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Capital spending by oil companies after you take out the 10% inflation in the cost of most drilling epuipment and people isn't growing by much. In 2007 spending on exploration and production totaled $270 billion, increasing by 10% over 2006 with most of the increase in cost coming from higher costs of everything from rigs to labor and oil field services. And oil companies are pasing back huge earnings to shareholders in the form of buybacks and share purchases, the top 5 western oil companies will have spent an estimated $179 billion in share buybacks in the last 4 years. And the the companies are not able to replace reserves that are used up each year in production. As aresult they are basically shrinking and becoming smaller in the whole oil picture. Only in 2008 is the spending picking up a bit but only by a small amount after one takes out inflation, and that because there may be more confidence that oil prices will hold up better in the long run to justify the higher costs of finding oil....

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At the closing stages of the primary season Obama is seen as bringing an advantage in terms of bringing in new voters to the electoral process especially younger people. But more significantly and this may be the difference in the calculations of superdelegates is their own future and the future of the party. First their own future is helped if a nominee of the party cn energize new voters. Second its seen by a growing and significant number of people in the party that a nominee in 2008 has to put all 50 states in contention. This 50 state strategy may hold the critical insight to the nomination process in its final stages by superdelegates. This stems from frustration among Democrats at two elections in which Gore and Kerry went down in a blue states and red states division almost identical in both elections to a large degree. Any candidate thatcan bring Republican fringe voters to vote for a Democratic nominee may be the one to win the 2008 election and most of the Democratic superdelegates will be thinking of this....

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The old online websites AOL and Yahoo are going through a transformation. Yahoo finalized an agreement to merge its web-search with Microsoft and much of their advertising busiesses. This leaves Yahoo with its popular finance, sports and news websites which are cheap to run as they are mostly aggregators of other websites' content with little that is Yahoo's own content. Yahoo's plan is to expand its audience , especially in develpoing countries where internet use is growing fast, and to package that audience in ways attractive to advertisers. In October 2009, according to comScore market research firm Yahoo had 158 millon visitors in America, and AOL had 98 millon. Yahoo! Mail has 106 million users monthly worldwide, AOL's email service has 336 million. The difference strategy pursued by Armstrong who is new CEO at AOL is to focus on creating new content. AOL is running about 80 websites covering everything from fashion (stylelist.com) and country music (theboot.com) to local news (patch.com). And has launched a website called seed.com to get people to contribute content. In this way it has about 3500 journalists on its payroll, some 500 of them work full-time. Armstrong thinks advertisers will pay a premium to appear next to this original niche site and home-made content. So far advertising has held up in this severe downturn, with online display advertising -the banners and boxes that show up on websites- at about $3.8 billion in the first half of 2009 in America, according to Interactive Advertising Bureau....

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The first signs of a change in Germany's position to promoting growth in Greece came when German chancellor Angela Merkel told CNBC on May 15, 2012: "I have the will, the determination to keep Greece in the euro zone." She added that if Greece's leaders are looking for "stimulus to be pursued for growth in the euro zone, which we could pursue in the interest of Greece, we're open for this. Germany is open for this." The Social Democrats, SPD opposition leaders have long said that Merkel is able to change positions as the situation changes. Looking back she even disassociated herself from her mentor German chancellor Kohl when he was not willing to disclose the names of donors for illegal donations. This has given her the flexibility that another Christian Democratic party leader Schauble lacked in leading Germany. She has also seen poll numbers favoring the CDU dissipate quickly before the 2005 elections and is aware how quickly situations can change, as is happening now with the public in France, Netherlands, Spain, Portugal, Ireland, Greece, and eastern european EU countries growing weary of strict austerity policies pushed by the CDU. A faction of the CDU pushed for strict austerity policies at the recent CDU convention in Leipzig, Germany. Merkel told the CDU about charges that she had shifted on a number of core issues such as nuclear energy, social issues, minimum wage, and euro zone bailouts- "Our political compass has not changed. The context is changing. This is a time of epic change."...

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Harris pragmatic approach and willingness to try new solutions applies to Michigan- to find ways to protect union jobs and make the transition to clean cars in a way that increases wages and jobs and creates a bright future for the auto industry. Letting other countries manufacture EV's would hand over the manufacturing technologies to say China and lead to a future collapse of the auto industry in Michigan. This is why there is a transition period which is flexible to 2030 or even 2034, and the curve is for more gains in EV sales in the latter years as prices come down and technology improves. At every step of the way business presents unique challenges, and FDR/Harris "persistent bold experimentation" is part of the answer as China's BYD has come up with a better cheaper in house battery that means it can export EV's at lower prices- the US can't as yet. Electric vehicles sales are plateauing in 2024 growing from 7.4% to 7.8%. The former president describes an EV mandate. No EV mandate for all cars to be electric exists. The action taken by president Biden is for all cars to meet greenhouse gas emission targets that would require 50 percent of cars to be electric vehicles by 2030. Michigan as the home of the auto industry is heavily influenced by the auto industry. Biden walked the picket line here last year to support a UAW strike for higher wages after decades of concessions by workers that reduced wages to near the poverty level for families.  Harris pragmatic approach and willingness to try new solutions applies to Michigan- to find ways to protect union jobs and make the transition to clean cars in a way that increases wages and jobs and creates a bright future for the auto industry. Letting other countries manufacture EV's would hand over the manufacturing technologies to say China and lead to a future collapse of the auto industry in Michigan. This is why there is a transition period which is flexible to 2030 or even 2034 an the curve is for more gains in EV sales in the latter years as prices come down and technology improves. At every step of the way business presents unique challenges and innovation is part of the answer as China's BYD has come up with a better in house battery that means it can export EV's- the US can't as yet. ...

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Growing the banking business right into the 2008 financial crisis - with the effects of the crisis playing out over the next decade- is one decision GE CEO Immelt has described as one he didn't do right. Moves in 2014 and 2015 were designed to focus GE on areas of its historic strengths. GE plans to sell $26.5 billion of office buildings and commercial real estate debt to Blackstone Group and Wells Fargo. This is after moves to spin off the private label credit cards and retail finance business as a separate company called Synchrony Financial. Most of GE Capital's $500 billion business will be sold off or spun off in 2015-2016, except for aircraft leasing and financing for energy and health care, which are related businesses. GE shares were up to $28.38, up 10%, in trading on April 9, 2015. GE Capital's shares were down to $6 in the 2008 financial crisis requiring an injection of government funds. Immelt's 13 years as CEO would end on a positive note with this move, as the role of GE Capital in contributing to the crisis is considered a blemish on his record....

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David Brooks of the NYT describes the approach taken by British prime minister David Cameron and his Conservative Party government to help the working class poor in Britain, and tackle the social roots of poverty. He says an American adaptation similar to this is badly needed in the Republican Party, with the candidates in the election providing solutions from an old rulebook. Only after Trump's popularity with appeals to less educated older Americans has the Republican leadership responded, with Speaker Ryan helping organize a forum on poverty under the Jack Kemp Foundation- emphasis was placed on education, work, opportunity and accountability for anti-poverty programs in the discussion moderated by Ryan and Senator Tim Scott. Less attention was paid to the other social aspects mentioned here by Brooks, and cited by Cameron when he described the inadequacy of traditional solutions from the right and left of the political spectrum. Cameron outlined the principles of his anti-poverty plans called "Life Chances Strategy," in a speech on Jan. 11, 2016, in north London, with the entrie transcript on the gov.uk website. Cameron acknowledged in the speech that social issues including single parent families, and other social problems such as long term unemployment, can make it harder for some people to use self-reliance and personal responsibility in a growing economy as a way to grasp opportunities. Cameron proposes a combination of economic, social and job growth strategies. His second term plans include 30 hours a week of free childcare for 3 and 4 year olds so both parents can work, parental maternity leave, expansion of Troubled Families Program, in addition to the introduction of National Living Wage, tax cuts, universal credit. In tackling social aspects of the problem Cameron cited the need for development in the early years of childhood, the huge importance of family, social connections and experiences, informal mentors, cultural experiences, broadenend horizons, that enable young people to acquire language skills, character and resilience. Second term projects include expanding reach of high performing schools to deprived areas, emphasis on core English, math, science, history, geography Ebacc skills, a 1 billion pound investment in the National Citizens Service by 2021, a plan to transform housing estates including rebuilding from scratch, additional 1 billion pounds to provide mental health treatment including treatment within 2 weeks in homes and communities. Throughout Cameron's "Life Chances strategy" is aimed at tackling not just the material dimensions of poverty, but also what he describes is broken in Britain- "the paucity of opportunity."...

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  A new German party called BSW,  Bundnis (Association) Sarah Wagenknecht, means Germany nationally could see a smaller Social Democrats party in parliament making way for the socialists who want to keep out migrants. Across East Germany a new party is challenging the AfD from the socialist side getting the protest vote against pro-migrant policies.The socialist BSW party is taking votes from the SPD and DIe Linke Left, from Free Democrats and Greens in the state parliamentary elections in East German states of Thuringia, Saxony, Brandenburg. Nationally SPD may be 15-20%, BSW 10%, and CDU 30%, AfD 10-15%, FDP 10%, Greens 10% in a new shape for German parliamentary representation. The AfD and far right in Germany is challenged by the BSW with both parties opposing policies that led to large scale migrant flows into Germany of Angela Merkel.  BSW is the socialist party of Sarah Wagenknecht which is opposed to migrants entering the country as it distracts from tackling the problems of the working class in Germany and burdens public services when needs are greater among the local communities.  It sees the ruling Christian Democrats, Social Democrat and Free Demcorats, Greens, as out of touch with the problems of working class Germans struggling to make a living. BSW also opposes the wars in Ukraine and Gaza for the same reasons as it takes away resources that are better used to tackle problems at home. The AfD party also opposes migrants but is seen as feeding on the grievances of people of old east German communist state who feel left behind by the reunification of Germany. As a socialist party BSW is for addressing problems of inequality and poverty, childcare, cost of living action, housing, and many of the problems of the working class. Mette Frederiksen Danish prime minister has combined socialist ideas with anti-migrant position in Denmark. A similar position is being taken in the US by the Biden Harris administration in the US by closing the Border with Mexico.  Who is Sahra Wagenknecht and the BSW? Bundnis Sarah Wagenknecht or Association of Sarah Wagenknecht is a socialist party that grew out of Sarah Wagenknecht's own experience growing up in the socialist state of the German Democratic Republic during her formative years in East Berlin.  Born to a Iranian father who disappeared in Iran, and a German mother she was raised by her grandparents. She was active in the socialist parties Die Linke group in parliament since 2000. She received her bachelors degree in philosophy and New German Literature at East Berlin Humboldt University. Followed by MA at Groningen University in philosophy of Marx-Hegel and a doctoral degree from TU Chemnitz in Economics. She was member of parliament in the Bundestag and leader of the Die Linke group. The twin 2009 financial crisis by banks pursuing excessive leverage profits and unethical dealings, the euro crisis that followed of state actors misrepresenting their finances, the rent seeking attitudes of finance, pharma, tech monopolies and other industries has led her along with Italian economist Mazzucato to question the existing system. ...

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In India 70% of smartphones sold in 2015 cost less than $150. Apple's market share in India is really small at about 2%. Apple iPhone sales were up 56% in the 1st quarter of 2016 over the same quarter in 2015, according to CEO Tim Cook. iPhones cost about $300-$1000 without a data plan in India reducing the size of the market. In May 2016 Apple applied for approval from the Indian government to sell refurbished or certified iPhones at lower cost. In India the best selling iPhone is the older 5S which costs about $300. It makes up 50% of iPhone sales in India for 1st quarter in 2016, according to Counterpoint. Apple has no model at the low end, as the SE model will cost even more at $500. The Indian market is growing at 26% in 2016 over prior year, making it the next largest market after China. Another approach Apple is taking is seeking approval to open its own retail stores and sell online. A waiver has been given by the government for using locally made parts. Apple's high prices and margins remain a significant barrier in opening up the Indian market, when lower priced Korean and Chinese smartphone models offer attractive options to price conscious Indian buyers....

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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. ...

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Mr. Chatzis is being forced to choose between paying a $372 real estate tax bill to keep his lights on, and paying for his wife's medicines on a $720 a month pension. Under new laws Greece now incorporates new property tax bills in the electricity bills ordinary Greeks receive. He says he cannot pay this. This was added as part of conditions agreed to by Greece for aid from the EU. Ordinary Greeks have paid real estate taxes in the past when they bought or sold property, and paid much lower taxes yearly to municipalities- about $133 yearly for Mr. Chatzis. The new tax means he will have to pay an additional $372 for the next two years. The new tax is added to electricity bills from the government owned electricity company to ensure payment. The tax makes no exceptions for the elderly or the unemployed. It is based on square footage, age of the building, and average value of the neighborhood, and has no relation to income. The feeling in Athens is that of growing resentment. Union workers have occupied the electric company's billing center, and the power company is holding off on electricity cutoff notices till the government decides. ...

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Tightening budgets in Greece, Spain and Germany, mean that governments are now cutting the prices they pay to pharmaceutical manufacturers. The governments are the largest buyers of pharmaceutical and medical products in Europe.

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The Economist points out that China's total debt of government, corporate and households has grown by about 100% of GDP since 2008. The 2009 crisis led to rapid increase in debt. It is now about 250% of GDP, according to the Economist. Slower growth of below 7% risks reducing China's ability to service this debt. About half of this debt is owed by state owned companies and property developers. China can use its sovereign reserves to continue supporting bank and state owned companies. Investor's are pricing bank shares to reflect about 10% of this debt as bad debt even though government estimates are much lower. The reserves provided China time to fix the banking system since 2008, yet the debt keeps growing and China has failed to take strong action in the last 6 years. Complacency is a problem, and the incentives for local governments to continue prior practices that increase debt continue. As Krugman and other experts have pointed out at some point the rules of finance will apply to China as they have for other countries that faced a debt crisis- Japan in the late 1980's, South Korea and other Aisan countries in 1997, and the U.S. in 2008. Even without a crisis through deft managemen and use of reserves China risks zombifying the economy as old loans are backed up by new loans, with the further risk of misallocation of capital or poor use of capital. This lowers productivity of capital and hurts development. With poor statistics such as the figure of 1% of debt being bad debt cited here, the problems of complacency can be magnified, as there is less reason for a strong response....

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GM' second largest market is China where it sold more than a million cars in 2007 and sales growth was 21%. Brazil is the third largest market. Russia is the fastest growing market with sales growing 75%, and it has a favorable pricing environment in Russia with growing class of more affluent buyers as Russian economy grows quickly. And India is a market that GM is trying to buildup sales with the introduction of GM's Spark car. Overall this should enable GM to maintain momentum even as sales in N. America declined 6%. Toyota's N. American sales declined 4% so it is seeing a slowdown there also. But compared to GM which has 65% of revenues from N. America, Toyota has 40% of revenues from N. America and 30% of global profit.

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WSJ's Monica Langley provides an exceptional report with a close look at the first woman CEO at a large corporation in the cusp of great change. IBM CEO Ginni Rometty is remaking IBM by moving out of existing businesses and shifting to new growth areas such as analytics, cloud computing, new R&D advances. She sees her job as building the IBM of the future, and this includes divestments and phasing out of some businesses, acquisitions, and building some businesses such as the Watson Heath Care business from scratch. In some fast growing areas such as cloud computing this means competing with other established competitors, Amazon, Google, and Microsoft. Rometty's job is tough because of the size of IBM with 380,000 people in 170 countries, a culture that lacks the agilityof younger companies, and the older businesses which continue to slow IBM's progress, and where divestments reduce revenues. IBM sales are down for 12 consecutive quarters from the year earlier quarter. IBM's share price is down about 10% since Rometty became CEO in Jan. 2012, resulting in investor dissatisfaction with results. Rometty's goal is for 40% of IBM's revenues to come from corporate markets in analytics, cloud computing, cybersecurity, social networking, and mobile technologies, increasing it from 27% of about $93 billion in sales in 2014, and 15% of $105 billion in sales in 2013. Sold off and divested are low end servers, IBM's chip maker, and other hardware businesses. It is so extensive that whats left of the mainframe business is focussed on new technologies for mobile. Rometty setup a partnership with Apple for the corporate mobile market, and started Watson Health as a new venture in analytics for healthcare using its Watson Computer technology. Rometty grew up in Chicago, one of 3 daughters raised by a single mom, who says she was taught to be "fearless" by her mother. She graduated from Northwestern University with majors in electrical engineering and computer science, joining IBM as a systems engineer in 1981. She carries a backpack, school size notebooks, on her frequent trips to see customers in person and is constantly prodding employees at IBM to go faster. Rometty has a passion for scuba diving in her spare time and always carries the gear with her. Christine Lagarde at the IMF is one of the few women heading large organizations that have the same level of energy. Lagarde's passion is swimming having competed in sychronized swimming, and both Rometty and Lagarde describe the loss of a parent in different ways as a significant impact in their life. ...

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The shift from non-conventional polluting single cylinder engine contraptions used by poorer Chinese called "Inkfish" to conventional fuel efficient engines will reduce oil consumption in China even as more cars are on the road. This explains the paradox of Chinese vehicle sales being up by 77% year over year in the first quarter of 2010, and still gasoline demand went up by only 3%. Kack Perkowski, founder of Chinese auto-parts manufacturer Asimco Technologies, says the shift from the low tech "inkfish" type vehicles to fuel efficient small cars popular with the Chinese and encouraged by government policies to reduce oil consumption is a big factor in this development. Perkowski says 50 million engines are manufactured in China each year and if you subtract the 13.6 million cars, trucks and buses sold in China last year, another 36 million low tech highly fuel inefficient engines including "inkfish" engines were sold. China's car buyers are very price conscious and prefer smaller cars. Smaller cars are also well suited to the crowded roads in the coastal cities. And the Chinese government wants to keep oil consumption down so it is pushing buyers in the direction of smaller engines with tax breaks. The Chinese governmet is expected to announce subsidies for plug-in hybrids worth about one third of the sticker price. The motives are environmental and energy security related, but also have the intent of enabling China's car manufacturers to gain experience and leadership in newer electric car technologies. Bottom line: some experts including Deutsche Bank's Sankey view China's oil demand growing much slower, at about 2.6% a year over the next 15 years. This would mean oil demand tapering off at 13-14 million barrels of oil per day by 2025, much higher than the 9.1 million bpd in 2010, but growth curbed by fuel efficient engines and increasing fuel efficency of the Chinese vehicle population....

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Kyle Wingfield meets up with Robert Mundell, Nobel winner in 1999. What does he have to say now? He thinks the oil prices are on track and would reach $130 by 2020 with 3.5% inflation, starting with $34 a barrel in 1980 doubling to $68 in 2000 and doubling again to $136 in 2020. Today its already at $136 but he thinks it will settle down lower to about $100, so hethinks were not so far off track. On inflation he looks at the price of gold at$850 an ounce , and now its still about the same, with high inflation gold should be at $1500, so he does not see the public thinking high inflation is coming. He was in favor of the Reagan tax cuts and set the groundwork for this and aslo supported the euro. He believes the Bush tax cuts should be kept as it would be disastrous for the world economy. Mundell has always believed that there is a link between economic growth and lower tax rates. He advocates corporate tax rates of 25%. Tax rates went down to 28% under Reagan back up to 40% under Clinton and down to 35% under Bush. Hewould like to see a ceiling on marginal rates of 30%. He would like to see a fixed exchange rate so that there are not these large currency rate swings, the euro should be valued somehwehere between 90 cents to the euro to $1.30. The US has a growing population and better adoption of innovation with a younger population than Europe so he sees the USA as a leader in innovation and growth and the dollar or some new global currency should be formed for a global economy. Just as he supported the euro he supports a currency for Asia. He does not see overvaluing the Chinese currency as doing much good as he sees the Japanese economy hurt by the overvaluing of its currency after a period of Japoan bashing. He is an advisor to China on currency issues....

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Osborn and Gauthier Villars describe how Russian president Putin and his former Dresden KGB associate Chemezov executed their strategy for Avtovaz to create a Russian state owned autombile industry in alliance with Renault. Troika Dialog and state banks put in hundreds of millions of dollars, and Renault put up $1 billion with more of it in cash up front, to get the necessary restructuring and financial setup to obtain state ownership and control of all of Avtovaz's assets. This had to be done because the company had descended into control by gangs and criminal elements by 2005 when Putin put Chemezov in charge with help of state police and prosecutors. And Putin conceded only 25% ownership to Renault as the Russians have gradually reasserted control of their companies and driven out gangs and elements that have grabbed assets in the lawless environment that prevailed with the collapse of communism. What is happening is that the state is then attracting capital and technology from foreign companies by selling them a stake at the best price possible. In the case of Avtovaz because of the highly deteriorated lawless situation, the state will use some of the Renault money to take financial ownership of Avtovaz in addition to loans from state banks. Putin says he has attracted $80 billion in foreign capital in 2007. During the Brezhnev years Fiat invested in Russian automobile factories which became part of Avtovaz. In 1993 it was privatized, but by 2005 it had fallen into Mafia type gangs hands and the state had only about 2% control of ownership. From this low level Avtovaz has recovered, and now is where it was before privatization, with the added infusion of technology and capital and part ownership by foreign companies interested in expanding in a fast growing Russian market. Note that its location is Southern Russia, and its employment base is huge employing 104,000 people. The company is now back on its feet and improving its prospects with newer models to replace the old Lada, of which 736,000 are turned out each year. With the help of Renault, Russians hope to create a large automobile industry of their own. Compared to 2004 when 24% of companies were state owned, now 40% are stateowned as the Putin strategy continues. By getting much better deals and selling off stakes at higher prices, keeping state control of the bulk of the assets, and seeing that capital and technology infusions occur as technology moves forward, this strategy is proving to be a winning proposition for Russia. For foreign companies the growing attractiveness of the Russian market, and the probability that even at the higher prices these assets might be worth much more in the future, makes it a win-win proposition. This is the direction Russia will increasingly take under the Putin-Medvedev administration. Note that Chemezov may take up Aviation industry reorganization next....

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The ABX Index which tracks subprime bonds is showing signs of recovery. The prices for representative parts of the subprime bond market have doubled from a low of 30 cents on the dollar to about 60 cents. This is happening as investors and some companies are taking on more risk and finding lenders. This is helping push up prices of commodities, junk bonds and stocks. The larger yields on the subprime bonds are attracting investors. Non-agency bonds- bonds not backed by Fannie and Freddie- yield between 5% to 7%, above the 4% yield on high quality corporate bonds and the 3.5% yield on U.S. government bonds. Demand for these bonds is growing. Companies that invest in these sub-prime bonds such as MFA Financial were buying $100 million of these bonds in 2010, and have increased this to $300 million a month recently. MFA Financial is able to do so because it can find funding from lenders who are now not as worried about the risks of these subprime bonds. Another development in this market is the offer of AIG to buy back apool of bonds that the Federal Reserve had taken over from AIG during the financial crisis of 2008. AIG offered to pay $15.7 billion for the pool of bonds with a face value of $30 billion. The Fed cited a high level of interest from investors and rejected that offer. The Fed will now let investors bid for these bonds to maximize its gain on these bonds. In another development even conservative investors such as four large life insurers are looking at buying these subprime bonds. Scott Robinson, a senior vice president of Moody's Investors Service, says the high levels of capital available is leading to a re-risking of balance sheets, even though it is not back to the old days yet. Considerable risks still remain in the housing market according to Nouriel Roubini and other experts....

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Apple shares are down 25% says this WSJ article and asks the question whether Apple's best days are past. In the fastest growing markets in Asia and Africa, Apple iPhones are beyond the reach of about 95% of the population. The number of Apple iPhones sold in India have dropped 40% in 2018 compared to 2017. Apple's market share in India has fallen from 2% to 1%, according to Canalys research firm. The $1.8 billion in Indian sales is about half of what Apple executives had hoped for when Tim Cook visited India in 2016. Some call it a rout. Tim Cook seldom mentions India now. At the center of this is Apple's reluctance to change its business model of getting the highest margins, making not a range of handsets, but a few models selling at high prices. This is the strategy that Apple has used to revive the company from near bankruptcy in 1997. Competitors including Xiaomi, the Apple for China and India, tweak their phones constantly to address local concerns for battery life, and lower prices to get market penetration. Only 24% of Indians have a smartphone and India is fastest growing market. Friction with the Modi government which cannot be favorable to Apple's plans to push a high  margin product when competitors have similar but better value packages.   In price sensitive markets of Africa and Asia most people buy phones outright and use pay as you go plans, Apple is not popular. Even in China Apple's market share is down from 12.5% in 2015 to 8% in 2017, according to Canalys. Apple is reluctant to make many models offering lower prices and to address concerns such as battery life in India. In India 39 million people will add smartphones in 2018 with 75% costing less than $250, 95% costing less than $500. In Apple's lineup the iPhone 7 costs around $550. Competitors such as Xiaomi, OnePlus, Oppo, and Vivo flooded India with smartphones costing less than $200. Unlike Apple which spurns market research these companies do extensive research work on local situation. OnePlus has focussed on battery life and gained 30% share of the premium segment to Apple's 25%. By making the devices in India these companies avoid having to pay the 20% tariff. Apple has so far not put up a new plant with the restriction that India places of single brand retailers over 51% foreign owned to buy locally 30% of manufacturing materials. The Modi government felt Apple was not focussed enough on bringing high tech jobs to India and helping local manufacturing, a perception not conducive to expansion in India where "Made in India" is the government plan. This means opening Apple stores in India is less likely now.  The turnover of Apple India executives is also increasing with 3 new CEO's 2017- 2019. Apple's strategy of targeting wealthier Indians makes it not even a fringe player in the Indian market down to 1% of the market. Just as it shrinks in the Chinese market where most customers are price sensitive and the economy is slowing.   ...

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Ford Motor Company profit increased in 2015. Ford made $1.9 billion net profit in the 2nd quarter 2015, a 44% increase over the prior year quarter. Revenue declined to $37.3 billion, as margins reach the projected 8-9% range for 2015. Full year operating profits are estimated by Ford between $8.5 and $9.5 billion. Prices on the F-150 truck were up $3600 over the prior year, reaching $44,000. Ford sold more larger vehicles and pickups than sedans. A favorable sales environment is helping sales of more profitable larger vehicles- low interest rates, low gas prices and higher fuel economy on newer F-150 vehicles, including an aluminium body on the new F-150 truck. Recent China sales also show increased demand for the larger vehicles and SUV's, with Ford China market share increasing to 4.5% for 2014. In the U.S. Ford and GM are losing market share, with a focus on profitability. In China sales are growing at a slower pace with the economic slowdown, with 2015 sales growth estimated at less than 1%. Worldwide sales for VW and GM increased to 5.04 million and 4.9 million for the first 6 months of 2015, on the basis of larger market share in China. Toyota worldwide sales declined slightly to 5.02 million. Future prospects may not be as good, as the market in China could become very competitive with too much capacity. The price competition in smaller cars could reach the larger vehicles at some point with the slowdown reducing profits from China....

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Russian and China sign a contract for Russian natural gas from undeveloped fields in Siberia during Putin's visit to Beijing in May 2014. The 30 year contract is for about $400 billion. China gets natural gas at prices about 25-40% below the current cost of importing liquefied natural gas from Australia, Qatar, Malaysia and other countries, according to RBC Capital Markets. For the last decade China and Russia have failed to agree on a price. In these negotiations a price was reached but is being kept a commercial secret. China imports large amounts of natural gas by pipeline from Turkmenistan at about $10 per million British Thermal Units (BTU's). Gazprom needs about $12 per million BTU's to break even. The two Siberian fields are the Kovykta field and Chayanda field which would remain undeveloped without the deal to supply China. Russia will spend about $55 billion for pipelines and infrastructure on its side, and China $20 billion. China's needs for natural gas were 170 billion cubic metres in 2013, growing to about six times consumption of about 30 billion cubic metres in 2000, according to China's NDRC. This is expected to reach 420 billion cubic metres by 2020. Currently 17.7 million metric tons come by pipeline mostly from Turkmenistan and 15.5 million metric tons of LNG mostly from Qatar and Australia, according to China General Customs Administration. The deal will put on hold higher cost LNG projects for Asian countries and make mores gas available at reduced prices in Asia, according to analysts....

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The full text of the letter is given here. In this letter the U.S. sets out some important facts about events that happened during the coronavirus crisis during the crucial 4 month period from December 2019 to March 2020. Every week lost in this time due to reasons of a lack of transparency, openness meant hundreds of thousands of people more infected and tens of thousands of deaths worldwide. There are questions of transparency, of openness and this raises questions about the manner in which the World Health Assembly operates with hundreds of small countries in Africa and Asia having votes equal to that of the U.S., India, Brazil, Mexico with votes taken of over 200 countries. The entire election process can now be seen as questionable, when over a billion people in one country alone such as India or hundreds of millions in Brazil and Mexico would have to bear the consequences of poor decisions made by small countries that can be swayed in one direction or another based on political bias and other considerations that have nothing to do with global health.  At the conclusion of the letter by the U.S. to the current WHO shaped by a controversial election in 2017 the following is stated about the standards set by Gro Harlem Brundtland and which helped the world prevent the SARS crisis which originated in China in 2003 from spreading to the large countries of the world India, Brazil, Mexico, and other such countries in Asia and Africa, Latin America, and the U.S. European Union. "In 2003, in response to the outbreak of the Severe Acute Respiratory Syndrome (SARS) in China, Director-General Harlem Brundtland boldly declared the World Health Organization’s first emergency travel advisory in 55 years, recommending against travel to and from the disease epicenter in southern China. She also did not hesitate to criticize China for endangering global health by attempting to cover up the outbreak through its usual playbook of arresting whistleblowers and censoring media. Many lives could have been saved had you followed Dr. Brundtland’s example." Even this does not come to grips with the flawed way in which the election of WHO head is done. It can no longer be relied on when there is the danger that lack of transparency can emerge in the WHO leadership itself because of a flawed process. It risks endangering the lives and livelihoods of hundreds of millions in countries such as India, Brazil, Mexico, as well as in the relatively small countries of Africa and Latin America where even basic water supplies are at risk but which could tilt elections at the World Health Assembly. Consider that a cyclone just hit the Indian state of West Bengal and Bangladesh on May 20 just as the coronavirus pandemic is spreading. That this region of 1.5 billion people had just 2 votes out of over 200 cast at the World Health Assembly in 2017 shocking. And even these votes cast based on old geopolitical considerations not how good the candidate is, and how good the country he is coming from is in terms of its record  on public health. The irony here is that private foundations in the advanced countries in the U.S. and Europe some of whom are major donors to WHO did not think that more experienced candidates in their own countries with a better record of public health such as in France or Germany are better qualified, in a flawed NGO support mentality left from the Clinton years. Basically the people in these large countries such as India, Brazil, Mexico were disenfranchised, when the austerity policies were consuming the European Union, and the U.S. had just elected a new administration itself groping for ways to reverse years of neglect of public services and infrastructure priorities. They would trust good leaders no matter where they come from, who have a record of transparency, leadership, and all the values we cherish together no matter where we come from. ...

LyrArc Article Gist
An Italy based auto analyst for Global Insight consultancy, Pierluigi Bellini, says Marchionne understands how the system works in the US compared to Daimler executives, who had a difficult time understanding and integrating themselves with the Americans at Chrysler. Marchionne has worked in North America, and brings a youthful culture with plenty of creative energy, which could work well with Chrysler. Chrysler is also at the similiar stage that Fiat was in 2004, when Marchionne came in from outside- it is broken and everyone including the Obama administration is looking for a fresh start. In such a situation its easier to tear up the old organization charts and bring in fresh blood, young people with new ideas, and make a fresh start. Wth the government providing the financing, the financial risk is minimized. What remains is the risk in a drastically smaller and rapidly declining market. Here the lack of mass market small cars in the US, may work to the advantage of a European maker with fresh ideas and speed, and popular European small car models, which is what Fiat has at this time. It is quite possible that the idea that Americans do not like small cars may turn out to be not true. The market is changing and the demographics and economic situation is changing dramatically, cost conscious Americans may like to have a popular small car. Americans with larger cars may like to have a less conspicuous, and easy to drive and park car for short city driving, as their second or third car. If a economic recovery does not occur for several years and Americans downscale in everything from homes, appliances, electronics, and cars to what their European and Asian brethren are used to, both from an environmental point of view, and from a practical commonsense point of view of gettting rid of excess and extravagance, size may be sacrificed for convenience and practicality. Smaller cars are well equipped in Europe with all the comforts and electronics so small does not have to be cheap. In short in a growing small car segment, innovative design and speed of development, with quality engineering may be the ticket for Fiat and Chrysler to the American market....

LyrArc Article Gist
Information provided by experts suggest that the government plans including the public-private partnership with $1 trillion committment to absorb the bad assets in financial institutions, offered as a general solution without specifics by Treasury Secretary Geithner, will be inadequate to cope with the growing bad debt. Nouriel Roubini at New York University says his analysis suggests that the USA financial institutions are already insolvent. The bad debts of banks he says now surpass bank assets. Roubini has been ahead of the curve in his estimates in 2008, and is respected for his prescient remarks about growing credit problems. In his latest report he says that total losses by American financial institutions and the fall in market value of the assets they hold will reach $3.6 trillion , up from his previous estimate of $2 trillion. Of the total he says American banks face half of this or $1.8 trillion, with the rest borne by other financial institutions in the United States and abroad. Mr Posen an economist at the Peterson Institute agrees. He says the liabilities of of American financial institutions far exceed their assets. The only qualification of this says Posen is whether this should be seen as a temporary panic, or whether the economic climate will improve and the value of bank assets recover from depressed values. Raghuram Rajan, of the University of Chicago graduate business school, agrees that if the banks had to sell these assets today at distressed prices then they are insolvent, but if there are calmer times say in ayear or so and values recover then banks may get anew lease on life. So much of this depends on market psychology, market confidence and the economic climate improving. The only problem here is that as happened in 2007 and 2008, the recognition, awareness and action has fallen behind the speed and accelerating manner of the downturn. The Bush administration, Congress, and the American public support, have all been lacking in providing the vigorous action needed, compared to the speed with which the crisis hit in the October 2008 to January 2009 period. The transition between administrations added to this effect. The total lack of any Republican support for the Obama administration's effort continues this effect. Now the Geithner plan with few specifics for a public private partnership for tackling the bad debt, and the lack of action on a bad bank solution with government takeover of certain banks as needed, continues this pattern. The constricted credit meanwhile continues to hit business with an additional hit from dropping sales, leading to layoffs across all industries, which simply worsens the housing crisis and growing foreclosures. So all across the spectrum government action is at worst very late as in the slow response to foreclosures, where the $50 billion proposed now should have come in early 2008, and the banks halting foreclosures and modification efforts proposed now should have come in early 2008 as proposed by Bair and Feldstein. And at best government is just catching up to the credit crisis as with the Fed and FDIC efforts to contain and stabilize it, with inconsistent results and the collapse of some financial institutions like Lehman Brothers. The lack of consensus in Congress and the inexperience of the new administration, means more valuable time will be lost in crafting an effective response in the manner of the bad bank solution. What all this means is that the overall response in 2009 as in 2008 will also lag behind, and the opportunity for a decisive solution is slipping away even as the cost of that solution is climbing, putting it further and further beyond reach. See the link to Hiroko Tabuchi's article titled In Japan's stagnant decade, Cautuonary Tale for America, February 12, 2009, NYT. Tabuchi touches on just this point, that the American experience in 2007-2009 is just like that in Japan where the response lagged the problem in strength and effectiveness till 2003, after years of wasted effort....