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A food scare for Danone's Dumex baby formula brand in China hurt sales. Danone has decided to swap the Dumex brand for additional stake in China's dairy company Mengniu, for a 12% stake in the company. Danone will focus on ecommerce business in China which has grown rapidly to about 461 million consumers as more baby food products are sold online. About 7% of total sales are from China for Danone. Danone has also decided it will keep the medical nutrition business line because of better future prospects. Earlier Danone sold off its majority stake in a joint venture with Wahaha in China. Business decisions at Danone are made by two executives Mr. Ribaud and Mr. Faber, the CEO. Fresh dairy unit of Danone faces several challenges, including rising price of milk, and margins dropping from 15% in 2010 to 10% in 2014. Fresh Dairy generates over 50% of revenues.

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Britain's National Health Service IT initiative failed because of a top down emphasis and focus on procurement. The project was started by Labor in 2002 and budgeted for 12 billion pounds. Lohr talks with Dr. David Brailer, and Dr. David Blumenthal, who headed the program for health IT in the Bush and Obama administrations, and with Richard Alvarez of Canada Health Infoway, which is the nonprofit corporation setup for conversion to electronic health records in Canada. Dr Brailer says the program in the UK was forced top down on doctors and nurses, and seen as a procurement program, ignoring the human aspects related to doctor preferences. Dr. Blumenthal empasized the need for collaborative effort all the way with doctors and nurses in a program of this kind. The confrontation that resulted from the lack of participation by health care professionals led to failure. Britain's new Cameron government ended the program.

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Fears that another crisis like that of 2008 could emerge with asset bubbles in China and other countries. Also fears that policies of austerity in southern Europe and the UK, combined with Germany's tight control on spending, could lead Europe to years of slow growth or stagnation. It is a tricky situation especially in Europe, trying to avoid a Greece type situation, and at the same time not cutting spending to the point where it would lead to stagnation. Criticism of the German government's policy to cut spending and fears that the European Central Bank might follow Germany's policy to focus purely on the deficit. Lower US bond yields give the US some room for dealing with the deficit. The need for swift action in China to move the economy towards domestic consumption, and let the yuan strengthen so that China can absorb more of the world's exports.

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To get the agreement of the 27 countries engaged in the talks to set new banking rules, the new Basel III banking rules are being phased in over a protracted period. Some changes go into effect in 2013, but others will be put into effect by 2019. The focus on the new rules is how much capital, or "common equity" banks will be required to hold as a cushion to absorb losses in a crisis like that of 2008. Large banks will be required to hold 7% of their assets in common equity. By 2015, banks will have to begin building a 2.5% buffer of capital, which must be in place fully by 2019. No action was taken on issues such as requirements for banks to have access to ample liquidity, what systemically important banks should hold in capital, and establishing a counter cyclical capital buffer.

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How diagnostic tests in portable toolskits, that patients can use themselves, are being developed at low cost in developing countries like China. This creates the kind of care appropriate for poor countries, where patients need something they can afford, and something that does not require repeat visits to doctors offices or clinics. Ustar Biotechnologies is a Chinese startup, that says it has the technology, costs that the founder says "no one can compete with," and affordable prices for poor countries. The sales of such diagnostic test portable devices or kits is expected to soar in coming years. Quimin You, the inventor and founder of Ustar, graduated in North America and worked with multinationals. His proposals for cheap diagnostic technologies were turned down by multinationals, who in their narrow focus saw these thechnologies undermining their existing products. Now Qimin is back in China with a startup that will do this.

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Ingrassia presents a different view of Steve Miller. He became the bogeyman for putting the facts the way they were: the days of the highly paid auto workers were over in a global economy, where automakers compete globally and parts can be made anywhere in the world sometimes at a fraction of the cost in the USA. Should Steve get some of the credit for the union taking the wakeup call? Delphi did not benefit from this public acrimony with the union. Was there a better way. Dana's McCracken thinks so doing this in a less public way. On the other hand the debate needed some kind of point man who got the discussion into focus even with straightforward remarks that would make few friends. Was it risky for Delphi and GM ,with the possibility of a lengthy strike. This was a serious risk.

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The Fed cuts rates by three quarters of a percentage point to 2.25%, but cautions about inflation expectations. The increasing inflation and the fears of a steep fall in the value of the dollar, and the knowledge that liquidity is hardly the root of the problem considering that opaqueness of mortgage securities and not knowing who owns the bad ones is the source of the confusion in markets, will limit what the Fed can do from now on. The focus should be shifting to reduce the loan burden on homeowners at risk of foreclosures so that they can make payments on smaller principal for longer periods with better terms with Government backing the softer terms and the Bush administration is gradually coming around to the view that its announced voluntary loan improvements are not enough to meet this crisis which is just beginning to heat up.

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The struggle of France's newspaper "Le Monde" to survive after losses for the last seven years to 2008. Daily circulation has declined 9% from 2003 to 354,000 in 2008. Compared to Germany and the U.S., newspapers draw a smaller number of readers, with 181 per 1000 people subscribing to newspapers in France, 371 in Germany, 274 in the U.S. Strategies pursued are to sell stakes to Lagardere, and Spanish media group Prisa. Le Monde was started in 1954 with directions from Charles de Gaulle to be the "conscience of France." As a result its sharehoders are mainly its journalists holding a 60.4% stake. Prisa and Largardere each hold a 18% stake. Losses in 2007 were 15 million euros. Strategies are to focus on news and world events and reduce sports coverage, and integrate the newspaper with the website, Lemonde.fr., which has 4.5 million unique vistors per month, according to Mediametrie.

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Dan Balz, chief correspondent of The Washington Post, says the stakes have hugely escalated in the 2016 presidential election with the rhetoric on immigrants and Muslims entering the U.S. following terrorist attacks in France and California offered by Donald Trump. He cites experts who point out that establishment voices are being ignored as a section of the American public supports Trump's opinions. An earlier article in the Post points out that about 30% of Republicans in a PPP poll support Trump's views, and 21% unsure. Other polls show American who are older, working class and not college educated support Trump in large numbers, compared to the support from college educated and higher income people who support Sanders on the Democratic side and who oppose American intervention in the Middle East- both Trump and Sanders supporters preferring to focus on problems at home than involvement in overseas entanglements.

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This editorial Board opinion piece in the WSJ gives exceptional insights into major issues facing Germany, the cost of electricity generated from renewables, failure to meet climate change emissions targets set by the government, and the difficulty of forming a new coalition government with conflicting goals of the Greens vs the CDU and the FDP.  By one estimate it cost households and business about $125 billion extra in higher electricity bills for 2000-2015 to subsidize renewable energy from solar and wind. Utilities are required to buy renewable at above market rates, especially since the energy revolution called Energiewende was launched by chancellor Merkel in 2010. German electricity prices are about 36 cents per kilowatt hour compared to 13 cents in America. The 2011 decision following the Fukushima disaster to phase out nuclear power by 2022 made the effort to meet renewables targets of 40% by 2020 compared to 1990 -exceeding the 20% for the EU- even harder. Germany sees a 30% target for 2020 as reachable.   Even though renewables can generate 50% of required energy supplies, only 30% of the supplies are utilized as the renewables are generated mostly in the north of the country and there is a lack of transmission lines to bring it to the industrial south. The dirty secret says the WSJ editorial board for the renewable story in Germany is that a lot of coal is used in dirty coal plants to meet electricity needs when wind and solar energy are not available. Cheaper coal not natural gas is preferred for such generation as daytime peak use that recoups more expensive gas cost is managed with renewables. Leading to the situation that Germany generates only 9% of energy from natural gas compared to 30% in the U.S.. The further Germany has gone in renewables has also led to the paradox of increased dependence on coal. Getting to the new Jamaica coalition being planned between the CDU and the FDP and the Greens. The problem is that the Greens want to see the 20 most polluting coal plants closed, the CDU and the FDP are willing to close only ten coal polluting plants. The WSJ's opinion is that voters chose the AfD right wing party with 13% of the vote because of the platform promise to shut down Merkel's Energiewende policy.   ...

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Sony has lost its focus, it is in so many lines of business, that its brand identity has been lost. Especially in Japan where it is in cosmetics, massage, mailorder shopping club, insurance, finance, robots etc. It has 1000 subsidiaries and affiliates worldwide, of which a third are unrelated to its core electronics business. How does this hurt? It hurts because management is distracted, and when top management is distracted then its not focussing on customers, changing business trends, creativity in its business pioneering new products. In a big company this problem is just magnified by the bureaucracy that develops. Problems similiar to the ones faced by IBM and General Motors. The analysts and Howard Stringer talk about restoring the Sony premium. What is a premium, its not just the brand, its the innovation or something special behind the brand that enables it to command the premium. Stringer probably understands that its the innovative edge that Sony as lost. See the other piece "Howard Stringer, Sony's Road Warrior" by Siklos and Fackler in the Sunday NYT, May 30, 2006 with Stringer shown in a large picture imagining him as a Sumo wrestler. An unforgettable picture. In that piece it becomes clear that Stringer is keenly aware about Sony's and Japan's weakness in software which is increasingly driving success in products when combined innovatively with new bold concepts. He says there that Sony takes great pride in its hardware, and this is true of Japanese creative spirit in innovative and miniature gadgetry, but its capabilities in software are very modest. As one action step Stringer has hired Tim Schaaf , a senior Apple executive to lead that effort at Sony. The other part, getting the focus back by focussing on customers of electronic products is evident in this piece. Ryoji Chubachi, head of electronics and co-head of Sony with Stringer, regularly visits large retailers to offer incentives for making Sony products more visible, something the prior management failed to do. The prior management failed to focus on customers, and thought it beneath their highflying ways. One of the decisions by Chubachi in TV's is to price HDTV sets close to the price of Panasonic, Samsung and Sharp at large retailers in Japan. This makes sense to gain market leader status, as it shows Sony is living in the real world and taking decisions appropriate and relevant to a premium free environment in television sets. You a manufacturer cannot imagine a premium, a premium is a perception in the minds of customers and most likely reflects a perception of uniqueness, creativity, fashion and some other attribute, which can include engineering. Sony's philosophy has stated in Akio Morita's book "Made in Japan", was to be a pioneer, to walk the untrodden ways, break new ground. One aspect of this in comparison to Matsushita, Sharp and other competitors, was going to be its individuality, something Morita borrowed from his days in the US, because it is typically American and sort of unJapanese in a way. Though this is a generalization and many American companies merely follow and some Japanese companies have their own way of doing things even if it is thought of as being very Japanese like, witness Toyota in its Aichi prefecture surroundings. In this light the surveys show Sony significantly deteriorating in "conspicuous individuality." The New York Times cites a survey from BP Nikkei Consulting in Tokyo that the number of consumers saying that Sony showed "conspicuous individuality dropped to about 25% from about 40% the year before. ...

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WSJ Lingling Wei's interview with Ding Xuedong, chairman of China Investment Corporation on its plans and strategies for 2015-2016, and future years. China's government formed CIC in 2007 to improve the returns on its foreign exchange reserves, estimated at $3.8 trillion in 2015. China Investment Corporation had largely stayed with low yields on U.S. Treasury debt till 2007. CIC has about $650 billion in assets in 2015. Its strategies provide insights into how China sees the outlook for the global economy. Ding sees opportunities in real estate and infrastructure, with a focus on the U.S. and Europe for steady cash flows. He singles out the U.S. as of particular interest as its economy rebounds. Strategies also include paring down of energy holdings. Foreign holdings are now $220 billion and have increased by 16.6% since 2009. A special unit CIC Capital was formed recently to more directly participate in managing foreign holdings with a long term view. Earlier focus of CIC on natural resources and commodities is now shifting as the commodities crisis has reduced long term prospects in that sector. The plan for the future is to shift to an allocation where financial products such as stocks and bonds are about 50%, and long term assets such as infrastructure investments, real estate and other investment take up the other 50%. At the end of 2013 equities and fixed income represented 57.4% of CIC global assets, and 28.2% were in long term assets. Ding wants to see China as the No. 2 engine for the global economy after the U.S. as No. 1. He sees the prospects for Brazil, Russia and South Africa as poor, and is optimistic about good performance from India, Mexico and Nigeria. On Japan Ding is skeptical of prime minister Abe's plans because he sees the lack of structural reforms in the efforts leading to a kind of lazy effort in his view. CIC is learning from the experience of other national investment funds and improving its in-house investment and management capabilities. Ding has many years of experience with China's Finance Ministry, the Cabinet, and the State Council. ...

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When a Saturn crossover with one name Outlook, and the same crossover with another name Traverse sells at a Chevy dealership does it take sales away from another GM brand. What happens wen marketing budgets and campaigns focus on a car like the Chevy Malibu does it take something away from the Saturn Aura which isn't the focus of marketing efforts and doen't have the financing package of the Chevy Malibu which is part of the marketing focus on the Malibu. The new Pontiac G8 doesn't get much marketing as GM focusses on the Malibu. So the question is whether it helps Toyota to have the Camry one car which benefits from a focussed marketing effort as opposed to the distributed and diffused markeing effort on a coupple of nameplates and brands.

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U.S. added 245,000 jobs in November. Unemployment rate drops from 6.9% to 6.7% as some Americans give up looking for work. The concern now is not the rate of job creation which is healthy but the drop outs from the workforce.  Concern arises from the long drawn out effects of the 2009 financial crisis and its effects which were seen over a decade. This report in NYT says the share of prime age Americans who were employed returned to the January 2008 level in 2019. And then the pandemic hits putting everything back again. This time if the lesson is learned about the long term damage to working families it is that this be tackled as a priority for the central bank, the U.S. Federal Reserve, an the Treasury, and Council of Economic Advisors, under the leadership of president Biden. Fortunately both Yellen and the new proposed head of the Council are students of labor markets and have stated this is one of the lessons they have learned and will act on. As this report says the opiate crisis, the risks of addiction increased, and there were links to the long period people were without jobs. The longer a person is without a job the more likely he will become permanently unemployed. The hope now is that the vaccination effort could bring people back to work quickly as business and life resumes in 2021, with workers being hired back. The share of prime age Americans working in November is 76.5% compared to 80.5% in February, which means this has to go up by about 4 percentage points. The people who are not in the labor force today but still want a job are 2.2 million. It is this that needs to be the focus of the new administration, central bank, and Congress. ...

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U.S. States faced a shortfall of $86 billion during the 2011 budget season, according to the National Conference of State Legislatures. This was after a rise in tax collections during the last year from an improving economy, and about $30 billion of tax increases passed in 2009 and 2010. States faced the end of $66 billion in federal stimulus aid, and their share of Medicaid costs are expected to go up by $16 billion in this fiscal year, according to the National Association of State Budget Officers. The political mood has shifted with worries about the deficit and fears that tax increases could make the states less attractive for employers. As a result there is a focus on spending cuts with very few tax increases. Forty six states began a new fiscal year this week after legislatures focussed on spending cuts, mostly avoided tax increases, and some states placed restrictions on the pay and benefits of public employees.

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News literacy programs that teach young people to read critically and help develop skills that encourage critical thinking. The focus is on school programs for middle and high school students. The News Literacy Project (NLP) has staff that includes 22 news organizations and 200 journalists who donate time to work with students. The Center for News Literacy (CNL) is a project at Stony Brook University, which sees news as "the oxygen of democracy." The projects teach young people how to find the truth behind the hype, propaganda, entertainment, and exaggeration in the daily news inside the the U.S. and from around the world. Pulitzer's words can be seen at the entrance to Columbia University's School of Journalism and on a U.S. postage stamp: "Our Republic and its press will rise and fall together." A sophisticated reader is critical for developing an insightful coverage of news and Pulitzer reminds us that the future of democracy and America depends on this.

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HDFC Bank CEO, Aditya Puri, has succeeded with conservative practices in lending. It is now India's second biggest lender by market value, after the government owned State Bank of India. HDFC's lending to consumers has doubled since 2008 under Puri. He believes in prudent lending and keeps an autographed copy of Michael Lewis's The Big Short in his office. This has enabled Puri to avoid the losses experienced by other banks such ICICI, and with India's growing economy HDFC has profit increases of over 30% for the last decade. HDFC is adding 2 million customers a year, says Puri. The bad loan ratio is estimated to be 0.2% in the third quarter of 2011, one tenth of that at State Bank of India. India's largest mortgage lender, Housing Development Finance Corporation, is the largest shareholder with 23%. Puri says he will focus on growth in India, and will continue to avoid taking the kind of risks that would make depositor's lose sleep at night.

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The Journal's interview with Weight Watchers International CEO, David Kirchhoff. Weight Watcher's strategies focus on increasing its online business and getting males to join Weight Watchers. According to Kirchhoff it has 1.4 million people, 90% of whom are women, attending meetings each week all over the world. Online business is surging, with an average of 1.8 million additional subscribers for the first 3 quarters of 2011. In the first 3 quarters of 2011 the online business showed gains of 70%. Estimates are for the online business to generate $400 million in revenues and $200 million in operating income in 2011. Today 65% of the business is in the U.S. and a large part of the rest is in Europe. Kirchhoff sees new opportunities in China, where poor lifestyles- the use of the internet instead of being outdoors, and the increased access to all kinds of food- is creating a surge in obesity.

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Britain's Office of National Statistics said that GDP declined by 0.2% in the first quarter of 2012 from the prior quarter. GDP declined by 0.3% in the fourth quarter of 2011. This means Britain is officially in a recession, with two consecutive quarters of negative growth. The ONS said GDP was 4.3% below its precrisis peak in the first quarter of 2008. The UK registered growth of a mere 0.4% since the coalition government of David Cameron took over in May 2010. This presents problems for prime minister Cameron in tackling the UK deficit. It also shows how difficult it will be for EU countries to address their deficits without economic growth. This has come into increasing focus with recent events in the Netherlands with the collapse of the government and upcoming elections on the issue of austerity cuts, and in France with the presidential elections and the swing to parties questioning austerity measures without economic growth.

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The reduced availability of child care services, longer time it takes to get steady jobs in a slow growth economy, and the "safety trap" of becoming used to a freer lifestyle, areincreasing the average age at which Italian women have their first child. It has moved up from about 30 to 31.4 in 2012. As more women pursue higher education and get university degrees the trend is to focus on jobs and lifestyle. As grandparents get older and the lack of enough preschool centers this makes child care harder, in a nation where 68% of children under 10 are still cared for by grandparents. At present only half of Italian mothers work, according to the OECD, compared to 74% in France. This worsens the demographics with currently 150 people over 65 years for the 100 under 14 years, and the figures increasing with fewer young people to support retirees, according to Istat.

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Prof. Brandon Garrett of the University of Virginia, School of Law, says the $2.6 billion settlement of Credit Suisse with the U.S. Justice Department does not provide accountability for the financial crisis. The settlement comes with an agreement to protect Credit Suisse from U.S. regulatory agencies such as the S.E.C. The Swiss bank will be allowed to conduct business as investment advisor, something not allowed if it is indicted for a criminal offense. And the focus of the investigation on secret Swiss bank accounts is unresolved, as the names of these account holders will continue to remain a secret for Swiss banks. Protess and Greenberg say if this was intended to burnish the image of the Justice Department and Attorney General Holder, after its lack of prosecution to hold individuals accountable following the 2008 financial crisis, it is not clear how long this will happen. A separate editorial by the WSJ raises the same questions.

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A simple sentence from Ms. Aslam, Pakistan's Foreign Ministry spokesman -as she confirms Pakistan prime minister Nawaz Sharif will attend the swearing in ceremony for prime minister Narendra Modi in New Delhi, May 26, 2014- says it all: "Pakistan sees peace with India as a precondition for economic development." A long established truth that applies to a large degree in reverse, that peace with Pakistan is also a precondition for a singleminded focus on economic development in India. How else can India tackle the problem of 1 million young people joining the labor market every month for the next 15 years, according to the UN Department for Social and Economic Affairs. The figure is much larger when including Pakistan, Bangladesh, Sri Lanka and Myanmar (Burma). And would approach 2 million a month if Indonesia is included, the entire region sharing the Buddhist-Hindu-Muslim legacy and lacking the strong engine for growth provided in East Asia by Japan and China.

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

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The changes at Sony Pictures outlined in an interview with CEO, Michael Lynton. Sony Pictures will look for savings of $350 million. Motion Pictures showed declining revenues and revenue from TV shows increased in 2013. Sony Pictures will expand its TV shows business. Part of the expansion will be through buying and starting up new television channels in the growing markets of India and Brazil. In this interview Lynton points to the risks in seeing franchises in big budget movies before they become franchises and before the first movie in the series is successful. Smaller budget movies such as "The Conjuring," "We're the Millers," have been profitable for Sony Pictures, so he sees the tendency to focus on franchises alone as risky. Sony pioneered in producing for cable but did not see this as being a large revenue generator five years earlier. What changed Lynton says, is the increase in subscription video-on-demand services and growth in Netflix reaching new buyers.

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Ausra using Australian David Mills technology and research has come up with soar mirrors that focus the intense heat of the suns rays in desert climates onto water that is directly turned into steam that then runs the turbines that generate electricity. With PG&E for distribution and Vinod Khosla's venture capital investment solar energy for about 10 cents per kilowatthour (kwh) is within reach using Ausra's technology and compettitve with cola based energy. Carbon is also going to be about 20% more expensive with higher environmental costs of coal based energy factored into the price as governments restrict its use. The plan is to go from a initial $47 million investment to a $400 million investment for a 100 megawatt plant. This technology could bring a promising future for solar energy and cut dependence on oil and coal, and help bring down oil prices and spur growth with cheaper and clean energy.