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Goldman's final superspike phase idea for oil prices and the trend to anywhere from $150 to $200. The duration and magnitude of this phase remain uncertain. other analysts support this including CERA and Yergin who are normally cautious. See the WSJ link to this on the facts, and the thinking behind this, and why Yergin also agrees in WSJ 5/7/08. Note that the term final spike is used because at some point in the next 6-24 months the slowdown will be global, and the bite into worldwide oil and commodities in general consumption becomes significant. BRIC's countries will see themselves overextended at some point in the next 6-24 months, just when the bite into US consumption becomes significant and really painful which it is not at this point, and with that prices should come down, and some of the imbalances get corrected. "The core of our super spike view is that the lack of adequate supply growth and price insulated non-OECD demand growth is leading to a sharp spike in oil prices," says the Goldman Report of May 6, 2008. This could lead to a sharp correction in demand as a result of the spike in oil prices. Deutsche Bank's Sieminski also said in a April 25 report that there is a huge risk prices could go up perhaps $200, before demand is collapsing when ordinary people can no longer afford to burn energy the way they are doing now. The Institue of Supply Management's index of USA non-manufacturing business, service industries making up a large part of the economy, shows a first increase since December 2007, according to a Bloomberg, May 6 report, and this suggests increasing energy use. ...

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With funding from the International Finance Corporation, Bangladesh, Pakistan, and other developing countries with shortfall in energy supplies are building offshore LNG terminals. The demand for LNG in these countries is expected to surpass the demand in developed countries.  IEA estimates show 90% of global LNG demand growth by 2022 coming from these emerging economies. Shortages of electricity in places such as Karachi and Dacca are the reason for the growth. Putting LNG terminals offshore is a viable and economical alternative. Petrobangla is completing a offshore LNG terminal by 2018 with IFC funding. Pakistan completed a floating LNG terminal at Port Qasim in 2015 for importing LNG from Qatar. This terminal alone covers 30% of the needs not met from domestic supplies in Pakistan for gas, according to Engro Elengy data.

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Patrick Buisson, a key Sarkozy adviser, who helped him win the presidential election in 2007, says Marie LePen's chances in the 2017 election are dimmer than people realize. Her Front National is popular in the north of France with working class people who formerly voted in favor of the Communist or Left parties. In the south of France in areas like Nice her niece Marion is popular with people who have social views on the right on abortion, and gay marraige. The problem is reconciling these 2 blocs of voters and the way Le Pen appears to have moderated her views on social issues. The opposing candidate from the Right parties formerly led by Sarkozy is Francois Fillon, actually prime minister for the full term of 5 years under Sarkozy. Fillon's views are closer to the FN voters in the south and opposes gay marraige and abortion, and has a strong foothold with Catholic voters in traditionally Catholic France. It is this split that hurts LePen who had hoped to run against Bordeaux mayor LeJuppe. The left parties are in disarray and likely not to be a factor. Another difference is that the voters in the south of FN do not see it the same way as FN voters in the north on issues of increasing the size of the state. Voters in southern France do not favor increasing the size of the state as Le Pen has promised and opposed by Fillon. Fillon has plans to cut France's large state employees by 600,000. France has a large state owned sector of companies and increasing the work week to 48 hours, reducing the state sector size to help private companies with incentives is seen as a way to increase productivity and grow the economy, plans supported by Fillon. A major problem for Marie LePen is her family name of Le Pen which Buisson says people in France associate with her father Jean LePen, and extremist positions. Buisson thinks Marie LePen will never be able to shake off this image in the second round of the election as she loses some of her right wing Catholic support to Fillon, and fails to attract enough working class voters in the north of France because of the family name. ...

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Lenovo shows a profit of $129 million for this fiscal year compared to a net loss of $226 million in the prior year. Revenues in the 1st quarter of 2010 went up to $4.32 billon from $2.77 billon with proft at $13 million. Margins are still under pressure because of growth in the lower priced PC market segment. Gross margins fell to 10.4% this year. To diversify Lenovo has introduced the Le Phone with China Unicom (Hong Kong) and sees sales of its mobile phones exceeding Apple's iPhone sales. It has also developed a prototype of a tablet PC in January 2010. PC shipments in China of $2 billon account for 45% of 3rd quarter revenues- up 67% in China's fast growing PC market. And Lenovo's plan is to expand sales in India, Russia and Turkey, from the current 5% in the fourth quarter ending March 31, 2010, to double digits.

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Glenn Hubbard says a Romney economic plan for the U.S. with tax cuts and spending restraint and reducing uncertainties over policymaking will increase GDP growth by 0.5 to 1% per year over the next 10 years. It would set the U.S. on the path to solid economic recovery by getting the private sector to generate 200,000 to 300,000 new jobs per month during Romney's first term in office. Hubbard is dean of the Columbia University Business School in New York, and economy advisor to Romney. A study by Scott Baker and Nicholas Bloom of Stanford University and Steven Davis of the University of Chicago shows that uncertainty over policy under the Obama administration reduced GDP by 1.4% in 2011, and returning to pre-crisis levels of uncertainty would increase jobs by 2.3 million in 18 months. See the Reagan memo and the interview with George Shultz, economic advisor to former President Reagan. The Shultz-Hubbard approach puts great emphasis on reducing uncertainty for business and creating the right climate for business to invest in a recovery. In this way its distinctly different from the approach of the Obama administration....

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A situation now in the Euro-zone countries of Greece, Portugal, Ireland and Spain, that is similiar to what Argentina faced when its economy collapsed and the peso was devalued in 2001. The Argentine peso was pegged to the dollar increasing the attractiveness of Argentine bonds for foreign investors. A severe recession in the 1990's made it difficult for Argentina to service its debt. And the high value of the peso made it harder for Argentine exporters to compete . A devaluation of the Brazilian currency in 2001 left Argentina in a situation where it was no longer able to compete. The government fell and the economy suffered a severe blow with depression and cuts in spending. Both the Argentine peso's peg to the dollar and the adoption of the euro by Greece, Portugal, and Spain prevent adjustment through a devaluation, making the situation worse over time. Some experts from that time including Mohamed El-Arian of PIMCO see the exit of some countries from the euro-zone. Their view is that bondholders in Europe will have to accept new securities that pay less interest and mature over a longer period....

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Concerns that the austerity cuts announced by Spanish prime minister Zapatero may not address the deeper causes of the financial crisis in Europe- taking on too much debt, government spending and the imbalances in the global economy. And the concern on the other side that even these small cuts and eventual larger cuts can squeeze domestic demand in countries with severe recession, weaken the tax base, test social cohesion, and dampen the prospects for recovery. Zapatero announced a 5% pay cut for public sector employees this year and a freeze for next year, cancelling index-linked pension increases, and cancelling a baby bonus tax break of 2500 euros, cutting back regional spending budgets, and postponement of infrastructure projects, all adding up to $15 billion in savings. This is intended to reduce the budget deficit to 6% of GDP from 11.2% in 2009. With Spain's unemployment at 20%, and the construction sector stalled, pain will be felt. Spain's large informal economy tied to tourism helps in this situation. Trade union Comisiones Obreras gave a muted response about a general strike saying that "it is the last thing this country needs at a time like this," after meetings with Zapatero. ...

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The difficult task facing Governor Jerry Brown of making the painful cuts in education, the state's university system and social services, as he faces a $15.7 billion gap in the state budget. The Republicans in the legislature have made it difficult for governors in the state to get the two thirds majority to increase taxes, and the Democrats have opposed the spending cuts, leading to chronic budget shortfalls. Governor Brown says unless temporary tax increases, including quarter percent rise in sales taxes and income tax surcharge on the wealthy are passed, California will have to make cuts of $6 billion in January 2013. This would include cuts in public schools and the university system. This would be in addition to cuts of $8.3 billion he has proposed for cuts in welfare, social services, and health care for the elderly. Experts say the political culture in the state is a problem, and is proving to be impervious to this governor's long years of experience and considerable skills. Jerry Brown says California, and the U.S. are both living beyond their means and need to take the medicine....

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India is becoming a major destination for foreign investment in manufacturing in many industries. The youth population 15-24 now exceeds that of China. Over the period 2015-2019 the number of youth 15-24 will increase to be close to 250 million in India in 2019, compared to a rapidly declining youth population in China of little over 150 million in 2019, according to the International Labor Organization. China's one child policy, investigation of multinationals business practices, and increasing wages in manufacturing, are reducing its attractiveness for foreign investors. Other destinations such as Russia are less attractive because of the economic crisis after falling oil prices. India also benefits from the large drop in oil prices to help reduce its chronic deficit and lower inflation- significant dividends at a critical time. Raghuram Rajan, head of the central bank, estimates the gain from the drop in oil prices at about $50 billion. Indonesia also benefits from the same trends. Prime minister Modi is reducing the bureaucratic structures and red tape that are a legacy of the Congress governments since independence in 1947, creating a new climate for business investment. ...

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This editorial in the WSJ after Jeb Bush's opening campaign rally, says his candidacy livens up the field because he could act as someone who brings the country together compared to other candidates who would act as polarizing figures- Hillary Clinton, Rand Paul, Ted Cruz, and others. It gives high marks to Jeb Bush for his two terms as governor of Florida, and says the only governor coming close for the last 20 years is Mitch Daniels of Indiana. And it says the Republican party needs someone who can attract non-Republican voters if it is to win in 2016, which means taking states like Florida and swing states Colorado and Virginia. It cites as a plus Jeb Bush having a nearly 60% approval rating in Florida when he left office. On immigration and other issues affecting the middle class Jeb Bush has the potential to act as a unifying force in the country. His goal to achieve 4% growth, after the 2% growth in the Obama years, will be needed to improve the prospects for the middle class and working class people in the U.S., after the damaging effects of the 2008 financial crisis....

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The pro-democracy protests in Hong Kong take a new turn as the pro-democracy supporters in the Hong Kong legislature adopt a different strategy. After 14 months of protests and unsuccessfully trying to get the Beijing government to allow free elections without the government vetting candidates, the supporters of free elections have adopted the position that it is better not to change the current system till genuine elections can be held. A vote on the Beijing election plans led to a walkout of 34 legislators supporting Beijing's position, and the remaining 36 legislators voting 28 against the Beijing plan and 8 in favor. Under that plan a pro-Beijing committee would have vetted candidates for free elections depriving voters of free choice. The current system may actually offer more room for voters to make a choice as the election is held for chief executive from 1200 business and political leaders, than the Beijing plan of a few candidates vetted by a pro-Beijing committee. This realization led to the historic vote in the legislature and a sense that staying with the status quo was desirable in the current situation....

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Bjorn Lomborg of the Copenhagen Consensus Center says about the decision by the Obama adminisration to stop contributing to World Bank financed coal power plants- including one in South Africa- does not take into account the simple fact that 1.2 billion people living in sub-Saharan Africa and Asia have no access to electricity. In the sub-Saharan region of Africa (excluding S. Africa) the entire electricity generating capacity is about 28 gigawatts, or about the same as Arizona with a population of about 9 million compared to 860 million in the region. He says China was able to lift 680 million people out of poverty with urbanization and industry powered by coal. There is no alternative to low cost fossil fuels for the poorer regions of the earth. This is why the International Energy Agency esimates fossil fuel generated energy to remain about the same percentage in 2035 as it is today- 81%. Shale based naural gas can make a difference for air pollution and China is begining to make the shift away from coal- for sub-Saharan Africa, South Asia, this goal will take time. ...

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Larry Summers role in developing the Stimulus Plan, the plan that Geithner presented for the banking crisis, and in discussions on a whole range of other issues like housing and the budget. The President calls him Professor, or with his other policy wonks he calls them "propeller heads." Summers is quick to respond nowadays, to drop other things for instance to meet Speaker Pelosi, and is careful to let his boss decide and to give his boss credit. And the President understands his rough edges from Summers' experience at Harvard, and can say "you absolutely do" when Summers overstresses a point with the "I don't want to overstress this". On the lack of bipartisan support for the Stimulus plan in Congress, Summers says "politics are hard to predict", and he says Geithner's plan details when announced will show that it is "tough and ambitious", on the Stimulus Plan he says that the President "has got what I think is the right economic plan." A colleague Romer says Summers is a different person nowadays, with less of the rough edges. Others say he listens nowadays instead of lecturing....

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Questions about the wisdom of Exxon's moves against Venezuelan oil company Petroleos de Venezuela- taking it to court for taking a majority interest in 4 big oil projects managed previously by large western oil companies. Responding to Venezuelan public concerns about the deterioration in the oil production and development in Venezuela, President Chavez is negotiating with Shell and Total to bring in technical expertise and capital from western oil companies, while working at the same time with Petrobras and other national oil companies from China and Russia to develop its heavy oil assets. With Brazil facing capital needs for its own huge offshore Tupi oil field discovery, the $10 billion that is needed for developing the Carabobo oil field in the Orinoco will have to be financed with other foreign help and expertise. Petroleos Venezuela cannot rely solely on other national oil companies as it had thought it could do before. With things changing in Venezuela, and possibly even a new more friendlier government in future elections, has Exxon found itself on the outside when the European oil companies can build their presence in Venezuela?...

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Among the things that make the U.S. different from Britain, that Roberts does not mention, is the character of the U.S. as a nation of immigrants. As true today as it was for millions who came to these shores from Ellis Island at the turn of the century. This makes for a much more adaptable society with different strains of thinking. Another point that makes the U.S. different is that it has striven to be an anticolonial power in its policies- working to ease the transition to independence of countries in the former French and British empires. The U.S. business and economic system has worked to bring development and economic progress in all parts of the world, as a partner in contrast to a colonial power. In this sense the U.S. has a very different character and a different capability for renewal than the empires of an earlier period- and new basis for belief in itself renewable from period to period.

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Cerberus Capital will lose its entire stake under the plan announced by the Obama administration. And Fiat will be limited to a 20% stake in Chrysler, down from an earlier figure of 30%. And Fiat will have to repay the $6 billion loan that the Obama administration is willing to make before in can take astake in Chrysler of above 49%. Obama administration official confirmaed that the Cerberus 80% equity stake no longer holds value and that the firm's ownership would come to an end. Only if Fiat and Chrysler reach an agreement in 30 days will Treasury invest $6 billion in Chrysler. The task force requires Chrysler to eliminate the "vast majority" of roughly $9 billion in outstanding secured debt. Cerberus acquired Chrysler from Daimler AG in august 2007 when US vehicle sales were 16 million a year, and did this by having Chrysler borrow heavilyusing its plants and property as collateral. $10 billion of secured debt was raised, and $2.5 billion was paid down of it. With prices of gasoline hitting $4 things collapsed. Chrysler sales fell 40%, and Chrysler was loaned $4 billion by Treasury. Now Chrysler has 30 days of working capital from Treasury till it reaches an agreement with Fiat, and before the government provides an additional $6 billion if the agreements as required by the Obama task force are reached....

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Hillary Clinton attacks Trump's policies in an address in Warren, Michigan, saying this was another version of failed trickle down economics. She called Trump's idea of taxing pass through entities such as small business reporting business income on individual tax returns at 15%, as a "Trump loophole." On trade policy Hillary Clinton said she would oppose the TPP or Trans- Pacific Partnership Trade Agreement that president Obama has supported. She put it flatly- " I oppose it now. I'll oppose it after the election, and I'll oppose it as president." And pointed out that too many companies have moved jobs overseas and "moved operations overseas and sold back into the U.S." after pushing for trade deals. The answer she said 'is not to rant and rave- or to cut us off from the world," in reference to protectionist policies Trump has supported. 

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The most senior management person of Indian origin in the US financial business, Vikram Pandit came to Columbia University from India at the age of 16, receiving a doctorate from Columbia. He was in a teaching position at Indiana University in Bloomington, Indiana before joining Morgan Stanley and heading its institutional client division. Richard Parsons was leading the committee making the choice, and Robert Rubin was lobbying hard for Vikram Pandit because he is deeply thoughtful, has international background, and can bring the strategic sense that Rubin sees as important. Rubin will help from the sidelines as Head of the Citigroup Executive Committee.

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Galston says the Hillary Clinton campaign strategy may be flawed. Following a president from the same party who has served two terms is difficult for a presidential candidate because of an anti-incumbency mood that sets in after 8 years. Galston cites an expert from Emory University about this costing the incumbent party about 4 percentage points in votes. This would eliminate President Obama's 3.9 percentage point win in 2012, says Galston. Hillary Clinton's cautious campaign sticking to the themes set by the Obama campaign and appealing to the core base of young people, women, minorities, and upscale professionals, runs the risk of not appealing to other voters needed such as the working class white voters. Stanley Greenberg, a pollster with much experience is cited by Galston as showing that the women's vote also is not the same for Democrats. Among unmarried white women for instance it has dropped from a 20 point margin in 2008 for Mr. Obama to a 4 point margin in 2012. By 2014 this was down to 2 points, and in 2015 this is now down to zero margin, with both Republicans and Democrats even among unmarried white women. Unmarried and working class white women are described by Greenberg as looking for a candidate who can help the middle class, with Democrats perceived as the party of government and special interests, making the 2016 election different from the ones before it....

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Under new lending facilities the U.S. Federal Reserve will buy $500 billion of short term debt of U.S. states, counties with more than 2 million residents and cities with more than 1 million residents. This is intended to ease funding strains for cities, counties and states in the U.S. that are seeing large revenue drops and rising expenses from simultaneous economic and health crises. Two other changes from the Fed. New classes of debt are included under the Term Asset Backed Securities Lending Facility or TALF. The Fed will now accept triple A rated tranches of existing commercial mortgage backed securities, and newly issued collateralized loan obligations. $100 billion is available under that program. To help business with less than 10,000 employees or revenues of less than $2.5 billion loans will be made through the Main Street Lending Program. This will initially fund up to $600 billion in loans, with restrictions on stock buybacks, dividends, and executive compensation. The emphasis is on helping businesses that were doing well before the crisis hit. Some that were carrying A ratings and were investment grade but downgraded to B after the health pandemic hit are considered "fallen angels." The Fed will also support new debt issuance by these firms in its corporate program.   ...