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Losses on aTishman/BlackRock property in New York , the 11,000apartment, 56 building, Bedford Stuyvesant property built by MetLife for veterans of World War II, is in danger of default. Losses would approach $500 million for Calpers, $575 million for Singapore's GIC, $250 million for Florida State Board, and $70 million ofr the Church of England. The property was purchased in the hope of using easing rent control laws to increase rents but tenants successfully blocked the rent increases in court.

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USA car sales drop 37% in January 2009 over same period in 2008. Sales at GM dropped 49%, at Ford 40% and Chrysler 55%, at Toyota 32%, at Honda 28%, at Nissan 30%. Subaru and Hyundai saw sales increases. Analysts at IHS Global Insight say the stimulus package may help prevent things from getting much worse, but it would be wrong to count on the stimulus package for a pickup in sales in the second half of this year. This is ominous for the Detroit car companies as they seek government help to avert bankruptcy. Chrysler is hoping to make tieup with Fiat, but it will be a year before Fiat cars make it to the US and longer for its cars to be made in the US, so it is not clear what will happen in 2010. Ford's economists think the market is nearing bottom, but if that is not the case it may prove risky for Ford.

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10.5 million vehicles is the new number at GM for USA auto sales in 2009. GM has consistently predicted a scenario for auto sales that is much higher than it has turned out to be, leading to a lack of proactive speedy decisionmaking where needed to close plants, get financing and other steps needed to pull the company out of trouble. This new lower number may also turn out to be higher than actual because figures for inventories, unemployment, foreclosures, consumer spending, exports, all are worsening.

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Chrysler's sales are dropping the fastest of all the car companies . April 2009 sales dropped 24% from March 2009. Ford sales are doing better than Toyota, as they declined in April over same month prior year by 32%, compared to 42% for Toyota. It appears that the Buy American factor may be helping Ford Motor more than the other American car companies, and that Chrysler also suffers from the lack of new models with new technology and investment in new features. At GM the situation is better at Chevrolet, Buick, Cadillac and GMC, where sales in April 2009 declined by 29%, over same month prior year, which compares with a 55% decline in sales, of Pontiac, Hummer, Saab, and Saturn brands which are likely to be dropped. See the related link on same day on steep fall in Chrysler sales.

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Car size shrinks as the Focus, Spark, Aveo, Cruze small cars attract attention at the 2010 International Auto Show in Detroit. The big change is that these small cars are following the European small car in being refined and sophisticated, with a lot of features. This isn't the Chevette that Americans knew in the sixties and seventies, and the perception of what is the right size and comfort is changing completely as a new generation of buyers brought up in a world of pc's, i-phones, and globalized cultures is in the driver seat.

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A major change is taking place. Automakers around the world are shifting to smaller engines. Hyundai's Sonata for 2011 and the Tucson crossover for 2010 are going to have only 4 cylinder engines. Many V-6's offered by Detroit carmakers are being replaced with 4 cylinder engines and V-8 with V-6 engines. Ford is using the EcoBoost a turbocharged V-6 to offer new options for its Taurus, Lincoln MKT and other cars.

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A Brookings Institution study of hiring trends and unemployment in the 100 largest metropolitan areas of the U.S. at the end of 2012, shows 78 metropolitan areas adding jobs in the 4th quarter 2012. 14 of these areas had more jobs at the end of 2012 compared to before the 2008-2009 recession. Six of these cities were in Texas. This included Knoxville, which gained from jobs added at a nearby VW plant. Other cities were Oklahoma City, Omaha, Salt Lake City, Charleston. Only three cities in the East and West are on the list- Pittsburgh, Washington and San Jose, and none in the midwest, showing the geographical divide in job gains. And Washington D.C. will lose government jobs after job cuts in the government. Charleston will lose jobs from cuts in military spending.

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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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Dow Chemical CEO, Anthony Liveris, is co-chair of the Advanced Manufacturing Partnership, an effort to bring together federal government, industry, universities and other groups to invest in new technologies that would generate good-quality jobs and increase U.S. competitiveness. He writes this letter in the Wall Street Journal to correct two misperceptions. The first, is that government has no significant role in nurturing an environment that is good for business and manufacturing industry. Because other countries, including China, are now operating like companies, it is important not to let the U.S. be in a disadvantageous position. Government has always been involved in its writing of tax and incentive policies, regulations, trade agreements, and creating a climate of certainty. The second, is that the loss of manufacturing capacity and job losses in the last 10 years are different from the job losses in the 1980's. These are not the low tech and less efficient manufacturing job losses of the 1980's, but job losses as a result of moving advanced manufacturing capacity and research and development centers to outside of the U.S. Of the 8 million jobs lost in the last recession, he says two million manufacturing jobs of higher pay and supporting employment in other sectors were lost. His point: its time to focus on expanding manufacturing in the U.S. because manufacturing is the sector with the highest multiplier effect on other sectors. Public-private partnerships are critical to this effort for increasing technology development and increasing investment. This view is supported by other experts....

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Kaushik Basu, economist at Cornell University, and Chief Economist at the World Bank, says the U.S. Federal Reserve should consider the current low labor participation rate and low inflation in its rate policy setting decisions in 2015. Basu points out that in the recent past unemployment has gone below the current 5.5% without increasing the risks of inflation. He cites the period from July 1997 to August 2001 when inflation was below 5%, and at some points below 4%, yet inflation in 2002 was close to 2%. The large number of discouraged workers in this economic cycle has placed the unemployment rate below what it really is, says Basu.

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GM shares hit a new low of $1.52 on February 20, 2009. On February 20, 2008, one year ago, GM shares were at $25.54 a share. This is the lowest level in 70 years. President Obama's task force onthe auto industry met on February 20 for the first time.

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Axel Friedrich, a top German Environmental Agency regulator who advocates using modifications of existing vehicles as a more effective solution to the auto emissions problem. He recently reconfigured the VW Golf to show that by making changes- such as lighter seating and weight saving hood other steps to reduce the car's weight, low resistance tires, and engines that turn off when stopped and start when accelerator is pressed, more efficient gear ratios, removing the mirrors and substituting tiny cameras, and improving the aerodynamics- emissions can be cut 25% even with horsepower intact. Working with the Institute of Automotive Engineering at RWTH University in Aachen, Germany, Axel redesigned the Golf in this way to achieve a CO2 emissions reduction from 172 grams per kilometer to 131 grams and is working to bring it to 120 grams. 120 grams per kilometer is the EU's tentative target for emissions for cars sold in the region by 2012. Automakers have for years complained that this would be difficult to do in this manner because customers were concerned about safety and comfort. Its not clear that this would affect safety. However with global warming a big issue in Europe, most automakers are making changes now to prepare for a shift to 120 grams per kilometer in emissions. VW has announced a diesel version of the gasoline version that incorporates some of the redesign changes that Axel Friedrich made on his Golf, such as low resistance tires, and more efficient gear ratios, lower chassis for improved aerodynamics etc. This diesel version costs a base price of euros 20,615, and is only euros 315 mor than a standard diesel Golf. BMW has a new diesel version of its 1-Series with low resistance tiresand a gearshift indicator, which emits 16% less CO2 and costs nearly same as its predecessor. At Frankfurt Auto Show Mercedes Mercedes is expected to announce more cars with stop start systems. All this will help automakers in Germany achieve the EU 2008 target of 140 grams of CO2 emissions by 2008 on the way to the 2012 EU target of 120 grams. ...

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American manufacturers are importing more of the parts that go into each product. According to Susan Houseman, a senior economist at the W.E. Upjohn Institute in Kalamazoo, Michigan, the imported portion for these parts is up to 25% from 17%. Even the Bureau of Economic Analysis figure of the share of GDP coming from manufacturing is overstated, says Houseman. That figure was 11.2% for 2009, but is closer to 10.5% if all the imported components are included instead of being counted as domestically made. This is down from 14.2% ten years ago, and about 30% in the 1950's. There is deep concern that the manufacturing decline has weakened America. Houseman says that one cannot separate manufacturing from innovation, and she asks if America can continue to be strong in R&D with a shrunken manufacturing base. James Jordan of the Interstate Maglev project, says Maglev- which uses special magnets to levitate and propel high-speed trains- was invented in the United States. Today equipment for that technology is manufactured and used in Japan, and innovation in high speed trains is taking place in Japan and Germany. The decline in manufacturing is shockingly large. From 1979 employment in manufacturing went down by 8.1 million to 11.6 million, with the largest drop occurring in the last ten years. With it America is losing something significant- all the knowhow and skills that go into making things. Today the airplane wings for several Boeing airliners are made in Japan and shipped here. In a not too distant past these wings would have been built here, and workers with the knowhow and skills for these critical components were part of Boeing's workforce....

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This WSJ editorial says the recent agreement at the Caterpillar Joliet plant in llinois is not about leverage but about increasing U.S. manufacturing competitiveness. As U.S. competitivness improves and the economy grows wages will increase. It does little service to management, labor and the U.S. economy for above market wage rates to lead to loss of manufacturing competitiveness as happened in the U.S. automobile industry, resulting in closing of plants.

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The critical exchange between oil companies and auto companies about who is at fault for the energy crisis. In one ad that ran last year, Chevron argued that "if automakers improved fuel economy across the board by just 5 mpg, we'd save over 22 billion gallons of gasoline a year." The criticism is also sparked by the high price of oil which is hurting sales of pickups and large SUV's that the automakers depend on for profits. One ad by Exxon Mobil shows a cartoon of a large SUV filling up at a gas station and hints that the problem rests with the automakers who have failed to build the kind of highly fuel efficient vehicles that are needed. The ad says that the average fuel economy of new U.S. autos has not gone up much in two decades, the small gains have been offset by the increases in the size and weight of vehicles.

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The unemployment rate in the U.S. state of Ohio drops to 7.2% in June 2012 from 10.6% in the second half of 2009. But polls show two thirds of the respondents see the economy as being worse or the same as in 2011. Because of lower wages in some industries such as auto manufacturing which are reviving there appears to be a lowering of incomes and expectations.

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The Federal Reserve reports show capacity utilization in the U.S. at 76.9% in April 2011. This is less than the 81% when the recession began in 2008. It shows an increase from the 67% capacity utilization in June 2009. The capacity utilization figures are 78.1% for the chemical industry, 80.5% for the computer and electronics industries, and 74% for the auto industry in March (which dropped temporarily to 63% in April as a result of the earthquake in Japan).