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Marcellus Shale natural gas prices are monthly average of $2.80 per million BTU compared to benchmark U.S. prices for natural gas of $3.61 in Nov. 2013. The low prices of natural gas are leading to closing of more coal powered plants in the Pennsylvania, and W. Virgina, where a glut of natural gas is developing with few pipelines in the region. For the U.S. coal lost market share down to 37% in 2012 from about 50% of the electricity generated in the U.S. Over 100 coal burning generators were closed in the U.S. since 2011 because of lower natural gas prices and the federal government's stricter pollution limits for power plants.

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Olivier Blanchard, chief economist of the IMF says that as government borrowing around the world surges, interest rates will go up. Governments borrow by selling bonds to investors, and to attract investors the government competes with stock and corporate bond markets for investor's money, leading to rising yields for investors. As the confidence has returned to corporate bond markets this is already happening. From the end of 2008. the yield on the benchmark 10 year Treasury note has increased by one and ahalf percentage points, rising to 3.54% from 2%, the sharpest upward movement in 15 years. In Germany the yield on German 10 year bonds has also risen, rising to 3.57% from 2.93%. Similiarly British bond yields have risen to 3.78% from 3.41%. Congressional Budget Office estimates are that net government debt for the USA will rise to 65% of GDP at the end of fiscal 2010, from 41% at the end of fiscal 2008. In 2009 and 2010 the US government will sell $5 trillion in new debt, according to Citigroup. A decade from now the government's outstanding debt could equal 82% of GDP, or about $17 trillion. Every one point rise in interest rates costs the Treasury $50 billion annually over a few years, and Kenneth Rogoff estimates that this could reach $170 billion annually if the average yield on 10 year Treasury note goes up to 4.7%, as the Congressional Budget Office estimates. This will dampen the effects of stimulus spending. It is a big issue says Rogoff. A year ago under old policy and assumptions before the financial crisis the Congressional Budget Office projected outstanding debt at $5.3 trillion in 10 years. Now the estimate is $17 trillion, which is triple the old number and an increase of $11 trillion. A recovering economy would make these numbers less relevant. But with struggling industries like autos and banks needing more help from the government, and with consumers having to reduce a mountain of debt, a weak economy for a long time and small growth for a decade would make this a story that won't go away. Rogoff says its like what happened to the subprime borrowers, people assuming that the funding is always going to be there. In 2009 and 2010 Citigroup says, the Euro zone countries will sell nearly 1.6 trillion euros or $2.6 trillion in new debt, and Britain will offer 490 billion pounds or $799 billion in new debt. Over the next decade this would slow Europe's recovery and prolong the downturn. Britain faces a bigger problem in the near term as Britain's governmetn debt equals 55% of GDP, and Standard and Poors estimates it could approach 100% by 2013. South America and Eastern Europe will also face the situation of rising rates. Asian countries like China with lower levels of debt are in a better situation, IMF's Blanchard says....

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A new generation of politics with an effort not to be defined by race while race still remains in the background. How politics is being shaped in the USA in 2008 due to a confluence of factors, events and leaders. The emergence of a new generation of younger people, blacks, whites and other minortities who don't carry all the baggage about racce of the previous generations and are open to a lot of different things, the global economy, changing Africa, Asia and Middle East, the integration of America into a global patern of manufacturing, trade and consumer demand, the emergence of 2 billion people from China and India to share in the development of science and technology and modernization are the confluence of factors. The events are the Iraq war, the Iran confrontation and the Afghan war, the confrontation with militant Islamist ways, which are seen as having been badly handled leading to a loss of confidence in the US in the world, the general mood of people looking at 2008 like they did after the war and the Truman period for a fresh face in a changing world in another confluence of factors. Then the independence of countries in Asia and Africa and the Middle East from centuries of colonial rule, in the case of India independence, in China's case a new ideology based government but striving for the bread bowl for a billion people, in the Middle East and Africa from Egypt to Kenya new aspiration for progress and development. The events then were the Korean war and weariness with it, now the Iraq war and Iranian confrontation, and Afghan war and weariness with it. A Irish Catholic face then, a mixed race face now, new generations and aspirations then and now. Leaders then in John Kennedy the ability to present oneself in a youthful way appealing to the new generation so that one is not perceived in the old ways, partly because like Kennedy talking to a new generation of people who did not carry the old baggage, easier to do because John was himself part of this new generation. Same thing with Barrack because he like the new generation both do not carry the old baggage and see things in a race neutral way concerned more with other things such as confidence in the future and the role of America in the world. How will this turn out? If electedthese leaders are still human and would still face the same difficulties like John faced in the cold war and Cuba and Vietnam situations, and the lack of experience would also show not that greater experience would necessarily help solve intractable problems. But the aspirations and desire for a fresh face and youthful energies of a whole generation of younger people and of other people in general who are weary of the old ways may carrry the day in election voting. ...

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Pearlstein raises the question, are there business leaders who believe that what's good for America, is good for business, rather than the other way around. Google, like other technology companies, pays much less in taxes than the corporate tax rate suggests. Research by the Washington Post shows this to be 18%, not 35%, for 2009.

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EU leaders and proposals to limit tax avoidance by digital companies by requiring the companies to show the profits in the countries where they are made. This would require changing bilateral treaties. France is looking at proposals to tax companies by the number of clicks or user data. Large digital companies, including Apple and Google declare most of their European revenue in Ireland using legal loopholes in that country to shift profits to lower tax locations. A Senate report in the U.S. in May 2013 shows Apple using technicalities in Irish and U.S. laws to pay only a small amount in corporate taxes in four years 2009-2012 on $74 billion. Fredrik Reinfeldt, the prime minister of Sweden stated the argument for fairness in tax policy- "These companies ask for a lot of investment in infrastructure, in research and development, they want to have well educated staff members. Well, let's keep that together: Pay your taxes so we can afford all of these investments."

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Russian rights activist Navalny wins over a quarter of the votes in Moscow's mayoral election. The search for pluralistic democratic system in Russia and a truly functioning multi party democratic system continues.

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Lower amounts for financial aid available offset the lower rise in tution costs to leave students just as worse off as before with large amount of student debt in 2013-2014.

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Krugman points out the risks for the U.S. economy as the U.S. loses export competitiveness with the euro reaching parity with the dollar. The huge shift from $1.50 to the dollar at one point to parity gives Europe a sudden strong boost. Europe needs the boost to escape a deflationary trap, and there is little that can be done for capital flows and exchange rates, says Krugman. He points out that many Federal Reserve governors were clueless of the impact this could have on U.S. growth, sanguinely assuming the U.S. would boost growth in 2015. Better says Krugman for the Fed to be very careful about raising rates at a time when wage growth is sluggish, and inflation low.

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The increasing competitiveness of Mexico compared to China and India as an investment destination in 2013. Foreign companies are investing heavily in Mexico because of investment advantages in labor cost, supply of engineering and management talent, and proximity to the U.S.

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The campaign rhetoric for renegotiating NAFTA and building a wall at the border has had a sharply negative effect on growth in Mexico. Growth slowed in 2016 and is expected to be close to zero in 2017 with declining foreign investment in the economy. The uncertainty is leading to sharp decline in foreign direct investment of 24% in the first 9 months of 2016, according to the Bank of Mexico. Further declines can be expected in 2017. The decline in the value of the peso of 16% since May 2016 has led to 6 interest rate increases in the past year. Inflation on annual basis was at 4.72% in Jan. 2017 and is rising. As Mexico depends on exports for one third of its output growth, and 80% is sent to the U.S., there is a need to diversify with trade agreements made with the European Union and other countries. Mexicans now question the value of NAFTA trade agreement as average growth of 2.6 since NAFTA was signed is below the 4.6% in the 2 decades prior to that. And poverty level is the same with about 60% of people in the underground economy. In addition crime, drug trade, a weak education system, weak rule of law, political corruption, show that Mexico has not made the progress since NAFTA that it should have made. ...

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Saudi Arabia continued to follow a policy of high oil production in 2016, and reported that it produced 10.67 million barrels a day in July 2016. Iran is producing at a pre-sanction level of 4 million barrels a day. 2017 oil demand prediction by OPEC is at growth of 1.15 million barrels a day. Experts says that the interests of Iran and the Saudis may be converging to reduce production as they face low oil prices. Iran needs to make large investments and Saudis face budget cuts with low oil prices. They point to this cooperation being temporary as there are issues of competing politics in the region, and beyond that both countries seek to expand their market share.

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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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An international arbitration panel gives Exxon $908 million for oil assets nationalized by Venezuela in 2007. This is much lower than the $7 billion claimed by Exxon. Exxon invested $750 million in its Cerro Negro oil operations in Venezuela. The operations had an estimated value of $2 billion and are located in the heavy crude oil region of Orinoco. Venezuelan oil company PdVSA showed net profit of $4 billion in the first half of 2011. Another case is pending for Conoco-Phillips.

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In Bagour, Egypt, in the crowded Nile delta, the old order was represented by Kamal-al-Shazli, a member of Parliament from the ruling party for 46 years. This means he entered Parliament in 1964, eight years after the Suez Crisis of 1956, when Egypt under a young military officer Gamal Abdel Nasser confronted the British and the French over the Suez Canal. Everything here in this town was done through Mr Shazli, the ultimate system of paronage was in place, and everything was named after him. Only the slogans of the anti-colonialism days, the days of hope of improving the living conditions of the people, remain. Everything else has stayed much the same for the vast majority of people. Now the task of changing things requires people to think for themselves and learn to work together to guide their own affairs under a democratic system of government and free expression. And this is quite different from the system in place for over 50 years, just as happened in the old Soviet Union. The old system was held together through a patronage system, bribes, enforced by the ruling party and its state security, and one in which individuals had to trust in the state to do their thinking for them about running the country....

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GM's marketing strategy for the new SUV, the Chevy Tahoe, which is in showrooms. 1) Defining the market segment- people with many children, a dog, a trailer, people who would otherwise need two cars to do the same job transporting kids. 2) Addressing the fuel efficiency concerns, showing how the fuel management system works. Fuel economy of 22mpg for the Tahoe. 3) Providing detailed training to salespeople handling these SUV's, checking that its working, and making sure it addresses the customer concerns. It took 12 days to sell a ChevyTahoe in U.S. showrooms in February 2006, according to Power Information Network. Links: see Maugeri of ENI in Foreign Affairs, April 2006 on refining constraints Yergin in same global issues in energy security Bush India nuclear deal for civilian energy Niall Ferguson on China and recession, affects future Chinese demand, Hoover Digest, Winter 2006 Links on Biofuels, Ethanol Offsetting this Links to geopolitical areas- Nigeria, Iran, Saudi, terrorism or other political risks, and declining production Iraq and Mexico links....