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The Bank of Mexico, Mexico's central bank, cuts interest rates by half a percentage point to 3% in June 2014. The consumer price index is at 3.4% for 12 months through mid-May, and the central bank sees the inflation target of 3% by early 2015 as achievable. The central bank's estimate for GDP growth in 2014 was lowered to 2.8% from 3.5%. GDP growth was annualized 1.1% for the 1st quarter of 2014. Mexico has failed to live up to the growth expectations after the new Nieto administration's efforts to jumpstart the economy and opening up of the state oil industry to foreign investment. The policy changes of the Nieto administration set the future course of the economy and will take time to deliver results in economic growth. More effective administration and execution is needed for economic growth.

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Shell reported a 60% drop in profit for the second quarter of 2013, after taking a $2 billion writedown on the value of its liquids rich shale assets. Excluding the charges, Shell's profit was $4.6 billion, declining 20% on the prior year quarter. Shell has the largest investments among oil companies in unconventional sources of oil and gas in the U.S. It is producing 300,000 barrels of oil equivalent a day from unconventional sources, including 50,000 barrels of oil equivalent a day from shale at end of 2012. Shell expects the exploration and production division for the Americas to remain at a loss during the second half of the year because of current oil and gas prices. Shell is now conducting a strategic review to sell around half of its main nine unconventional oil and gas assets in North America.

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Nevada, Georgia and Alaska have some of the highest unemployment in the U.S. in July 2013. It grew by 0.3 percentage points in Georgia and Alaska. to 8.8% and 6.3% respectively. Nevada's unemployment is at 9.5%. North and South Dakota with the booming energy industry have the lowest unemployment at 3.0% and 3.9% respectively. The unemployment rate showed improvement in Mississipi declining 0.5% to 8.5%. According to the Labor Dept, 162,000 jobs were added in July 2013. The U.S. unemployment rate declined to 7.4% in July 2013 from 7.6% in June reflecting the increase in employed people as well as some who left the labor force. But the progress is uneven, as 28 states and the District of Columbia saw the unemployment rate go up in July 2013, 14 states showed it steady, and the rate fell in only 8 states.

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GE will spin off GE Capital into a separate business and put up about 20% of the assets for an IPO in 2014. GE will also get out of the retail lending business. The unit may also be put up for sale at a later date. This move is designed to meet shareholder interest in separating the industrial assets with steady earnings from the volatile financial business. GE Capital is the fifth largest bank in terms of its size and still generates a large part of profits for GE. Profits in 2012 for GE Capital were $7.4 billion. Other moves would reduce exposure to consumer lending and increase lending to midsized businesses. These are remaining moves following the 2008 financial crisis, in which GE Capital hurt GE's overall performance badly, for GE to return to its industrial business roots.

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A detailed look at the limits of the November 23, 2013 nuclear deal at Geneva negotiations with Iran. David Sanger of the NYT points out the limits of the deal and any future deal reached with Iran. Experts and negotiators of deals with North Korea point to the difficulties and the reversibility of such deals. Only a deal that takes the centrifuges and the nuclear fuel out of the country would be complete, say experts in Israel. In the period since 2009 when Obama took office Iran has increased the amount of low-enriched uranium to 9000 kilograms from 2000 and centrifuges from a few thousand to 18000, according to the International Atomic Energy Agency, showing the difficulties of achieving such an agreement. The reactor at Arak is another pathway to nuclear weapons using plutonium. Any hidden facilities also present risks.

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The U.S. Treasury plans to sell off its whole stake in General Motors in 15 months. Treasury will sell about 200 millon shares to GM for $5.5 billion by Dec. 2013. The buying price for GM of $27.50 is about 8% higher than GM's closing price on Dec. 18, 2012. Treasury plans to sell the remaining 300.1 million shares within in the next 12-15 months depending on market conditions. Treasury's breakeven point is about $53 a share, and the government will lose money on the bailout compared to the AIG rescue. The government invested about $49.5 billion to help take GM through a planned Chapter 11 bankruptcy filing and reduce a huge debt load. The key in the auto bailout was preserving over 1 million jobs in the U.S. auto industry during an economc crisis.

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The educational system in Italy suffers from the same problems as the economy- a strong tendency to exclude young people who can bring new energy and new skills to the classroom or the workplace. New teachers are made temporary working at lower salaries with only 1 year contracts. The average age for teachers is 50. A teaching exam for new positions would normally be held every 3 years. The Education Ministry simply postponed this and the exam held in 2012 is the first since 1999. Upto now hiring freezes and budget cuts were common. The exam held in 2012 attracted 321,000 applicants for 11,500 job openings. Young people in other professions such as law who were stuck in temporary work also applied. This also reflects a high unemployment rate of 14% for people ages 24-35.

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Uniqlo, the unit of Japan's Fast Retailing, is now the largest apparel chain retailer in Asia. Uniqlo has expanded rapidly in Asia, opening on average 2 stores a week. Uniqlo has 182 stores in China. CEO Tadashi Yanai, says the goal is to become the world's No. 1 apparel shop by 2020, even though Uniqlo has only half the sales of Zara's fast fashion apparel chain, which is part of Spain's Inditex Group. Uniqlo plans to open about 10-20 stores a year in the U.S. and is not planning on making an acquisition. Yanai, who owns one third of Fast Retailing shares, says he prefers organic growth. He has studied Gap in detail during the 1980's and 1990's when Gap was popular, including its display methods for khakis, sweaters and tees, calling its then CEO Drexler, "professor."

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How IBM with its Smarter Planet initiative, GE, Cisco are creating smart infrastructure that saves energy. This reduces carbon dioxide emissions by reducing traffic congestion in cities like Stockhom, uses less water at plants, uses less energy for rail locomotives. These companies use technoloical advances in sensors to monitor use and advaced software to control usage. The huge stimulus spending in these areas creates new opportunities that companies are pursuing aggressively. One Dept of Energy project in Washington state using IBM technology showed that peak loads on utility grids can be reduced by 15%. Nationally such an advance in the U.S. over a 20 year period would eliminate the need for 30 coal-fired plants. IBM has a project in Norway for distribution with the largest food supplier using tracking software to optimize shipments and reduce spillage.

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A shocking fact about oversupply in one crucial industry. Automakers worldwide have the industry capacity to make 94 million vehicles. According to researcher CSM Worldwide the current sales in late 2008 reflects demand for 60 million vehicles worldwide. This is about 34 million extra vehicles and represents about 100 plants. Toyota has already cut production in Japan by 27% in November, the biggest cuts seen at Toyota in 30 years. The numbers for 2009 will reflect a deepening downturn from higher unemployment and lower spending. Not all of this capacity wil be cut as automakers will look for a rebound as customers replace aging vehicles, but as sales decline in Russia, China and emerging markets and in the USA and Europe, some consolidation will take place and many plants will have to close in the US, China, Portugal, Italy and Spain.

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Exports measured in dollars were 2.8% lower in December than a year ago, and imports down 21.3%, according to the customs agency. Measured in yuan exports were down 9% from a year ago. To get a sense of how big an impact this is, consider that the exports were growing an an annual rate of close to 30% in summer 2007. The result is millions of workers having lost heir jobs heading back to homes in rural areas by train. The slow down in imports also reflects exporters cutting back on purchases in anticipation of falling demand. Importers in the USA are finding it harder to get letters of credit financing, and rates are as high as 20% according to Bank of America, Sr VP Treasury products. This suggests the slowdown is just beginning and could be severe in 2009.

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Create small, more transparent financial institutions out of the big banks by breaking these big banks up and selling them to private equity. These big banks are too big to save, too big to manage, andprone to taking excessive risk, thus damaging the economy. Craft policy and antitrust laws so that no financial firms become too large, as this has been proven to create risks for the whole economy. Do this by dividing banks up regionally or by type of business. TARP simply contimues the old game of big banks and financial institutions. These are the views of Paul Krugman and Simon Johnson presented to the Joint Economic Committee of Congress on April 21, 2009. Also on the panel Kansas City Fed President Thomas Hoenig who said policy measures have focussed too heavily on propping up big institutions like AIG.

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About 1800 people die in traffic accidents in New Delhi and most of them in motorcycles accidents, the Nano has this market in mind. Whole families riding in tricky fashion on a motrorcycle, a vision that Ratan Tata had in mind when he pursued the goal of a 1 lakh ruppee car affordable to the average Indian on a motorcycle. It meets the Euro III pollution standards and could meet Euro IV with some improvements. Part of the ingenuity of the engineers challenged with this task of affordable quality in design from scratch to reinvent the automobile- a car that has 21% more space and still is 8% shorter than the Maruti 800 the smallest car on Indian roads today. The engine is placed in the back and the wheels at the extreme corners of the car.

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Palin as someone who could energize McCain's conservative base. How it may work both ways and mix things up at least, making this election even more uncertain in different ways. Biden was a drawback on Obama's calls for Change you can Believe In, but gave him a respite on the question of foreign policy experience and experience in general. Now Palin is a drawback on the McCain experience argument but gives him a respite on the age (he is 72) argument and having been around so long whereas his opponent stood for Change, because Palin is bringing Change to Alaskan politics and has shown courage in facing the Republican older politicians like Murkowski. So who knows how this thing will work out as McCain himself is forthright and acts like an outsider who uses his independent judgement on matters.

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The French government announced a 26 billion euros or $33 billion package as Stimulus spending. Its going into infrastructure projectsand investents by state owned firms like Electricite de France. It also includes aone-off payment of 200 euros for low-income households. Its valued at 1.3% of GDP. Under this plan, France will dig acanal north of Paris, renovate university buildings, and put new metro cars in service, and also fincnace the construction of 70,000 homes, on top of the 30,000 unfinished homes it is buying in 2009. Motorists who scrap thier old cars to buy new fuel efficient cars in 2009 will get a1000 euros bonus. This is aimed at reducing the stock of unsold cars which is at 1 million cars. And small companies will be exempted from social charges when they hire new employees.

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Erfurt is a very German city in the heart of Germany with its many churches and medieval past, the home town of Martin Luther. Katrin Bennhold provides this exceptional report of how Erfurt is coping with new refugees from talking to town officials and observing the process of resettlement. Erfurt has a population of 208,000 with only about 500 Muslims, and few people from Africa. The town's mayor sees it as the biggest challenge since World War II, larger than reunification with the east, as 300 migrants arrive every week and 4000 have to be resettled by Christmas 2015. Under Germany's quota system the state of Thuringia gets 2.5% of refugees, and Erfurt gets 10% of this. When the Soviet bloc expelled 14 million Germans from the eastern territories in the bloc, 670,000 passed through camps in Erfurt. The difference now is the language barrier, and the anxiety among some Germans of how this could change their lives, which is visible from the questions asked at a town hall meeting in Erfurt. Because of the suddenness with which Germany was confronted with the refugee problem it will take time to get organized- in September 2015 there is a shortage of housing space, cots, temporary shelters, translators, social workers, and some of the infrastructure has to be put in on an improvised basis. Rarely has a people come under the spotlight of world attention in modern communications media, in the way small cities and towns throughout Germany are now facing, and providing a glimpse into the hearts and souls of so many....

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In all elections since 2002 Mr. Erdogan has prevailed except June 2015. Much of the support for Erdogan is a result of economic gains by Turkey including 70% rise in per capita incomes since 2003.  These gains are under threat now because of heavy dependence on foreign investment and the decline of the currency Lira from 2.15 to the dollar in 2014 to 4.50 to the dollar in June 2018, losing half its value since the election of 2014. Experts say recent developments in Turkey have dented investor confidence, with investors uncertain about Mr. Erdogan's plans. The presidential candidate most likely to face Erdogan in a runoff election if Mr. Erdogan does not get 50% of the vote on June 24 is Mr. Muharrem Ince. Ince says he sees a wind of change, saying Turks are "very tired of this one-man regime" and that unlike before the economic trouble is so severe and harder to cover. This time the opposition is better coordinated and the secular CHP Party which was once dominant after Ataturk, is running in an alliance with traditional Islamist party Saadet, and with new secular nationalist Iyi party. Erdogan has called early elections a year and half ahead of time because he sees the economic troubles are at an early stage and his AKP Party would do better now than in 18 months when the economy may be in worse shape than it is now. ...

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Experts in the U.S. say the U.S. made a mistake in not supporting the idea of a new financial institution to meet the urgent needs of development and infrastructure financing of Asia's developing countries. India, Australia, S. Korea, Britain, Germany, France and Italy are joining as founding members in 2015. China has offered leadership in providing resources for the new bank. Jane Perlez says China is looking for the best talent worldwide to help write the charter for the bank and to run it. It is a project pushed forward by China's president Jinping, and was discussed at the 2013 G-20 meeeting in Moscow as a critical part of the agenda. Laurence Brahm, who supported Chinese premier Zhu Rongji in 2001 for entry into the WTO, says it is natural for China to look for ways to use its extra capacity in steel, concrete and pipes to build projects in other parts of Asia, which would mutually benefit China and the region. Paul Haenle of the Carnegie-Tsinghua Center in Beijing, says the U.S. lack of support is shortsighted, as the existing U.S. sponsored institutions World Bank and the Asian Development Bank are sorely lacking the resources to deal with the huge infrastructure challenges in Asia. China's Finance Ministry is looking for the best talent worldwide to write the charter and run the bank. Natalie Lichtenstein, a lawyer with 30 years experience working at the World Bank will write the bank's founding charter. ...

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Greg Ip provides useful insights into the nature of the economic recovery in Britain compared to the U.S. by 2015. The recovery in Britain has done better than in the U.S. in job creation, but has lagged behind in productivity gains. The labor force participation rate is 72% in Britain compared to 68% in the U.S., going back up to 2007 levels in Britain, whereas in the U.S. it has steadily declined with some older working class Americans too discouraged to look for work and left behind. Stagnant wage growth is a major issue in Britain, more so than in the U.S. where wage growth is slow. Economic austerity is not the main cause of the economic difficulties as the coalition government of prime minister Cameron relaxed earlier goals for austerity by 2012 with tax revenues and growth below forecasts. The structural budget deficit has been reduced by 6.6% of GDP since the peak, and the Office of Budget Responsibility estimates the UK economy was 1.5%-2% smaller by 2013 because of the austerity policies. Britain was also affected by the eurozone crisis to a larger degree than the U.S. Productivity remains a long term challenge- with needed investments in housing, education and infrastructure, improved lending for new business, and higher tech improvement exports....

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First signs that OPEC may relent on production increases, as price of oil takes a new turn and becomes driven by forces that are beyond what OPEC may either foresee or be able to control. OPEC's different oil countries' senior officials are probably studying these new signals. Shukri Ghanem of Libya, a former prime minister and former head of Libya's national oil company, comments on new developments and shows willingness to increase production, to support a meeting before September and to look at the option of increasing production is his comment to Bloomberg News, May 8, 2008. Shukri was trained at the Fletcher School, Tufts Unversity, with a Masters degree in International Economics, and may have a better understanding of what is happening in international oil markets than senior officials of other OPEC countries. The signals that OPEC as well as the rest of the business community are watching are first the estimate by analysts at Goldman Sachs, Deutsche Bank and CERA's Yergin that prices are headed in the direction of another spike to $150 to $200 per barrel before coming down sharply. Ghanem and others at OPEC may find that it is not in their interest to actually lose all control of prices if this happens, that is lose the market stability that enables a cartel to do well. Price spike would generate huge spike in revenues for a short period 6-12 months before setting up for a big fall as a result of setting in motion a whole set of new forces in the use of oil. Some of this are much higher and aggressive automobile fuel efficiency targets for Europe, the US and also in places like India and China, conservation in a big way, fuel efficiency in other uses such as generating electricity and other industrial uses in plants and so on, almost like the race to the moon, with new urgency. The spike in revenues followed by a drop may actually hurt OPEC long term revenues over next 5 years as the moderation in growth in developing countries like China and India is quite likely as the US slows down and this would only accelerate the pace of this moderation. With focus on efficiency in the use of oil worldwide, accelerated new production in non-opec oil fields, and moderated growth worldwide, enough savings could be generated in 24-36 months to bring oil prices down from the demand side and reduce speculative investments. The second signal was a WSJ survey of 53 respondents n this case economists, and 51% of the economists surveyed said that the oil price rise's key reason was on the demand side from developing countries. And speculation was a smaller factor attributed to by 11% of the economists. So the combination of these 2 factors added up to 62%. Foreign exchange was cited by 15% of the economists, adding all three factors would attribute 77% of the rise in oil prices to demand from developing countries, speculation based on rising demand, and the weakness of the dollar. If demand the key element in this drops as a result of an even bigger spike in oil prices to $150-$200, with demand moderating in developing contries, and the dollar strengthens in 12-18 months, then the spike would be temporary, leading to significant correction afterwards. This sharp correction would then become entrenched as the world would look at oil in a new way entirely different from the way it did in the years 1945-2007. ...

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Exchange of remarks between Ben Bernanke of the Fed and James Dimon of JP Morgan Chase Bank on regulation and new capital reserve requirements for large U.S. banks. Fed governor Tarullo has proposed a 14% requirement of capital reserves for banks that are "too big to fail."