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Sheila Dewan provides analysis of the figures on household debt for the fourth quarter of 2013 put out by the U.S. Federal Reserve. U.S. households added $241 billion in debt in the 4th quarter 2014, increasing by 2.1%. It shows says Dewan, that American households were beginning to spend on homes and consumer purchases such as autos. Certain groups such as students and young people were restrained in spending by high levels of student debt. Debt increases were $152 billion for new morgages, $18 billion for car loans, and $53 billion for student loans up by 5.3%. Total household debt to income ratio went up to 130% by 2007, and has since declined to above 100% at the end of the 3rd quarter of 2013, going up again in the 4th quarter of 2013. Credit card debt showed only a small increase of 1.6% as households focussed in cutting credit card debt with high interest rates. Increases in credit card debt and in mortgage debt were shown to be for people with very high credit scores of above 720 in the Federal Reserve analysis, a sign of the caution exercized by households and banks following the overleveraging in 2008....

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At a meeting of GM engineers and Continental- which manufactured the Cobalt's diagnostic modules on May 15, 2009- the faulty ignition switch defect was confirmed by repeated verification of data from many car crashes. No evidence shows this was shared with senior managers. GM filed for bankruptcy in June 2009, two weeks later, and this could be the reason as the situation could be chaotic in managerial ranks. It was tnot until Oct 29, 2013, when GM officials met with the supplier Delphi that the issue comes up again. Records for the meeting showed clearly the defective switches were made at a Delphi plant from 2004 to late 2006. A part change had led to the defective switch. It is the period between 2009 to 2013 that GM has no answer for, as public opinion increasingly looks to GM for answers on why it took so long to make the recall. At Toyota the footdragging in managerial ranks caused the problems for the recall. At GM the problem simply disappeared at the lower levels as the company went through a bankruptcy and emerged from bankruptcy under new management....

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Shinzo Abe is determined to avoid the mistakes made during his last term as prime minister 2006-2007, which lasted only 10 months and ended with defeat in the upper house elections. The LDP is aware that it won by a landslide because of the splintered opposition. The LDP won only 40% of the vote in the electoral districts in Japan. His focus will be on the economy, on tackling deflation, on central bank policy and efforts to support exporters with a weaker yen, and this time he will be cautious about sounding too nationalistic. Abe told a news conference: "I once fell to rock bottom and was hit with a storm of criticism. Now, I want to prove it's possible to start over again." During 2006-2007 Abe followed a popular LDP leader, Junichiro Koizumi, and hope that he represented a new post war generation of leaders. One approach he might take is to stay close to the U.S. on policies. The early stumble in this respect hurt DPJ's prime minister Yuko Hatoyama after differences with the U.S. shortened his term in office....

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Deutsche Bank Co-CEO Jurgen Fitschen's call to Volker Bouffier, governor of the state of Hesse where Deutsche Bank is located, to complain about a police raid on the bank's headquarters in Frankfurt, has come under heavy criticism. The prosecutor's office comes under the state government and the governor said he could not intervene. The raid took place on Dec. 19, 2012, and the call was placed on Dec. 20th. Michael Meister, a senior official in the coalition government of Chancellor Merkel said that Deutsche Bank has created an impression that it feels it is "above the law." He added "the prosecutor's investigation must be supported. Deutsche Bank must send a clear signal." The Handelsblatt newspaper cited Green party co-chief Jurgen Trittin's strongly critical remarks: "A fish rots from the head down. That also applies to Deutsche Bank's boardroom." The tax fraud probe started in 2010 and little was known about its progress until the raid. Investigators went up to Mr. Fitschen's office and told him he was one of 25 employees being investigated under suspicion of tax evasion, moneylaundering and attempted obstruction of justice....

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Only one in three Mexicans graduate from high school according to the OECD. Only about 4750 of Mexico's primary schools out of 99,400 give a full day of classes. The 1.4 million teachers union dominates the educational system and decides which teachers get hired or fired. Only union members can hold teacher positions and teachers are guaranteed lifetime positions. No testing or evaluation system is accepted by the union. A system unlike anything seen in other countries with strong teacher unions. The government of former president Calderon tried and failed to change this system. The new president Enrique Pena Nieto secured the cooperation of opposition parties to a 95 item agenda for change in Mexico. As one of his first steps he passed a bill in Mexico's Congress 360-51 changing the Mexican constitution to give the government powers over the hiring and firing of teachers, creating a new independent body for evaluation of teachers and requiring teachers to meet set standards. It also lengthens the schooling day to 6-8 hours from an average today of about 4 hours, half that in other industrializing countries such as S. Korea....

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Chrysler will have $1 billion in free cash flow each year in 2013 and 2014, down from an earlier estimate of $1 billion in 2013 and $3 billion in 2014. This is because Chrysler needs to increase spending to replace aging models. Even with the higher spending Chrysler will not be able to meet its original goal of 8 new or redesigned vehicles in 2013, including one midsize, one subcompact and two small Jeeps. Some will arrive in 2015-2016. Fiat will not give a dividend so that it can conserve cash to pay for buying the remaining 41% of Chrysler it does not own. Fiat's losses in Europe limit cash flow and under the agreement for the stake in Chrysler it does not not have access to Chrysler cash flow to finance increases in research and development of small car technologies used by Chrysler. Chrysler's margins are smaller than other automakers because of higher incentive costs. It increased market share in the U.S. market in 2012 from 10.7% to 11.4%. Ford and GM experienced declines in market share after a resurgence of Toyota and Honda and efforts to preserve margins....

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Michael Gerson was a policy advisor to Geroge W. Bush when Bush announced the PEPFAR program to fight AIDS in Africa. Here he reflects on its lessons. He recalls visiting sub-Sharan Africa and finding only about half a million people being treated out of about 30 million afflicted with the disease. About 14 million orphans had already resulted from AIDS, life expectancy had declined by 20 years, and in whole villages only grand parents and grand children were to be seen, says Gerson. The support came from Rep. Hyde, Rep Barbara Lee, Senators Frist and Kerry- in 4 months after the announcement in a State of the Union address the law was signed. Bush said: "a work of mercy beyond all current international efforts to help the people of Africa. This comprehensive plan will prevent 7 milion new AIDS infections, treat at least 2 million people with life extending drugs and provide humane care for millions of people suffering from AIDS and for children orphaned by AIDS." By late 2005 PEPFAR and the Global Fund to Fight AIDS, Tuberculosis and Malaria had treated 800,000 people, and by 2012 this had increased to 5 million....

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A survey by Japan's Yomiuri Shimbun newspaper in Feb. 2013 shows 71% support for the Abe government. The effort to reduce the overvalued yen's currency value using monetary policy of the Bank of Japan, fighting deflation by setting a 2% goal for inflation, moral suasion with business leaders to increase wages, are all part of an effort to get the Japanese economy moving again. The Nikkei Stock Average is up nearly one third to 11,000. Unlike previous prime ministers, Abe is prime minister for the second time, and is likely to have a better plan for building public supprt for his economic moves which are described in Japan as "Abenomics." Recent meeings of the EU leaders have taken Japan's currency moves as steps related to fighing deflation and not efforts to manipulate its currency. The Swiss who are major exporting nation like Japan have also taken strong steps to keep their currency at competitive levels, giving Japan a precedent from Europe. With sharply slower growth in emerging markets, in China and India, the revival of growth in Japan would be seen as an encouraging sign in the global economy in 2013-2014....

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Efforts to raise money by Eventbrite, a event ticketing internet startup in the U.S. Eventbrite raised $60 million from T. Rowe Price Group and Tiger Global Management in late stage financing. Private investments in late stage financing have accelerated in 2011-2013. In the 1st quarter of 2013 $2.2 billion was raised in late stage venture capital investments compared to $672 million raised through venture capital backed IPO's, according to figures put together by the National Venture Capital Association from Pricewaterhouse Coopers and Thomson Reuters. For 2012 late stage financing raised $8.6 billion compared to $21.5 billion in IPO's, including the $16 billion for Facebook IPO. Excluding the Facebook IPO, IPO's raised $5.5 billion, much less than the late stage financing. Investors who purchased Facebook Inc. privately just prior to the IPO, face paper losses at the current trading price in April 2013 of $25.73 per share, making investors wary of heavily hyped up IPO's. SurveyMonkey, a web survey company has raised $800 million from private equity and debt investments. The Jumpstart Our Business Startups Act lets startups remain private longer by allowing startups to have over 500 investors before having to disclose financial statements to the public....

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Brooks of NYT says that the corporate culture at GM is at the heart of the company's problems and this hasn't changed with the government's ownership of GM. The "ancien regime" as he calls it, is still running GM, minus Rick Wagoner the fired CEO. He quotes Elmer Johnson, a GM executive, who wrote in a memo on Jan 21, 1988: "we have vastly underestimated how deeply ingrained are the organizationaland cultural rigidities that hamper our ability to execute." Brooks qotes Rob Kleinbaum. a GM employee, who says that unless GM's culture is fundamentally changed in North America it will become dependent on government help for a long time to come. The baffling thing about the new GM is that except for a new balance sheet, a new board of directors, scrapping dealerships and brands to be more focussed, culturally things remain the same. The unions and union attitudes, the management and management attitudes, the bureaucratic culture, mindsets and relationship patterns, all remain the same. And the influence of new private outsiders is limited at this time. And competition according to experts is going to be intense in the shrinking market. How does one generate optimism in this context?...

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Google has the lowest share of the search market in South Korea- 2%. This has prompted Google to follow the leading search portals in South Korea. Whats different in South Korea is that people say they go to a home page to see the news, and topics that are popular with fellow users. NHN and Daum the leading portals present users with home pages that look more like those of media outlets than asearch engine. They give latest news, photos, videos and updated lists of highly trafficked blogs and popular online chat sites. First they look at this information, then they start a search. NHN Naver has 66% of search queries, Daum 21% and SK Telecom's Nate 6%. Yahoo Korea 3%, Google 2%. Daum and Naver have created vast databases of popular content and link to them first. A search for lung cancer will show information from articles acquired or commissioned from Korean doctors and hospitals. Its adiffernt approach and it works in South Korea. To adapt to this user preference Google will now showblocks of links under the main search box about topics and news that are popular in for South Korean users....

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With Toyota facing amajor crisis the company speeded up the appointment of the new CEO, the grandson of Kiichiro Toyoda, who founded the automaker as it diversified from its textile automated looms in the prewar years. Note the statement by Koji Endo, analyst of Credit Suisse in Tokyo, that he expects Toyota to lose up to three times the 1.7 billion loss of the current fiscal year ending March 31, in the next fiscal year of 2009. This suggests that a lot will be happening at Toyota as major actions to reduce capacity and to improve management, reduce bureaucracy and speedup decisionmaking are taken by the new President. Especially so as Akio Toyoda, the new CEO, is different from the tradiitonal CEO's who have come up through manufacturing and not educated in the U.S. He will not have the same patience and comfort factor with Toyota's bureaucracy as these other CEO's like Watanabe who preceded him. By pushing the transition up the other elders like Shoichiro Toyoda may want to give Akio time to prepare for the tough decisions he will have to make, and to setup his own management team as early as possible....

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A series of voicemails and emails in court documents now disclosed, show that AstraZeneca tried to suppress findings about diabetes after effects in taking its psychiatric drug Seroquel. In an August 15, 2005, voicemail sent to company salespeople an employee Christine Ney, followed up on a"weight and diabetes sell sheet" they had recently sent. It said that the salespeople should assuage doctors' fears about their patients' weight gains, telling them that the data did not show any causal link between diabetes and the drug. "Our objective is to neutralize customer objections to Seroquel's weight and diabetes profile", Ms Ney said in the voice mail message. She instructed representatives to "refocus the call" away from diabetes to the drug's tolerability. While all this was going on and years before this, Astra Zeneca concealed a drug safety expert's own assessment of Seroquel's relation to diabetes. In a 2000 position paper about the safety of Seroquel sent to Dutch regulatory authorites, an AstraZeneca doctor named Wayne Geller wote that there was a relationship between the drug and diabetes. He wrote " there is reasonable evidence to suggest that Seroquel therapy can cause impaired glucose regulation including diabetes melliutus in certain individuals."...

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Michael Kinsley of Washington Post points out that the $469 million of bonuses to AIG FInancial Products employees was first seen in SEC filings in November 2009, then on Rep Cummings blob on the Huffington Post November 27 entry. It was reported in the Washington Post in an article headlined "AIG Spa Trip Fuels Fury on Hill", and in the New York TImes on October 17, titled " AIG lets New York Review the Propriety of its Pay Packages", so where was everybody then? Its as if noone knew about till last week when all hell broke loose. Kinsley refutes the argument that as AIG CEO Liddy suggested that the employees only take half of the bonuses, by asking the question: bonuses for what? For creating a black hole in which government rescue funds have to be poured of $170 billion, the largest rescue in history, and then these skills to create black holes needed so badly in the midst of a near Depression that they be kept from leaving with retention payments. Or as Republican Senator Snowe put it "Bonuses for what?", the same question the whole country is asking. ...

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The problems in owning an asset like the Chrysler Group. Dennis Berman of the WSJ says, its less like owning a car company and more like having a hard luck case. Thats because Chrysler Group carries an estimated $18 billion in unfunded health care and other benefit costs. These were built up in another era of automotive dominance of the Big Three car companies of Detroit, but are carried over to another era when this dominance has disappeared. In the 5 years 2002 to 2007, Chrysler's $2.7 billion in operating profit actually translated into a $1.75 billion loss, when including these payments. So from a banker's point of view, Chrysler's value is a small fraction of the $39 billion Daimler paid for Chrysler. In fact many bankers value Chrysler at zero, because of the liabilities associated with it, including the difficulties to get the unions to modernize the workplace and avoid class warfare labor negotiations. This is how the financial markets see it, as Daimler's stock market value went up by $20 billion after it disclosed it was looking for abuyer for Chrysler, and was determined to separate Daimler from Chrysler. ...

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Questions about the wisdom of Exxon's moves against Venezuelan oil company Petroleos de Venezuela- taking it to court for taking a majority interest in 4 big oil projects managed previously by large western oil companies. Responding to Venezuelan public concerns about the deterioration in the oil production and development in Venezuela, President Chavez is negotiating with Shell and Total to bring in technical expertise and capital from western oil companies, while working at the same time with Petrobras and other national oil companies from China and Russia to develop its heavy oil assets. With Brazil facing capital needs for its own huge offshore Tupi oil field discovery, the $10 billion that is needed for developing the Carabobo oil field in the Orinoco will have to be financed with other foreign help and expertise. Petroleos Venezuela cannot rely solely on other national oil companies as it had thought it could do before. With things changing in Venezuela, and possibly even a new more friendlier government in future elections, has Exxon found itself on the outside when the European oil companies can build their presence in Venezuela?...

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Medvedev who won 71% of the vote in the March 2008 election for President answers questions from journalists and the public in the course of the election campaign. It reveals his own thinking about Rusia, its past, present and hopes and plans for the future. These are useful answers to get insights into his thinking. He sees the 8 years of the Putin Presidency as only a small beginning. Russia he says needs decades of stable development. He seems to say the goals of stable development after all the upheavals of the 20th century are so pressing that he and Putin are committed to simply continuing the policies of promoting economic development that gives dignity and respect to the people of Russia. He shows a deep dissatisfactionwith the corruption and the lack of respect for the law that is so prevalent in Russia and sees this as part of the overall goal to create a civilized state. And he harbors no illusions about the weaknesses prevalent in Russia from is beginnings centuries ago, a sense of legal nihilism and lack of respect for the law as he calls it....

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Peruvian President Alan Garcia has worked hard to atttract foreign investment and improve Peru's economic growth. The economy has grown every year for the last 7 years and growth in 2008 is expected to be 8%. Peru received investment grade rating from Fitch Ratings because of good fiscal management. Yet his popularity has hit new lows and is at 26% because the expanding economy has not benefited low income people and the rise in food and fuel prices have hit the poor the hardest. Government and private sector economists estimate is inflation at 5.71 % in the 12 months through June, but a former President Alejandro Toledo says the price increases for basic foods are in double digits. Even government estimates show tha poverty has declined by 5 percentage points from 2006 but remians high at 39%. Many countries around the developing world are facing the same difficulties and government popularity is declining as the rise in food and fuel prices hit the low income and poorer sections of society. In India the government is facing dificulties with higher inflation. With the revolution in expectations in these countries all sections of society are expecting more. Countries across...

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This leader in The Economist reviews an essay in the magazine's October 8-14th, 2016 edition by U.S. president Obama. In it Obama points to the unfinished tasks of his presidency and what comes next as tasks to be done for the U.S. economy. The Economist points out the problems in the 2016 election campaign where there is a lack of discussion of economic issues as a serious problem. Obama lists as priorities efforts to improve conditions of people left out in the recovery, reducing inequality, offering more job opportunities, and increasing productivity.

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The U.S. Labor Department reports that 4.4 million unemployed workers in the U.S. were out of work for more than one year. For the U.S. this is 30% of all unemployed. In some of the largest states about one in three unemployed workers have been out of work for more than one year. For New Jersey which has a 9.4% unemployment rate compared to 9.6% nationally, 37.1% were out of work for more than one year. Older Americans, the highly educated workers, are more likely to have longer stretches of unemployment. This is the situation in New Jersey and Florida where there is a larger population of older workers.

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About 3.5 million Americans ages 45-64 were unemployed as of May 2012, 39% for 1 year or more. This is even higher than the unemployment among younger workers and is a new aspect of this recession compared to the ones before this. Some have quit looking for jobs after depending on extended unemployment benefits of upto 99 weeks, and some have taken part-time jobs. Statistics on unemployment from the U.S. Labor Department give a more distorted picture this time because the unemployment rate as defined by the Labor Department includes only people looking for work. More people today are discouraged and not looking for work, dropping out of the labor market entirely or in part-time jobs. So that the unemployment rate is much higher when these workers are accounted for.

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How one war widow is coping with the death of a husband in the war in Afghanistan. Lisa Hallett in Puget Sound with three small kids has kept alive her husbands memory as she makes a 26 mile run through the streets near Puget Sound, Washington.

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The U.S. Labor Department reports 204,000 nonfarm jobs were created in October 2013. Upward revisions of prior months lead to a level of about 202,000 jobs created in the three months July to October 2013. The unemployment rate goes up from 7.2% to 7.3% in the household survey, with furloughed government employees counted after the temporary government shutdown. The negative part of the picture is that 720,000 persons dropped out of the labor force, a high and puzzling number, and the labor participation rate drops to a 35 year low of 62.8%. This has been a problem since the 2008 crisis as more discouraged workers drop out of the work force, go to school or stay home and care for children, and increasing numbers retire. Some economists now see the Fed waiting till the unemployment rate drops to 6% before withdrawing from the bond buying program in place of the earlier announced 6.5%.