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Kodak an American icon teeters on the brink of bankruptcy in January 2012.

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How Kodak failed and lost its preeminent position in the photography market.

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The difficult task facing Governor Jerry Brown of making the painful cuts in education, the state's university system and social services, as he faces a $15.7 billion gap in the state budget. The Republicans in the legislature have made it difficult for governors in the state to get the two thirds majority to increase taxes, and the Democrats have opposed the spending cuts, leading to chronic budget shortfalls. Governor Brown says unless temporary tax increases, including quarter percent rise in sales taxes and income tax surcharge on the wealthy are passed, California will have to make cuts of $6 billion in January 2013. This would include cuts in public schools and the university system. This would be in addition to cuts of $8.3 billion he has proposed for cuts in welfare, social services, and health care for the elderly. Experts say the political culture in the state is a problem, and is proving to be impervious to this governor's long years of experience and considerable skills. Jerry Brown says California, and the U.S. are both living beyond their means and need to take the medicine....

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GM surprised German officials on June 28, 2009, with the information that Opel would need an additional 300 million euros. Also significant was the development that Fiat learned of earlier in the week that Opel's finances were much worse than previously disclosed by GM. Instead of a $1.5 billion loss Opel expects a loss of $2 billion to $3 billion for 2009. Fiat pulled out of the talks. At that point the German government put together a deal in a memorandum of understanding in the next 36 hours, with Magna International taking a 20% stake in the new Opel, the Russian government through its bank Sberbank taking 35% stake, GM taking 35%, and Opel's employees taking 10%. The German government's position was focussed on protecting the 25,000 Opel jobs in Germany, with both labor leaders and politicians supporting this. Angela Merkel, the German leader spoke on phone with Mr Putin of Russia to firm up the deal. Magna International, a Canadian autoparts supplier with Austrian roots provides the carmaking expertise. Cooperation with Russian carmaker Gaz raises the prospect of selling 500,000 Opel vehicles in Russia. Opel produces about 2 million cars in Europe and has 50,000 employees. ...

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Germany's Economic Ministry is part of aconsortium to fund aproject called Desertec, which plans to to generate soalr energy in the Maghreb desert in North Africa and transmit it through anew grid of high-voltage transmission lines. IT would use low-tech methods using mirrors in the deseertto jeat up water, which drives turbines in alocal power plant. The new initiative could provide 15% of the energy needs of Europe, and would require cooperation from different European countries. The consortium also includes Siemens, Deutsche Bank, energy company RWE and Munich Re.

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Because there is no cash available in financing these days, the few deals in commerical real estate aare like this one in Birmingham, Alabama. An office building there aold for $147 million, but the buyer put up only $1.3 million. See the link to the report by Conway of the Fed's Rapid Response program on the danger to 45% of commercial loans that are expected to sour in 2009. And the WSJ analysis on the risks facing 800 banks with heavy real estate exposure.

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A real risk for the economy in 2010: the more than half of the $3.4 trillion outstanding commercial real estate loans, many of which will be souring in the coming year. A rerun of what happened in the residential mortgage is expected. A Fed document prepared by the Fed's Rapid Response program and presented Sept 29 by K.C. Conway points to the dangers to bank's with heavy commercial real estate exposure. THis will further constrict lending as banks fold and remaining banks are forced to set aside money for additional losses. At this time banks are simply extending the loans and paying the interest on these loans to themselves. A study of regulatory filings of 800 banks by the WSJ shows that banks with large exposure have set aside only 38 cents in reserves in the second quarter for every $1 in bad loans, a decline from $1.58 in reserves for every $1 of bad loans from the beginning of 2007. Conway's report presents ableak picture for 2010, with commercial real estate losses for warehouses, apartment buildings and office buildings reaching 45%....

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German banks lent $21.3 billion to the Icelandic borrrowers according to the Bank for International Settlements, well over a quarter of all international lending to Iceland. Most of Iceland's banks have collapsed. Iceland's central bank chief says lenders are likely to get only 5,10 or 15% back.

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The small size of the German stimulus plan, $12 billion of new spending over 2 years, 0.25% of GDP, even though German budget was close to balance in 2007 and may be in surplus this year. The reservations about spending arise from the feeling in Germany that spending packages in the 1970's produced little stimulus and aded new debt. When people see the new debts and taxes headed up people tend to save more and spend even less says Scheide of the Kiel Institute of the World Economy. And the coalition of CDU and SPD had set 2011 as year to balance the budget, so the prevailing wisdom is that spending packages do not work and the term economic package is unpopular in Germany. So finance minister Peer Steinbruck says the small stimulus package is not of the old style. But as the economy deteriorates and exports slump, aid may be provided to small and midsized companies, and investments in transport and early education, subsidies for energy conservation and help to the car industry.

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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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Mexico sends 80% of its exports to the US, and China a significant $439 billion in additional exports to US, which makes it incredible that for so long it did not take effective action to stop fentanyl flows, and Mexico allowed migrant trafficking across it's borders through 2016-2024. Even in the face of this becoming an explosive issue in the US with DJT elected in 2016 and the Border Wall being built. A silent but still existing in plain sight idea that the US would tolerate such flows became part of the culture in media outlets in the US and Europe and China and other parts of the world, even when there was a storm of discontent building about manufacturing shipped overseas hurting communities in the US since 2010, with added burden of safety endangered in these neighborhoods from fentanyl, drugs and illegal migrants. What worsened this situation and pain in the US was the idea that somehow it was the US's fault, an incomprehensible disdain for the US, US that enabled the modernization of China, Mexico, and Canada's economies. China sends $439 billion in exports more than the US does to China (US exports $143 billion China $582 billion in 2024). It is only surface presentation of indignation of face saving that these trading partners are showing when the real facts point to an extraordinary and incomprehensible disdain for the US as a nation in decline. There is a feeling in parts of Europe of American disdain for  Europe, without mention of the disdain for the US in Europe, China, Mexico and Canada and other parts of the world. Particularly disdain for neglected communities in the US that have suffered for far too long under previous administrations of Clinton-Bush-Obama with shipping of manufacturing and jobs overseas and inaction on drugs and illegal migrant flows. The EU Canada retaliatory approach has not worked. When DJT proposed doubling the tariffs imposed by US in the face of Canada EU retaliatory steps, the EU and Canada pulled back. Part of the reason is that in the case of Canada it is an economy one tenth the size of the US. The other is that there are real concerns on the US side that Canada EU are not playing fairly in trade. And Canada, Mexico, China, have not stopped the flow of fentanyl into the US.  ...

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Former Louisiana fovernor Bobby Jindal comes under severe criticism from the Washington Post for policies it says hurt the poor by turning down federal Medicaid funds under Obamacare, for using rainy day funds, and cutting spending on education and other needed programs in the state. It says Jindal pursued Grover Norquist's no tax pledge leading to spending cuts in the state and budget gaps, merely to appeal to voters in the GOP presidential primaries. Jindal's appeal to Republican voters actually fell sharply because of unpopular policies and he did not qualify for participation in the presidential televised Republican debates. Republican voters turned to outside candidates such as Trump, Carson and others.

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The Reserve Bank of India (RBI), India's central bank, left rates unchanged in October 2012. RBI Governor Subbarao says inflation could go above 8% by January 2013. High global oil prices and a weaker currency are adding to food price increases to push inflation higher. The RBI lowered its growth forecast to 5.8% from 6.5%. Mr Rangarajan, chairman of the Prime Minister's Advisory Council said the RBI will not lower rates till January 2013 unless there is a significant tendency for a decline in inflation before then.

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Deepening frustration and economic diffficulties in Iran over sanctions. The Iranian currency, the rial, loses a third of its value.

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The U.S. responds to Iran's threat to close the Straits of Hormuz, a vital route for oil tankers.