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Haberman and Thrush of the NYT provide an account of what happened at the White House when U.S. president Trump met privately with Chuck Schumer and Nancy Pelosi to work out a deal on the Dreamers, or Deferred Action for Childhood Arrivals, called DACA, that under president Obama allowed 800,000 young immigrants to stay in the country. President Trump had earlier said he would reverse DACA. DACA was setup under an executive order by president Obama in 2012 to allow immigrant children brought in under the age of 16 to stay in the country, with maximum age 30. In 2014 a second executive order by president Obama expanded this to include children under the age of 18, with no maximum age. Both executive orders were opposed by Republicans. In the meeting Chuck Schumer answered Trump's question on delaying or changing Trump's mind on DACA, "what's in it for me?"  Schumer said Democrats would work with Trump on new legislation on border security, but not on funding for a border wall. Trump agreed to work on a deal, including no deportations for a six month period. After different back and forth in the media, typical of the politics in immigration issues, the president says he is ready to work out a deal on DACA, if the Democrats work with him on toughening border security. Both Democrats and Republicans in Congress now agree that steps have to be taken on border security in stages. ...

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The revised AIG rescue plan helps banks recover some of their losses on collateralized debt obligations and helps AIG by cancelling the credit default swaps it wrote on these CDO's, and thus helps shore up the financial system. This is what happened. During the boom period banks bought protection from the insurer AIG on securities backed by now-troubled mortgage assets. These securities are called CDO's or collateralized debt obligations backed by subprime mortgage bonds, commercial mortgage loans and other assets. Banks in the US, and Europe bought credit default swaps on these securities from AIG, and AIG promises to compensate them if the securites default. Now with the housing and the credit crisis the values of these CDO's plummet, banks go to AIG and AIG has to provide them collateral to help cover these losses of the banks. AIG ends up giving $35 billion in collateral to the banks including Goldman, Merrill, UBS, Deutsche Bank and others. The continuing fall in value of the CDO's meant AIG had to give more and more collateral to the banks leaving AIG severly exposed, which is along with other problems on its accounting books when the government stepped in in early October to bailout AIG with loans, with interest rates that became punitive for AIG leaving it in a struggling condition. What does the new revised plan do. It eases conditions on the interest rates and the New York Fed puts $30 billion of its money to buy the multisector CDO's at market prices averaging 50 cents to the dollar and AIG provides an additional $5 billion. With than one action banks get to recover their $35 billion and AIG gets to cancell its credit default swaps on these CDO's, in effect freeing AIG from thses swaps that were creating a hemorrhaging effect as it had to keep posting more and more collateral to banks, and banks got to recover the money on CDO's. In effect helping shore up the financial system. There are other problems at AIG but this was the biggest and most draining, and it helps AIG protect its other businesses, and banks get to put this dismal chapter behind them. ...

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China's housing developers are increasing the issuance of high yield bonds in 2013. European and American companies have issued $120 billion in junk bonds for Jan-March 2013. Chinese companies issued $8 billion to overseas investors for Jan-March 2013, increasing from $2.3 billion in junk bonds issued in the same period for 2012, according to Dealogic. Yields are dropping. In the U.S. yields have dropped from an historical level of 10% to 6% on junk bonds. The same pattern is seen for China's junk bonds. Yields for bonds issued by Chinese housing developers have dropped from 11-12% to 7-8%. Investors are taking on higher risks on these bonds and the current yields do not reflect higher risk, as the bonds are issued from overseas subsidiaries for foreign investors. As with the bankruptcy of Suntech Power, foreign bondholders could lose everything. These junk bonds are not backed by the company assets in mainland China, and local banks and creditors in China come first in getting their money back. ...

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Toyota's sales in Sepember fall 32% and Hondas sales fall by 24% showing how even the Japanese makers are hurting with sales of Corollas and Camrys down. Nissan's down by 37%. General Motors down by 16% but only because of fleet sales. And Ford down 34%. According to AutoNation CEO Jckson whereas in 2007 90% of auto loans were approved for buyers with top credit ratings now only 60% are getting approved.

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Naoto Kan becomes Japan's new Prime Minister after the resignation of Hatoyama and his entire cabinet. Kan was a civil rights activist and was actively involved at the grass roots level. He is also known to have tried to control the bureaucrats and civil servants who have tended to be secretive and distanced from public opinion. As Health Minister in the mid 1990's, he exposed his own ministry for using blood tainted with HIV. He was deputy prime minister in the Hatoyama administration which lasted only 8 months.

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Thomas Kleine-Brockhoff, a senior transatlantic fellow at the German Marshall Fund of the United States, leads the EuroFuture Project. Here he offers his ideas of the dilemmas facing German leaders in agreeing to letting the European Central Bank take a larger role of supporting the bonds of Italy, Portugal and Spain. He says Germans are seeing a contradiction between European demands for German leadership and not wanting to be led by Germany or perceiving Germany as a hegemon. Brockhoff says Germans have never in the postwar period wanted to or learned to exercize continental leadership. He recounts the postwar period when Germans were content with the deutsche mark, and limited their expression of national pride to the deutsche mark. Giving up the deutsche mark was part of the deal for reunification of the two Germanys, a surrender of economic sovereignty for the sake of a larger integration into Europe. He says that even though the arguments are framed in terms of orthodox economics, economic nationalists who never really wanted to give up the deutsche mark are the core of the opposition to the common issue of eurozone bonds. The German position is to go back to the framework of principles for economic and monetary union and tighten the rules for spending and taxes, something that is good in the long run, but does not work in the short run with shrinking economies from austerity programs and nervous markets. The Merkel government's resolution of this crisis is to set new fiscal rules for the eurozone, and either move in the direction of letting the ECB play a larger role, or support such a move. What is not clear is whether the government will survive the next election taking on this leadership role in Europe, or a revolt in the Christian Democratic party....

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Feldstein says GDP growth was smaller than the 1.8% that was reported for the 1st quarter of 2011, because two thirds of that 1.8% went into business inventories and not for sales to consumers or final customers. This means final sales growth at an annual rate of 0.6% and actual quarterly increase of 0.15%. With mostly inventory investment and not much response from the consumer he says business cannot be persuaded to hire and invest. A closer look at the numbers shows the growth was in February and March, with declines in April for real wages, durable goods orders and manufacturing production, existing home sales, and in real per capita disposable incomes. Feldstein sees the Obama administration's failure in several areas. The stimulus could not make up in size and structure for the loss of annual consumer spending of $500 billion and loss in housing construction of $200 billion. At $300 billion in 2009 and $400 billion in 2010 it was not enough to fill the huge gap presented by the financial crisis. President Obama allowed the Democratic leadership in Congress to put together a package that while adding to the deficit added less than a dollar to GDP for every dollar of stimulus. The stimulus lacked punch for economic growth as it consisted more of transfers to state and local governments, transfers to individuals, temporary tax cuts for low income people etc. The lack of a plan to reduce the deficit by creating higher uncertainty about future tax rates and interest rates has hurt the economy. The President's health legislation with the cost of $1 trillion over 10 years diverted much needed time, attention and bipartisan goodwill from the core issues of unemployment and the deficit. The Obama administration also did not tackle the housing issue as suggested by Feldstein with specific proposals in the first year of the Obama administration, with very little done to reduce the millions of foreclosures that have kept housing in a prolonged slump. ...

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Ian Jack asks if Johnson's Conservative party can deliver for Britain, can deliver for women, can deliver for climate change, can deliver for health, education and infrastructure, can deliver dignity for workers, deliver for families and children, by looking at the roots of one of its leaders. He looks at Jacob-Rees Mogg and how he sees himself in the bewildering mix of English social classes in St Pancras neighborhood of London where he comes from.

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Economists are the cause of the problem with text book theories that have no connection with realities on the ground, misleading th American people about what is good for them. Today's realities are multifaceted with many dimensions, economists knowledge is so specialized and only a small part of this reality changing on the ground and changing rapidly. Simply stated the US could be displaced as world power, if it does not act. The loss of its middle class is only the beginning, things could end up badly listening to economists and their textbook theories.

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Honda with its popular Civic and focus on small cars is emerging a winner as it increases market share and sales. During the first half of 2008 Honda sold 100,0000 more passenger cars than Ford. A new plant in Greensburg, Indiana will begin production in September making the Civic compact. By 2009 that plant could produce 200,000 Civics.