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Because technology spending has been more disciplined and focused on productivity and efficiency gains, the investment has been lower but more effective than in the 3 years leading to the last recession in 2001. At that time it was increasing 12.9% a year leading into the recesson and faced sharp cutbacks leading to a drop of 11% over the next 2 years 2001-2003. By contrast this time the tech spending went up by about 2.8% a year in the last 3 years, according to Gartner, and has delivered solid results at places like American Airlines. Technology spending is likely to hold up and continue moderate increase this year and next as the US enters a recession. At American a fuel efficiency drive starting 2005 including software to come up with best routes, flight paths and baggage loading has saved 96 million gallons a year. Note that spending on computer hardware and software is about half of all capital spending by business.

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How returns in the U.S. stock markets of over 30% in 2013 change the picture of five year returns to the end of 2013 compared to the end of 2012. Long run has to be much more than 5 years and even longer for decent returns.

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Lower oil prices in June 2012 with slowing growth worldwide and a planned buildup of inventories by Saudi Arabia and western nations. U.S. crude oil prices dropped to $83.23 a barrel on June 1, 2012.

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As the U.S. population ages and grows at a slower pace the demand for automobiles is likely to peak in 2013-2014, and moderate in subsequent years. Automakers need to be vigilant about adding manufacturing capacity to avoid the problems faced in the last decade when sales and profits declined.

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Even though U.S. president Trump has singled out countries such as Mexico, South Korea and China for trade practices, the U.S. today faces stronger competition in trade from Germany. The trade surplus with Germany for 2016 was $297 billion for Germany compared to $245 billion for China, according to Ifo economic institute. China's trade surplus according to the World Bank was down from 10% of gross domestic product or GDP in 2007 to 3% in 2016, while Germany's has gone up to 8.5%. The Chinese currency is seen as not being undervalued by some experts, while the euro has lost a quarter of its value in the last 3 years, giving Geman exporters an edge. The U.S. also competes with Germany in nine of the 10 export categories such as machinery and electronic equipment, according to the Peterson Institute. Then why is the focus under U.S. president Trump not including Germany? One reason is that China's products have put a downward pressure on U.S. manufacturing wages, and the the speed with the Chinese manufacturing has grown in certain industries. Germany has very few of the manufacturing subsidies that China provides to its industries. And the depreciation in the euro is not favored by the German government as it opposes the policies of the European Central Bank. Germany also has a higher propensity to save about 10% of GDP compared to about 3% for the U.S., according to OECD. As a result Germany is accumulating foreign assets at a faster rate than any other nation, while the U.S. is borrowing capital from overseas. Ways to change this are minimum wage regulations introduced by the government, but larger measures such as increasing government investment in the economy are not supported as the country prepares for the future with an aging population.   ...

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A report by pharmacy benefits managing company Express Scripts shows a 13% increase in the price of branded drugs in the U.S. from Sept 2011 to Sept 2012. Generic drug prices declined by 22% in this period. The report also shows that growing spending on specialty drugs for cancer, MS and other diseases is a big reason for the increase in prices of branded drugs. This report is from a random sample of six millon Express Scripts members using prescription drug coverage. Prof. Schondelmeyer of the University of Minnesota, who manages the drug benefits program at the university and conducts a similiar price report for AARP, says the potential benefits for these specialty drugs are not that good to justify the high prices.

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10.5 million vehicles is the new number at GM for USA auto sales in 2009. GM has consistently predicted a scenario for auto sales that is much higher than it has turned out to be, leading to a lack of proactive speedy decisionmaking where needed to close plants, get financing and other steps needed to pull the company out of trouble. This new lower number may also turn out to be higher than actual because figures for inventories, unemployment, foreclosures, consumer spending, exports, all are worsening.

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Sony has lost its focus, it is in so many lines of business, that its brand identity has been lost. Especially in Japan where it is in cosmetics, massage, mailorder shopping club, insurance, finance, robots etc. It has 1000 subsidiaries and affiliates worldwide, of which a third are unrelated to its core electronics business. How does this hurt? It hurts because management is distracted, and when top management is distracted then its not focussing on customers, changing business trends, creativity in its business pioneering new products. In a big company this problem is just magnified by the bureaucracy that develops. Problems similiar to the ones faced by IBM and General Motors. The analysts and Howard Stringer talk about restoring the Sony premium. What is a premium, its not just the brand, its the innovation or something special behind the brand that enables it to command the premium. Stringer probably understands that its the innovative edge that Sony as lost. See the other piece "Howard Stringer, Sony's Road Warrior" by Siklos and Fackler in the Sunday NYT, May 30, 2006 with Stringer shown in a large picture imagining him as a Sumo wrestler. An unforgettable picture. In that piece it becomes clear that Stringer is keenly aware about Sony's and Japan's weakness in software which is increasingly driving success in products when combined innovatively with new bold concepts. He says there that Sony takes great pride in its hardware, and this is true of Japanese creative spirit in innovative and miniature gadgetry, but its capabilities in software are very modest. As one action step Stringer has hired Tim Schaaf , a senior Apple executive to lead that effort at Sony. The other part, getting the focus back by focussing on customers of electronic products is evident in this piece. Ryoji Chubachi, head of electronics and co-head of Sony with Stringer, regularly visits large retailers to offer incentives for making Sony products more visible, something the prior management failed to do. The prior management failed to focus on customers, and thought it beneath their highflying ways. One of the decisions by Chubachi in TV's is to price HDTV sets close to the price of Panasonic, Samsung and Sharp at large retailers in Japan. This makes sense to gain market leader status, as it shows Sony is living in the real world and taking decisions appropriate and relevant to a premium free environment in television sets. You a manufacturer cannot imagine a premium, a premium is a perception in the minds of customers and most likely reflects a perception of uniqueness, creativity, fashion and some other attribute, which can include engineering. Sony's philosophy has stated in Akio Morita's book "Made in Japan", was to be a pioneer, to walk the untrodden ways, break new ground. One aspect of this in comparison to Matsushita, Sharp and other competitors, was going to be its individuality, something Morita borrowed from his days in the US, because it is typically American and sort of unJapanese in a way. Though this is a generalization and many American companies merely follow and some Japanese companies have their own way of doing things even if it is thought of as being very Japanese like, witness Toyota in its Aichi prefecture surroundings. In this light the surveys show Sony significantly deteriorating in "conspicuous individuality." The New York Times cites a survey from BP Nikkei Consulting in Tokyo that the number of consumers saying that Sony showed "conspicuous individuality dropped to about 25% from about 40% the year before. ...

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The turnaround at Ford Motor Company described in Detroit News reporter Bryce Hoffman's book "American Icon: Alan Mulally and the Fight to Save Ford Motor Company."

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The Editorial Board of the Washington Post draws attention to the speculative bubble in housing in China, the policies for sale of land by local governments that fuel the bubble, the corrupt local officials, and GDP growth that reflects overinvestment in housing creating serious imbalances in the economy. The structure of the economic and political system which promote this overinvestment in real estate has also reduced the role of the Chinese consumer in GDP growth, and is preventing a rebalancing of the world economy.

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A hard look at the idea of the "Great Moderation" a peiod of stable prosperity that America has enjoyed for 20 or so years with low inflation, stable unemployment and smaller bumps along the road even in recessions such as the one in 1990 and in 2000 which had shorter durations with good rebound. The IMF report on the world economy for September looks at this period of stability and sees a continuation. This report takes a look at the current crises in housing and credit markets and takes a more cautious view wondering if things may be at a turning point where such stable growth cannot be taken as a given. In general the world economy has become more flexible and structural shifts to globalization and the shifts in manufacturing to other parts of the world such as emerging countries have made for a more resilient world economy compared to the economy that faced the oil shocks of the seventies. The three specific causes to which this stable period is attributed are the better handling of monetary policy, the better inventory management with Just in Time and manufacture to order, inventories literally being the shipments that are carried by Fedex or UPS on a particular day, and credit markets securitization of debt packaging it into marketable securities creating a large credit pool so thay companies could have better access to credit. Securtization has suffered because some of the basic rules were broken such as how securities are rated and not because of the basic concept. Have the markets and investors and households taken on more risk in their asset portfolios because of the belief that this period of 'Great Moderation' would simply continue. Its these kinds of behaviour that get tripped up until things get cleared up and return to normal. Is this simply a phase like the prior downturns preceding it that should see a similiar rebound or is it something different. One thing that is noted is that the period of relative prosperity has ocurred as in many countries in Europe and Asia. And the housing markets in many countries in Europe and Asia have also seen rising prices similar to that of the US. Can this turn into a worldwide recessionary situation? Comment made later on April 12, 2008 after the Bear Stearns crisis in March 2008 and the Fed meeting summary describing the downturn as expected to " be protracted and severe", and the emergency measures by the Fed itself made to prevent a possible global financial crisis. In hindsight the 3 reasons for the Great Moderation can be evaluated in this way. The first was the only real one to which researchers attribute about 50% of the Great Moderation, which is the revolution that Just In Time inventories have accomplished for smoothing drops in demand. The second financial innovation proved to be illusory just as mentioned here because it was gamed because the financial houses and other firms were able to get around regulation or the regulations were inadequate and the innovation fell victim to unrestrained greed in the manner mortgage securitization was done. The third wise better monetary policy as mentioned here did not get much credit from researchers and this turns out to be true. Keeping interests rate low was possible because of the disinflationary aspect of globalization specifically manufacturing in China which ended in 2007. Further the success of the US economy made it possible for the US dollar to remain strong and the USA to continue to attract capital for much of this period even while interest rates were low. But its the export of disinflation from China, and no pressures of inflation from globalization through commodities demand for much of this period, that kept inflation low and made it possible for the Fed to keep interest rates low without creating inflationary pressures. Of the three financial innovation and monetary policy may have in them in fact unlike the first Just in Time and information technology, may have in them the seeds of trouble as well as gain if not carefully managed, like fire a good servant but bad master, and this is really what happened in what turns out to be a very human world, greed subverted financial innovation without the necessary appropriate regulation to go with it and the Fed's libertarian instincts and complacency or lack of energetic oversight under a man past eighty years made it lose sight of its need to adjust interest rates to cool off excesses in the market and send appropriate signals to the financial and housing markets. The Economist was slightly ahead of the curve when it makes the observation here that this is likely to be a global housing crisis and a global credit crisis with all the implications of this for global economic growth. ...