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A deal with Venezuela gives Eni Italian oil company 40% ownership in a block called Junin 5 in the Orinoco River belt. The $10 billion investment will be shared proportionally by the 2 companies PDVSA and Eni to expand production to 300,000 barrels a day by 2014.

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China's rapid eanings growth is illusory because behind the numbers there is an illusory element- the profits from stock gains. Luizhou a maker of toothpast and soaps is one example where its earnings increased by 19 times the leel in 2006 from sale of Citic securities. Wow!

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Supreme Court of India supports Posco's and Vedanta Resources projects in Orissa state in India. These are large projects for the aluminium and steel industry in India for instance Posco's project is for 12 million tons of steel and for developmet of a port in Orissa.

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German plan takes shape Saturday as Finance Ministers of the 14 eurozone countries meet in Paris after the G7 meeting in Washington. It will include capital injection into banks in exchange for equity stakes, but further details are being worked out including the size of the plan.

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German banks lent $21.3 billion to the Icelandic borrrowers according to the Bank for International Settlements, well over a quarter of all international lending to Iceland. Most of Iceland's banks have collapsed. Iceland's central bank chief says lenders are likely to get only 5,10 or 15% back.

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BP makes a final settlement with the states and the U.S. government for the Gulf oil spill. Of the $18.7 billion settlement in July 2015, the Clean Air Water Act penalty is $5.5 billion, the Natural Resource Damages are $7.3 billion, the 400 local government claims are $1 billion, the economic claims to 5 states are $4.9 billion, according to BP. Most of the money goes to the states of Louisiana, Mississippi, Alabama, Texas, Florida, for environmental improvement and economic development. Louisiana gets $6.8 billion. The settlement comes after court rulings went against BP. BP chairman Carl-Henric Svanberg, says it provides -" A path to closure for BP and the Gulf. It resolves the last remaining legal exposures, provides clarity on costs." BP shares were up 5.1%, and Fitch Ratings say this strengthens its ratings. For BP this adds $10 billion in cost to $44 billion already incurred for legal and cleanup costs.

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The U.S. House of Representatives votes to repeal and replace the Affordable care Act 217-213. Moderates were won over by an addition of $8 billion  to add coverage for a popular feature of the ACA that covered people for pre-existing conditions.  The bill that passed gives credits of $2000 to $4000 a year, depending mostly on age, upto $14,000 for a family. Credits are reduced for individuals making over $75,000 a year or families making over $150,000. There is no mandated insurance coverage. This trims the federal budget deficit, yet also is expected to keep 24 million more Americans without health coverage after 10 years. The bill now goes to the Senate where moderate Republicans are worried that this may increase premiums for older people, one of the drawbacks of the earlier version of the House Republican bill.

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Polls show 83% of the German public support increasing the minimum wage to 8.50 euros an hour. About two thirds of the public support increasing income taxes on high wage earners. The Social Democrats talks with the CDU to form a coalition are likely to lead to CDU accepance of the condition for a minimum wage of 8.50 euros an hour, but not to the condition for raising the taxes on high income earners. The SPD sees the higher taxes as a way to pay for new infrastructure. A survey done for TV broadcaster ZDF shows 61% of Germans favoring a SPD-CDU coalition. In the 2013 elections the SPD gained 25.7% of the vote and the CDU-CSU gained 41.5%. The SPD is pushing for flexible retirement age, equal pay for men and women, a tighter financial regulation, and a growth and employment strategy in the EU.

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The Guardian points out that Macron is making a political choice rather than an economic imperative with making workers work longer for pensions during a cost of living crisis. France's pension advisory council says that the annual 10 billion to 12 billion euro deficit for pensions was manageable in the context of total expenditure of 340 billion euros. It also predicted agradual return to breaking even by the mid 2030's. As much as 80% of people under 65 oppose the reform says the Guardian. Macron has a minority government and won with support from working class parties led by  Melenchon, and is in his second term, so it is not clear anymore why he has pursued this course of action.

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Should age be a factor for running for president of a country. In the U.S. the main candidates are all in their seventies. Elizabeth Warren is the exception. She is 70 yeas but looks much younger with a lot of energy. Sanders even at his age of 78 is giving it all he's got with gusto and nerve, and so is Warren at 70, and Trump at 76. So how does one decide in favor of youth with inexperience as compared with age with experience and belief in oneself and ideas. It is also pertinent that old can become new again. Corbyn is trying to take UK back to a quieter more stable period post war. The young can get pragmatic or lose authenticity and connectedness.

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On May 11, NYT shows the rail network in India opening with the first trains taking 45 million migrants to homes in all parts of the country. Australia calls for an international inquiry into the cause of the coronavirus pandemic and its origins in China. Russia begins a cautious reopening with the governors of provinces having powers for reopening based on local conditions. In Spain restrictions are gradually being lifted but the major cities of Barcelona and Madrid are still in lockdown. And as Germany the first country to reopen opens up its business and schools the crucial R ratio of reproduction of the virus -with 1 being the number at which it grows again and below 1 showing control of spread- moves up to above 1.

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Sweden now joins NATO after clearing it with Turkey and Hungary. Finland has already joined NATO. These 2 neutral nations had a strong defense and Finland has a long border with Russia. They dropped neutrality to join NATO after Russian invasion of Ukraine. Sweden's defense industry, technological innovation, and "Total Defense" based participation of everyone 16-65 years old makes it unique in Europe. A new Defense Innovation Initiative aims to integrate civilian and military technologies even more. Unusual for a small Baltic nation Sweden makes the advanced Saab Gripen jet fighter, sophisticated submarines, and jet trainer aircraft used by US Air Force. It has no border with Russia. It faces the Baltic and Russia also faces the Baltic near St Petersburg.

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Mexico's newly elected president Lopez Obrador says spending for a new airport was not in the interest of a country with Mexico's social needs. He voted to cancel the project in favor of using a military airbase north of Mexico City and building new runways to complement the existing airport. The aiport project was a key effort by the outgoing administration of Pena Nieto. About $5 billion spent on the airport would be written off, and bondholders holding $6 billion in bonds could ask for payment.

The airport cost originally estimated at $10 billion is now expected to cost $13.3 billion. Mexico City airport handled 44 million passengers last year and the new airport was intended to handle future congestion.

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A vote on Brexit and whether Britain should stay in the EEA (European Economic Area) in the British parliament, has 75 Labor MP's supporting staying in EEA and 15 opposing it. Labor party leader Jeremy Corbyn wanted Labor to abstain in the vote. 

Corbyn and Brexit Shadow Secretary McDonnell are socialists who see the embedding of the capital markets model in the EU as a mistake. They favor full access to the single market area EEA without the obligations of membership. As parliament votes on Brexit there is the prospect that parliament could overturn Brexit and a fall of the government of Theresa May, with opposing factions in each party voting across party lines on the issue of the European Union's relationship with Britain.

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Even though 61% of Germans in a recent poll want migrants with an open asylum application  in another EU state to be turned back, about two thirds of people in the Forsa poll of June 15, say they want this to be done with a European resolution not a unilateral approach. This favors Chancellor Merkel in her dispute with coalition partner CSU leader Seehofer who seeks a tougher approach to immigration. Seehofer's attempt as Interior Minister to set a new order at German borders without the agreement of the Chancellor would be a challenge to Merkel's authority. The dispute was postponed for 2 weeks till consultation with European partners. Merkel says this would be a challenge to the authority of the Chancellor. 

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Snapchat CEO Spiegel's aloof management style leads to him becoming unresponsive to the views of his team. A new design fails to win customer approval and the share price of the company falls 76%. He decided to launch a redesign of the messaging site which sends photos and videos to friends as "snaps" that disappear in a few seconds- was once seen as a competitor to Facebook. He called for a redesign unexpectedly after visiting China in 2017.

Spiegel, 28, a designer, tends to push ahead based on instincts.  He ignored the pleas of his executive team for more time to do the redesign. A gut decision was made and a schedule was set that pushed an aggressive timeline, dismissing concerns of team members.

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The airlines are hit hard by the coronavirus crisis. Reservations have declined as fewer people travel. There is a sense that a recovery will take time, several months. Delta is cutting international capacity by about 25% and domestic flights by 15%. It is also offering voluntary leave options to employees.

Southwest CEO Kelly says the severity of the decline is being felt with loss of $300 million in revenue in March. One piece of good news for airlines that offsets the severe demand decline is the fall in oil prices. American Airlines estimates the cost savings as much as $3 billion. A decade of industry profits have put the airlines in a better position to tackle the crisis. Other cost savings moves are reducing capital expenditures and managing cash flows efficiently.

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Britain's parliament voted Jan. 15, 2019 to reject the Brexit deal crafted by Theresa May with the European Union by a huge margin of 230 votes. The vote was 432 to 202, with 118 Conservative MP's voting against along with the entire Labour Party members. 

If a no-confidence vote by the opposition Labour Party is defeated as expected with 118 Conservative MP's backing the government in that vote, the uncertainty and rancour and bitterness will continue. May will look for ways to tweak the deal to get it through parliament. If this fails Britain could march out of the EU with no deal on March 29, 2019, or the date is extended. She opposes extending the date or having a second referendum.

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Nocera points out that in a larger sense pay czar Feinberg hasn't accomplished his goal- to change the ethos of the pay culture at banks and companies. $200 million to be paid out at AIG is in contracts for March 2010, and 14 of the highest Citigroup executives still will make $5 million to $9 million each, and Ken Lewis wil still get $70 million in retirement pay, and nothing that Feinberg can do about it. A lot of it has been shoved under the rug. As far as shifting compensation to stock instead of salary, Goldman and Morgan Stanley have already done that and that is a change that is already happening at these banks. But executive compensation will nevertheless be out of proportion and the public angry. Nell Minnow, the co-founder of the Corporate Library, says the only way is to throw the bums out, meaning the board members on the compensation committees. But this is up to shareholders and the job maybe to make it possible for shareholders to do so easily.

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The difficulties Cerberus is having selling $4 billion of the debt it incurred in buying Chrysler and its pullout of the United Rentals deal are signs that private equity deals are fraying. The credit crunch looks like its going to get a lot worse. And sales of cars are expected to decline from the present 16 million for the year to 15.5 according to Jerry York a former GM board member, and 14.5-15.0 million according to John Stallkamp a former Chrysler president. There is a difficult year ahead for the auto companies and for the economy in general.

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Northwest to respond to higher fuel costs by cutting flights 5% and raising fares and fuel surcharge. For flights to Japan the fuel surcharge goes from $140 to $160. Second checked bag is $25 and 3bags checked is $100. Fees for bags over 50 pounds double to $50. Northwest will take 15-20 planes out of service after the summer travel season. And international flights will go up. For Northwest the higher fuel tab since May 2006 projections is $1.7 billion in higher fuel costs. Aloha Airgroup, Champion Air and ATA airlines will close according to announcements this week.

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The US trade deficit at about $10 billion in 1995 reached a high of about $65 billion by 2007. Now the figures are expected by economists to drop in March from $62 billion to $61 billion as exports increase and the US imports less. The trade deficit is finally moving in the other direction. But the strength of this trend depends a lot on how strong the rest of the world economy remains to draw in US exports. It also depends on the dollar, and the dollar strengthened by about 4% against the euro in the first two weeks of May.

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After 16 years of GDP growth the British economy is now facing big headwinds as the housing market falters badly. GDP grew at an annual rate of 1.1% in the 1st quarter 2008.The highly inbebted British consumer and the faltering financial markets which propelled the British economy and the area around London cause further problems for 2008 and 2009. And Gordon Brown does not have much room in the national budget to stimulate the economy with additional spending. Consumer price inflation is at 3.3% and expected to reach 45 so there is not much room to cut interest rates.

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The part of the tax law that limits state and property tax deductions to $10,000 and limits deduction of mortgage interest is likely to slow the rise of housing values in 2018. Much of the effect is psychological as the impact is felt on the East Coast, California, Midwest and the D.C. area. The median U.S. county will see a decline of 0.8%, and some counties in New York could see declines of 10%, according to Moody's analysis. The impact is greater for higher priced homes, and where incomes are higher with big mortgages and big tax bills.

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Japan and the European Union announce a new trade agreement, in a response to the protectionist tone of the Trump administration in the U.S. The deal is announced at the time of G-20 meetings in Hamburg, Germany. The deal removes the 10% duty on Japanese car imports to the EU, and removes barriers to European automakers in Japan. Experts say the deal comes at a time when the European Union wanted to come up with a response to Brexit and Trump style protectionist sentiment. European automakers say they need assurances that they will have better access to the Japanese market.