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The Bank of Cyprus and the Cyprus Popular Bank (Laiki Bank), passed stress tests given by the EU in 2010 and 2011. By the end of 2010- even as other banks such as Barclays were cutting their Greece government bonds by over 50%- the two banks held 5.8 billion euros of Greece bonds, over $1 billion euros larger exposure to Greece than nine months earlier, according to European regulators. Regulatory supervision failed to alert the banks and the banks risk management failed to see the warning signs in Greece. The Laiki Bank Risk Officer went in the opposite direction actually increasing exposure to Greece, saying in a conference call in August 2010, that he had used the bank's capital position "to deepen selectively some highly profitable client relationships." What went wrong with the stress tests by the EU regulators in July 2010 of these two banks, was that the tests looked at what would happen if economic conditions deteriorated, but did not consider the possibility that government bonds could produce losses. The two banks suffered total booked losses of 4.3 billion euros in 2013 from holdings of Greece bonds. The EU stress tests of July 2010 showed the two banks having total of 572 million in surplus capital. The two banks then went on to issue dividends in 2010-2011 totalling 141 million euros. By March 2013 the Laiki Bank was "on respirator" for a few months, according to the Central Bank of Cyprus, until the 10 billion euro EU bailout in March 2013 with the closing of Laiki Bank and the sharp downsizing of Bank of Cyprus....

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Even as huge losses continued at RBS bank bonuses remained high. After $15 billion in losses at RBS in 2013, banker bonuses were $960 million for the year. Banker bonuses declined from 679 million pounds in 2012 to 576 billion pounds in 2013. New CEO Ross McEwan, says "I need to keep people engaged." He announced another reorganization. He says RBS "is the least trusted company in the least trusted sector of the economy." This follows public criticism of RBS for not lending enough to small business and unfair treatment of customers. The new plan is for cost cuts to save 2.2 billion pounds by closing 16 corporate call centers and 11 offices in London. Sales and restructuring cuts are planned for 3.1 billion pounds in savings.

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The steep decline in popularity of French president Emmanuel Macron in the period of one year. With the yellow vest protests on the economic insecurity of struggling families, Macron's efforts to bring in business friendly policies as a change agent are itself out of step with the times and with France in the provinces and small towns, as pointed out in the New York Times and Times of London analysis of the situation in France today.

As pointed out in the analysis Macron's base itself is small and its anti-institutional posture rejecting conventional politics itself has given momentum to the current yellow vest protests about economic insecurity of struggling families. The support for this comes from all parts of society and single political party, without nationalism, race or migration as factors at all, and comes so soon in one year from the time that Macron emerged with his own movement rejecting the institutional structure.  

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With his dwindling popularity and failure to support the socialist parties alliance Macron has made the party En Marche his own creation, a failed project. Macron started out in the Socialist Party in Amiens, France, was a minister in the Socialist government of Francois Hollande 2012-2017. Socialist voters twice voted for Macron in 2017 and 2022 elections to keep the Le Pen National Rally out. After the last election 2022 Macron faced union protests on pension age changes and on issues related to fairness for workers as he failed to take cost of living action and protect workers. He now faces a divided parliament and becomes a lame duck president till the next presidential election in 2027. He called the party he created during the last year of socialist Hollande's term as president initially En Marche, later En Marche El Republique and Renaissance, initially tapping into support for reviving France with younger people in political life. Yet he failed to live up to this instead put himself at odds with working class people and families and the problems they face across rural and urban areas of France. He has run out of support after the yellow vest protests, union protests, and protests over the pension age during his first and second terms. By calling the socialist parties of which he was a member in derogatory terms Macron increased his isolation and created a situation in which the RN of Le Pen is vying to be the leading party in the National Assembly. Only by making large investments in the French economy of $140 billion that the Socialist parties alliance proposes can France's economy and infrastructure be revived, not by the programs of either the RN or En Marche which make no effort to increase investment in the French infrastructure and economic strength. A modest tax on the top 1-4% of the wealthy finances this investment of $140 billion which RN, En Marche and Macron seek to avoid calling this program in derogatory terms to protect a tiny minority of the affluent who in the right way would want to contribute a fair share to the growth and revival of France. ...

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Ezra Klein says about the contrasting choices offered by Romney-Ryan vs Obama-Biden, that everyone wanted to see a clear choice between different approaches to the issues, and now they have got one. Its almost a repeat of Reagan-Bush vs. Carter-Mondale during a period of high unemployment with Democrats risking underestimating the importance of the careful choice made by Romney today.

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Rep. Paul Ryan got his start in politics in 1983 when he was hired to work for a think tank Empower America. This think tank was formed by Weber, Kirkpatrick, Bennett and Kemp, to preserve Reagan era ideas of focussing on economic growth generated by private investment. This was followed by working as an aide to Senator Brownback of Kansas and Rep. Jack Kemp till his election to Congress in 1996. Kemp was the big idea guy and it was Paul Ryan who delved into the budget details at the time to support Kemp's ideas. Kemp was Republican vice presidential candidate, the same position that Ryan is in today. Ryan represented the area around Janesville, Wisconsin, in the U.S. Congress. He graduated from the University of Miami, Ohio.

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Fiat-Chrysler's Sergio Marchionne tells an automotive conference that the new fuel efficiency targets proposed by the Obama administration will be "an incredible stimulus for the American auto industry." He is confident that the new 2025 standards can be achieved. He said the industry had a bad habit of crying wolf and emphasized the need to get there so that the U.S. auto industry could be at the forefront of the changes taking place. He also cautioned the industry to not get comfortable with China's role as an emerging market that helped increase global sales. That growth is slowing and it presents another potential risk for the automakers- the potential for China to export 10% of what it makes to overseas markets including the U.S. and Europe. All of which increases the urgency of building the industrial base and competitiveness of the automotive industry in the U.S.

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Smaller companies are being squeezed by rapidly escalating costs as costs are going up as fast as oil prices, and face tighter emissions rules in Alberta's oil sands projects. Some projects now cost 2 to 3 times the original projections and there is a severe labor shortage. Even the big players will find it difficult and expensive. To meet the stringent emissions rules, as Prime Minister Harper signs on to new international greenhouse emissions targets, Shell may have to use a technology that captures CO2 from the plants that process the oil sands and store the gas underground. This costs $120 a ton, and would cost Shell upwards of $2 billion a year just to capture and store the CO2, for the 15-20 million tons of CO2 that would be emitted when it increases production to 770,000 barrels a day. The cleanup from oil sands processing is costly because processing is very pollution intensive. Production of one barrel from these oil sands is 3 times more polluting than producing conventional oil. Synenco Energy, which had a project in partnership with China's Sinopec for mining and processing the oil sands called Northern Lights for $10.8 billion, called off the project last year because of all these hurdles, slashed its work force, and decided it may sell the company. Currently 1.1 million barrels a day come from the Alberta oil sands. 2020 output was expected to rise to 4.3 million barrels a day. But now this looks too optimistic. CAPP forecests 3.8 million barrels a day, but even this may be on the high side. ...

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Reps. Eric Cantor (Va.), Kevin McCarthy (Calif.) and Paul Ryan (Wis.) have jointly written a book "Young Guns," that completely distances the new leadership in the Republican party from the leaders of a prior generation. The book says the older Republican leadership "betrayed its principles," by not controlling spending. See the the link to David Stockman who has criticized previous Republican administrations for their attitude to spending, including President Reagan. A recent NBC/WSJ poll shows only 24% of those polled seeing the Republican party positively. The idea is to differentiate the younger leaders as new voices in the party, different from the party's previous role.

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Jeff Sommer talks to Harvey Markovitz, considered the founder of portfolio theory, on share prices and the stock market. Markovitz says portfolio selection are the two most important words he wrote and the ones to remember. Building a diversified portfolio is the most important thing in investing. Markovitz says investors should forget about individual stocks and their oscillations, and buy low cost index stock and bond funds. Allocating these in a way that depends on the volatility and risk that the particular investor feels comfortable with. Rebalance the portfolio as needed periodically, and change allocations. Other than that do other hobbies, things that give you a greater sense of reward. Markovitz was deeply influenced by Hume's ideas of skepticism and the thought that one was never sure about the probability of an event occuring even if it had ocurred before.

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The Tax Plan of Jeb Bush, with the help of advisors Martin Feldstein and Kevin Warsh, lowers the top personal tax rate from 40% (including surcharges) to 28%, and reduces the corporate tax rate from 30% to 20%. The plan is designed to jumpstart the economy for higher growth by increasing business investment and incentives. Businesses are allowed to deduct 100% of new investment immediately. The idea is to increase capital investment so that benefits also go to workers in higher wages. The Bush economic advisors see 50% of the corporate tax burden as affecting workers wages- average compensation would go up by $2750 a year by 2020 and $6200 by 2025 in 2015 dollars. Companies can pay a one time 8.75% tax on money earned and held overseas, paid over 10 years- about $2.1 trillion of this income held overseas can be added to the pool available for business investment. As proposed earlier by Feldstein the itemized deductions including mortgage interest can be taken only upto 2% of adjusted gross income, suggestions during the reform effort not taken up by Obama. To reduce the excessive use of leverage in business decisions the field is levelled for use of debt and equity by removing the deduction for business interest expense. This editorial says that by putting in the details, which political leaders tend to leave vague on specific figures, Jeb Bush and his advisors have taken a crucial step forward. This it says, shifts the debate from current shallow posturing to how America can lay the groundwork for the kind of growth needed to help increase wages, increase economic growth to higher levels, and preserve America's position in the world....

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The lack of trust in negotiations on the terms of spending cuts between Greece and EU ministers in February 2011. In difficult exchanges between German finance minister Schauble and Greece's finance minister Venizelos, Schauble criticized the Greek government for not beginning negotiations for reduction in the minimum wage. EU ministers at a meeting with Venizelos on Feb 10, 2012, showed a distrust of Greece's figures on austerity cuts and asked for an additional $428 million in cuts to make up for the refusal of Greece to cut supplemental pensions. In Greece five ministers in the Greek cabinet resigned in protest over the conditions set by the troika of the EC, ECB and the IMF, just as unions launched a 48 hour strike in Athens. Greece is in the fifth year of a recession with unemployment at over 20%, making sharp cuts more painful. A shrinking economy makes achieving budget defict targets even more difficult and worsening the debt situation.

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Questions about the euphoria for US stock market performance in 2011. Negative impact of housing market, rise in food and fuel prices, and the precarious condition of state and local government finances, raise concerns about the economy and stock markets for 2011-2012. John Makin sees a one third chance of sovereign debt crisis in the eurozone, and a 40% chance of China not making a soft landing, in a video interview with Wessel of the WSJ, December 30, 2010. This would impact stock markets in the US. WSJ's Brett Arends column also expresses similiar skepticism. Robini sees housing losses in 2011.

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Only 61% of shareholders present at the annual general meeting voted in approval of the management at Deutsche Bank in May 2015. Legal settlements and lack of trust in strategies of management have hurt credibility. A large part of the lack of credibility comes from the culture at Deutsche Bank which is seen as slow to change. Co-CEO Jain was head of the investment bank when traders engaged in activities that are causing large legal settlements for wrongdoing. Strong criticism came at the annual meeting from shareholders. Han-Martin Buhlmann of the shareholder association VIP raised the question: "Mr. Jain, are you the solution to the problem or part of it?" Alison Esse, managing director of change consultancy, The Storytellers, says shareholders had voted no-confidence against senior management because they lack the credibility to restore the reputation of the bank.

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Both sides harden positions before the June 30th deadline for 1.5 billion euro repayment of debt to the IMF. Greece's prime minister Tsipras accuses the IMF of "criminal responsibility" for the pain of austerity programs in Greece. Eurozone leaders says Greece's default on its debt and exit from the eurozone is a possibility. The Economist points out that a Greek default and Greece's exit from the eurozone would be a mistake. It points out that this means repudiating debts of 317 billion euros, or about 180% of GDP. Yet the repayment is at low interest rates spread out over decades. Until the early 2020's interest rates are about 3% of GDP a year. In theory a devaluation would help exports, but Greece with its small trading position, may not see much benefit. The drop in nominal wages by 16% has not led to a surge in exports. The cost in terms of broken banks, sharp decline in savings, and collapse of confidence could be disastrous. The very people Syriza is trying to protect the poor and elderly, would be hit hardest, as the collapse in the currency would lead to a shift to a barter economy as in Argentina during its default crisis. For the European Union, the problem would not go away, as it would have to deal with a bigger problem of a failed state on the Aegean on the EU's southern flank. Syriza's gamble that this can be used to extract concessions by holding off till the last minute is failing, because it is leading Greece back to contraction after the small growth in 2014 under prime minister Samaras- with capital flight from the banks and investors leaving in a general fall in confidence. The management of the economy and negotiations by Syriza is now seen as incompetent and has jeopardized any difficult progress made....

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Interview with Levinson of Genentech and answers to a wide range of questions about ther drug discovery process at Genentech, the cost of Avastin to treat cancer, the long years taken to develop the drug, the development and pricing of Lucentis for macular degeneration from the basic process of blocking the VEGF protein that helps the macular degeneration develop. The reasons for the pricing of Avastin- $55,000 for one year. And of Lucentis $2000 for one shot and the possible equivalence of Avastin and Lucentis so that doctors can take a small fractional dose of Avastin and use it in a tiny opthalmic syringe for cost of $50. The research budget of $1.86 billion. And the philosophy of Levinson about attracting the best scientists to Genentech by giving them opportunities as he puts it for "doing great science." And his emphasis on making Genentech a great place to work. Genentech was on Fortune's top twenty list 4 years in a row and No 1 in 2007 and No 2 in 2008 behind Google. Can Roche keep this up without Levinson and his team and the culture they have fostered, and the way they have created a great place to work ? ...