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AMR announces it will purchase 260 A320 planes from Airbus and 200 additional 737's from Boeing. This is the first order from Airbus since the 1980's. Airbus and Boeing have agreed to $13 billion in lease financing to fully cover 230 deliveries . AMR president Horton says financing has been arranged for all othe orders from 2013 to 2016 and for 80% of 2017. This is critical because AMR is still losing money. Its second quarter loss increased to $286 millon from $11 million the prior year. Total debt is at $17.1 billion on June 30, 2011 compared to $16.1 billon the prior year, and cash balance at $5.1 billion the same as prior year. The new order will help reduce fuel costs. They will use 35% less fuel per seat than the old MD-80 planes according to AMR CEO Arpey. The new engines on the aircraft deliveries of A320s and 737s in 2017 and 2018 will provide even more fuel efficiencies compared to the 737s and A320s for this model year. For this reason Standard &Poors says the large order and financial commitment by AMR does not affect its ratings. It said the order will result in an airline that is over time more profitable because of the fuel effiencies gained but also more heavily indebted. S&P estimates of fully adjusted debt are at $24 billon. For Boeing the order means a decision to go with a new engine 737 and not an all new model that would succeed the 737. The technology was there says Jim Albaugh, CEO of the Boeing commercial plane unit, but the production system was not clearly understood to get production to 60 planes a month and avoid delays. For Airbus the AMR order is a significant advance. Except for Southwest which has an all 737 fleet, AMR was the last holdout without any Airbus planes. And the decision by Boeing to stay with a new engine 737 means Airbus wil not have to worry about Boeing leapfrogging the A320neo, which is anew engine A320. ...

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Proposals for using a plan in the euro-zone, such as the Brady Plan. The Brady plan arranged for bondholders for Latin American debt to take losses of 30% in return for longer term debt instruments with lower rates, and backed by 30 year US zero coupon bonds. This helped restructure Latin American debt in the late 80's and early 90's, and helped countries in Latin America forge an economic recovery. At this time Angela Merkel from the German side is pushing for bondholders to take losses for having made risky loans, which was made part of the EU bailout plan in late November 2010. However investors in financial markets continued to push up bond yields for Belgium, Portugal, and also for Germany. There is the sense that something is needed that would require bondholders to take losses, with some compensating mechanism such as the Brady bonds. Also needed is a restructuring of debt without which euro-zone countries cannot stage an economic recovery. Ireland, Portugal and Spain can no longer devalue their national currencies as a way out of the financial crisis. This increases the urgency for coming up with a solution. Mr. Brady was asked about this at a financial markets conference recently. He said what is needed for such a plan to work, is to have a unified decision. In the Brady plan the US took the lead and agreement was arranged bringing together the bondholders and the sovereign countries. Nicholas Brady was Treasury Secretary of the US in the 1980's. Argentina, Brazil, Mexico and other countries restructured their debt, and commercal banks were able to reduce their exposure at a discount. The principal benefit to the lending banks was that they were able to exchange their claims on developing countries into tradeable instruments, and were able to get this debt off their balance sheets. The negotiations for the Brady bonds involved some form of "haircut" - meaning that the value of the bonds resulting from the restructurings was less than the face value of the bonds. All of the Brady bonds were eventually retired. By Mexico in 2003, and also by Brazil, Colombia and Venezuela....

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Economists at the IMF estimate that the public debt of the leading 10 industrialized countries would reach 114% of GDP by 2014, from 78% today. The governments then owe about $50,000 for each person in the country. Unlike World War II this situation is not temporary, because of the pension and health care costs of a population that is getting older. So what is to be done? Without the stimulus, the deep and prolonged recession would lead to greater damage to the finances of these countries. But continued in this manner the government would crowd out private investment and lead to lower economic growth. In some countries, Greece, Ireland, Italy Portugal and Spain it might lead to default, in other countries the real cost of the debt may be reduced through inflation. In the USA yields on 10 year Treasuries reached about 4% on June 10th, in December it was about 2%, a consequence of the economic recovery. If interest rates are allowed to rise too fast, it might abort the economic recovery. A rise in taxes is also not the answer, because in Europe the taxes are already at 40%, in America they are around 30%. But raising consumption taxes at the time when the economy was fragile, aborted a recovery in Japan during Japan's earlier crisis decade. A caution signal that says fiscal tightening can backfire, especially some years after a banking crisis when things are still in a weak condition. Some steps that can be taken are raising the retirement age, which would cut pension costs as people work longer and would boost tax revenues, and eliminating the tax deduction for home mortgage payments in the US. Its important to build credibility that the government and the legislative bodies are serious about controlling the finances and acting with prudence. In America wasteful health care spending is a priority, as this would reduce the burden on public finances considerably , and should be as much of a priority for the new Obama administration, as providing universal health care. With today's finances its not something that can be put off....

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How short sellers target Citigroup and work havoc with its share price losing half its value in afew days. The need for reinstating the uptick rule but a mystery that no action has been taken. And Paulson scores himself as a ten from 1 to 10 in a question from Alan Murray at the WSJ CEO Council, even as lack of comprehensive action on foreclosure prevention, the failure to reinstate the uptick rule, and time lost in the debate in Congress and afterwards over buying up toxic assets, remain a mystery.

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The National Front party of Jean-Marie Le Pen received over 20% of the vote in the first round of the presidential election in France. Socialist candidate Hollande received 27% and Sarkozy 25%, with about 80% of the votes counted. Jean-Marie Le Pen campaigned on the economy and fears of economic decline, as well as in favor of French national identity. She called for France to leave the EU.

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The prime minister of India gives 5 commitments to the world at the COP26 summit. This includes building 500 gigawatts of renewable energy capacity by 2030. He also called on developed countries to provide $1 trillion in financing for climate change efforts in the rest of the world. He said India has delivered on its commitments to the Paris Climate Change Agreement and will do so again.

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Nijmegen, in eastern Netherlands, only 10 miles from Germany is a university city that has made some of the best strides in sustainability in Europe, says this report in the BBC. This report shows this progressive oldest city in the Netherlands, and its green initiatives. 

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US president Biden is on his way to Rome, Italy, for the G-20 summit and then on to Glasgow for the climate change COP26 meeting. Climate change, democracy, redesigning the supply chain, and tackling the coronavirus will be major topics for discussions with world leaders.

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A decade of austerity under the Tories has made everything harder for leveling  up to happen between the south and north of England, says this analysis in The Guardian. Huge gaps in health, education, transport, and wages. Grimsby wages are 60% lower than London's.

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The average round trip airfare to Europe has dropped to about $650. With the end of revenge travel prices are returning to lower levels. Airlines are adding capacity and additional flights to Europe from the US which should further ease prices that stayed high in the summer.

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BBC's The Travel Show shows this video of the world's first solar powered camper van. The author goes to Eindhoven, Netherlands to see the camper. It can do 750 kms in one day on the road and take one to distant locations.

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DeepSeek vs OpenAI -

1. chain of thought reasoning + mixture of experts = less computing power = 1/20 the cost

2. Open source makes it go viral

3. embeds DeepSeek in many places and gets developers to come up with new versions

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The Bank of Italy, is conducting central bank examinations of Italian banks in July 2013. The loan portfolios of the 8 largest banks are being examined, and on-site inspections are being conducted for 20 other banks. This could lead to Italian banks having to sell assets or take other steps to improve capital positions. During the last central bank examinations in the fall of 2012 Italian banks were required to set aside 3.4 billion euros to protect against bad loan losses. Bad loan losses are increasing at Italian banks as businesses and individuals fall behind on payments with the worsening economy in 2013, and into 2014. Non-performing loans are up to 249 billion euros, or 14.2% of the banking industry's total loans, according to the Bank of Italy. This is up from 157 billion euros, or 8.9% of total loans in 2010.

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Brazil's currency, the Real, moved up to 1.7 per 1 US dollar, on the eve of the Presidential election in the first week of October 2010. Brazil's overnight interest rate of 10.75% attracts speculative foreign capital in the carry trade, where investors boorow cheaply in the US and Japan and invest it in Brazil. The central bank has kept these rates high to finance a current account deficit of $46 billion in 2010 -which is forecast to hit $60 billion in 2011- and to finance a high level of government spending. This spending is likely to continue with Ms Rousseff as the new President, as Rousseff plans to invest in infrastructure such as bullet trains and river dams, as well as the FIFA world cup and the Olympics. Government spending has increased by 18% so far in 2010. Exporters are affected by the artificially high value of the Brazilian real. Goldman Sachs economist, Alberto Ramos, says the real is overvalued by 55% compared to its fair value of 2.65 to 1 US dollar, based on a computer model that incorporates factors such as trade, inflation and productivity. Sao Paulo is already the most expensive city in the Americas, according to one survey....

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The role of Merz and Leyen of the CDU is bigger than is grasped in the trade deal with India and the change that Germany has made in shifting the gaze and engagement of the European community towards the 1.4 billion people of India for a new start after the disappointment of the relationship with China from the Merkel years. Merkel completely failed to understand China its history, and Asia and its history. India as the homeland of Buddhism is the source of the spiritual culture of China and Japan, Korea and Vietnam. The intervening period of invasions from north in the 15th to 17th century and British rule and the European early shift to science and industry in the 18th to 20th century has acted as a hazy atmosphere that clouds many perceptions of how Indian, Chinese, and Japanese history has evolved.  For Merkel there was the additional layer of misperceptions from the period growing up the GDR, or Communist East Germany in Soviet influence. This is why Merz completely fit into the Kite festival mood and atmosphere on the banks of the Sabarmati in Ahmedabad and at the Sabarmati Ashram of Gandhi in January 2026. Leyen also of the Christian Democrats could grasp the fact that German philosopher Schlegel translated the Bhagavad Gita from Sanskrit into German soon after Charles Wilkins did this in 1724. People to people ties have great potential to develop between Europe and India now that the engagement is set for the next 20 years at every level by Leyen, Merz and Modi, so that the world is completely transformed in ways that can never be imagined today.  ...

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Khamanei as leader of post revolution Iran set up Iranian supported military organizations in neighboring countries such as in Lebanon (Hezbollah), in Iraq, and in Syria, in Yemen (Houthis), over two decades, but failed to make the gains that Asian nations in that period made by investing entirely every dollar in the homeland economy of Iran. By comparing with Asian nations such as South Korea/Japan/Taiwan/China and now India/Vietnam the entire region from Iran and Afghanistan, Pakistan, Persian Gulf, Egypt can be seen as having lost some vital decades of the early twenty first century, and the scale of the difference is nothing short of staggering.  China after suffering invasion from Britain and then Japan, after civil wars and the Korean War, after going through this for two centuries sought peaceful development in 1990-2025, working with Japan and Britain countries that caused so much suffering yet China sough rapprochement, patiently with humility, with incredible results.  Gandhi also sought rapprochement with Britain through the British Commonwealth and cherished institutions of parliament and science learned and gathered from Britain. This was woefully missing in West Asia. When considering the access to capital in fossil fuel sales, the region of West Asia around Egypt may be seen as having recorded the largest wasted capital in wars in world history in the period 1920 -2047 (with only 20 years left to 2047),  by which time India, China, Europe and the US will have shifted from fossil to solar nuclear and renewables and fossil will be no longer generating revenue flows. Very little time is left as development will be that much harder by 2047 without the capital and result being one of being left behind in this new world that is facing us all.  ...

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Yale's internal report on its failure on price, value and political polarization.  “In its report, the committee calls on Yale to reflect on and take responsibility for our role in the erosion of public trust.” Maurie McInnis, Yale president  wrote- “I accept this judgment fully.” The report cites one fault as tilting admissions in one direction- to the children of the rich and connected. Report has 20 recommendations including removing the tilt to legacies, varsity athletes, children of faculty, staff, donors. This is not the institution or institutions of higher education that promote the social mobility that happened under FDR and throughout the 20th century to create what emerged as a society that made it possible for people of all incomes to rise. This is also what Marco Rubio has made his main complaint in his book -Decades of Decadence How our Spoiled Elites Blew America's Inheritance of Liberty, Security, and Prosperity. How a immigrant family from Cuba was able to raise a child (Rubio) with a decent income from factory work making steel chairs in a Florida factory and give him a good education.  Something Rubio says is no longer possible today. Much of this factory base was shifted to China under the Clinton, Bush and Obama administrations, and no longer exists. In its place is a financial services business that does nothing for workers and ordinary Americans and a business culture that puts costs further and further away and out of reach for education in the nation's universities and colleges. ...

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Greg Ip of the WSJ looks at the result of changes in supply chains away from China, and the new trading relationship with China to 2028. He says the shift to a new global supply chain that diversifies it away from concentration in China is taking place. Would taking the tariffs from 30% to 60% under a new Trump administration be a good idea? Greg Ip thinks it is a bad idea as the change is gradual and is actually taking place. It may have the unintended effect of worsening US China relations essential for global stability when it is coupled with erratic or retaliatory rhetoric. Rhetoric that appears to China that it is being singled out in world trade beyond what are changes that have taken place with Japan in the past in trade. The Biden administration is for good reasons working to restore a balanced yet stable relationship with China. Apple is shifting production of 25% of iPhones to India. Samsung is investing more in Vietnam. The trade deficit with Mexico has reached $151 billion twice as large as in 2017. And $100 billion with Vietnam three times as large as 2017. The US trade deficit with China has dropped from $381 billion to $281 billion in the last 12 months, the Commerce Department reports show. And from $1.1 trillion with the whole world from $1.2 trillion for the last 12 months, 4% of US GDP. Overall the Trump era tariffs of 30% have not reduced the US  trade deficit substantially but has shifted American and European foreign investment to India, Vietnam, Mexico and other countries as well as to the home country. Over time the supply chain would become truly diversified as India makes great strides to become the third largest economy with new infrastructure by 2030. The head emeritus of the European Union Chamber of Commerce in China, Joerg Wuttke, says the pressure to export will be high for China as its economy shifts more to manufacturing from construction. Most Chinese companies are producing more than internal demand in China, and most companies in solar are losing money, in wind turbines and solar all are losing money, Wuttke says. This means China will double down and increase its investments in Mexico, Vietnam, Morocco and other countries so that it can send its products to the US through third countries that do the final export. One expert even says removing a few screws here and some there, find a different supplier, and shipping to a third party for final export that makes it not 100% Chinese content, the pressure for that is high. ...

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GM will invest $3 billion in electric car production in Michigan. The Orion Assembly plant near Detroit  will produce electric pickup trucks- renovation costing $2 billion and bringing 1500 jobs. A new battery cell factory near Lansing would bring $2 billion in investment in 50-50 joint partnership with LG Energy Solutions creating 1200 jobs. Ford is investing in other states, with $11 billion investment in building 3 battery plants- 2 in Kentucky, one in Tennessee near Memphis. Tesla is investing in Austin, Texas. GM says it is revamping existing factories to save $10 billion through 2030. The new GM investments are part of $35 billion in spending on electric cars through 2025.  For the US as a whole these investments change the look of the auto industry from one that in the past put factories in China and Mexico for gas and diesel vehicles. The shift to electric is now being taken as an opportunity by the Biden administration to encourage auto companies to make a new beginning and speedily build the future electric car base in the homeland itself. So that American workers and families come first in the great American tradition. ...

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Eyal Press brings ups the issues of moral injury when physicians work under a system of corporate takeover of medicine. She cites  the situation of Emergency Room's at hospitals where the service is outsourced to private groups working only with profits in mind. Sociologist Paul Starr in his book  The Social Transformation of American Medicine said that about 50 years ago this was not the prevailing practice in America, when physicians earned the public's trust by being "above the market and pure commercialism." The trend now is to form unions such as the one at Stanford University for medical professionals, as this provides a balance when dealing with corporate interests. A 30 year old resident at Stanford is cited, who says the prestige of the profession of medicine does not any more prevent the degradation that is being experienced by workers in other sectors of todays economy. With its excesses in one direction away from the values of the past. Physicians he sees as moving to the category  of "laborers," like other workers in such an economy, that is far removed from what existed in America 50 years ago. ...

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CERA study of 811 oil fields show that depletion rates will be 4.5% worldwide. Schlumberger's estimate is higher at 8%. CERA is on the optimistic side when it sees two Irans making up for one Iran lost. CERA estimates by 2017 33 million barrels a day will be lost from depletion. still it believes production would go up by 59 million barrels a day to 112 barrels a day. How can it say 59 its anoptimistic estimate of new stuff that will come out of the Caspian, Africa, Russia and other places in Asia and upto now unknown places. The reason its hard to estimate depletion is that OPEC and Russia are not sharing the data. CERA's estimate includes also stuff that comes from biofuels and natural gas liquids as half of that 59. As that 59 is 6 times today's Saudi output the estimates are coming under criticism and not widely accepted. IEA estimates demand will go up by 2.3% to 87.8 million barrels a day. But things may change as fuel efficiency becomes a big factor in reducing consumption and as millions of Asians join the world economy from rural areas the impact of more cars may not be as severe with cars that give 60 or so miles per gallon like the Tata Nano and the competitors it creates. And in the west the USA may not be so wasteful as it has been to make up for the increases in Asia of new motorists and industrial uses of energy. Meantime the gains from exploration at today's prices may provide additional output though not by what CERA's overestimate. ...

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The Editorial Board of the Washington Post says people should be concerned about going back to the 70's when New York City struggled with funding and went downhill. The very goal of affordability that Mamdani is trying to achieve could end up being hit because the methods may not work at all. It says free bus service means a transit funding hole, city run stores would hurt privately run stores, and a rent freeze would depress housing supply. Greg Ip in the WSJ compares Austin with NYC with Austin seeing 20% increase in housing supply to NYC 3% in 2020-2024. Austin had a 23% jump in one year in housing prices but it came down and over 4 years rent increases in NYC are 20% in Austin 11%.  It is only that much of the New Yorker educated elites have let the city down so much by not finding solutions to the affordability crisis and not focusing on fixing infrastructure and modernization of the American cities, in the last three decades that this has happened- as a desperate young population turns to giveaways or free services across the board as a solution that never works. A fiscal crisis could happen as in the 1970's creating another vicious cycle says the Washington Post. It says one can only hope that the damage is at the margins. ...

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A ZDF poll in Dec. 2016 shows 64% of the German people support chancellor Merkel's decision to run for fourth term. Of CDU supporters 89% support Merkel. If the election were held today CDU/CSU would win 36%, SPD 21%, Greens 11% and FDP 5%. Schulz is a lot more popular than Sigmar Gabriel in the SPD. About 51% of the German people support Martin Schulz, current head of the European parliament, Gabriel gets only 29%. With SPD supporters Schulz has 64%. Merkel could form a government with Greens and FDP support. See the related article on Greens and CDU positions coming closer.