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As Citigroup shares dropped to $3.77 a share last week abruptly losing 50% of their value in a week, the Federal Reserve, Treasury and the FDIC were in negotiations over the weekend with Citigroup. Mr Paulson had several discussions with Robert Rubin, influential executive and director of Citicorp. And Citicorp CEO Vikram Pandit spoke with regulators and lawmakers. The deal that was worked out is as follows. Under the deal about $306 billion of largely residential and commercial real estate loans and certain other assets, which will remain on the balance sheet, will be backed up by Citigroup and the government. Any losses will be shared in the following manner. The first $29 billion in losses on that portfolio will be Citigroup's responsibility. Any losses over the $29 billion will be shared 10% by Citigroup and 90% by the government. Of the government's losses Treasury will use $5 billion from the bailout fund, FDIC bear the next $10 billion in losses, and the Federal Reserve will guarantee any additional losses above this $15 billion. What will the government get in exchange? Citigroup will issue $7 billion of preferred stock to government regulators. In addition the government is buying $20 billion in preferred stock in Citigroup with all preferred shares paying a 8% dividend. The other aspects of the deal are that all dividend payments by Citigroup will be halted for 3 years, certain executive compensation restrictions, and Citigroup will put in place the FDIC's loan modification plan which is similiar to the plan it recently announced....

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This article in the Guardian points out that Britain did not just wake up one morning and find itself in a strange predicament of leaving the European Union. This was happening over two decades as leaders appealed to immigration fears on the right to win voters and the leaders of the Labor party failed to protect their traditional working class base. Voter turnout declined and it points out that Cameron of the Conservative party won the election in 2015 with only 24 percent of the eligible voters, as the hold of the Conservatives and Labor parties declined with each successive election on their voter base as they desperately tried to shore up support by appealing to voters fears even as they literally abandoned their traditional voter base and appeared elitist to less educated, poor workers. The economic crisis and austerity policies created a new voter group of disaffected voters who turned to the UK Independence Party (UKIP) and the Scottish National Party (SNP). The referendum offered by Cameron in 2015 on the EU against the advice of coalition partner Vince Cable and the Liberal Party, without an understanding of the situation in the country after years of austerity policies was only one of a long series of developments that unfolded over two decades unraveling years of work building a better Britain following 1945. ...

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Mark Landler of the NYT says about the return of Boris Johnson as PM of Britain after 45 days of Truss- it is at once both incredible and inevitable. It would give a sense of incredulity and become a rallying point for a demoralized Conservative party say some Conservatives, much as he has done throughout his political career.   Boris Johnson already has the support of 52 MP's and needs 100 in parliament to be nominated for PM again. If of 367 members of parliament one of the three candidates Mordaunt, Sunak or Johnson withdraws the election would then be decided by 160,000 members of the Conservative party with whom Boris Johnson is very popular. Others believe that it was Johnson who won the election by a landslide and it is Johnson who got the mandate. 

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The pandemic, the economic management, and the surge in the US dollar is worsening the debt situation of countries in Africa. This DW.com report looks at Ghana and Zambia. The Ghana currency Cedi has lost 50% of its value in 2022. With every increase in the value of the US dollar in countries in Africa imports become costlier and business activity suffers. The result as shown in this report is the closing of many shops and parts of the market in Ghana's capital city Accra. Ghana and Zambia have raced to get IMF support as their debt condition deteriorates. Ghana began negotiations with the IMF at the end of September for a $3 billion bailout. The IMF approved $1.3 billion of the $8.4 billion that Zambia needs to restore its economy.

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The European Union is drafting a ban on oil imports from Russia, says this report in the NYT. The European Union now pays Russia about $1 billion every day for oil imports from Russia. Under chancellor Merkel Germany actually increased its dependence on Russian natural gas from 36% during Russian annexation of the Crimea to 55% today. In this way creating some of the conditions that emboldened Russia into its invasion of Ukraine, creating over 4 million refugees and immense destruction. Oil revenues of this magnitude of about $1 billion a day from the European Union help finance and prolong the invasion with enormous cost of human life. The longer the war lasts it affects a grain producing region in Ukraine that would lead to world food scarcity and famine.

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Mr Yousaf Humza, the newly elected head of the SNP party is from the progressive wing of the party, continuing the work of former first minister Nicola Sturgeon.He was elected by 50 votes to 48 for Forbes who represents the socially conservative pro-business part of the SNP. The attention is now focused on how he can help people in Scotland with the cost of living crisis and public services, as Scottish independence has dipped in popularity. Labour, Liberals and Conservatives had two thirds of the Socttish parliament till 2011. In the last election Labour had just one MP. Labour can now structure its appeal to Scottish voters around the cost of living crisis as parts of the SNP feel being in the opposition for a change is in the long term interests of the party. 

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The Seagreen wind farm in the windy North Sea waters off Scotland begins production this week. It is a 3 billion pound project of SSE Renewables and TotalEnergies of France located 17 miles off the Angus Coast of eastern Scotland. Production is 1.1 gigawatts of electricity in the first phase enough to power 1 million homes. It is the world's deepest fixed bottom windfarm- the deepest foundation to be installed in December will be 59 metres below sea level. 

Its location near the old oil and gas capital of Aberdeen, Scotland, shows how the renewable energies acceleration is giving a new life to the region. Seagreen uses new renewables technology because of the rocky difficult conditions in the North Sea. SSE Renewables is a London based company that has $12.5 billion in investments in renewable energy.

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Chile's new constitution that replaces one written in 1980 under military rule, is likely to be rejected in a vote on September 4. It puts every conceivable right into the constitution beyond the basic rights of fairness in the economic, in incomes, in health and education services access, and pensions the original reasons for the two years of protests. About 80% of the Chileans voted in members of the constitution drafting boy the Convention. About 47% say reject and 38 say accept, 17% undecided at this time in a poll cited by DW.com. Controversial are judicial setup for indigenous groups (13% of Chileans), abortion in a predominantly Catholic country, and women holding 50% of positions in all public positions as mandatory, and the environment in a predominantly copper export based economy.

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Ajaz Patel comes from a humble background in Mumbai before moving to New Zealand as a child. Here he recalls the excitement of getting his first cricket spikes. His father worked at his brother's automotive shop in the new country and his mother was a schoolteacher.

Ajaz did the incredible feat of getting all 10 wickets with spin bowling at the Wankhede stadium in Mumbai in his first innings bowling for New Zealand. Like Jim Laker 10 for 53 against Australia in 1956, and Anil Kumble with 10 wickets against Pakistan, Ajaz's effort is a result of hard work, patience, and knowhow, says this report in The Times. And in Azaz's situation he had less experience as his first Test match was played at age 30 years. 

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Leaders of Africa's development banks and the president of Kenya make this plea for adjustments on debt repayments and a moratorium on debt servicing before the annual conference of global finance at Marrakech, Morocco. The problems are: a 35% increase in debt repayments to $62 billion for Africa with increase in interest rates. The total debt of Africa now at $1.8 trillion. The neglect of education and health when countries such as Zambia and Ghana default on debt. The complexity of debt renegotiation with 40% of debt in private hands and 31% with China which is not part of Paris Club. It took 3 years for Zambia to negotiate its way out. And 23 nations in Africa are near default out of the 52 in the world facing this situation.

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After the first round of elections Mauricio Macri threw his support to Milei. Macri was president from 2015 to 2019 when pro-market reforms led to unrestrained borrowing from overseas investors. It failed leading to high inflation and turning to the IMF for loan of $57 billion. Any time there is a drought or agriculture in Pampas fails reserves dry up as in 2016 and again recently. Macri was ousted in the next election and replaced by Peronist Fernandez. The problems persist with a return to Macri and Milei who was just elected president turning to dollarization when the country lacks the $9 billion needed to convert pesos to US dollars. Argentina has net reserves of $20 billion, borrowing from China of $17 billion and net reserves of  negative $10 billion. 

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The important thing is doing the right thing- building America, building jobs and wages for average Americans. All Americans. Dionne writes in The Washington Post that Biden investments  in renewable energy, infrastructure, and manufacturing, are promoting growth in all parts of the country, many of them rural, Republican leaning, that have experienced decades of neglect. And others once part of the 50's and 60's Truman Kennedy period Democrat leaning- parts of the northeast, the midwest that had suffered badly from outsourcing and sending of jobs to China. A rising tide lifts all boats, in the words of John Kennedy, and Biden tells a Philadelphia rally of union workers that looking back 10 years from now it would be seen that this is when it all started.

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"My economic plan is working and we are just getting started," says president Biden about the US economy as it registers growth of 2.4% in the second quarter. Inflation is cut to 3% from about 9% last year. Even US central bank Fed increases in rates by 5 percentage points since March 22 at consecutive bank meetings has not slowed down the US economy enough. Biden says there is nothing accidental about this. Biden pushed investment in the US. Business investment increased by 56% in the last quarter accounting for a third of the economic growth, much of it in infrastructure, in bridges and roads, in manufacturing plants. Biden administration has allocated $299 billion in infrastructure funding for projects, another $503 billion is done by private investment. And more is coming down the pipeline.

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Levelling up is proving to be a false promise of the Conservatives. Where the money is coming from and how much and where it is going answers the question in America for Biden. Fair taxation is key, a strong economy is key for Biden. Fair taxation supports trillions in public investment that in turn generate private investment. In the second quarter of 2023 business investment was up 56% in Biden America, about $1 trillion with more in the pipeline.  The Conservatives fail on both and have no plan for step by step action that fits needs and opportunities in the economy as Biden has. Getting equal share of the fruits of labour to all Britons is never going to happen under trickle down economics of the Trump or Tory kind. That much is clear as daylight.

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Without hydropower and the clean energy from dams estimates are for 10% more use of burning fossil fuels. China and Brazil have added 12.5 gigawatts of power from hydropower, 50% of this in the world for 2017. Africa added 1.9 gigawatts in this period and 6 countries depend on hydro for 90% of electricity production.  The entry of private capital and the financing from the government in the case of China and India is replacing the role of the World Bank. 

The effect of lack of electricity in India and Africa is underestimated in how it affects people's lives in these regions with lack of water supplies, and lack of electricity severely hurting people in large numbers who are marginalized or forgotten because they never had access to lighting at night before.

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Britain faces the most acute housing crisis in living history says Angela Rayner, Secretary of Housing. The shortage of homes- 4 million. Private rents have jumped, eroding living standards and creating homelessness. Rayner has introduced a plan to build 370,000 homes a year. This is the first time in decades that this problem is being tackled on this scale, after Tories neglected to do much to address this problem. A similar situation of rising rents exists in the US putting 25% of apartment renters into a situation where over 50% of the household income goes to apartment rental. US president Biden has called for price increases for home rental to be limited to 5%, and Harris has plans for the government to help families where the rental exceeds 30% of household income.

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If the wording in the Pew Research Survey were to include that only the government can tackle huge problems in climate change, infrastructure, and manufacturing, the over 50% of Americans that support government taking on these responsibilities might just as well be closer to 60-70 percent. The tide is turning as the whole culture since Reagan and the key adopters of Reagan's theory  successive Democratic administrations of Clinton and Obama is being reversed- Democrats and Independents supporting the change to get government to tackle these problems is up 15 percentage points. Another shift is the young people who are filled with frustration by the lack of government taking on a bigger role to solve problems such as climate change, manufacturing jobs in US, infrastructure rebuilding that only the government can do. 

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Action taken by president Biden to protect pensions of 10.1 million workers. Biden talks to workers in Philly, about "the most significant investment of pension security for union workers and retirees in over 50 years." Biden signed the Butch Lewis Act protecting pensions of workers on March 20, 2021. A worker's spouse who fought this battle for pension rights over 10 years says Biden restored the dignity of workers, that he walked the walk and talked the talk.

"I would always the remember the speech of John F. Kennedy, when I was a young girl" on the dignity of workers. She was awarded the Citizen medal of Freedom by president Joe Biden for her efforts to protect worker pensions endangered by reckless actions on Wall Street.

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A 40 year old sailor from Normandy accomplishes an utterly mind boggling feat- sailing alone from the western coast of France across the Atlantic to the Cape of Good Hope in 19 days, to the Atlantic at Cape Leeuvin in 29 days, then on to Cape Horn at the tip of Argentina and Chile in 43 days, from there to the Equator in 56 days, and the last leg back up the Brittany coast of France., around the world in 64 days. He wins the 10th edition of Vendee Globe, a non stop non assisted race around the world, and does this for a second time. A heroic tribute to ancestors Cartier and Champlain who sailed to Quebec and to Africa and the east from the coast of Brittany from the 1530's.

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How much of the rise in price of oil is from speculators? About 20%. How much money is chasing oil? About $85 billion or thereabouts. What is causing the volatility, price shock atmosphere? Losses in production in Venezuela after a strike, Nigerian production in a backward region (issues of redistribution of wealth and periodic violence), and Iraq (Sunni insurgency). And now the Iran standoff with the USA over nuclear proliferation. According to Cambridge Energy Research Associates, an energy consulting firm owned by IHS, Iraq is 900,000 barrels a day below its prewar output; Nigeria has shut 530,000 barrels a day; Venezuela is still 400,000 barrels below its prestrike production; and the Gulf of Mexico remains down by 330,000 barrels a day. In all, this amounts to more than two million barrels of disrupted oil, Cambridge Energy estimates. The impasse with Iran on nuclear proliferation is the latest factor in oil prices. One analyst says the hedge funds have come into this commodities market in a big way and are willing to take risks. Energy funds make up 5 percent of the global hedge fund business, with about $60 billion in assets, according to Peter C. Fusaro, principal at the Energy Hedge Fund Center, an online research community. The gains on the oil market have attracted a fresh class of investors: pension funds and mutual funds seeking to diversify their holdings. Their investments have been mostly channeled through a handful of commodity indexes, which have ballooned to $85 billion in a few years, according to Goldman Sachs. Goldman's index holds more than $55 billion, three times the amount in 2002....

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The current economic expansion in the U.S. in April 2014 is at 58 months from the beginning of recovery in 2009. In this exceptional account Josh Zombrun of WSJ compares the current expansion to previous expansions since 1950, with the views of experts such as Stan Hall of the NBER committee, which studies turning points. This expansion is forecast to go for 90 months into 2016 by the U.S. Federal Reserve, and 102 months into 2017 by the CBO. Sooner or later, says Stan Hall, some adverse unpredictable event takes place that ends the expansion. So far the expansion has been slow and protracted, as predicted by economists Reinhart and Rogoff from previous financial crises in the last century, giving it room to grow as corporate earnings continue to improve. Fed chairwoman's sense of slack in the economy also provides room for employment and incomes to grow in the later stages of the expansion. This is good news for the emerging market economies such as India and China, and for the European Union, faced with slowing growth. So how does this expansion compare with earlier ones. The expansion of the 1991-2001 of the tech boom was 120 months, 1961-1969 of the Sixties 106 months, 1982-1990 of the Reagan era 92 months. The controversial one on shaky foundations is the recent housing boom 2001-2007 of 73 months ending in a huge bust with the 2008 financial crisis. The shorter expansions are the 1975-1980 Post-Vietnam one for 58 months, and the 1970-1973 spurt before the OPEC price surge. Figures are from the NBER, CBO and the Federal Reserve's Summary of Economic Projections....

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Whitacre is basically blunt about his mission from the Obama adminstration when he attends meetings at the Tech Center in Warren or at the Westin Detroit Airport hotel and the San Antonio club: get GM growing again, he wants to see market share north of 20%. The Obama administration, Bloom and others are clear about the government wanting to get its $50 billion for the USA and $9 billion for Canada back as early as possible. He has told GM's Henderson he will be replaced it things don't change fast enough, and he wants product out faster, 2 year development times for new cars instead of three years today. The same message has been passed on to middle and upper middle managers in diagonal meetings. And what are readers commenting on this- and readers views matter a lot because GM has a wrong perception out there that hurts sales- a third of twelve readers said they cannot understand why young people are not moved up to run the company especially from design and engineering, one mentions Whitacre's age 70 years. A third just don't think much will change, and one says he will buy aFord. And a third says Whitacre is the guy who can shake things up and he should. ...