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With the reduced demand for Fannie and Freddie mortgages with coupons under 5%, the Fed steps in and purchases $192 billion of 4% and 4.5% conforming mortgages on a gross basis by March 25, 2009. The move helps support falling house prices in the U.S. and reduces mortgage rates. It also helps banks improve profits. Estimates show the top 10 banks increased their holdings of securities issued by Fannie and Freddie and government agencies by $128.6 billion or 30% in 4th quarter 2008, which can be marked up in future quarters.

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WSJ was effective in calling to the attention of the US president that tactics of one Border Patrol officer were against the American tradition and appeared to be not what police, ICE and Border Patrol, DHS itself was doing in the past. Greg Bovino of Border Patrol led sweeps in LA, Chicago and other cities in what people inside ICE and DHS including Border Head Homan  considered  "unnecessarily aggressive"  and less effective tactics. By being provocative in tactics this attracted more protestors on streets, made law enforcement look worse than when it was using the normal approach of ICE, and by reducing the local authorites cooperation required more and more Border patrol and ICE agents till it became unworkable and attracted critics from within the government and Republicans in Congress. Even DJT said that the this agent was an "out there kind of guy." In Congress many Republicans including Kennedy of Louisiana went on the floor of the Senate asserting the right of peaceful protest enshrined in the US Constitution and called for soul searching to get effective but the right kind of law enforcement that was the tradition in America. Anotehr aspect of what happened in Minneapolis is the troubled history of the city as this is where George Floyd and unarmed man during Covid lost his life in a situation with Minneapolis police, which had already created a sense of unease in that city, compared to Chicago, and Los Angeles BP and ICE sweeps which did not end up like this. In Nashville, and Washington DC National Guard not ICE operated which has different training.  ...

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Managers need to take care that they do not become insulated, and do become insensitive to the workplace and workers, as this can lead to making costly mistakes, says Rosabeth Kanter. Kanter says this has led many top managers to distance themselves from the workplace, feel entitled, and think they are indispensable, leading to mistakes that led to them resigning in the last 2 years.

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The $42 billion withdrawal on Thursday March 9 from SVB bank is the largest one day withdrawal in US banking history, over twice that of Washington Mutual when it collapsed in 2008, says this report in the WSJ. By concentrating on Silicon Valley, SVB bank went on a growth spree, but its concentration in the Valley proved to be its undoing. The optimism turned awry in 2021 with the decline in NASDAQ of 33%, and tech companies facing layoffs with more scrutiny from the government and the US Congress, efforts to breakup monopolies, the Fed chairman Powell's and president Biden's efforts to focus on the cost of living crisis.

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US public companies, manufacturers and retailers that make up more than half of the S&P 500 index, came out with strong sales per share of 24% increase in 2022 over 2019. This means slower growth is expected ahead in 2023, says Justin Lahart in the WSJ.  The shift to consuming more services such as dentist visits and tourism from buying washing machines and appliances will mean slower sales for these large companies that are manufacturers and retailers. Fed chairman Jay Powell's higher interest rates will also limit growth in sales in 2023. Overall the US economy may barely skirt a recession, and this depends on which forecaster one talks to.

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Something that Bernanke has studied for adecade and has spent time preparing for. He took the step yesterday to proceed with a $300 billion purchase of Treasurys by the Fed. The idea is to reduce long term borrrowing rates on consumer loans to corporate bonds that are benchmarked to Treasury bonds. By reducing the yields on Treasurys the Fed hopes to keep borrowing rates lower, now that it is clear from the jobless numbers of 500,000-600,000 a month that slack in manufacturing capacity will keep inflation down and risk deflation. The Fed will purchase Treasurys of 2 to 10 years maturity. THe Fed also increased its ceiling on purchases of mortgage backed securites guaranteed by Fannie and Freddie to $1.25 trillion from $500 billion previously laid out. So far Fed has purchased $69 billion of mortgage backed securities and committed to buying $148 billion more. It will increase the amount of Fannie and Freddie debt that it buys to $200 billion from $100 billion. So far to March 11, it has purchased $48 billion of their debt....

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Thomas Hoenig, chairman of the Kansas City Federal Reserve Bank, says the five largest financial institutions in the US are 20% larger today than they were before the 2008 crisis. These five institutions control $8.6 trillion in financial assets or the equivalent of 60% of gross domestic product in the USA. He points out that whether we like it or not, these firms are too big to fail. Though these institutions survived the 2008 crisis with a bailout from the Fed as shown in the Fed's recent revealed documents, Hoenig says, little has changed on Wall Street. Two years after the crisis of 2008, these firms again operate with bonus and compensation schemes that reflect not the recent failures but a sense of success. Hoenig says this is why the American people are angry. An absence of accountability and blatant inequities with which smaller businesses and institutions were treated compared to the large ones, is why they will remain angry. Without this accountability he feels Americans cannot build a national consensus for the sacrifices needed to rebuild the American economy....

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Christoph Hasselbach of DW.com says the idea of European Union brings so much good for Europe that it should not be diminished by use of pressure or punishment. He refers to the firm opinion in Brussels, of Mr. Juncker and Merkel, that there can be no cherry picking when it comes to remaining in the EU. This led in Jan. 2017 to British prime minister May saying Britain would not go begging to Brussels, and would simply opt out of the European Union and the single market. Hasselbach offers an interesting and plausible explanation for the Brexit vote shifting by a small margin to the exit side. He says rightly that uncontrolled immigration fears were used by the politicians supporting exit. Interestingly he says the worries in the UK were not just for current people but for future citizens from the hundreds of thousands of refugees who would become German citizens in a few years. Would they try to settle in the UK- prime minister Cameron failed to provide a convincing answer, says Hasselbach. He is right to point out as we have at Lyrarc that it is healthy to have questions and even some skeptical views about Brussels, that the appeal of the EU must depend on not being dogmatic about it, but being open and willing to accept questions.   ...

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Bernanke's speech at the annual Fed Jackson Hole meeting put any future policy action off for the September meeting of the Fed's Open Market Committee, which will meet for 2 days to allow lengthy discussion of issues. He repeated his focus made in earlier statements that other actions are needed to reduce the headwinds facing the U.S., actions other than the Fed's monetary policy. He called for "good, proactive housing policy," which has been a major missing piece in the jigsaw puzzle of the American economy. Specifically, "families with mortgage debt bigger than the value of their homes facing unusual financial hardship which is also hurting the banks." Martin Feldstein and other experts have repeatedly called for action to help homeowners under water since the mortgage financial crisis hit in 2008. And the government's response has been tepid at best. Most evaluations of the Home Affordable Modification program and other programs to help prevent foreclosures consider them a serious failure of the Obama administration. Higher unemployment has only increased the urgency for government action in this area and good proposals were made by Feldstein and other experts. On the deficit and debt issues Bernanke would like to see debt to GDP ratios "at least stable, or preferably, declining over time." He also cautions that this be done bearing in mind "the fragility of the current economic recovery." He says his estimate for the U.S. economy's growth rate is 0.7% annual rate for the second half, and 'looks likely to improve." His prediction is for inflation to settle at around 2%. His main concern is that the there will be "an erosion of skills and loss of attachment to the labor force" for the long term unemployed....

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Landers and Gale of the WSJ show how undersupplied conscript soldiers, high inflation and industrial breakdowns during wartime have led to major upheavals in Russia. Three conflicts led to such changes in Russia's domestic situation. The Russo-Japanese war in 1905 led to Russia seeing one fourth of 340,000 Russian troops killed in a battle near the Chinese city of Shenyang, and loss of most of its Baltic fleet in a Japanese attack on Port Arthur. The war ended with a peace treaty arranged by president Theodore Roosevelt of the United States. The Russian czar gave up most of his absolute powers in 1905.  In 1914 Ukraine was involved in regime change as the Germans fought to take Ukraine. The czar wanted to keep Russia's expansive sphere of influence. Without Ukraine's agriculture and industry and its population Russia would not be a great power, says an expert on Czarist Russia. At the time the Russian military was ill prepared in motorized vehicles and communications equipment, and industry lacked the ability to resupply the military. Inflation jumped leading to unrest and protests. Fighting in the First World War led to millions of refugees. In 2022 experts see the same old problem of seeking spheres of influence leading to wars, and the lack of sufficient ability to cope with prolonged wars when short wars were expected by the regimes in power in Russia. Dissent inside Russia and protests led to the abdication of Czar Nicholas in March 2017, and Bolsheviks led by Lenin seizing power in November of 2017. By 1979 Ukrainian leader Leonid Brezhnev was leader of the Soviet Union as Russia's economy could not keep up with modernization. Seeking spheres of influence Brezhnev pushed into a long war in Afghanistan in the mistaken idea that a quick strike on Kabul with a change in government would achieve Soviet goals in central Asia. By 1989 the Russian army withdrew from Afghanistan and in 1990 the protests led to the fall of the Berlin Wall and the collapse of the Soviet Union and emergence of Russia as a separate country. Landers and Gale of the WSJ see these events in Russian history showing how wars have led to domestic changes and upheavals in Russia when leaders projected power beyond Russia's capacity to handle the results of conflict. Russia's economy is about the size of Italy or Britain say experts and its industry much smaller than the European Union economies and the US, Japan combined.  ...

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Shiller says that his CAPE ratio for the U.S. stands at above 25 in 2014, from 23 in 2013, above the 20th century average of 15.21. He looks at possible reasons for the CAPE remaining above 20 for long period of about 20 years, except when it dropped to 13 following the 2008 financial crisis. CAPE is similiar to the price earnings ratio except it uses the average of the last 10 years earnings. Reasons he gives are low interest rates, high bond prices, Fed policy, and the lack of alternative investments in a low interest rate environment that puts more money into the stock market in the U.S.

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The US House of Representatives led by Speaker Kevin McCarthy passes a debt ceiling bill with a close vote on largely party lines 217 to 215 votes. The bill raises the debt ceiling in exchange for spending cuts of 14%. President Biden cited Moody's analysis showing a loss of 780,000 jobs with such large spending cuts. The bill has no chance of approval in a Democrat led Senate.

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New Zealand faces the need to look for other overseas market following the changing situation for Australia that led to trade friction with China. Australia has diversified its exports to follow policies in the Indo-Pacific with the US, India and Japan as allies. Last weeks meeting of the New Zealand prime minister Ardern with president Biden led to a joint declaration by both countries on Pacific Ocean security.

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Sunbelt manufacturing is taking off. TMC of Taiwan is spending $65 billon in Phoenix plant in one project alone. Biden's infrastruture spending is as active in red states, even more in red states than in blue states. Throughout America a "rising tide is lifting all boats," when it comes to manufacturing in America, an expression once used by JFK in then backward Arkansas in the South.

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When Trump was four he lived in the Jamaica Estates area of Queens in New York. He later shifted to a different part of Queens. In the 1950 census the number of Latinos were so few no count was done of Latinos. 96% of Queens was white then. By the time Trump was 25 one in 13 were Latino, starting the gradual influx which by the 1980's led to a steady decline in whites. About 900,000 whites left New York and today only about 25% of Queens is white. Archie Bunker the famous TV program character who has attitudes typical of lower middle class Eastern European whites was famous in a TV program of the sixties and seventies. Archie Bunker was from this white community in Queens. And Archie Bunker is similar to Trump in his views. It is the sense of lost neighborhoods as immigration increased that has become a source of deep discomfort to this section of the white community.

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French president Macron cancels a fuel tax increase after violent protests. Spontaneous protests took place in Paris and across France. People in rural France were angered by the increase in the fuel tax even though by a few cents, because many people in rural areas of France are struggling to make ends meet. The tax aroused sentiment in rural areas because it followed a move by president Macron to cancel a tax on the wealthy.  Students and ambulance workers joined the strike. 
The aloof nature of president Macron staying above the public concerns has led to a sharp drop in his popularity and the sudden eruption of protests.

Macron's large majority in parliament may not reflect the true nature of public opinion as many people stayed away from the polls in the election for the National Assembly. Since the election Macron has alienated members of his own Movement by not listening to concerns and several ministers have resigned.

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Cuba needs 100,000 gallons of fuel a day. It produces 40,000 gallons a day on the island. The shortfall is leading to a humanitarian crisis with the dererioration faster than expected. Reports from Le Monde, El Pais, and other media show adire situation unfolding. To provide about 10,000 private companies with enough fuel to operate as they import $1 billion of food and goods each year the US government is allowing the flow of some oil to Cuba. This is about 100,000 gallons in small containers as a step to avoid a economic catastrophe. For Cuba, as in Venezuela, and Colombia, and also in Mexico, central America, thirty years of experimenting with ideological movements has led to unmitigated disaster with drug trafficking, drug cartels, migrant trafficking, economic mismanagement on a massive scale. The result is repercussions across the continent and disturbing the social, political and economic fabric of the United States.