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Exxon's position with cash on hand of $37 billion gives it agood position from which to invest in partnerships with Petroleo Brasileiro for exploration on the Atlantic coast of Brazil, or to acquire another oil company. It may also consider investments in possible oil finds in places like Greenland, New Zealand, Madagascar or the Black Sea.

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Japan in 2007 with a new mix of anglo-saxon capitalism and Japan's postwar social cohesion base industrial model. A strong industrial sector with a inefficient services sector, and a largely inward looking society which has changed somewhat by adopting some of the aspects of the anglo-saxon model with low immigration and foreign investment compared to European countries.

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Fed Vice Chairman Donald Kohn speaking at a conference in New Orleans comments that the USA economy is in uncharted waters because the financial system is so disrupted, and because of uncertainty about how credit conditions will evolve and how businesses and households will react to the changing conditions there can only be less confidence in the economic forecasts.

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Honda with its popular Civic and focus on small cars is emerging a winner as it increases market share and sales. During the first half of 2008 Honda sold 100,0000 more passenger cars than Ford. A new plant in Greensburg, Indiana will begin production in September making the Civic compact. By 2009 that plant could produce 200,000 Civics.

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The lives of China's female migrant workers many of them as young as 15 or 16 right from the villages and rural interior. Leslie Chang a Chinese American spent time living with them in Dongguan and gives an account of their lives and struggles as they leave the farm for a new life in the factories of China.

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In endorsing Obama for President the New York Times says he has met challenge after challenge and put real flesh on his early promises of hope and change. It says leading America forward will require strength of will, character and intellect, sober judgement and a cool and steady hand, and Obama it says has these qualities in abundance.

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Tells the story of Cherry, a state owned company that is China's largest independent car maker. It started about 1995 with just an idea in the head of Zhan Xialai an assistant to the mayor of Wuhu, and some other local government officials, in a poor eastern province Anhui who saw this is a way to boost incomes and growth in the province. Zhan brought in Zhoua manager in a cityowned building supply company. They brought in Yin an Anhui native who worked at a VW joint venture. In 1996 Zhou went to England to buy engine assembly equipment discarded by a Ford plant there and in March 1997 started building its first factory. It hired a Taiwanese company to help design its first model the Fengyun or Wind Cloud which it cobbled together using parts from component makers that supplied the China operations of VW and GM. It was not till Dec 1999 that the first cars came off this makeshift assembly line. And then it ran into bureaucratic obstacles as the company did not have a government license to be in the auto business . To solve this it became a part of the Shanghai Automotive Industry Corporation a large state owned company that had partnerships with VW and GM. Then it wasn't till 2001 that this Fengyun made it to market with 28000 being sold that year. Cherry then began work on a 4 door hatchback minicar that was called the QQ when it went on sale 2 years later in 2003 and looked like the Chevy Spark, a GM model. GM sued Cherry in Chinese court in 2004 saying Cherry had copied its design for the Spark and the lawsuit was settled in 2005. The settlement was described by Cherry as "very friendly." GM may have secured other concessions for manufacture and assembly in China because the QQ was then manufactured with local partners at a plant in southwestern China. It is Cherry's No. 1 model and far outsells the Chevy Spark. About this time in 2003 a big shift was ocurring in China as the car market was being pushed up by continuing development of infrastructure and road expansion, new ventures from Europe and the US expanding car sales in China. Government planners and executives began thinking about how China could develop its own potential in this growing and about to explode market. They decided they had to move upscale and buy the best technologies from Europe and the United Staes and recruit Chinese engineers working in the automotive industries in these regions. This led to a new phase of massive new investments. One of the goals after Cherry's brush with GM over copying its designs, was to acquire and then develop the technology so that it would be Cherry's own technology. In 2003 Cherry hired Xu Min an engineer at Delphi who was an Anhui native and was a specialist in combustion and fuel injection. They turned to an engineering consulting firm in Austria that specializes in internal combustion engines, and this firm AVL List GmbH agreed to train Cherry engineers to design and build the sophisticated engines. The culture that has grown up around this company in Wuhu, Anhui province, is also what drives the company. It exhorts employees in posters hanging on factory walls, "Know plain living and hard struggle." And in some areas of the plant JD Powers charts showing where Cherry lags behind its western counterparts in quality control surveys are shown on bulletin boards. Zhou, Zhan and Yin are known around Anhui and in the rest of China as "the Eight Guardians", a reference to eight defendors of the faith in Buddhist legend. ...

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Advice on walking away from a home loan when you are way under water, and it makes no sense to keep writing checks, and when government help is not there as you are way under water. Martin Feldstein had warned abut this as a major cause of rising foreclosures from early last year. Now without government help this looks like a rising tide for many homeowners under water. This financial planner says its feasible, and may make sense. He talks to the Mortgage Bankers Association, and a spokesman there tells him that its cost prohibitive for a bank to chase down a borrower in financial difficulty. And some states have laws that prohibit banks from going after borrowers for the remainder after foreclosure, including California and Arizona, two of the worst affected. And a lawyer arranging the foreclosure, can put in writing a waiver for this. For the tax impact, he says recent laws eliminate a federal tax through 2012 on most primary resident debt that a lender has reduced through loan restructuring, or forgiven through foreclosure. And states like California and Arizona have passed laws echoing these federal rules. Then there is the question of credit. Yes, its impaired for about 7 years. But with so many in foreclosure there may be an effort by credit unions and financial institutions to destigmatize borrowers who have foreclosed. A law Professor at George Mason University says credit scores will have to be adjusted to lessen the impact of a foreclosure, as this does not carry the information value in 2009 that it would say in 2005. And with so many people in foreclosure there is an emerging market here, according to credit union lender BECU in Washington state. If other than foreclosure you have good credit, its not going to be a big issue, says the director of the Rental Property Owners of Michigan, especially as good tenants are not that easy to find in this difficult economic environment anyway. What this suggests is that many will take this option and foreclosures will rise for the rest of 2009, especially if the job losses go on for longer in the range of 400,000 to 600,000 that we have seen for the last 4 months. Changes in the bankruptcy laws and restructuring the loans on that basis, or government help to those under water in some future plan that lowers payments to something in the range of 30-40%, are ways in which this can be averted. But with job losses of this magnitude a lot of people would end up in serious difficulty, and consider the foreclosure option....

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Habitat for Humanty is shifting to fixing homes in Saginaw, Michigan, which has so many vacant homes. With $500,000 from state and local governments and an agreeement with the city, volunteers and pid workers plan to demolish two vacant dilapidated houses here aweek, every week for the next 2 years. About 800 homes in this city sit empty and abandoned. Saginaw is down to 56,000 residents, half of what it had in the years the auto industry was at its strongest. Now what jobs exist are mostlyy in health care.

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As moratoriums on foreclosures that were put in place earlier expire at Chase, Wells Fargo, Fannie and Freddie, and other mortgage companies, foreclosure activity has increased. Foreclosure related filings increased by nearly 6%in February from month earlier, and were up nearly 30% from February 2008, according to RealtyTrac. In California notices of trustee sales, which are a precursor to foreclosure sales, climbed more than 80% to 33,178 in March from February, according to ForeclosureRada.com and the Field Check Group. The increase reflects both the expiration of foreclosure moratoriums and a California law made late last year that temporarily delayed default and foreclosure notices. As aresult Ronald Temple, co-director of research at Lazard Asset Management, expects that home prices will decline by 22% to 27% from their January levels. Over 2.1 million homes will be lost in 2009 in foreclosure according to Moody's Economy.com, up from 1.7 million in 2008.

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NYT editorial says Bush Administration thinks it has time on its side in the housing foreclosure crisis but they are wrong. The White House has not come up with a clear strategy or what needs to be done as the way forward from here. And this it says wil prove costly. Because there is no clear direction coming out of the White House the Congress also has not been able to articulate a clear strategy with near unanimous support. Alt-A loans called Alt A for alternative to grade A prime loans are scheduled to reset to higher payments starting 2009 with losses mounting in 2010 and 2011. Alt A losses are projected to reach $150 billion but his is based on price declines following a stable pattern, but if housing prices take a steep decline then losses could go much higher causing a great deal of instability to the financial system, which will be harder to fix at that time. NYT is urging the Bush administration to wake up to the impending crisis.

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The plan to prevent foreclosures in Minnesota is supported by the state's Democrat- Farmer-Labor party which has a majority in the legislatre. The Republican Governor of Minnesota Tim Pawlenty is mentioned as running mate to McCain and he will be criticized in the election if he vetoes the bill. A 39% increase in foreclosures is expected for 2008 by Housing Link, a Minnesota nonprofit research group. with about 28,000 households affected. CEO of Toll Brothers, a luxury builder rates Minnesota a F- in assessment of regional housing markets. So what will this bill do? Under the foreclosure deferment plan loans closed from January 1, 2001 through August 1, 2007, when antipredatory lending law took effect would be eligible. Borrowers must be legal U.S. residents and have adjusted household gross incomes of less than $250,000. Second home are not covered. During the deferment period borrowers keep paying a portion of their mortgages. This is set at either the monthly payment of principal and interest when the loan was originated, or 65% of the monthly payment at the time of default, whichever is less. Rep Matsui of California introduced a similar bill in the House of Representatives May 13, 2008. Because the bill limits the benefit to those who are needy and worst affected it would appear to be a sensible approach. At this time there are so many proposals but with little Republican support and a public opinion that sees this as moral hazard or rewarding people for their mistakes with public money, there is little to help the most needy and deserving borrowers for whom a good case can be made for help on a bipartisan basis and with support of the public....

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Amazing! Just fresh from the foreclosure crisis and as the worst of the foreclosures are taking place between now and 2009 for subprime and other loans homebuilders and home sellers are financing the 3% downpayment required by FHA for loans from the is government agency. What do they hope to accomplish sell homes and have the government foot the bill when these homes also go into foreclosure in a downturn? Already above average default rates for seller assisted down payment programs will make this government agency the Federal Housing Administration ask for a government subsidy for the firtst time in its 74 year history. The FHA will need $1.4 billion next year. FHA estimates that down payments provided by nonprofit groups account for 34% of all 200,000 loans backed by the FHA so far this year, up from 18% in all of 2003, and less than 2% in 2000. And FHA says that borrowers are 2 to 3 times as likely to default on their payments when they receive a down payment from a nonprofit. The reckless manner in which homebuilders are selling these homes is unbelievable, more so in today's difficult economy. See the ads for these homes in this WSJ article and its is shocking. D.R. Horton is advertising 100% financing for 2 and 3 bedroom homes near the beach in Maui, costint $498,000, and a Seattle area builder Quadrant corporation is advertising townhomes for $500 downpayment. Use your coffee budget says a online promotion in the St Louis area! And though the risks are known to housing officials in the government they face a battle from well funded and coaltition of homebuilders, lowincome housing and minority groups. though its hard to understand how a home that ends in foreclosure for a low income group or minortiy group can benefit a minority group. Yet the Black and Hispanic caucus, people in Congress like Maxine Waters and Barney Frank still think it does as they continue to support the lobbying that keeps these kinds of loans going. Two examples given here of a Dick Whitmore and a Gloria Harris one saying it was impossible for him to come up with the $5000 downpayment and the other saying she was living from week to week suggest that they are likely to end up having difficulty making payments. ...

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Warnings by state and city officials that were ignored by federal agencies and their officials. Efforts to protect homeowners from oppressive lending were thwarted by federal officials when state attorney generals took up the issue in Washington DC. Not a pretty picture and says a lot about what went on in that period when federal officials were too close to lenders way of seeing things or ideologically blind because lenders played the deregulation music to perfection.

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JP Morgan Chase will modify the terms of $70 billion in mortgages for borrowers who are behind in their payments or expected to be. This covers 400,000 borrowers. The focus is especially on a type of loan structured so that the monthly payment increases, and Chase inherited $54 billion of such loans with the takeover of Washington Mutual in September 2008. Some of these loans are called options adjustable rate mortgages where borrowers can make payments that don't even cover the interest costs, resulting in increasing the loan balance. Chase will replace the options ARM's with fixed rate loans.In taking over WaMU, Chase had a large exposure to the California housing market. WIth WaMu CHase ended up with $16 billion of subprime mortgages. The mortgages that Chase will modify for this plan with affordable payments make up 4.7% of the home loans it owns or are serviced by Chase's EMC Mortgage Corporation. So this is a good start but a lot remains to be done. Chase's Scharf who heads the retail division said that Chase had heard loud and clear what the thought leaders in the country are saying, and wanted to provide leadership on this issue to the whole industry as it does'nt make sense to wait. About 7.3 million American homeowners are expected to default on their mortgages from 2008 to 2010, and about 4.3 million homeowners lose their homes, according to Moody's Economy.com. While opinion leaders like FDIC's Sheila Bair and Reagan adviser Martin Feldstein have called for government help to prevent foreclosures from the early months of 2008,and FDIC has considered about 40% of current monthly payments the affordable amount for loan modification in IndyMac FDIC modifications, neither the Bush administration, banks or companies in the mortgage industry have taken any leadership on this issue. And now Scharf says it makes no sense to wait, in effect a signal to other banks to do the same. Scharf also said the stronger you are the more easier it makes to take these decisions suggesting that the $25 billion in government funds it received helped it reach this decision on this plan, which makes a lot of sense for the banks because foreclosures are the worst way to recover money with bad consequences for all parties and disastrous for the US and global economy....

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FDIC program for loan modification at IndyMac Bank. About 3500 loans were modified, and 15,000 borrowers contacted in recent weeks with offers for lower affordable monthly payments. FDIC's innovation is to create a comprehensive program with clear guidelines so that a lot of loans can be modified without doing it on a case by case basis which would take too long. Loans are modified by reducing interest rates and the principal amount so that the payments are affordable each month, and the FDIC has come up with 38 to 40% of the previous monthly payment as about the right amount. It also looks at tax information to verify earnings. There have been complaints about the responsiveness of FDIC Indymac call centers which may have inadvertently turned down some homeowners looking for help. A big problem is that the FDIC can do little for loans sold to other investors so that out of 653,000 loans serviced by Indymac Bank only about 47,000 are eligible for FDIC modification program. ...

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Sheila Bair tops the list of women in prominent positions who have exercized good judgement and vision in their positions.

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Why the loan modification programs get media attention but are not going to stem the rising tide of foreclosures. Even with all the programs announced by the banks it would affect only 2 million of the 8 million homeowners facing foreclosure. As the loan modifications are working with reducing payments to 40% of the prior monthly payment,this may not be enough as 28% is a better figure for homeowners struggling to makepayments. As a result homeowners with loan modifications may still end up in foreclosure as unemployment rises to 8% in 2009 and 2010.

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Peter Orszag's role in the healthcare debate and the formulation of health care policy proposals. One proposal of Orszag, who heads the Congressional Budget Office, is to set up a new agency with powers to cut spending and implement changes in Medicare. Says Orszag, "one of the reasons we have such disjointed and skewed incentives is that we have an excessively political process." At a recent meeting with House Democrats, one Congresswoman said her top priority is winning higher payments for oxygen suppliers, and Orszag was taken aback. For years officials have been trying to cut payments to oxygen and medical equipment suppliers, which are said to be inflated. When a new competitive bidding process was set to take effect last year, industry supporters in Congress were able to delay the plan, and these supporters are still fighting to block changes says the WSJ. Here is a 40 year old Orszag, with degrees from Princeton and London School of Economics, who got his early experience in the Clinton adminstration at age 24. He then followed this with a number of policy oriented jobs, ending with appointment to head CBO in 2007. And he faces the whole system of Congressmen from both parties beholden to interests in the healthcare industry, who provide the donations for them to finance their election campaigns. Dan Eggen describes this in the Washington Post, 7/21/2009. Max Baucus of Montana, and to some extent Grassley of Iowa, are senators from both parties who Eggen points out are beholden to the healthcare industry because of large donations they receive from the interests in the healthcare industry. These interests want to see their payments system protected. The further escalation in health care costs, which would make the whole healthcare system unaffordable even as it delivers poor results, can only be prevented by making cost control an exercize that is not influenced by healthcare industry donations. Jackie Calmes describes the huge hurdles in achieving a deficit neutral move to universal health care in the U.S. in the NYT 6/26/2009. See the link. The exchange between Grassley and Orszag on the issue of the $177 billion in savings needed from the payments to health insurers under the Medicare managed care plans- which allow seniors to obtain Medicare coverage outside the government run program -went as follows. These are dubbed overpayments by outside experts and efforts have been made to cut them in Congress. When Mr Grassley raised concerns about the impact of such cuts in a hearing, -and Grassley has opposed the cut for this overpayment to insurers- Orszag responded saying: "I very firmly believe that capitalism is not founded on excessively high subsidies to private firms. This is what this system delivers right now." ...

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Sharp swings in attitudes have left America divided in terms of education. A comparable situation exists also in the UK as areas with more education access have separated from areas with less access to higher education. As the WSJ analysis points out at one time social cohesion prevailed in the postwar years till 1970 with educational attainment playing a small part leaving social cohesion intact. Even in the period 1970-1990 when there was a shift for college educated women to prefer Democratic Party and white men without a college degree to prefer Republicans this was not a significant gap. The Democratic Party appealed to less educated union voters in manufacturing industries as well as it did with college educated men and women. This gradually fractured during the Clinton and Obama administrations as the Democratic Party  moved closer to the higher educated and drawing more support from new tech industries than manufacturing. Nowhere is this more evident  than in the way college educated women have shifted to the Democratic Party and white men without a college degree have moved to the Republican Party. Swings of different types are normal in elections and politics. But swings purely based on education are rare in American politics and not healthy for the democratic system of government. As the analysis from WSJ/NBC News shows college educated women favor Democratic Party by 33 percent margin. And the swing is even deeper for white men without a college educated degree who favor Republican by a 42% margin. This is the situation before the 2018 U.S. Congressional elections. The combined group of college educated women and white men without a college degree make up 40% of the U.S. voting public. This makes each group unreachable for the other party, a situation unimaginable for many of America's leaders if they would be living today- from presidents Harry Truman and Dwight Eisenhower, John Kennedy and Lyndon Johnson. White voters make up 70% of the electorate, and a situation where they would be unreachable for Democrats would be unthinkable or unimaginable for Truman, John Kennedy. And Eisenhower would also find it unimaginable that he would have to writeoff college educated women in his campaign.  By returning the Labour Party to its roots Britain is combatting this tendency for fracturing of social cohesion. In the way the UK's Blair administration moved away from Labour party's roots in manufacturing and the trade unions, the Democratic administrations under Clinton and Obama  moved away from manufacturing industries and the trade unions.   Most of the postwar leaders of the stature of Eisenhower and Kennedy would have seen such a situation as a significant failure in political leadership. ...

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Krugman points to the connection between the failure to achieve debt reduction through debt forgiveness and the sluggish economic growth in the eurozone and U.S., five years after the global banking and financial crisis of 2009 and four years after the beginning of the eurozone debt crisis in 2010. In the U.S. debt reduction for homeowners was delayed with a wave of foreclosures, and in Europe austerity budgets were the norm as Germany pushed hard for austerity policies. In 2014 small relaxation of austerity to give relief to voters took place in Greece, France, Italy and Spain, with austerity budgets still in place. Growth also slowed in Germany to slight contraction in the third quarter and no growth in the fourth quarter of 2014. This is leading to the formulation of new policy to address growth challenges in the eurozone. Debt to GDP is growing in eurozone countries and Britain because of lack of growth, even though spending cuts have been made, showing the need for rethinking policy. ...

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Fitch Ratings downgrades Brazil's bonds to double-B-plus in Dec. 2015, a junk rating from an investment grade rating. The yield on Brazil's 10 year benchmark dollar denominated bond increased to 6.97% from 6.7%. Other emerging markets such as Turkey and South Africa now expect ratings downgrades in 2016 as the U.S. Fed raises interest rates. Standard & Poors downgraded Brazil's sovereign debt to junk status in September 2015. GDP in Brazil declined 4.5% in the third quarter of 2015 from a year earlier. Brazil's currency, the real, declined by 32% in 2015, making it harder for companies that borrowed in dollars to pay off debts. President Dilma Rousseff is facing impeachment proceedings following a corruption scandal at Petrobras.

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An intimate biographical account of new Chinese leader Xi Jinping and his connections with Muscatine Iowa, where he visited as a head of a Chinese farm delegation in 1985. Xi Jinping remembers the trip vivdly and plans to spend time with friends from that visit during a visit to the U.S. in 2012. He spent two nights during that visit in the bedroom of two college age boys of the Dvorchak family. This revealing account of Jinping's life shows that the actual story of his life is quite different from the title of "princelings" or privileged sons of former communist leaders that is suggested by this reference in the media. Because of the volatile nature of Chinese politics, his father Xi Zhongxun, who led communist partisans in the struggle of the pre World War II years, was rehabilitated twice after falling out of favor. The first period was in 1962 and it was not till 1979 when he was fully rehabilitated. During this period which coincides with the growing up period of Xi from 9-26 years of age, Xi experienced many hardships. During the years of the Cultural revoultion Xi was sent at age 15 to Shanxi province where his father had led partisans. He lived there for 7 years in a traditional cave dwelling in the village of Liangjahe doing farm work. He was denied admission to Tsinghua University twice before being accepted in 1974. There he graduated with a degree in organic chemistry. This was followed by three years working as an assistant to Geng Biao, defense minister and a partisan who was a colleague of his father. The next job was deputy Communist party chief of Zhengding county in Hebei province. Iowa Governor Branstad visited Hebei in 1984, and Branstad played host to a animal-feed delegation led by Jinping in 1985- the visit to Muscatine was part of this trip and which Jinping has told others he enjoyed more than his visits to Oregon or California that year. The second time Xinping's father went out of favor was after his criticism of the crackdown of protests at Tienanmen Square. These experiences have given Xinping a confidence and experience in different situations that other Chinese leaders including the current leaders lacked. If Jinping has inherited some characteristics from his father he may also have the courage to take China in a new direction, and make the kind of changes China needs as it shifts away from an export based economy. At the same time rule in China is by consensus of leaders on the communist party's standing committee. His father helped initiate the special economic zone in Guangdong province in 1978, and Xi Xinping held senior posts in the provinces of Fujian and Zhejiang and in Shanghai, giving him close ties with industry and local government in areas that led the export based economy. Prime Minister Lee Kuan Yew of Singapore puts Jinping in the" class of Nelson Mandela type leaders, who has great emotional stability to not let his personal misfortunes and sufferings cloud his personal judgement." Of political positions Jinping has a certain wariness. He once responded to mention of him as the potential leader with the words: "Are you trying to give me a fright."...