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Ann Lee a former investment banker and now adjunct Professor at New York University, gives us facts that show the smaller banks that lend to small and medium sized businesses in the country are being closed by the FDIC. According to ADP small business that employs between 1 to 49 people, accounts for 48 million jobs, those between 50 and 499 employees account for 42 million jobs, and large business for only 17 million jobs. Without access to capital these small and medium sized businesses will continue to layoff employees, creating a vicious cycle of falling credit and demand. According to Automatic Data Processing's August employment report large business shed 60,000 jobs, medium sized business 116,000 jobs and small businesses shed 122,000 jobs. These smaller banks says Lee have done most of the lending to small and medium sized businesses. And overall lending has dropped from pre-crisis levels. Treasury's Capital Purchase Monthly Lending Report shows that banks that received government money actually reduced loan balance by $54 billion. According to reports issued by major credit rating agencies $700 billion of asset backed securities were underwitten in 2007. In 2009 only $10 billion was issued. This has a significant impact in every area. Banks have no incentive to lend with all the bad nonperforming loans on their books. They only hope that over time renegotiated loan terms would enable to recover these loans. But this might take a decade says Lee, if this is similiar to other crises like the one in Japan. She says what the banks do to make money is to borrow virtually unlimited amounts from the Fed at near zero rates and earn money from the spread when they lend to the Treasury. Does our current banking system make sense she asks. Banks are not investing in economic activity, in real products and services,but engaged in agovernment backed shell game that enriches bankers at the expense of everyone else. She says that the banking lobby may prevail in preventing the nationalization of the banking system, but this will not prevent questions about the status quo and its assumptions from arising if the recovery and regulatory reforms fail. ...

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This WSJ report shows how the debt ceiling negotiation were conducted and the process that made it possible to reach an agreement since the State of the Union address by president Biden on February 7, 2023. It started with Biden getting unanimity right on the floor of Congress during his speech about protecting Medicare and Social Security. The Republican strategy was to pass the legislation on spending that did not specify where cuts were to be made yet used 2022 spending levels with a 1% increase. The deal was to be for three years and passed the spending bill with an increase inthe debt ceiling. Till that time the Democrats decided to not enter negotiations.  Biden and McCarthy then had to choose who would represent their side in the long negotiation process that lay ahead till June 5. Progressive Democrats called for invoking the 14th Amendment that allows the government to continue functioning and pay its bills. Biden chose not to take that route. Respect for the other side, a prepared script are an important point in negotiations. To get results something even more important is essential flexibility and a plan, Plan B. Trust began to develop between McCarthy and Biden. Biden and McCarthy did not any time engage in acrimonious description of the other side. At one point when Biden was in Hiroshima for the G7 meetings Ricchetti on the Biden side and Graves on the Republican side began to feel the frustration. Biden decided to fly home early from Hiroshima. He was constantly in touch with his negotiators Steve Ricchetti, a trusted aide, and a cabinet official the Budget Director Shalanda Young. Graves a long time trusted adviser of McCarthy headed the negotiations for McCarthy.  Shalanda Young and Garrett Graves are both from Louisiana and Graves says he used to work out with Young's dad in the same area. This had a positive effect. It also reduced the tensions in the negotiations so that it could be said this was the calmest negotiation from either side that has been seen in the US  for a long time and bodes well for America's future and for its people, far beyond any concessions made by either party.  Biden made clear at the outset what he could accept without leaving it hidden- he would agree to some work requirements, he would not agree to work requirements for Medicaid. Others in the Democratic party conveyed how distraught they were with efforts to impose stringent requirements for federal food aid during a cost of living crisis when the Republican positions ruled out any new taxes on the wealthiest Americans. In the end Republicans agreed to keep spending limits for 2023 for two more years into 2025 when they would be increased by 1%. Democrats offered to cut (Income Tax) Internal Revenue Service (IRS) spending to increase IRS staffing from $80 billion to $70 billion. Biden said "nobody got everything they wanted." It would have to be passed in Congress with the support of moderate Democrats and moderate Republicans, with members holding extreme positions among Republicans and Democrats opposing. The two parties coming together after a long time to meet the real challenges ahead for the American people. ...

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Jair Bolsonaro, a former army officer, is expected to win by a large margin in the runoff election in Brazil against Fernando Haddad of the Brazil Workers Party. Crime, corruption including the Car Wash scandal involving the state oil company and politicians, a deep recession with the fall of commodity prices, have led to a shift in Brazil away from the Workers Party. Polls from Datafolha show about 60% of the vote in runoff going to Bolsanaro. About 30% of supporters say they are voting for something new after the deep recession and failure in providing government services with no money in the budget for adequate spending on infrastructure and services, education and health.  Both the centrist PSDB and the Workers Party that came in following the shift to civilian rule from military dictatorship in the mid-80's failed to win a significant part of the vote. The conservative PSL party only had 5 seats in the outgoing 313 seat house showing the deep dissatisfaction with the existing Congress and politicians in Brazil. Crime is a big issue with 64,000 deaths in Brazil in the last year, with failures in government services, including a failure to tackle a yellow fever epidemic over 2 years, are other issues that have led to the change in the mood of the voters in Brazil. ...

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Sweden places in the top three countries in the Women in Work Index for 2019 of the 33 member OECD. The other two are New Zealand and Iceland. As a country emphasizing gender equality Sweden has taken this approach through policies and legislation.  Feminist government, feminist international policy, are terms frequently used. Focus is on policy that provides equal rights, participation in decision making, and equitable allocation of resources. Swedes get 480 days of parental leave to share, of which 390 are at 80%, till a child turns 8. In government funded schools when it comes to gender roles preschool teachers and principals are allowed to act as social engineers so girls are not restricted to traditional roles only. Swedish colleges and universities are free and women earn two thirds of the degrees. A gender neutral word "hen" was adopted in Swedish popular culture. Legislation makes violence against women by partners punishable for each offense, and explicit consent is required in sexual relations.  Women and men share equally in leadership of government agencies but women still fall behind in private industry positions. Salaries are 88% to 92% of men's salaries. Women have 161 of 349 seats in parliament after 2018 election.   ...

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Gilberto Hinjosa was state head of the Democratic Party in Texas. He resigned and said he would not run for reelection after he said that Democrats should take moderate positions on social issues like transgender. Ken Martin the new head of the Texas Democrats says the party has to show that it is present and give people a sense that we give a damn about their lives. Democrats are seen as paying little attention to South Texas. This report in NYT says Texas is urbanizing and 5 of the 15 largest cities in America are San Antonio, Dallas, Fort Worth, Houston, Austin. Another 2 million population increase in Texas in last 4 years, by 2030 in redistricting 4 more seats in Congress could be added for Texas. For Democrats to be competitive the road runs through Texas says this report in NYT. A lot depends on understanding that Latinos are conservative on cultural issues, immigration border issues affect all people in Texas, Latinos and Whites alike.

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Gerard Baker describes the potential and the risks of the new DJT administration in this essay in The Times of London. The risks are being minimized to some extent with Susie Wiles as the Chief of Staff and having an experienced group of Senators and governors in the core of his administration- from Thune, Borghum, Noem all from North and South Dakota in the rural heartland of the country, and experienced financial talent at the Treasury with Scott Bessent.  Pew Research and NYT poll shows overwhelming support for quick action by the administration to remove illegal immigrants who have a record of committing offenses in the US- as much as 87% of the Pew Research poll shows support for action. For this and the task of cultural literacy in the US that is at risk there is broad support and it falls to Senator Thune, Cornyn and others and to Susie Wiles to keep the narrative from getting distracted by some attention getting or volatile businessperson or lobbying by special interests. ...

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The US ports of Los Angeles and Long Beach after Liberation Day- soon to be relics from the China Trade of yesterday. On April 9 US responded to China's 34% tariff with another 50% tariff of its own on China. The US tariff now stands at 104% to China's 84%. China says it won't back down and "will fight to the end." The US president DJT is now certain to restore world trade to the days before China entered the World Trade Organization and upended the world trade order leading to the deindustrialization of the US when US corporations followed Apple in 1998. With Tim  Cook in charge of Apple manufacturing in 1998 doing the first major act of outshoring the whole manufacturing base of a company to China. It was a strategy- to use the huge profits of a three punch approach- brand the product at the high end to command high price in the US through innovation and design (punch 1), followed by making using Chinese labor at low cost in China (punch 2), to generate the huge profits to create a virtuous cycle of investment from these profits to generate new cycle of growth (punch 3). What Apple gained, America's workers lost. This was sold by economists at the service of corporate narrative that it was good for America in the face of the facts showing just the reverse for 25 years 2000-2025. Soon almost the entire manufacturing base of the US was shipped out to China, or Chinese supply bases Vietnam. Japan fell in line and became a supplier to this China Manufacturing for the World. What started out as Microsoft demolishing Apple by 1998 and Apple using this 1-2-3 punch strategy turned into first a disaster for American workers, a loss of the working class leading to the loss of the middle class backbone of America, replaced by Silicon Valley and financial interests in New York City and disproportionate rewards to capital, the rural and small towns, cities across America's heartland thrown into decay and neglect.   ...

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GM executives say they plan to reduce the number of platforms for vehicles to 14 globally in 2018 from 30 in 2010. GM plans to reduce the number of engine families to 12 by 2018 from the 20 in 2009. Another step GM plans is to keep its investments in new product development stable and not follow the jerky product development that follows the roller coaster ride with sudden increase and decrease in market sales. That kind of product development resulted in wasteful spending.

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Efforts by the government of prime minister Erdogan to keep Turkey's interest rates at the same rate as inflation, with an effective real interest rate of zero. Erdogan strikes out at what he calls the "higher interest rate lobby." Erdogan's party fears a downturn in the Turkish economy could affect the government's referendum on a new constitution. The IMF sees a high credit growth to GDP ratio as a warning light for countries and Turkey is identified as one of the main countries facing this problem.

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The percentage of borrowers with loans overdue 30-90 days is at 7.4% at the end of the 1st quarter 2012, down from 8.3% for the prior year, according to the Mortgage Bankers Association. About 4.4% of mortgages were in foreclosure at the end of the 1st quarter of 2012, close to the 4.5% the prior year. Florida had foreclosure rate of 14.3%, New Jersey 8.4%, and Illinois 7.5%, at the end of March 2012. The inventory of loans in foreclosure is at 4.39%.

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The Nikkei Stock Average makes strong gains in mid Dec. 2012 after the landslide win by Shinzo Abe of the LDP party. The Nikkei is up 16% since the announcement of new elections in mid-Nov. Abe is pressuring the Bank of Japan for effective monetary easing to lower the value of the yen and help Japanese expoters. The Nikkei closed at 10,086 on Dec. 19, 2012. The Nikkei is still down 74% from the 1989 peak and off 21% from the Sept 2008 high.

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Markey and Dingell are supporting diiferent fuel efficiency standards in the House. Vote on the legislation in the House has been postponed after a meeting between Speaker Pelosi and Ed Markey. This gives Markey more time to build a consensus for stricter fuel econonomy standards among House members to be voted on later this year. Meantime rising crude oil prices which are close to $80 a barrel and reaching new highs may nudge the House in his direction while giving the automakers time to adjust their thinking.

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Some positive signs that drivers are sticking to their new fuel efficient ways even as gas prices drop below $3 a gallon in the USA mindful that the economy just got worse, jobs are shrinking, may be paying less, and the cost of groceries and other things have gone up. This will mean contiued decline in gasoline consumption that should help ease oil prices in the long run even as conservation helps reduce consumption, helps fight climate change, and sends fewer dollars overseas to pay for oil.

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Chief of TechMet a company in mineral resource development says that it will take years to dislodge China's dominance in rare metals mining and development for metals critical to technologies in car batteries, wind turbines, cellphones. This includes nickel and cobalt for car batteries.Last week president Trump signed an executive order declaring a national emergency and authorizing use of the Defense Production Act to speed development of mines. The U.S. imports 80% of its rare earth elements from China, with further supply coming indirectly from the country. For 14 of 35 critical types of minerals the U.S. has no domestic production. Gallium for light emitting diodes in cell phones is one of these metals. Half of Barite a metal used in hydraulic fracturing for shale oil is imported from China. To get some idea of the neglect in U.S.policy in these area under three administrations, the U.S. in the 1980's was the largest producer of rare earth metals and the technology to process them. Today there is only one mine the Mountain Pass mine in California, and no processing plants. It takes about 10 years to develop a mine. Just as in health care products essential to tackle the virus the U.S has found its manufacturing and technology base left in woeful shape after manufacturing and mining were neglected in a failed policy. Under the guise of globalization corporations transferred essential manufacturing from the U.S. and Europe to China, without understanding the importance these products played in the life of countries, and governments neglected to help local manufacturers and mining companies. Governments play a critical role as China has done by providing loans and grants to develop the national industrial base. Tariffs and quotas are also used to promote local development of the manufacturing base and mining base. Another factor is that investors are more able to invest in these companies when the government take some of the risk with its help and active support. With the Trump executive order comes a new awareness in Canada, Australia, and European Union which are now taking active steps to nurture and develop the local resources. ...

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The new plan of the Obama administration in August 2016 to tackle climate change is to cut power plant emissions of carbon dioxide by 32% by 2030 from 2005 levels. This will increase the energy from renewables to 28% of the total by 2030 from about 13% in 2014. The power industry was given more time to comply by shifting the first year to begin complying to 2022 from 2020. The final rule will also provide for generating more energy from nuclear power which provides 20% of the electricity, and which will help reach the 32% target for cutting emissions by 2030. It will also give more flexibility for the shift to natural gas from coal by giving credits towards compliance for projects starting early, rather than mandating a large shift early.

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The possibilities of gradual restructuring of France's nuclear engineering company Areva SA. A new CEO, Luc Oursel, the current Deputy Chief Executive, succeeds Anne Lauvergeon. Restructuring the company could mean sale of assets, including the sale of its uranium mining business. The French government plans to make Electricite de France take the leading role for exporting France's nuclear technology. The failure of a French consortium to get a $20 billion contract in Abu Dhabi in 2009, has highlighted the need for changing the way France markets its nuclear technology overseas. The French government owns an 87% stake in Areva. Areva has 3.7 billion euros of debt and needs to raise cash for future needs. In 2011 Areva sold its transmission and distribution unit for about $3 billion to a French consortium.

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The smartphone market in Brazil is shifting to the $100-$300 range. Because of higher import taxes and other costs, including paying for the full price upfront, buyers pay about $260 for a Moto G whereas a iPhone 6 would cost $1060. The focus is on the better value for the Moto G compared to the Samsung Galaxy and Apple iPhone in developing countries, where new middle class consumers such as in Brazil may make between $5400 to $27,000 a year. This creates opportunities for such phones with superior value- the Moto G has a 5 inch HD display, a 1.2 GHz Qualcomm pocessor, and an 8 megapixel camera. This has helped Lenovo Motorola Mobility take 18% of the Brazil smartphone market, according to IDC, making the Moto G the best selling smartphone in Brazil.

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The situation for organic farmers in the U.S. and Canada where conversion is discouraged by the high costs incurred over 2-3 years for converting to regular farming. A period in which use of pesticides and other chemical products is reduced and new farming practices are introduced. During this period farmers still sell product at the regular price, even as high upfront costs are incurred. The result is tight organic supplies for corn, soyabeans and other food products, with organic prices as much as three times the regular price. In responding to the surging demand buyers are getting involved to support farmers by guaranteeing prices over several years, and in some cases buying farms. This trend should result in lower prices for organic foods as supplies catchup with demand.

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Sweden implements new rules that make it easier for companies to recruit foreigners for jobs in Sweden. The idea is to meet labor shortages in the short run and to support an aging population down the road. For the first 2 weeks the job postings have to be made with an employment registry that reaches all 27 EU member countries and then the position can be made open to foreigners outside the EU. THe Swedish Public Employment Agency is no longer required to examine each individual case for ability to fill it with someone inside Sweden. But employment is still required to meet working conditions and collective bargaining agreements with workers so that these areas are safeguarded. So as the UK moves to a points system, Sweden moves in another direction.

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Should private equity taking stakes in distressed companies benefit while the government and taxpayers get no ownership stakes for the $700 billion they put out- thats the issue for the New York Times in an editorial on Wednesday, September 23, during the days of Congressional hearings and Paulson Bernanke and company failing to budge on this and on help for those facing foreclosure. Those two days saw Paulson and Bernanke facing angry and distraught members of Congress who in question after question brought up these points relentlessly for both days and got simply the same response that something needed to be done quickly and these points could wait. Late Tuesday September 23, Obama and McCain joined the Congressman by urging action but requiring these points be put in.

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A new report on American driving habits by Samantha Gross and Aaron Brady of Cambridge Energy Associates shows that finally the gasoline price increases are beginning to bite the consumer and American drivers are changing their habits. After increasing from about2.5 trillion miles of total vehicle miles travelled by Americans in 1998 to about 3.0 trillion miles in 2007 the last 6 months are showing a downward trend for the first time. In the late 1970's and early 1980's something similar happened with a deep recession, rising gasoline prices and improved fuel efficiency standards, during this period gasoline consumption declined by 12 % accordingt o CEA. What is different now? For one thing the environmental issues are a big factor now and they take a new meaning as developing countries like India China Brazil and Rusia as well as other countries with much larger numbers of people than the US and Europe are now part of the car buying and electricity using peoples of the world. Its impossible both for the environment and for resource supplies to meet the needs of billions of new people joining the global economy and western ways of living without doing something radically different. And he problem is immediate as China becomes the second largest car buying country and India is not far behind with an explosion in Nano sales expected in the next few years, and the huge demands on electricity in these countries meaning burning huge amounts of coal to generate this electricity and create global environmental problems. All this makes the 70's and early eighties period remotely relevant. We are looking at something hugely different and 21st century defining now as its clear fuel has to be conserved and resources shared between the western world and the developing world, and technology moved forward quickly to meet the needs of a new world of Asia, Africa, Europe and the Americas all bundled into one both by the global ecoomy and the way business operates and by the needs of people everywhere. And the media and public perceptions may be just catching up to these changes which are already taking place on the lands and under the feet of millions of people around the world. Some clues to what might have happened. Americans spent 4.5% of their after tax income on transportation fuels in 1981 according to Global Insight, a forecasting firm, and this went down to 1.9% in 1998, and is back up to 4% now in 2008. In California and more affluent areas of the country where the incomes are higher and gasoline prices are higher over 4% is spent on transportation fuels, whereas in areas of Alabama and Mississippi in the poorest areas where gasoline is less expensive this is over 16% according to the New York Times interactive graphic. During this period 1998 to 2008 demand increased for gasoline, in terms of the number of miles driven went up by 25% from 2.5 trillion miles driven to 3.0 trillion miles driven, and the sales of large pickup trucks and SUV's soared to make them the largest number of vehicles sold each year. At 1.9% of after tax income nationally, transportation fuels were cheap and consumers reacted rationally by splurging on gasoline in the USA. As a sobering note to all this sign of improvement in conservation of fuel the miles driven are still at about 3.0 trillion miles the high reached last year 2007. It will take a lag of a couple of years before a changing fleet to smaller vehicles and more fuel efficient vehicles and better driving habits and conserving fuel habits to make itself felt in transportation fuel usage across the USA and this requires prices at least at these levels to make the change seen as necessary to meet global needs and global environment....