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The shares of Belgium's Dexia bank dropped 22% on October 4, 2011, to 1.01 euros. Dexia has large holdings of sovereign debt- 21 billion euros of debt from troubled eurozone countries. Of this 3.8 billion euros is in Greek bonds, 13.4 billion euros in Italian bonds. The total Dexia holdings of Greek, Portuguese, Italian, Spanish, and Irish debt is about 3 times the book value of its equity. After the 2008 crisis Dexia attempted to change to a retail bank based in Belgium and Turkey. But customer deposits are only 25% of its liabilities, making Dexia heavily dependent on issuing covered bonds which are difficult to issue because of the large debt from troubled countries. The response of the Belgian and French governments on October 4-5 is to breakup Dexia. The breakup plan includes selling off the asset management business and DenizBank, its retail bank in Turkey. Other actions include selling Paris based public finance Dexia Municipal Agency to French savings banks Caisse des Depots & Consignations, and La Banque Postale. The 21 billion euros of bonds from troubled eurozone countries will be placed in a "bad bank" with guarantees from Belgian and French governments. ...

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On tariffs on Mexico, Canada and China, DJT tells members of Congress -"My goal is not to tax people, it is to change their behaviour." DJT in the second term will not wait for Congress to act- and intends to move quickly on Title 42, Countries on the banned list for immigration, Willing to test courts on ending birthright citizenship as a mistaken rendering of the 14th Amendment, on National Guard assistance to federal Border Patrol efforts at the Border, and on Tariffs on foreign goods. Much of this will be done by 100 Executive Orders even if it goes to the Courts. In the first term there were long delays as DJT waited for Congress to act. Underlying this action is a sense that the American people have shown support for needed action on illegal immigration surges and fentanyl flows that have not stopped over a decade when no strong action was taken by the American government, and foreign governments failed to take the necessary action. ...

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A Dreamers deal between president Trump and Democrats looks less likely now after meetings between the two parties show Democrats and Republicans have little they agree on. A meeting on January 11, 2018 was convened to discuss a proposal from Senator Durbin, Senator Graham and four other senators that would allow children who arrived in the U.S. with their parents (the Dreamers in the DACA Act of president Obama) to stay in the country with a path to citizenship, give $1.6 billion for a wall or fence on the U.S. southern border with Mexico, and change the diversity visa lottery to move to a merit base system.  President Trump's remarks at the meeting disputed by the president and confirmed by some senators have created added animosity. Trump is reported to have made some remarks derogatory to immigrants from Haiti, while saying why not get more immigrants from Norway, as Trump prefers a merit based system. The remarks have alienated African countries and were refuted in Norway. This also complicates the situation for the U.S. image overseas as diplomats struggled to represent the U.S. in a different light. In Congress the presidents remarks make it more likely that Democrats and some Republicans will make it harder to pass spending bills including on defense. As a result short term spending approval action will be taken, and there will be a prospect of government shutdown. ...

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Rebecca Solnit says the Biden administration has governed very well over the last three years, the Washington Post, NYT, WSJ are showing poor judgement and lack of civic duty in not considering what the two alternative visions of America are today as offered by the candidates in the 2024 election. On climate change alone the differences are vast and if nothing is done the results will be catastrophic with increasing risks of extreme heat, floods and other catastrophes. Because of this and all the work being done under Biden's leadership in manufacturing in America, in rebuilding its infrastructure, and in building leadership in science and chips, the Washington Post, the NYT, WSJ, and the television media have shown an extraordinary degree of incompetence. The Washington Post had a sample of its readers responses which we show today in Lyrarc. Of 5 letters from all parts of the country only one stated the Post's position, the rest all 4 wholeheartedly supported Biden and his overall record, his vision and competent administration. This itself shows that the president has the support of the American people and the Media has the lowest ratings in its entire history somewhere in the 20% level where it has languished for the last two decades as we pointed out in Movement for Global Literacy. ...

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Antonis Samaras, leader of Greece's New Democracy Party, opposes the tax increases mandated by the E.U.'s June 2011 program for Greece. He supports the spending cuts. The shrinking economy with no hope for recovery under the current plan will only worsen the situation. The Greek economy declined by 4.5% in 2010 and will decline 3% to 4% in 2011, and unemployment is already at 16%, with much higher unemployment among young people. Many experts, and editorials in the Wall Street Journal and the Economist, share this opinion. With the austerity program's cuts and tax increases deeply unpopular among ordinary Greeks Samaras's party is moving ahead of Prime Minister Papandreou's socialist party in public opinion polls. Papandreou is not expectd to complete his term of office which ends in 2013, and a change of government may come by the end of 2011. At that point the E.U. leaders will have to negotiate with Samaras. Samaras says he told German chancellor Merkel- if your plan works I will say I was wrong, but if it doesn't you will need a new plan....

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FactSet Research Systems shows that of 13,339 ratings of U.S. listed companies 96% were buy, hold or overweight. Only 4% were sell or underweight. Mike Mayo describes the difficulties he faced giving true ratings of banks that reflected loan and other problems- in over 2 decades as a bank analyst- in his book "Exile on Wall Street." A significant culture change is required, says Mayo, for the hundreds of analysts who do the ratings to perform their function of providing proper scrutiny of companies. The clout of banks in the American capitalism of today also works to the severe detriment of the economc system to perform the way it should. He says the U.S. should look to the Financial Services Authority in Britain for the kind of actions that are needed for the financial sector supervisory officials. He points out that the FSA fired many of its existing staff and looked for new talent, at the same time increasing the salaries and benefits so that regulatory supervisors were not looking for opportunities in the private sector....

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Daniel Altman's proposal for a tax on wealth over $1 million. He makes the case for taxing wealth not incomes to reduce inequality as this is where the situation in terms of inequality has worsened for the U.S. in recent decades. To support this proposal Altman cites the change in the U.S. Ginni coefficient, which measures inequality. The Ginni coefficient is anumber from 0 to 100 which goes up with higher income inequality. From the late 70's to the 1990's, the Cnesus Bureau showed this to be in the low 40's. By 1992 the Ginni coefficient went up to the mid-70's, according to the Federal Reserve data. It increased to about 80 in 2010. In 1992 the top 10% in the U.S. population controlled 20 times the wealth of the bottom 50%. By 2010 this figure triples to 65 times. and the graduated income tax even if it redistributes a small share of the wealth does little to affect the trend of wealth extremes from building up and threatening the social fabric of America, reducing mobility and opportunities for the bottom 50% to unprecedented levels since the 1950's. ...

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Japan has accomplished a remarkable transformation of its workforce and its economy even as the working age population is declining. For years Japan was seen as a stagnant economy with a rapidly aging population. In recent years Japan has shown how a change in policy can work. Since 2012 working age population declined by 4.7 million, yet the number of people working increased by 4.4 million. The proportion of the population in the workforce rose sharply since 2012. To do this Japan turned to three underutilized parts of its workforce and population- the elderly, women and new immigrants. Japan has pursued an active policy of reviving the economy by bringing women into the workforce and breaking taboos on new immigrants. In 2004 Japan raised retirement age from 60 to 65, and then made it mandatory for companies to raise or abolish the retirement age, or introduce a system for re-employing workers who retire. This has changed Japan a lot with Japanese men working well into their 60's and 70's. In the west coast city of Kanagawa which now has a bullet train to Tokyo, out migration was a big problem that added to a declining workforce. The head of Ohara, a family owned company that makes desserts tried a novel method of advertising to seniors in apartment blocks and starting attracting seniors to fill worker shortages. It found that seniors came to work on time, performed even tedious tasks, and brought a great deal of experience. Since then the regional government has started programs to get more retirees and women into the workforce. The special programs teach small companies to adapt to the needs of retiree workers who can work in shorter shifts of few hours and do less physical jobs. Women need predictable hours to pickup children from school and shorter work weeks, for which the regional government program helps companies adapt by sending in specialists to guide the companies. As a result female participation in the workforce, for very long a big handicap is no longer so. Female participation has jumped to 63%, higher even than that in the OECD where the average is 62 years.  Japanese women had a M curve that meant they worked most in their 20's. less in the 30's with children, and more in the 50's. First the government tried to correct this with extended parental leave, increased childcare, and rewarding companies with good work-life balance. Then in 2009 the effort accelerated with employers required to offer 6 hour days if a worker asked for this. Under prime minister Abe's "womenomics" effort child care was significantly expanded- by 2015 Tokyo went from 28 to 38 spots open for every 100 two year olds. Alongside these efforts the Abe government tried to get companies to rethink their assumptions about quantity of work and overtime as productive effort. One could work shorter hours and be productive, and the old notions were seen as resulting in lower productivity. As fathers with parental leave took on more responsibility the changes transformed the attitudes for women at work. Most remarkable is the quiet change in immigration policy. The government allowed foreign construction workers to address shortages for work on the 2020 Olympics. It introduced a 3-5 year visas program for nursing care workers. Two new categories of visas will add 340,000 additional blue collar workers over next 5 years. The total foreign born workers in Japan doubled from 2012 to 2017 to 1.3 million. ...

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House rules of order from the U.S. House of Representatives would have as presiding officer at the Republican National Convention, Speaker Paul Ryan. Efforts to change this were pushed back at a RNC meeting in Florida. Trump's representatives Manafort and Ben Carson attempted to repair damaged relations between the Republican National Committee, its chairman Vince Preibus, and Trump, at that meeting. The Manafort argument was that Trump's flaws were of personality not character, which would be easier to fix than that facing Hillary Clinton, yet many RNC members were skeptical of this. A April 2016 WSJ/NBC poll shows Hillary Clinton leading Trump 50% to 39%, by 11 points- the surprising finding is that the poll also shows 56% of both candidates support comes from voters anxious to avoid the alternative candidate.

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The new plan of the Obama administration in August 2016 to tackle climate change is to cut power plant emissions of carbon dioxide by 32% by 2030 from 2005 levels. This will increase the energy from renewables to 28% of the total by 2030 from about 13% in 2014. The power industry was given more time to comply by shifting the first year to begin complying to 2022 from 2020. The final rule will also provide for generating more energy from nuclear power which provides 20% of the electricity, and which will help reach the 32% target for cutting emissions by 2030. It will also give more flexibility for the shift to natural gas from coal by giving credits towards compliance for projects starting early, rather than mandating a large shift early.

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VW bonds take a big hit following the emissions scandal. The annual cost of insuring 10 million euros of VW debt against default for five years is 214,000 euros. VW's cash flow after dividends is estimated at 5 billion euros by Fitch in 2016-2017. What is happening to VW goes beyond the emissions scandal. The overly easy environment for corporate borrowing with the loose monetary policy in Europe and the U.S. has made it easy for corporate borrowers to raise money at really low rates. This environment is about to change with VW being the beginning of a shift. In January 2015 VW raised 1 billion euros, with a 15 year bond and interest rate of 1.625%. This bond has dropped in price to 85.6% of face value.

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The four decades of Libyan rule by Moammar Gaddafi that started in 1969 with a 27 year old Bedouin officer in the Libyan army ousting King Idris. It led to change in Libya in the first decade but deteriorated in the next three decades. Libya's support of terrorist groups and plane bombings of Pan Am flight 103 over Lockerbie, and other actions, led to a UN embargo of Libya. The rule of Gaddafi in Libya, as of Mubarak in Egypt led to economic stagnation and suppression of civil liberties, followed by repression, which delayed the development of the Arab countries for several decades. The move from a monarchy to the rule by military officers turned out to be a disaster for the Arab world over these four decades.

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Changes Republican Governor Sam Brownback is making in the state of Kansas, which focus on conservative values, lower taxes, and major cuts to spending to reduce the footprint of government in the state. Kansas has a large Republican majority in the House of Representatives and strong tea party fervor, giving Brownback an opportunity to remake government in the state. Yet there is some skepticism about how lasting these changes can be with the cuts in government services. Some Republicans say the question is how much in government services do the people of Kansas want- if the cuts are too steep the people of Kansas may find too many services have been cut. Over the the last century Kansas has usually voted for moderate Republican governors, making this a major change.

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Friedman visits the campaign office of Abdel Moneim Fotouh, a doctor running for president of Egypt. What he finds is a lively debate among Egyptians, new and many voices discussing the future of Egypt and a transition to democratic forms of government and economic progress. One newly elected member of parliament Hamzawy tells Friedman that Islamists from the Brotherhood have about two thirds of the seats, the liberals 20%. Moderates within the Islamists like Fotouh, who left the Brotherhood, form a separate faction inside the Brotherhood. There will be a need to transcend differences and work together. Egypt is still under the rule of the military, but many democratic voices are now present and a lively debate is on which will provide the impetus for real change and progress, if properly channelled.

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The growing middle class in Mexico is to be seen in cities like Queretaro, far from the drug violence seen in cities on the Texas border. Even though growth has averaged only 2-3%, the number of Mexicans who see themselves as middle class in a country of over 100 million is 65%, according to a survey by pollster Jorge Buendia. The definition of middle class is a new refrigerator, a car and a couple of cellphones. Sometimes this is also aspiring to be or thinking you are middle class. A big change is the shift to small families. Astonishing as this may sound, Mexico's fertility rate has declined from 7.3 children per woman in 1960 to 2.3 today, according to the World Bank. The U.S. fertility rate is 2.1 children per woman.

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A big change for the presidential election in 2012 is the lopsided way in which white voters who are struggling with job losses or seeing economic difficulties are alienated from President Obama. By 58% to 32% these voters favor Romney over Obama in a May 2012 Wahington Post-ABC News poll, a 26% margin. Of those struggling financially about 7 in 10 lack a college degree. This is happening even though 31% of these voters in this poll say they are Republicans and 27% Democrats. It is true that Obama could still win in 2008 losing this group 58% to 40%, an 18% losing margin, similiar to Kerry in 2004, and Al Gore in 2000. A wider margin of 26% poses more risks if the unemployment situation and the economy looks weaker by November 2012.

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Jodi Kantor provides insights into U.S. president Obama's thinking about the law, how it affects society, and the areas in which it falls short of what is intended. Obama is looking at a number of possible candidates to replace Judge Souter on the Supreme Court, including Elena Kagan at Harvard Law School. He is described by professors and students who know him as a minimalist who does not want to see the Court appointees to go ahead of their times. Minimalist refers to a view which is skeptical of court led change far out ahead of where society is. He is also described as a structuralist, referring to a view that seeks to learn how the law affects people in their real lives, aside from abstractions and theory.

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Money from the mainland is fueling a real estate bbubble in Hong Kong. One 5 bedroom apartment with 6000 square feet sold for 56.5 million dollars or 439 million HK dollars. Hong Kong pegs its currency to the dollar and links interest rates to the dollar, With the money pouring into Hong Kong banks mortgages areavailable for 2.05%, with interest rates going up in the USA this would change making payments much higher. Hong Kong plans to release some of the manufacturing space that it has reserved for developing new industries in new fields and technologies- these are areas used by plants that shifted to China for lowwage labor in the 1990's. In Hong Kong the government owns all the land and leases it to developers for 99 year leases.

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How the Drug Industry and Drug Companies will go through a complete change and look nowhere near what it looks like today. Huge changes are overtaking the Drug industry and old ways of doing things will go out the window. Patent expirations for blockbuster drugs, safety issues, increased regulation, rise of generics drugs, cost issues, outsourcing of manufacture and testing and some R&D, changes in marketing practices, slimming down of marketing and sales force personnel, new approaches to R&D- Novartis emphasizing science, Glaxo breaking up into smaller teams, and the growth of emerging markets. All this happens as the public in the USA looks at healthcare in anew way and the demand for healthcare expands quickly in growing developing countries of Asia, Africa and Latin America and Eastern Europe.

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Welch believes India will rebound from the Mumbai attacks and it has a bright future ahead of it in spite of the huge problems with infrastructure and the troubles with Pakistan. To rebound India will have to come to grips with India's internal problems from greatly improved security to responsible government and business will have to take the initiative to provide new momentum for growth. He credits India's people with insights, creativity and positive energy and credits its entrepreneurs with indomitable spirit. And he says over the last 20 years India has shown that it can educate managers and front-line workers alike. He sees India's greatest obstacles to progress as not just terrrorism but India itself. Something internal that can be tackled from the inside as India's neigborhood will take some time to change.

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Facebook announced changes in June 2016 for the way its algorithm for news feed will work with increasing importance for content that is posted by the friends and family of users. The impact of this change is that the content directly posted by publishers will now get less importance. Under the Instant Articles initiative Facebook had previously given publishers a way to reach the larger social media audience it attracts. This now changes with publishers reminded of the uncertainty in the way social media sites continue to change their algorithm.

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The pandemic and ensuing lockdowns, unemployment in the US separated workers from their jobs just long enough to give them a chance to rethink how bad their jobs, incomes, and working conditions were before 2020, says this expert in the NYT. The aid to unemployed workers through long term unemployment benefits, moratorium of rent payments, direct money to households, gave workers enough financial room to make the choice not to go back to poor paying jobs with huge contact risks from coronavirus in the restaurant, fast food franchise, travel and entertainment industries, related industries.  With the Biden administration investing in child care, maternity leave, care for elderly leave, new opportunities for relocating and looking for work were opening for women, and for men who had stuck to old jobs and put up with lousy conditions because of a lack of alternatives. Biden administration's Families and Workers Plans, the effects of the pandemic, helped to shape a new culture of what was possible for workers- a sense that dignity in the workplace was part of culture in America. Restored by FDR/Truman and now again by Biden after two tech booms in the 1920's and the 1990's. A similar situation of a change in culture respecting the dignity of workers and of work is taking place in European Union as stated by SPD leader Olaf Scholz in his election campaign in Germany. Scholz is now incoming Chancellor replacing Merkel. European Union countries have better laws and rules in place for worker retention, and also better worker protections so that the great resignation that happened in America took place in a milder version. ...

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This NYT article looks at another side of Biden in the meeting with Putin, Biden's optimism. Biden says of his style- "the important thing is to put an optimistic front, an optimistic face." By doing this he achieved more with Putin than was thought possible after years of deteriorating relations. In a way it could be said that Biden brought the optimism that Russia, Germany, France, India, and other nations, the rest of the world also need, especially now during the pandemic. He prepared carefully for his meeting, more than most presidents, much more than Reagan, Trump or Obama. He met with German and French  leaders, prepared with Blinken and Sullivan, coordinated with G-7 allies at Cornwall in the UK, in a way that was rarely done before.  After the meeting Biden could tell reporters "The country has put a different face on where we've been and where we're going- and I feel good about it." It is also a measure of Biden's leadership style that he took a constructive approach in the face of difficult issues.  Biden based it on a sound footing. The way Biden says "is to know what your adversary's interests are." In Russia's case Biden and his team see this as "legitimacy, standing in the world stage." And for Russia "desperately wanting to be relevant." For the most part Putin and Russia responded positively to this effort by Biden to change the tone, texture of voice, and manner in the conversation. ...

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Experts say CEO's have constituencies in the form of employees, shareholders and customers. This has affected CEO's as they responded to president Trump's comments on the Charlottesville attack.  Even the cautious optimism that CEO's maintained during the early months of the Trump administration- as they sought not to miss out on representation on advisory councils- has now faded. Most CEO's have decided that it is not worth having this voice in advisory councils when they have to be seen as supporting positions on racism and culture they cannot support. One by one the actions by Trump on the travel ban, climate change agreement withdrawal, Charlottesville attack,  has led to a shrinking of support. From non-involvement in Trump's campaign but cautious optimism, to a sense that it is not possible to work with the president without violating deeply held beliefs. Gini Rometty of IBM told employees that dialogue was critical to progress, but that " this group can no longer serve the purpose for which it was formed."  A sense that not much would be accomplished, and the reputational cost for business was too high to make it worth the effort. In the span of 3 days three advisory councils to the president were disbanded. ...