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A striking change is coming over US airlines as they turn their focus from operating costs to taking out unprofitable routes, reducing the size of their plane fleets, and increase the number of seats filled on a flight. The numbers bear this out. According to ATA the airlines reduced fleets from 3469 aircraft to 2747 aircraft from 2000 to 2005. American Airlines is typical in discontinuing 27 MD-80 aircraft which are older and gas guzzling. Delta and Northwest used the bankruptcy period to to get court approval to return many planes to leaseholders by breaking the leases- before breaking the lease parking the planes was more expensive than flying them at a loss. As a result according to ATA US airlines filled an average of 77.6% up from 75.4% in 2004. With this strategy airlines recovered some of their pricing power. US Dept of Transportation statistics show prices are higher than at any time since Sept 11, 2001 and the Air Travel Price Index, increased by 9.1% in 4th quarter 2005 over 4th quarter 2004. And airlines are being more restrained in getting into new routes just because some other airline has eliminated that route. Airlines however have to be careful to increase prices just enough but not too much that demand starts falling, and this is possible with fewer seats on more popular routes. Other methods the airlines are using are sophisticated O&D origin and destination revenue management systems which reduce the number of inexpensive, and unprofitable seats available on the internet. Larger airlines have tried to get back corporate customers by reducing the extremely high fares they used to charge and instead raising last minute fares because corporate customers see this as a price burden they are willing to shoulder. Larger airlines are doing better in relation to the price discounters like Southwest and JetBlue. With Southwest's hedging strategy against fuel price increases not as useful as in prior years it too faces need to raise fares....

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Charles Dallara, managing director of the Institute of International Finance, which represents large global banks, describes the deal that was reached by eurozone leaders for restructuring Greece's debt in July 2011. He was one of the key negotiators. He says the agreement helps prevent contagion to Spain and Italy, and helps increase confidence in banks. By showing the losses are better understood and seen as manageable conveys a message that builds confidence for the banks and for the EU. And the effort to create the conditions for growth in Greece will make all the difference, he says. The Institute of International Finance estimates the deal will cost the banks and other investors $54 billion. Dallara says the turning point in the talks came in mid-July when European governments agreed to a plan for banks to swap Greek debt for new securities, backed by collateral.The focus then shifted to shaping the details. Josef Ackermann, chief executive of Deutsche Bank and chairman of the International Finance Institute, used his skills to pull the package together with European leaders. Dallara has experience going back to his days working on the negotiations for the Brady deal for Latin American debt in the 1980's. The Brady deal was also designed around banks swapping the old bonds for new ones with longer maturities and reduction of principal, and lower interest rates. In return the banks were given guarantees of repayment removing uncertainty- through 30 year U.S. zero coupon bonds- and making it possible for banks to start anew. The reduction of principal in the July 2011 eurozone agreement is around 20%, the Brady reduction was much larger, around 30%. This suggests eurozone governments are putting up more of the funds in this situation with the weaker condition of banks which may need to be recapitalized at some point, and the preservation of the euro itself at stake....

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As Washington Post writer points out from personal experience- he is one of those who put up 15% to buy ahome inDenver at the top of the market and now has negative equity as prices drop- negative equity is one of the most serious problems facing the US economy. It has the potential to undo many of the encouraging things from the stimulus, as rising foreclosures continue to act as adrag on the overall economy. As he says about one fourth of Americans with home mortgages, or about 11-15 million people, owe more money on their homes than the market value of their homes. As Hoffman says the administration's approach has been a Band-Aid at best for a serious injury. The Obama administration set aside only $75 billion to get banks to modify loans and also made this voluntary for banks to modify loans. Treasury Secretary Geithner testified in Congress: "This is a conscious choice we made, not to start with principal reduction. We thought it would be dramatically more expensive for the American taxpayer, harder to justify, create much greater risk of unfairness." But making it voluntary means very little of this $75 billion has gone to help achieve modifications- banks had no incentives to do this. Only 31,000 permanent loan modifications have been made. Of the 750,000 temporary loan modifications made as of Dec 2009 only 4% of homeowners signing up have qualified for permanent federal relief. See the links to Martin Feldstein's proposals for this on the pages of the Wall Street Journal in 2008 and 2009 which called for aggressive program of relief for the sake of the economy. With 2.4 million Americans likely to lose their homes in 2009 according to Moody's Economy.com estimates, following the 2 million in 2009 and 1.7 million in 2008, this may be a serious mistake of the Obama administration and drag out this recovery....

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Adam Bryant interviews Satya Nadella, CEO of Microsoft in Feb. 2014. Nadella led the cloud computing effort at Microsoft before becoming CEO in 2014. He is a native of Hyderabad, India, studied electronics and communication engineering at Manipal Institute of Technology, and computer science at the University of Wisconsin. Here Nadella recalls his early leadership experiences. As a bowler on his school's cricket team (similiar to a pitcher in baseball), Nadella was pulled out from a bowling spell when he wasn't having success getting batters out. He recalls the captain bowling to get some outs and then putting Nadella back in, who continued getting wickets at that point. He sees this sports analogy as a leadership experience where the captain was sensitive about keeping Nadella motivated and confident, and giving him an opportunity to try again. He takes more out of this and other experiences in his role at Microsoft- to create energy and genuine commitment in his team, and build a team effort to take advantage of opportunties that present themselves in the future. Nadella makes some interesting observations about the tech business. A $1 million business can seem too small for a large company, but in the tech business driven constantly by innovation, there is the need to pay attention to innovation that starts small. At some point says Nadella an innovation can appear to be a failure, an absolute flop, until it becomes a hit. Leadership has to be able to dig deeper and listen, as small changes can lead to big things. About people Nadella likes to know what people have done that they are most proud of, and what they feel didn't work out or where they failed, and looks for how a person can reflect on his experiences and grow as a result of having had them. A useful point Nadella makes at the end of the interview is that people outlive companies in our rapidly changing society, having a sense of our own mortality within this short duration, gives one a special sense of responsibility. ...

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Holman Jenkins on what may be advisable steps like the Fed's efforts to print money and acquire every kind of private asset, but which have large "confidence costs", and the effects of the Madoff scandal that have another kind of confidence cost and is he says peculiarly demoralizing. He is skeptical about how well spent the $1 trillion stimulus will be, and there is a sense of bailout fatigue. He is also skeptical about policy which he says is always bad to a degree the way its made in ademocracy, but becomes an unvirtuous circle in the kind of situation where different interest groups start competing for where money should be spent. In the light of all this Jenkins sees a lost decade and asks the reader to get ready for that. The image of long lines from the 1930's that is the picture going with this article, with the caption "what the stimulus looks like", is not reassuring. It captures the mood of those who know that the strong steps ofthe new administration and the Fed are advisable, but simply not convinced that these steps will lead back to prosperity in the years ahead. In the American economy built as it is on innovation, energy, immigrants, and independent spirit, the churning of companies as new ones take the place of the old, and new technologies and their commercialization, the virtues of policy driven goals however worthy are set against the limits and inherent weakness of government bureaucracies, and the crowding out of private investment and initiative as the government steps in. Compared to previous periods like the FDR administration when business skeptical about the policy of the Democrats remained critical, there is a different situation today when bipartisan policy has been developed for years and a consensus was reached after the Reagan years that was followed through the Democratic Clinton administration, so that critiques of policy can be used to improve the way things are done to address the economic problems facing the country. ...

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As German chancellor Merkel pointed out at the EU summit, all central European states and Eastern European staes are not doing the same. Czech Republic and Poland are doing relatively better, Hungary, Romania and the Baltic Countries are in serious crisis. And smaller Slovenia and Slovakia are part of the core countries in the EU which use the euro. The Baltic countries are looking to Sweden to help and the Swedish Finance Minister has said it is the political responsibility of Sweden to help the Baltic countries, which Sweden should consider as part of the home region. Romania is looking to a reluctant Germany for help. And voices in Europe are asking if it isn't the political responsiility of Western European countries like Germany to help, and if not what does it mean to be part of the European Union? The Eastern European countries caught up in this crisis with their currencies losing value and large loan repayments to western European banks, feel they embraced the liberal capitalist model without any knowledge or experience with its fluctuations and crisis prone nature, as part of the integration into a united Europe. Now they are left they feel, to drift on their own. The recent emergency European summit meeting in Brussels saw the Czech prime minister Topolanek, who holds the rotating presidency of the EU, say that no member would be left in the lurch, and the need to avoid a dividing line in Europe that North-South or East-West. The Hungarian prime minister insisted on a special European Union fund of upto $241 billion to protect the weakest members, and circulated a paper saying that Central Europe's refinancing needs for 2009 were $380 billion. So far the governments of the EU have already spent $380 billion in bank recapitalizations and put up $3.17 trillion to guarantee bank's loans and to get credit moving again. And the European Bank for Reconstruction and Development, the European Investment Bank and the World Bank have promised $31.1 billion to Eastern European countries....

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Peter Coy says that as long as unemployment numbers keep going up and foreclosures keep increasing as aresult of the job losses housing prices will keep falling. He says that they may have to fall 20% more than the level they are at today. And that the foreclosure levels could become atidal wave if it becomes easier for alot of people to just hand their keys to the banks. This was what Martin Feldstein warned aginst in the WSJ oped pages several times in 2008. As more people are under water it makes sense to just hand the keys to the banks, and as long as this goes on, the economic recovery will be put off. A study cited by Coy done by Reinhart and Rogoff shows that housing crisis of this magnitude last about 6 years before all the bad effects wear off. And in addition to housing there are other things at work in this crisis especially in the job loss rate which is increasing (663,000 jobs lost in March), and the readjustment in savings rate upto 6.4% according to BW for 2009 till March, which suggests a serious drop in the consumption rate is underway and may go on for several years crimping demand and increasing unused manufacturing capacity. The stories in the media and other information reinforce this statistical information. The bit of good new from hard hit housing markets in California and Nevada and other staes has to be seen as no more than a limited play in the foreclosure markets, that does little to the broad brush strokes that are ocurring on the national and world landscapes in job losses and consumption. Coy a veteran analyst who has covered the housing market and warned during the boom of the likelihood of abust in a cover issue at the time, brings experience and reflection to the developments, and urges serious caution in interpreting signals that may have no broad meaning....

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The party congress of the Communist party does not look like its going to lead to any changes in the system, only to make sure it runs better by getting public input through pollsters on public officials, and on web sites on new legislation. The pollster, including a firm, Horizon Group, describes his role as working out a mechanism for people to express themselves as there is very real frustration in society. Websites airing public opinion helped introduce nondiscriminatory clauses in the new employment legislation. But otherwise there is actually a tightening of the control of dissent, as the party is worried that once it starts it will get out of control and jeopardize the economic progress However this leaves the future quite uncertain as there is still not enough room for airing the very real frustrations and concerns such as for the environment, health and services, the prevailing corruption, and the problems in the countryside of the poorer regions in the interior of the country. These concerns are being pushed into the future. For instance without a free press its hard to air corruption cases, as in India. Only two of the several thousand petitions under the system of letters and complaints xinfang are resolved. About 12 million are received each year by the government. Because of the obsession with tight control many activists end up in prison even though the causes such as the environment are popular. Like the activist who called attention to the Lake Tai pollution, and the rural blind activist mentioned who argued on behalf of women that were forced into late term abortions. Here the government actually stepped in to announce plans to cleanup Lake Tai, but the system continues its inexorable push to drive out any dissent even if it does not relate to political issues. This may be one of the severe distortions of the present system. ...

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Two things happened last week. The yields on mortgage debt rose sharply, with debt from Fannie Mae yielding 1.8 percentage points more than Treasury bonds of same maturity, which compares with a 0.7 percentage point spread over Treasury bonds in September. Investors including foreign central banks are shunning Fannie and Freddie debt because of uncertainty about the government backing and other forms of debt such as bank borrowing backed by the FDIC has explicit government guarantees. As Fannies and Freddie borrowing costs rise so do mortgage rates. Beginning next week December 1, 2008, the Fed will start buying $100 billion of debt issued by Fannie and Freddie and it also plans to buy upto $500 billion of mortgage backed securities guaranteed by Fannie and Freddie, and the Fed will hire private asset managers to manage this portfolio of investments. By doing this the Fed hopes to lower yields on the debt and bring down mortgage rates to help people buy housing. Teh second thing that happened is that according to Treasury Secretary Paulson the market for securities backed by consumer debt came to a halt last month making it impossible for consumers to get financing for everything from college to computers. This would lead to disastrous results for the many industries and companies that rely on consumer finance to sell their products. this in turn would lead to rising inventories and layoffs, something the auto industry saw happen as financing dried up and sales for GM collapsed dropping over 40% in October, over October 2007. The solution with the support of Treasury the Fed will provide upto $200 billion of financing to investors buying securities tied to student loans, car loans, credit card debt, and small business loans. This should help lower interest rates on these consumer loans and help maintain consumer lending. The Treasury will assume the first $20 billion in losses from this program. ...

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UK's energy company, BG Group PLC is offering 12.9 billion Australian dollars for Origin Energy. Origin Energy Australia's biggest gas producer is also the owner of large coalbed methane assets, known as coal-seam. Trillions of cubic metres of natural gas are trapped in Australia's coal seams. Extracting this methane has been considered too costly until now as natural gas prices have risen significantly. There are environmental benefits as coal seam gas does not produce any sulfur dioxide or particulates, and emits only 50% of the carbon dioxide emitted when coal is burned.BG already has plans to spend A$8 billion on one LNG plant with capacity for 4 million metric tons a year of LNG. LNG is natural gas, mostly methane cooled to liquid form for transport by ship. This would use the coal-seam assets purchased from Queensland Gas Company for A$664 million as part of plans to start the LNG plant near the port town of Gladstone, in the state of Queensland. The Origin coal seam assets could provide gas for a second plant at the Queensland site. BG has an LNG supply deal to provide 3 million tons a year to Singapore from 2012. BG has prior focus in the Atlantic region with operations in Brazil, the UK, North Sea, and Trinidad and Tobago, the Queensland deal and acquisition of Origin gives BG an entry in Asian LNG markets. This will be the second biggest takeover of an Australian company after Mexican cement maker Cemex's acquisition of Rinker Group for A$16.7 billion....

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Liz Sly of the Washington Post provides this exceptional account of the different phases of the war in Syria originating in 2011 with the Syria democracy protests, suppression of protests by the Assad regime, civil war by 2012 , Russian intervention by Putin, the U.S. under Obama and France under Hollande on the sidelines in 2012-2014. The result is a breakup of Syria by 2014 with coastal areas under the Assad regime supported by Russia and Iran, the Kurdish controlled areas, areas controlled by various rebel groups, and the control of other areas by Islamic State which also gained control of Mosul in Iraq. France conducting an air campaign in Syria in 2015 in response to terrorist attacks originating in Syria. With a number of foreign countries involved in support of Sunni and Shia factions in the conflict, the Turks opposing Kurdish autonomy, the U.S. supporting Kurdish forces after withdrawal from Iraq under president Obama, the situation by the beginning of 2016 was much more complex than in 2011. The five year period led to a situation where half of the population of Syria of 22 million is displaced or turns into refugees, about 2 million in refugee camps in Turkey, and 500,000 seeking asylum in Germany and Austria. In Iraq an additional 2 million are displaced or refugees with the Sunni-Shia conflict. Understanding of the events and insights over these 5 years can be gained from the group- "Events for the democracy protests and the struggle for freedom in Syria." The intervention of foreign countries and the missing element of U.S. leadership in the region in 2011-2015 as the U.S. and France remain preoccupied with economic crisis, lead to a situation where most Syrians decide to leave the country entirely. ...

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Coca Cola's new Turkish-American CEO Muhtar Kent is interviewed by the WSJ's Mike Esterl. Kent answers questions about obesity and Coke, about management style, plans with Coca Cola's cash reserves of $13 billion, and his olive grove in the Aegean part of Turkey. He says he is a hands-on person and spends one day in the market every week wherever he is, keen on learning something each time. He points to the time spent on trucks during the seven and half months in 1978, when he joined the company. His response to the obesity issue is that Coca Cola is now a 500 plus brand, 3000 products company, of which 800 introduced in the last 4-5 years are calorie free or low calorie.

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Useful and necessary tips on driving not taught at driving school but which should be part of that driving school training requirement. It should also be part of the program at high schools. Getting young people to have good driving habits early that save energy. Here Gil Portalatin, a 25 year veteran engineer at Ford, the Hybrid Propulsion System Applications Manager, talks about Ford's work in hybrids, the best way to conserve energy in driving regular cars, and how to drive hybrid cars. Tip 1: Don't accelerate too hard from a stop, Remember easy on the throttle and then glide. By Glide is meant releasing most of the pressure on the accelerator to use the bare minimum to maintain your speed. Tip 2: Anticipate Traffic. Watch the flow of traffic and distance to the light, then ease off the accelerator pedal to coast up to the next light. Tip 3: You won't believe how much energy it takes to go from 65mph to 75 mph. Gil knows from working in an aerodynamic lab. Its huge and to save energy just ease up on the accelerator pedal. For hybrid drivers he says many accelerate too slowly from a stop, and he advises accelerating a bit more and then lifting off the throttle to engage EV-motoring. About the Fusion hybrid. The 2010 Fusion hybrid gets 41 mpg city and 36 mpg highway. It beats Toyota Camry hybrid by 8mpg and 2 mpg respectively. Ford has its own unique hybrid technology, and is engineered differently with its own unique software....