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A major change is taking place. Automakers around the world are shifting to smaller engines. Hyundai's Sonata for 2011 and the Tucson crossover for 2010 are going to have only 4 cylinder engines. Many V-6's offered by Detroit carmakers are being replaced with 4 cylinder engines and V-8 with V-6 engines. Ford is using the EcoBoost a turbocharged V-6 to offer new options for its Taurus, Lincoln MKT and other cars.

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Sales of automobiles in China in July 2012 declined 12.6% from the prior month according to the China Association of Automobile Manufacturers. There are two parts of China's automobile sector, the foreign brands of GM, Toyota, VW, Ford and others, and the Chinese brands. There are 48 Chinese domestic carmakers for 30% of China's automobile market, with sales of 87,500 per brand on average, according to J.D. Powers. Many of these carmakers will not survive even with subsidies from local governments. China's car buyers prefer foreign brands because of the better quality and reliability. Foreign carmakers face an oversupply of cars as GM, Honda, Ford, VW have continued to add capacity. Total automobile manufacturing capacity is about 28.5 million cars and commercial vehicles. This is 9 million more than the expected sales in 2012, according to J.D. Powers. The most recent company adding large capacity is Ford Motor Company, which was relatively late in the Chinese market, and decided to boost capacity from 450,000 in 2011 to 1.2 million in 2015, to make it the largest manufacturing location outside of its home base of Michigan. This creates the prospect of foreign carmakers having to offer larger incentives and discounts to manage inventory and operating with higher levels of unused capacity, reducing profits in future years. Most of the plans to increase capacity were made when China's GDP growth was over 10%, it is now slowing to 7.5%....

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Ghannouchi of Tunisia's Ennahada Party puts forward ideas for a pathway that Islamists could follow to integrate into the political life of Middle Eastern countries- compromise, working together with non-Islamist parties for the common good, focussing on economic development, pursuing moderate Islamist ideas, bringing in those excluded from the political process thorough a new inclusiveness, and respecting the opposition. He sees the successful election in Tunisia in which Ennahada worked with the opposition parties to ensure a smooth transition, as a model for other countries and the Arab neighborhood. In 2014 another process of smooth transition after elections, and respect for the opposition, happened in Indonesia with the election of Jakarta governor Widodo to be the new president. This set another model of respect for democracy, fair elections, respect for the opposition, focus on economic development and inclusiveness, for Muslim countries in another part of the world. Pakistan is another Muslim country which is working to create a model in the presence of much violence from Pakistan Taliban, and interventions by the military in politics. Assistance from the U.S. helped Iraq make the transition under the Bush administration till it unraveled with the policies of the Obama administration. Libya had the potential to make the transition with continued western cooperation and support- a change in administrations in the U.S. and France resulted in policies not supportive of a stable transition. The whole process now needs to be fostered carefully by western liberal democracies. Here Ennahada's Ghannouchi tells the world about the lessons learned by Islamist parties themselves for pathways to embrace for more inclusive societies focussed on economic development and progress....

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This WSJ editorial on March 7 with Cruz winning in Maine and Kansas with wide margins, and Trump winning narrowly by 3.6% in Louisiana and in Kentucky, says that the Cruz win in Maine shows he could win in other states. It points out that Trump actually lost in Louisiana with those who voted on election day, that early voters made a difference. As Trump gets not just media attention on which he thrives, but also close scrutiny in media the situation appears to be changing. The WSJ calls for Trump to release his tax returns, particularly important in Trump's situations says the Journal because of his flamboyant statements about competence as a wealthy businessman. Also a factor in the elections in March will be how much Trump spends on ads as he has spent little so far.

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S&P managing director John Chambers, says the U.S. credit rating could be dropped from the AAA bond rating it has enjoyed since 1941. S&P says it could downgrade U.S. debt securities even if the debt ceiling is reached, if it appears that there is too much political maneuvring in debt ceiling talks and deficit reduction. It said there is a 50% chance that U.S. debt securities would be downgraded in three months. Another reason for a downgrade given by S&P is a failure to come up with an agreement to reduce the budget deficit by $4 trillion over 10 years, because it would show inability to agree and implement a credible fiscal consolidation policy. Moody's Investors Service also said that it has placed its Aaa rating on U.S. debt securities "on review for possible downgrade."

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Blackberry maker Research In Motion's will introduce new products to prevent further erosion of market share. Five new smartphones will be introduced, including an all touch screen phone to compete with the iPhone. Smartphones using its new QNX software will not be available till 2012. Meanwhile Apple is bringing out a new version of the iPhone and new smartphone are being released by competitors. RIM's share of global smartphones is down to 12.9% for the 1st quarter of 2011, compared to 19.7% the prior year. In the N. American market RIM's market share for smartphones is down to 16.5%, a big decline from 41.3% in the first quarter of 2010. Missed deadlines for new products are a major problem for RIM in the fast paced environment for new technologies and software with new competitors from related fields.

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Mr Niederauer, CEO of NYSE Euronext, who will be the CEO of a combined NYSE-Deutsche Bourse, took pains to emphasize that it is a merger, a business combination arrangement, not an acquisiton. Because Deutsche Bourse current stock market value is $15 billion compared with about $10 billon for NYSE Euronext, Deutsche Bourse shareholders will get 60% of the combined company. The issues of ownership, the name of the new company and the headquarters and management team, are sensitive ones because the NYSE has traditionally been a symbol of America's role in the world of finance. American lawmakers want to see NYSE appear first in the new name to symbolize America's position in the world of finance. For this reason Deutsche Bourse will not appear first, and the headquarters will be dual headquarters in New York and Frankfurt.

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The stock market rally appears to have legs with the increase in revenue growth for the fourth quarter. But what supports this other than the Fed's bond buying, which suppresses the true cost of capital, is a question posed by analysts. Add to that transfer payments such as unemployment and other benefits which help sustain consumer spending levels, but are temporary measures. Charles Dumas of Lombard Street Research says GDP growth for the fourth quarter of 2011 could be more than 5% year on year. The question is whether this is pulling growth forward from later years, so that larger dips could be expected ahead? Brokerage firm LCM Commodities says transfer payments from the government to consumers were 16-18% of personal consumption expenditures between 1995 and 2007. This has jumped to 22% by the end of 2010.

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The Buick Regal is turning out to be just the car for going after younger buyers, and going after Gen Y buyers, buyers who have appeared so elusive for GM. It handles like European cars in its ride, and this reviewer compares it to a Peugeot. It was almost an accident in the way it was developed. It started as the development of a global, midsize front-drive platform at GM's Opel division in Russelsheim, Germany in 2004. At the time it was to be the next generation Saturn Aura for the US, but with Saturn closed down, it was renamed Buick. In Germany its called Opel Insignia. In China where Buick sales are growing rapidly, this car is called a Buick. This car is getting great reviews and is a part of the new rebirth of GM.

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Ford Motor opened its new plant in Chongqing, China. It was approved in 2009 and is operated in a joint venture with Chongqing Changan Automobile Company and Japan's Mazda Motor. It has annual capacity of 150,000 cars and will manufacture the redesigned Ford Focus. Ford says this will be part of 15 new models in China by 2015. Further expansion is expected to be slower from now on, because China's policy is shifting towards consoldating its manufacturing base for automobiles- which experienced hyper level growth in the last decade- and not adding new capacity. Ford made a late entry in the Chinese market compared to GM. It sold 519,300 vehicles in China in 2011, compared to GM's 2.55 million vehicles. The change in China's policy may mean Ford has less opportunity to catch up with VW, GM and Toyota in China.

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Barcelona sculptor Jaume Plensa and his 44 foot high work " Echo," which shows a girl's head. This was raised in Madison Square Park in May 2011. It gives viewers pause amid the bustle of the Flatiron district of New York city. Plensa recently went to Chichester Cathedral in England. He is creating a sculpture for the cathedral's nave, a hand raised in blessing , which will be formed with a stainless steel lattice of letters in eight alphabets. Plensa's focus on the body is evident- something from the nineteenth century sculpture tradition but done in a twentieth century way. Plensa wants to see people pause at the sculptures such as the Echo, to be jolted out of their everyday consciousness when they are listening to the constant chatter of voices outside, so that the can hear the voice from inside themselves.

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Total's new CEO, Patrick Pouyanne, is moving ahead with plans for the $27 billion Russian Arctic Yamal LNG project. As China shifts away from coal with increased imports of LNG and pipeline natural gas, it is keen on providing financing for the project. Chinese banks will provide the bulk of the financing. Pouyanne disclosed in an WSJ interview that this would be $15 billion in Chinese bank financing to be arranged in 2015. Most of the LNG will go to meet China's needs. Partners in the Yamal project are OAO Novatek of Russia, and China National Petroleum Corporation. OAO Novatek's major shareholder is on the western sanctions list making it difficult to obtain financing from western banks. This makes the project riskier because of foreign exchange risks taken on by Total SA which are to hedge against.

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China's carefully planned stimulus in April 2014. It is designed to balance goals of not letting credit growth lead to a bubble and preserving a high enough growth rate of 7% to create 10 million new jobs each year. The smaller stimulus will be financed by the federal government which has more leeway than local governments burdened with debt. The stimulus is focussed on low income housing and railways. Pension funds, banks and other financial institutions will be encouraged to invest in shantytowns to create low income housing. Railways construction is focussed on southern and western China. Part of the rail construction is designed with the goal of creating export based industry in the interor of the country. IMF reports say this may not work out as planned as businesses may prefer to remain in the coastal or eastern part of the country.

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David Cote, CEO of Honeywell International, says U.S. corporations have $1 trillion sitting on the sidelines ready to be invested if business can be provided with more certainty about U.S. finances through successful deficit reducion negotiations. He is the most active CEO behind the Fix the Debt organization and is respected by both sides. In the fiscal cliff negotiations he has taken messages in both directions from Democrats and Republicans. Cote is a former executive of General Electric, who has led a turnaround at Honeywell. Large business stayed out of the deficit negotiations in 2011 which brough on the fiscal cliff arrangement of deep cuts in defense and automatic tax increases if no agreement is reached by Jan. 1, 2013. Cote and CEO's behind Fix the Debt have decided to engage with both political parties in the negotiations in 2011-2013.

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So we need lobbyists and food producers and cola producers out of the schools. Here is an alarming fact- the current standards that govern whats served at all public and many private schools haven't been upsdated in 14 years. And the current standards don't even mention calories should be limited to 650-850 calories for lunch and 500-600 for breakfast. With the Institute of Medicine recommendations for more fruits and vegetables and healthy whole grain foods for school lunches comes cost its estimated that schools get $2.68 for the free lunches served to poor students, which cost $2.92 plus overhead and labor costs. The Obama administration is expected to add $1 billion but more is needed. Here s another place where money is needed at home that can be saved from expanding the war in South Asia-

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Graham Allison of the Kennedy school of Government at Harvard and John Deutsch former head of the CIA under Clinton and now a Professor at MIT, say it would be adesirable thing that Afghanistan develop into a prosperous, poppy-free and democratic country, but it is not vital for American interests. They say lets face it, one cannot push Afghistan into modernity overnight, just because we wish it. It would be atragic mistake to do so, and take a huge and ultimately failing effort to do this, with a vast expenditure of American blood and money, to do this. One can expect for Afghanistan after we exit to revert to conditions that exist in other countries at the same level of development, like Bangladesh, Sudan, Somalia. Allison sees a vital interest at stake in Pakistan because of nuclear weapons.

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Most people hae not heard the name Radhabinod Pal the sole dissenting judge at the Allied Tribunal who questioned its legitimacy in a dissenting opinion. Here we learn that Judge Pal's opinion sealed a friendship between him and Abe's grandfather Nobusuke Kishi charged with war crimes but never tried. Mr Abe visited the Netaji Subhas Bose museum in Calcutta and said that he was determined to strengthen Japanese Indian bilateral relations that Bose wanted to see. Appears to be an emotional bond and a visit that aroused old feelings from a family tie for Abe. Note that India and Japan vowed to seal a economic partnership by December. Small as this seems this may be a big turning point for South Asia. See the details of the Japanese investment plans in India especially in infrastructure projects in related article.

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Foreign investment in the electricity generation industry has be encouraged by Russia. Ane Eni the Italian electricity generating company is a big investor acquiring one of the 5 OGK companies when its investments are complete of about $6 billion. And other European companies are following suit. E.ON a German utility has bought 47% of another wholesaler OGK-4 one of the five companies of the former UES parent of these 5 generation companoies and will acquire 70%. And a Finnish utility has invested in a regional generator. Gaz France and Korea Electric Power Corporation are looking at making investments. Russia's electricity generating business is growing at 6% and Russia is the world's fourth biggest power market. Though profits are small at present it is hoped that with deregulation profit margins will be good. The market to businessusers is already being deregulated.

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Dubai has been on a borrowing binge the likes of which has rarely been seen in the middle east. It has no oil and gas reserves of its own. Then how is it financing all this investment? Through international debt markets. Standard and Poors estimates that at then end of last year Dubai government debt was 42% of its GDP, compared with 22% in Bahrain still high ad only 2.9% in Abu Dhabi. Would a sovereign fund of Abu Dhabi come to its rescue in a crunch if credit is frozen and no acess possible. Dubai is one of the United Arab Emirates and this is possible but this would mean that much less capital that can be accessed by western companies. And still most of the huge projects would be left incomplete or put on hold.

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Economists from Mankiw, Eichengreen, Kashyap, Harrison Hong, Brad Long and others all agree that capital is front and centre, capital injection into the banks has to be the centrepiece of any action plan, and that a coordinated plan by all countries is necessary for it to work effectively. The remarkable consensus is registernig among policy planners and central bankers and finance ministers, as this is the direction that Paulson and the rest of the G8 are following, taking the cue from Gordon Brown's announced plan for the UK that made capital injection a key feature for recapitalizing the banks and getting credit flowing. Governments also need to guarantee the interbank markets as banks are shy of lendig to each other because of fear of what may be on the other party's balance sheet, something the US has still to do.

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GMAC under Cerberus 51% ownership is actually restricting credit for purchases of GM cars by insisting on credit scores over 700. To the point that GM is encouraging dealers to look for financing outside GMAC. Not a good state of affairs. Cerberus motivation may be that it wants the rest of GMAC instead of Chrysler and wants GM to give its 49% of GMAC in exchange for Chrysler's merging operations with GM. But anywhere upt half of Chrysler employees could lose their jobs in such a merger because there is no time for long term integration and the costcutting would be immediate. Again a bad state of affairs. And merging a money losing company with another money losing company at the beginning of a deep recession is not the kind of merger that has the chances of some success.

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Japan's new prime minister told the Japanese Parliament in a policy speech, that a crisis like that in Greece was possible in Japan, if trust in national bonds was lost and the policy of public spending to lift the economy was not reversed. This speech followed the resignation of Shizuka Kamei, as banking minister. Kamei was seen as an advocate of continued public spending. He cautioned that a policy of relying heavily on issuing debt could not be sustained for long. Japan has government debt of $9.7 trillion, which is close to twice its gross national product in 2009. Much of this debt is held by the public in Japan, but analysts have cautioned that with the aging population, it is possible that people who retire will need the cash from bonds, requiring the government to turn to the debt markets for financing. Among the proposals Kan suggested is raising the 5% sales tax to pay for rising social welfare costs for an aging population. Satoshi Arai, the new national strategy minister, says the government will draft a plan by June 22 to address the public debt. He said the government would not exceed $500 billion in bond issuance for fiscal year ending March 2012....

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About 4.2 million Americans will be 65 years old in 2024, and for the next six years about 4 million will be added to the 65 plus population each year making the 2030 population of 65 plus larger by about 24 million people. As America ages it will need more young people to do many jobs in healthcare, care for the elderly, in agriculture and transport. This is what we are seeing in Japan and even a country highly protective of its own culture has a policy of admitting immigrants from Vietnam and other countries to meet worker shortages. Claire Ansberry looks at the 65 plus population today and compares it to 35 years ago and finds it is more oriented to exercise, health, and has more accumulated wealth. About 20% of people over 65 years work today compared to 15% 35 years ago, says Pew Research, and of these working 65 year olds two thirds are working full time compared to half in 1987. They are wealthier having median net worth of $410,000 today compared to $282,000 in 2010 much of the 45% gain made in the last 2 years from rising house prices and stock investments. Those over 75 years have a 13% gain. Overall the wealth is significantly higher today. ...

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The state of India's fight against Tuberculosis is shown here by AID's Atul Gawande in NYT. He visits a homeless shelter in New Delhi and asks what can be done to prevent the number one infectious disease in India and globally. The disease affects 1 in 38000 in the US and 1 in 500 in India a huge contrast as poverty and poor health conditions increase spread of TB. It grows with depleted immune systems and poor food intake. This alone shows how important it was and continues to be that prime minister Modi put forward no cost (free) allocation of foodgrains, lentils and vegetables during the pandemic to hundreds of millions of needy households. This and Clean India campaign Swacch Bharat + Har Ghar Jal Clean Water Every Household  play a critical role in providing the basic environment for health in India at the ground level for nutrition+ clean water, and sanitation. India has allocated $1.7 billion for TB prevention and treatment. 4-5 TB vaccines are in test stages.  Nearly 90 percent of estimated TB cases are now being diagnosed with treatment success rates high, says Gawande. Prevention is also at a similar level.   ...