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WSJ Owen Fletcher's interview with Robin Li, CEO of China's internet search site Baidu Inc. Li describes his plans for growth. He sees opportunities in a landing page where Baidu builds its own content and integrates the content on the search result pages. The Qiyi venture is a online video streaming site with Baidu search users directed to this site when searching for such content. Advertising would show up on Qiyi. Baidu has started a Japanese search site. Li is a 41 year old engineer who worked in Silicon Valley before starting Baidu in 2000. Baidu now has 70% of the Chinese search market compared to Google's 24%. Li says he follows China's laws and has found that most search users are interested in terms other than the censored ones- in entertanment, lifestyle and business fields.

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Vegetable prices in China went up by 22% in July 2010, from a year earlier, and grain prices went up by 12%, eggs by 8%. About a third of household budgets go to food in the budgets of people in India and China. Wheat prices are climbing on world markets after the ban on Russian exports, and rice prices are also climbing with the floods in Pakistan ruining the rice crop- Pakistan being the No.3 world's rice exporter. Personal spending accounts for 36% of overall GDP in China and 57% in India. Food prices in China were up 6.8% in July, 2010. Industrialization in China, and agricultural land freely taken over for factory sites with the consent of local authorites, may be a complicating factor. See the link to BYD's acquisition of agricultural land for factory site.

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Adidas took a one time charge of 125 million euros for irregularities in its Reebok India Company, and expects an additional charge of 70 million euros. Adidas expects net profit to increase by 12-17% in 2012. Net profit for the first quarter of 2012 increased by 38% to 289 million euros, mainly on higher sales in China and Japan and its TaylorMade-Adidas Golf sales. Revenue increased by 14% to 3.8 billion euros on a constant currency basis. Profit results reflected lower financial expenses and a lower tax rate. The 2012 Olympics and Euro 2012 soccer will offer additional marketing opportunities for Adidas. Adidas is increasing its distribution in China and plans to have 2500 stores in 1400 cities by 2015. It will use its NEO brand at lower price points for entry customers in the smaller cities of China.

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The rupee reached a low of 56.55 rupees to the U.S. dollar on June 20, 2012. Factors affecting the rupees include the large current account deficit and trade deficit, declining capital inflows and foreign investment in the Indian economy in 2012. Other factors are risks of further credit rating downgrades. Fitch Ratings lowered its outlook on India from stable to negative on June 18, 2012. Standard & Poors lowered the outlook in April 2012. The current rating is one step above junk rating, making India the only Bric country without an investment grade rating. The lack of decisionmaking to attract foreign investment within weak coalition governments in India because of the influence of regional parties is a major problem. Other problems include the poor management of coal, energy, electricity generation and the lack of funding for these sectors to power the economy.

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Emily Glazer of the WSJ interviews Clorox CEO, Don Knauss. Knauss talks about his strategy to focus on the U.S. and Latin American markets and not make a costly effort to enter markets in Asia. He sees competition intensity in Asia and Brazil as much higher today with P&G and Lever focussing on these markets. Clorox is concentrating on brands known for being environmentally friendly such as its Green Works line of cleaners, Brita water filters, and products of acquired companies such as Burt's Bees. Knauss describes the Hispanic consumers preference for Clorox and Pine Sol for cleaning and the use of bleach 70% for cleaning. Hispanics use 25% more bleach than other consumers and prefer fragrances such as lavender for Pine Sol. These are some of the insights the company is using to maintain its penetration in this market.

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European Union leaders including European Council president, Herman Van Rompuy, European Commission president, Jose Manuel Barroso, ECB president Mario Draghi, and Eurogroup finance ministers head, Jean-Claude Juncker, draw up a 10 year road map for "a genuine economic and monetary union." The prime ministers of Italy, France and Spain push jointly for deposit insurance to cover European bank deposits, Europe wide banking supervision, and bailout funds to directly purchase sovereign debt of Italy and Spain without conditions. This takes place June 22-27, 2012, with the EU leaders increasing pressure on Germany for the first time in concerted fashion. Ms. Merkel and her coalition partners the Free Democrats see this as an effort at mutualizing debt. Merkel says Europe will not have total sharing of debt "as long as I live," in her talks with Free Democrats.

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A three judge special bench of India's Supreme Court led by chief justice Rajendra Mal Lodha, said the process of allocation of coal licenses by the coal ministry lacked accountability and openness. Lodha said: "There was no fair and transparent procedure, all resulting in unfair distribution of the national wealth. Common good and public interest have, thus, suffered heavily." A report by India's federal auditor in 2012 stated the improper allocation of 200 coal leases to private companies cost the government about $30 billion. Former prime minister Manmohan Singh of the Congresss party headed the Coal ministry for part of the period when the improper coal leases were given, leading to intense criticism from the media. This was an issue in the elections leading to the defeat of the Congress party by the BJP party led by Mr. Modi.

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NYT reporter Neuman takes a17 hour road trip across the island of Cuba in a 1956 Ford Fairlane. He heads west from Havana near the west end of the island to Guantanamo on the east end. He sees a changing Cuba with houses for sale, little sign of ideological signs in the countryside, old cars, oxcarts, horsecarts, a Cuba that looked like it was stuck in the past. In the five years that Raul Castro took over from Fidel Castro, money and business have gradually taken the place of politics. The average salary of $20 a month is not enough for most workers even with free healthcare and education, and most people dream of making more money to enjoy a better life. Many rely on relatives abroad for additional funds, or buying and selling on the black market, or a second job.

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Lee Kuan Yew, passes away at the age of 91. He led Singapore for 31 years after becoming prime minister in 1959. During this period he helped transform Singapore's economy into a centre for international trade and finance by attracting foreign investment. To do this he developed infrastructure, setup training colleges for the workforce, and provided tax breaks for investors, using Singapore's strategic location on the sea lanes in Asia to best advantage. Singapore became a export hub for Japanese electronics companies, and U.S. companies such as HP and General Electric established regional headquarters there. Strategic investments were made in high tech industries and Singapore's sovereign wealth fund took stakes in companies overseas. He retired in 2011 after opposition parties won 40% of the vote in general elections. His son is now the new prime minister.

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Maruti Suzuki has 41% of the Indian car market. Sales in rural areas are helping the company weather the downturn in sales in 2013 because of a weak economy. In the April to November 2013 period sales were up 18% in rural areas compared to 5% decline in urban areas. With 7 small car models Maruti is able to provide a small car that is useful on Indian roads. Sales for the last fiscal year reached 1 million. The Maruti Suzuki sales network reaches 60,000 villages and planned expansion is to reach 100,000 villages. CEO Bhargava says the fast growth in rural markets is critical for Maruti, making up 30% of its sales. Overall sales for urban and rural sales is flat for Maruti and declining by 5.3% in the April to Nov. 2013 period, according to the Society of Indian Automobile Manufacturers.

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Ingram says Obama's 2015 budget is more of a wish list for Democrats, because 2015 spending levels are already set and House Republicans will put together their own budget putting forward the Republican views. Obama's budget includes new taxes on busiess and the wealthy to reduce the deficit. Other ideas- raise tobacco taxes to pay for universal pre-K education, a "Fianncial Crisis Responsibility Fee" on big banks, overhaul immigraion laws to increase tax revenues, limit itemized deductions for the rich, force drug companies to give large rebates on Medicare prescriptions. Another proposal is a $56 billion "Opportunity, Growth and Security" Initiative, for spending on early childhood education, job training, and medical research. To pay for this he would cut the amount wealthy people can save tax free for retirement, cut crop insurance and raise airline security fees.

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Roger Cohen interviews Glenn Greenwald, a journalist for Britain's Guardian newspaper, in Rio de Janeiro, Brazil. Greenwald made disclosures of NSA spying on Brazil's president Dilma Rousseff. He now has the backing for a online publication from eBay founder, Pierre Omidyar, for the venture with financing of $250 million. Greenwald helped make Snowden's information on NSA spying public by writing about it in the Guardian from his base in Brazil. Cohen says old style mainstream journalism has been affected by the 9/11 events, and brings up David Halberstam's words at Columbia University in 2005- about not letting the powerful intimidate independent journalists. In 2013 the government of Britain asked the Guardian to turn over documents related to NSA spying, which the Guardian resisted, leading to a protest by Germany that this violated respect for freedom of the press.

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GE will spin off GE Capital into a separate business and put up about 20% of the assets for an IPO in 2014. GE will also get out of the retail lending business. The unit may also be put up for sale at a later date. This move is designed to meet shareholder interest in separating the industrial assets with steady earnings from the volatile financial business. GE Capital is the fifth largest bank in terms of its size and still generates a large part of profits for GE. Profits in 2012 for GE Capital were $7.4 billion. Other moves would reduce exposure to consumer lending and increase lending to midsized businesses. These are remaining moves following the 2008 financial crisis, in which GE Capital hurt GE's overall performance badly, for GE to return to its industrial business roots.

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The U.S. Treasury plans to sell off its whole stake in General Motors in 15 months. Treasury will sell about 200 millon shares to GM for $5.5 billion by Dec. 2013. The buying price for GM of $27.50 is about 8% higher than GM's closing price on Dec. 18, 2012. Treasury plans to sell the remaining 300.1 million shares within in the next 12-15 months depending on market conditions. Treasury's breakeven point is about $53 a share, and the government will lose money on the bailout compared to the AIG rescue. The government invested about $49.5 billion to help take GM through a planned Chapter 11 bankruptcy filing and reduce a huge debt load. The key in the auto bailout was preserving over 1 million jobs in the U.S. auto industry during an economc crisis.

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The Dutch had their tulip bubbble, the Chinese have their Pu-er tea bubble which has just burst. It was a pure speculative bubble with speculators cornering the market and bidding up the price of tea in Yunnan province on the Burmese border. From 1997 to 2007 the price of these green tea leaves from Yunnan- that make a fermented brew called Pu-er- wentup from $15 to $150 a pound. Actually a group of manipulative buyers drove prices up. Production doubled from 2006 to 2007 to 100,000 tons. Unlike other teas this tea is said to grow better with age and is packed into compressed cakes for transport. Now prices of this tea have collapsed to $3 a pound. Russia had its own experiment with unbridled capitalism, now China is struggling with the effects of the aftermath of its own unbridled capitalism.

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Term Asset Backed Loan Facility of $1 trillion is aimed at bringing new life to the market for asset backed securities that effectively subsidizes loans to consumers and businesses to buy cars, pay for tution, buy farm equipment or use credit cards. Through the program an investment fund can put down $5 to $14 for every $100 it plans to spend and borrow the remaining $95 to $86 cheaply from the Fed. The investment fund agrees to buy highly rated securities issued by lenders that the Fed deems eligible collateral for the loans. About $10 billion in such loans could be made available to auto lenders, Ford Motor Credit and World Omni Financial Corporation. Modifications to the TALF program are being proposed by the banks, but are being reviewed for risk by the Fed and Treasury.

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Note the shift to internet based access and use of software. this is happening already in information access, which Google does over the internet. When it comes to applications we see the traditional model of installed software for Microsoft and Oracle. So there is a gap for someone larger and with the resources to make it work to come into this gap and use it to get a lead over its competitors. This maybe what SAP is about to do. The pricing of the software is at $149 oer user per month and the target is to increase customers to 100,000 by 2010 double its present customer base. The project is called Business ByDesign and 12,300 out of 61,000 developers at SAp are working on this new software. About $560 million will go into marketing and getting it off the ground to users.

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

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Iraqi production now up to 2.5 million barrels a day according to International Energy Agency, helping to ease some concerns about supplies worldwide for winter. About 2 million barrels a day in the southern province by South Oil Company is fairly stable. Its in the north where a lot of the supply has been erratic because a pipeline that carries the oil through Turkey to the Mediteranean has faced repeated sabotage. As security has been beefed up along the pipeline production in the north has reached 500,000 barrels a day. Poor oil field maintenance and lack of security and underinvestment are the main problems. For example even though about $2.4 billion is set aside for capital investment for 2007 only 30% of it has been spent so far. And the $2 billion allocated for 2008 is way short of whats needed.

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All the major investment banking houses are highly leveraged in their ratio of assets to shareholders equity. Bear Stearns was 32 to1, but so is Morgan Stanley, Lehman Brothers is 30 to 1, and Merril Lynch 27 to 1. And so what is Goldman Sachs ratio? It is 26 to 1. These are the ratios according to WSJ at the end of 2007 and likely haven't changed that much today. All of these banking houses searched for higher returns through high leveraging. This is becoming a problem in this crisis as a lot of capital has to be raised by these firms to reduce the extent to which they are leveraged. And the speed in which the unwinding is occurring in this nervous hangover for the markets requires that firms stay way ahead of the curve and some paranoia is in order.

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Reusable bags can replace 520 plastic bags used at stores each year for each person. Estimated 100 billion plastic bags are discarded in the USA alone each year according to Worldwatch Institute. San Francisco has banned them from stores and Boston, Baltimore and Portland (oregon) are considering banning them. The nylon bags made of thicker material that are being used as a substitute can also be a danger in landfill unless they are reused again and again because those bags will sit longer in landfills than the thinner ones. according to a source at MIT in materials science. The critical idea is getting a good sturdy bag and to kep using it over and over and not discard the bag for a long long time so that we keep less of this plastic in the landfills.

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

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About $18 billion will be spent in the 4th quarter of 2008 by the government in China out of the $586 billion stimulus package. So the initial impact will not be great for the next few months and unlikely to make up for the rapid slowdown in exports. By the time the stimulus package kicks in with a larger impact in 2009 the economy may well be at 4-5 % growth rates. The stimulus announcement is also a signal to government owned banks to increase lending. The stimulus package covers 10 areas, including low income housing, electricity, water,rural infrastructure, and projects aimed at environmental protection and technological innovation. After the Asian financial crisis in 1997 a similiar but smaller package was announced, with money spent to build the country's highway and tollroad system, projects to keep the economy growing.

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This op-ed essay by the President of Toyota Motor Company, Akio Toyoda, talks frankly about the situation that led to the quality failures at Toyota and promises that Toyota will try to live up to the ideals that shaped its beginnings some 70 years ago. Toyota had humble beginnings in the thirties when the original founder of Toyoda was in the textile loom manufacturing business. Following a new venture in automobiles in the 1930's, for three decades Toyota was only trying to catchup with the U.S. in auto manufacturing. It started with the current chairman Shoichiro Toyoda's father -and Akio Toyoda's grandfather Kiichiro- visiting a Professor of Metallurgical Engineerig at a university in Tokyo to collect ideas and information for entering the automobile manufacturing business. Akio Toyoda seems quite cognizant of these beginnings in this essay. Action steps he mentions are a top down review of global operations, establishing an Automotive Center of Quality Excellence in the United States, and asking a blue-ribbon safety advisory group of outside experts in quality management to independently review Toyota's operations, with the findings made public. Akio Toyoda points to the lack of effective communication in quality matters in its global operations that led to the problem festering for so long. He says that in regard to sticking accelerator pedals, Toyota "failed to connect the dots between problems in Europe and problems in the United States because the European situation related primarily to right-hand-drive vehicles." Toyota also moved to address problems in its Prius and Lexus HS250h models for anti-lock braking systems....