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Greg Ip points out that Saudi Arabia's effort to get back market share is not working so far as shale oil producers continue to increase production. OPEC now confronts a very different competitor in the U.S. shale oil industry- 77 different producers produce 75% of American oil production, each acting like a tech startup, with access to capital markets which are continuing to provide capital. These producers can increase or reduce production with agility, and act differently from state owned oil producers or the major western oil companies. He cites Goldman Sachs figures showing average rig in Texas Eagle Ford shale yielding 5000 barrels a day in the first year compared to 2000 barrels in 2011. This analysis also shows shale oil production cost on a declining curve- $80 in 2014 and $60 in 2015, which could upset Saudi calculations with the advances in technology. Majors such as ExxonMobil are also moving forward with the technological advances.

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A food scare for Danone's Dumex baby formula brand in China hurt sales. Danone has decided to swap the Dumex brand for additional stake in China's dairy company Mengniu, for a 12% stake in the company. Danone will focus on ecommerce business in China which has grown rapidly to about 461 million consumers as more baby food products are sold online. About 7% of total sales are from China for Danone. Danone has also decided it will keep the medical nutrition business line because of better future prospects. Earlier Danone sold off its majority stake in a joint venture with Wahaha in China. Business decisions at Danone are made by two executives Mr. Ribaud and Mr. Faber, the CEO. Fresh dairy unit of Danone faces several challenges, including rising price of milk, and margins dropping from 15% in 2010 to 10% in 2014. Fresh Dairy generates over 50% of revenues.

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BYD shares have fallen sharply as sales of its gasoline powered cars have declined in the Chinese market, declining by 43% from the high by Feb. 8, 2012. Part of the problem is that sales have shifted to foreign brands. BYD pushed ahead with developing electric car technologies, but the market appears to be moving in the direction of gasoline-electric hybrid cars, in which the Japanese manufacturers have the lead. BYD sold very basic cars at the low end of the price range. In 2009 and 2010 the government provided incentives with reduced sales tax for cars with small engines and subsidized sales in rural areas, which helped BYD sales. These program were phased out. In 2011 restrictions on cars went into effect for Beijing, with license plates for the municipal region reduced by two thirds, to limit the automobile congestion in the city. The license plates were distributed using a lottery system., This further shifted purchases to the higher price end made by foreign brands. BYD now sees the future sales potential in hybrid gasoline-electric cars and has changed its strategy....

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The views of Timothy Geithner, president of the New York Fed, of Robert Steel Undersecretary of the Treasury, and of r Schwartz of Bear Stearns and Dimon of Chase JP Morgan and Ben Bernanke in answering questing at a key congessional hearing of the Senate banking Committee about the Bear Stearns collapse. The $2 a share was determined after Geithner and Paulson knew that JP Morgan was prepared to bid $2 a share, and Paulson saw the need to keep the price as low as a higher price would create the possibility of moral hazard. Dimon's view he was buying a house on fire and he had to do in 48 hours what it would take a month to do, Schwartz, view the rumors did Bearn Stearns in ans set the stage for a bank run, Geithner's view the Fed would not have lent money to Bear Stearns directly under its new policy of lending to investment banks because it felt very uncomfortable about Bear Stearns knowing what it knew at the time. Officials say that the first $1 billion in losses from Bear Stearns would be borne by JP Morgan and after the $10 a share upgrading of the Chase offer the Fed lent $25 billion to Bear Stearns/Chase to complete the deal separate from the $30 billion Fed support of the original deal. Fed disclosed that securities firms borrowed an average of $38.1 billion a day through the week ending Wednesday and direct lending to tradtional borrowerswent up dramatically to $7 billion a day up from $550 million a day the previous week and the highest level since 9/11. Ben Bernanke's view it was action necessary in the interest of the American economy, and the bailout of Bear Stearns was a bailout of the markets in general. This includes Asian markets because the pressure was to do something before Asian markets opened Sunday night....

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

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Small farmowners hate to see good fruit and vegetables go to waste just because of odd shape and appearance, even if it is just as nutritious. EU standards across Europe for fruits and vegetables made it difficult to get this farm produce to consumers. EU standards are now being revised, but supermarkets set their own standards and continue to accept fruit and vegetables only with "a slight defect in shape and development." A study by the Dutch and Swedish governments show Europe wastes 89 million tons of food a year and the two governments called on the EU "to reduce the amount of food waste caused by its labeling system." In Portugal as much as a fourth of the fruits and vegetables are at risk of waste because of such rules, according to small farm owners. Ugly Fruit, is a company trying to get this produce to consumers at lower prices in Lisbon. Farmowners say the idea that quality can be measured only by appearance is a mistake, as nutrition levels and flavor can be the same.

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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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Canada's 2015 budget provides an extension till 2025 for a tax break to write off capital investment at an accelerated pace that was first introduced in 2007. Business investment in Canada is slowing to growth of 1% since mid-2012. The tax rate for small business over four years starting in 2016 will be cut from 11% to 9%.

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The Irish prime minister Varadkar says it is time to move on. When he assumed office he was the first from an ethnic minority background to lead Ireland, the son of an Irish mother and an Indian immigrant father. He took Ireland through the crises of coronavirus pandemic, Brexit, and improved unemployment and budget shortfalls. Recently he accepted defeat on a referendum intended to remove language in the Irish Constitution on a clause about "a woman's life within the home." Disagreements over the language of the referendum led to its not getting approved on International Women's Day by about 70% of the vote with 44% of people voting. It suggest there was no enthusiasm and its relevance at this time was not understood. It is not clear why there was a need for this referendum in the first place to remove one text of the constitution that respects the role of family and mother's contributions in the home. During the pandemic for instance women played a major role, and sometimes took on a greater share of the burden. Efforts to have women's participation as shown in Japan and India does not require constitutional wording to be changed. Japan has done remarkably well and India is about to do this. And removing the wording about women's role at home, instead of encouraging or adding wording about women actively participating in the workforce and actions to make that possible, accomplishes little. Coupling this with a wording that includes gay families in the definition of family while removing the role of women in the family language seemed to be making changes that had little to do with each other. ...

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Krugman raises questions about the way in which the government of Ireland made the decision to guarante all the debts of its banks. Debts that were incurred during a wild period of reckless speculation in real estate. This speculation ocurred with huge borrowings by Irish banks, mostly from banks in the UK and Germany. One would expect that those who lent the money should have paid attention to the risks, and should now share in the losses. But this is not what happened. He points out that before the speculative boom in real estate Ireland had little public debt. This decision put taxpayers suddenly in a situation where they were responsible for huge bank losses. He says Irelan is in a worse situation than Iceland, because it cannot devalue its currency. Iceland let foreign lenders to its runaway banks pay the price of their poor lending decisions, and he quotes the IMF which says- "private sector bankruptcies have led to a marked decline in external debt."

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The 525 seat Airbus A380 launched in 2007 is expected to reach the breakeven point in 2015. Higher deliveries of the A380 led to a 41% decline in net profit for the 3rd quarter 2014. Production improvements on the A380 increased operating income by 14%. This will enable Airbus to benefit from the fuel efficient long range A350, which completed a maiden flight in the 3rd quarter 2014, with the first deliveries by the end of the year. The A320 neo also will add to profitability, as it is sold out to 2020, according to UBS. The A380 will be profitable by 2020, with more investment needed to upgrade the engine's fuel efficiency to compete with Boeing's competing version, the 777X. The uncertainty is reflected in Airbus share price, declining 8% in 2014 and trading at 5.7 times earnings before interest, tax, depreciation and amortization, compared to Boeing's 8.7, according to FactSet.

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Like Harry Truman Tim Walz can understand what free school lunches are about- Walz worked as a high school teacher, so did his wife Gwen. See the story on school lunches on this page.  He knows what cost of living is about with prices of groceries and gas and auto repairs rising. We want to say to America not since Harry Truman have finances of two vice presidents looked so similar- and their dedication to workers and families is genuine and of the kind that is needed for these times when working families and working men, rural families,  have deserted a Democratic party distracted by Tech millionaires and billionaires in its ranks. Tim Walz is America's Everyman in this sense of the word  with net worth excluding pensions of under $300,000, and shares the pain of meeting cost of living and other concerns that are spared from other vice presidents or presidents from wealthy backgrounds. The Minnesota Governor has modest income and wealth compared to recent presidential tickets. The former  high school teacher and congressman’s assets are mostly limited to pensions, whole life insurance and college savings. Tim Walz and his wife, Gwen Walz, have net worth between $112,003 to $330,000, as of his 2019 financial disclosure, according to WSJ. The value of  federal pension benefit about roughly $800,000 to add to their net worth, based on The Wall Street Journal’s analysis. The couple did not report any dividend or capital gains income on their 2022 tax return, the most recent return available. ...

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Evern though the Detroit carmakers initial quality as measured by J.D. Powers Initial Quality Survey is slightly higher than Japanese carmakers in pickup trucks, the Japanese carmakers still have a lead in the more popular cars and in crossovers. The Prius is made in a factory in Japan which ranks as one of the highest in quality. Quality is higher at plants in Japan for Toyota cars, and a bit lower here in the states for Toyota plants. Its on a par with Ford for the Toyota cars made in the USA. As the quality gaps shrinks to near zero between the quality of American and Japanese cars made in the USA, Toyota continues to maintain its edge in quality for its plants in Japan over both the Americans and the Germans. And the one carmaker that intends to surprise is Hyundai which surpasses Toyota, Honda, Ford and Chevy in quality and does this with a lower price. Consumers are noticing and making the switch, as Hyundai's market share is increasing. See Hyundai link. Here are some of the results. First the plants that produce the best quality, as measured by the J.D. Powers Initial Quality Survey. A survey of 80,900 cars between November 2008 and February 2009, for the first 90 days thses cars were driven, using the number of problems per 100 vehicles. All numbers refer to problems per 100 vehicles. Toyota plants in Japn that scored highest- Higashi-Fuji at 29 making Lexus SC and Toyota Corolla, Fuijimatsu at 30 making the Prius, Kyushu at 34 making the Lexus ES and Highlander. At the next level German plants, Bremen at 40 making the Mercedes Benz Classes- C, CLK, SL, and SLK. Daimler in E. London, S. Africa at 38, and BMW at 40 in Dinggolfing, Germany. And a cluster of Japanese and American plants in the USA that produce cars of comparable quality. Honda in E. Liberty Ohio at 41, making the Honda Civic, CRV and Element. GM at Oshawa, Ontario, at 42 making the Buick LaCrosse and Chevy Impala at 42. GM at Bowling Green, Kentucky at 43, and Toyota, Georgetwon, Kentucky making the Avalon and Camry at 43. What is notable from the last survey in this highly competitive market is the following. 1. Hyundai at 91 problems per 100 vehicles surpasses Honda at 95. Better quality at a lower price, so its no wonder Hyundai is gaining market share and is the new carmaker gaining a presence in the USA. 2. Toyota is at 101, Ford at 102, Chevy at 103, so the difference now in carmakers quality is perception, perception, perception. Its about lifestyle, what you like to be associated with and what you want your friends and neighbors to think about you in your choice of car, younger buyers who are the next generation that makes or breaks your business, the new trendy things among younger people, and design that appeals to them. 3. VW is at 112. So even though there is aggressive marketing and VW is picking up some market share with the Jetta, it still lags slightly in quality. 4. The American car makers still lack consistent quality. You have the Buick at 117, GMC at 116. Ford with Lincoln at 129. The Koreans with Kia at 112. 5. Chrysler is at the bottom of the list. Dodge at 134, Chevy at 136, Jeep at 137. THe lack of resources, changes in management and ownership, and the distractions of bankruptcy and dealership closings, and most of all dire lack of resources including the layoff of large parts of its engineering talent, all hurt. 6. GM sold Saab, Ford sold Land Rover and Jaguar. The neglect of Saab shows with Saab at 138, and Ford's distraction during the last 3 years shows with Jaguar at 134 and Land Rover at 150. also. 7. In summary Ford has done well overall, Toyota is coming up short in the USA and resting on its laurels, GM has a perception gap with younger buyers, Hyundai looks like a winner with both price and quality, and VW has work to do. ...

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Average return on U.S. IPO's for 2011 is a loss of 18% for institutional investors getting in on day one according to Dealogic analysis of 23 IPO's. For small investors the losses are 34%.

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It is a landmark agreement and more innovative than the GM and Chrysler agreeements, with the UAW getting a significant stake in Ford, something that is a first. UAW supported money going into creating 5 flexible body shops so that investment to get Ford new models and manufacturing capability is put in place in this agreement- showing union management unanimity in understanding Ford's situation. The UAW Ford Agreement details: UAW gets about 18% ownership of Ford and becomes Ford's largest shareholder with about 4 times the shares of the Ford family. Ford will build 5 new flexible body shops in unionized assembly plants, invest separately $200 million in new technology and equipment in unionized stamping plants, and make substantial new investments in engine operations. All new hires will get a starting rate of $14.20 an hour and a full rate of $15.34 an hour, nearly half the curtrent level and its good till Ford reaches 20% of the Ford UAW workforce. When this is reached for entry level positions Ford must first move those hired at the lower wage upto the higher wage before filling in more positions at the lower rate. The VEBA health trust will work this way. Ford will only put in $6.5 billion in cash into the trust and $450 million each year in current dollars. The rest is done innovatively to conserve cash and give the union a stake in Ford that will be a first time in such a deal. It may change the labor vs. management atmopsphere in the long run as Ford recovers. A $3.3 billion convertible debenture note will be issued giving the union a stake of about 18% at current share prices, which terms are still not clear. Ford will also issue a $3 billion secured note. And to cover retiree health obligations until the trust makes payments Ford will pay $2.2 billion. The Jobs Bank is restricted to 2 years. After 2 new job offers are declined the worker goes off the payroll. Ford will also trim about 10,000 to 14,000 workers with buyout packages. ...

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Attacks from Iran on Saudi oil infrastructure leading to a loss of half of Saudi oil production is likely to be a problem for countries such as China, South Korea and Japan that have reduced oil imports from Iran and increased dependence on Saudi supplies. This was a result of tighter U.S. oil sanctions on Iran. India is also affected. About 30% of the lost production will be restored say Saudis.  The U.S. is less dependent on Saudi supplies and as Gerald Seib points out in a video in WSJ the U.S. has 3 reasons not to intervene on behalf of Saudis. The U.S. has increased its oil production from shale oil and is less dependent on Saudi oil. It is also becoming reluctant to engage in Saudi Arabia's wars such as the one in Yemen against Houthi rebels. There is also less support in Congress and in the country for supporting endless wars that originate from Saudi actions. A Trump tweet before his election campaign shown in WSJ makes this point about endless wars and the U.S. needing to be paid trillions of dollars for these wars. The conflicts in the region affect China and India where growth is close to 5% before any impact from oil price increases. Together Asian countries take in 72% of Saudi oil exports and China now imports more Saudi oil than Russian oil by a wide margin- in June 1.88 million barrels a day. Saudi oil makes about 19% of imported oil in India and 33% for Japan. Imports into India of Saudi oil are up 8% this year to 847,000 barrels a day in 2019. China is better situated than Japan with reserve supplies of 644 days of imports compared to 230 days for Japan. This why Japan has played a constructive role in reducing tensions between the U.S. and Iran and urged both sides to negotiate. China and India also have interests that converge in reducing tensions between the U.S. and Iran. As a first step president Trump removed his National Security Adviser John Bolton in preference for reduced tensions.  ...