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Foreclosures and the impact on Lowe's and Home Depot, which is a net negative- as more homes are going into foreclosure and being neglected, than coming out of foreclosure and needing repairs.

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The bonus issue at RBS bank in the UK, where performance has been abysmal but 1 billion British pounds in bonuses were planned. The public outcry. RBS has been the biggest disaster in British banking or one of the biggest. It has angered Prime Minister Brown for the Government to come up with $20 billion pound injection of capital into RBS recently, yet the current management saw it fit to consider this sizable bonus. Somewhere in all this there is a disconnect between what makes sense and what does not make any sense.

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Philippe Varin faces some tough decisions when he takes over Peugeot-Citroen. Unlike the turnaroungd he achieved at Corus steel group where the booming demand from China for steel helped, this time the auto market in Europe is declining by about 30%. He has to navigate betwen the interests of the Peugeot family which has 45% of the voting rights, employees who are affected by the cost cutting, the French government which has required no closing of factories for as long as the company receives governement aid. Peugeot-Citroen received a low interest loan of 3 billion euros from the French government. Questions he will have to address, as do all auto manufacturers in the USA and Europe relate to overcapacity as demand declines. And for Peugeot this has to be tackled without factory closures. And the other major issue facing auto manufacturers worldwide is how much to focus on the fuel efficient small car segment. Peugeot has key strengths in this segment and Varin may decide on refocussing on this segment....

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Thomas Frank describes how things went wrong in America by drawing the contrast between Martha's Vineyard and Decatur, Illinois. In 1946 he says a typical executive's salary was only 2 times that of a worker at a Caterpillar plant in Decatur, Illinois. By 2016 this had changed to where the top executive at Caterpillar was making over 400 times the wage of a typical worker at a Caterpillar plant. Democratic politicians he said had moved away from their working class base towards places like Martha's Vineyard. For Republicans the embrace of tax cutting, the deficit, and cuts in education and healthcare, entitlements, to the exclusion of everything else in a recession environment led to the rise of Trump and the rejection of stands on these issues- including amazingly the embrace of a $5.3 trillion increase in the deficit under the Trump plan estimated by economists and a recession after a temporary boost.  Inserted into this were the culture wars, immigration, with the change to mass deportation as a solution to immigration problems. ...

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After creating new money at ablistering pace to try and slow down a precipitate downturn, and getting interest rates on Treasuries to a negative interest rate, (in effect people paying the Treasury to park money there), the Federal Reserve will now turn to quantitiative easing. The speed with which this has happened is shown by the fact that the Fed's balance sheet has gone fro $900 billion in September 2008 to just over $2 trillion by December 12, 2008. Till Septemeber 2008 the Fed had financed its lending to banks and other financial institutions by lending with its existing reserves, mostly Treasuy securities, by exchanging its cash or Treasury securties for hard to sell securities. Analysts fear unintended consequences from the kind of quantitative easing that the Fed will now have left by way of tools to address the crisis as the Fed funds rate is now close to zero.

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As one wonders how the housing crisis will affect sales of items like cars and other items, its interesting to note that in addition to subprime borrowers who should never have taken the mortgage in the first place because of lack of proper credit background, there are borrowers who were otherwise healthy but are in a financial bind because of house flipping or speculative buying in the hope of gaining from the speculative price increases. These are defaults on prime quality loans and about 21 to 32 percent of the prime quality loan defaults in California, Nevada, Arizona, and Florida are mortgages with homes not occupied by the owner. Note that Goldman Sachs estimates that housing prices will fall about 7% this year and another 7% next year. These estimates may change as the housing crisis deepens with more foreclosures on subprime and prime properties.

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People from Denmark are known for fluency in English, and are some of the best non-native speakers of the English language. About 38 percent of courses at Danish universities are in English. Yet debate is shifting to the inflluence of immigrants in society as "pizza-Dansk" or "pizza-Danish" is spoken by Middle East immigrants at pizzerias. One Danish member of parliament from the DF Party is suggesting the government prevent the spread of "pizza-Dansk" and help preserve the Danish language spoken by 6 million people in the country. It is reflection of the anti-immigrant mood in Sweden, Denmark and other European countries, where parliamentary elections have given parties opposed to immigration a larger number of seats.

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Michelle Obama delivers a rousing speech in Pheonix, Arizona, as she campaigns across the country for Hillary Clinton, saying "they are trying to take away your hope." And by reminding voters Obama lost the state in 2012 by only 208,000 votes or 63 votes per precinct, so voters should not stay home. She tried to revive the 2008 campaign theme of "hope" of the Obama campaign in that year.

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Country Garden is turning into a worse problem than Evergrande. Both housing developer companies are in serious financial problems in China affecting the larger economy. Consider that Country Garden has $286 billion in liabilities and $7 billion in first half losses for 2023. Two years earlier Evergrande went into insolvency over extravagant projects and spending. Country Garden's problems come from a shift away from housing in the country a retreat by investors and buyers. Yet 25% of the economy and the savings of ordinary Chinese are tied up in housing. Local government finances are also strained adding to the debt burden. In the boom years housing created hyper growth, now it is in reverse acting as a drag on the economy.

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The US housing market in 2022 with sharp increase in cash out refinancing and home equity financing. Total home equity increased 20% in the first quarter to $27.8 trillion, a record high, according to the Federal Reserve, the US central bank. About 60% of equity was withdrawn through cash out refinancing in 2021, according to mortgage data. Cash out refinancing simply adds the amount borrowed to the existing mortgage balance. The amount borrowed through such financing by homeowners adds to inflationary pressures with more cash borrowed on the house for home improvement projects, gardening projects, appliance spending and automobile purchases. The increase in the interest rates by the US Federal Reserve including the 0.75% increase in the rate announced on June 15 slows the amount of borrowing through cash out refinancing. The supply chain disruptions disrupted flow of goods at a time of high demand in 2021 following the lockdowns, and then the war in Ukraine added another layer of inflation from high gas prices. The combined effect with housing price pressures created the perfect storm in inflation the US is facing with the rest of the world. ...

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The Guardian makes a serious point that the German miracle 70 years ago after World War II, was based on giving debt relief to war torn Germany. Half of Germany's borrowings accumulated after two world wars were written off. Germany was allowed to repay a large part of its debt in its national currency. The cost of servicing the debt was kept at 5% of export revenues. In 2021 the comparable figure is 16% for poor indebted countries. Yet the generosity extended to Germany is not extended to poor indebted nations in 2023, says The Guardian. There is no space for them to gain industrial strength or control, says this editorial. Big powers are not in a hurry to let poor nations develop away from sectors such as agriculture and mining. Private bondholders would be the biggest ones to pay for international debt relief- institutional funds and investors lent 250 billion dollars to 55 most climate vulnerable countries, China 46 billion dollars. It calls on US and UK to pass legislation requiring private bondholders to take part in international debt relief, as bonds are covered under English or New York law. ...

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Israel vaccination drive has now reached 2 million people for the first dose and 400,000 for the second dose. What do early results show? As the effectiveness is only 52% after the first dose, according to Pfizer for its vaccine, vaccination drive is only one part of the solution. The number of cases in Israel are high at 10,000 a day. There is concern about the ultra-Orthodox community following the protocols and rules for prevention. Ben Gurion International Airport may be restricted to only essential flights. A mutation variant of the coronavirus, a UK detected variant, is seen as making up about 30% of the cases and could make up the bulk of cases in the future. Lessons being learned are that Pfizer vaccine is effective at about 52% for the first dose. Only after the second dose are enough antibodies triggered to resist the virus effectively. This can be as much as 6 to 12 times the increase in antibodies for second dose, compared to what happens after the first dose says the Sheba Medical Centre at Tel Hashomer, Israel.   ...

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Apple appears to have peaked and it marks the end of an era. Americans have more to be concerned about than the latest incremental iPhone design with decline in reading skills among children, dropping mens college enrollments, cost of living crisis, and retiree poverty.  For the most part US prices are kept at last year's level as Apple is facing new competition and restrictions in China, with a new Huawei phone which matches the new iPhone. Apple has increased iPhone revenues by 44%, even though shipments have increased by 15%, with aggressive pricing, making iPhones generate $40 billion, 50% of total revenue. This aggressive pricing phase may now be ending as Huawei plans to increase global shipments by 20% even as the total smartphone market declined by 6% to 1.15 billion shipments. Apple has 55% of the US smartphone market and worldwide at 27%. This may be the peak and the end of an era in which Apple and other Tech companies not paying a fair share of taxes led to the defunding of infrastructure and public services. ...

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Netherlands is well ahead of other countries in remote working. The percentage of employed persons working from home is about three times that of the U.S. or Britain. It is about 15% in Netherlands compared to 4-5% in the U.S. or Britain. A culture of near universal fast internet connections, a culture of trust with companies knowing the work will get done, and companies providing employees with funds to set up a good working environment from home. In some Dutch companies employees can take vacation freely as long as the work gets done. The idea of a whole work day spent at a desk in the office in some office building is not entrenched in Dutch culture. A U.S. poll shows 59% of remote workers would like to continue working remotely after the pandemic. Companies are shifting to a new culture of work done away from the traditional business office as the economy reopens. In the Netherlands the pandemic is only giving more confidence in the idea of working away from a business office. This can now catch on in the U.S. and other countries. ...

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AP VoteCast shows over half of Americans and 8 in 10 Trump voters think support for transgender rights in government and society has gone too far. About 90 of Republicans, half of Democrats, and two thirds of Independents think support for transgender rights in government and society have gone too far. The situation about allowing transgender persons in women's locker rooms offends most women. Abortion rights is an issue for two thirds of women but half of the same women think transgender rights having gone too far, they cannot support transgender people in their daughter's locker rooms at school. Cultural issues such as these inflamed the situation with the signs in Madison Square Garden saying "transgender the hell out of locker rooms in our schools." What would FDR and Frances Perkins say about this, their whole lives spent trying to figure out a way for unemployment insurance and stabilizing employment. The net result is that only about 20-25% of women thought abortion was the issue, and 60-70% saw the economy as the main issue. ...

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The Guardian's Geof Lemon shows how India's lower order collapsed not able to hold on for 14 overs or just one hour on the final day of the MCG Test in Melbourne, Australia. After 30 from 103 balls Rishabh Pant became impatient without a goal in mind and took aim at the 104th from Travis Head over midwicket into Mitchell Marsh's hands. This started the collapse when the tea session was close at hand on the final day and India could easily have batted out the rest of the day. Boland, Cummins, and Lyon ran through the lower order with some excellent catching in the field. Australia lead 2-1 as the cricketers head to Sydney. The Indians have a lot to think about, including the absence of Shubman Gill, the failure of Rohit Sharma in batting, the Australian lower order Lyon and Cummins putting up resistance and the Indian lower order folding so quickly in the final hours on the fifth day. For the Australians a record is broken with 75,000 watching the final day of the Test cricket at MCG cricket ground. ...