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Lahart reminds readers that the Model 3 from Tesla at $35,000, half the price of $70,000 for a basic Model S in 2014, will not be out till 2017. Models for share price targets of over $200 for Tesla assume the car company will sell these models in large numbers, a Barclays model assuming 350,000 of these cars sold by 2020. It is hard to predict the future for gas prices. In the current environment sales of electric vehicles and popular hybrids such as the Toyota Prius are declining. Tesla faces real challenges considering that gas prices though unpredictable face continuing increases in the development of lower cost shale supplies with new technologies in the future.

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Barley points to the other factors surrounding the ECB decision for massive monetary easing on Jan. 22, 2015. THe ZEW and IFO business sentiment indicators show an upward trend, and the German economy is picking up momentum in 2015. The lower oil prices, and the decline in the euro boosting exports, are two other factors pointing to higher growth in 2015. Just as the U.S. QE program came at a time when economic conditions were improving, the same can be said for the Draghi ECB QE program in Europe, says Barley. Draghi appears to have sent a strong signal to financial markets, just as he accomplished in July 2012, when bond yields of Spain and Italy were over 7%.

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Small signs of an upturn in the job market in Spain in early 2014.

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Economists predict annualized growth of 0.9% for the second quarter U.S. GDP growth, suggesting that the U.S. economy is stalling and the U.S. Federal Reserve will continue its bond buying QE program.

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China is not experiencing high unemployment in 2012 the way it did in 2009. The lower growth rate of 7-8% is not having an adverse impact on unemployment. This makes it possible for the stimulus this time to be much smaller. There is rising upward pressure on wages. According to the National Bureau of Statistics, CEIC and WSJ, average annual wages at private sector manufacturing companies in current U.S. dollars was up 5% in 2009, 16% in 2010, and 20% in 2011. This is being encouraged by the government as China gradually shifts its economy towards higher domestic consumption and better standards of living for workers. Hon Hai Precision Industry Company added 82,000 workers in China in 2011. Salaries at the Shenzen plant were 2200 yuan or $345 a month in February 2012, an increase of 10%. An April survey by Manpower Group showed that a majority of companies will increase workers or hold employment stable, only 3% of companies will have job cuts. Demographic changes are also playing a part-with fewer people in the 15-19 age range, dropping from 120 million in 2005 to 95 million in 2015, according to UN estimates. The number of migrant workers remains steady at 252 million in 2012, up 4% from 242 million in 2010, according to the Bureau of National Statistics....

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Two politicians, Nakaima and Iha, are in a tight election bid for Governor of Okinawa, Japan. Both are campaigning against the location of the US Futenma military base on the island of Okinawa. About 84% of Okinawans are against the continuation of the base in Okinawa.

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Industrial profits are down, but lending by banks is up dramatically for the stimulus. China's banks made $757 billion in new loans in just 4 months of 2009, more than in all of 2008. With corporate profits decliningthere will be more bad loans in the future. After the recapitalization of banks with about $475 billion at the time between 1998-2006, according to the Bank of International Settlements, Chinese banks are in better shape. Nonperforming loans account for about 2% of the loans. ANd China's deputy central bank governor Yi Gang says- " in a situation of financial crisis, rapid growth in leding does more good than harm. We should also consider the sustainability of the rapid growth of credit and the possible adverse impact." Banks for their part say they are not loosening their standards for lending.

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Orlando Patterson, a Professor of Sociology at Harvard, says Mr Obama is seen by inner city blacks as too remote from them and their lives to be a role model. And that he is more likely to influence the racial attitudes of middleclass blacks and younger white Americans. He sees constructive effort in policies for education, improved parenting in black families, and efforts to help disadvantaged white and minority families. But he does not see Obama in any way ending America's long ordeal with race.

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Citigroup remains extraordinarily leveraged, with tangible leverage at 47 times tangible common equity. JP Morgan's is 26 times and Goldman's is 21 times. The government's two preferred shares capital injections of $45 billion does not reinforce the common stock, which fell 20% on the 14 January, 2009, and the discarding of the universal bank structure this week does not adequately address the root problem of problem mortgage related assets and excessive leverage. The government's agreeing to to take a large share of losses on $306 billion of problem assets helps, but with the leverage being so high significant problems remain. So what are the options. Reducing leverage to where J.P. Morgan Chase is would take $35 billion in common equity, something that would make the government the owner of Citibank, as Citibank's market capitalization on January 14, 2009 was $25 billion. The risk of doing this would be that other large bank stocks also fall steeply as the market prices in a similiar outcome. And there are political considerations as giving capital to banks is not popular with so little bank lending to show constituents. The capital needs of Bank of America as it completes the acquisition of Merrill further complicates the picture. But stopgap moves like additional loss sharing agreements will leave Citbank's problems still unresolved. ...

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Prices can top $100 a barrel, some reasons why this is possible including depleted old field and lower production relative to demand. Important article by King and Chazan because of the experts from Aramco, IEA, and Schlumberger being all pretty much aligned in their view and reasoning that not much is happening in the way of oil exploration and production is happening to meet the extra demand from India, China and deveoping countries. Aramco expert cites older depleted oil fields with a 15 year production plateau, Saddad Al- Husseini estimates that price will go up by $12 for every million barrels a day in additional demand. Nobuo Tanaka the new executive director IEA thinks supply will not keep up with demand because many oilresource rich countries are not bringing in outside investors, and also because he is not sure there will be enough investment, skilled workers and technology to to get the oil out in a timely manner. Note there have been constraints in engineering and manpower shortages. And Andrew Gould CEO of Schlumberger says that 70% of the oil fields are over 30 years old, amd just in the last four years from 2003 the demand has increased by the production thats generated from North Sea and Mexico....

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Treasury is looking at doing what Gordon Browns plan does in the UK which is to inject capital directly into banks. Paulson pointedly stated that the bailout law gives Treasury the right to use the $700 billion to inject capital into banks as needed. In return the law Paulson stated gives Treasury the right to take ownership stakes in the banks.

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Even Schlu,berger is suffering from the oil price decline. It had the slogan "stronger for longer". Its shares have dropped from their high July 1, 2008, by 52% this far. Halliburton, Baker Hughes, And Weatherford International have fared worse, As falling oil prices slows down the pace of drilling. Natural producers have been cutting drilling budgets. Depending on how far oil prices decline offshore drilling budget could also be affected.

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This editorial in the Times of India says China's new border law that goes into effect on Jan 1, 2022, aims to tighten control over border areas, with strengthening of border defenses and integration of border populations. It says this means border relations will not be affected by improvements in bilateral relations. China is rejecting the Indian position for border standoffs to be settled through improvements in bilateral relations in other areas. The Times Editorial says that an "aggressive, inflexible, belligerent China" is what India now faces.