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RIM's management change with new CEO Thorsten Heins is received positively by analysts as the co-CEO arrangement was not considered responsive enough to losses in market share- RIM's share in the smartphone market dropped below 10% in 2011. However the statement by Heins that there would be no "seismic" change at RIM was received with caution. One analyst pointed to the need for fresh thinking and thought it would have been better to bring in someone from the outside, though Heins only joined in 2007 and worked for 23 years at Siemens. The need for a new Chief Marketing Officer was pointed out.

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IKEA's plans announced in June 2012 for opening 25 stores in India with an investment of $1.9 billion. IKEA says it will meet the requirement that 30% of its products be sourced from small scale local industries, as it plans to increase its purchases in India from $450 million currently to $1 billion in a few years. It said the government should be flexible in its defining of small-enterprises. For India the entry of large scale retailers will help modernize its supplier base in a number of areas. India's current account deficit has increased to 4% of GDP making it important to send a strong positive signal to foreign investors.

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Weakness in the U.S. and Russian market for Adidas and criticism of CEO Herbert Hainer by shareholders. Adidas share price is down about 25% compared to Feb. 2014 even after a 11% increase in 2015. In the U.S. market Adidas has fallen behind Under Armour Inc. to No.3 spot in U.S. sports brands, and North American sales decreased 10% in euro terms for the first 9 months of 2014. The largest competitor Nike has seen a 30% increase in its share price in the last 12 months. Hainer is CEO since 2001, a period in which Adidas earnings quadrupled. Adidas is preparing a new 5 year strategy.

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Brian Dunn will be new CEO of Best Buy. He worked for 24 years in Best Buy most of them in Best Buy sales and in stores. He believes in Best Buy's blue shirted sales employees, who help custoners navigate difficult technology. He sees them as asingular advatage in the electronics struggle for market share with Walmart, and in keeping customers. His idea is to turn Best Buy shopping into a series of experiences, and using innovative practices of store employees. Best Buy stores sales fell 6.5% in December and 4th quarter estimates are for sales decline of 5-15%, with anlysts estimates of a 20% decline in earnings per share.

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U.S. added 245,000 jobs in November. Unemployment rate drops from 6.9% to 6.7% as some Americans give up looking for work. The concern now is not the rate of job creation which is healthy but the drop outs from the workforce.  Concern arises from the long drawn out effects of the 2009 financial crisis and its effects which were seen over a decade. This report in NYT says the share of prime age Americans who were employed returned to the January 2008 level in 2019. And then the pandemic hits putting everything back again. This time if the lesson is learned about the long term damage to working families it is that this be tackled as a priority for the central bank, the U.S. Federal Reserve, an the Treasury, and Council of Economic Advisors, under the leadership of president Biden. Fortunately both Yellen and the new proposed head of the Council are students of labor markets and have stated this is one of the lessons they have learned and will act on. As this report says the opiate crisis, the risks of addiction increased, and there were links to the long period people were without jobs. The longer a person is without a job the more likely he will become permanently unemployed. The hope now is that the vaccination effort could bring people back to work quickly as business and life resumes in 2021, with workers being hired back. The share of prime age Americans working in November is 76.5% compared to 80.5% in February, which means this has to go up by about 4 percentage points. The people who are not in the labor force today but still want a job are 2.2 million. It is this that needs to be the focus of the new administration, central bank, and Congress. ...

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Michael Barnier leads the negotiating team for the EU as it begins negotiations with Britain on Brexit. He is a former foreign minister of France and former EU commissioner, giving him the necessary skills and experience. Yet as he meets with the Affairs of the European Committee in the German parliament, even Barnier is not clear how the negotiations will be conducted. Only that the issues relating to disentangling the closely interwoven economies of the EU and Britain relate to nationals of the EU and Britain in each others region, the common 20,000 legally binding regulations, and the price tag for Britain to pay of 60 billion euros. The leading German in the negotiating team is Gunther Oettinger, a former EU budget commissioner, and he tells Der Spiegel that the bill may be even higher than that number. The figure will be arrived at by taking into account the obligations of Britain and applying this to assets. The obligations include the money owed to the EU budget, share of medium term budget planning to 2020, share of pension payments to EU civil servants. The British take a different view and do not understand why they have to pay this amount when they are exiting. The British want to see their future relationship on trade and access to the EU markets discussed early, but the EU position is just the opposite, first exit negotiations to be completed by September 2018, then other discussions on trade. March 29, 2019 is the date set for Britain to be no longer a member of the EU. Yet even the sequence of issues has not been set and the sides could not be further apart than they are now. Each side looking at its situation domestically with elections in the EU in 2017, and May facing the added challenge of Scotland threatening to leave the UK. ...

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Lehman sale may be arranged by Treasury and the Fed but fate of Lehman is uncertain.

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The Royal Mail is the oldest mail institution in the world. After a series of strikes a share of ownership is given to Czech billionaire Kretinsky 49 years, who built his company in European energy markets and pipleines to Russia. BBC Reports on this unusual step and what it means for one of Britain's oldest and sacred institutions.

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The U.S. Supreme Court by a vote of 7-2 struck down a California law that bans the sale of violent videogames to children. Writing the majority opinion Justice Scalia said "even when children are the object the constitutional limits of governmental action apply." Breyer dissented by saying that it made no sense to not allow a child to see a nude picture woman under obscenity laws and yet allow the child to see violent acts against women. Clarence Thomas was the other justice in the dissent. Justices Anthony Kennedy, Ruth Ginsberg, Elena Kagan, Sonia Sotomayor supported the decision to allow violent videogames to be sold to children. Justice Alito supported the decision but expressed serious reservations about the breadth of the majority's opinion saying- " the Court is far too quick to dismiss the possibility that the experience of playing videogames (and the effects on minors of playing violent videogames) may be very different from anything we have seen before."

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The Japanese yen surged in value following the 2008 financial crisis as it was seen as a safe haven. As a result the Korean won declined by 42% against the Japanese yen. This continued till 2012. Japanese companies had to compete overseas at 80 yen to the dollar and shifted operations overseas. Now with the policy of monetary expansion of the Japanese central bank the situation is reversed in December 2014. The Korean won is up 40% against the Japanese yen since 2012. The Japanese yen is now down to 118 to the dollar in Dec. 2014. Abenomics gets a new mandate with the snap election in Dec. 2014. Aaron Back says Samsung may have gained ground in televisions and smartphones but other areas in electronics such as chips, displays and image sensors remain competitive and responsive to price. In autos Hyundai market share has declined to 4.4% by Dec. 2014 from 5.1% in 2011, according to MotorIntelligence.com. So far Japanese companies have used the currency advantage to improve profits and come up with better products. By using profits to invest in new technology and productivity Japanese companies can provide more features at the same price points to gain market share without having to cut price. After years of declining margins in electronics, autos and other markets this appears to be the current strategy. Another reason for this is that Japanese companies have already shifted production overseas, the shift being higher for Honda than for Toyota. Technological improvements from investments in R&D in Japan can be transferred to manufacturing operations overseas just as Apple is doing with smartphones manufacturing in China. The currency shift also improves Japan's position relative to American and European competitors in international markets....

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This WSJ report shows how a record 4.4 million American workers resigned from their jobs in September 2021 alone. WSJ shows map of US with the states where this is happening marked with "I Quit." States with the largest quit rates have large share of employment  in food, restaurant, hotel and entertainment industries- Hawaii, Montana, Utah, Oregon, Colorado, New Hampshire, Louisiana. In the northeastern states the education sector which accounts for a larger share of employment the quit rate has risen at the fastest pace since January as shown in the Labor Department numbers. For years wages, benefits and working conditions in the food, restaurant, grocery store, hotel and entertainment industries, supply chain logistics, lagged behind, exacerbating inequality and widening the income gaps between working class Americans and the professional and other classes. Increases in minimum wages lagged behind the cost of raising families, rent and grocery bills. Professions such as nursing, children's education, critical to the nation's health were also left behind in wage increases as the tech boom rewarded different sectors in outrageous ways worsening the social divide and creating pools of income scarcity and income abundance in indiscriminate ways. The pandemic is changing all this. Workers in states with higher proportion of workers in these sectors of the economy are saying "I Quit," as they seek better opportunities elsewhere and better working conditions. The checks to working class Americans in 2020-2021 as aid for the pandemic, the child credits, investments in affordable housing, child care, early childhood education, and other aid in the Biden Families and Workers plan are giving workers for the first time in decades the right to choose better working conditions and incomes over worse working conditions and incomes that were set without regard to their role and contribution to the welfare of the whole country and people.  After the lockdowns in the northeastern states, States such as New York, Massachusetts, New Hampshire, Rhode Island,  with higher vaccination rates and rebound in the economy are seeing higher job openings. This is making it possible for workers in the northeastern US to quit jobs in educational services and other sectors  for better paying jobs, better working conditions, remote work options, and improved work-life balance. ...

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Newly elected president Yoon Suk-Yeol's has promised to invest heavily in new cultural, educational and medical infrastructure in Sejong, new capital planned for South Korea. The work on this site was started in 2007. It is located 125 kilometres south of Seoul. One of the goals of this effort is to encourage regional development, and share the wealth that is concentrated in Seoul with the rest of South Korea. This will also reduce the over-crowding in Seoul. Currently Sejong city has a population of 360,000, with the Ministry of Education and Ministry of the Environment shifted to Sejong. Experts describe this as similar to how Canberra in Australia and Brasilia in Brazil created new regional development in these countries. Today too much is concentrated in Seoul from business to government and culture.

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With a general election approaching in Britain the question about a progressive alliance is brought up in the Guardian. A big block is the Labour party with its obsession for vote share, and not seeking alliances of any kind. The Liberal Democrats are creating their own barriers with hostility towards Labour party. This report cites Best for Britain data and says 457 seats are immune to alliances. Of 150 marginals 111 seats the numbers show if SNP, Lib Democrats, Greens swung behind Labour party  it would make a big difference. as in 30 seats even a 5% swing from Labour to the Lib Democrats would give the seat to the Conservatives. The other approach is to have informal alliances at the grassroots level so that progressive candidates can do well.

 

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Brexit and Scotland's referendum both have similar consequences economically for Britain and Scotland. This hurts both countries in unwinding relationships built over many years, unwinding 44 year membership for Britain, and 310 year union for Scotland. Britain exports to EU are 45% of total exports, and for Scotland the number is 63% for exports to the rest of the UK.  Scots benefit about 1200 British pounds more for average citizen than a average citizen of UK, and pay 400 pounds less to the government. Scotland would start with a 90% debt to GDP ratio if it takes a proportionate share of UK government debt from the beginning of independence. Fidler correctly points out the economic risks to Britain and Scotland which are being ignored or not fully taken into account by politicians.

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Jeff Flake, U.S. Senator from Arizona tells Republican candidates, "Distance yourself from Trump," and Flake is thinking not just of 2016, but of elections to come.  In the West generally it is not just about minorities, but also the educated white collar professionals in cities such as Salt Lake City, Denver and Phoenix. The percentage of registered Republicans in Colorado dropped by 4 percentage points since 2012, and now Democrats have the same share of registered voters. In Arizona Hillary Clinton has invested resources to register more Hispanics and minorities. The distancing from Trump by Romney and the shift of the Mormon vote is making Utah also a place where Clinton is catching up in polls. As a result most of the West now looks very different. The remaining western states of Wyoming, Idaho, Montana and Alaska, say experts have a total of 13 of the 538 Electoral College votes. With Utah this is 19. 

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Indian foreign minister Jaishankar tells a conference in Begaluru that what happens outside India affects each and every Indian. Inflation with prices of fertilizer, foodgrains and oil are affected by the war in Ukraine, coronavirus started in Wuhan, China, the incursions since 2020 in the Himalayas were started at our borders by China and began with its invasion of Tibet, what is happening on the border in Kashmir with crossborder terrorism happens with China's support of Pakistan.  Gaining access to pools of US and European capital and technology will involve action taken by foreign investors from outside India's borders in lands far away. This will affect the infrastructure and the speed and scale of India's industrialization and modernization, and will affect every Indian. It will also help India compete with other industrialized countries including China, and emerge as a leader of the Free World along with US and European Union. The world is where everything takes place and India's place is in the Free World. ...

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More than 6.7 million persons are displaced inside Ukraine most of them from the war torn eastern part of Ukraine, and most of them women and children. In addition over 3 million are refugees in neighboring countries such as Slovakia and Poland. 

The war is now extending to the Donetsk region with about half of the population of the population in eastern Ukraine having left that region for safety in central and western Ukraine. The rolling farmland and old coal mines of the region, the destroyed infrastructure and industrial facilities, make the area of no use to Russian forces. A fraction of the Russian population in the area has also left says this report in the NYT. 

The scale of the damage and the refugee situation is hard to imagine and can be seen in the pictures in this NYT report. Boarding trains and buses civilians have poured out of cities in eastern Ukraine where the war has intensified.
 

 

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Guiding the debt ceiling talks in a safe way that does not distract in any way from the stronger economy that is taking shape with large investments in every sector, and which people can see and feel in their own lives, is the goal of president Biden. It would be a win for Biden if overall spending can be kept at the level of 2023 for the next two years. How he does this is by maneouvres that concede somewhat in some areas- one example is by reducing spending on the Internal Revenue Service by $10 billion from $80 billion to $70 billion, and shift the $10 billion saved to education and other similar spending. The idea is to mitigate the effects of small cuts by shifting money from other places in the budget spending plan. These maneouvres are designed to keep the overall investment largely intact and deliver results in 2023 and 2024 in a rebuilding of America that the people can see. 

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About one third of cars in China will be electric cars by the end of 2023 from one fourth today. Compare this with 6% of cars being electric in the US. EU, US and Japan are far behind. Toyota has only now ramped up EV's with a new CEO. In the domestic Chinese market 80% of EV's are made by Chinese auto manufacturers, And this could go up to 90%.  This means the share of the Chinese market for German and US manufacturers is actually shrinking. Chinese buyers now prefer Chinese brands over foreign brands. Over 4 decades says Keith Bradsher in NYT the US and European auto manufacturers trained a whole generation of Chinese auto engineers who now work for Chinese electric auto makers. This is one market in which China has built a formidable capacity. This is also a big contribution to cutting emissions from fossil fuel powered cars after China's massive use of fossil fuels over two decades worsening climate change.

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At the New Year's eve service on National Day of Prayer January 1, 1942 president Franklin Roosevelt and Winston Churchill worshipped together at Christchurch Episcopal in Alexandria, Virginia. The Reverend Wells said on this day 82 years ago. The idea that we could not prevail with military strength alone but with deep humility depend on God's help was one of the great strengths of Franklin Roosevelt. That it says much to the present, to the divisions of the present and lack of humility cannot be overstated.

"Our president has appointed this first day of 1942 as a Day of Prayer, for asking forgiveness for our shortcomings of the past, power for the present task of achieving victory... but spiritually we are in bad shape. We must have a deep spiritual unity that will make us ready to sacrifice our material possessions and even life itself for the moral principles for which this war is being fought." 

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PM Modi tells parliament in a reply to the president's address yesterday laying out the government's program, that if India operated at the speed of previous governments before 2014 it would take three decades to get to No.3 in the world's economies. Instead India plans to move from the 5th largest economy in the world to No.3 by 2030. He pointed to the investments that the government had made in providing housing, income support, water, on a scale uparalleled in history to bring 250 million people out of poverty. The four pillars of the programs are Nari Shakti women's progress, Yuva Shakti youth progress, Anna Data farmers progress, and strengthening the industrial infrastructure of the country. The prime minister pointed to previous prime ministers having doubts about what India could achieve in the community of nations and compared it to the convictions, the hard work and the single minded determination of the people driving progress today who have no such doubts. ...

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Inflation has moderated to about 3% and unemployment is at historic low of 3.7% in March 2024. Public perceptions are gradually changing when asked about the economy this WSJ survey shows. Key points are that now 37% approve Biden handling of inflation up 7 percentage points, and 40% approve his handling of the economy up 4 percentage points. The public perception of the economy had diverged so much from the actual strength of the economy under Biden that this was hard to understand in 2023. This is changing in 2024 as there is now a clear sense that the better reading on inflation and unemployment is not temporary but is only the beginning of a surge in economic progress. The public has not yet grasped the extent of the change for the first time in 3 decades of the scale of the reinvesting in the economy under Biden and a bipartisan Congress of trillions of dollars being invested and the speed of execution of projects. This will become clear as the year progresses.  ...

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A states attorney generals lawsuit filed against Google states Google operates a monopoly that harms advertisers and publishers by lowering sales of publishers and charging inflated prices to ad buyers. Cases will go on trial in 2023. The Justice Department and 35 states attorney generals have a separate antitrust lawsuit against Google's search services. Democrats and Republicans in the Senate are pushing forward a bill that would treat Google search engine like a railroad operator making it illegal for it to give an unfair advantage to Google products and charge inflated prices by distorting the markets. This report in WSJ shows the way Google ran a series of programs named Project Bernanke, Reserve Price Optimization and Dynamic Revenue Share, to distort the normal operation of markets so that Google obtained an unfair price advantage. Bernanke program was operated between 2010 and 2019. In some cases the lawsuit says publisher revenue was reduced by 40%, according to internal company communications quoted in the complaint, as shown in this WSJ report. ...

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To president Joe Biden the Democrats instincts of FDR and Truman, with the focus on building better lives for workers and families, comes naturally. Biden takes the Democratic Party back to what it was in the 1930's to the 1960's. Just today the Labor Department showed 336,000 jobs added and the unemployment rate steady at 3.8% for 2 years, 32 months of jobs growth. Brooks offers a clue on how this is happening- president Biden has aggressively directed American capital and resources to where it is needed most, in counties red or blue where economic growth has suffered in the past. Yet 57% of people polled cited by Brooks say the economy is in poor shape. There are another 14 months to go and the economy will get even stronger with the capital allocation and Biden economic policies of Build Better and America First. Workers and families will see real and tangible improvements in their lives in 2024.

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Biden makes a rousing speech to workers and worker families at the AFL CIO campaign rally in Philadelphia. He tells them when he thinks about global warming or renewable energy he is thinking of jobs for union workers, when he is thinking of chips and science he is thinking of jobs for workers and union workers, all in the USA. What trillions of dollars in investments mean is jobs for decent workers, working families in the US, jobs with respect for hard work and dignity. And trillions of dollars that come with deficit reduction because of the super wealthy paying their fair share just like everybody else, not 8%, less than schoolteachers pay, firefighters pay. "What this all means for you is a simple proposition. And I remember having this discussion with you, old buddy. When I think global warming I think jobs. Jobs, jobs, jobs. Good paying union jobs. Jobs you can raise a family on. Jobs you can't outsource (applause) that can't be outsourced." ...