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The election debate brodcast live on Iranian television between Moussavi and Ahmadinejad. Moussavi described Ahmadinejad's foreign policy as engaging in " adventurism, illusionism, exhibitionism, extremism, and superficiality. He also described Ahmadinejad's denial of the Holocaust as harming Iran's standing with the rest of the world, and undermining its dignity. The debate was intense with Moussavi at one point saying the Iranian president was moving towards a "dictatorship." Ahmadinejad said that Moussavi was being supported by Khatami and Hashemi to bring him down. A video showing this simple home was circulated before the debate to contrast Ahmadinejad's simple style with that of some of his opponents like Nateq Nouri, a conservative Speaker of Parliament.

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As Obama faces the situation FDR faced, between political popularity after election in 1932, and loss of some political capital in the first year by 1933, and a lot depends on political will and courage. He has to execute and implement plans for efficient government spending that builds jobs to replace those lost, and to use the investments in really productive ways including projects that provide returns for years into the future. As David Axelrod points out in the Frank Rich column in the NYT, people sometimes live in a parallel universe, which may be completely at odds with what the rest of the country caught in the economic currents of layoffs and collapsing businesses is thinking.

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The repeated denials by VW officials from global headquarters in Wolfsburg, Germany, and from VW in the U.S., since 2012- when the problem of higher emissions on roads compared to emission test readings first came to public attention- show that VW management took the problem lightly. The deep consequences of such a move to hide real emissions, not just from the EPA but from unwary buyers, appears to have been entirely missed by management. Even when the issue was raised by the EPA, VW stated to EPA that the differences in results on roads vs actual emissions tests were technical flaws. In December 2014 VW even made a voluntary recall of half million diesel vehicles. Yet the high emissions on roads continued till VW officials told EPA about the software that was the real cause in August 2015. Even then VW officials offered to personally apologize, and asked for certification of 2016 models in the U.S., missing entirely the deep consequences of their actions. VW now says that the software to conceal the real emissions was installed on 11 million vehicles worldwide. VW management has set aside $7.7 billion as provision for penalties. The VW stock declined by 35% by September 22, 2015....

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John Lyons of the WSJ writes in this report from Seoul, South Korea, that president Moon may have inadvertently contributed to the sense of the futility of talking to South Korea about missile defense when he opposed the installation of the Thaad, Terminal high altitude missile system, in his election campaign. This led to the U.S. and the South Korean government of president Ms. Park moving ahead with the system before Moon was elected. Moon is a human rights lawyer who favored improved relations with North Korea. Domestic South Korean politics were decided by younger voters alienated by the existing business structure, leading to the conviction of president Park and later the head of Samsung on corruption charges, and the election of Mr. Moon. In foreign affairs the picture is quite different as Moon is seen in South Korea as not being consulted by the U.S. as it frames policy for the region. South Koreans call this "Korea passing." As U.S. and Japan are directly affected by North Korean missile tests, the most recent on August 29th passing over Japan, U.S. president Trump consults with Japanese prime minister Shinzo Abe. People in Japan are cited in the NYT as saying recently, that they knew they had to worry about earthquakes, but had not expected to have to worry about missiles. A recent report in NYT showed that most people in Seoul have not prepared seriously to use underground shelters because they do not believe a war could take place with Seoul only 35 miles from the North Korea border. The U.S. policy is now focused on working with China, and coordinating its policy with Japan. A U.S. anti ballistic missile test was conducted from the ship USS John Paul Jones on August 29th. Moon has changed his position and now supports Thaad missile defense. South Koreans are apparently resigned to the prospect of "Korea passing." ...

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Pop and Troinanovski look at the tough negotiations ahead for Brexit and describe Theresa May as a experienced negotiator. Belgian Interior Minister Jambon says she has "a lot of policy knowledge" and moved in the direction of European cooperation. Germany Interior Minister Hans-Peter Friedrich says May has a very clear idea of her objective, uses clear language, and is consistent. Yet much depends on other factors including elections in Germany and France in 2017. For France and Hollande the issue becomes particularly filled with implications with the need not to give the far right and Marie Le Pen any advantage by making concessions in the negotiations. German chancellor Merkel is also very clear from her perspective on migration and free movement in the European Union, a point on which she was tested by other Eastern European countries during the refugee crisis. Merkel made this clear that it was Britain's choice of direction in future relations- "Whoever wants free access to the European single market must in return accept all of the basic freedoms, including the free movement of people." Because of domestic politics in Germany and France and in the rest of the European Union, these negotiations could drag on for a very long time. The only positive sign for both sides is that May is known as a responsible politician after 6 years as Britain's Home Secretary, holding one of the top positions in the cabinet. As Merkel's popularity has recovered with about 55% popular support and the decline in the support for the AfD in recent poll cited by DW.com, Merkel may be prepared for a long negotiation to keep the original idea and spirit of the founders of the European Union alive and strong. ...

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On taxes instead of $100 billion a year increase in the deficit that the 2017 tax cut of Biden's predecessor cost the Treasury -which benefited average Americans only $750 a year studies show, and reduced corporate taxes from 35% to 21% shifting billions to large corporations- Biden proposed $500 billon cut in the deficit by putting a 25% tax on 1000 billionaires in the US. Biden's guarantee that no one making less than $400,000 a year would pay an extra penny in taxes. Everyone would be better off, no one worse off. His predecessor's 2017 tax cut did not increase investment spending by companies which remained same as before. "There are 1,000 billionaires in America.   You know what the average federal tax rate for these billionaires is? 8.2 percent!  That’s far less than the vast majority of Americans pay.   No billionaire should pay a lower tax rate than a teacher, a sanitation worker, a nurse!  That’s why I’ve proposed a minimum tax of 25% for billionaires. Just 25%.  That would raise $500 Billion over the next 10 years." Only some of it would pay for the following the rest to cut the deficit- "Imagine what that could do for America. Imagine a future with affordable child care so millions of families can get the care they need and still go to work and help grow the economy.  Imagine a future with paid leave because no one should have to choose between working and taking care of yourself or a sick family member.    Imagine a future with home care and elder care so seniors and people living with disabilities can stay in their homes and family caregivers get paid what they deserve!  Tonight, let’s all agree once again to stand up for seniors! "       ...

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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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Steep drops in economic activity and loss of so many jobs is the reason why total lockdowns are not the best solution as seen from the experience gained by August. Selective lockdowns are now being applied across France, Germany and Britain in specific areas. About 400 million jobs have been lost, 13 million in the U.S.  Hospitals overwhelmed in northern Italy by March is what made the total lockdowns necessary.  These steps for total lockdown were made with very little known about the pandemic and the need to protect hospital and health systems. These decisions at that time are not questioned today. It is that now  with some treatments found, a vaccine close to being introduced, hospital system protocols established, health ministries and departments organized to respond quickly, and the public awareness at high levels,  it is now possible to impose these selective lockdowns effectively and quickly. As the WSJ now says the CDC had botched the initial development and distribution of tests in February- see WSJ analysis and our Lyrarc links of how 3 crucial weeks were lost in Feb with failure of the CDC and HHS in testing- making test and contact trace strategy window to be missed. China had not cooperated in letting a U.S. team quickly in the early days of February creating more uncertainty and risk. In that situation total lockdown suddenly became the reality to avoid a catastrophe. Today a carefully applied selective application of solutions can be done and is seen as the right way to protect jobs and livelihoods of people. ...

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The crisis facing investment bank Jefferies Group about the extent of its holdings of European sovereign debt. Jefferies faces rumors about its financial condition. The desperate effort of CEO Handler to contain the crisis by listing online its holdings of debt by country and maturity with every ID number for every bond to show that it was not using credit default swaps to hedge investments. Shares of Jefferies Group fell 20% in October and 60% for 2011. As a safety measure Handler sold off $1.1 billion of sovereign debt of Portugal, Italy, Ireland, Greece and Spain in November, and continued to reduce its exposure during the last week of November 2011. The collapse of MF Global for making large bets on European sovereign debt followed by crisis in market confidence was the background in which Jefferies Group fought for survival.

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One negative effect of the trade war with the U.S. is an increased emphasis on energy security and increased use of coal in China. After China committed to goals for climate change coal use declined in 2014, after reaching a high in 2013. The attack on Saudi oil facilities showed risk in its reliance on Saudi oil. China's import dependency for oil reached an all time high of 72% in 2018, according to BP 2019 Statistical Review. Gradually the commitment to climate change and lower use of coal has changed since 2016 with the withdrawal of the U.S. from the Paris Climate Change Agreement. Initially after the U.S. withdrawal under president Trump China made bold commitment to lead the fight against climate change but has since wavered. In an October 2019 speech Premier Li Kequiang called for the development of the coal industry to ensure energy security.  As China's economy slowed in 2019 in the face of U.S. tariffs and a trade war with the U.S. efforts are being made to increase infrastructure investment which has driven coal use higher. China's steel output reached a record of 750 million metric tons in 2019. The amount of coal fired capacity under construction in China now exceeds the rest of the world combined, much of it from plants permitted before 2017, according to Global Energy Monitor. China is also expected to become the world's largest importer of natural gas by 2020. Even the Russian gas fields from Siberia supply only a fifth of China's energy demands in 2020.  China has made large strides in renewable energy helping it meet its Paris Agreement targets. Renewable energy is about 10% of China's energy mix, but its use showed growth of 29% in 2018, making up half of the world's growth. China's use of coal in the energy mix has dropped to 58% in 2018 from 72% in 2008, according to BP 2019 Statistical Review, as a result of renewable energy investments. At the Madrid Climate Conference China renewed its commitment to the Paris Climate Change Agreement. Now it is a balancing act keeping in mind energy security and economic growth along with the need for clear skies and better air quality. ...

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The contrarians not just then, but still today, as many economists shrug off facts about the new savings rate and predict a bounce back in 2009. Jeremy Grantham, co-founder of Boston money mangement shop GMO LLC, got the date right, predicting real risk to the financial system in October 2008. He pointed out for years since 2000 that the Fed's moves and the government's fiscal actions (including 2 costly wars) after the 2001 terrorist attacks, had simply postponed "a sensational bust". Its useful to see how these three, Peter Schiff, President of EuroPacific Capital, Bob Rodriguez of the FPA New Income Fund, and Jeremy Grantham agree and where even they disagree, and where the common thread of logic runs. Currency valuations including the US dollar, are the hardest to predict, and the predictions in this regard are also hardest to state for their timing. When separated from the rest of the picture, they give a better sense of what this common thread of logic in most of the crisis picture is. Grantham saw this crisis coming, but its not clear that he sees this running for a long period of a decade. He agrees with Rodriguez and Schiff about another 30% fall in the S&P 500 stock index, but at the same time he predicts over the next 7 years returns in the US stock markets will be 7.5% annually. Rodriguez sees this going on far beyond periods 1 and 2 to periods 3 to 10. And he sees government efforts to jump start the economy leading to some progress and then sputtering out because consumers are turning frugal. The savings rate will grow eventually going up to 10% by 2010. What this means is that as 70% of the US economy depends on consumption spending, and consumption spending has been too deeply damaged to recover in a few years, the downturn will only deepen in 2009 and 2010. This is his central point, and the analysis free of clutter and controversy. Basically he says the policy makers do not fully grasp that the US consumer has turned into a saver, and while the Obama administration puts one foot on the accelerator to stimulate spending, consumers will be pushing on the brakes. Schiff sees difficulties in financing the debt leading to higher interest rates and a serious drop in the value of the dollar. The views on the dollar face a lot of uncertainty as to timing, the relative strength of currencies in countries in Europe which have weak economies (UK, Ireland and Spain), and the rapidly weakening Chinese economy. But the common thread of logic runs through Rodriguez's argument about the savings rate and consumption spending, with debt and the overstretched consumer in the US running through every discussion about a weakening economy. Something much like what is happening to the auto industry because of its extraordinary degree of oversupply (with capacity reaching 94 million vehicles worldwide and demand inflated by the boom years and easy money now deflating) playing out in a few quarters, is likely to happen across the whole economy. In a gradual pattern playing out over a few years, as consumers postpone purchases of retail goods. Already this is showing up in the inventories of electronic goods that is building up. See links. Kelly Evans in the WSJ front page on January 6, 2009, confirms the signs of a seriously frugal American consumer....

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The title is misleading as it does not day that the the drop in the trade deficit is largely because of the steep climb in the trade deficit in March so that the April numbers decline was made that much larger. Importers tried to beat the DJT tariffs by importing ahead of the tariffs date. For the trade deficit to truly turn around Make in the USA has to go into effect over the next 5 years reducing imports and rebuilding American manufacturing, and the tariffs should be seen in that context as a way to do this. Tariffs only reduce the overconcentration of manufacturing in one country which poses serious risks as well as leaves American workers at the mercy of other countries.Imports were still $351 billion in April and the deficit at $62 billion.

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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....

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The lack of jobs is a major problem for Tieling New City in Liaoning province in China. Liaoning provincial leaders started the plan to build a new city in 2005 to help revive the local rust-belt economy. The new city was planned for 60,000 residents in 2010 and 180,000 by 2015. Today because of few job opportunities most of the new city is empty. The business park is also empty. The original plan was to create growth in the province by creating 7 such urban centers and building highways and high-speed rail lines to connect them to Shenyang, a 90 minute drive south of Tieling. Rural residents would take up homes in the new urban areas with affordable homes, and businesses would be attracted to these smaller cities because of lower labor and land costs, but this has not happened. Credit Suisse property analyst Du Jinsong, says there are better job opportunities in higher tier cities, so that lower tier cities are seeing a net outflow of population. He found that in two thirds of 287 mostly small urban centers there were fewer residents than people registered to live there. ...

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Ed Thorp and Bill Gross of PIMCO on risk management techniques they use which build on one basic fact avoid overleveraging. If you have a 5% edge from an information standpoint or over your opponent bet only 5% of your wealth on each toss of a coin. What do they think of today's markets? In the hedge fund world they say there has been a large flow of capital into it in the last 15 years from $100 billion in the early 1990's to $2 trillion now. But the amount of available investing opportunities have not gone up by much. So you have a large number of bets in a pool of assets that are of declining quality and the overbetting phenomenon that leads to gambler's ruin. And as the edge available diminishes one needs more leveraging to generate same returns which leads to the overleveraging that got Carlyle Capital and Bear Stearns collapse. The puts a big dent into the perceived stable situation creating huge crises in confidence and declining spiral.

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As Germany looks back at the mistakes of the past in failing to get immigrants to integrate and letting ethnic communities form that failed both in terms of jobs and language/culture skills needed to become full citizens, it is now taking a fresh approach to the task of integrating about 1 million new immigrants. For the first time the government is putting this approach into legislation that is sure to pass, offering new incentives, requiring immigrants to look for work and to take jobs in smaller towns and communities. It offers new opportunities and at the same time takes away benefits if this is not done. Chancellor Merkel calls this "a milestone," and said about this legislation- " We are a country that makes a good offer to those who come to us, to those who are fleeing war, persecution, terrorism. But we are also saying very clearly- because we have learned from the past  when we did not provide these integration opportunities- that we're also expecting people to accept this offer." The lessons were learned after large immigration from Turkey in the 1960's and 1970's with ethnic communities being formed that never integrated with the rest of German society. The new law requires refugees to stay in municipalities where they are first assigned when arriving in Germany unless they have a job offer elsewhere. The government plans to subsidize creation of 100,000 new jobs across Germany, in work such as maintaining public parks, helping elderly, an alternative says Labor Minister Andrea Nahles "to doing nothing." The law also makes it easier for private employers to hire people in towns across Germany. The new German approach is for a two way handshake, and to take a pioneering approach. ...

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Criticism of the Supreme Court's decision on recognizing gay persons constitutional right to marry in a 5-4 decision, and Donald Trump saying he would appoint justices to reverse the decision, plus the litmus test proposed by Hillary Clinton for new justices to have rejected Citizens United campaign financing decision, are putting the highest court in the spotlight. Chief Justice Roberts says his decision to uphold the Affordable Care Act was something he would have opposed in a legislative session, but which he upheld strictly based on the law and the Constitution. Roberts points to the party votes for Sonia Sotomayor and Elena Kagan as showing that even the confirmation process is now a noisy affair, and the rancor spreading all the way to decisions of the court from people in the two political parties. Roberts says he writes opinions keeping his three sisters in mind who are not lawyers, so that if one of them picked up an opinion it would be easy to understand the issue and how it's resolved. ...

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Greek unemployment is up to 11% and this does not reflect the women who are not registering as unemployed. About 100,000 public sector workers will be let go by 2013 as the austeity plan takes effect. The three year reform programme from the IMF, the European Commission and the ECB tries to cut the budget deficit from 13.6% to 2.7% of GDP in a quick three years even as the econmy is shrinking. The criticism of Germany is relatively less, but there is strong resentment in Greece for the IMF program with 60% of Greeks opposing it. And in Germany Merkel faces voter resentment of having to pay for other EU member countries mistakes in the election in North Rhine-Westphalia, where her CDU and FDP coalition faces a tough challenge. Intenationally Merkel is facing tough criticism for waffling as the euro currency faced a serious threat. The whole European Union plan was being put to the test resulting in the size of the bailout growing from $60 billon to $160 billion in a few weeks, many experts calling it ineptitude....

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One of the opportunities of this pandemic is that it offers a chance to think anew and act anew. Where in Lincoln's words "the dogmas of the past are inadequate for the stormy present, as our case is new we must think anew and act anew." Here Vladimir Putin offers his assessment of how the pandemic calls for a fresh approach to reviving De Gaulle and other postwar European leaders vision of Europe that spanned the entire continent culturally including Russia. He accepts mistakes have been made by all sides and the title of the article by Putin is "Be Open, Despite the Past." The Russian Embassy in Germany contacted De Zeit for publication of an article by Putin, and it can be seen as part of the Russian response to president Biden's effort to build a new cooperative relationship with Russia that is in the best interests of the US, Russia, Germany, the European Union and also of India which has a cooperative relationship with Russia. There is the danger that it could be seen as reported in The Times of London and comments posted seeing it against distrust built around Ukraine and Eastern Europe. The 670 Comments in Germany on De Zeit site on the article reflect a more German perspective of being a close neighbor that suffered so much from the war that left millions dead on both sides. One German commenter says his father and grandfather were forcibly recruited to fight in France and Russia and suffered much in wartime. The occasion is the 80th anniversary of the German invasion of Russia in World War II. Some of what Putin has to say- "We hoped that the end of the Cold War would mean victory for all of Europe. It would not be long before Charles De Gaulle's vision of a unified continent would become a reality, more culturally and civilizationally from Lisbon to Vladivostock." Russia has changed, Russians see themselves as European, as part of the larger European Union, culturally and civilizationally. This is not the old Russia of the Cold War or of the Soviet period. "NATO itself a relic of the Cold War, created out of a confrontation from that time." Not objecting to NATO but to the expansion of NATO to Russia's borders. But saying this has not got us anywhere where our heart not our brain says we ought to go. Lets try again to draw different conclusions from what we have seen. Its important to think anew because "we are all confronted with the common challenges of the pandemic and its extremely serious social and economic consequences." "The entire prosperity and security of our common continent are only possible through the combined efforts of all our countries, including Russia because Russia is one of the largest European states. Wed feel our inseparable cultural and economic ties to Europe." "We simply cannot afford to carry around the burden of previous misunderstandings, hurts, conflicts and mistakes. A burden that prevents us from solving current problems. We are convinced that we all have to admit and correct these mistakes. Our common and undisputed goal is to ensure the security of the continent without dividing lines. And to create a unified space for equal cooperation and collective development in the interests of the prosperity of Europe and of the whole world." President Biden was right to think anew and act anew in Geneva, and to "disenthrall ourselves" from old ways of thinking, and for rising to the occasion. Jill Biden said of president Biden's preparation for the meeting in Geneva- "Hell, he was overprepared," and it showed Biden's genuine feeling and effort that he owed it "in the interests of Europe and the world."       ...

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Theresa May, the new British prime minister, announces her choice for cabinet positions- Liam Fox is new minister for International Trade, David Hammond is the new Chancellor of the Exchequer replacing Osborne. Hammond was Foreign Secretary under Cameron and helped negotiate the Iran nuclear accords. David Davis, a former minister for Europe, is in charge of a new ministry created to arrange Britain's exit from the EU. Boris Johnson replaces Hammond as Foreign Secretary. Johnson was Mayor of London and was a key figure in the Leave campaign. Michael Gove is out. David Davis and Johnson were in the Leave campaign and are now given responsibility for working on Brexit, a move that puts to rest any doubts about steps to be taken for Brexit, and is an effort to reunite the Conservative Party. With Osborne out, a principal architect of the austerity budgets of the 6 years of Cameron's government is now replaced by Hammond, who will now reflect the desire of Theresa May to come up with policies that "benefit everyone" and fight "burning injustice" to use May's first words as she assumed office at 10 Downing Street.  ...

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This editorial deserves an award for best editorial on international economic matters in 2011. The editorial, goes right to the point, when it says the French, the Germans, and the European Central Bank are deluding themselves if they call this weeks resolution of the Greece debt crisis a realistic solution. It is anything but a solution. The Journal calls it a French deception. It is unworkable because the main problem, the high ratio of Greek debt to GDP -which is now 155% and is expected to reach 170% by the end of 2011- is sure to get worse under the arrrangement designed in the interest of French and German banks. Under the arrangement French and German banks and other creditors will get to double their return from 4-5% today to an effective interest rate of 10% if Greece grows by 2% a year, on 49% of the bonds they hold. These bonds will be converted into 30 year bonds. This effectively doubles the interest cost for Greece in servicing this debt. On the other approximately 51% of the bonds the French and German banks would redeem the bonds for cash and a triple A, sovereign zero coupon bond. The Journal asks what is the point of making Greece's debt problem worse than it is now and calling it a solution. The austerity cuts are already expected to lead to a deep recession, something that is also happening in Portugal, leading to a worsening of the debt situation. Creditors are not sharing in the losses under this arrangement, as Germany and the Netherlands have insisted. As the Journal points out they are instead taking out half of their investment and doubling their return on the remainder. And the fears of contagion for Spain are not lessened, as financial markets can clearly see through this for what it is- unworkable and unrealistic. ...

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Alluring scenery but hollowing out. Rail station in Dunedin New Zealand looks like it is from the 19th or early 20th century. New Zealand wages are 27% lower than Australian wages in 2025. New Zealand's weak, economy cuts in public services in 2025 affect jobs and employment. New Zealand sees emigration of 69,000 for the year to Feb 2025, highest on record.  Australia has mining and huge demand from China and India for its coal to support it's economy. In a paradox black coal in the interior supports a healthy lifestyle with weather and sports in the coastal belt of Brisbane, Melbourne, Sydney, and further up the coastline in Perth and Adelaide. New Zealand life means higher grocery prices and less quality than Australia, it means health services are not as good, and the public services are being cut to reduce the deficit and borrowing. Most migration is to Auckland and towns in the interior look scenic such as Dunedin but are increasingly seeing people leaving for lack of prospects, lack of pay raises and high cost of living, poor public services. This is a cycle that was felt in 2002 and goes back a long way and is unlikely to change. ...

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Consumer buying habits at Walmart in the last 6 months since the sharp downturn in the economy hit in October 2008. Executives in merchandising at Walmart, Target and other stores discuss trends with the WSJ. There is adisciplined shopper with less browsing on the aisles. FOod is up on the list. Private label groceries at lower cost are selling well. At Walmart sales are up for refrigerated pizza,lower grades of meat. Ground beef and chicken sell way better than steak and beef. And carbohydrates are doing better than protein foods, so that pasta is doing well. Staying at home and entertaining at home is the trend says Fleming of Walmart, from the take and bake pizza at $5 to the movie and popcorn. Which is why the luggage section and trvel is slow, and flat screen tv's are selling well. Vitamins, herbs and plants for vegetable gardens are up as customers try to plant their own vegetable gardens. Car maintenance and repair is big, sales of motor oil, filters and tires. are some of Walmarts big sellers. Whatever makes the car last longer is considered attractive by customers. And home repair items are selling well at Home Depot....