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Ruchir Sharma, head of emerging markets at Morgan Stanley Investment Management, provides insights into the economc problems facing Brazil in 2016. He points out that 41% of Brazil's GDP goes into public spending by local, regional and national government, crowding out private investment. The tax burden is high at 35% of GDP. And under the Rousseff administration budget discipline has been lacking. Compared to the Lula government running consistent surplus Ms. Rousseff ran a deficit of 10% of GDP. With a large welfare state, the budget has rigidities, says Sharma, with public pensions increasing since 2000 from 3% to 7% of GDP, and heavy state spending tending to push interest rates up and increase borrowing costs. Retirement age is 54 and 52 for men and women respectively, and pensioners get 90% of salary, compared to 60% in advanced countries. The decline in commodity prices has hit Brazil hard because 67% of exports are from commodities such as soyabeans in 2016 compared to 46% in 2000. Manufacturing accounts for only 11% of the economy. As long as high commodity prices supported the lavish welfare and public spending Rousseff's popularity remained high at 60% as recently as 2013. The collapse of commodity prices has hurt the economy leading to growth of negative 3.5% in GDP. Rousseff's popularity hit a low of 11% as public protests over poor public services, were followed by a series of corruption scandals. Even if impeachment led to new leadership the problems are deep rooted, with neglect of education, healthcare, public services, and manufacturing industries, and heavy public spending no longer supported by high commodity prices. Some of the problems existed in the boom years of the Lula administration, only covered up by the commodities boom cycle, and becoming evident in the down cycle of the Rousseff years. ...

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Cillizza points to two demographics that the Republicans missed in the 2008 and 2012 U.S. presidential elections. The Hispanic vote comprises 10% of the electorate. Obama won this demographic with 69% compared to 29% for Romney. Romney's extreme positions, to the right of Governor Rick Perry of Texas got him through the Republican primaries but left him exposed in the national elections as he defended his statements of support for "self-deportation." In this respect Reagan, Bush, Perry adopted moderate positions and favored helping children of immigrants get a good education so they could be integrated into American society. Perry even took a hit for his moderate position supporting immigrants in the primaries even before his memory slip in a debate. Romney failed to support even the Dream Act for a pathway to be given to children of immigrants supported by Mark Rubio, a Cuban-American Republican senator of Florida. The second key demographic is the young people vote ages 18-29. This was 18% of the electorate in 2008, and about 19% in 2012. Obama took this demographic with a lead of 34 points in 2008 and a lead of 24 points in 2012. So that even with diminishing support such large numbers meant there was a large cushion to win the election by combining several demographics even if the Democratic position eroded somewhat because of the economy and unemployment at near 8%. This is what happened because of the 6 out of 10 voters, or 60% of the electorate who voted, Romney won 51% to Obama's 47%. This enabled Obama to get the small victory margin he needed in the popular vote. In many ways Romney was "an unnatural candidate" as the Wall Street Journal described him in its editorial, being a private equity business executive fighting a election with Democrats fighting to protect middle and working class interests....

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The port of Long Beach which takes in 20% of the container shipping of the USA,, and is next only to Los Angeles port in container shipping, is becoming a story of two economies, the American and the Chinese. Thousands of cars from Toyota, Nissan and Mercedes are piling on port property turning it into one huge parking lot, as dealers across the country say they have no need for them, and piles of paper and metal baled together to be shipped back on these ships to China to be recycled into cardboard for export boxes are also piling up as China no longer needs them. The drivers who drive the trucks are also being laid offf and looking for new jobs, which are signs that a deeper economic downturn is underway and the the Detroit automakers GM and Ford CEO's who told the Banking committee that they are making their estimates for 2009 on the basis of a 13- 14 million vehicle sales year may be in for another rude shock. The figure for the last quarter may be running at 10 million, and if this continues into 2009 as its expected to do, even the producton of cars after accelerated plant closures may have nowhere to go in 2009. Which is why there are so many questions about what is going on in the auto industry and so much need for candour and frank discussion that was missing in the evasiveness apparent in the Senate hearings on November 18, 2008, as CEO and union president skirted around the issues and senators failed to ask many other questions like these on what is happening on demand as well as many others....

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Quidel Corp. gets the first FDA approval of an antigen test which tests for the disease itself. Quidel is a company specializing in tests for the flu and infectious diseases. It uses an older technology to detect the disease. Quidel CEO Douglas Bryant, says he will ramp up the manufacturing of the test to go from 200,000 tests a week in the week of May 11, to more than a million a week in several weeks. The current testing technology has several shortcomings. The most common test so far is the PCR test which magnifies virus particles to ease their detection. It is cumbersome technology because it takes time to run the test and analyze the results. The new antigen tests have several advantages. They have a simpler design, are easier to process, and can be produced at lower prices because of the simpler design. They are designed to identify the virus in people in real time, to process results quickly in minutes in Quidel's Sofia analyzers. Because of the simple design and proven technology it can be scaled up quickly to do millions of tests.  The U.S. currently has the problem that it is not able to do enough testing- about twice the current rate is needed to do what health experts recommend. A minimum of 4 million tests weekly is needed and followed up with contact tracing to make it safe for people to go back to work, says Ashish Jha of the Harvard Global Health Institute.   The U.S.   ...

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With 3.7 million workers in the informal economy Italy is one of the worst hit European countries. Italy's south, including Naples and its capital Campania is one of the hardest hit. Italy's lockdown ended May 18, with some restrictions. Affected worst are small business owners such as shopkeepers, restaurant owners and market vendors, also hit are workers employed in tourism and entertainment. The Italian government has made a 600 euro emergency payment to self employed or part time workers, and 12 million workers have applied so far for these payments, about half of the workforce. A new payment by the government will cover workers in the informal economy with a55 million euro additional aid package by the government of prime minister Conte. Italy's economy will decline by 9.5% in 2020, exceeded in Europe only by Greece. The country is seeing a further erosion of the lower middle class after the difficult period following both the financial crisis of 2008, the eurozone crisis, austerity cuts which hurt people across southern European countries, Spain, Portugal, Greece, and Italy. It is also true that Italians came together during this difficult period in a way not seen since World War II and prime minister Conte provided much needed leadership for Italy, with growing confidence in his leadership. This provides a new sense of hope that Italy can come to grips with many problems it has faced in the last 2 decades, similar to that in other parts of Europe where investment in  infrastructure and manufacturing has fallen behind. ...

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Tokyo has the reputation for being the city with the longest working hours. Overwork leading to death has a term for it in Japan- "karoshi." But this is changing. Recent studies show Mumbai as the city with the longest working hours per worker per year at 3315 hours. The Japanese government had a law passed this year limiting legal overtime work to 45 hours a month, with an extension in busy periods to 100 hours for a maximum of 6 months. Yet the culture is taking time to change, even though long hours often leads to low productivity. It does not mean productivity is high in Mumbai or Tokyo. Dublin, Ireland has one of the highest productivity scores, workers in Dublin worked 1856 hours a year and still created $84 in GDP every hour- compared to this in Mexico City the third hardest working city had only $18 in GDP per hour. This is calculated by dividing GDP by the hours worked. Occupational health psychologists say working longer hours can be less productive because of the drain on performance, resulting in poor concentration, memory and compromised problem solving and creativity. The lack of rest means resources are not replenished with rest, and can deteriorate physical and mental health. Singapore a fairly liveable city has the highest percentage of people working more than 48 hours per week, in a Kisi study. Suggestion for work life balance include taking holidays and short breaks, and switching off from work mentally, using mindfulness and meditation. Practicing self-compassion and prioritizing self-care is needed. ...

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Prime minister Johnson of Britain is calling for a general election on December 12. This will be debated in parliament on October 28, and is expected to be rejected a third time. Mr. Johnson faces opposition from the Labour Party which wants to delay the election till it is certain that there is no Brexit without an acceptable deal with the European Union. Mr. Johnson heads a minority government that depends on the support of the Democratic Unionist party, the DUP, of Ireland. He also dismissed 23 Conservative rebel MP's from the Conservative Party headed by Mr. Hammond, a former finance minister under Theresa May who are leery of Mr. Johnson's willingness to go with a no-deal Brexit, if parliament does not back him. This puts Mr. Johnson 45 votes short of a majority in parliament. The new deal Mr. Johnson negotiated with the EU was done with concessions on Ireland and an open border, which was rejected by the Unionist party of Ireland. This deal passed in parliament but was rejected on its short timetable of less than a week giving MP's little time to look at the details.  The Labour party is also divided on going into an election before it is ready because it is behind by 10 points in the polls.  The reason the Johnson deal was initially passed in parliament was because 18 Labour MP's decided to support it pursuing a strategy of getting it rejected by passing amendments during final passage.    ...

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China is exceptional in the speed with which it is moving on infrastructure projects. And this bodes well for American exporters like Caterpillar which is seein g big jump in excavator sales, and for China which may see thre fourths of the 6.5% increase in GDP in 2009 coming from infrastructure building. Fortunately there is still a need for alot of infrastructure development in China. Typical is the approval and start of work on the $930 million Xiangshan Island Bridge which will extend over the East China Sea and through mountain tunnels. Caterpillar CEO James Owen says of approval and start of construction as fast, "its something like nine months in the USA versus 9 weeks " in China. China has agood pipeline of projects and alot of planning work has been done for many years. For Xiangshan Island Bridge this goes back to1994. Liu Cijun completed a PhD dissertation in 1999 on bridge wind resistance, and the Ningbo native is now Chief Engineer for the project. Preparatory work on the bridge goes back to 2004 and the stone cutting ceremony in 2006. In August the bridge's feasibility report won approval from aplanning agency in Beijing, and in December approval by the Ministry of Transportation. Construction started in just 11 days after the Chinese government approved the project. China's investment in infrastructure has jumped by 102% in the 1st quarter of 2009 from a year earlier, according tho the National Bureau of Statistics. By comparison Washington has distributed $69 billion of its $787 billion in stimulus fundsto states and localities, which have spent $14 billion according to the WSJ....

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This WSJ report tallies the cost of maintaining U.S. forces in South Korea and Japan and shows that much of that cost is being paid by the governments of South Korea and Japan. This follows Mr. Trump's comments about the high cost of maintaining U.S. presence in the East Asian region. The editorial says the presence is essential to U.S. security and maintaining peace in the region. Japan is paying 100% of the $12 billion to replace the Futenma facility on Okinawa, and 94% of the $5 billion for the Marine Corps station Iwakuni in southern Japan, and even 36% for facilities on Guam, South Korea providing 93% of $11 billion for Camp Humphreys being built for all U.S. forces in Korea by 2017, says WSJ.

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Merkel expresses her support for Portugal during a meeting with prime minister Pedro Passos Coelho of Portugal in Lisbon on Nov. 11, 2012. In a news conference which was live on German television Merkel said: " I feel a great sense of determination here in Portugal to overcome this difficult phase." Recognizing the cost of austerity measures and spending cuts, the 16% unemployment rate, Merkel added: " I know that its very hard for some people. Unemployment is high, especially among young people. Consequently, Germany in particular wants to support Portugal through professional training for young people." The German chancellor is travelling with a German business delegation which is meeting with Portuguese executives to determine areas for German cooperation with Portugal to generate growth in the economy.

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With Amazon taking customers from specialty retailers on the basis of price questions are raised about the future of Best Buy. Best Buy competed by having tech savy salespeople and moderately lower prices. Borders lost sales to Amazon. Now this is happening in electronics as Amazon increases share. Customers can visit Best Buy to check out electronic goods and then buy on Amazon for the lower price, making Best Buy Amazon's showroom. Amazon's electronics and nonmedia revenue went up by 66% in 2010 to $18 billion. With Sony selling through Costco another advantage is eroding. Even with Circuit City out of the market Best Buy was losing market share (December 2010 figures show) in the key television and computing segments.

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Internet content and communications provider Yahoo, is losing ground. Compared to a 4% growth for the Internet overall, Yahoo's increase in unique vistors was 4%, according to comScore in the 4 months of 2010 to April. Total minutes dropped 11%, and page views dropped 13% in same period, compared to double digit increases for the Web. Yahoo CEO, Bartz, lacks a background in journalism and content development. And AOL is pursuing a similiar strategy. Yahoo agreed to acquire Associated Content which aggregates content from bloggers, and it is making trials with local content in Detroit and Cleveland for user engagement. Bartz plans to revamp the email interface. Analysts sense that the repair job will be tough for Bartz as Yahoo's image has suffered.

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The effect on Asia of the US Fed's action on November 3, 2010, to buy $600 billion of US Treasury securities. This will create even more inflows of capital into emerging markets. Hong Kong with its currency pegged to the dollar, effectively imports low interest rates from the US, at a time when property prices have risen 50% since early 2009. And with the growth in China, Hong Kong's economy is growing rapidly. This risks a price bubble. The response in Hong Kong is to tighten lending restrictions on property purchases. South Korea is considering imposing controls on the inflow of capital. The Thai baht is up 11% against the US dollar in 2010, the Korean won 6%, and the Philippine peso 8%.

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The U.S. Commerce Department announced in March 2012 that it would impose tariffs ranging from 2.9% to 4.73% on solar panels imported from China. China has about 47% of the U.S. market for solar panels- with Suntech at 17%, Yingli at 11%, and Trina at 10%. U.S. based companies have 29%, and other including EU countries 24%. The imports of solar panels from China were $2.65 billion in 2011. In the last 4 years Chinese lower priced products have reduced the cost of panels by two thirds. What this does is send a signal to encourage companies to manufacture in the U.S., and show that the U.S. government was taking action against illegal subsidies by China without disrupting the availability of lower cost imports.

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Subaru's new marketing campaign "True Love" tries to broaden the car's appeal to customers outside the northeast and Colorado. In the past the car's four wheel drive and performance in snow driving made it popular in states with winter snow conditions. Subaru is now making an effort to sell in southern and western states, appealing to customers who want higher fuel efficiency and improved safety. Subaru has 2.3% of the American market, but its sales are higher in a few states. with a 11% market share in Vermont. Subaru sales have grown rapidly and increased during the recession. Sales increased 41% between 2008-2010 with the popularity of a new version of the Outback wagon. In 2010 Subaru increased sales by 22% to 263,820 cars.

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Airlines are using the savings from lower oil prices to do do much neded upgrading and improvements on planes, for improving airport facilities and to reward employees. Airlines are investing at the best rate in 13 years. Much of the investment goes to upgrade service for business class travel. As planes are full airlines have little incentive to reduce fares. American Airlines says it wil invest $2 billion to improve service inside planes. Air France-KLM says it is spending $1.2 billion to refurbish planes and modenize airport lounges, ground services. IATA estimate is for airline industry profits to go up from $11 billion in 2013 to $19.9 billion, increasing to $25 billion in 2015, almost doubling in 2 years.

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Legal experts say Lufthansa faces significant liability claims from the 150 persons killed in the crash of Germanwings Flight 9525, beyond the $150,000 per crash victim established by international airline rules. The claims could be much higher in countries such as the U.S. and lower in Germany. Lufthansa's insurer Allianz would pay out the claims, with Lufthansa incurring higher future premium costs. Lufthansa said it was initially paying out 50,000 euros per person to relatives of victims. Airline insurance premiums were about $1.65 billion for the industry in 2014, according to Ascend Worldwide, with premiums down by over 50% since the Sept. 11, 2011, terrorist attacks, and were not affected by the loss of two Malaysia Airline aircraft in accidents recently.

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Even as huge losses continued at RBS bank bonuses remained high. After $15 billion in losses at RBS in 2013, banker bonuses were $960 million for the year. Banker bonuses declined from 679 million pounds in 2012 to 576 billion pounds in 2013. New CEO Ross McEwan, says "I need to keep people engaged." He announced another reorganization. He says RBS "is the least trusted company in the least trusted sector of the economy." This follows public criticism of RBS for not lending enough to small business and unfair treatment of customers. The new plan is for cost cuts to save 2.2 billion pounds by closing 16 corporate call centers and 11 offices in London. Sales and restructuring cuts are planned for 3.1 billion pounds in savings.

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About 10 million households in the U.S. are underwater in their mortgages, living in homes that are worth less than what they owe on the mortgage. According to Zillow Inc. in the first quarter of 2014, about 9.7 million households or 18.8% of U.S. homeowners are underwater in their mortgage. Another 10 million U.S. households have less than 20% equity in their homes. Underwater homes are concentrated in the bottom third of the price range with 30% in this range, resulting in fewer homes available to new first time buyers entering the market. At the same time the higher mortgage rates and 11% price increases in the last 2 years make homes costlier for first time buyers who face sticker shock, according to Zillow economists.

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Insights offered by a actor- growing up as a child in London of parents from Ghana and Sierra Leone- on the younger years of Nelson Mandela. Idris Alba is interviewed by Barbara Chai of the WSJ on his role in the movie "Mandela: Long Walk to Freedom." To understand his role Idris spent one night at the prison on Robben Island where Nelson Mandela spent 18 years of his life. Idris says he focussed on bringing the younger Mandela to life, not on his lines but everpresent the idea of a man setting a revolution in motion. In doing this he was bringing to life a man with all his character and flaws, a man unknown to young S. Africans, who only know the older Mandela.

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In a Washington Post-ABC News poll conducted June 2-5, Republican presidential candidate Romney receives more support than President Obama. Among all Americans Romney and Obama receive 47% each, among registered voters Romney leads 49% to 46%. Independent voters gave Romney 50% to 43% for Obama. The poll shows Obama is being viewed with increasing skepticism because of the economy. By 2 to 1, Americans say the U.S. economy is on the wrong track, and 9 in 10 see the economy as doing poorly. The poll also show a significant shift to Republicans being seen favorably for running the economy, 45% now see Republicans as being better able to tackle the economy, a 11 point increase from a March poll.

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The U.S. Defense Department awards Boeing a $30 billion contract for aerial refueling tankers. The first phase of this deal requires building 18 aircraft by 2017. EADS, the European supplier that lost out on its bid, had planned to build the planes in Mobile, Alabama, EADS had support of some southern states. Boeing sent a design based on its 767 commercial aircraft. This gives new life to Boeing's 767 program which was launched in 1982 and is seeing declining orders- down to 50 orders. Boeing says this supports 50,000 manufacturing jobs at Boeing plants in Washington and Kansas, and at suppliers around the country. EADS said it would have brought jobs to the Gulf region and keep 48,000 Americans employed.

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The effects of a health scare about chicken and hormones on China's internet sites is affecting sales of Yum Brands store outlets for Kentucky Fried Chicken (KFC) in China. As most of the stores are company owned compared to 11% in the U.S., this is having an outsized effect on Yum Brands performance. Fast growth in China can be an asset as well as a liability if not carefully handled. Food is an especially difficult field in China with careful management and control of supplies critical. The Chinese public is skeptical about government monitoring and checks of food supplies and pharmaceuticals after years of lax enforcement. Yum Brands has 5400 KFC and Pizza Hut stores in China, 14% of total global store outlets.