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Only 1.9 million hourly workers in manufacturing now earn more than $20 per hour, its down 60% since 1979, according to the Bureau of Labor Statistics. Of all hourly workers in every sector of the economy the percentage of people earning more than $20 per hour shrunk to 18% in 2008 from 23% in 1979, thus losing some of the gains the US made since World War II which helped build the American middle class. One can see this unwinding clearly in the auto industry as wages are being reduced to match nonunion Japanese plants, and the industry itself is going through a huge downsizing fast. The hourly work force totals 76 million or 52% of all workers ranging from managers and professionals to factory and construction workers to technicians, educators and sales people. The wages of salaried workers show a similiar trend but are not converted into hourly amounts. As the numbers for 2007 are at the point where the economy was still booming, the path ahead as things go through a steep downturn can only have serious implications such as a slow recovery for demand in 2010. If a number of trends converge, employers shift to part time employment, auto related workers downshift to lower wages and benefits, shift to nonunion plants in the south or the midwest, and work is offshored or outsourced, this could worsen effects on consumption for years ahead especially with the credit remaining tight and consumers paying off old debt. Frank Levy, a labor economist at MIT, says that all this is happening wihtout a political debate or discussion, as people are worried more about having a job, and only secondly about what it pays and whether they are losing ground. Even the Pennsylvania primary debate, says Levy, between Hillary Clinton and Obama was conducted without quantifying the decline, and no one mentioned the eroding of the $20 per hour wage. What happened to support the consumption and support imports, was to pay for consumption by going into debt or refinancing the home. This has implications that range from the future of export industries in China's booming coastal sector, to how long the recovery drags on, and to what the future would look like....

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Russian president, Vladimir Putin, tells academics and journalists at an event called the Valdai Discussion Club, he had reservations about expanding the state sector by approving the deal for Rosneft to acquire TNK-BP assets. His motivation for doing this was the endless shareholder conflict between the Russian partners and BP. Putin says he warned British prime minister Tony Blair that a 50%-50% ownership venture would not work as nobody was in control, and described this as so bad that "sometimes they were fighting each other with their bare hands." The injection of private ownership into Rosneft with the 20% stake for BP would provide stability for the company and was the bright side to this. Foreign academics and journalists participate in three days of discussions with Russian academics and journalists in this event. Putin has no new vision for this third term beyond consolidating and protecting the achievements of the last decade. He cited as his achievements- growth of the economy, expansion of the foreign exchange reserves, and the increase in the birthrate....

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Diversification has helped BHP weather the decline in commodities prices better than Rio Tinto, Anglo-American and Vale. BHP is expected to report profits of $12.5 billion for the last fiscal year. BHP is also in the oil and gas business, in addition to iron, ore, copper, coal and aluminium. This has made it possible to take writedowns of $5.5 billion and still make stable profits. Andrew Mackenzie, the new CEO of BHP, is a Scotsman who is focussing on the productivity of capital and cost-cutting. BHP announced $1.9 billion in cost savings since July 2012. Mackenzie's goal is to reduce capital expenditures from $18 billion today to $15 billion or less in 2-3 years. Capital is tied up in incomplete projects taken up in the boom period of higher prices, and the process of reducing capital expenditures is gradual. Capital expenditures in the mining business increased dramatically from $20 billion to $120 billion from 2003 to 2012. For most of this period China's economy registered growth rates of over 10%....

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U.S. GDP growth in the second quarter was at annual pace of 1.3% for the second quarter, down from the previous estimate of 1.7%, according to the Commerce Department. About half of this or 0.2% comes from the severe drought and drop in farm inventories, with crop production declining by $12 billion. Macroeconomic Advisors now estimates GDP growth of 1.5% for the third quarter of 2012, down from 2%. The drought continues in 65.5% of the U.S., according to U.S. Drought Monitor. Consumer spending and business investment is sluggish. The drought impact is likely to take out one tenth of GDP growth for the fourth quarter 2012 and 1st quarter 2013, through the impact of higher food prices and lower real incomes and wealth.

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The Baltic Dry Freight Index (BDI Index) dropped to 577 in Jan. 2015, its lowest level since 1987. The BDI Index went up to 11,793 in 2008. Capacity is about 20% higher than demand for dry bulk shipping vessels of commodities such as iron ore and coal. Analysts say tonnage of dry bulk vessels went up by 85% after 2008, just as the demand fell sharply.

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About 1.17 million jobs were lost in 2008 according to the Labor Department, with half of these job losses in the last 3 months, as unemployment reached 6.5%. Bu the the labor underutilization rate is the one to watch, the measure of total unemployment including parttime workers who seek full time employment but can't get it. This hit 11.8% in October up from 11% a year earlier. This is what happened in Japan where companies began using parttime workers to reduce costs and not to have to pay benefits, a trend that has already started in the US. See link to trend. Over a long period like 5-10 years this can lead to depressed consumer spending as workers see an uncertain future, as ocurred and is still the case in Japan. Also note that the unemployment rate reached 10.8% in the 1981-82 recession and this is shaping up to be something bigger, and half of the 1.2 million job losses ocurring in the last 3 months so this is accelerating. The economy is expected to shrink at an annual rate of 4% in the 4th quarter, and could see these kinds of declines or worse in 2009 and beyond....

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Max Fisher of the NYT points out the unique approach taken by Canada in the U.S.-Canada relationship - to cultivate a grassroots network of Americans in legislatures, business, and at different levels of government. This has enabled the Trudeau government to build a relationship with president Trump, and at the same time have relationships at different levels of government and with business in the U.S. to tackle issues where the Trump administration has acted in ways unfavorable for Canada. Provincial governments in Ontario and Quebec lobbied against a New York state government provision for Buying American on state contracts worth over $100,000. By emphasizing the $10 billion in exports from New York to Ontario this lobbying persuaded the New York legislature to cancel the provision. Premier Trudeau's popularity helps and the proximity to the U.S. means Canadians can visit quickly and understand the U.S. as a close neighbor. Still Premier Kathleen Wynne of Ontario says Canadian businesses are nervous about the uncertainty from the Trump administration.   ...

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IMF research by Ocampo and Erten shows that when adjusted for inflation since the 1970's, the prices of metals have remained about the same, food prices down 58%, and energy prices up 163%.

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Cadillac had between 60-126 days inventory for different models in Jan. 2014 compared to 38 days for imported luxury cars, according to Autodata. Cadillac XTS had 126 days and the Escalade and ATS 92-94 days.

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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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The Economist makes an important point about the violence, poverty and terrorism in failing states. The failure of civil institutions and civil wars in Africa, have led to complete breakdown. Similiar situations playing out in Afghistan and Pakistan. At the very least says the Economist, "there is evidence that economic growthin countries next to failing states can be badly damaged." Even in South Asia where India has forged ahead with high growth rates, one can say that economic development has not made a significant dent in the poverty, malnutrition and lack of infrastructure across the country. It adds that a weak goverment may lack the wherewithal to identify and contain a pandemic that could spread globally.

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The Bank of Japan's plans to buy 100 trillion yen of Japanese government debt in 2 years to fight deflation is having a positive effect on the eurozone economies. Japanese investors are buying eurozone sovereign debt. J.P. Morgan estimates the increase in investments for overseas bonds by Japanese investors in 2013 at 45 billion euros. This is lowering the yields on the sovereign bonds of France, Netherlands and Austria to record lows and lowering the yields of sovereign bonds of Italy and Spain. The 10 year yields on Italy's government bonds declined to 4.326%. Yields on 10 year Japanese government bonds was 0.514% on April 8, 2013.

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Judith Warner coins the phrase "dysregulation," for the cultural phenomena that may be behind the lack of restraint exercized in everthing that relates to personal lives like obesity, to the lack of regulation in the gulf and financial crisis. Citing Whybrow's book, "American Mania: When More Is Not Enough," she points to a disturbance in the national psyche, something that disturbs some inner clock or mechanism, that disturbs some inner balance that is built into us from the beginnings of man in the universe.