit and housing crisis in the USA. And if thats the case what does this mean for other Asian housing markets in bubble mode, consider this a Early Warning Link. See the link to the South Korean election where even corruption charges against the favored candidate are not affecting his popularity because he is seen as a candidate to who could help S. Korea overcome fears about the economic future. Comments that the current crisis is tougher for real estate and construction than the one during the Korean financial crisis of the 1990's suggest that this is something serious. ...

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About $200 billion in speculative or hot money entered China and landed mostly in bank deposits which pay 4% interest rate compared to 2% for dollars in the USA with the idea of profiting from the interest rate and the appreciation of the yuan, in the first 5 months of 2008, according to economists at Logan Wright, an economics research firm and at Beijing University's Guanghua School of Management. Beijing's foreign exchange reserves are at 1.8 trillion dollars at the end of May 2008 so even if their is an abrupt reversal of flows of this hot money China would not be protected but an abrupt outflow could hurt the banking system. Amore relevant fear is that this speculative inflow will raise inflation in China as the central bank prints more yuan to buy dollars and keep the yuan from appreciating and then sterilizing the excess liquidity by issuing bills or increasing bank's reserve requirements. Sterilization is now upto its limit and the central bank has raised the reserve requirement 16 times since January 2007 from 9% to 17.5%. The Peoples Bank of China, China's central bank only pays i.9% on reserves so this hurts bank profits and there is a limit to raising reserve requirements also. This leaves one time appreciation of the yuan but this would have to be of some magnitude about 20% to stem the speculative inflows of money trying to take advantage of the appreciation of the yuan. Another problem this situation presents for the central bank is making monetary policy tools like increasing interest rates to calm inflationary expectations not available as the increase in interest rates would only increase the profit to be made in bringing in speculative money into China. So where does this leave the Chinese economic policy managers? Monetary policy will continue to be losse and with large amounts of speculative inflows in the rest of 2008 and into 2009 inflation is likely to continue its upward climb. Inflation was at an annual rate of 7.7% in May. 2008....

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Friedman on the $43 billion infrastructure he saw in China and the crumbling infrastructure in New York City and driving from dilapidated La Guardia airport in New York city into the city vs the new Shanghai airport and the magnetic levitation trains into Shanghai. He says don't forget that they are mere snapshots. And he is very aware that you go 100 milews outside Beijing and you find a poor developing country. So which is the real China, no easy answers. Give credit to their dedication and all the hard work and the motivation and planning to Chinabut still ask the questions about what we should do here in America and what countries like India have to ask what they should do and go about doing it. China will have its own questions and problems to think about too as it has to figure out what their best allocation of capital will be, what their policies should be from the birth rate and demographic changes, to the environment, and to ways to bring the rest of the country and farmers into the picture and see that the gains from now on reflect the imbalances in growth. The country building the latest infrastructure will always have the latest infrastructure and that will be the next country around the corner with the capital and energy to do it, the USA or India or Russia or some other country. The real progress is in the quality of life, of health and the resources for living productive healthy lives for most of the inhabitants of any country or region and that goes beyond politics or nationalism or rivalries or vested interests of groups of people, as it depends on learning from the best that every productive mind anywhere in the world or any productive place anywhere in the world has to offer. And the thing about this is its never a goal only because in a true sense the road well travelled is the destination for this kind of progress. ...

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How Sweden in 1992 and is Finance Minister Lundgren faced a similar crisis in its banking system after a housing bubble in that country collapsed. At that time the way Sweden approached it set aside 65 billion kronor or $11.7 billion dollars then or $18.3 billion in today's dollars, 4% of its gross domestic product, for rescuing failing banks. The US plan for $700 billion is roughly 5% of gross domestic product. But the way Sweden did it it extracted full price from shareholders and rescue was arrranged only after the Swedish government got a big equity share in the banks that were rescued. Lundgren is concerned that the US plan does not provide for the US government to take big equity stakes in the banks that receive government money. By selling off these shares in better times the government of Sweden has recovered most of the money depending on how its calculated. However the US government has taken big ownership stakes in Fannie, Freddie, and in AIG. And the plan is not yet spelled out. In terms of its size its similar to the Swedish plan an in this sense its similar, a big government effort to take a decisive and complete approach to the problem. In the short run this may create problems for the dollar according to currency experts like John Taylor, but some experts like currency strategist at Deutsche Bank think that in the longer term this rescue plan hel[ps American macroeconomic fundamentals and in doing so will help the dollar. Another factor is the European economy and as Europe also faces some problems of its own, from a housing bubble standpoint Britain, Ireland and Spain fall in the same boat as the Americans, and Germany may also have some bad loan problems of its own, so the macroeconomic fundamentals may weaken in Europe over time and this might also favor the dollar vs the euro in the longer term. ...

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The figures are startling, alarming dangerous whatever you call it. How many homeowners are under water or owe more on their mortgage than their house is worth today in today's depressed market? And how many more will be under water in tomorrow's even more depressed market as unemployment gets worse in 2009, and much worse after that in 2010. Moody's Economy.com's chief econmist mark Zandl has worked out some figures. And he says one in 6 mortgages in America today are under water, that is 16% of 7.5 million households that own homes they live in, or roughly 12 million households. To give some idea of how quickly this is deteriorating while Congress, the Administration and the general public could not reach any agreement or consensus about assisting homeowners avoid foreclosure in steps that cover all homeowners across the USA. The comparable figures were roughly 4% under water in 2006 and 6% in 2007. Thats a huge jump from 6% to 16% and was not expected to be such a steep jump in 2008. And it may be accelerating for 2009. And of the homeowners who took on a mortgage in the last 5 years the figures are startling, 29% are under water according to estimate by real estate Web site Zillow.com, that is one in 3 almost. Which is why absence of government help on a comprehensive scale covering the whole country and all homeowners facing foreclosure remains the one huge gap in the rescue package passed by Congress for $700 billion at Sept end 2008. Why is it dangerous? Because it accelerates the downturn in the economy and exacerbates the problem of toxic mortgage assets on the books of overleveraged banks, as dropping housing prices from higher foreclosures depresses the value of those assets even further. And this creates a vicious circle of lower consumption spending followed by lower production, higher unemployment and leading to lower consumption spending in a repeat cycle leading to higher foreclosures as a consequence of higher unemployment....

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The IMF extends $100 billion in loans to countries that have healthy economies but need temporary help, such as S.Korea, Brazil, Mexco and Singapore. Some of these countries have borrowed heavily in other currencies and the drop in the value of their own currencies makes repayment difficult. No strings such as requirements to raise interest rates and to cut public spending are attached to this program. Under this program countries could borrow five times the amount they are normally entitled to, $25 billion in Brazil's case, without the strict conditions that normally accompany such loans. Nobel Prize winner Stiglitz was chief economist at the World Bank. He said the funds use of the words restore confidence itself could make a lot of countries nervous. That is because in the Asian and Latin American crises in the past, the IMF set strict conditions to increase interest rates and cut public spending and food subsidies at a time when the poor especially and the rest of the people, all needed help, thereby increasing public distress. In the developed countries stimulus packages and infrastructure spending goes up to support employment and incomes, but the IMF has advocated quite the reverse in the case of the developing countries, with the US Treasury a key factor in IMF support and ideology. Which is why countries in Asia like South Korea see a stigma attached to the IMF and are refusing IMF help. In Pakistan also the IMF support is a last resort or Plan C. Iceland for instance raised rates in return for IMF help from 6% to 18% to try to stabilize the currency. The IMF was created as part of the Bretton Woods agreement of 1944 when the Allied Powers USA and Britain and other countries that sent representatives met in New Hampshire for a postwar economic system. Japan, S. Korea, India and China and many other countries were not part of it because of the war or colonial empires....

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Kamal Ahmwed says in this BBC report that the WTO has belatedly recognized that the losses from world trade for workers in industries that are hurt can be significant, and public sentiment matters especially when there is unfair trade. He visits a small Pennsylvania steel town of 40,000 where the population declined to 7000 after closure of steel mills. This is why the WTO now recognizes that the gains from fee trade are "often uneven," and "may have led to rising inequality." 

Even if the overall gains from free trade are significant as Kamal Ahmed points out the downside and losses are still smaller but significant, and concentrated in certain regions such as the midwestern U.S. or eastern U.S. can lead to public anger that led to the change in administration in the U.S. in 2017.

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Efforts to protect rights of workers with a new labor. Criticism is that it does little to protect the rights of migrant workers from the rural areas in the huge wave of urbanization that is going on in China and India as well, and does little where enforcement is weak. On the other hand cases like that of Huawei a Chinese telecom maker are attracting notice as they violate the laws protections for workers with more than ten years of employment who get job security and companies have to inform the union before firing employees. Huawei asked 7000 employees with more than 10 years of experience to resign before being hired for short term positions.

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Patrick Gelsinger who is general manager of Intel's deigital enterprse group and its chief technology officer sees new chip technology evolving from today's core circuitry of one to four microprocessors to many core and tens to hundreds of electronic brains. Medical images that take hours to process will be instantly available and instantly available speeding diagnoses. It will require development of newprogramming languages, tools and techniques. Computer availability will be ubiquitous , and it will be more intuitive and interactive. Intel architecture will move towards the cell phone market. And moving to the next level 450 millimeter wafers from today's 300 millimeter wafers will cut the cost of producing each chip by 40%.

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Equity markets in Europe and the U.S. are likely to see some of the 62 trillion yen, or $630 billion, which the Bank of Japan plans to add to holdings of banks and households in two years 2013-2014. A senior advisor to Deutsche Bank, Thomas Mayer, says equities of Germany, France and Britain are likey to see interest from Japanese investors, as are bonds and equities of the U.S. Japanese companies such as Toyota and consumer product companies such as Sony and Panasonic will now be able to better compete on price against their S. Korean, American and European competitors.

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Shipments of LG phones were up 54% in the 1st quarter of 2008 from a year ago, about 4 times the average growth of 14% in the industry., according to Strategy Analytics. The market share goes up to 8.6% from 6.4%. This puts it near overtaking Motorola for 3rd place ater Nokia and Samsung. Its biggest hit so far is the Chocolate, a skinny phone that looks like a chocolate barwith a dial pad that glows red. About 18 million have been sold worldwide sine introduction in May 2006. It also developed a pricey handset called Prada designed with the Italian fashion house and introduced in March of 2007. What is interesting is the way LG has approached product development. The Chocolate's creator Skott Ahn got the top job at the LG cell phone business unit in early 2007. And he has been put in charge of all areas of design developmet with the authority to make decisions in the way he would run this business. Ahn doubled the headcount of designers to 150 and engineers to 4000. He launched an inhouse design competition. The winner of the 2008 competition is the Secret, made from sleek yet sturdy carbon fiber and tempered glass and with a 5 megapixel camera and software to let users create their own music videos. This phone was intorduced in Europe this month. LG's profits on cell phones are expected to double to $2 billion according to Mirae Securities in Seoul, with a 50% jump in sales, and the stock is up 57%....

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Black people reflect on the Obama presidency and what it means to them during the last year of the presidency.

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Nancy Koehn calls this a brave and insightful book, with relevance for readers watching the debt ceiling negotiations unfold in the U.S. in July 2011. The question he asks about how the elites could have got so many things wrong relate to Greece as well as the bubbles and ensuing crises in the U.S. in the last decade. Manolopoulos points to the problems of using GDP indicators if the economic activity it measures is not reflecting an increase in the productive capabilities and competitiveness of the country. He also cautions about the negative impact of liberalization of capital flows if this results in a large pool of global credit that short termist governments can access without regard to the longer term consequences of repayment. The creation of bubbles is one danger of access to large pools of capital. another danger is that this capital leads to governments relaxing all conservative practices of budgeting in managing a nation's finances.