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Pearlstein says American Airlines (AMR) management had hoped to reduce employees count by 13,000, reduce benefits for employees and retirees and reform work rules by going through bankruptcy in the manner of other airlines such as Delta and Northwest. As it turns out AMR's unions and US Airways have made their own deal and come up with labor agreements that are likely to result in a merger deal with AMR with 1.2 billion in savings from synergies, instead of relying on labor savings for $800 million as AMR management had planned. This is because US Airways CEO, Doug Parker, sees increased savings and revenue from a new combined airline and a better hands on management team. Part of the reason is also the the way the combined airline provides additional feeder traffic from smaller cities to hubs in the east coast and midwest markets and in the Miami routes to South America. The Pension Benefit Guarantee Corporation also tacitly sees the benefit of a stronger airline so that its funds are not depleted further by having to support AMR's underfunded pension plan. The creditors have also realized what all this means by increasing the value of AMR bonds to 50 cents on the dollar from 30 cents on the dollar....

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For years economists and finance people left this hidden and obscured, the common sense understanding that higher interest rates in an economy based on better education with investments in infrastructure and manufacturing as Biden has put in place today would actually stimulate the economy. Why? David Uberti rightly points out this is household wealth growing larger with investment in CD's and savings accounts, dividend paying stocks at higher interest rates. Consider this important fact -Americans have earned $3.7 trillion in the first quarter alone in interest and dividends. This is $770 billion larger than in 2019, according to Commerce Department. In the last quarter of 2023 Americans had the largest wealth ever held in stocks, real estate, and other assets such as pensions, according to the Federal Reserve. Charles Schwab of the brokerage company he founded in 1971 stated this as a major loss for the American people and the economy when zero interest rates were used to tackle the problems created by greed and poor behaviors of banks in the 2009 crisis, Schwab was talking about something real. Hit the country with war burdens for Middle East wars of Reagan, Bush, Obama and Trump by taking away funds from infrastructure and education, healthcare and you have two burdens -2009 financial crisis created by banks and wars that reduce the household wealth and the capacity of the American economy to grow and create needed jobs to reduce standard of life/quality of life in the US. A third burden fell heavily on pensioners and elderly depriving them of interest and dividends with zero interest rates that no economist wanted to talk about for 30 years including  the previous administrations since 1990.  ...

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US Border wall is at $39 billion in the House version vs. $62 billion investment in the Senate version of US 3B Tax Cuts Bill 2025. The $6.5 billion in savings from the earlier figure of $46.5 billion in the House bill are justified says Rand Paul, head of the Homeland Security Committee in Congress, as most of the goals for border security can be achieved with the lower amount. The WSJ Editorial Board agrees with Rand Paul.

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This self portrait by Vladimir Putin about his growing up years in Leningrad and the life of his father and mother during the siege of Leningrad by Germans may offer a better sense of the mind and thinking of the Russian president than the Dresden years when he was a junior Russian official in Communist East Germany (the GDR). It is an interview of the Russian president in 2000 by Nataliya Gevorkyan, Natalya Timakova, and Andrei Kolesnikov over twenty years back. Putin's father suffered severe injuries during the war in the fighting around Leningrad, twice being given up for dead and being dragged wounded across the frozen Neva river to a hospital by a neighbor. His mother was half dead from starvation and his father passed on his food given to him at the hospital. Having gone through the memories of this period affected Vladimir Putin's view of the world and no amount of US or German assurance about NATO's intentions may have erased these memories from childhood. The long period in power and the Covid isolation may have led to  perceptions that were less likely to change so that Putin did his own research and wrote a long paper on Ukraine in 2021 that reflected Russia and Ukraine's long history but did not reflect the changing national aspirations of Ukraine's people in 2022. This may have led to the miscalculation and the errors by both Putin and the leaders Merkel-Bush-Obama that the detailed WSJ report of 20 years of events show to have happened. The WSJ report of April 1, 2022, was titled "Vladimir Putin's 20 Year March to War in Ukraine and How the West Mishandled It." The Social Democrats in Germany under Schroeder and Steinmeier mishandled it by deepening economic integration with Russia as a way to make up for what had happened in the German invasion of Russia, and the Christian Democrats under Merkel with business interests never really grasped the different thinking of the Russian president relying solely on deep economic integration of the EU and Germany with Russia as well as China as an answer. Mr. Bush and Mr. Obama from a distance even less so.  This has led to the miscalculation by Russia under Putin leading to invasion of Ukraine, and the US and Germany being unprepared about taking action to prevent it.  Beyond the key participants and the war damage, there is the enormous damage that is taking place in the mental health around the world after Covid with constant barrage of images of war and refugees streaming into Poland. There is the problem of food imports, of food scarcity in the Middle East, and inflation in food prices for Africa and the Middle East. As Brendan Simms, a Cambridge historian has shown in his book "Europe The Struggle of Supremacy 1453 to the Present," which is now being read by German chancellor Scholz, this has happened before with the UK, Netherlands, Spain, Germany, Sweden, Denmark and Russia engaging in these conflicts that led to prolonged wars and eventually to only small shifts in power. Yet with huge effects for ordinary people caught in the wars such as today's refugees and people struggling to feed their families in Africa and Asia after the effects of Covid on income. Food prices have gone up by 50% to almost double in these countries.   ...

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Polls show about 69% of people in Northern Ireland support the Good Friday Agreement that was signed 25 years ago with US help. About 55% see improvements can be made to that agreement. With the new generation of Irish there is now a significant part of Northern Ireland that sees itself as not identifying with the Unionists who favor links with Britain or the Nationalists who favor reunification with Ireland. Over this period of peaceful coexistence of the Catholics and the Protestants in Northern Ireland who are still largely segregated, there is even a sense that reunification and joining the European Union is an option for Northern Ireland following Brexit. 

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Apple's new privacy rules are reducing the extensive tracking of internet users that took place in an unregulated industry for the last decade. Apple has introduced a long overdue privacy change that restricts how users can be tracked on apps such as Facebook, Instagram and other apps. Users are now asked if they want to be tracked and can opt out. US users opt to allow tracking only 16% of the time they see the Apple privacy prompt. This will be one more needed step to protect the privacy of users that had suffered  in the last 10 years from rampant and unrestricted tracking of users.

 

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US EU relations are on a better track with president Biden, yet tough talks on issues such as Russia and China, vaccines, climate change remain, and there is the uncertainty of new leadership in France and Germany with upcoming elections.

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Values of St Augustine are to be celebrated with Vance, and of Mohandas Gandhi with Harris. Then why the discord? End wars (Biden ending the war in Afghanistan). End migrant incursions Harris pledge to sign the Lankford-Biden legislation into law that fixes asylum entry and Closes the Border with Mexico. Cost of living that hurts the needy and middle class the most. As Applebaum writes about Housing costs Trump has no plan, Harris is willing to put government resources into it. Republicans have their hands tied by a hands off government that is supposed to do nothing and hope everything will work out. That is without corporate housing company greed in a system that doesn/t work -they set the prices too high. As Kristof writes about in the NYT the Republicans will not support paid marital leave, will not support child care assistance, will not support cuts to high pharmaceutical costs, making healthcare unaffordable even to the middle class not to speak of the lower income working class. And will not support investment in the infrastructure that is crumbling around us even as the infrastructure is crumbling around us, like the bridge in Baltimore that went down in minutes. Trump used infrastructure issue in 2016 and rightly so, and talked about it being Infrastructure Week every week, yet did nothing for infrastructure, nothing serious until Biden in 2016-2020. This a continuing project for Harris. Part of this is to end the wars (Biden's efforts in Afghanistan ending it). And end the migrants incursions, Harris 's pledge to sign the Lankford-Biden immigration bill that fixes asylum entry and closes the US Border with Mexico. ...

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Dunne and Nawaz say the situation in Egypt is developing into something similiar to Pakistan where the military has special privileges and controls what happens in the country even when democratic governments are elected. Dunne and Nawaz are directors of the Middle East and South Asia centers at The Atlantic Council. They say that the U.S. government should suspend military assistance if the conditions are not met for the clear leadership of the elected government and for democratic processes to work.

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Vodafone is well positioned to cope with the eurozone crisis. Operations in Greece and Spain are only 6% of total enterprise value, according to JP Morgan estimates. Vodafone expects free cash flows of 5.3-5.8 billion pounds in 2012 compared to 6.1 billion pounds in the prior year. Vodafone continues to show growth in Turkey and India. And the 45% stake it has in Verizon Wireless in the U.S. also contributes to earnings, as growth in Verizon Wireless revenues was 7.3% in 2011.

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Fronterra Cooperative Group Ltd. cuts it forecast payout for the current dairy season to 4.70 New Zealand dollars per kilo (U.S. $3.70) for milk solids, a sharp decline from NZ$8.40 in 2013. This reduces farmer incomes by NZ$6 billion. Farmers are culling herds and cutting the size of farms as it becomes unprofitable to remain in dairy farming. Milk makes up 30% of overseas sales for New Zealand. Lending to farmers increased 42% since 2008 to NZ$34.5 billion.

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With the U.S. Federal Reserve pulling back from its monetary easing policy and the ECB holding steady with a low interest rate policy, bond investors are finding attractive buys for government bonds of Italy and Spain. 10 year government bonds of Italy yielded 4.2%, and Spain's government bonds yielded 4.3% on Aug. 22, 2013. By comparison German government bonds yielded 1.88%, narrowing the gap between the bonds of southern European countries and German bonds as the eurozone economies recover in 2013-2014.

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Questions about the every 5 years 20th Party Congress of the CCP or Chinese Communist Party, and the 2300 representatives attending from all parts of China are answered in this report in The Guardian.  Xi Jinping is expected to get a third term. To outsiders in US and Europe it is all about power in China, to insiders in China it is about China making it through the 100 years since the 1901 revolution and the tumult, the chaos of the first 100 years, and now a period of modernization and growing incomes,  the need to create jobs, tackle climate change, ensure a good future for the Chinese people. 2300 party members representing millions of party members in China attend the gathering. New appointments and retirements take place at this Congress. Of this there are 200 elite members of the Central Committee with voting rights. This central committee is responsible for electing a 25 member Politburo, of which the seven most senior persons are appointed to the Politburo Standing Committee. Xi Jinping is the General Secretary, the most senior position in this hierarchy. Age related retirements are at 68 years and a new Politburo standing committee is announced at each Congress. After the Bo Xilai effort to take power and take China in a new and unknown direction, and the gradual loss of the party's respect from corruption and abuses of power by local officials, Xi Jinping sensed problems in the future and conducted a anti-corruption campaign. Most of the system of government set up during the Deng and Jiang Zemin years after 1980 remains in place with Jinping calling for a revival of China, the next stage of modernization, under the banner of the CCP. The result of the anti-corruption campaign and a third term assumed by Xi including lifting of a term limit for heading the CCP, gives Xi Jinping an opportunity to shape the future for China as Deng did after 1980. Jinping in the manner of Deng sees the CCP as the organization that can continue the modernization and growth of China. The model set by Deng and Zemin of local autonomy for economy and centralized overall direction continues under Jinping who is General Secretary since 2012. China has made rapid growth during the period 2000-2022, but faces challenges of reorienting its economy away from dependence on a tight economic export oriented relationship with the US and EU, as supply chains are being shifted after the pandemic. This means more unemployment and need for careful economic planning and investment to create jobs in other sectors, and to meet the challenges of unequal distribution of wealth in China after hypergrowth that hurt China in some ways, and in the climate change effects of use of coal other fossil fuels. As focus of interest is on Jinping externally, within China it is these three challenges that must be uppermost in the minds of the 20th Congress members. Much of this stems from the tumult of the century that began with the 1901 revolution through Japanese invasion and upheavals in the 60's and 70's, leading to the rare period of stability and growth in the last 20 years. Jinping like Deng and Zemin has personal memories of the anguish of this period and the tumult, the chaos of the 20th century for China, and the yearning for stability with modernization.   ...

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Efforts by the Obama administration to improve Iran-U.S. relations during the period before the election of Rouhani as president in 2013.

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Average US bills for electricity have gone up by over 10% in about 15 states with some rate hikes over 20%, reports the Washington Post. In New Jersey 21%, Virginai 15%. Higher prices in Utah where renewable energy projects cancellation have drawn criticism from Republican governor Spencer Cox. Higher rates also in Indiana, Ohio and Louisiana. Data centers put up by tech companies are taking up huge amounts of energy pushing up rates. Voters believe these tech companies are not paying their "fair share." There is also no clear idea on whether clean energy is pushing up prices of electricity or whether the cancellation of clean energy projects including the ones that make sense  are pushing up electricity prices, with voters going both ways in their perceptions. With a rapidly shrinking gap between India+ Japan and China, the US can finally put to rest the burdens of conflict such as the 1930's Japanese invasion of China, the war after pearl Harbor in the Pacific, the Korean conflict, and the Vietnam conflict in which America and its people shouldered huge burdens. ...

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The surprise is the DJT Senate bill cuts to about 75% of the solar and wind subsidies in the Biden 2022 IRA Act for $843 billion in investments that were going to Republican districts. New rules in the Senate version of 3B Tax Cuts Bill require US renewable solar to disentangle supply chain from China by 2027 or face an excise import tax. All renewable subsidies will also be phased out earlier by 2027 instead of 2032 set by the Biden administration in the Inflation Reduction Act. The Inflation Reduction Act passed in 2022 with subsidies, tax credits for renewables solar and wind led to $843 billion in planned solar and wind investments. Suddenly much of this is placed in doubt. Instead of 2032 phase out the date is moved up to end of 2027 for 30% subsidies and to end of 2028. The result is confusion in the renewables industry and opposition to the excise tax for not disentangling from China supply chain by end of 2027 spreading to the US Chamber of Commerce. ...

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Knight Capital's aggressive introduction of software with ony a short period between approval and implementation resulted in a wave of erroneous orders resulting in losses for the brokerage firm of $440 million. These losses were incurred as Knight Capital had to sell all the stocks it accidentally bought as a result of malfunctioning software that sent out waves of wrong orders on August 1, 2012. Knight accounted for 11% of the stock traded in the U.S. in the first half of 2012, according to TABB Group. It took 45 minutes for the New York Exchange to detect the problem, identify Knight Trading as the source and shut down trading.

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This opinion in the Economist magazine says Britain's position in the world has never been this low since the Suez crisis in 1956. With its volatile politics and no sense of direction Britain it says has lost its place in the world. During the Suez crisis Anthony Eden's efforts to restore Britain's position in Egypt was torn down by America. The U.S. pursues its own interests first- so much for the special relationship with America. It is only when the three pillars that sustained Britain operate together does Britain have a role- its relationship with America gives it a special place in the EU, and its relationship with the EU gives it a special place with America and acts as a counterbalance to Germany and France inside the EU. The third pillar is Britain's place with the emerging world which is supported by its being a member of the EU, a 500 million people market. The Economist counts as mere deceptions the idea that British industry is handicapped by being in the EU. It says the Mittelstand has done well with the EU market, so has British industry.     ...

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GE's decision to exit the banking business ends a period of aggressively reducing taxes using GE Capital operations. This ended in disaster in the 2008 global fianncial crisis with GE shares down to $6 and GE needing a government rescue. GE reported in its securities filing that its tax rate of 10.3% in 2014 would have been 17% without the use of GE Capital operations to reduce taxes. Experts say GE's tax rate is lower using GE Capital because of doing business in lower tax jurisdictions overseas and global funding base. In 2013 securities filing cited in the Washington Post show GE taxes were an astonishing 4.2%. GE will repatriate $36 billion in overseas earnings as the first step and pay taxes to the U.S. Treasury of $6 billion.

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Italy's prime minister Berlusconi is changing the terms of the 45.15 billion euro austerity package after political protests. He has to weigh what is doable in the political context with demands from the European Central Bank, which is buying Italian bonds to prevent a surge in borrowing rates for Italy. The new measures as the old package unraveled are: an increase in the value added tax to 21% from 20%, increasing the retirement age for women in the private sector to 65 from 60 in 2014, two years earlier than expected, and a 3% tax on Italians earning above 300,000 euros annually. The street protesters in Bolgna, Milan Rome and other cities, protested that the earlier package unfairly put the burden on the working class. The cuts in local government spending in the earlier package would have impacted spending on items such as nurseries for children, drawing protests from teachers. The debate on an equitable sharing of the burden of reducing deficits is ocurring both in the U.S. and Europe, especially with high unemployment and lack of economic growth....

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US China talks on trade hinge on fentanyl action on export from source material countries- fentanyl action with more American deaths 3 times the Korean and Vietnam Wars is allowed to be a trade negotiation by both sides. The abject failure of politicians and the media in not spotlighting the issue as one common to humanity and one that speaks for people, mothers and sons, daughters, in all races, in many countries, to defend justice and protect the weak. It shows that today's politics and culture is failing the People, the Nation, and the World.

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Car insurance and tariffs on Mexico made auto parts would take a 2 year lag in inflationary impact, says this report in WSJ. Insurance companies will wait to see the impact and how long the tariffs are in place. Tariffs are put in place to stop fentanyl flows through Canada, Mexico and China to the US, which have cost 490,000 deaths in the US over the last 12 years. Canada now fully supports the US for action to be taken and cites similar loss of lives in Canada from fentanyl comparable to the US for its smaller population. Much of the focus on tariffs is seen as economic action in the media, when as Commerce Secretary Luttnick pointed out it is being used as an instrument to get immediate action from countries that have not acted to stop the flow of fentanyl -action they should have done taken many years back. DJT's action is to protect average Americans, communities across the US that have lost their manufacturing base to Mexico and China, and are being hit by the flows of fentanyl across borders for over a decade now. Never in American history has this kind of flow across borders happened since the first settlers came to America in 1600. ...

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Renewable energy will get a big boost after the Ukraine war but there will be a period of transition during which more fossil fuels are produced in the US, Qatar and other parts of the Middle East to meet demand in Europe in 2022. Europe is working to develop alternative supplies of energy in an effort to move away from dependence on Russian energy.

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Russia is seeking guarantees from the US that Ukraine will not join NATO. Russian concern is that NATO would put in missiles on countries along its border. A Russian buildup on its border with Ukraine continues with the prospect of an invasion. President Biden and president Putin of Russia will discuss ways to resolve the situation this week in a phone call.