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Peers says Amazon's strategy is flawed and the new Kindle Fire tablet will cut into Amazon's already low margins. He points to the analysis of components going into tablets by IHS iSuppli, which found materials costs alone come up to over $262. For companies making hardware such as Samsung and Sony the tablets have to be priced higher. By pricing the Kindle Fire at $199, Amazon CEO Bezos, may be counting on the tablet boosting Amazon's retail business, the digital music, and the streaming of videos, and bookstores. Surveys show the tablet being used mainly for web surfing or email, and less for watching video or reading books. Amazon has the Kindle e-reader which is a better option for readers because of the price. And video sources include other suppliers including YouTube and Netflix. Apple still has the edge in resources- $76 billion in cash and investments in mid 2011- to support lower prices on newer versions of the iPad with more capabilities and design features. Apple with its supply chain experience may be able to obtain better costs from component suppliers than Amazon for future price reductions. Sony and Samsung also bring the manufacturing knowhow and expertise to do this, with Sony's added capabilities in designing devices. The H-P tablet experience shows how quickly a tablet can become obsolete in this market....

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In an effort to calm unsettled global financial markets ECB president Mario Draghi said in a speech on July 26, 2012: "Within our mandate, the ECB is willing to do whatever it takes to preserve the euro and, believe me, it will be enough." Yields on Spain's government bonds reached 7.5% as investors shunned Spanish bonds fearing the need for a government bailout.

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A movie marketing and distribution strategy developed by Focus Features -using the idea of a platform release-for a specialty film, based on a spy novel by Le Carre called "Tinker, Tailor, Soldier, Spy." The idea behind it was to keep costs for marketing and advertising down by targeting groups that would like to see the film. This was done by opening on just 4 screens and obtaining information about the demographics and the groups attending. The next step was to expand this to just 55 screens because most of the theatres were booked with large budget movies like "The Iron Lady" and "The Descendents." The target was set at 800 theatres and Focus Features CEO, James Schamus, decided to wait a few weeks before making the move up to 800 screens.

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The Rousseff administration announces plans to cut $30 billion in 2011 spending. Inflation is up by about 6% in January. Most of the cuts says Finance Minister Mantega, will be achieved by cutting earmarks added to the budget, and by slowing hiring in the public sector. But analysts say this will not be sufficient to control inflationary pressures, as 2011 spending will still be above 2010. Higher inflation puts pressure on the central bank to raise interest rates at an high of 11.25%, which in turn brings in speculative money and creates a highly overvalued currency.

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Robert Ortner, chief economist and under secretary of commerce during the Reagan adminsitration, is critical of the Deficit Commission's recommendations to cut back Social Security, Medicare and other social welfare programs that would hurt the poor, the sick and the elderly. Other readers comment ranging from critical from someone living on social security, to favorable comments for the boldness of Bowles and Simpson.

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Stress test performed by the consulting firms of Oliver Wyman and Roland Berger used data as of Dec 31, 2011, and a scenario of a 6.5% decline in GDP and a 26.4% fall in housing prices by 2014. An international panel of experts from the Bank of Spain, the Spanish government, the ECB, the IMF, the European Banking Authority and the EC was formed to oversee the consultancies report. A separate more detailed audit of 14 individual banks will be made by Deloitte Touche, Pricewaterhouse Coopers, Ernst & Young, and KPMG International with results by the end of July. The four banks that need capital injections are Bankia, CatalunyaCaixa, NovaCaixaGalicia and Banco de Valencia. The consultancies estimate was for 51-62 billion euros needed according to Oliver Wyman, and 51.8 billion euros needed according to Roland Berger, for recapitalization of Spanish banks by 2014. The issue now is about any remaining questions about additional losses, and whether rescue funds from the EU fund the EFSF should go directly to the banks as favored by the IMF and the government of Spain. This is because of the stress on yields of Spain's 10 year bonds with rescue money going to the Spanish government at the insistence of German chancellor Merkel....

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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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Germany's largest utility plans to spin off its conventional power generation, exploration and production units to focus on renewable energy. The fossil fuel units are restricted by German regulation as Germany moves to increase use of alternative solar and wind energy. The German government sees this as a positive step for energy transformation. German government support for green energy, including large subsidies, is resulting in a power surplus and lower prices for wholesale power. This makes traditional power plants unprofitable. In addition the ruble is negatively affecting Russian operations, Brazilian operations are unprofitable- these assets will be part of the fossil fuels unit, a kind of "bad bank" of assets, say analysts. E.ON shares went up by 4.3% on the DAX exchange, Dec. 1, 2014, showing positive investor perceptions of the move.

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In testimony before the U.S. Congress Fed chairwoman Yellen says the softer spending and expected lower gowth of 2% for the 1st quarter of 2014 is due to adverse weather. The Fed sees no reason to change course on its reduced bond buying. If this were to change she is open to reconsidering the course of action.

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This NYT editorial says the Pfizer bid to acquire Astra Zeneca is an inversion, a tax maneouvre using openings in U.S. and British tax laws that allows an American company to incorporate in London by acquiring a British company. In effect Pfizer beomes a subsidiary of the British company. This reduces taxes owed even though business takes place at Pfizer as before. NYT says 25 companies have adopted inversions since 2008. The top corporate tax rate in Britain at 20% is lower thant the top rate of 35% in the U.S. Additional tax maoeuvres could make it easier for income shifting to tax havens, and make it possible to free up cash held in foreign countries without the need to first repatriate it to the U.S. The problem is that such maneouvres are taking place at a time of large U.S. deficits, and deep cuts in public services and government investment in R&D, infrastructure, education, that would lead to future economic growth.