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Several factors make it likely that oil prices will remain low for an extended period of time into 2016 and beyond. As Ailworth points out nobody is blinking. The Saudis plan no change to their high production. U.S. oil producers in the Gulf of Mexico have already made investments for deep sea drilling wells following the end of the moratorium on drilling in the Gulf. Many of these wells are producing at very low marginal cost as most of the investments have already been made. It makes economic sense to produce even in a low price environment, according to Andarko. Shell continues to invest in the deep waters of the Gulf. Its production is up 10% to 250,000 barrels a day. American shale oil drillers have not cut back as much as expected, partly because many companies with large debts need the cash flow to pay interest on debt. And some of the 1200 wells that were drilled but left untapped may also be brought on stream to slow production declines. As a result the overall production of American crude, according to monthly federal information, has declined by about 3% to 9.3 million barrels from the peak reached in April 2015. This helps the U.S., Europe, China and India, at a time when their economies are experiencing different problems. It hurts Russia, Venezuela, Nigeria, and Iran. Russia is coping as its exporters convert dollars into rubles after the sharp depreciation in the ruble, and helps local industry including steel producers, as well as wheat exports. Venezuela's economy is the worst hit. And Iran now has to produce at high levels in 2016 to improve its economy following the lifting of sanctions....

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Palin as someone who could energize McCain's conservative base. How it may work both ways and mix things up at least, making this election even more uncertain in different ways. Biden was a drawback on Obama's calls for Change you can Believe In, but gave him a respite on the question of foreign policy experience and experience in general. Now Palin is a drawback on the McCain experience argument but gives him a respite on the age (he is 72) argument and having been around so long whereas his opponent stood for Change, because Palin is bringing Change to Alaskan politics and has shown courage in facing the Republican older politicians like Murkowski. So who knows how this thing will work out as McCain himself is forthright and acts like an outsider who uses his independent judgement on matters.

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Older and young Latinos in Arizona think differently. The demographics and attitudes are changing. Younger Latinos in Arizona are considering both parties and see the issues of cost of living and gender similar to other voters. Older Latinos think more about cultural affinities. Part of this change is that two thirds of Latinos in Arizona were born in the US and 40% of Latino immigrants are naturalized citizens. Economic issues and opportunities are playing a bigger part in how they see the world.

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Differences over Gaza policy in the ruling coalition in Israel lead to the reisignation of the defense minister Mr. Lieberman. The result could be early elections which Mr. Netanyahu called "irresponsible" considering the situation in Gaza and Israeli security.

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The ruling party LDP's defense committee has decided Japan needs to strike North Korean missiles on the ground. There is a growing consensus on this. Another consensus is developing over the issue of protecting the Senkaku islands adminstered by Japan and claimed by China. 

Earlier in 2020 T12 missiles with 100 kilometres range were deployed on Miyako island between Kyushu and Taiwan. Now these missiles range will be increased to 300 kilometres to reach the Senkaku islands. China has sent patrol planes and ships near the Senkaku islands. Other cruise missile range is planned for 1000 kilometres as Japan Self Defense Forces expand their capabilities to take on more of the responsibility for defending the Japanese islands. In alliance with India and Australia this capability is being expanded to the entire Indian Ocean region to counter an expansionist China.

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Lee Zeldin at EPA and effort to cleanup PFAS Forever Chemicals 2025. Action taken the EPA under Zeldin to hold companies responsible to do the cleanup. Zeldin in his term at US Congress helped pass legislation to do this.

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How much is the drop in sales of light trucks, including truck based SUV's? Acttually not much so far, title is misleading! 2004- 55.7% of total vehicle sales 2005- 54.9% of total vehicle sales 2006 1st quarter- 53.8 % of total vehicle sales source: Autodata, NYT cite For GM in April 2006 situation according to GM figures Overall Light Truck sales up 1.5% Escalade up 127% Tahoe up 30% Overall GM down 7.3% in all vehicle sales in April source Ward's AutoInfo Bank But the mix weighted toward the Escalade, Tahoe, and new SUV's which are non-incentive and priced to meet demand, which mean higher profits to make up for lost volume in cars. This is occurring in the middle of bigger changes, and as GM moves to introduction of more fuel efficient cars with better quality and appeal to younger demographics. GM is restructuring to transform itself into a global company with growing Asian sales and shifting volumes overseas. It is shifting employee and capital base to more countries overseas to create new opportunities and make GM a new and different company, a global company. Incentives pay part of the gas price for buyers, and more fuel efficient SUV's also chip in to pay gas costs. Americans are not out to get off the SUV's just yet, as fuel effficiency standards go up.The investments oil companies are making are expected to provide a payoff in increased production by 2008-2009, and the new oil policy of Saudi Arabia kicks in (see Naimi at CSIS 2006 meeting). The situation eases up for families accustomed to carrying kids around or hauling stuff around. See also links to Tradin Frenzy (Mouawad, NYT, 4/29/06) speculators in oil markets cause 10-20% of price rise, could lead to drops later after ethanol part of spike eases, and if global demand drops with economies cooling off a bit. ...

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About 200 coal plants closed in the U.S. since 2010. Another 40 will close in the years ahead. No new coal plants are being built. At the most the new EPA roll back of emissions rules will stave off closure for a bit longer for a few coal plants, reports Brad Plummer in NYT.

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At the New Year's eve service on National Day of Prayer January 1, 1942 president Franklin Roosevelt and Winston Churchill worshipped together at Christchurch Episcopal in Alexandria, Virginia. The Reverend Wells said on this day 82 years ago. The idea that we could not prevail with military strength alone but with deep humility depend on God's help was one of the great strengths of Franklin Roosevelt. That it says much to the present, to the divisions of the present and lack of humility cannot be overstated.

"Our president has appointed this first day of 1942 as a Day of Prayer, for asking forgiveness for our shortcomings of the past, power for the present task of achieving victory... but spiritually we are in bad shape. We must have a deep spiritual unity that will make us ready to sacrifice our material possessions and even life itself for the moral principles for which this war is being fought." 

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Greg Ip says in WSJ that China turned to lender after 2010 and financed loans for development, for roads, highways and infrastructure in Asia and Africa. Between 1970 and 1990 the World Bank was extensively involved in infrastructure projects, by 1990 it retreated from this role and China after 2010 was lending at double the rate of the World Bank for it Belt and Road Initiative programs. At G20 New Delhi, India, Biden and Modi, leaders of Brazil, and South Africa, agreed on advancing the World Bank's loan capacity by $100 billion for next decade under leadership of Ajay Banga. Thjis is happening at the meeting of finance leaders in Marrakech, Morrocco in 2023. The IMF and the World Bank were set up after World War II under the agreements signed at Bretton Woods, New Hampshire, as postwar finance system. The IMF was to serve as lender to countries facing short term finance crises, and the World Bank to finance development in poor countries such as India, Indonesia and after 1990 China. The largest borrowers from the World Bank were India, China and Indonesia. India is at $37 billion loans outstanding in 2021, China at about $21 billion after repaying much of its loans. By 2010 Brazil, Mexico, China and India had shifted to international capital markets for development support. Total outstanding debt of World Bank is $460 billion in 2021. ...

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Angela Rayner, Secretary of Housing and deputy prime minister, removed the "beauty" requirement that was unnecessary and blocking new housing development in Britain. 62% of Britons support the aggressive housebuilding program of Labour government, 9% don't know and only 29% are opposed. Britain has a crisis in housing with a shortage of 4 million homes and 20% price increases in housing. Rayner's response on the change in the wording of housing requirements set by the government-  "This is ridiculous. Beautiful is so subjective. Actually, within the planning framework, there is a lot of specifications about in keeping with the local [environment]. Beauty is in the eye of the beholder anyway. It’s actually about [being] in keeping with the area, it’s about protecting nature and having access to nature, it’s about making sure that buildings are safe, they’re warm, they’re sustainable. So there’s a number of guidelines and rules that a developer has to follow. Beautiful? Beautiful means nothing really, it means one thing to one person and another thing to another." ...

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The new probe into 1MDB after the election of Mr. Mahathir will investigate the corruption scandal involving former premier Najib. It is also expected to involve leading conglomerates in Malaysia. 

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Germany's export oriented economy and its export oriented companies are struggling in 2021 with broken supply chains and high energy prices. This report in the WSJ looks at how Germany needs to rebuild its economy in a different way. German industrial output was 9% below its 2015 level in August, compared to 2% for the eurozone as a whole, according to EU's statistics agency. Italy's growth was 5% over the same period. There is a redirection underway to bring more production back home after years of outsourcing and outshoring. Other changes taking place are the policies being put in place for net zero emissions by 2050, and the targets for 2030 that would make this possible. This also changes prospects for Germany's large auto industry. By 2030 30-50% of all cars will have to be electric cars. About 30% of Germany's industrial output and exports are tied to overseas demand, 4 times that in the US. From 2003 when competitive overhauls took place under chancellors including Mr. Schroeder, German industrial growth was sustained by demand from China. Now with China looking to internal demand following global tensions on trade, sales of some companies are looking flat instead of sustained year over year growth. What will happen now? Here is what the likely new chancellor from the Social Democrats has to say about the overhaul of the German economy and industry- "It will be the biggest industrial modernization project that Germany has carried out probably for over 100 years, and it will really help our economy." The SDP and Greens that together share the same ideas for rebuilding Germany around infrastructure and climate change and upward mobility, badly neglected in the Merkel years, plan big investments. Big investments are to be made in climate protection, high speed internet, education, research and infrastructure. Germany's net investment rate has been around 0.5% of economic output since 2000, compared to 1% for Italy and 1.5% for the US, according to the World Bank. This WSJ report even says net public investment has fallen below zero as existing assets depreciate. To achieve this transition Germany has identified several problems. One is the delays in investment projects that cost German companies 55 billion euros a year, about half the money invested in research and development, according to Germany's statistics agency. Germany was thought to be an industrial powerhouse but the quality of work in projects and delays so apparent in the Berlin Brandenburg airport infrastructure project clearly shows a decline over the past two decades. This will need to be fixed. Other problems are in getting more workers as Germany faces a shortage of workers for factories to 2030.     ...

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Dvid Attenborough, the naturalist and broadcaster, says he has campaign for years against plastic pollution and no one paid attention. Now he says people are fed up with politics of Brexit and are showing great interest in fighting single use plastic. He says the people in the U.S. are acting even though the president Mr. Trump has taken action for withdrawing from the Paris climate change agreement. He sees things can change quickly if there is a new president and policy changes. 

He is heartened by the way people have received the movie Blue Planet 2 and the action politicians and ordinary people are taking. He thanks primary school teachers for all the work they are doing and the enthusiasm shown.

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The risks of the Fed's reinflation policy in 2010-2011. It risks increasing "bad" inflation, the kind that fall heaviest on low income households. Commodities are on fire, and the increase in the price of oil and food, would only leave consumers drowning in the new inflation, says Kelly Evans.

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NITI Aayog does much of the development planning for India. It's CEO Parmeswaran Iyer, says about one third of the population of 1.2 billion people has reached the middle class. The poverty level has dropped to about 16% of the population. He describes the steps taken to achieve this. First inflation control by keeping inflation below 6%- it was 5.7% in December 2022. The decline of loan rates for education, buying home and appliances to about 8%. Second the pioneering action of One Nation One Tax under GST that has saved Rs 18,000 lakh crore or Rs 12000 per household annual saving. To create small micro business in a country the size of India with a large informal economy action was taken. 120 million of 380 million beneficiaries are from the  middle class for PM Mudra Yojana who received Rs 7 trillion in collateral free loans. This is designed to provide non farm small loans of 10 lakh rupees (about $8000) to micro unit enterprises at the bottom of the development pyramid to encourage an entrepreneurial culture and micro enterprises. Non Performing assets (bad loans) or NPA were reduced from 11.1% of the banking system to 5.8% in 2022. This is critical to support future growth as banks that well capitalized can make the loans needed to support growth. In health and education  a large network of new universities and medical colleges, hospitals is being built. The Ayushman Yojana provides health screening to millions of people and aid is channeled to people for low cost generic medicines. It is the size of these efforts that is making the difference in the lives of ordinary people. For technological advancement the government has moved quickly on digitalization, and 5G implementation to be done by 2024. ...

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Safety checks at Norfolk Southern are the subject of this report in the WSJ. The derailment of a freight train leading to spill of toxic chemicals in Ohio on Feb 3, 2023, led to concern about the safety practices at American railroads in the efforts to cut costs. The National Transportation Safety Board has opened a probe into the safety culture and practices of Norfolk Southern. One practice called PSR or precison scheduled railroading has been used by railroads in America to cut costs. This means fewer employees, longer freight trains as long as 3 miles, and fewer locomotives. The result is that employees count went down from 159,000 in 2011 to 115,000 in 2021 a drop of 28% even when freight dropped by 11%. This increased profits resulting in higher dividends and stock buybacks, with a heavier workload and less time off  even for sick days until a threatened strike. President Biden intervened to set a new pay and work deal and an element of fairness for workers. ...

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Chip performance that doubles every two years is now the norm. Costs decline proportionately. Of more concern today is investment that pulls educational levels up in schools at even a small fraction of that speed and this investment has sorely been lacking. Investment in infrastructure, in education, in health, in public services that improve the quality of life have declined with the obsession with technology that is showing poor results when it comes to education of children in schools from elementary to secondary to higher secondary schooling.

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There is strong cirticism from many quarters about low interest rates as a prime culprit in causing the bubble in housing prices. In comments before the American Economic Association, America's Fed Chairman Bernanke defended his role as Fed governor in 2003 when he along with Greenspan was an advocate of the decision to cut the Fed's target interest rate to 1%, and to leave it here for a year and raise it only slowly. Bernanke says countries like Britain, New Zealand, and Sweden had tighter monetary policy but there home prices rose more, and monetary policy explains only 5% of the variation in home prices. Analysis has shown he says that capital inflows such as those the U.S. received from China and other Asian countries explains 31% of the variation in home prices, supporting a contrasting theory that that its these global imbalances that drove the crisis. He also placed the primary fault for the housing bubble on relaxed lending standards and views that housing prices would rise forever. Alongside these comments Fed chairman Bernanke also said that bank supervisors and other financial regulators of which the Fed was one, has a better ability to contain the excesses that led to the economic crisis including housing bubble and other excesses, than the Fed as a monetary policy maker. By saying this Bernanke is acknowledging that the failure of regulation was a key part of what happened in the economic crisis. The failure to fix the regulatory system even now leads Bernanke to say that he is open to using monetary policy as a supplementary tool for addressing risks should another bubble develop, if the regulatory system isn't reformed. Still Bernanke and Greenspan were quite complacent at the time of the low interest rates and did not point out the dangers of global capital imbalances which were evident at the time, preferring to say that the United States could benefit from the inflows of capital from overseas without serious risks. And the Fed did not exercize its role of vigilance in alerting the country to excesses in the way the housing industry operated and in exercizing its own powers to that effect. Instead the Fed as regulator and in role as asafeguard for serious risks let itself become part of the cheering section as the worst excesses in housing were being exposed....

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Focus on billionaires and remote parts of the world distract from the vital issues of infrastructure renewal, cost of living and incomes growth that affect everyday lives of Americans. In an economy the size of the US the $5 trillion of billionaires out of a $31 trillion US GDP, is about 15% of the nation's wealth. Many of the billionaires such as at Amazon lead product and service companies that generated new products and services. Five of the top 25 in the US are from Walmart a large retailer in the US, 2 from Amazon, three from Microsoft in personal computers, 3 from chemical industries.This accounts for 13 of 25 or half. Removing these billionaires would take out $2.5 trillion leaving the billionaires controlling 7-8% of the country's wealth. The focus by Bernie Sanders in the US and Jeremy Corbyn in the UK on remote spots in the world and on billionaires distracts from the real issues of cost of living, of incomes of ordinary families, of everyday issues of health and quality of life faced by all. It also does not help in the discussion because of the need to move away from the poor leadership of the Blair-Brown, Cameron- Johnson years and the Bush-Obama years in the UK and the US. Here no ideologies are needed just common sense solutions to common problems that affect lives of all the people, with the cooperation of all the people. ...

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Inherent conflicts between views of Reidel, Biden and other policy advisors such Richard Holbrooke, all wary of Hamid Karzai's government in Afghanistan and General McChrystal -whose experience in tactical strategy was his strong point, not an overall perspective that took into account factors outside US control such as the people, their history, recent history, the terrain, lack of viable government, neighboring Pakistan- spill out into the open. Holbrooke, the special ambassador to the South Asian region has serious differences over Karzai with ambassador to Kabul, Eikenberrry, and with Jones, National Security Advisor. Eikenberry has his own differences with Karzai. See the group "Eikenberry Cables," which provides his cable reports from Afghanistan which talk about Karzai, the Afghan military, and the prospects there, in bleak terms. The same Eikenberry is shown here telling Jones that Holbrooke's chilled relations with Karzai are not helping, and Jones assuring Eikenberry that Holbrooke is on the way out. Followed by Secretary of State Clinton supporting Hilbrooke by talking to Obama. See also the group "April 2010 Biannual Defense Departmet Report on Afghanistan," which shows that of 92 districts surveyed none supported the Karzai government, somethig that must cause policy team members to pause and think....

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Raheem Sterling, Manchester City soccer striker takes England to the quarterfinals of Euro Soccer 2021 with his goal in the game against Germany. In that 2-0 game the second goal came from Harvey Kane.

The Guardian gives this story of Raheem growing up in a difficult neighborhood in Kingston, Jamaica. His mother, a nurse, moved to London after losing his father to gang violence. There he played for teams before he was 14, then moving to Liverpool Club, in the north of England. He showed real determination at an early age, and concern for kids growing up near Wembley stadium where he once lived, who had no chance to watch soccer or participate in the game.

 

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Germany's Economic Affairs Ministry and Economy Minister Habeck have called for blocking of the sale of a Dortmund chip production company Elmos to Sweden based Silex, a unit of Sai Microelectronics of China, for 85 million euros. There is now significant debate within the German ministries about the degree of dependence on China. Habeck's move seeks to prohibit the acquisition of Germany technology companies by Chinese competitors on grounds of protecting public order and security.