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The UK corporate tax rate is set to go down to 17% in 2020. To discourage the one fifth of British companies planning to move headquarters overseas the Theresa May government plans to accelerate the lowering of the corporate tax rate. The Trump administration is considering reducing the corporate tax rate down to 15%. Ireland has a tax rate of 12.5%. The move by the Trump administration would reduce the incentive for inversion by corporations trying to reduce taxes by moving overseas.

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New legislation in the Italian parliament introduced by prime minister Renzi would give the party winning 40% of the popular vote extra seats to reach a majority of 340 in the 630 seat Chamber of Deputies, lower house of the Italian parliament. If no group gets the 40%, a run off is to be held between the 2 largest parties to determine who gets the absolute majority. The new law also turns the upper house, the Senate into an assembly of local representatives, and makes the lower house, the Chamber of Deputies the one that runs the country. The new law would go into effect in July 2016.

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Actions BP has taken to improve safety one year after the Gulf Oil Spill.

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The European Recovery Fund package finally gets settled after long negotiations over the weekend. It is settled by lowering the nonrepayable direct aid to countries hardest hit by the pandemic of 500 billion euros the initial target to 390 billion euros. The change was made to meet Dutch demands that are based on right wing parties in Netherlands critical of the deal and upcoming elections in the country. Mr. Rutte of the Netherlands held on to the end. He has been in power for about ten years by following the Dutch mood carefully. This time both Merkel and Macron, both France and Germany supported the 500 billion euro plan for nonrepayable aid to countries particularly in southern Europe that took the brunt of the pandemic- Spain, Italy and Greece. The EU's executive branch will now for first time issue debt on a large scale to fund this nonrepayable aid and additional loans of 360 billion euros. There is also a multiyear EU budget of 1 trillion euros for 2021 to 2027 designed to meet the goals of European recovery. The way the EU is setup a lone holdout or a small country like the Netherlands with the help of two other small countries Denmark and Sweden could hold up the agreement against the interests of the larger nations Germany, France, Italy, Spain, Portugal. Poland and Hungary also strongly supported the 500 billion euro target for nonrepayable aid. The combined population of these countries is about 314 million compared to just 17 million for Netherlands, 10 million for Sweden, and 6 million for Denmark. In addition Merkel has recovered her footing in Germany after the pandemic and most right wing parties in Europe have lost ground during the pandemic. That Mr. Rutte could push this far in the face of the need to show solidarity at a time like this shows weakness in the fabric and structure of the EU, and its rules and organizing charter. Normally a blocking minority would need 4 countries and 35% of the population to block EU proposals supported by the majority. This could be used if the blocking is seen as not in the common interest. In recent years most decision are made with unanimity, but this is one in which solidarity needed to be shown without the long negotiations taking some of the spirit and vigour behind the earlier plan. ...

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The effects on Allianz and Pimco of the sudden departure of Bill Gross.

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This editorial opinion in Economist magazine says the dangers of cutural illiberalism are very real as the candidacy of Donald Trump and the National Front's popularity in France's 2016 first round of regional elections have shown. This is the result of increasing economic anxieties of the white working class in America, and the working class in Europe. Only by increasing economic growth, and improving the economic prospects for broad sections of society can this be addressed, says Economist magazine. It says also needed is a robust foreign policy to address the terrorist threats as the Obama foreign policy lacks credibility with the public, giving rise to anti-immigrant sentiment in the U.S. and Europe.

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US Border wall is at $39 billion in the House version vs. $62 billion investment in the Senate version of US 3B Tax Cuts Bill 2025. The $6.5 billion in savings from the earlier figure of $46.5 billion in the House bill are justified says Rand Paul, head of the Homeland Security Committee in Congress, as most of the goals for border security can be achieved with the lower amount. The WSJ Editorial Board agrees with Rand Paul.

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The UK's effort to protect its pharmaceutical exports of $8 billion and auto exports of $7 billion in trade talks with the US. Reeves will meet Scott Bessent in Washington DC.

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Inflation in India is at 9.1% in May 2011, compared to the prior year. GDP growth for the first quarter of 2011 slowed to 7.8%, from an annual rate of 8.3% in the fourth quarter of 2010. Other figures show the same trend. Local investment growth for the second half of the fiscal year ending March 31, 2011 was at 4.1%, a decline from 14.7% at the beginning of the year. Foreign investment in the first quarter 2011 declined 32% from the prior year, down to $3.4 billon. Car sales have also declined to the lowest rate in two years.

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WSJ reporter Bob Davis writes this report on the end of the China economic miracle in 2014 as he completes a 4 year assignment covering China. He says China's economy is slowing rapidly and he is pessimistic abou the future. Construction cranes visible across China's skyline says Davis, can no longer be interpreted as growth inducing. With rows upon rows of empty flats in third and fourth tier cities which account for the bulk of the increase in housing construction, the consequences of a debt fueled construction boom are easy to see. Davis cites the IMF on the dangers of credit fueled growth in China- only 4 countries have experienced as rapid an increase in credit to GDP ratio in 5 years. Each of the 4 countries Brazil, Ireland, Spain and Sweden experienced a sharp decline in GDP growth and banking crises following the credit bubble. Estimates of debt to GDP are as high as 250% for China. Krugman, Roubini and other economists have warned about the credit bubble, saying China is no exception to the rule for the risks posed by such a bubble. ...

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China's exports to all countries surged in November by 21% from a year earlier. Chinese made consumer goods and electronic goods were the main products with increased exports. According to WSJ calculations November exports were up 10% to the U.S. and 46% to Asian nations in ASEAN trade group of countries. Some of the exports to ASEAN including Vietnam and Malaysia find their way to the U.S. New tariffs by U.S. on China lead to some products diverted to Asian destinations and reexported to the U.S. China's imports of goods from the U.S. were up 33% from a year earlier but imports of farm, energy and other products and services were below what was expected under trade deals. Experts say Chinese imports of goods covered in the agreement were 55% of the year to date targets. The Biden administration will leave the tariffs on $370 billion in Chinese goods in place. China is not expected to make up the gap by the end of 2020. Experts also say the exports of Chinese goods has accelerated during the pandemic in 2020 and with the size of the second wave in the U.S. In 2021 U.S. imports from China should slow as the U.S. manufacturing recovers following the vaccination effort.  Also expect increased focus on the trade gap as U.S. trade policy continues to focus on closing the trade gap and continuing policy of the Trump administration. ...

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The famous Chilean author of books including: A Long Petal of the Sea, talks to the BBC about her life and travels, about her home country Chile. She left Chile in 1975, spent 13 years in Venezuela and three decades in California. Here she talks about Chile as Pablo Neruda describes it as that long petal on the sea, a country with an insular mentality surrounded by high Andes range, Patagonia, and the Atacama desert. She is not entirely critical of Chile's development under the administrations that came after the dictatorship years. Chile has some upward mobility, the economic conditions have improved compared to the rest of Latin America even though a lot remains to be done. The events in Venezuela show the limits of regimes that have attempted change. Even with administrations from both ends of the spectrum Argentina has turned to the IMF in economic crisis the last in 2018. Brazil has seen a commodities boom followed by a severe bust, and the lack of funding for basic services including sanitation and health. This gives a sobering view of the economic situation in Latin America. Allende says Chile has modernized and created prosperity though at some social cost.  Isabel Allende is still nostalgic about her home country and still calls it home as she reaches 75 years, with a world wide audience for her books in 42 languages, 70 million copies sold. ...

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Rick Perry's IPO for startup Fermi plans to build natural gas processing plants in Amarillo, Texas, in wide open country, and wait for approval of large nuclear plants planned for the next couple of years. It is attempting to build on the surge in data power for AI. Yet these investments in data power take away from other needs for power in the manufacturing sector and for homes and infrastructure. How the Nation allocates scarce resources is something on which there will be much debate.

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Vigorous and eloquent testimony before Congress by Treasury Secretary Scott Bessent, answering questions from Republicans and Democrats. Bessent had just landed from London at 3 am in the morning and after 3 hours of sleep took the time to answer over 5 hours of questioning by members of the House of Representatives. In question after question he explained how the certainty offered by the tax cuts bill would help small business and job creation in the US. The permanence of the 100% expensing of buildings and equipment would help farmers and small business , regulations would be cut, and manufacturing would take off. Manufacturing employs 9% of the workers in the US and their wages will rise faster than for service workers. The combined effects of the improvements for small business, farmers and for manufacturing workers will help the American middle class, America's working class, and increase the growth of the economy. Bessent points out that in the original bill of which the new tax bill is an extension the top 10% paid 7% more in taxes in 2017. He also points out that workers were hurt the most by the slower rise in wages and the rise in cost of living of 21% in 2021-2022, which he says was in essential goods with the actual impact of about 30%. With higher jobs creation by small business and more investment in the economy more able bodied men can join the workforce and gain healthcare benefits under new rules. He pointed to low inflation at 2.1% and to higher job creation, and to higher growth in the economy of 2.6%, that with other savings could lower the deficit. ...

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Eni's investment buying Dominion Resources assets in the Gulf of Mexico for $4.8 billion, and Alaskan acitivity. This balances its investments in areas with more uncertainty such Iran, Nigeria and Kazakhstan.

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Mexico continues to be a problem state for the US with drug trafficking a part of the culture, not fully recognizing the damage it does to society in its neighbors, and not accepting responsibility for good governance that respects the lives of people in the North American region. More lives are lost to this drug trafficking across the US borders from Mexico, more lives lost in the US than in all the wars combined since the First World War in 1914. No recognition of this fact and the common responsibility of leaders to the people of North America.

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Trend to remote work is cooling off. 80% of employers now say that over 3 years they see full time office work 5 days a week. The new trend is just beginning.

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US to take stakes in American companies to help them achieve goals of Make in America with Intel stake the first action. The $8.9 billion Biden intended for Intel to make chips in the US will be handed over to Intel but for a stake in the company of 10%. For years Taiwan, South Korea, Japan and China have subsidized their companies in different and some hidden ways. Many times these companies have sustained losses as they built for the long term in volatile market situations. Nvidia now a trillion dollar company was at one time a company struggling to survive saved only by a Japanese corporate investor as shown in a recent WSJ report. The US has taken no such action losing its dominant position in many advanced industries including chips till the Biden and DJT administrations. Yet the media keeps voicing the old ideas of market capitalism as if there is such a thing when state capitalism operates with market capitalism in the Chinese model, and a form of semi state capitalism operates with market capitalism in Taiwan, South Korea and Japan with hidden subsidies by the state to build dominant positions in certain industrial sectors. Even US companies are willing to take such subsidies as when Elon Musk builds car plants in China with state assistance and support, which never comes up in the media even when the Chinese EV makers are learning from the Americans and Tesla is losing market share in China. Theory is for the textbooks and economists,  in business all forms of capitalism work including a mix of state and market, and America has to invent its way back to lead the way in advanced industries.  ...

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The US Fed under Jerome Powell is going to raise interest rates one more time in 2023 following rate increases in 2022- by a quarter percentage point this week. This is not only a fight against inflation but a way to reverse a situation that has affected the wealth and standard of living of ordinary Americans by reducing interest on savings to a paltry less than one percent. Only stock market investors benefitted under the previous regime widening income and wealth disparities in America. Just as today's story in the WSJ showing Bath and Body Works returning to basics such as producing soap in America, something that would not even have been given a second of thought in the 1900's, the Fed is doing its job under Jay Powell of going back to the basics. Where interest on savings provided retirees a comfortable stress free retirement and the inducement to save help build a savings pool in America to invest in what really improves the standard of living for all Americans across this country, from rural to urban, from all parts of the land. ...

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Companies now realize that stretched supply chains is a risky business. Shipping costs have tripled and in some cases are ten times what they were before the pandemic. Logistics, containers, shipping, manufacturing in remote locations, is making this more complex and unmanageable. Cuts in coal consumption in China and economic recovery is pushing up demand for oil leading to $80 a barrel in oil prices. Outages in factories in south east Asian countries and China are leading to shortages in semiconductors and other products in the supply chain. This is affecting automobile production and other production affected by lack of such inputs.

This is prompting a serious rethink of existing supply chains.