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After all the fuss TARP will not buy up troubled assets like mortgage securities held by banks and will focus on injecting capital into banks and other needs.

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China's slowdown may be much worse than is generally thought. Germany went through this thinking that it was relatively safe as it had no housing bubble and no consumer debt like the US and the UK. But the drop in demand from China and other countries has led already to a contraction in the German economy by 0.5% in the third quarter of 2008, expected to worsen to 0.8% in 2009. China's National Statistics Bureau announced a 4% decline in electricity output inOctober from a year earlier. This is a result partly of factories manufacturing for export cutting back as their orders decline. There was a 17 drop in production of pig iron and crude steel in October and a 0.7% fall in output in the output sector. From all this it appears that even without the beggar thy neigbor policies of the 1930's, even without the protectionism of that period and even with the global coordination of the G20 and the G7 countries, its hard not to see the impact in one place flowing through to other places. The loss of export markets in the USA for Chinese export factories leads to this slowdown in China which in turn now needs much fewer machinery imports from Germany leading to a contraction in Germany. See the link to German economy in WSJ November 14, 2008. These effects show up in an exaggerated manner with economic contraction because of the heavy dependence on exports in Germany to China, and heavy dependence on exports in China to the USA, and the heavy consumption of Chinese exports in the USA, all ocurring in an exaggerated unsustainable way considering the American spending binge and the zero savings rate in the USA, the pressures on the environment with runaway growth in China, and the lack of any domestic led consumption in Germany. China's infrastructure spending can provide some growth along with the stimulus spending but much of the export led growth may disappear. The stimulus spending could help prevent a contraction in the Chinese economy but may deliver only a few points of growth, way off from the runaway over 10% growth of two decades which was heavily dependent on manufacturing exports. How badly Chinese exports are affected depends on how badly the US market is affected for Chinese imports. Higher unemployment in the US if the auto industry sees a collapse in its market in 2009, would lead to lower consumption in the US as laid off workers cut their purchases at Walmarts and Targets and at other retailers, and this would drive imports from China to even lower levels, wiping off a couple of percentage points of China's GDP growth rate. ...

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The Economist argues against a bailout ot Detroit automakers and says Chapter 11 could be made to work. the alternative is to get preferred equity in return for bailout money.

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China needs to make a serious effort to move away from export based model for growth and fix what is broken about that model which is investment in health care, education, the environment, improving rural incomes by giving farmers ownership of land, directing money to the poor and to rural areas that have suffered during the long three decade boom years. The growth rate is expected by analysts to hit 6% in the fourth quarter. And further declines can be expected as exports get hit hard as export markets in the USA and Europe see large declines in consumer spending. The stimulus package is less than what it appears because it includes things that were already planned expenditures, yet it is a step forward. Investment in railways to modernize the rail network is a good investment. And with proper reallocation to the rural sector this stimulus and approoriate new policies could unwind what the Economist calls the grotesque global distortion that has seen poor Chinese farmers help finance the debt fueled excesses of western consumers in countries like USA, UK, and Ireland. Something the Economist has not emphasized in the boom years, but now that the growth rate could drop to 4-6% there is deep concern what it would do for social stability, for rural incomes, and the disparity that has been built up between urban and rural incomes, both within China for policymakers and the media outside....

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If you are Exxon or Exxon's CEO Tillerson there are no regrets and its a hydrocarbopn world for as far as you can see and that is decades from now. Or has success made Exxon grow complacent when new winds are blowing.

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A professor of Environmental Design asks that GM be asked to build innovative transportation systems in addition to fuel efficient cars by the government in return for rescue money. He cites the warnings given by Stewart Udall, an interior secretary under John Kennedy and Lyndon Johnson about overdependence on mideast oil. See the article on Exxon's Tillerson's vision of a world based on hydrocarbons for decades still. Someone may rub his eyes and ask whats going on?

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In talking about the systemic risks of the failure of GM, about 3 million jobs depend on the auto industry with 1,187,000 employed by dealerships of which 325,000 are employed in GM dealerships. Another concern is that GM's pension obligations are underfunded by $18 billion at the end of 2008 according to Deutsche Bank. This would be added to the $11 billion deficit at the Pension Benefit Guaranty Corp. were GM to fail.

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A Prof. at New York University School of Law on why bankruptcy is the only viable option for GM, and his reasoning, including GM's legacy costs hard to get rid of without bankruptcy, the DIP set aside for warranties or a DIP loan for this to reassure customers, and the need for urgency to reduce brands, facilities, plants, dealerships, and have contracts that are realistic for the times, and retiree benefits taken up by the PGBC.

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China's diesel imports declined by 46% in October year over year, according to General Administration of Customs, and China was a net exporter of gasoline for 2 months in a row, signs that the slump in China is serious.

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Putin takes the first step for Russia to join in discussions for a lasting peace. More than a ceasefire is needed, as many ceasefires have come and gone and the war is now over 15 years old, pausing for a while and then starting again many times. Russia calls for addressing the underlying issues behind the war.  It started with Russian support for Yakunovich 2010-2014 which ended with the Maidan protests in Kviv and Lviv. Russian and Putin strategy at that time was that as long as  a pro-Russian or a person leaning towards Russia with good relations to the West -as existed in some of the former states in Eastern Europe during the 1980's during the Soviet Union such as Poland and GDR- this would be acceptable. The Maidan protest led upheaval thus had a contrary effect which Germany under Merkel and France under Sarkozy and Hollande failed to grasp. Obama judged Russia by its GDP, ignoring its history and relations among European states as one of the major powers in Europe, a technological state with nuclear power. As China shifted away making the integration of Hong Kong and now Taiwan a priority under president Xi, and asserting the virtue of its state run capitalist system over free market capitalism, the fissures began to develop in the system that prevailed after World War II and which survived the fall of the Berlin Wall. These are some of the origins of the war and are also in some of its aspects geopolitical and relate to world peace,, and peace inside nations in general outside the Ukraine war. And here relate to Venezuela Mexico and US inaction in tackling borders and cartels, the US border with Mexico, Syrian war and Syrian refugees entering Germany/Europe, the anti refugee movements in Germany and the EU, refugee crime in US and Europe, all connected in some way to the unsettled borders of the Russian state with US and Western European + Eastern European states in NATO and the EU nearby. And the limiting or removal of Russian influence in Ukraine seen by Russia as unacceptable in regions nearest to Russia that speak Russian. Britain has the virtues of its parliamentary democracy, yet it is far from Russia's borders and it just like the Russian Empire had an Empire in India and a near thing to an Empire in China, as recently as 1950, over history of western colonial empires of 500 years not too long ago. Which means it is good to be starry eyed but the reality in European history since 1400 is of dominant states and colliding or co-existing spheres of influence, mostly co-existing in some balance of different states in the interests of peace and welfare of the people.     ...

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Claire Cain Miller points to the high cost of child care in the U.S. and the benefits to society from providing affordable child care. It has a high impact on women's employment and incomes, and ability to pursue opportunities in education and career. The effect on children especially for low income families is enormous. Average cost for child care in the U.S. is by one estimate $16,514. The higher the quality of care in early years the better the outcomes are for children in education, careers, income, and later in life.

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Mexico's unemployment rate fell to 3.3% in June 2017, the lowest level since 2006, as the outlook for the Mexican economy improves. The problem for Mexico is that most of the new jobs created have low wages and wages have not kept up with inflation. Inflation is at 6.3%. Low labor skills means many people take jobs at low wages.

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David Beers, John Chambers and the Committee that made the U.S. credit ratings downgrade. Earlier calls on Iceland, Argentina and Italy by David Beers and his willingness to make a tough call and defend it. The committee is called the sovereign ratings division, with David Beers as head, and John Chambers as his deputy. A report from the IMF gives good marks to S&P on making timely sovereign ratings revisions where approporate and on being ahead of Moody's and Fitch in this regard. S&P spokesperson says that the sovereign ratings group is quite different from the corporate ratings group.

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With a 6% decline in sales in Europe expected for 2012, the problems at GM's Opel operations are expected to worsen. GM's sales in Europe declined by 2% in 2011. Critics say GM has not give enough attention to Opel's operations. Giving it only an afterthought after being overwhelmed by problems in the U.S. operations, and mostly using the design expertise of its engineering center in Russelheim, near Frankfurt. The Buick Regal is based on the Opel Insignia and the work of Opel engineers. Ferdinand Duddenhoffer, professor at the University of Duisburg-Essen, Germany, says GM has neglected Opel and is not making good use of the manufacturing capacity at Opel. The problem, he says is production management and being able to shift quickly to different models based on demand, and using Opel as part of a global factory network. The repeated restructurings at Opel for 15 years have left this problem unresolved. In his view GM is still in the Middle Ages in this respect.

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The Moody's ratings downgrades of major American banks will increase the short term borrowing costs of these banks especially because they have large amounts of debt to roll over.

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Even as General Motors consider further cuts critcs point out that the company's 76,000 white collar employees deliver subpar performance, middle and upper managers are still in leadership roles even with poor performance, and under Wagoner little has been done to make it an effective force for the company, especially with layers and layers of management actually hurting when things need to be done quickly in many areas. Major decisions have not beenmade regarding the brands and GM management has chosen to just keep most of the brands just as they had existed before without putting them under some new arrangement and taking out some brands. And through all this the Board of General Motors continues to live with the status quo even with the stock going below $10.

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The Bureau of National Labor Statistics in China says China's GDP growth for 4th quarter 2008 was 6.8%. Private economists expect growth to slow to something like 5% in 2009 as the full brunt of the housing downturn and the drop in exports manufacturing is felt this year. Housing and exports were the two engines that helped China to reach 12-13% growth rates for 2007 and 2008. 2008 was also the year of the Olympics, and it now appears that by excessive growth and production capacity in many industries and increasing exports China may have created severe imbalances in the world economy. One way this happened is through the huge and ever increasing trade deficits with the US. By reinvesting the money in US Treasurys, China made a huge wave of liquidity and cheap credit possible in the US creating a bubble economy. The other is through the inflated demand in commodities like oil from the Middle East and countries like Russia, and demand for iron ore and other metal commodities from places like Brazil and Australia. This put upward pressure on the prices of commodities, creating a bubble in the price of oil. With the bursting of these bubbles the economies of Russia, Brazil and Australia and other countries are in a deep nosedive. The effects have operated in myriad ways, including a circular effect of the bursting of the credit bubble in the US leading to a collapse of demand in the US market for Chinese goods. In turn the collapse in demand for German and Japanese goods in China with declining demand, as the effects moved through the channels of the international trading system. The decline in Chinese demand also affects the US ability to make a export driven recovery....

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Wagoner became President at age 45, CEO at age 48. So you would think that young blood is coming in to GM, but that does not appear to be the case. At the Board level most of the Board members like George Fisher formerly of Motorola, have been around for a long time, and there does not appear to be new blood that would bring in fresh thinking. And serious decisions about investment in developing new technologies to develop fuel efficient cars, like hybrid technologies, electric and other alternative technologies, diesel technology, have been held up for years at General Motors. The way decisions are made on such issues with Board members voicing their opinions more than wrestling seriously with the issues, shows serious shortcomings of management and the Board. At key points of decision making the CEO and key members of his team had not prepared carefully, and Board members did not come up with serious thinking on the problems facing GM. It, appears that the investment in technologies to develop fuel efficient cars much earlier, long before they were finally being addressed in 2006, was a failure of Wagoner's management and of the Board. Management discussed this but continued to be mired in old ways of thinking that continuing with the status quo- cars with existing low fuel efficiency- would not expose GM to illwinds as preferences changed. Its clear from the description here of discussions within GM that the old thinking is quite entrenched at GM, and Wagoner just was not the kind of person who could vigorously articulate a new vision for GM. A couple of things are noteworthy in this account of management indecision at GM. When fuel prices began hurting sales of SUV's and large vehicles in 2005, efforts to get a decision on investments in new technologies for fuel efficiency for the whole product lineup failed at the Board level in an April 2005 meeting. One Board member saying at that meeting, that" do we want to lose another billion dollars in developing new technology for fuel efficient cars." And no one calling him to account that the remark still did not address the point that GM had to respond to the changing market and world oil dynamics, and not just hope for the best, as GM had aggressive competitors, and faced continually diminishing role in the market place for the entire decade of the 1990's. While April 2005 was already at the tail end of the previous era of gas guzzling cars and a decision then would still not have shown a forward looking vision of things, it was not until 10 months later that a decision was reached. And this almost from necessity, as oil prices jumped in 2006 after hurricane Katrina, and by this time President Bush was also calling for higher mandated fuel efficiency standards. The other noteworthy point here is that by making the changes so late in the game, GM had to compress the development cycle for new and some cases unknown technologies into short time frames. If the ingenuity of its engineers comes to its rescue it still faces another hurdle that of cost, because the technologies have to be perfected and improved, so that the costs are low enough for customers, and importantly comparable with what it is costing competitors to make the same fuel efficient technology engine or other part. Which is why one Honda executive remarked, "GM like everyone else is serious about this, because they have to be, but how many of their hybrids and how many Volts will they sell? Their technology is very expensive." Even if GM develops the Volt electric car by 2010, GM will need a whole range of fuel efficient technolgies to power its large product lineup. Its just to hard to avoid the conclusion that this is going to prove costly. All the dragging of feet and indecision, and failure to prepare GM for a different world in case something drastically different from what was expected happened, will prove very costly especially considering how aggressive and well financed some of the Japanese and German competitors are. It also hard to avoid the conclusion that there is too much bureaucracy at the large auto companies, and getting new blood and new ideas and fresh thinking is tough in a place where everybody agrees with everybody else, and there is uniformity of thinking. This makes it difficult for any original or wayward types to thrive. These bureaucracies look up to the top for direction. Initiative is discouraged on one hand, and at the same time even if a new direction is taken at the top. a lot of resistance can be expected to implementing it throughout the company without persistent persuasion and reminder of new facts and realities. This is true for both Wagoner and Mullaly as they face the skepticism of subordinates to new direction. Mullaly for instance has to remind his managers that large vehicles are only a small percentage of the entire global market, and if Toyota is making money in small cars so can Ford. See the link to this. Is Toyota immune from bureaucracy type behaviour throughout the company? Not really, Toyota's chairman emeritus came out of retirement in fact and went out of the way to caution its CEO and management about their complacency a year or so before. Shoichiro Toyoda personally intervened to caution against too much expansion in the US and climbing wage costs, and other risks they perceived such as the company managers in the USA appearing to be resting on their laurels. See the link to this. A lot of discussion is probably going on within these companies about the present state of affairs, and considerable anxiety for what the future will bring. It may be useful to ask the question is there something that makes it difficult for once successful organizations -now with entrenched bureaucracy and set ways -to put forward leaders with vision and foresight, till it becomes very late? The vision and foresight about where their markets and the world is heading, and the ability to move their organizations in that direction. Or to break out of old patterns of behaviour and thinking....

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Yoshimi Inaba, who now heads the North American operations of Toyota, thinks Toyota became complacent and lost touch with the customer. He says Akio Toyoda, the new CEO, wants to put some "passion" back in the company, and to see local executives speed up the decisionmaking at the company.

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Akio Toyoda and Yoshimi Inaba answer unrelenting questioning by a Congressional panel. Toyoda reafffirms the principles his grandfather stood for in building Toyota. A rare comment by former Toyota executive Jim Press throws light on the struggle going on inside Toyota betweeen the Toyoda family and career managers from the previous two CEO's. Jim Press said that the company was hijacked some years ago by anti family financially oriented pirates as he called the two previous CEO's Okuda and others working for them. And he added these managers lacked the character to preserve the company legacy.