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"This is a very, very, very, big deal," says Chuck Schumer about the Climate Change bill that is expected to pass in the Senate of the US this weekend August 6-7, 2022. This is the biggest climate bill in history, and may also be called the Schumer-Manchin bill after the compromise reached to give oil and gas some support with big moves for climate change action between now and 2030. It gets Biden and the US to within 40% reduction of carbon emissions over 2005 emissions by 2030, when the commitment by the US at COP26 Glasgow is for 50% reduction over 2005 emissions by 2030.

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Bill Gates of Microsoft calls the Biden climate change bill the single most important legislation in US history. He says only America can offer the vision for climate change action, and make it happen. Gates says he has talked to corporate leaders in America and most of them say they are ready to act once the climate change bill is passed. Many of the industries that need to be created are in the early stages and the climate change bill will create the right atmosphere for sustained innovation.

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The US has 124,000 charging stations for electric vehicles. The Biden administration wants to see that go up to 500,000 by 2030. For this to happen $7.5 billion is already going to states under the $1 trillion infrastructure bill of 2021. The Biden $369 Climate bill that passed the Senate last week will give companies that build each charging station 30% tax credit for maximum of $100,000, up from $30,000 earlier, to build one charging station. It costs about $100,000 to tear up pavement and build a conduit for a charging station.

Supply chain issues will linger for 2022 and 2023 with shortage of chips after which it will move much faster says this report in WSJ. For EV's to go mainstream charging stations are a priority.

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What is in the biggest climate bill in history, the Biden $369 billion Climate Bill, also called the Inflation Reduction Act of 2022? The WSJ looks at the bill that passed the US Senate and now heads for passage in the House of Representatives this weekend. 

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President Biden signs the $379 billion Climate bill and tax legislation into law. Mr. Biden told a White House crowd to standing ovation "This is the biggest Climate Bill ever." At the signing event Mr. Biden tells Senator Manchin  "Joe, I never had a doubt." Senator Schumer quietly negotiated the final bill with Senator Manchin in one crucial week just recently to get it through a 50-50 split US Senate.

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As president Biden signs the biggest Climate Bill in history Jim Tankersley says there is still more to be done. In addition to the work remaining for children, women and families, he mentions the Civilian Climate Corps with financing for $10 billion that is patterned on the Civilian Conservation Corps set up during the Depression by FDR, which is still to be passed. This would form "the next generation of conservation and resilience workers," says Biden. Much like the 3 million people who helped build parks, cut trails and planted trees around the US in the 1930's and 1940's under FDR.

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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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One key point came in early Harris said she had a Plan for the economy, for an Opportunity Economy, Trump she said had none. Trump did not offer a plan. Harris spelled out a plan to tackle housing costs including a $6000 child tax credit and building 3 million new homes. Harris called higher tariffs, double than exist today, a way to increase costs for each family by $4000. She also pointed out that economists had confirmed that Trump tariff policies would lead to higher costs for Americans as they would be passed on by importers. Harris also offered a position of all of the above that included fracking where appropriate to increase oil supplies to bring down prices for American families, a key issue in Pennsylvania. On immigration and crime it was David Muir who reminded Trump that the FBI had stated crime was down in the country. On Ukraine, Afghanistan Harris clearly explained that US was not at war for the first time in one hundred years and was saving the US $300 million a day it cost for the war in Afghanistan. On Ukraine she said Biden-Harris had strengthened NATO and ties with allies, in an answer to David Muir's repeated question to Trump "Is it in the US interest for Russia to win the war in Ukraine?" To which Trump offered only a reply that suggested this was not important for him, disavowing US policy from 1900 to preserve the rule of law in international relations that no country should violate sovereignty of other nations through invasion. Among Republicans this is an issue with Mitch McConnell and others supporting Biden-Harris. ...

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Protectionist sentiment in the USA is keeping tariffs high on ethanol to keep out Brazilian ethanol. Some of the arguments used for keeping it out are concern for the Brazilian rainforests, for food prices, for labor. Are these concerns real or just a way of keeping out imported ethanol by farm lobbies in the USA. Brazilian ethanol packs 8.2 times as much energy as the energy used to make it compared to just 1.5 times for corn ethanol, according to the Woodrow Wilson Center. It is grown in Sao Paulo state or the northeast miles away from the Amazon so it is not deforesting the Amazon. About 65% of it is grown on land that was previously pasture, the rest was used for other crops according to Conab, a government agency. Also sugar cane occupies only 7 million hectares or 17 million acres of Brazilian farmland compared to 200 million hectares for cattle ranching so it is not pushing cattle ranchers into the Amazon. So it does not have a noticeable impact on food or beef prices. And sugar cane production may benefit from higher yield varieties with more research. In 2005 of the 440,000 workers, 453 died, 17 were killed in accidents according to a study by a researcher at the the University of sao Paulo. In the same year of the 2.16 million workers in other branches of Brazilian farming, 2900 died and 135 were killed in accidents, so the situation in the sugarcane industry is not much worse than the rest of Brazilian agriculture. Moreover cane cutting is getting mechanized. At Santelisa Vale 60% of cane cutting is mechanized. So the arguments of protectionists in the USA about environmental impact, labor situation, and others do not carry much weight. The tariff on Brazilian ethanol makes it less attractive to import ethanol from Brazil and it creates uncertainty about future imports if the prices of corn based ethanol drop in the USA. Removal of the tariff is supported by John McCain. The tariff is 54cents on each gallon of imported ethanol. Importing ethanol from Brazil would have less impact on corn supply in the USA and on on corn prices so it would put less pressure on the world food supply and world food prices. ...

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Corporate concentration with larger companies, each more dominant in its industry, and fewer companies controlling half of U.S. corporate profits, are trends economists say that hurt wages, create income inequality, shrink the middle class and lead to less consumer welfare. About 30 companies control half of U.S. corporate profits in 2018 compared to 109 in 1975, according to economists at the University of Arizona. Fewer companies in each industry mean less competition for workers, and less leverage for workers in setting wages. Apple Computer just reached the trillion dollar size and Amazon is close to doing this with its dominance in online shopping. Amazon is known for lower wages in its industry. Apple has some of the highest profit margins in  industry, and trends show the margins have risen between cost of making a product and price in an unprecedented way. The result is higher corporate profits and labor commanding a declining share of the nation's wealth. ...

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Denning provides a reminder of the growth but also real risk in emerging markets. The weighted average score in Transparency International's 2010 Corruption Perceptions Index for BRICs countries is 3.3 out of 10, compared to 6.7 for the Eurozone, and 7.1 for the U.S. Russia needs an oil price of $120 in 2012 to balance its finances, and the consensus is for oil price to be $103. China has a bad loan problem at its banks. Brazil and India have inflation problems and growth constraints from poor infrastructure. There is aneed to be grounded in realities when it comes to emerging markets. The IMF underscored this weakness in its recent report. Sudden capital outflows could reveal serious weakness in some countries.

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Saudi global forum on oil price issues meets even as differnces emerge inside OPEC with Algeria, Iran and Venezuela opposed to increasing oil supplies and to a unilateral decision by the Saudis to increase production. After the Bush visit the Saudis increased production by 300,000 barrels a day or 3% to 9.45 million barrels a day. The bulk of the unused production capacity of 2 million barrels a day in OPEC is with the Saudis. The Algerians and the Saudis blame the price increases on futures speculation, lack of refining capacity to produce gasoline in the western countries, and geopolitical tension. For the Saudis and the Kuwaitis there is also resentment that they are asked to use their declining oil supplies while the USA is not allowing offshore drilling and drilling inside its borders to the extent that it could. Note that the ordinary Saudis lower and middle classes are not seeing much change in their lives as inflation is high, and the prices of food and other needs is reducing their purchasing power. Much of the oil price windfall is going into large projects to build aluminium and other plants, and to build new cities in the desert for a growing population, which effectively rechannels the money back to western countries who are actively involved in these projects. The projects themselves may produce value but it is still an open question whether this is the best way to invest this money. And the other serious question is whether this will come at the expense of future oil earnings as the world reduces its dependence on oil. The money is also spread very disparately across the Middle East, with neighboring countries like Yemen in southern Arabia without oil revenues suffering serious lack of development. The political structures like Saudi Arabia created after the first world war by western powers, itself may impede a proper distribution of commodity resource revenues across the region....

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About $2 billion estimated by the Nigerian government is the amount stolen by military ruler Abacha from the central bank between 1993-1998. The Swiss government agreed to return $458 million of this to Nigeria in September 2006. Desperately needed development funds have long been diverted from the oil wealth of Nigeria into private accounts. Note the present government has made some progress in the area of fighting corruption. Also note that much more needs to be done for development in places where oil is produced like the Niger delta, and these problems have resulted in the shutdown of oil production in the area, affecting world oil prices.

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HTC was the first company to come out with a smartphone using Google's Android software in 2010. By the second quarter of 2011 HTC's share of the global smartphone market climbed to 10.7%, only to see a sharp decline in 2012 dropping to 2.2% according to IDC, as it faced stronger competitors Samsung and Apple. Second quarter 2012 revenues were down 27%, and an expected drop of about 50% in the third quarter. Samsung and Apple invest significantly more in distribution and marketing, and discount prices on older high end models making it difficult for HTC to compete. In 2012 the company's value declined by 50%.

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Mishkin a Columbia University Prof. who is a Fed Governor close to Ben Bernanke presented a paper at the Jackson Hole conference saying that the best strategy was for the Fed to act quickly as house prices fall and cut rates. Under this strategy the Fed would hit bottom in rate cuts a little over 2 years compared to about 4 years if the Fed waited to see what happens to the housing market and the housing market was in steep decline by the time the Fed acted decisively. This would mean less lost economic output. This makes sense as the housing market is going to see a serious impact.

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Spain's construction industry is hit hard and half of immigrants who make up 11% of the workforce have lost their jobs. Spain is hoping to give them alump sum payment to induce them to return home. Economic growth will be below 2% in 2008. Zapatero pledged to return 400 euro from the budget surplus and this helped him get reelected at a time in March when the economy was looking a lot better. Zapatero has no control over interest rates which the ECB raised on July 3, 2008 and no control over commodity prices, and the housing downturn in Spain will continue.

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Horowitz provides a rare portrait of Donald Trump's father, Fred Trump. This is  useful in understanding Donald Trump because as Trump says frequently many of the traits- self-promotion, aggressive business promotion, taking advantage of political connections to advance the family business, penny pinching for construction sites- are all traits he inherited from his father. His father did not want to go to Manhattan as business was already nice and easy in Brooklyn and other places. The son went into Manhattan and put his name on Towers he built in the city. Fred Trump benefitted from the FHA and depression era programs setup under the New Deal by FDR, and the flow of immigrants and returning veterans, the zoning allowances given by politicians. Without this the business would be nowhere as successful as it was. Making it self-made only upto a point, in the intensity and the individualism displayed. Fred Trump was born in 1905 to German immigrants who spoke mostly German at home. His brother John was into books, and went on to teach at the Massachusetts Institute of Technology, so the family was certainly aspirational immigrant. Fred was the doer and started his business with his mother at the age of 21, and by 28 had won the mortgage services business of a failing German bank, by 1938 at 33 he had setup property developments in Brooklyn. Federal Housing programs were the key- homeownership was emphasized in the New Deal with F.H.A. 25 year mortgage loans- as affordability was an issue in the Depression era period. Fred Trump keenly used these loan subsidies with price tags so it would be a stretch to say the business simply went up on the intensity and the business skills.  ...

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Next five year plan for China calls for more concentration on industry, dominance in key sectors identified by China such as rare earths, and more exports- not less in each of these areas. Chinese Communist Party is very conservative and once this has worked for China it is not going to change its reliance on exports even at the risk of leaving goods unsold in China or oversupply. The result is that the US effort to reduce the trade deficit, trying every tool in the book does not work, leading to an effort to resort to tariffs as a last resort to cut the unhealthy and risky $1 trillion trade deficit China has with the world. Has it worked? WSJ and other reports show that large companies are diversifying their supply channels, only smaller companies without the resources are sticking with China dependence for supplies. The tariffs themselves make headlines yet the US has made careful calculations not to upset relationships with key partners Britain, European Union, and Japan, keeping tariffs low at 10% with EU, and 15% with Japan which exports automobiles to the US to recover some of the years US made concessions to Japan. There are also loopholes on certain products where it is in the US interest to do so. As a result the effective tariff is 10-12.5% not 17-20% shown in reports. Of this 10% what is passed on to consumers is small- as in autos 80% of tariffs are not passed on by auto importers such as Toyota and Subaru because of the higher margins postpandemic. In retail only 30% is passed on again because of the post pandemic higher margins. The administration of DJT has also carefully worked with world oil suppliers to keep oil prices low, lower than in 2023-2024. The result is that inflation is at about 3% in September 2025. The idea that a capricious DJT is doing the tariffs is a myth as careful economic planners including Bessent, Jamieson, Lighthizer, and Luttnick, economic advisors in the Republican party, are carefully articulating the policy with room for DJT's political talk and appeal to public sentiment. ...

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Liberty Interactive Corp., parent company of home shopping network QVC, acquired Zulily in a cash and stock deal valuing Zulily at $2.4 billion, at a discount from the IPO offering price. Zulily's model of no returns, with orders taking 2-3 weeks for delivery based on the company not holding any inventory, is not catching on with shoppers, as sales declined in the 2nd quarter of 2015.

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BHP Billiton was known as Broken Hill Proprietary in the 1990's. The largest Australian mining company, it was based in Melbourne and simply known as the Big Australian. It had huge losses in that period - $3 billion in 1998-1999. The turnaround at BHP Billiton comes as a remarkable turnaround for the whole mining sector. BHP made $6.5 billion in profit in the year ending June 2005. Its not just rising Chinese demand that has made this possible. Billiton has taken steps to avoid past boom bust cycles in mining by taking a conservative approach to investing in new mines that might create an oversupply in the market. The company is run buy a banker. CEO Charles Goodyear avoids taking on large risky projects and has announced plans to return $2 billion to shareholders in stock buybacks. Even with this discipline compared to the past, some mining analysts believe the boom bust cycle will occur over time. HP has $10 billion worth of projects in different stages of development. One advantage the mining companies enjoy is the concentration of mining in a few companies- BHP, Rio Tinto, Xstrata PLC. This makes it possible to price aggressively for the nickel, copper, iron ore, and other metals. A 72% price increase was negotiated with steelmakers in 2005. Another part of the transformation is the use of risk-analysis tools. BHP uses "Monte Carlo analysis" to check all potential outcomes once a range of parameters- commodity prices, currency vales, interest rate scenarios- are entered that affect financial performance of a new mine or a new investment. Goodyear came in as CFO under a new team led by Paul Anderson, a former executive of Duke Energy Corporation, after the huge losses in failed copper mining investments in the late 1990's. Even with the recent success and the careful investing discipline there is a sense that things could change quickly if rising demand slows in China and other developing countries. And in that situation this discipline may prove insufficient and the models may only be good as the assumptions and information entered....

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Whites are gradually coming back to the cities just as black people are leaving the cities for the suburbs and Hispanic people are skipping the cities entirely and heading directly for suburbs. The change is gradual and slow except for some cities like Atlanta and San Francisco where the change is becoming significant. As demographic changes take years to play out this change means that at some time in the near future America's cities will look differentas whites return. This change will only accelerate as more whites abandon long commutes from the suburbs as the price of gasoline keeps climbing and move closer to places of work in the cities.

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Bank of Scotland stands to lose close to 90% of the value for a 1500 acre luxury golf-course property and homes it financed in Hawaii called Hokuli'a. From its peak price of $600-800 million it is now going for $50-100 million after the developer based in Phoenix defaulted on the $1 billion loan from Bank of Scotland, which is now part of Lloyd's Banking Group.

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As one wonders how the housing crisis will affect sales of items like cars and other items, its interesting to note that in addition to subprime borrowers who should never have taken the mortgage in the first place because of lack of proper credit background, there are borrowers who were otherwise healthy but are in a financial bind because of house flipping or speculative buying in the hope of gaining from the speculative price increases. These are defaults on prime quality loans and about 21 to 32 percent of the prime quality loan defaults in California, Nevada, Arizona, and Florida are mortgages with homes not occupied by the owner. Note that Goldman Sachs estimates that housing prices will fall about 7% this year and another 7% next year. These estimates may change as the housing crisis deepens with more foreclosures on subprime and prime properties.

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Hon Hai, a Chinese company which makes IPads and IPhones for Apple has grown by doing high quality work for lower prices than anyone else. In the process Hon Hai has generated a culture that is tough even by Chinese standards. About 250,000 workers are employed in its factories in Shenzen alone. A series of suicides at the plant has attracted attention to the tough conditions. One worker says conversation on the production line is banned, bathroom breaks are limited to 10 minutes for every 2 hours, and the discipline is strict. Hon Hai won Apple's order says one supply-chain search expert, by pricing low. Its CEO Gou was willing to sell some components at zero profit according to people familiar with his actions. Workers come from rural areas, are very young, the first time they are away from their families, and live in dormitories, eight to ten people to a room. Hon Hai's response is to increase wages 30%. But a report about a college graduate who was asked about conditions reflects the general feeling. This graduate makes twice as much in product development, at 2000 yuan a month, or $293 a month. But the monotonous life and the feeling of no future affects this worker and may be a sign of something changing in China's factories. The unwillingness to accept the conditions that existed in the past....