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The European Union Commission president Manuel Barroso announced a multiyear $15 billion package of loans and grants for the new Ukrainian government on March 4, 2014. No immediate conditions were specified. Barroso said, this is "designed to assist a committed, inclusive and reforms oriented government in rebuilding a stable and prosperous future for Ukraine." This is meant to replace the help offered to the previous pro-Russian government by Russia and now cancelled with the ouster in street protests of that government. The U.S. has offered $1 billion in loan guarantees. For Ukraine this offers the prospect of making a new start under EU and possibly IMF guidance. The needs are estimated at $35 billion in international assistance loans over 2 years by the Ukrainian government, because of the dire state of the Ukrainian economy.

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Researchers David Autor of the Massachusetts Institute of Technology, Gordon Hanson of the University of California, San Diego, and David Dorn of the Center for Monetary and Fiscal Studies in Madrid, in independent research, studied the impact of trade on 722 clusters of interrelated counties in the U.S. They focussed on the surge in Chinese imports and found a pattern. Counties with higher exposure to Chinese import growth showed higher unemployment and higher expenditures by the government for unemployment benefits, food stamps and disability benefits. Their calculations show the increased government payments amount to one to two thirds of the gains from trade with China. This does not include the losses suffered by people losing jobs who deplete savings as they look for new jobs. Hanson studied the effects of trade and Chinese imports in the 1990's and found the effects were relatively small. This time the effects are large and show counties that lacked local investments in industrial machinery and technologies in which China was still playing catchup such as Caterpillar in Peoria, Illinois, and Boeing in Everett, Washington, were most susceptible to higher jobless rates and in need of government support payments. Autor and Hanson found that from 2000-2007, communities in the 75th percentile- ones with greater exposure to Chinese import growth than 75% of all communities- saw a manufacturing jobless rate of about one-third more than communities in the 25th percentile. The government payments mean higher taxes or larger deficits are needed to support these communities, and long periods of unemployment reduce the incentive to work. Michael Spence, a Nobel prize winning economist from New York University, says the world has never seen such a rapid pace of growth as China experienced between 2000-2011, with rates approaching 12% in some years, making past experience and prevailing theories on trade an insufficient guide to what is happening....

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The WSJ's Latour, Browne, Tejada and Wei interview Lou Jiwei, chief executive of the China Investment Corporation (CIC), China's sovereign wealth fund. He says it is too early to talk about eurobonds as the financial arrangements necessary have still to be put in place. CIC is reducing its exposure to Europe. CIC is interested in infrastructure investments and sees infrastructure investment as the way out of the economic crisis for the U.S. and Europe. He has the most confidence in investing in China. Other locations are in emerging markets Brazil, S. Africa, Latin America. CIC's target is to have 50% of the assets in long term investments in infrastructure investments, commodities, real estate and direct investment and private equity, etc. and the other half in public securities. But this will pose challenges and CIC has not reached this level. It is learning from ATP, the Danish pension fund, Calpers, TRS, and CPP, the Canada pension fund. The portfolio is mark to market which creates pressures to reduce short term volatilities....

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The northeastern region of Brazil, the poorest region of Brazil, has benefitted from the economic expansion in Brazil. The region's GDP went up by 4.2% a year for the last ten years compared to 3.6% for Brazil. Bolsa Familia, President Lula's anti-poverty programme has benefitted the northeast, but the Getulio Vargas research institute shows three quarters of growth coming from earnings and expansion of export based agriculture in soyabeans and other products and from mining export industries. Projects in the northeast include development of the port and industrial area around Suape. A petrochemical plant, a shipyard and a Petrobras refinery, are under construction. A new railway will link Suape to the interior. Much of the development is for export industries in soyabeans and iron ore, and for the rail and port infrastructure that supports these exports to China. As a result the development looks similiar to what is happening in Australia with the huge expansion in rail and port infrastructure in that country to support iron ore and other mining exports to China. Any slow down in China will affect Brazil as the IMF has recently warned, because of an overdependence on commodity exports to China. Alexandre Rands of local Datametrica consultancy points to this when he says that infrastructure booms while helpful are not enough to sustain development. Big firms train the workers they need which is how Brazilian companies cope with a weak educational system. Schools in the northeast are however not getting the financial support to improve education, a situation that affects Brazil as a whole, but is even more evident in the northeast....

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Economist Paul Krugman says Gordon Brown does good. Gordon Brown Britains Prime Minister has taken the lead and the initiative to give a proper direction to the rescue efforts of the USA, and the G7 countries. His plan to inject capital into financial institutions and a host of initiatives was done speedily, intoduced Wednesday, October 8, 2008 and to be executed starting today, Monday, October 13 with some of the first capital infusions and other steps. In giving direction to Paulson who has agreed to take the direction of Gordon Brown after some faltering and missteps and in properly guiding the whole of the G7 Gordon Brown has done a lot of good. Which goes to show that the British public may have underestimated and underappreciated the quality of leadership Gordon Brown can show in a crisis, (considering his low poll ratings), which is where it really matters and where its sorely needed, especially when its for the global financial system.

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Internet content and communications provider Yahoo, is losing ground. Compared to a 4% growth for the Internet overall, Yahoo's increase in unique vistors was 4%, according to comScore in the 4 months of 2010 to April. Total minutes dropped 11%, and page views dropped 13% in same period, compared to double digit increases for the Web. Yahoo CEO, Bartz, lacks a background in journalism and content development. And AOL is pursuing a similiar strategy. Yahoo agreed to acquire Associated Content which aggregates content from bloggers, and it is making trials with local content in Detroit and Cleveland for user engagement. Bartz plans to revamp the email interface. Analysts sense that the repair job will be tough for Bartz as Yahoo's image has suffered.

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The State Budget Crisis Task Force is co-chaired by former Fed chairman Paul Volcker and Richard Ravitch, a former lieutenant governor of New York. The Report of the Task Force says rising pension expenses and healthcare costs for public sector employees and Medicaid costs are severely reducing the ability of states in the U.S. to fund essential infrastructure improvements, education for low income students and other services. The report said there were six major threats to the fiscal situation of states- including Medicaid spending, underfunding of retirement, "budgetary gimmicks" to address the short term needs, and uncertain tax revenues. Ravitch told a news conderence: "It will be a hell of a lot more expensive to deal with theses problems in five or ten years than to deal with them now." The report focussed on California, New York, New Jersey, Illinois, Virginia and Texas. It was funded by the foundation of Blackstone Group co-founder Peter Peterson, and George Soros's Open Society Foundation....

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Germany's Federal Criminal Police (BKA) says its online tip portal is hit by hackers in a denial of service attack. The site was restored to normal service shortly afterwards. The tip portal was for the public to share video and text on clues to the attack.

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New Yok has a mandatory foreclosure mediation program, with a 3rd party mediator working with the homeowner and the bank to achieve a loan modification. Of the 42,256 mortgages in New York approaching foreclosure since Jan 1, 2010, 75% went into the mediation process. Of this 80% achieved permanent modifications. In Connecticut 70% of 29,000 mortgages went into mediation with over 60% achieving permanent modifications for the same period. Where the mediation was optional as in New Jersey, only 20% of 50,713 mortgages went into mediation. In Nevada, another optional state, only 11% of 62,593 mortgages went into mediation. Mediation rates rocket when it is mandatory. One expert says that this is because mandatory mediation brings accountability and humanizes the process. By reducing the interest rate and making for lower payments the borrower stays in the home, and the bank continues to get its lower but consistent income stream compared to a default in payments. Today 20 states offer some form of mediation but only 2 states and 2 cities make it mandatory. This is happening in the disturbing context of a decline in troubled homeowners receiving assistance or modifications. About 470,000 homeowners received loan assistance in the 3rd quarter, down 17% from the second quarter, and down 32% from the same quarter a year earlier. The paradox is that one way to stimulate the economy that is not being tried is to mitigate losses in the housing market for homeowners and lenders. Spain's financial sector is doing modifications routinely and this is one way it is softening the impact of losses from the housing market. See Spain and residential mortgages....

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Following the Dallas police officer shootings Bruni of the NYT says U.S. president Obama has not set race relations back 50 years as some of his detractors say. Instead the conversation on race relations has become more heated with technology providing instant images on iPhones, and the loss of black lives, says Bruni.  Obama has tried unsuccessfully to have his voice heard for moderation on all sides.

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Huawei executive, Meng Wanzhou, is released after agreeing to a deal in a Brooklyn court hearing. Meng Wangzhou, chief financial officer of Huawei Technologies, admitted to wrongdoing in a fraud case. The Biden administration acted to remove a friction point with China, and China released 2 Canadians held by China since 2018, following Meng's release.

Meng is daughter of Huawei founder Ren Zhengfei. She was arrested at Vancouver International Airport in December 2018 at the request of the United States. The US Justice Department during the Trump administration had accused Meng and Huawei of a decade long effort to steal trade secrets, and evade Iran sanctions. In retaliation China arrested 2 Canadians who were released after Meng's release, after a long period in detention.

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Huawei moved into third place passing RIM Blackberry and Nokia in smartphones with about 5% market share in the 4th quarter of 2012, according to IDC. Huawei increased market share with its strategy for cheaper smartphones.

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Spain to limit subsidies to salar power companies. Starting October 1, Spain may cap subsidies at 300 megawatts, about 1100 megawatts were installed in 2008. Greece, France, Italy and South Korea may pick up the slack.

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South Korea which is dependent on exports for nearly half of economic output took a massive hit with January's economic news that exports fell by 32.8% in January 2009 compared to a year ago. The information appeared on the website of the Korea Customs service, and the Ministry of Knowledge Economy released this information also. The government reported that industrial production fell by 18.6% in December 2008. A large proportion of South Korea's exports are semifinished goods like televisions, cellphones, cars and other products that are finished with final assembly in China's factories, and then exported to other countries. So these numbers in South Korean exports will show up in figures from Chinese exports in the coming months and may be just as steep. This begs the question, what will happen with the export model in countries like South Korea and China and countries like Germany that are heavily dependent on exports to China. If as reported in today's WSJ Americans are now becoming thrifty, spending less and saving more, with this showing up in the statistics- and in habits like shoe repair with a story on the growing shoe repair business in today's WSJ- where will this take export dependent economies?...

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Stephen Bosworth was appointed by Hillary Clinton as U.S. Representative for North Korea Policy. He is one of America's best diplomats who served in several postings overseas before becoming Dean of the Fletcher School of Law and Diplomacy, Tufts University, Medford, Massachusetts. Prof. Drezner points to the work done by Bosworth in keeping dialogue with North Korea alive, till a solution can be found. He also cites Chinese analysts who say pressuring China comes from a worn playbook, that China would not agree to reunification on the Korean peninsula, to bring U.S. influence right up to its borders. South Koreans have been wary of reunification because of the decade long experience of integrating East Germany. As a result new solutions need to be found and the valuable work of diplomats like Bosworth is badly needed to keep dialogue alive for a solution to be found.

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Fiat Chrysler CEO Marchionne's strong opposition to the deep discounting of cars and focus on market share of the Detroit automakers. He scrapped discounting plans of the sales team at Chrysler and fired executives who pushed this strategy. Marchionne's office is located on the fourth floor of the technology center at Chrysler headquarters, next to Chrysler engineer's offices, and the management team meets in a nearby conference room. Fiat engineers and managers in Italy participate through videoconferencing.

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Supreme Court Justice, Elena Kagan, after her first year at the U.S. Supreme Court. Kagan was appointed by President Obama in 2010. Kagan talked about her experience at the Supreme Court at an Aspen Institute event. Kagan replaced Justice John Paul Stevens. Stevens says Kagan has voted very similiar to how he would have voted on most of the cases. And Justice Ginsberg says about Kagan: "she has already shown her talent as an incisive questioner at oral argument and a writer of eminently readable opinions." Kagan takes writing opinions for the Court very seriously. She described her style at the Aspen Institute event as figuring out how to communicate difficult ideas to people who know little about the subject. An additional aspect of Kagan's writing is that she strives to put things using vivid and colorful language that sticks with people. She has used expressions such as "loosey-goosey," for instance. In her dissent on the campaign finance case she described the supposedly smoking gun found by her colleagues, as: "the only smoking gun here is the majority's, and it is the kind that goes with mirrors." The media tends to compare Roberts with Kagan, the two youngest chief justices on the court, both articulate and vigorous in their opinions, with similiar intellectual backgrounds but taking different positions. Kagan says the most valuable experience to prepare for her new position, was the year she spent as Solicitor General, where she was trying to persuade nine chief justices of the court why they should take a particular position. The difference now being that she must persuade eight justices. The most striking aspect of the two appointments by George W. Bush and Obama, with the absence of a retirement age for the U.S. Supreme Court- as in other democracies such as India- is that both Roberts and Kagan may well be on the Court for 25 years or longer. ...

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This report in the WSJ says Reince Preibus, Republican National Committee chairman, has told party officials on Oct. 8, 2016, to redirect party funds away from nominee Trump to down-ballot candidates. This means the Republican party will try to get Clinton supporters to vote who are likely to vote for candidates like Rubio in Florida and Portman in Ohio. Republican Portman has joined Senator McCain in withdrawing support for Trump. This is the result of a video showing Trump making lewd comments about women in a conversation with Billy Bush of NBC. Speaker of the House of Representatives, Paul Ryan, immediately disinvited Trump from a rally in Wisconsin and withdrew his support leading to a big outflow of support from Congressman and Republican leaders. A former chairman of the Republican party in California describes this as the biggest crisis for Republicans since Watergate. The Republican party now stops its mail program to voters that supported Trump and redirects it to down-ballot candidates. It also comes as the Republican party funds and party infrastructure are a necessary and vital  part of any Republican nominee's effort to get elected. The Republican strategy may now be to try and preserve its control of Congress, as a loss in Wisconsin, Illinois or Missouri, could give the Democrats control of the Senate and other losses reduce its House majority. This appears to be the backup strategy of Paul Ryan as Speaker, and the leading Republican after his overwhelming win in his Senate seat against a Trump supported candidate. ...