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Michelin has come up with a tire that improves braking distance and reduces rolling resistance on the tire. This "green" tire is now on the Peugeot 308 model car. It brakes 10 feet shorter than the previous generation tire and cuts carbondioxide emissions by 4 grams per kilometer, equal to a reduction of one metric ton of carbon dioxide during the life of the car. Michelin charges 10% more for this tire. All this is happening while tiremakers in the US which hasn't signed the Kyoto Protocol like the Europeans have, are trying to dissuade Congress and the states from passing new legislation or adding to the current energy legislation to mandate fuel efficiency standards for tires. One of the US tiremakers arguments is that it would create safety problems by increasing braking distance. Which can't be very convincing if Michelin already has the technology. The Japanese tiremakers like Bridgestone also are trying to develop new technologies to come up with better more fuel efficient tires. As this happens will this put US tiremakers behind and give a competitive advantage to the European and Japanese tiremakers? Note that a study in 2006 by the National Academy of Sciences in the USA estimated that about 2 billion gallons of gasoline and diesel fuel could be saved each year in the US by reducing rolling resistance of the tires by 10%. This was estimated to be the equivalent of taking 4 million cars and light trucks off the road. Other studies on the cost side show that the increase in production costs in Europe for reducing rolling resistance of tires comes to about 20 to 30 euros. Add to the 2 billion gallons of gasoline saved in the US the amount saved in Europe and Asia and you have a substantial saving. Add increases in air conditioning efficiency, increases in fuel efficiency of automobiles, and you have significant reductions in demand over the next 5 years and even more over next 10 years. How will this affect gasoline demand and prices? ...

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This WSJ editorial says the recent agreement at the Caterpillar Joliet plant in llinois is not about leverage but about increasing U.S. manufacturing competitiveness. As U.S. competitivness improves and the economy grows wages will increase. It does little service to management, labor and the U.S. economy for above market wage rates to lead to loss of manufacturing competitiveness as happened in the U.S. automobile industry, resulting in closing of plants.

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James Pressley reviews Simon Johnson and James Kwak's new book - "13 Bankers: The Wall Street Takeover and the Next Financial Meltdown. " He suggests reading the first and last chapter for what the authors recommend, limiting banks to no more than 4% of GDP in assets or $570 billion maximum, and investment banks to 2% of GDP or $285 billion. Pressley agrees that incremental steps are not going to change the situation. And the authors have thought this thing through, with Simon Johnson, a former chief economist at the IMF and writer of the Economix columns in the New York Times on the current crisis in Greece, Portugal and Spain. Some of their analysis on that crisis has been borne out by developments, as Greece lurched towards default with the slow response of Germany enlarging the dimensions of the crisis, and requiring a larger bailout for Greece of $160 billion in late April.

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The strange story of how computer whiz kids figured out a way to get trains running again in Poland after being rebuilt, when pieces of software instructions buried deep inside tons of code had the trains stall in some situations.

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Banking regulation in the U.S. after the Dodd-Frank legislation differs from banking regulation rules proposed by the Independent Commission on Banking in Britain. Britain has a much bigger financial sector relative to the size of its economy than the U.S., posing larger systemic risks. The commission in Britain is proposing structural changes that would separate investment banking from deposit taking at banks. Banks would have separate balance sheets for these two activities- and operate them as separate subsidiaries- even though they are part of one holding company. This means it would be harder to raise money cheaply for risktaking in investment banking. Under the Volcker Rule in the U.S., banks investment banking and deposit taking would not be separated in a structural separation- there would still be one balance sheet- only banks ability to trade with their own capital and run hedge funds would be constrained. Some banks have spun off trading operations in the U.S. and the the rules banks have to follow have not been clearly defined. Too big to fail is still a problem under current American regulation, though its effects are mitigated to some extent. As one expert puts it, its hard to regulate the banks because too much money is involved and the banks have the money and the lawyers to prevent or dilute new rules. The argument made by the banks in Britain is that universal international banking provides a public benefit and efficiencies. But John Vickers, the former chief economist of the Bank of England, and chairman of the Independent Commission on Banking, has a different view. He said recently, "it seems quite hard to identify and quantify real efficiencies as distinct from purely private gains."...

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The critical exchange between oil companies and auto companies about who is at fault for the energy crisis. In one ad that ran last year, Chevron argued that "if automakers improved fuel economy across the board by just 5 mpg, we'd save over 22 billion gallons of gasoline a year." The criticism is also sparked by the high price of oil which is hurting sales of pickups and large SUV's that the automakers depend on for profits. One ad by Exxon Mobil shows a cartoon of a large SUV filling up at a gas station and hints that the problem rests with the automakers who have failed to build the kind of highly fuel efficient vehicles that are needed. The ad says that the average fuel economy of new U.S. autos has not gone up much in two decades, the small gains have been offset by the increases in the size and weight of vehicles.

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Gao Xiqing, vice chairman, president of China Investment Corporation, told a panel discussion during meetings of the International Monetary Fund, on September 24, 2011, China cannot be expected to provide solutions to the eurozone debt crisis. Xiqing said: "We're not saviors. We have to save ourselves." He added that CIC would consider buying bonds of troubled eurozone countries -"if it has a risk profile that fits into our allocation, but don't expect us to buy more than our risk appetite would take." And the head of China's central bank, Zhou Xiaochuan, told the panel that China cannot raise its growth rate because of inflation and other problems from unsustainable growth.

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Declining manufacturing wages in the U.S. and the return of manufacturing jobs. Indiana's experience with new manufacturing plants.

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Martin Fedstein has a new idea for solution to the mortgage and credit crisis. He has a Loan Substitution Program and this is how it works. The Government would loan mortgage holders 20% of their current mortgage loan, with a 15 year payback period, and an adjustable interest rate based on what the government pays on two-year Treasury debt (now just 1.6%).The loan proceeds would go to immediately reduce the borrower's primary mortgage, cutting interest and principal payments by 20%. Participation in the program would be voluntaryand participants could prepay the government loan at any time. The basic idea is to lower the Loan to Value Ratios and help prevent foreclosures and defaults so that house prices which may have another 10-15% to fall, do not fall steeply and overshoot as millions of foreclosures take place across the country in coming months. Legislation would require that the government must be repaid before all creditors except the mortgage lenders, and that the debt to the government would have to be paid, even if the homeowner defaults on a mortgage. The critical thing this would accomplish is that homeowners would pay less in total interest. In exchange for that reduction in that interest, they would decrease the amount of the debt they can escape by defaulting on their mortgage....

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This report in the WSJ says Reince Preibus, Republican National Committee chairman, has told party officials on Oct. 8, 2016, to redirect party funds away from nominee Trump to down-ballot candidates. This means the Republican party will try to get Clinton supporters to vote who are likely to vote for candidates like Rubio in Florida and Portman in Ohio. Republican Portman has joined Senator McCain in withdrawing support for Trump. This is the result of a video showing Trump making lewd comments about women in a conversation with Billy Bush of NBC. Speaker of the House of Representatives, Paul Ryan, immediately disinvited Trump from a rally in Wisconsin and withdrew his support leading to a big outflow of support from Congressman and Republican leaders. A former chairman of the Republican party in California describes this as the biggest crisis for Republicans since Watergate. The Republican party now stops its mail program to voters that supported Trump and redirects it to down-ballot candidates. It also comes as the Republican party funds and party infrastructure are a necessary and vital  part of any Republican nominee's effort to get elected. The Republican strategy may now be to try and preserve its control of Congress, as a loss in Wisconsin, Illinois or Missouri, could give the Democrats control of the Senate and other losses reduce its House majority. This appears to be the backup strategy of Paul Ryan as Speaker, and the leading Republican after his overwhelming win in his Senate seat against a Trump supported candidate. ...

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Karen Elliott House, who has reported extensively from Saudi Arabia for a long time, says the Saudi succession to a younger generation is established, yet the different strains on the fabric of Saudi society continue. The parts of the society that are Islamic fundamentalist see the monarchy as too worldly compared to a militant Islamic State, and the western educated class sees the monarchy and religious clerics as not making enough room for modern ideas, for women and a free press. Inside the kingdom the very dichotomy that allowed the Saudi state to flourish from its beginnings in the feudal period of the late eighteenth century with Wahhabbi given the role of religious authority in exchange for guaranteeing political legitimacy of the monarchy now creates tensions in a modern state. Outside the kingdom Iran is seen as a rival state in the region, and the Saudi monarchy is seeking the support of the U.S. to fight Islamic State. Ibn Saud, described as a skilled statesman by John Foster Dulles, carefully strengthened the monarchy's role in the region for the first half of the twentieth century in his dealings with Britain and the U.S., and successors including King Abdullah continued his policies. Saudi Arabia now is in a new period of radicalism, and conflicts in the region, with an aging leadership in transition, a house divided against itself, as Karen Elliott House who as observed the kingdom for so long points out....

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WSJ Editorial Board looks at the reserves being set aside by banks and oil companies against losses in Russia as the situation in Ukraine worsens in April 2022, and has questions for CEO's that have not made preparations for a similar situation arising in China. Too much is being done on Russia "on the fly." For China 83% of American company CEO's have made no plans for supply chain action for China even after the pandemic hit and after the supply chain chaos from zero covid policies. JPMorgan, Goldman Sachs, and Citigroup have set aside $3.36 billion for Russia, according to Reuters. Shell says it may take charges of $5 billion to write down Russian assets. Exxon will take a similar charge. WSJ Editorial Board says the situation in China with respect to territorial claims on Taiwan are similar, and asks what preparation is being done for China risks. WSJ's Editorial Board says American CEO's should be calculating their supply chain and investment risk now in the event that there is a conflict in Asia. Some of this foreign investment has shifted it says as foreign direct investment as a share of China's GDP is down to 1.2% in 2020 from as high as 4.6% in 2005, according to the World Bank. Much remains to be done. Yet in 2021 despite the supply chain chaos from China's zero covid policies and rising geopolitical plus trade tensions, 83% of American companies operating in China were not considering or were not in the process of relocating their manufacturing or sourcing out of China, according to a recent American Chamber of Commerce in China business-climate survey. A figure that is the same as in 2019, a sign of complacency says the WSJ, one that could be costly, and with Russian write downs today a warning to executives that they should start preparing now for the danger that lies ahead. ...

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Cathay Pacific incurred a $979 million loss on hedging contracts as oil prices went down sharply. Southwest Airlines also had large losses and Delta had $200 million loss to wind down hedging contracts.

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Germany's Foreign Ministry warned in a cabinet note that investment by China's COSCO in Hamburg port terminal "disproportionately expands China's influence on German and European transport infrastructure as well as Germany's dependence on China." Germany handed over a 25% stake in the Hamburg port terminal to China's COSCO shipping with the decision approved by chancellor Scholz. Several government ministries in Germany including the Economy ministry headed by Habeck and the Foreign Ministry have opposed the bid which is seen as having geopolitical aspects as Germany has no stakes in Chinese ports. "On behalf of the Foreign Ministry, I point out the considerable risks that arise when elements of Germany's transport infrastructure are influenced and controlled by China- while China itself does not allow Germany to participate in Chinese ports," said the note from the Foreign Ministry brought forward by Anna Luhrmann, Minister of State for Europe.  China is seen by Germany and NATO as posing security challenges. "In this respect the acquisition of the container terminal does not only have an economic aspect, but also a geopolitical aspect."  ...

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Softbank the epitome or synonym of waste on a huge scale of capital allocation for the last 2 decades in massively distorted capital markets when healthcare, childcare, manufacturing technologies and infrastructure is suffering from lack of funding, is hit with a loss of $23 billion for the second quarter which was one and half times the loss of the first quarter. As the WSJ reports Softbank and Masayoshi Sen was delirious in his own words during the tech booms of the last 20 years and its founder talked about bigger and bigger capital allocation even as productivity of capital declined rapidly. This happened astonishingly with little restraint in capital markets shown by participants even as healthcare in the ten years before the pandemic was not adequately funded, and education, infrastructure, manufacturing technologies were neglected which would have provided better returns on capital and served the interests of the American people and the world in a way that would have been said was well done had this been done. This went on astonishingly right into the pandemic period. Investments of about $50 billion were made in tech startup companies in 2021.  ...

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The point at which pensions begin and retirement begins is thought of normally as 65 years. This is changing. Experts on ageing at Britain's ONS, Office of National Statistics say 70 years is replacing 65 years as the age at which people can work and contribute to society, working later in their careers and doing voluntary work. This would help ease pressure on pension system financing and cost of social service to elders. Because of rising longevity and improvements in healthcare, diet and lifestyles people age 70 had characteristics of people age 65 in 1997, say ONS experts. ONS looks at a new way to measure ageing. Do not use chronological years from birth, work backwards from remaining life expectancy and operate on the basis of 15 years as the marker for old age. Under this method start of old age is 70 for men and 72 for women. As people over 65 years is approaching a fourth of the population this fresh thinking gives more room for pension system sustainability, and helping engage people at work for longer more productive lives. Both for the economy and personally for the individual. ...

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Northwestern University has its federal funding  frozen. $790 million federal funds are frozen by the US government for toleration of anti-semitism on campus in 2024 and 2025. Northwestern cut a deal with protesters putting out anti-semitic slogans following an encampment, that was followed by other universities, says this WSJ report. This is not in the tradition of US universities and the Nation founded with the Christian faith that includes the Catholic, Protestant and Jewish faiths as one indivisible faith. Northwestern and others fail when new drug research leads to discoveries funded by federal dollars. Yet the universities get their portion of the return from the pharmaceutical companies, which then charge the average public exorbitant prices, making the universities complicit in the huge burdens placed on the American people. Similar to a Catholic Church  working with the nobles in feudal times- placing ever higher burdens on ordinary working people. Another issue is that universities are investing in new buildings, raising their prices, and operating as if they are unaccountable to the people, as young American men are being pushed away by high prices and foreign students are taking their places.   ...

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Steve Bannon, president Trump's former strategist in the first 6 months of his presidency and during the election campaign makes a rupture with Trump after astonishing revelations in a new book. Michael Wolff in his new book, "FIre and Fury: Inside the Trump White House," attributes statements to Mr. Bannon that say the president's son Donald Trump Jr., Jared Kushner, his son-in-law, and Paul Manafort, the campaign chairman at the time, had acted in a "treasonous" way by meeting with Russians during a June 2016 meeting at Trump Tower. According to Mr. Wolff's account in the book Bannon also predicted that the special counsel Mueller investigation would eventually focus on money laundering. This account of the Wolff book is from the New York Times, which released excerpts from the book after the Guardian first put out this story. It quotes from an email from an unnamed White House aide, describing the Trump operations in the White House as the worst possible- that the president refused to read much, not even one page memos, getting up often because he is bored through meetings. And using words that reflected it says Mr. Gary Cohn's view that much of the operation was "stupid," "dumb," or even idiotic. Wolff is a columnist and author not particularly known for meticulous reporting says the New York Times.    ...

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 Donald trumps economic plan would worsen the country's economy through extravagant borrowing and lower economic growth in the long run. Because it lowers taxes by 15 percent without any paired cuts Trump's plan would worsen the deficit, so that large debt would hurt the economy in the long run. Clinton's plan would increase taxes by 4  percent largely on high incomes so as not to hurt consumer spending, with paired spending to help lower income households. Because Trump's tax cuts benefits go disproportionately to higher incomes the benefits in terms of consumer spending are slight or insignificant. In the current state of weak income gains of the last ten years it would take some time for the middle and working class to recover. Clinton's plan carefully nudges that recovery forward without aggravating the debt, so that as incomes and net worth recovers across broad parts of the population, the U.S. is poised to go forward with strong growth as in the postwar years. Trump's plan frontloads tax benefits to higher incomes at the expense of worsening debt and enlarging future debt. In the process it worsens income disparities already aggravated by the 2008 financial crisis. Reducing the chances of a broad based recovery for all parts of the population, necessary for a strong recovery.                       ...

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Simon Nixon says British prime minister, Cameron, has antagonized European leaders by making demands to protect Britain's financial industry. Ironically this happens as Britain was arguing for stricter financial regulation. Britain has been isolated and risks remaining on the sidelines from now on. Nixon says this starts a process that could lead to Britain withdrawing from the European Union.

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Bernie Sanders tells his supporters at the Democratic National Convention in Philadelphia that "immediately right now, we have got to defeat Donald Trump, and we have got to elect Hillary Clinton and Tim Kaine." He says this campaign was not about just electing a president but about transforming the country. And for this he was planning to back about 100 candidates with similiar thinking across the U.S. He called on supporters to continue the campaign for social, economic, racial and environmental justice. Voters for Sanders were offended by the information shown in DNC email leaks of the bias against Sanders shown by DNC chair Debbie Wasserman Schultz, who has since resigned.

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The cost will increase the longer the effort for cleanup of PFAS chemicals used in military bases is delayed and could also lead to increased contamination of water in surrounding areas. In 2025 the cost is about $31 billion for 50 US military installations says The Guardian.  The Environmental Working Group policy analysis group senior analyst Jared Hayes is cited in The Guardian- "The DoD is facing a ticking cleanup time bomb as funding falls dramatically behind cleanup costs.” “The DoD has an obligation to its service members, the families living on bases, and the surrounding communities that have already been contaminated, so they need to clean up their mess." The adjoining article in Le Monde shows the awareness being created by Le Monde and its partners and The Forever Pollution Project in Europe about PFAS cleanup in France, and in Europe. ...