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Darren Woods of Exxon gives the view of many in business in the U.S. when he says of the Paris climate change accords of 2015- "We need a framework like that to address the threat of climate change." GE's CEO Immelt says a decision to leave the Paris accords "is not going to change one thing we do for energy efficiency, and I think all business is going to feel the same way." Most utilities including AEP see the political changes in government as coming and going, making it important to base their long term strategies on the economics and the general trends worldwide. Only support for the move to leave is coming from some coal companies and the steel industry, a small fraction of the overall industry in the U.S. Not mentioned here is the moves worldwide, by China motivated by health and pollution concerns to shift away from coal after disastrous pollution effects seen in China, and the decades old effort in Germany that has made the country self sufficient in renewable energy through use of solar and wind energy. India has set aggressive targets for renewables energy and is likely to join this long term trend as the economics shift in favor of wind and solar, especially when the health costs are counted in.   ...

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The Europeans led by France and Germany demand stricter regulation and a financial regulatory system that oversees the entire financial system, and oversees all the larger countries. The US in contrast wants to see a lighter regulatory system, and lighter regulation of parts of the financial system like hedge funds. For the USA where the crisis originated, the emphasis is on larger stimulus spending. For the Europeans which have a larger safety net that they would like to see considered as part of their stimulus- and their social arrangement such as reduced hours in Germany to avoid layoffs, and the presence of a large public sector in France that is about 52% of GDP- the situation as they see it does not require breaking the EU's committment to control large deficits. The cultural and historical roots are also different. Germany was hit by hyperinflation in the period between the two wars, and there is thought there that this helped the rise of demagogic leaders and the collapse of democracy there. At that time the issue was war reparations that Germany found difficult to absorb in an economy devastated by the first war, which strained German finances. France and Germany also have no foreclosure crisis, and car sales and consumer spending are not in the deep decline that is seen in the USA. In fact car sales have increased in the two countries with the refunds for scrapping old vehicles, with no such plan in place in the USA. Making there is a credible position on the European side. Germany does see itself hit by the collapse in international trade. Germany and France face the prospect of helping their banking systems deal with the large bad loan situation facing them in Eastern Europe. At the same time Germany and France want to save some firepower for coming to the aid of key parts of the European community like Spain, Greece, and Ireland, which are facing a worsening crisis. In short both sides have credible positions, and some form of accomodation as events unfold may be a better desired outcome than some unified outcome. And little has been said of the position of the other countries in the G20, the emerging countries like Brazil, India, China, Russia, Indonesia, Argentina and others, and the position of the World Bank speaking for the poorest countries. These countries may favor stronger stimulus, and would favor the stricter regulation and supervision of global financial systems favored by the Europeans. This is because they may rightly feel that the messups in the global financial system have stolen their chance, at just the point where they were turning the corner in their efforts at bringing better standards of living to their peoples....

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On April 20, 1996 the story of the merger of Ciba Geigy with Sandoz was the first story in notes made that day for Lyrarc from the WSJ Europe. This was during a trip to Europe. Ciba Geigy and Sandoz had become part of the home medical kits in Asia and Latin America by the 1960's, and their story had to be told to millions of people in these countries bringing Basel, Switzerland, to the world. Sandoz was founded in Basel in 1886 as a chemical company in Basel, Switzerland, and entered pharmaceuticals business in 1900. Ciba Geigy was formed in the 1850's as a chemical company for dyeing silk fabrics and entered the pharmaceuticals business in 1930's. The two companies were merged in December 1996 to form Novartis. Today Sandoz is the generics manufacturing part of Novartis. As prices of generics have declined Novartis CEO Narasimhan is planning to sell or spinoff Sandoz. With this move Novartis will focus solely on innovative drugs, says this report in WSJ. CEO's have also shifted fin the 25 years since the merger of Ciba Geigy and Sandoz from one with family connections to one with a professional background from India.   ...

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The story of how Mr. Rausing of Sweden built Tetra Pak from a small Swedish packaging company. Today 500 millon Tetra Pak containers a day are sold globally, making it possible to store milk, juice for over 6 months. Mr. Rausing says he understood machinery, but not finances, and had no idea how much money he had.  Estimates run to $12 billion. In Europe Tetra Pak containers are known for storing milk, and in the U.S. for fruit juice with straws that puncture a foil seal. They are very popular in India, Latin America and Africa. Teta Pak's innovation was to devise machinery that could fill long tubes of paperboard with fluid and pinch the material into individually sealed containers, with box like shapes for easy storage. Hans Rausing studied economcs, statistics and Russian at Lund University. The Rausing brothers were patient in building up their fathers small company which was unprofitable for more than two decades. Eventually Rausing moved to Britain, to East Sussex in 1982. As a privately held company Tetra Pak was nimble and made long term bets. In 1984 it started China operations with a factory long before other companies when China was just opening up. Rausing invested in Ecolean AB in 2001.  Tetra Pak is considered one of the most important Swedish inventions of all time with a display at the British Science Museum. ...

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Blackberry employees reached a peak of over 17,000 in 2011 as the company continued to hire through 2009-2011. It was about 8000 in 2008 the first year of the financial crisis and recession and doubled in 3 years. The employee count is at 12,700 in 2013. The company was hit hard by the introduction of smartphones by Samsung and Apple. Blackberry now plans huge cuts of about 40% by the end of 2013. This shows how quickly the winds can change in the tech business field where disruptions for existing technology are the norm. A niche in the corporate business field was not sufficient to keep Blackberry from shrinking rapidly as businesses shifted to the new smartphone technology from rivals. Failure to anticipate new technologies can lead to irreversible losses. Blackberry shows the way down can be just as fast as the way up and a lost year or a wrong decision can be the difference between success and irreversible failure.

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During the 8 years of the Clinton administration and the 8 years of the Bush administration China moved from employment of roughly one fourth of its workers by the private enterprises and the rest by state owned enterprises to three fourths now employed by private enterprises and one fourth by state owned enterprises. This completely reverses the situation. See graph by China's National Bureau of Statistics appended here. And during this period both administrations were open to low cost goods from China, encouraging China to accelerate its conversion to an export model, heavily dependent on US and European markets. Now with the US and European markets collapsing, China is increasingly worried about what happens to all the small factories catering to the American market.

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The Italian comedy movie "Quo Vado," became a hit in Italy in 2016, premiering on Jan. 1. It tells the story of a government clerk played by Checco Zalone, whose only aspiration in life is a 9 to 5 government job for life. It lets Italians laugh at the past in a Italy that is changing. Today, the Turin newspaper La Stampa points out from its survey, two of three Italians would take some risk if it means career advancement. Yet public sector job protections remain firmly in place even as the private sector is changing rapidly not just in Italy but in Spain and other parts of the European Union.

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This WSJ editorial says president Obama's inaction, including the smaller step of not putting in place a safe zone in Syria, comes at a price for Liberals. The recent action by Governors in Michigan and other states turning down Syrian refugees, it says is one of the moral consequences of Obama's policies. For Liberals it says a policy of inaction and turning America's back to the needs of ordinary Syrians during the Arab Spring is not neutral, it also has consequences. The consequences for Liberals is the steady stream of refugees to Europe, and the greater intolerance in western societies as the safe havens created by these policies in the Middle East lead to terrorist actions in Europe or the U.S. In short doing little or nothing carries risks for the kind of society liberals want to see. Through developing policy in response to the Bush Administration's policies the Obama administration makes a series of errors of its own that compromise liberal values, including the collapse of the Arab Spring without American and western support, and the creation of a huge refugee crisis in Syria, Iraq, with a spillover to Jordan and Turkey, and further spillover to Europe. Liberals in Europe also face a similiar situation, including Liberals in France....

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Zhou Xiaochuan, is head of the People's Bank of China since 2002. For a long time Zhou has tried to convince party leaders in China to make financial sector changes. The new leadership of Jinping-Li Keqiang has now adopted most of the road map and priorities drawn up by Xiaochuan. The first is bank deposit insurance, which would especially protect small depositors and provide a basis for new private banks to compete with large state owned banks, creating competition in the financial sector. By supporting creation of privately owned banks impetus could be given to loans to the private sector to rebalance the economy away from state owned banks and state owned enterprises. This is a key goal in the road map drawn up by the think tank Development Research Center (DRC) which has the backing of premier Li Keqiang. Competition from new private banks would let banks compete to offer higher rates to depositors, another goal. In a September article for the Communist Party Seeking Truth magazine, Zhou pointed out the pressing need for " supporting private capital to set up private banks and guide them to position themselves in serving small and micro companies." These new companies especially in tech and information technology fields can be the new drivers for growth in the future as the burst of infrastructure building generated growth slows down. The one area Zhou faces resistance is his idea of opening up China to foreign capital inflows and outflows. Here critics,including younger economists, say this protected China in the Asian financial markets crisis of 1997, and would protect China in the event it faces outflows of the type that are happening in India in 2013 after the U.S. Fed's plan to withdraw from its quantitative easing. Xiaochuan sees the flow of foreign capital as another way for capital to flow to new private companies and balance away from the state owned enterprises, and for China's savers to be able to obtain more attractive returns. Zhou says his plan would include the option for China to reintroduce capial controls in a crisis. As China's debt to GDP ratio is set on a trajectory to approach the levels reached in Japan before its banking crisis there is greater awareness from party leaders about the need for prudence. Xiaochuan has worked with party leader Jinping's key economic advisor Liu He for years, and has the support of He and Jinping for introducing deposit insurance as a top priority. President Jinping and Premier Li Keqiang see the need for Xiaochuan's experience and foresight "as a talent who can be counted on," as the sense of importance of changing the economic structure has deepened in 2013. Mandatory retirement for Xiaochuan at 65 was set aside to give him a third five year term, and his road map long ignored by former premier Wen Biao, is now at the top of China's agenda. ...

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The IMF Global Economic Outlook report for 2012-2013 presented at the annual meeting in Oct. 2012, says there are considerable downside risks and a large degree of uncertainty in late 2012. The IMF report lowers estimates for global economic growth in 2013.

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James Warren talks to judges and other experts who are skeptical about the value of deterrance in stopping white collar criminal behaviour. Jim Cramer of the television financial markets show, says that on Wall Street they fear nothing more than jail time. Warren, who says the greatest corruption of legal and illegal kinds is to be found today in the financial sector, is still not convinced. He asks why was this guy Bagojevich elected a second time, when it was clear throughout Chicago and in Springfield that pay-to-play was typical of his behaviour. Is the public some virtuous group that gets hit with these undeserved types or is it that the public gets the politicians it deserves.

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China Investment Corporation, China's sovereign wealth fund is expected to issue upto 28 billion in bonds to help recapitalize China's state owned banks. These banks face the prospect of increasing bad loans as a result of the hectic pace of bank lending in 2009-2010. Loans guaranteed by muncipal governments are estimated at 7.7 trillion yuan, or 17% of overall lending, about 50% of these loans face uncertainty in the event of falling housing prices, and 25% are bad loans. The recent IPO of Agricultural Bank of China raised funds, but the environment for raising money in this way does not look good, as information is spreading that these banks face large loan losses. The bonds from CIC would be picked up by state controlled companies. Yet these state controlled companies are engaging in the real estate speculation, as reported by David Barboza of the New York Times and Peter Coy of Business Week. In a down cycle things could get much worse as a state sovereign fund is selling bonds, state controlled companies would buy these bonds, and state controlled banks are expected to be recapitalized making a complete circle....

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The U.S. Federal Reserve announced on Dec. 13, 2016, that it would increase its benchmark short term interest rate by 0.25 percentage point, to between 0.50% and 0.75%. The increase will also be reflected in business and household borrowing costs. The Fed also announced its intention to make 0.75% percentage point increase in 2017, possibly in 3 quarter percentage point moves. The Fed's forecast is for the fed-funds rate to reach 2.1% at the end of 2018, and 2.9% at the end of 2019. The Fed's policy is based on a sense of strong labor market with unemployment falling, and says it is based on discussion at a 2 day meeting, and "in view of realized and expected labor-market conditions and inflation." This reflects a view that there is now not that much slack in the labor market, that further improvements could trigger higher inflation. Fed forecasts for inflation are for it to increase from 1.5% in 2016 to 1.9% in 2017 and to the target of 2% in 2018. The unemployment rate of 4.6% in 2016 is forecast to go to 4.5% in 2017 and remain at that level till 2019. Economic growth is forecast at a median annual rate of 1.9% in 2016, 2.1% in 2017, only a slight improvement from last forecast in Sept. 2016. Support for chairwoman Yellen's policy decision was unanimous. See the link on views of NYT's Binyamin Applebaum and Neil Irwin on how Fed rate policy and economic growth under the Trump administration is likely to play out, and Ian Talley's report on impact on exports with a stronger dollar in WSJ. These views also are in line with the Fed's forecasts and policy decision as they reflect the concerns of the Fed about inflation, and also reflect the Fed's view that growth will be close to 2% in 2017-2019, and not the 3-4% stated by Trump and Treasury Secretary Mnuchin. Fed rate policies to keep inflation at about 2% tend to counter stimulus spending by the Trump administration and effect of tax cuts. The size of the stimulus and the tax cuts are also likely to be much smaller than stated because of Republican concerns about the deficit in the U.S. Congress, according to these views. The stronger dollar also has the paradoxical effect of making trade gains more difficult while increasing trade friction in tougher bargaining supported by Trump, making the higher growth targets harder to reach.   ...

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The average of vehicles on the road reached a record of 11.1 years in 2011, according to R.L. Polk research company. Using the average of 15,000 miles driven a year used by the EPA for cost calculation on fuel economy labels, shows that car are being driven for much longer nowadays, over 150,000 miles. In the 1960's and 1970's the average was closer to 100,000 miles. Because of the EPA mandated fuel emissions standards and technological advances the newer cars in 2012 have better life than the older cars in the 1970's. Toyota's, Honda's and Volvo's frequently get 150,000 or 200,000 miles and still have some usage left for example. In addition the tighter fuel efficiency standards of the Obama administration and technological advances now underway are likely to bring a new generation of cars that provide another level of improved performance.

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Pessimism about the pace of democratization in China with the continued dominance of the Communist party in the business and economc structures of the country. The interrelationships of the party with state owned companies and the role of its 80 million members in running all aspects of life in China. Experts in China say the 18th party Conress showed no signs of change in the party's control and no sign of experimentation to allow for change comng from within the system so that China could establish a constitutional democracy with the rule of law. Experts in China say the new leaders Jinping and Keqiang may not be able to make changes even if they wanted to, because of the party's control and the earlier presidents and prime ministers from the last two decades who still retain a strong influence on the direction of the country.

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The experience of Nestle and other consumer product companies selling at low price points in Indonesia and other developing countries.