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Signs that Turkey's economy is growing and consuming beyond its capacity. The current account deficit is now at 8%, and foreign credit is helping finance the boom. General purpose consumer loans are growing rapidly- at 42% in 2010, and at 61% on average from 2005 to 2008- according to Standard Unlu, an Istanbul based investment bank. Banks are known to send text messages to borrowers if they qualify, so that the money can be picked up at the bank branch. Turkey has gone through two boom bust cycles- in 1994 and in 2001. The central bank of Turkey has increased the level of interest free deposits banks must keep at the central bank, a move designed to reduce lending. However Turkey's younger generation of consumers are on a spending binge, and access to personal loans is easy. Signs of an asset bubble are easy to find. A 24 acre plot in Istanbul's city center sold for $33.3 million.

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Air routes that cross over Ukraine are used by many airlines for direct Europe to Asia flights. Even though this does not add many miles if Ukraine is avoided airlines have preferred Ukraine as a more direct route. Before Malaysia Airlines Flight 17 jet was shot down by a missile, about 150 international flights crossed Ukraine each day, according to Brian Flynn, a senior manager at Eurocontrol, a pan-European air-traffic control organization. In just the two days before the crash of the jet about 75 airlines flights were routed through Ukraine, according to the Eurocontrol director network manager. The question still remains were airlines taking on more risk by flying so close to the Russian-Ukrainian border, where fighting on the ground and in the airspace was taking place weeks before that missile struck. It appears from this that it could have been any one of these airlines flights that could have been hit.

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The 525 seat Airbus A380 launched in 2007 is expected to reach the breakeven point in 2015. Higher deliveries of the A380 led to a 41% decline in net profit for the 3rd quarter 2014. Production improvements on the A380 increased operating income by 14%. This will enable Airbus to benefit from the fuel efficient long range A350, which completed a maiden flight in the 3rd quarter 2014, with the first deliveries by the end of the year. The A320 neo also will add to profitability, as it is sold out to 2020, according to UBS. The A380 will be profitable by 2020, with more investment needed to upgrade the engine's fuel efficiency to compete with Boeing's competing version, the 777X. The uncertainty is reflected in Airbus share price, declining 8% in 2014 and trading at 5.7 times earnings before interest, tax, depreciation and amortization, compared to Boeing's 8.7, according to FactSet.

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Under a new agreement reached between the new Iraqi government of prime minister Haider al-Abadi and the semi-autonomous region of Kurdistan, Kurdistan will export 250,000 barrels of oil a day in 2015, and the province of Kirkuk will export 300,000 barrels a day. Exports will be made under the Iraq national oil company, SOMO (State Organization for Marketing of Oil). Kurdistan will get 17% of Iraq's budget expenditure, Kurds will sit on the SOMO board, and Kurdish Peshmerga army will get direct monthly payments from Iraq's budget. Earlier in 2014 talks had broken down under the Maliki government- Kurdistan began exports using a pipeline to Turkey and the Iraqi government cut off budget payments to the Kurdistan Regional Government. Iraq's oil minister Abdul-Mehdi said in Vienna after an OPEC meeting in November that Iraq has set a production target of 3.8 million barrels a day for 2015. This is an increase of 500,000 barrels a day compared to production in Oct. 2014.

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The increase in immigrants in German society is creating new tensions especially with immigrants who fail to integrate into German society. A large increase in refugees from the wars in the Middle East in 2014 is creating new tensions. Asylum applications went up from 127,023 in 2013 to 181,453 for 11 months of 2014. According to the OECD the 1.2 million immigrants admitted to Germany in 2014 make it the second largest destination for economic migrants in the world. Immigrants have also come from Greece and other countries experiencing economic difficulties. The protests in Dresden, drawing 10,000 people, show a significant minority opposes the current immigration policy. Similiar opposing views were expressed in the recent elections in Sweden and at the elections for the European parliament. The CDU Interior minister Maiziere says the Pegida movement cannot call itself as "patriots," as the acronym Pegida stands for "patriotic Germans against the Islamization of the West."

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Simon Nixon looks at the different scenarios for Greece as it faces snap elections on Jan. 25, 2015. He makes the point that unlike the situation in 2012 Greece's debt after considerable adjustment with creditors now looks sustainable. The nominal debt to GDP ratio remains high at over 170%, yet says Nixon, the long term average interest cost is about 2.3%. He even cites hedge fund Japonica Partners analysis showing Greece's debts valued on a discounted cash flow basis under international public accounting standards at a debt to GDP ratio of about 18%. Alexis Tsipras's left coalition if elected is likely to moderate its demands and continue with EU programs for Greece to restore confidence in financial markets and lower the interest rates on debt- including removal of special tax treatment exemptions and pension reforms. Support for EU membership remains high in Greece and Tsipras is likely to change his program to adapt just as Samaras and New Democracy Party did when it was elected....

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U.S. federal government efforts through changes in programs for loan repayment to reduce the burden of $1 trillion in student debt. A weakness of the programs is that no effort is made to put some form of cap on what colleges charge for tution, which is moving ever upwards. As a result students will continue to be burdened by high debt. The loan forgiveness after 20-25 years is not an adequate solution as the writer suggests, because extending loan payments of 15% of income for such an extended period of time leaves less for buying a house, for mortgage payments, education of children, and limits what a family can spend for two decades, a poor option for any family especially when both husband and wife are paying off student debt. As long as young people with student debt defer purchases for a new home and other purchases consumer spending will be weak.

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Mitch Daniels, former 2 term governor of Indiana, and president of Purdue University, describes the damage done to hope for the future by putting so many people in so much debt- with estimates by WSJ-Experian showing 70% of recent graduates as borrowers and the average borrower graduating with $33,000 in debt. 40 million young people are affected, as they postpone marraige, postpone childbearing, postpone buying a new home, stay away from starting a new business. Daniels put his own social and moral obligation to the test as he brought the cost of an education at Purdue for 2 successive years- with a 3 year freeze on tution and cuts in room and board, textbook costs. Purdue student borrowings have dropped by 18% since 2012, adding a new metric in evaluating the delivery of quality education for the country, and a moral and social obligation for all the leaders in our society.

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The fiscal 2016 U.S. budget of president Obama proposes government spending at 7% or $74 billion above the caps set in a bipartisan deficit reduction deal reached in 2011. It proposes $561 billion in defense spending with an increase of $38 billion, and $530 billion in non defense spending with an increase of $37 billion. Across the board cuts known as the sequester were set in 2013 following a 2011 bipartisan budget deal plan to take $2 trillion out of the federal budget deficit over 10 years. Spending caps were set at the time and a supercommitte was setup to look for ways to trim $1.2 trillion from the federal budget. With the failure of the supercommittee the sequester went into effect until Sen. Murray (Democrat) and Sen Paul Ryan (Republican ) agreed to ease cuts through fiscal year 2015 ending in September. The Democratic president's effort is to remove the caps in 2016 to invest more in infrastructure, medical research, other strategic priorities and defense.

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China's central bank the PBOC lowered the reserve requirement ratio for commercial banks, the amount of deposits set aside for financial safety, by half a percentage point to 19.5% on Feb. 5, 2015. The move is intended to get banks to lend more to stimulate growth. Growth is slowing in China, with GDP up 7.4% in 2014, and expected to go below 7% in 2015. With China's debt up to an estimated 282% of GDP, the PBOC has resisted efforts for monetary easing that would make the debt problems worse. The lowering of the reserve requirement ratio by half a percentage point gives commercial banks an additional 500 billion yuan or $81 billion to lend out to customers. Another 160 billion yuan comes from measures targeted at small business and agriculture. With the soft business conditions worldwide China's manufacturers may be reluctant to borrow more at this time, making it uncertain how much actual lending will take place following the move.

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Germany's statistics office Destatis reports record numbers for imports and exports for 2014, showing a stronger economy going into 2015. Exports surged even as imports increased to 917 billion euros. Imports from the eurozone increased by 2.3%, a healthy sign for recovery of other struggling eurozone economies. Domestic consumer spending was up 1.7% for the 4th quarter from prior quarter. The trade surplus for 2014 set a record of 217 billion euros, exceeding the record of 195 billion euros set in 2007. A slowdown in Russia is made up by increased exports to other countries. Analysts say the lower euro exchange rate should improve trade performance with improving global demand also lending support. For the first time since 2007 domestic consumer demand is also picking up as wages are increasing. Destatis reports 1.6% increase in real earnings for 2014, the highest since 2008. Additional positive factor for domestic consumption is that wage agreements in 2015 should boost incomes further, say analysts....

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U.S. exports reached $2.34 trillion in 2014, increasing by $760 billion over the figure in 2009, according to the Commerce Department. Exports accounted for one third of the U.S. economic growth since 2009, say Pritzker and McNerney. Goods and services for exports supported 11.7 million U.S. jobs in 2014, and a Commerce Department 2010 paper shows these jobs pay 18% higher than jobs unrelated to exports. Commerce Department Secretary Pritzker, and McNerney, chairman of the President's Export Council, say free trade agreements and investment by private business is critical to supporting export promotion, but make no mention of the effect of the stronger dollar on future exports. In a period of a few months in 2015 the euro is approaching parity with the dollar and the yen is now 120 to the dollar, giving European and Japanese business a significant advantage, and raising questions about the strength of the U.S. recovery going forward.

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The 2016 presidential election campaign is expected to lead to $10 billion in campaign spending. The Federal Election Commission is unable to take any action against campaign abuses with the commission deadlocked 3-3, with 3 Democratic members and 3 Republican members voting strictly along party lines and seeing any move by the other side as partisan. The members are not even on talking terms. Republican members see the issue in terms of First Amendment rights to free speech. The Supreme Court's decision in the 2010 Citizens United case affirmed First Amendment rights of free speech and unlimited fund raising to conduct election campaigns. The Supreme Court ruling considered corporations as associations of individuals and therefore entitled to First Amendment rights of free speech. The Court suspended the "electioneering communication" ban imposed by the Bipartisan Reform Act of 2002, allowing corporations and unions to engage in free speech electioneering during election campaigns.

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The Dec. 2013 CBS/NYT poll showed only 39% overall support the Obama health care law, a majority say it increases their health care costs. 57% of the uninsured without health coverage say it increases their costs and only 20% say it decreases their costs, for the very group it was designed to help. For the uninsured a third say they will not sign up for the law and pay the penalty. Annie Lowrey of the NYT looks at these numbers and says part of the reason for the lack of enthusiasm for the law is the sharp increase in deductible costs of insurance coverage- the percentage of Americans in health insurance plans with deductibles over $1000 has jumped to 38% in 2013 from 18% in 2008, according to a survey by the Henry Kaiser Family Foundation. During these 5 years the average deductible has increased to $1097 from $735. This is happening as incomes are stagnant or declining in inflation adjusted terms for many working Americans.

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Italy will get 6 billion euros in savings from lower interest rate charges on its debt as a result of lower borrowing costs in capital markets. Italy's borrowing costs were at record low of 2.08% for debt issued in 2013. The new budget fails to provide relief in payroll taxes that would help reduce high youth unemployment. A payroll tax cut will increase take home pay of lower income workers by about 15 euros a month. Carlo Cottarelli, IMF expert, has the task of doing a spending review to cut 32 billion euros in public spending within 3 years. The Letta administration is looking at which tax credits to eliminate. These tax breaks range from aftershool sports programs and veterinary costs and amount to 130 billion euros a year. Automatic measures to reduce spending are part of recent Italian legislation and act to keep spending down. limits in the event the political system fails to produce agreement.

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The ship Prelude being built in S. Korean shipyards for Royal Dutch Shell measures 1600 feet for the hull from bow to to stern. It is designed to take gas and chill it to liquid as LNG from smaller gas fields where building pipelines is not the best option. It could supply enough gas to Hong Kong for one year. The entire processing plant is on the ship replacing the cost of building costly pipelines and plants. The LNG is then put on tankers for transport. The project is expected to cost $10 billion and Shell is going ahead with it even as it is selling stakes in costly projects in Australia to control spending. The advantages are that it is not affected by the rising costs of building gas pipelines on land in Australia, growing demand for LNG in Asia, and the technological viability of this method of producing LNG on ships for smaller gas discoveries where building pipelines is too costly.

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Use of oil for transportation has increased from 30% ten years ago to nearly 50% in 2013, according to Sanford Bernstein, as more cars are added to China's roads. This makes it less likely that a slowdown in China's growth will affect demand for oil. Sales of passenger cars increased by 11% in January and February 2014. A study at France's central bank by Gauvin and Rebillard shows only a much smaller effect on oil prices from a hard landing of the Chinese economy, compared to the effect on metal prices. Passenger cars now make up two out of three vehicles on Chinese roads, according to LMC Automotive. The growth in cars is likely to continue, not just in China, but in other emerging markets such as India, Brazil, Mexico and Russia. Metal consumption is different, as it comes mostly from housing, infrastructure and factories which are the most affected parts of the economy in China.

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Joe Kaeser, CEO of Siemens AG, meets Russian president Putin in Moscow on March 26, 2014. He also had talks with Gazprom chief, Alexei Miller. Siemen's has invested 800 million dollars in Russia in the last 2 years. Siemens sales in Russia are 2.17 billion euros, 2.9% of the company's revenue. Germany's total trade with Russia is 56.3 billion euros for 2012. Eckhard Cordes, chairman of German industry group Ostausschuss, representing German companies with investments in Eastern Europe, met with Russian officials and Alexei Mordashov, CEO of Severstal metals group. He then briefed the German government on his talks. Chancellor Merkel says dialogue is also part of government policy: "Business contacts are still taking place and I am not interested in seeing the situation escalate, but rather am working towards a de-escalation." Exxon has major investments in Russia and deals with Russian oil companies and the Russian government for oil exploration. Exxon CEO Tillerson has taken a similiar approach....

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Greece gets strong demand for its bond offering in April 2014. A sale of 3 billion euros of bonds maturing in 2019 attracted 20 billion euros in demand. The yield on the 5 year bond was 4.95%. This is the first longer term bond sale since 2010. The yields on bonds issued during the depths of the eurozone crisis for investors had yields close to 20%. This is a huge turning point for Greece's recovery, and shows tangible progress for the efforts of the Samaras government to stabilize Greece's finances and restore growth. With yields on 10 year U.S. Treasury debt at record lows of 2.64% in April 2014, this brings Greek bond yields to within a little over 2 percentage points of U.S. Treasuries, something that would have been unthinkable only one year ago at this time. It also helps stabilize the entire eurozone, after years of turmoil and riots in Greece created the possibility of Greece's return to the drachma.

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Under Blackstone private equity ownership Hilton expanded overseas, acquired the international operations, and increased room capacity and revenues. It also almost doubled the debt load to about $13.5 billion in 2013 and hit a rough patch in timing because the 2007 buyout happened close to the 2008-2009 financial crisis. About $4 billion of the debt load has been reduced by negotiating with creditors during this period. Room capacity went up from 501,000 in 2006 to 665,000 in 2013, occupancy from 72.5% to 72.3%, average daily rate from $124 to $136, and revenue from $8.2 billion to $9.4 billion. Hilton adjusted earnings before interest, taxes and depreciation were up 25% from 2010 to nearly $2 billion in 2012, according to SEC filings. Hilton now plans an IPO for the first half of 2014 to raise $1.25 to $2 billion. About 80% of rooms under construction are outside the U.S. showing the opportunities overseas Blackstone has focussed on.

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The auction of the Libra ultra-deep water oil field in the waters off Rio de Janeiro, Brazil. Shell, Total and two Chinese companies took part in the auction. Libra is estimated to hold about 12 billion barrels of oil and combined with the other fields in the newly discovered area has about 50 billion barrels of oil. Brazil's laws passed after the discoveries offshore were made in 2006 give Petrobras a critical role in development of the oil fields. A new company Petrasal was created to oversee the new oil fields. The winning bidder in this auction is required to pay the government $7 billion in an upfront payment and source much of the equipment inside Brazil. New investments are required in education, infrastructure and supporting public services after nationwide street protests, making oil field development and new revenues a priority for the government of Dilma Rousseff and the Workers Party that runs the government.

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CEO Jeffrey Boyd of Priceline.com hands the CEO role to Darren Huston, a former Microsoft executive. Boyd will continue as chairman. During a remarkable leadership for the company following the dotcom bust Boyd made important acquisitions, including Booking.com. The smaller online travel companies with a focus on hotels in Europe and Asia helped Priceline.com grow rapidly by taking smaller commissions. Priceline shares increased by 65% in 2013 to reach $1000. Revenue for the third quarter of 2013 increased 33% to $2.27 billion with increase in Asian bookings, and overall profit increased to $866 million from $596 million in the year ago quarter. Boyd's strategy in 14 years at Priceline.com was to keep the different websites acquired under separate management to keep brand loyalty and customer perceptions. Websites such as Agoda.com, Booking.com, Kayak, and Rentalcars thrived under independent leadership at each website. Huston headed the international brands and Booking.com from Amsterdam, where he will continue to be located....

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Frenchman Christophe Weber, 47, is head of Glaxo's vaccine business. He is the next CEO of Japanese pharmaceutical manufacturer Takeda Pharmaceutical Company. He will succeed President Yasuchika Hasegawa. Weber will join Takeda in April as chief operating officer and become president in June 2014. Hasegawa will continue as interim CEO for one year and Weber is expected to succeed Hasegawa, 67, at that point. Hasegawa has run the company for 10 years. During this period Takeda has expanded internationally. Takeda acquired Swiss drug company Nycomed in 2011. Executives were hired from western companies. Francois-Xavier Roger, of Luxembourg's Millicom International Cellular SA was made the chief financial officer, and Phillip Duncan of Novartis joined as chief procurement officer. Hasegawa sees new talent from western companies as useful in penetrating emerging markets. Weber also headed Glaxo's Asia/Pacific operations. Hasegawa told a news confernece: "We're no longer in an age where decisions are based on whether a person is Japanese or foreign." ...

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About 38% of Gen Y (18-34 years) prefer to locate in mid or large sized cities such as San Francisco, Chicago and Boston. Companies are following this trend especially in the tech and internet field to attract young employees. Many professionals marry later with both partners working and prefer living in a close environment with many opportunities for interaction and activities. Commercial vacancy rates in central business districts are down faster than in the suburbs- 13.9% of urban space is empty in the 3rd quarter of 2013 compared to 18.5% in the suburbs, according to Reis Inc. The recession had reduced downtown rents and cities offered additional incentives. After the merger of Continental with United, the corporate offices were moved to the Sears Tower in downtown Chicago. Google's Motorola Mobility is moving into the Merchandise Mart in downtown Chicago from the suburbs. Twitter moved to a location in downtown San Francisco attracted by the space and lower rents.

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Spain's central bank says the Cajas savings banks have 217 billion euros in exposure to real estate and construction companies. Of this 100 billon euros is "potentially problematic." The Cajas have provisions for 38% of this. The government approved rules for minimum capital requirements. The capital ratios are set at 8% for all banks and higher for the Cajas. It said all banks will need to raise 20 billion euros by a September deadline. Barclays estimates this at 46 billion euros, twice the government estimate. The government will extend the deadline on a case by case basis, so that banks have until December 2011 to close sales of stakes to private investors.The government will then take stakes in the banks by September through the Fund for Orderly Bank Restructuring or FROB. After a 3 billon euro bond issuance in January 2011, the FROB has 4.5 billion euros on hand and a 3 billion euro credit line.