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The growing middle class in Mexico is to be seen in cities like Queretaro, far from the drug violence seen in cities on the Texas border. Even though growth has averaged only 2-3%, the number of Mexicans who see themselves as middle class in a country of over 100 million is 65%, according to a survey by pollster Jorge Buendia. The definition of middle class is a new refrigerator, a car and a couple of cellphones. Sometimes this is also aspiring to be or thinking you are middle class. A big change is the shift to small families. Astonishing as this may sound, Mexico's fertility rate has declined from 7.3 children per woman in 1960 to 2.3 today, according to the World Bank. The U.S. fertility rate is 2.1 children per woman.

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Alicia Munnell, is the director of the Center for Retirement Research at Boston College. Munnell says the Domenici-Rivlin deficit reduction proposals should serve as the basis for putting Social Security on a sound financial basis. Tackling the budget deficit should not be focussed simply on the 12% of the budget that makes up nondefense discretionary spending in his view. Tackling Social Security would build confidence and reduce the long term deficit. The Domenici-Rivlin plan has the following proposals for Social Security- indexing the full retirement age after it reaches 67 to improvements in life span, a smaller cost of living adjustment, increasing the earnings subject to the payroll tax to about 180,000 from 106,800 in a gradual way, and gradually taxing employer and employee premiums for health insurance.

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The WSJ discloses that the U.S. Federal Trade Commission's Bureau of Competition 160 page report in 2012 described Google's anti-compettitive practices and recommended a anit-trust lawsuit for three anti-competitive practices. The WSJ obtained documents based on the Freedom of Information Act. Mullins and Winkler provide a detailed account of the practices cited in the report as anti-competitive. The FTC Commissioners did not act on the report and instead voted unanimously in 2013 to end the investigation after Google agreed to some voluntary changes. The report stated a different conclusion: Google's "conduct has resulted-and will result- in real harm to consumers and to innovation in the online search and advertising markets." Mullins and Winkler point out that this report shows Google's statement that no wrongdoing was found is incorrect.

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Banks in Britain will be charged a 50% tax on 2009 bonuses of more than 25,000 pounds or $40,800. It will be imposed directly on the bonus pool at banks and will be paid by the bank. It takes place effective immediately and affects 2009 profits. The public in Britain is sympathetic to such a move and it comes in the midst of concerns about the British deficits similar in proportion to that of Greece, and of the Dubai debt crisis. Andrew Hilton, who runs CSFI, a research center focussed on financial issues put it aptly: "I think banking has become a truly parasitical business. Bankers these days borrow money at 30 basis points and lend it to te governmet at 300 basis points and then they go play golf."

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The Fed reduced rates to 1% from 1.5% on October 29, 2008. If the Fed were to reduce rates down to zero that would put the USA in the situation that Japan found itself when Japan's central bank reduced rates to zero in the 1990's, and where it remained for years as its economy struggled. For the USA these low rates were last reached in 2003 and 2004 after the bursting of the internet bubbbe. The only surprise element in this is that this comes so early in the deep and prolonged recession that is expected. What if the rate is down to zero, then the Fed could use unconventional tools like buying longterm Treasury securities that would help to push down the terms for consumer credit that tracks those Treasury securities.

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Volodymyr Zelensky is given the Charlemagne Prize in Aachen, Germany. After World War II the border town of Aachen in Germany where the grave of Charlemagne is situated, decided to set up a prize for leaders who supported European unity. Charlemagne is the king from eighth century Europe who united France, Italy, Germany and Eastern Europe into a European state, and supported the Carolingian Renaissance and revival of Christianity. Winners of the prize include Monet, Schumann and Konrad Adenauer. Giving the prize to Zelensky and the people of Ukraine is a way to symbolically bring the people of Ukraine into the European community of nations and do this in a solemn commitment with an "obligation of the highest ethical value." Present at the ceremony were Chancellor Scholz, the city officials of Aachen, Ursula Leyen of the European Commission and the prime minister of Poland. Scholz committed Germany to supporting Ukraine as part of the European family in an historic setting that goes back over a thousand years. Mr. Zelensky spoke in Ukrainian and said this must be the first time Ukrainian was spoken inside these walls in Aachen. Dr. Kurt Pfeiffer, its founder in 1950, set the goal of the Charlemagne Prize award- "the prize reaches into the future and at the same time embodies an obligation- an obligation of the highest ethical value. It is directed at a voluntary union of the European people's without constraint, so that in their new found strength they may defend the highest earthly goods- freedom, humanity and peace- and safeguard the future of their children and their children's children." ...

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Advertising revenues increased for Google, Facebook and Amazon in 2020 as these three companies took over 50% of total ad revenues in 2020. Large companies shifted more ad spending from television and print media to digital in the pandemic after finding the return on ad spending was increasing on digital. Smaller companies including the jump in startup companies increasing from 300,000 a month over the decade to 500,000 by July 2020, put all their ad dollars into digital. The result is that the pandemic has given the 3 digital companies a dominant role in the advertising economy. More time spent in front of computer screens, more ec-commerce, new business formation, and tech companies ability to steadily increase return on ad investment, has produced strong revenue generation. The pandemic had the effect of increasing retail purchases online from 10% to 16% in the second quarter of 2020. Biscuit maker Mondelez found that return on ad spending was 25% higher on digital compared to television and now spends about half of its $1.1 billion ad budget on digital. Trendy garment makers are seeing returns on ad spending that are high with quadrupling of sales following a doubling of ad budget for active apparel maker Vuori of California. Small advertisers such as Vuori are the reason digital ad spending has remained strong for Google, Facebook and Amazon. For furniture maker Steelcase in Michigan the return on ad spending on digital using Amazon made up for the lack of sales from its brick stores. It increased online staff from 2 to 25 and was able to bring in $30 in sales dollars from $1 in digital ad spending. ...

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This NYT article looks at another side of Biden in the meeting with Putin, Biden's optimism. Biden says of his style- "the important thing is to put an optimistic front, an optimistic face." By doing this he achieved more with Putin than was thought possible after years of deteriorating relations. In a way it could be said that Biden brought the optimism that Russia, Germany, France, India, and other nations, the rest of the world also need, especially now during the pandemic. He prepared carefully for his meeting, more than most presidents, much more than Reagan, Trump or Obama. He met with German and French  leaders, prepared with Blinken and Sullivan, coordinated with G-7 allies at Cornwall in the UK, in a way that was rarely done before.  After the meeting Biden could tell reporters "The country has put a different face on where we've been and where we're going- and I feel good about it." It is also a measure of Biden's leadership style that he took a constructive approach in the face of difficult issues.  Biden based it on a sound footing. The way Biden says "is to know what your adversary's interests are." In Russia's case Biden and his team see this as "legitimacy, standing in the world stage." And for Russia "desperately wanting to be relevant." For the most part Putin and Russia responded positively to this effort by Biden to change the tone, texture of voice, and manner in the conversation. ...

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An obscure parliamentary precedent was used by Speaker Bercrow to end Theresa May's strategy of repeated votes in Britain's parliament to browbeat reluctant Brexiters to vote for her negotiated settlement with the European Union. The precedent was set as far back as 1604 and was designed to protect the powers of parliament in the face of a Scottish royal assuming the role of sovereign of Britain. Repeated votes on the same proposals are not allowed if the intention is to find ways to get reluctant members of parliament to vote in favor, essentially by bullying them into this. This is also why Brexiter MP's have hailed the Speaker's decision in their opposition to Theresa May. Britain's constitution is based not on a single document like the U.S. Constitution. It is based on a a collective set of laws and precedents. A parliamentary rule book published by Thomas Erskine in 1844 sets out these rules in 1097 pages, available for 439 pounds in parliament's bookshop. It has gone through 24 editions. Speaker Bercrow says of the rule he was referring to as a statement on page 397 of the 24th edition.  There is not much time, just 10 days, for prime minister Theresa May to end the current parliamentary session and call a new one to nullify Speaker Bercrow's decision. This would also further antagonize the 40 Brexiter MP's led by Mr. Jacob Rees-Mogg and Boris Johnson in May's own party, making it impossible for parliament to agree on a course of action. ...

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How attitudes are changing towards bottled water as the Nestle bottled water plant for McCloud in Northern California arouses fierce opposition among townspeople and brings in people from all aound the country in opposition to it. A Links column cites the Oakland California based sustainability think tank's estimate that it takes about 17 million barrels of oil to produce all the plastic bottles for the water which is enough to fuel more than 1 million cars and light trucks for 1 year. Few people think of it this way.

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This leader in The Economist magazine says a hard Brexit of the sort announced by Theresa May at a Conservative Party conference is clearly bad for Britain. It also point out that half of British people voted to remain. It is not clear that voters have voted for a hard Brexit, a soft Brexit, or voter alienation with elites and effects of years of austerity since the financial crisis have helped tilt the vote to Brexit. It points out that the rhetoric may be damaging Britain's chance of negotiating a Brexit that limits damage to GDP, which the Treasury estimates to be nearly twice the loss in GDP if a member of a single market as compared to leaving it. British government leaders may be overestimating the willingness of leaders of France, Germany and other countries to make concessions. By talking up to their party base politicians such as May may be putting German and French leaders to also toughen their positions on free movement as an integral principle of the European Union, and consequently of membership in a single market. ...

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A vivid and amazing account of the the earthquake and tsunami that hit the city of Ishinomaki, Japan, 35 miles up the coast from Sendai. It tells the story of where different people were that day, and the hours of their lives before and after the tsunami. Hiroshi Kaneyama, is the mayor of Ishinomaki, who is in Sendai that day attending a symposium on commercialization of algae. He would drive up to a dark town filled with water, and no electricity, and find his way to a Red Cross hospital command center. Toshikatsu Kumagai, is a 34 year old newspaper reporter, who will find himself driving at 3.30 pm that day on a bridge over the Satagawa river, on the western side of Ishinomaki. He spots the first 19 foot wave and tries to make a run for it, racing towards a fence before he was swept away. He finds himself in a landscape that has become part of the ocean. He jumps on top of a plastic tub and is rescued by helicopter 18 hours later. Most of the students at Okawa Elementary School who lined up outside the school when the tsunami alarms sounded, were swept away. Taylor Anderson, is an American teacher who teaches English to Japanese students at 8 schools in this coastal town. She has been in Japan for over 2 years. At Mangokuura Elementary School, Anderson helps students ont the playground and then jumps on her bike heading down Route 398, Onagawa Highway, which runs along the coast, to her apartment. She will never make it, and her body is found washed ashore days later. In this city alone 2,283 bodies were found, 2,643 people were missing, 23,000 in shelters. The town of Onagawa with 10,000 people, near Ishinomaki, was washed away. And this is only one part of northeastern Japan hit by the earthquake and tsunami....

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Scotland joined with England and Wales to form Great Britain in 1707, at a time of increasing opportunities for Scottish people in the expanding British Empire. Britain's shipbuilding industry had a major base in Glasgow. During the Thatcher Conservative government Scotland suffered, and decades of globalization led to gradual deindustrialization for Scotland, the demise of the shipbuilding and other industries. The Labor Party under prime minister Blair pursued a "devolution of powers" policy, creating the first Scottish parliament following a referendum in 1999. Ironically this has changed the fortunes of the Scottish Nationalist Party led by Jack Salmond, a economist first elected to the British parliament in 1987. Salmond became head of the party in 1990 and led it to second place in 1999 elections, followed by a win in 2007 and 2011 elections. Salmond is seen as a vigorous campaigner, who can speak above others and not seen as a good listener. The party gained the confidence of Scottish voters by running a competent administration led by businessmen who were well aware of problems in local communities. Programs such as free prescriptions for medicines were popular with voters. The Labor Party stands to lose its voter base in Scotland (former Labor prime minister Gordon Brown is from Scotland), and the Conservative Party will also suffer a blow with a yes vote to independence. Polls show voters don't fully trust Salmond, but a majority 39% support an yes vote to 38% no vote, with 23% undecided. Britain just emerging from a deep recession would lose Scottish oil revenues of about 6 billion pounds, and the economy would suffer as business waited to see how things would turn out before making investments. Scotland now manages health, education and transport. Even without independence Scotland now stands to gain more powers and control, and control a higher percentage than the 60% of Scotland's budget that the Scottish government manages today. Scotland represents about 148 billion pounds or 9.2% of the UK GDP....

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Jonathan Cheng of the WSJ reports from Seoul that the sense of alarm at the escalating rhetoric between the U.S. president and North Korea seen elsewhere is missing in the South Korean capital. A city of 10 million only 45 minutes from the border with North Korea is within artillery range from the North. There is a sense that North Korea would not attack the South because of long ties of culture and ethnicity. The new government of Mr. Moon was elected with its plan to improve relations with North Korea that had deteriorated under the previous government of Mrs. Park. An effort is made by Rex Tillerson, the U.S. Secretary of State to tamp down tensions from the rhetoric. South Korean officials say recent experience shows the Trump administration is capable of making sound policy even with Mr. Trump's tendency to tweet strong comments. The South Korean government urged the media to present the situation without aggravating tensions. In fact the popular online news portal Naver in South Korea did not show the escalation in its top ten trending topics. An earlier report in the NYT shows the use of underground bomb shelters in drills is ignored by many South Koreans. ...

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Marie Le Pen's National Front Party gets only 8 seats in France's parliament following the second round of voting. It will not have enough seats to form its own parliamentary group. After winning about one third of the votes in the presidential election Marie Le Pen will not have enough seats in parliament to act as opposition leader. Marie Le Pen will represent the industrial constituency of Henin-Beaumont in northern France. Many voters from the parties on the right and the left decided not to vote in the parliamentary elections giving smaller representation to all parties, with a sharp drop for the Socialist and Republican parties. The big gainer in this situation was the En Marche party of  president Macron. For the first time younger members were elected with average age around 40-ish and 38% of parliamentary seats going to women, which is seen as a positive factor in the results. By giving Macron a solid majority in parliament the French people chose to give the government the ability to implement its program for reviving the economy, and reducing the gap between rural areas, industrial towns and large metropolitan areas such as Paris, Lyon, Bordeaux.   ...

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A passenger hears aloud noise near the overhead bin, then sees ahole not far from his head in the fuselage of the plane. This is Southwest flight 2294, June 13, 2009, on a 30 minute 737 Boeing airplane flight from Nashville to Baltimore. outhwest inspected all of its 181 737 planes and found no problems. The National Transportation Safey Board, the FAA, and Boeing are investigating what caused it to happen. In March, the FAA ordered Southwest to pay a$7.5 million fine for aseries of safety violations in which its jets were flying with undetected fatigue cracks. The investigation also uncovered efforts by managers to cover up reports of maintenance problems at Southwest. Two inspectors filed whistleblower complaints aginst the FAA claiming that they were threatened by the superiors after warning that Southwest was flying planes too long between inspections.

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The Netherlands, home of the Maastricht summit, is seeing public opinion shifting to negative opinions about the euro and supporting countries such as Greece. Some experts say the idea was right but the method was wrong. Some polls show a majortiy supporting going back to the old currency, the gilder. An EU survey in 2009 showed 80% of Dutch people supporting the euro. Frits Bolkestein, former EU commissioner for internal markets, points out that Chancellor Kohl insisted on Italy which had not met its debt criteria becoming a founding member of the monetary union, something that made it possible for over-spending Greece to join the euro only 2 years after the 11 founding members. Bolkestein led the party that now runs the Dutch government. His view is that political romanticism overwhelmed sound economic thinking and realities in the formation of the eurozone.

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The Wall Street Journal has examined 77 businesses in which Bain Capital invested during 1984-1999, the period in which Mitt Romney headed the firm. Its findings show that 22% of the firms filed for bankruptcy by the eighth year after Bain first made its investment, some with large job losses. Additional 8% of the firms were in such bad shape that Bain lost all of its invested capital. Only a small number of firms produced most of the returns- 70% of the gains come from 10 firms. Of these 10 firms, four were later found in bankruptcy court. Another aspect mostly overlooked is that where large job gains were made they were mostly in lower wage retail jobs at Domino's Pizza, Staples and Sport's Authority, and did not involve the kind of innovation that produces sustained advantages.

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With the UK budget deficit approaching 12%, Mervyn King, Governor of the Bank of England, said at a postelection conference that he intended to intervene as little as possible in the election, yet it was important that he comment on the measures for reducing the fiscal deficit as it would color monetary policy for years to come. During the election King warned the the UK's top credit rating, "was ours to lose," and his comments were seized by Cameron to question Brown's handling of the economy. King said that Greece was a clear warning of what could happen if budget deficits were not brought under control. He also described the agreement to trim the budget deficit reached between the Liberals and the Conservatives as a very strong and powerful agreement. Conservatives say they plan $6 billion pounds in budget cuts this fiscal year.

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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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Apple maintains its grip on the tablet market with its iPad at $499. Experts at Wharton and the Stern School of Business say Apple has found the strategically right price to maintain a dominant share of a rapidly growing market. So rapidly growing that some estimates show tablet computers surpassing PC sales by 2013. Apple CEO Tim Cook, has the logistical expertise that helped him work out the right price. The Kindle at $199 is hardly profitable by some estimates. Samsung has a smaller tablet at $499. In 2011 Apple saw its tablet market share decline from 87% to 68%, according to IDC Research, but still able to get a dominant share of sales. Apple uses the same approach to pricing for the iPhone. The profits generated on large sales and higher margins helps Apple invest in new products.

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Financial Planner Carl Richards, warns investors about relying too much on market predictions. He cites the law of small samples as one way things go wrong. Another is investment managers with good track records in one decade doing badly in the next decade- David Miller in the 70's and Bill Miller of the Legg Mason Value Fund are others. To show how ridiculous market predictions based on computer models can get he gives the example of a researcher who found that over a 13 year period butter production in Bangladesh 'explained' 75% of the fluctuations in the annual returns of the Standard & Poor's 500 stock index. Adding in U.S. cheese production and the total population of sheep in Bangladesh and the U.S., this researcher was able to forecast past U.S. stock returns with 99% accuracy.

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The Shanghai Composite Index went up by 65% since July 1, 2014. On Jan 19, the Shanghai Index went down by 7.7% as Securities Regulatory Commission placed a 3 month bad on margin financing at brokerage firms Citic Securities, Haitong Securities and Guotai Junan Securities. All large state owned brokerage firms which were found to have violated securities rules on margin financing. Analysts say that the action by the regulator was to control risk on the stock market and give the the central bank, the People's Bank of China more room for monetary easing without negative side effects in the stock market, which had an extraordinary jump of 38% in the last 3 months. Margin financing has more than doubled in the last 6 months and accounted for 18% of average daily trading volume, according to an analyst at Credit Suisse.

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Ram Ramadorai of Tata Consultancy Services talks about his cross cultural experiences setting up the American offices of TCS in New York, his interest in western classical music, his love of reading, and taking long walks by the ocean in Mumbai with his wife who is a vocalist. His years at UCLA getting a Masters degree in Computer Science, making his first trip to Los Angeles from India in 1969. How he joined NCR as a programmer testing codes for computers. Being a fan of the UCLA Bruins. His return to India in 1972 and joining TCS as a programmer in Mumbai. How he found amentor in TCS founder Faqir Chand Kolhi. He has helped the company grow to where it now has 130,000 employees. He travels 6 months of the year and he says his wife often travels with him.

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This NYT editorial points to the dangers lurking behid the jobless numbers. The House bill that passed recently for $154 billion to extend unemployment benefits- set to expire in Feb 2010- to June 2010, and increases aid to local and state governments. It also includes infrastructure spending and help for small business. But it does not do enough for young people whose joblesness is at all time high. For instance only 4 in 100 low income black students found work in Fall 2009 This according to a study by the Northeastern University Center for Labor Market Studies. According to the analysis done by this Center the employment rates among teenagers has risen four times faster than the rate among adults since 2000, and todayme over 65 are more likely to find jobs than youth of 16-19 years.