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Foreign born population after a series of restrictive Immigration Acts dropped from 15% in 1890 to 12% in 1930, to 5% in 1970. The effort of 1924 Act was to make the southern and eastern European immigration that jumped by 1924 to 41% of total to much lower numbers. A look at the Immigration Act of 1924 under the Coolidge administration sponsored by senators from Washington state and Pennsylvania, Albert Johnson and David Reed, by Chishti and Gelatt in MPI. It shows the prejudices of the early Europeans from one country to Europeans from other countries that followed, after the British, the Germans, the Irish, the Italians and Polish, as the immigration waves shifted to Eastern and southern Europe in the period between 1880 and 1920. During this period Southern and Eastern European immigrants that made up 16% of the population reached 41%. In 1882 Chinese immigration to the US came under the Chinese Exclusion Act restricting it. The Dillingham Commission of 1911 stated the merits of different racial types with northern European and western European preferred to southern and eastern European. Still only 1% of the immigrants entering America were turned back between 1880 and 1924.  The 1917 Immigration Act set up an "Asian Barred Zone" that included Japan, a head tax of $8 on immigrants, requiring proof of read and writing of all immigrants, vetoed by president Woodrow Wilson. The Emergency Quota Act of 1921 set the first quotas at 358,000. Under the Immigration Act of 1924 it was revised to 165,000. President Hoover asked for strict consular restrictions so that between 1929 and 1945 immigrant numbers fell below 100,000 a year.  ...

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The authors of this article say 2.4 million excess houses over and above nomal working inventories remain to be sold, and it is this surplus that is a mortal enemy of housing prices. US buyers are too debt ridden and have seen their 401 K's and pensions decline. So they suggest giving permanent resident status to immigrants who will invest in US housing, buy one or more than one house. They did not have to live in them, they also could not rent them, and would have to be above a certain price, so they would be taken off the housing market. They are aware of the effect on Vancouver of letting people from Hong Kong buy into that market, just before the handover to China. About a quarter of Vancouver's population became Chinese, and billions were invested in the housing market. They quote Merrill Lynch that there are 7.1 million households in the world with $1 million in financial assets, with a total of $29 trillion. They figure that 2.4 million excess houses could be sold at a median price of $184,000, and bring in billion sof dollars. If jobs are not impacted, and wealthy people in Asia and the rest of the developing world were to put money into buying houses of above $184,000 as an asset, with a temorary residency attached to it which could be permanent in 5 years, this could be part of the overall solution to the housing excess supply. The fact that values are attractive could make this an investment for affluent foreigners who may not stay in the houses at this time and keep it as a safe haven house, an additional property to use in the USA. It would ease the hosuing price situation in certain cities by bringing in a new buyer with resources into the market. ...

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U.S. states want flexibility in applying the Medicaid program which covers 53 million Americans earning lower levels of income. This amount was $11,616 a year for working parents in 2009, according to the Kaiser Fondation. Some states have a higher income level, as high as $48,400. The problem for states are serious budget deficits, with Medicaid comparing with education as a major cost. The recession and job losses has added 8 million Americans to Medicaid rolls. The Federal government supports 57% of the Meddicaid budget on average. A provision in the 2010 health care law says states cannot limit Medicaid eligibility, or they would lose funding by the federal government. The Obama adminstration's position is that eligibility or provider cuts will not bring in large savings, and will allow larger cost-sharing by Medicaid users, with only minor cuts in eligibility. Its position is also that the law does not give the federal government waiver authority. Some of the issues raised relate to the structure of Medicaid cost and its rapid escalation. Health and Human Services says 1% of benificiaries, especially the long term care, use up 25% of the Medicaid expenditures. One astonishing fact is that two thirds of all U.S. nursing home residents are on Medicaid. The total cost is rising, from $187 billion for Medicaid in 2000, to $346 billion in 2009, according to the Centers for Medicare and Medicaid Services. In July 2011, $26 billion in additional federal Medicaid funding expires, which will be added to state expenses as they struggle with large deficits. In states like Maine, with generous benefits, about one fourth of all residents are in the Medicaid program. ...

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Three very important point about a soda tax. First, obesity was rated as the No 1 problem of concern for business leaders at a WSJ conference for business leaders at the beginning of the Obama administration in January 2009. If obesity related costs are taken out of health care, and even though they are not collected as statistics they must be significant, it would reduce the costs of providing universal health insurance. Especially considering that most diseases are exacerbated by obesity, and in some obesity figures as one of the leading causes. Second, Centers for Disease Control Data shows that a typical person now consumes 190 calories a day from sugary drinks, up from 70 a day in the late 1970's. That 120 calorie increase, an almost threefold jump in consumption of sugary sodas, represents one-half of the total daily caloric increase during that span per person, according to C.D.C. data. This is a crucial finding. Just one product alone can cause so much disruption in people's lives. Just as thrifty ways of living are becoming popular in America, better education in schools and communities on good nutrition and eating habits can become popular to reverse the bad habits acquired in the last 20 years, habits that are careless and reckless. Third, research shows that soda drinkers are price sensitive, so that in the past when soda prices went up by 10%, consumption dropped about 8%. So a tax on sugary sodas would make sense. The huge soda sizes at fast food places are one of the signs of the excess of this age with no regard for the consequences to health. living habits....

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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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The Public Private Investment Program announced by Treasury Secretary Geithner finally gets underway in October 2009. Black Rock, a group led by the Wellington Company and a group led by Alliance Bernstein are private participants in the effort to get private participation to rid banks of bad loan assets. Five of nine money management firms selected by Treasury to buy toxic mortgage related securities have raised the minimum of $500 million from investors each, to qualify for matching government loans. In total the program will allow money management firms to buy up $12 billion in bad assets. THe IMF estimated last week that financial institutions around the world have still on their books $2.8 trillion in troubled mortgages and securities. Only half of that amount has been booked in losses, which leaves $1.4 trillion still to be resolved. $12 billion is less than 1% of this, which begs the question how will this make a difference? Treasury only hopes that this will restart trading in bad assets and help establish market prices for these assets. If unemployment worsens and the economy sees a sudden relapse in the near future this $1.4 trillion in bad assets will continue to create serious problems for financial instituions and the international financial system....

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With Bud Lights sales declining for the last 3 years, Anheuser Busch is responding with new "craft" beers and new malt beverages which have the taste of iced tea and tequila. Anheuser has 46.9% of the U.S. market, down from 48.9% in 2008, according to Beer Marketer's Insights. Shipments declined by 3.2% in 2011. The emergence of many small independent "craft" beers as consumers look for variety and new alternatives, has cut into sales for Anheuser and MillerCoors. MillerCoors, a joint venture between London based SABMiller and Denver based Molson Coors Brewing, is increasing its advertising budget by 50% to boost Miller Light. In the U.S. "craft" breweries increased production by 13% in 2011, reaching 10 million barrels according to the Brewers Association. This is 5% of the total market in the U.S. of 200 million barrels. Anheuser's new product introductions include Bud Light Platinum, with higher alcohol content, and new packaging, which has taken a 1% share in the market. Anheuser has a research brewery which is trying out new beers- one is a wheat India Pale Ale with its strong taste, introduced under its Shock Top Label. In the malt beverage category Anheuser has Bud Light Lime-a- Rita, with 8% alcohol coming to stores in April, that has the flavor of margarita. Anheuser is also heavily promoting its Belgian beer Stella Artois, which increased sales by 24% in 2011, to reach 1 million barrels. Another strategy is buying craft breweries, such as Chicago based Goose Island, which Anheuser acquired for $39 million in 2011....

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This article in the Economist Report on India focusses on politics, and the implementation of a state devolution of powers and finances. This is the big idea referred to by the prime minister's Economic Advisor, Arvind Subramanium. The Modi administration is providing the direction at the federal level for a development push at the state level. The states will now get 42% of federal tax revenus and with state revenues this increases to 62% of total revenues, giving the states leverage to compete for talent, capital, and investment for economic growth. This element of competition will be strong to attract different industries and foreign investment similiar to the experience of Gujarat and now pushed at all levels of government. It also introduces the idea of "competitive federalism" as India is a country with states at various stages of development from Gujarat to Punjab and Bihar. The new NITI Aayog replaces the old command economy Planning Commission from the Congress administrations since 1947, and supports "competitive federalism" as a think tank that provides advice and help to the centre and states. Rising aspirations in India helps the Modi government with voters who are incresingly urban and better educated, looking for jobs. The election in Delhi suggests voters will always be open to new ideas to fight corruption and bring better delivery of public services, and wins by parties offering positive change for improvement will always be a part of India's democracy, introducing competition in politics for who can do a better job at the regional level. ...

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Sales of automobiles in China in July 2012 declined 12.6% from the prior month according to the China Association of Automobile Manufacturers. There are two parts of China's automobile sector, the foreign brands of GM, Toyota, VW, Ford and others, and the Chinese brands. There are 48 Chinese domestic carmakers for 30% of China's automobile market, with sales of 87,500 per brand on average, according to J.D. Powers. Many of these carmakers will not survive even with subsidies from local governments. China's car buyers prefer foreign brands because of the better quality and reliability. Foreign carmakers face an oversupply of cars as GM, Honda, Ford, VW have continued to add capacity. Total automobile manufacturing capacity is about 28.5 million cars and commercial vehicles. This is 9 million more than the expected sales in 2012, according to J.D. Powers. The most recent company adding large capacity is Ford Motor Company, which was relatively late in the Chinese market, and decided to boost capacity from 450,000 in 2011 to 1.2 million in 2015, to make it the largest manufacturing location outside of its home base of Michigan. This creates the prospect of foreign carmakers having to offer larger incentives and discounts to manage inventory and operating with higher levels of unused capacity, reducing profits in future years. Most of the plans to increase capacity were made when China's GDP growth was over 10%, it is now slowing to 7.5%....

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The Spanish government said on May 23, 2012 that it will provide 9 billion euros to help Bankia cover capital provisions for bad loan losses. The government took control of Bankia in early May 2012. Bankia was formed by merging 7 troubled cajas savings banks. It has about 10% of Spain's loans and deposits. Bankia has the largest exposure of financial institutions in Spain to real estate loans. Of 37.52 billion euros in loans for real estate, about half or 17.85 billion euros are troubled loans. Spain's approach to the banking crisis from the real estate bubble was to merge failing banks with smaller amounts of government money as aid, and having the new entities raise cash through initial public offerings. For Bankia most of the nonperforming loans were separated and placed in BFA, the parent company. Bankia did an IPO in July 2011 raising 3 billion euros. Since the IPO Bankia has lost half the value in its share price for large losses to investors. Under new capital provisioning rules set by the government for banks to adequately cover nonperforming real estate loans, Bankia needs 7.1 billion euros. An additional 1.9 billion euros is needed for capital requirements for a total of 9 billion euros, which is the amount of the capital injection by the Spanish government. Finance minister Guindos told parliament that the rest of the Spanish banking system can withstand adverse scenarios....

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Are bubble type incentives inflating the size of the U.S. auto market in 2012-2013 as happened in the past decade. This could hurt future sales. Japanese automakers have sharply increased incentives to make a come back after the tsunami and earhtquake restricted supplies. U.S. automakers are reluctant to go further down the incentives route that hurt them in the past decade. The result is higher inventories for Detroit automakers, another undesirable result. General Motors had 5 months of Malibu supply at dealers in Nov. 2012 at the current sales rate, Ford 4 months of Fiesta subcompact inventory and 73 days of total inventory overall, Chrysler 6 months of 2013 Dodge Dart inventory. GM has 3 months of Chevy Cruze inventory, and 138 days of Chevy Silverado pickup truck inventory. GM decided to idle one of two plants making the Cruze. In contrast Toyota has 2 months inventory for the Camry and Corolla. The largest incentives in the U.S. market are from Nissan, a 55% jump to average $4,273 in Nov. 2012 from $2,764 in Jan 2012. Honda increased incentives to average $2,428 from $1,978 in Feb. 2012, a 23% increase. Toyota up to average $2,075 in Nov 2012 from $1717 in Jan. 2012, a 21% increase, according to TrueCar.com, with zero percent interest rates not counted in these numbers. Ford offers $2895 off its 2013 Focus sedan, which has 2 months inventory. General Motors offers between $2900 and $3500 in average incentives , according to TrueCar.com....

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Andrew Ross Sorkin of the NYT interviews Bill Gross, former head of PIMCO, in May 2015. Gross says the separation with PIMCO was hard, like a painful divorce, especially because he is sensitive. He continues working at 71 because he wants to show PIMCO made a mistake.

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Vanguard Index funds attracted $233 billion in new investment in 2014, according to Morningstar. Of this $40 billion went into the Vanguard Total Stock Market Index Fund, $27.5 billion into the Vanguard Total Bond Market Index Fund, and $9 billion into the Vanguard Total International Bond Market Index Fund. The poorer returns from actively managed funds with high fees and the PIMCO Total Return Fund led to this shift into index funds. For every $100 in investment with Vanguard index funds the cost in fees is about 18 cents compared to $1.24 in the average actively managed mutual fund, according to Morningstar.

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The advanced technology on the Noble Bully 1 oil drilling rig in deep waters 140 miles south of New Orleans. It is jointly owned by Shell and Noble Corp. The technological improvements on the rig could only have been imagined a few years ago. A Eiffel tower shaped structure is completely enclosed in the rig compared to open derrick structures used on earlier rigs. The technology includes GPS, wind sensors, motion sensors, hydraulic systems, computer controlled thruster propellers on the bottom of the vessel to drill wells with precision. It can operate in water 8250 feet deep to 12,000 feet with safety upgrades, and upto 40,000 feet. A similiar ship Noble Bully 2 operates on the coastal part of Brazil. A new platform called Olympus will be a tension leg platform floaing on the sea like a cork, held together by tying it to the ocean floor using cables. The project is called the Mars B development. New sensors use seismic technology with devices closer to the ocean floor in the Gulf picking up data. The data is sent to Shell scientists working onshore and produces four dimensional maps of oil reservoirs using computer chips. The cost savings for the smaller structure include less steel and less fuel used, zero toxic emissions, and operating with 160 workers- 40% less workers than previous rig designs. Veteran drillers say its a lot better working environment and lot safer. Chief drillers sit in "drill chairs" and adjust the speed and direction of drill pipes using joy sticks and computer screens. It is this kind of technology that countries like Mexico, Brazil, Argentina and India need to develop their off shore oil fields, creaing new opportunities for oil companies such as Chevron, Shell, BP, Exxon and Total. The new technology equiped drilling ships, platforms and LNG processing ships are a way for Shell to reduce costs and improve capital efficiency, the new focus for CEO Van Beurden in 2014-2015....

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Chinese banks have 20% of total loans as receivable in 2016, up from 6% at the end of 2011, according to WSJ analysis. Many banks disguise loans as receivables. The government regulators have warned about this, but are hesitant to take strong action so that there is no shock to the system. This has created a parallel buildup of debt next to official debt of over 250% of GDP. These are seen as "hidden credit risks" by Shang Fulin, top banking regulator. As a result about $2 trillion is missing from broad measures of credit reported by the central bank, according to economists at UBS, using shadow lenders to mask loans as investments.

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The share of new mortgage loans backed by the US government through Fannie Mae and Freddie Mac is at 92%. This makes the fast overhaul of the two agencies much more difficult. Treasury Secretary Geithner said last week that overhaul of the two agencies could take 5 to 7 years. The problems with Fannie and Freddie are real. The U.S. government subsidizes mortgages through Fannie and Freddie, encouraging Americans to take on more debt. Their balance sheets pose serious risks in another crisis, as long term investments are financed with short term borrowing. Any losses will be the responsibility of the US government. A recent paper from the US Treasury outlined some of the steps needed to wind down both agencies and to reform the way they operated including- requiring larger down payments and lowering loan limits, and increasing the fees charged for the government's guarantees to be more in line with the risk being taken. Slower reform in this area means additional systemic risks in the event of another crisis....

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Litigation expenses and settlements for JP Morgan Chase at $17.7 billion for 2008-2012 now exceed the $16.1 billion for Bank of America, according to FBR Capital Markets. JP Morgan Chase plans to spend an additional $4 billion and commit 5000 new personnel to help it clean up the bank's risk and regulatory compliance problems. Of the $4 billon $2.5 billion go into litigation reserves, and $1.5 billion for a 30% increase in risk control staffing and other related expenses. As part of the changes CEO Dimon has put the most senior executives in charge of separate parts of regulatory problems. These executives cannot be overruled by business heads. In another change still to be made at other banks the top compliance officer reports to the chief operating officer of the bank not the general counsel. This change was made at the request of regulators who now meet about 50 times per month with compliance executives. The total control staff for compliance and risk are now at 15,000 in 2013, up from 8000 in 2012. At a 2 day business retreat at Martha's Vineyard compliance and control officers were invited for briefings and came away with equal authority as business chiefs. JP Morgan has also provided 750,000 hours of training on control and regulatory issues to its staff using McKinsey, Ernst Young and other firms. CEO Dimon sees the effort as making the bank stronger than ever and this has become a top priority for him, reflecting a change in his views from the period when the London Whale crisis first emerged. It also shows a leadership trait of Dimon as a learner who puts his full weight behind an effort after gaining new insights into hidden problems....

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Interview with Gerard Kleisterlee, retiring CEO of Philips Electronics. Kleisterlee led the effort to focus on emerging markets where sales of health care, lighting and consumer products are accelerating. Second quarter sales in emerging markets went up 29% for 2010 over the prior year, and now are 34% of total Philips sales. As part of this strategy Philips is increasing its staff and research divisions in China, to capture part of the $125 billion that China plans to spend on healthcare in the next 3 years. Kleisterlee talks about local competitors in emerging markets who are trying to get a regional or global presence. How Philips is increasing local responsibility, and how it is designing, engineering and manufacturing products specifically aimed at local markets in emerging market countries- as away to compete effectively in these markets. He also points out that it is no longer sufficient to be in the major cities, Philips has to move into smaller cities and into the rural areas to increase sales. He sees consolidation opportunities in Asia where the lighting manufacturing is still fragmented. Responding to a question about Philips still being too old, too male, and too Dutch, Kleisterlee agrees that it is too male and too Dutch for his comfort. Women are a bigger part of his health-care team, but not that much progress in other areas of the company. And he would like to see more local leaders in emerging markets. He sees consumer behaviour changing in one respect- there is an increasing consciousness among buyers for value, and not just for low price points, but at all price points....

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According to analysts about 3.1 million workers across the USA work in auto manufacturers or related businesses. And every direct job at an automaker in the USA creates 5 other jobs according to the Center for Automotive Research, 2 of the 5 are related to suppliers or dealers and three are related to jobs a businesses where industry workers spend their paychecks. About 355,000 workers are directly employed by automakers, and the USA has 783,000 who make parts for automakers or the aftermarket including repair parts, says Debbie Menk project manager for CAR. Each of those supplier jobs has its own substantial trickle down effect. Another 1.97 million workers produce the steel, rubber and other materials to make the parts, or provide engineering, distribution and other support services, bringing the total to 2.78 million employees with jobs tied to suppliers. The spinoff effects spills into stores and restaurants relying on the incomes of those workers. Menk says that there are 1.7 million people who owe their jobs to the fact that the 2.7 million have jobs, getting the figure up to 4.4 million just on the supplier side. Factoring in some overlap in the retail spinoff from each supplier and automaker job, she estimates total employment in the auto industry at a minimum of 5 million jobs. She describes CAR's figures which are based on a study from earlier this year that used 2006 data, the most recent available, as conservative. Other experts like Anderson Economic Group using 2006 data come up with a higher figure of 8.7 million jobs. The auto industry spends spends more on R&D than any other industry except the government, $18.5 billlion a year says McAlinden, chief economist for CAR, with 85% of this done in Michigan. They also spend $15 billion in advertising. So why is this not registering in the minds of leaders around the country and in the minds of the public? Its possible that most people see only the 355,000 jobs at the automakers and not realize that the 355,000 direct jobs are assembly jobs which is what the automakers do and design and R&D, but there thousands of parts that go into this assembly, and the steel, rubber and aluminium that goes into the metal. And then there are the jobs to feed, clothe, and provide services to these workers. And its possible the arrogance and mismanagement at Detroit automakers, and failure to come up with innovative fuel efficient technologies at a time when the country was sending hundreds of billlions of dollars to the volatile middle east, and failure to come up with really appealing passenger cars, have soured the public mind and image of the Detroit automakers. Resulting in a public perception that the Japanese, Korean and other automakers could pickup where Detroit failed. In the process what is being missed is that the Detroit portion of the USA auto industry is a very significant part of the jobs and economy of certain states, and a big part of the economy of the midwestern states. And as CAR mentions most people do not realize that in the financial services industry one Wall Street job creates only 2.5 jobs elsewhere including spinoff jobs. Only high-tech comes close with 4 jobs including spinoffs for every direct job in Silicon Valley. ...

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Surging investor interest in passively managed Vanguard index funds. Vanguard's Total Stock Market Index Fund takes the leading position in the mutual fund industry. Assets pass $3 trillion in 2014. Warren Buffett advises his trustee to put 90% of his net worth of $66 billion in very low-cost S&P 500 index fund, suggesting that it be Vanguard's. Vanguard is based in Malvern, Pennsylvania.