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On average about 90,000 jobs were added by the private sector by July 2010. 125,000 jobs have to be created on average each month for the job numbers to keep up with growth in population. And most of these jobs were created in March and April of 2010 when the economy was doing better. The 8 million jobs lost in the recession still remain to be recovered. And employers who have raised funds at low interest rates -companies like IBM paying 1% for $1.5 billion in bonds issued- are holding off on hiring in the current economic uncertainty. Worsening the situation is the cutbacks in state and local governments with layoffs of 48,000 workers. Even the $26 billion aid package passed in Congress for state governments will not help make a serious impact, considering the budget problems facing state governments. An example is Seattle, which has used its rainy day fund to bridge a $40 million gap in its 2010 budget. It faces a $56 million gap in 2011.

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The National Association of Realtors reports that sales of previously owned homes dropped by 27.2% from June, to seasonally adjusted annual rate of 3.83 million homes. House prices gained ameasure of stability in 2009, after dropping since 2006. Now that measure of stability may be lost as house prices weaken. The expiry of a home-buyer tax credit was expected to dampen sales but not by this much. Paul Dales of Capital Economics expects a further drop of 5% in house prices. Combine this with sluggish consumer spending and prospects of deflation in 2011, a weak Obama administration HAMP homeowner relief program, fading stimulus and the likelihood of no further stimulus because of deficit fears; and the picture shows serious problems. The underlying picture of housing is not changing. One in four homeowners with mortgages owe more than their house is worth. Banks are handling over 5 million loans that are delinquent, if these loans are modified or short sales are permitted by banks, there would be support for housing prices. HAMP has failed in this regard, see the link to this....

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The Nissan NV 200 designed from scratch as the next taxicab for the 13,000 cabs in New York City. Nissan won the Taxi for Tomorrow contest, and a 1 year contract worth $1 billion. New York's Taxi and Limousine Commission will require all medallion owners to buy the Nissan NV 200 as they replace the old cabs. It costs $29,000 and will be phased in over a 3-5 year period. The Nissan NV 200 was designed from scratch for New York City. It has a French designer working out of a studio in California. The design team went through each detail in great detail. The designer Mr. Farion took a month hailing cabs throughout the day just to get a feel for what the cabs today are like and what needs to be improved. This includes horn sound to the inside of the vehicle and the wear and tear that the cabs are subject to on New York roads. New York roads are rough because of potholes and other problems.

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The situation in small towns in East Germany such as Loecknitz on the Polish border. The economy is depressed with unemployment twice the level in West Germany, and young people moving away. The economy on the Polish side is much healthier and Poles are moving to the German side from the Polish city of Szczecin, a 30 minute drive. Poles are also buying depressed German real estate and starting businesses. This is adding to the local economy as young Germans have moved to the larger cities but there is the sense of being left behind among some Germans. It comes from the period of reunification when after investing $2 trillion to integrate the two economies the best that could be done was making cities like Leipzig and Dresden in the east prosper but leaving the coutnryside in East Germany in an abandoned state as young people sought opportunities elsewhere. This may be why Angela Merkel who grew up and studied in the former East Germany told the German parliament in June 2012, "Germany's strength is not infinite. Germany's powers, too, are not unlimited."...

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Merkel prods Russia to follow Germany's example as she lands in Kiev on the 75th anniversary of the nonaggression pact signed between Nazi Germany and the Soviet Union. Merkel said: "That today a German chancellor can be here shows what has happened... We want countries to be able to freely decide their political direction. We no longer participate, as the Federal Republic of Germany, in stirring up historical misery, and that is a good development of history." Russia badly needs to find a new place in a new world rather than stir up memories from the Soviet or Tsarist period, just as Germany has done in the period since 1945 with chancellors Adenauer, Brandt, down to Merkel and president Gauck today. The world today is very different from the period when Merkel grew up in the German Democratic Republic and Putin lived as a KGB officer in Dresden, Germany. Even more so as the manner of living in urban areas in different parts of the world, business, industry, the arts, culture, products is increasingly converging, with higher expectations. ...

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Experts say Kuroda of the Bank of Japan still has some Finance Ministry DNA, as he is from Japan's Finance Ministry which has pushed for the consumption tax to be increased to 10% in 2015. Even though Kuroda favors aggressive monetary stimulus compared to others in the Finance Ministry, he shares the views of Ministry colleagues on the tax changes. LDP leaders in the Abe cabinet and Abe see the recession with 2 consecutive quarters of declining GDP for the 2nd and 3rd quarters of 2014, as good reason for delaying the next tax increase from the 8% already implemented in 2014 to 10% in 2015. Under Abe's revised plan the tax increase would be postponed till 2017. Abe referred to the different views on the tax increase in his announcement for a snap election in Dec. 2014 for a new mandate to pursue his Abenomics economic policies of Three Arrows. Kuroda for his part downplayed their differences saying fiscal policy was the mandate of the elected government.

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Four former close advisors of U.S. president Obama in a public statement say they fear the current Iran negotiations fall short of reaching a 'good' agreement. The statement says " We fear that the current negotiations, unless concluded along the lines outlined in this paper and buttressed by a resolute regional strategy, may fall short of meeting the administration's own standard of a 'good' agreement." The advisors are Dennis Ross, David Petraeus, Gary Samore, Robert Einhorn and James Cartwright. It sets strict inspections for all sites, including Revolutionary Corps and military sites, as a precondition for any significant lifting of sanctions. The statement goes further in saying about Iran's development of a nuclear weapon: "The United States must go on record now that it is committed to using all means necessary, including military force, to prevent this." The statement was released from a study group of the Washington Institute for Near East Policy. Ayatollah Khamanei in a televised speech on June 23, 2015, stated military and Revolutionary Corps sites would not be included in snap inspections, and economic sanctions should be lifted immediately. ...

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Jorg Asmussen, Germany's representative on the ECB'S Executive Board, will take the position of deputy secretary in the Labor Ministry in the new coalition government of Angela Merkel with the SDP. He moves to Berlin from Frankfurt to be close to his two small children and family, who continued to live in Berlin after Asmussen moved to Frankurt ECB headquarters. Germany is likely to nominate Sabine Lautenschlager, member of the executive board of the Bundesbank, to Asmussen's position on the executive board of the ECB. The ECB Governing Council, including the six member executive board and the heads of 17 central banks, will now have the first female member. Ms. Lautenschlager's expertise is in banking regulation, which is relevant today because of the ECB's new role as regulator of banks in the eurozone. Asmussen, who is from the SDP, assumes a position under Labor minister Andrea Nahles. He will be responsible for introduction of the national minimum wage, which was a key demand of the SDP for joining the coalition with Merkel....

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Under the current bankruptcy settlement plan of Judge Rhodes bondholders would get $1 for every $5 and pension cuts for ununiformed workers would be about 30%. A library clerk for example could see a pension cut of $400 in a $1400 pension. Retired Detroit firefighters and police would see smaller cuts of 10%. The Detroit bankruptcy is being closely watched as other cities an local governments are facing similiar problems. As part of the plan $1.5 billion would be spent on reducing blight and improvements in the city. About 40% of Detroit streetlights are broken and police response time is about 1 hour. One reader says the unions sent companies to low cost regions and stuck Detroit with the bill. After the bankruptcy of GM and Chrysler the city shaw a sharp decline and many people left the city reducing its tax base and worsening urban blight. The events in Detroit are being watched around the country and had an impact in the vote at the VW plant in Chattanooga, Tennessee, where former mayor Corker cited the situation in Detroit as an issue....

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In an intervew with WSJ's David Pearson, Tom Enders, CEO of Airbus, points to the changes at Airbus after improvements in governance in 2012, leading to a smaller role for the governments of France and Germany. One is the shift away from Europe. Compared to 2004 when Airbus orders were 50% from Europe, this has dropped to 10% in 2014. Airbus is also staying away from a 623 million euros loan from Germany for the new Airbus A350 widebody jet, because of pressure from the German government to allocate work to German factories. The same policy will be followed in future programs to rely less on government support. Enders does not want to be tied down to certain workshare agreements imposed by governments with the loans. In 2012 Airbus reduced the role of the German and French governments with a large increase in the percentage of shares traded on stock markets. In the past the funding was critical for programs. Today Airbus has 9-10 billion euros on its books because of booming sales.

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WSJ's Fidler describes the views of Victor Ruhe, a former German defense minister, on the Ukraine crisis and the EU's response. The EU's position for relations with Ukraine comes under criticism for being technocratic as in earler trade and aid negotiations, and not addressing the problems which Ukraine faces. This requires closer cooperation from the EU, and some costs the EU has been unwilling to assume. Ruhe says the best response for the EU is to turn Ukraine into a European success story. This means taking on the effort to gradually transform the corrupt and inefficient political and economic system, something the EU did over many years in the Balkans. EU leaders have signed an agreement with Ukraine's new government on political dialogue and security cooperation. Critical parts of the agreement for trade, law enforcement, anticorruption actions, and macroeconomics changes, will be signed after a new government is elected in May 2014 elections. The EU is in this for the long haul as political support will be needed for a new generation of politicians....

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Peugeot's finances come as a shock to the French government as it cuts spending to reduce the deficit. A 3 billion euro loan was made to Peugeot in 2009. Another loan may be needed from the French government says Peaple because Peugeot is losing 200 million euros in cash each month. One key reason for Peugeot's problems is that it gets 58% of its sales in Europe, with particular emphasis in southern European countries, and demand in key markets France, Italy and the UK is expected to decline by about 7- 10%, according to Moody's forecasts. Peugeot's operating loss for the first half of 2012 was 700 million euros. The plan to close the Aulnay plant and other planned cost reductions may not be enough say experts. The closing of that plant could save 600-700 million euros, according to JP Morgan estimates. This would improve operating profit margins to 3.3% from 2.2% based on 2011 results, and this may not happen with the price competition in these markets. This leaves Peugeot in a precarious position....

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Russell Gold's interview with Shell CEO, Jack Voser. Voser describes his perspective on the global oil situation in the next three decades with a doubling of demand in 40 years, a third of which would come from renewables and 10% from nuclear, the rest from fossil fuels. Natural gas plays a large role in Shell's future strategies. Voser sees the potential of China's shale gas supplies being larger than the U.S., with clearer energy policies than the U.S. The cost of producing China's shale gas will be higher because of complex geology. He sees the potential for the reindustrializing of the U.S. midwest with the abundant shale gas supplies, bringing back jobs that were exported to other countries. Clear standards and regulations are needed to make investments. He thinks it will be very unusual if the U.S. did not grasp this opportunity. Shell's operations generate $470 billion in revenues and its capital budget for 2012 was $32 billion, providing enormous scale and requiring careful planning for long term projects in Australia, Africa, Canada and the Middle East....

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Richard Posner, who teaches at the University of Chicago, and is federal appellate judge, takes an incisive look at the economic crisis. Posner says this was not a failure in the sense of irresponsibility alone of people involved, but a failure of capitalism, and that capitalism is prone to failure unless properly governed. Markets left to their own devices can fail, monetary policy is not enough to counteract other deep seated problems. Under capitalist system people can make individually rational decisions like continuing to invest in mortgage securtite if they were financial institutions, or losing the profits to be made, and collectively make irrational and in time enormously costly decisions, with no less consequences on an individual basis when things collapse. "We are learning," he says "that we need a more active and intelligent government to keep our model of a capitalist economy from running off the rails." But that may be nothing more than returning to common sense, or a healthy dose of skepticism for overblown claims for any system or form of economics or politics. ...

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Tyler Cowen, Professor of Economics at George Mason University, points out some basic truths about health care as it is practiced today in the USA, and healthcare spending as it stands today. He questions whether starting out with extra spending plans to provide coverage to all will help solve the basic problems facing American health care. Too many tests and diagnostic procedures used by doctors is not aproblem that will be solved by spending more money to cover everyone. And government taking on more spending to cover all will not address all the other major shortcomings of the American way of practicing medicine, like prescribing a battery of tests, that tend to drive up costs, to just mention one of the problems. And it will not address any of the shortcomings in the way Americans take care of their health, diet, exercize and healthy lifestyles. THese are critical to get good health outcomes for the people, and which combined with careful spending of dollars where it will provide the greatest benefit, is the only way the health care solutions can be found....

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Pusing aggressive bank lending with a steep rise in bank lending of 34% in 2009 can lead to an asset price bubble in China. Factors the Economist cites mitigating this are the follwing: only about 25% of middle class Chinese have mortgages and loan to value is less than 50%. Also Chinese regulators are more alert to the dangers than were American regulators. At the same time the pegging of theyuan to the dollar means the instrument of raising rates to cool the bubble is not existent. And the US is likely to keep rates low for alonger period which may be adverse for China and prop up a bubble there. These dangers mean China had better take firm action in letting the yuan rise now rather than later because heavy inflows from currrency appreciation can only make the bubble worse later on. This will need to be watched carefully as so much of the global economy is dependent on China maintaining growth, Germany in particular. And with the US consumer cutting back China has to manage this carefully....

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The shocks to the UK banking system resumed Monday with the announcement on January 19 that RBS faced losses of a huge magnitude, of 28 billion pounds for 2008 with fresh losses in 2009. RBS shares went down 66%, and at closing on on January 21, 2009, were at 12.5 pence. Lloyds Banking Group shares are at 45.1 pence, at 66 pence. Barclays which has avoided taking government money saw its shares drop 25% on January 16. The government is hoping that its plan to provide insurance that would limit bank's losses on bad loans and investments will work, but uncertainty on how the insurance will be priced is raising doubts about the plan's effectiveness to restore confidence. Especially when RBS is collapsing. The government owns 70% of RBS and 43% of Lloyds. The next step would be nationalization of the banks. According to WSJ nationalization would mean that taxpayers have new liabilities of about $3 trillion or $4 trillion, an amount far exceeding the UK's entire annual economic output.

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Samuelson's point about the comparison with Japan and its lost decade is that Japan did poorly but it still managed to get small modest growth averaging about 1.5% for the period, and Japanese unemployment only rose from 2.1% in 1990 to 5% in 2001. Japan he says did not suffer adepression or great recession, but only a listless boring prosperity. Its only because of high growth rates of 9% from 1956 to 1973, and 4% in the 1980's, that the low growth looked bad. Japan continued to be prosperous country, and some of the choices such as the dual economy, of competitive export industries and less competitive and inefficient domestic industries, were made by society as a whole. It gave export led growth in combination with the job security and social stability of the domestic industries. Stimulus plans help in bad times but at some point the economy has to grow on its own, and the shift to other natural sources of growth has to be made, is Samuelson's other point.

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Ethanol stocks are trading for what they were went they went public in 2006 or early 2007 way down from the highs they reached. When the IPO's were done corn was $1.80 a bushe and ethaol was $4.50 a gallon, since then things have changed and corn is now $5.64 a bushel and ethanol is $2.60 a gallon, corn prices tripling and ethanol prices almost half of what they were. So things look very different now. It takes refiners one bushel of corn to produce 2.8 gallons of ethanol. Ethanol sudden surge was because of its use as a replacement to methyl tertiary-butyl ether, a gasoline additive that has been proved to be a carcinogenic groundwater pollutant. But there are many uncertainties surrounding ethanol, the price of gasoline, corn, and ethanol and the future government mandates, subsidies to refiners and a possibility that tariffs on imported ethanol may be reduced or eliminated, and the effects on food prices of dedicating so much corn production to ethanol creates other concerns. So the inital excitement as faded....

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A day by day account of Secretary Paulson and his handling of the Fannie and Freddie crisis. Secretary Paulson's style of doing things where he'd give marching orders and even before his staff had started he would be checking up on progress and his interest in all the details of actions taken and progress made in carrying out the steps agreed upon. His interest in keeping good relations with Barney Frank and his calling inhis staff and stamping his fist on a marble table so its reported, saying he did not want to be dragged into a " holy war" as the Bush administration wanted to rein in fannine and Freddie and Fannie and Freddie's heavy campaign giving had members of Congress going along with what these companies wanted. Showing ofcourse how for yewars Fannie and Freddie have distorted rational well reasoned policy because of ites built on campaign money with Congressmen. Secretary Paulson looking for Greenspan's home phone number which they finally found and his conversation with Greenspan....

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GE's Jack Welch on a preplanned bankruptcy with government financial, and debtor in posession financing including finacially backing all car warranties, as the best solution to the GM and Chrysler crisis. Will it be tough? Jack Welch says this task would be at the outer limit of difficulty and leaders may balk at leading such painful change, but it is necessary. He says for the sake of self-respect, national defense, and jobs, the country needs to keep the auto industry, and even after the loss in market share during the transformation ahead GM and Chrysler could still have 25% of the market. This is the first time a seasoned veteran of American industry of the stature of Welch, who is known for tackling such problems with realism, gives his approach to the auto companies problems. He sees the problem with a bailout with strings attached as simply letting the Big Three heave along basically as they are on life support, because a bailout simply won't enable the transformative change required....

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Ms. Annegret Kramp-Krarrenbauer, elected leader of the CDU party in 2018 with the support of Angela Merkel, will not run for chancellor in next years election and will resign from her position by the end of the year. She will continue as Germany's defense minister. After losses for the CDU in recent elections and the embarrassment of local CDU leaders in Thuringia supporting the far right AfD, AKK as she is known decided to step down. Angela Merkel has decided not to run for chancellor again. Germany is set to chair the EU in the second half of 2020, and Merkel is no longer seen as a leader of influence. The Nationalist Alternative for Germany AfD has gained votes in recent elections following the 2015-2016 migrant crisis, with large numbers of refugees from North Africa and Arab world landing in Greece and Turkey and walking to Hungary, Austria and Germany. Merkel's handling of the crisis with acceptance of a million refugees in 2015-2016 unsettled European and German politics. Why? One way of looking at it is that in the same way that the U.S. took in Chinese imported goods ending in the Trump tariffs war, at some point it just becomes too big to handle. That ended up at $1 billion a day in imports from China when president Trump called it off and accused Obama Democrats, Bush Republicans, of betraying the country. Putting it into perspective Germany with one fourth of the population of the U.S. took in about twice the number of refugees in just one year 2015-2016 that the U.S. took in 10 years 2005-2015. The U.S. took in 675,000 immigrants between 2005-2015. This is as if the U.S. took in something like 20 million immigrants in a short period of 1 year on an equivalent basis- though the cultural impact is even greater in a nation like Germany that is like Japan an historically immigrant averse nation. All this happened too quickly for Germany to handle for its fragile cultural fabric. Much of the initial outpouring of support and positive sentiment came from the sense of having gone through World War II and the refugees in that and the early post war period, the need to return in the same spirit support Germany had received. Over time it eroded support for the Christian Democratic Union and Merkel. That Merkel could have done this is itself a small miracle. Now the rebuilding has to begin. Adenauer's CDU and the socialist SPD party of Willy Brandt now have less than 50% support, only with the Greens Party do they make up 50%. The question now is can the CDU, and the SPD which has fallen to 14% in elections, make it back and what kind of future makeup political parties will have in Germany, how the social fabric can be restored. AKK's achievement is to mend relations between the liberal Merkel wing of the CDU and conservatives from Bavaria (CSU) over immigration.  Candidates for CDU leadership are Armin Laschet, Jens Spahn, and Friedrich Merz. Laschet premier of North Rhine-Westphalia has Merkel's support. Looking back too much attention was taken up by the euro crisis, and too little was done in the areas of infrastructure, inequality gaps, education, child care, under Merkel's leadership and of the preceding SPD years, much like what happened under Bush and Obama administrations in the U.S. where wars, economic crises led to neglect on issues that affect lives of ordinary working families. ...

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Auto sales for 2010 are expected to come in at 11.5 million, a significant drop from the 17.5 million in 2000. A better job market expected to push the unemployment rate down a bit to 9.7% from 9.8% in November will help, but not by enough. Credit Suisse analyst Christopher Ceraso says each percentage point that the rate is above normal ( about 5%) keeps sales back by about a million auto sales on an annual basis. To get sales back to a 16 million range this would require an unemployment rate of 6%. Economists expect a better US economy in 2011 but the prospects remain uncertain for 2012, bringing unemployment down to about 8-9% if hiring picks up. The other concerns are high consumer debt and a rise in gasoline prices. If gas prices rise and buyers shift back to smaller vehicles, as they did in 2008, this would squeeze margins and profits. This is especially a concern as automobile companies have increased profits with a larger truck and large size vehicle component of sales, in a reverse shift after the shift to smaller cars in 2008-2009. Ford Motor is one example of this. It helps Ford use the extra profits to reduce its debt load but automakers have to be prepared for a sales shift to smaller cars in the face of higher gas prices....

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Drop in immigration reduces labor supply keeping the unemployment rate steady even as hiring cools off. Compared to the roughly 1 million in 2019 net migration was about 3 million in 2022 and 2 million in 2024. In 2025 this is now about a negative 250,000 or quarter of million negative migration. Out migration is expected at about 1 million. This means that about 35,000 non farm jobs created between May and July 2025 haven't increased the unemployment rate as fewer new workers join the workforce from illegal migrants. This has to have an effect for wages for the workers in construction and farm work as employers compete for a smaller number of existing workers though economists and the financial media rarely talk about this. This was needed following decades in which the labor supply increases from illegal migrants meant no pressures on employers to pay more than the minimum wage kept artificially low. This means that even well meaning Democrats who clamored for increasing minimum wage were doing exactly the opposite of what was needed for the existing worker base wages in construction, farm work, and household help, because of their sentiments or because of the immigrant wing in their party. Note that about a third of maids, a third of construction workers, and 25% of landscaping workers are not legal migrants. Agriculture Department estimates are for about 40% of farm workers to be without legal work authorization. ...

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After Macron and Merkel flatly reject Britain's appeal for direct talks, Mr. Boris Johnson says it is now looking "very, very likely" that Britain will leave the European Union without an agreement. Johnson said this was a potentially "wonderful" outcome. Both sides want to be seen as not responsible for the failure of the talks. The stumbling bloc is the adherence to EU rules which Britain rejects as infringing on its sovereignty, and EU's fears of Britain relaxing its environmental and other rules to gain unfair competitive advantage in business.