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Retail sales in Vietnam for the first 2 months went up by 21% from same period in 2008, down from 32% growth the prior year, but still holding up. At its height Vietnam's consumer price index went up by 28% in 2008, now its down to 14.8% in February 2009. This gives a big boost to disposable incomes. As a result Vietnam expects growth of 5% a year, according to the IMF. It was 8.4% in 2007, 6.2% in 2008. Vietnam is less dependent on exports and this has helped sustain growth. The inflation shock acted as abigger brake on GDP growth, and now this is easing. And exports were down by 5.1% for the first 2 months, not the steep decline in countries like Taiwan and S. Korea. The Philippines has 30% of growth dependent on exports compared to 70% for Thailand, and it has a steady flow of remittances from workers overseas employed in stable fields like health care and education. These remittances go into disposable income and are spent quickly so they acted as a stabilizer. Indonesia also has a growing domestic market, and is not as dependent on exports. Domestic consumption in both countries should help them see 4% growth according to government estimates for the Phillippines and Indonesia. See the link to Honda motorcycles to observe how the domestic market is continuing to grow for Honda in Indonesia....

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Roubini at NYU and Rosenberg at Merrill Lynch see serious damage this time- prolonged and serious downturn. Roubini sees the auto loans and credit cards next as another bubble unraveling. The consumer may have already been affected and the effects there may be serious and lasting in 2008 and 2009. Exports may not boost manufacturing that much as to make up for the severe impact of a number of things-tight credit, consumer spending declines, housing bust, and escalating oil prices. The losses from the housing and mortgage bubble has been estimated at around $400 billion, Roubini thinks that the figures approaching $100 billion that the candidates are saying they would stimulate the economy by are nowhere near the $300-$400 billion needed and the government cannot afford that magnitude of stimulus. Experts are saying that the losses of firms are not revealed as firms are not saying much, and there is a lot more to come which will act as a further drag on growth. Roubini thinks this one will be severe and a recovery may not be in the works to 2010 or 2011. Some stimulus after the election and rate cuts may just make it appear that things may reverse themselves, but there is just too much going on. The consumer has human feet that are bound to falter at some point with all this burden stacked onto him....

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China needs to make a serious effort to move away from export based model for growth and fix what is broken about that model which is investment in health care, education, the environment, improving rural incomes by giving farmers ownership of land, directing money to the poor and to rural areas that have suffered during the long three decade boom years. The growth rate is expected by analysts to hit 6% in the fourth quarter. And further declines can be expected as exports get hit hard as export markets in the USA and Europe see large declines in consumer spending. The stimulus package is less than what it appears because it includes things that were already planned expenditures, yet it is a step forward. Investment in railways to modernize the rail network is a good investment. And with proper reallocation to the rural sector this stimulus and approoriate new policies could unwind what the Economist calls the grotesque global distortion that has seen poor Chinese farmers help finance the debt fueled excesses of western consumers in countries like USA, UK, and Ireland. Something the Economist has not emphasized in the boom years, but now that the growth rate could drop to 4-6% there is deep concern what it would do for social stability, for rural incomes, and the disparity that has been built up between urban and rural incomes, both within China for policymakers and the media outside....

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Brazil's economy is forecast to contract by 2% in 2015, the currency has lost about one third its value and the stock market is down 22% in the last year. This follows the decline in demand for Brazil's commodities exports as China growth slows down. Experts say Brazil is now seeing another boom bust cycle similiar to boom-bust cycles in the past, such as the 1966-73 boom followed by years of hyperinflation and stagnation. Brazil's exports to China declined 17% in the first 7 months of 2015. The crisis is in many ways similiar to crises in other emerging markets dependent on commodities exports. The resources boom leads to overvaluation of the currency, and decline in development of manufacturing away from dependence on commodities exports. Other errors rise from complacency and politics prevalent in such periods. These errors include mismanagement of resources with poor resource allocation decisions such as spending on soccer stadiums in cities in the northeast while basic bus services remained underfinanced in large urban areas, large overspending by the government using state owned bank BNDES to offer rates at below market rates, a credit fueled boom and credit card binge for households, and a reversal of capital flows from the U.S. and Europe with the sharp decline in investment climate. There is a severe loss of confidence in the government of Dilma Rousseff with her approval rating as low as 8%. Corruption scandals at Petrobras show close links between the Workers Party of Rousseff and executives, with about $2 billion in misused funds. Brazil, like other emerging markets such as Russia and India, have taken some lessons from the 1997 financial crisis by setting aside large foreign exchange reserves for a crisis. Brazil's reserves of $397 billion help it cushion the effects with funding of the safety net and support to industries to avoid large layoffs. Other problems not tackled as in Mexico, India, and other emerging markets, are the weak educational system, and poor infrastructure, that create bottlenecks for growth. Brazil could face a lost decade after the debt overhang, decline in foreign investment and commodity export generated revenues. ...

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Consumer Reports is published by nonprofit advocacy group with 640 employees. It is based in Yonkers, New York, and was founded in 1936. It takes no advertising and answers only to buyers of the magazine and to consumers. Its labs based in Yonkers test a whole range of products and Consumer Reports does not hesitate to put a "Don't Buy" rating on products. In June it pointed out the defect in the Apple iphone that made it lose reception when the left corner was touched by a user. It tested the Lexus 460 a few months ago, and when it found that it was a rollover risk, Consumer Reports gave it a "Don't Buy: Safety Risk" rating. The magazine has come up with new contraptions that test different products. In the 50's it created a smoking machine that accumulated what was left of a smoker's inhalations in a container device. And it was credited by the Surgeon General's Report in 1964 warning of the dangers of smoking, as having done some of the serious research on the subject of smoking dangers. The magazine suffered a loss in 2001 of $9.4 million, but has since recovered under the leadership of Guest, who had earlier served as chairman. Guest moved the testing to more expensive products like Lexus cars and made another important decision. He expanded testing so that when it came to laptops, cell phones and flat screen TV's (which were becoming rapidly popular in the market), the testing would be ongoing. Guest moved announcements and postings of new product results to the internet and online subscriptions have tripled in the last 7 years. As a result the company has been profitable since 2003. Other decisions have been to add user opinions and comments, buying Consumerist.com which puts up reader opinions, and to attract younger readers. And though initially feared by scientists at Consumer Reports, who preferred to avoid user opinions and stick with the scientific facts, the moves have not affected its credibility. About 7 million subscribers subscribe to Consumer Reports, and about half of these subscribers pay $26 a year for access to its website, ConsumerReports.org. This makes it one of the handful of information publications that have paid digital subscribers, including the Wall Street Journal Online, which has only a fraction of the subscribers of Consumer Reports....

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Petrobras and the discovery 200 miles offfshore of the Tupi field with estimated reserves of 5-8 billion barrels of light crude oil. As Brazil is self sufficient in energy with its own ethanol industry helping substitute ethanol for oil at the pump, it can become a major exporter with this find. However even with Petrobras technology and expertise in offshore drilling its a challenge as the oil is 4.5 miles below the oceans surface, and involves drilling through 7000 feet of water and 17000 feet of sand rock and massive salt layer. Cost could approach $20 billion according to analysts with current inflation in oil drilling rig costs. It involves challenges like building floating liquefied natural gas plants. Gabrielli, the Petrobras CEO thinks Petrobras has the expertise to develop it on its own. If oil majors are given the chance to join in the development the investment terms will be ones that favor Brazil. Gabrielli pointed this out saying that Brazil had already incurred most of the risk in exploration offshore so the oil majors have far less risk and Brazil should invite them only on its own terms if needed. The Tupi field puts Brazil ahead of Canada in oil reserves and in the leagues of China and Nigeria, with new Brazilian reserves at 17.2 billion from the 12.2 billion barrels currently. Brazil has invested in refineries with 2 new refineries coming up in 2010 and 2014 to increase refining capacity by 40%. It is also investing to convert heavy crude oil into diesel and $8.6 billion to reduce sulfur at 11 refineries. The Tupi field will take about 7 years to develop. Similiarly the Kashgan field in the Caspian in Kazakhstan is also in difficult in this case icy and gases filled environment that will take years for a Eni led consortium to develop. When oil does come will the demand situation have changed with new conservation taking hold in the developed world and the cars in developing countries more like the Tata Nano at 54 miles per gallon consuming less gasoline? Even with increase in energy needs of developing countries, improved efficiency and new technology for conservation brought into developing countries could if not significantly reduce, at least moderate demand. To the point where prices drop from $100 a barrel to something more affordable to developing countries....

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The influence of lobbyist on members of Congress just as the Obama administration, having studied the failure of the Clinton submitted healthcare plan try a different strategy of letting Congress come up with a healtcare plan. $133 million was spent in the second quarter alone by healthcare industry lobby interests creating headaches for reform efforts and the Obama administration.

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The U.S. Justice Department files a lawsuit against VW seeking $18 billion in sanctions on behalf of the Environmental Protection Agency. VW shares declined by 4 percent. Experts expect an out of court settlement of $12-$13 billion. The inconclusive discussions between the EPA and VW led to the filing of the lawsuit. The lawsuit is seen as sending a message to the auto industry that the kind of behaviour that led to the VW emissions cherating scandal will not be tolerated.

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The third largest nickel, and second largest copper mineral deposits, are to be found in northeastern Minnesota. Governor Tim Walz has supported environmental studies on the Twin Metals project. Much of these deposits will be needed for supporting demand for renewable energy electric car batteries. Union labor supports the project and sees Walz as an ally. 

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Improving performance of Toyota, Nissan and Honda in the U.S., Japan and emerging markets. Japanese automakers report higher profits in the fiscal fourth quarter. Sales for 2012 are expected to quadruple for Toyota in the 2012 fiscal year compared to fiscal 2011, according to analyst estimates. Part of the recovery is from weakening of the yen from 75 to the U.S. dollar in October 2011 to 81 in the March-April 2012 period. Profit margins are expected to improve for Toyota from 1.5% to 5.1% for Toyota, 5.4% to 7% for Nissan and 2.5% to 6.8% for Honda.

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Gordon Fairclough's trip over the 1700 mile Silk Road in Xingian province in a Cherry A1 compact, the car which will be sold in other overseas markets by Chrysler. Its a fascinating account with amazing scenes.

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Research shows that when a home's value falls below 75% of the amount owed on the mortgage, the homeowner thinks hard about walking away even if he has the money to keep paying, as it does not make economic sense to keep paying. By 3rd quarter 2009 4.5 million Americans reached this point and by June 2010 it is estimated by Corel Logic, a real estate firm, that 5.1 million will reach the 75% point- or 10% of all mortgages. Homeowners who made the mistake of buying as the market was cresting are seriously considering walking away and bank's reluctance to reduce the payments is for them the last straw. The Obama administration hasn't helped as this comment by assistant Treasury secretary for financial institutions, Michael Barr, shows. He discounts the idea that many people will walk away from their homes, saying that the overwhelming number will stay in their homes. Consultants at Oliver Wyman show from their research that at least 17% walked away from their homes even though they could make payments in 2008, or 588,000 people, and this was before the full impact of the global financial crisis. These numbers could be much higher in today's depressed market....

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