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The number of companies with at least one employee fell by 100,000, or 2%, in the year ended March 31, according to the Labor Department. There was a 3.4% drop the previous year.

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The influence of business executives who helped shape president Trump's views on Mexico, China, Export Import Bank, and other issues is covered by Stokols and Bender of WSJ. On Mexico the departure of Mike Flynn helped moderate views, Wilbur Ross, the Commerce Secretary also provided a moderating influence. The plans are now to change NAFTA but not entirely redo the agreement. On the Export Import Bank the views of Boeing CEO Muilenburg, who explained to Trump why the Bank supported U.S. exports and how other countries had similar banks, led to the president filling the bank vacancies. On China the influence of NEC head, Gary Cohn, former president of Goldman Sachs, and other business executives, led to a less confrontational position. The president once called NATO obsolete during the campaign but he met this week with NATO secretary general Stoltenberg this week and expressed strong support for NATO after rising tensions with Russia.

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Banking regulation in the U.S. after the Dodd-Frank legislation differs from banking regulation rules proposed by the Independent Commission on Banking in Britain. Britain has a much bigger financial sector relative to the size of its economy than the U.S., posing larger systemic risks. The commission in Britain is proposing structural changes that would separate investment banking from deposit taking at banks. Banks would have separate balance sheets for these two activities- and operate them as separate subsidiaries- even though they are part of one holding company. This means it would be harder to raise money cheaply for risktaking in investment banking. Under the Volcker Rule in the U.S., banks investment banking and deposit taking would not be separated in a structural separation- there would still be one balance sheet- only banks ability to trade with their own capital and run hedge funds would be constrained. Some banks have spun off trading operations in the U.S. and the the rules banks have to follow have not been clearly defined. Too big to fail is still a problem under current American regulation, though its effects are mitigated to some extent. As one expert puts it, its hard to regulate the banks because too much money is involved and the banks have the money and the lawyers to prevent or dilute new rules. The argument made by the banks in Britain is that universal international banking provides a public benefit and efficiencies. But John Vickers, the former chief economist of the Bank of England, and chairman of the Independent Commission on Banking, has a different view. He said recently, "it seems quite hard to identify and quantify real efficiencies as distinct from purely private gains."...

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The FDIC with help from the Treasury would bail out the creditors and the counter parties in the event a large financial institution fails. And then the FDIC would collect the money from some 120 banks. This is the idea behind a Geithner- Rep. Frank proposal. But critics point are skeptical whether the FDIC can collect the money from banks, which would be too weak themselves in a financial crisis. One critic said it allows the government to spend another $1 trillion to bailout banks, and then perhaps in one year or a hundred years collect that money back.

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This article has several information links for different groups. One to "Putin and Russian oil policy"- consolidating into state hands all the major oil properties by buying the privately held company holdings such as BP-TNK's Kovykta gas field. A link to remarks to the New York Times in an interview by Medvedev, deputy CEO of Gazprom. And a separate link to "How Russians see Themselves and the World around them." The other link is in comments by Surkov, Mr. Putin's deputy chief of staff at a news conference and Putin's remarks in pre-8 Summit television interviews. Content Links 1. Link To the group "How Russians See Themselves and the World." In remarks at a news conference, Vladislav Surkov, Putin's deputy chief of staff referred to Russia's desire to keep its national sovereignty in terms of how it manages its oil resources in Russian interest. Russia did not want to have to respond to western demands for access to its oil resources and oil and gas pipelines. Surkov pointed out that Russia was a free nation among other free nations and did not want to be controlled by outside interests. Putin in pre-summit television interviews had an interesting view of the criticism of Russian oil policy and its consolidation of oil resources into state hands, as well as the centralization of powers and putting media into state hands, and its new stance in foreign affairs. He told this to the French channel TF1: Putin suggested old views of Russia stemmed from outdated cold-war competition, and misguided colonial-era arrogance. If we go back 100 years and look through the newspapers, we see what arguments the colonial powers of that time used to justify their involvement in Africa and Asia. They justified their involvement with statements that is was about playing a civilizing role, the white man's burden, the need to civilize these people, Putin told TF1. All you have to do is change the words "civilizing" to "democratization" and then we see the application almost to a word of what the newspapers were saying in 1900 to day's world. These are the arguments one hears from our peers in the U.S. and Europe on democratization and democratic freedoms. This is remarkable statement in revealing how the post Berlin Wall 90's experience with democracy has soured Russians view of democracy. And the peculiar way Putin and other Russians see the western exhortations for openness, transparency, freedoms, self interested, motivated by gains for western economic interests, and disregarding Russian interests such as national pride, economic-higher energy prices to sustain growth, national sovereignty. The NYT article can be seen in the context of a strategy article in Foreign Affairs, July/August 2006, "Russia Leaves the West," by Dmitri Trenin. Trenin says the U.S. and Europe want a weak Russia that they can exploit and manipulate, which means Russia needs to assert itself and its own interests just like the U.S. and China. The idea presented by Deputy Director of Carnegie Moscow Center, echoes Putin's own suspicion of western interests and their "colonial era arrogance". Trenin's view is of a fundamental shift in Western-Russian relations: the United States and Europe could protest this change in Russia's foreign policy all they want but it will not matter. For Trenin the U.S. and Europe had to agree that the terms of the Western-Russian interaction, set after the collapse of the Soviet Union's collapse, was now fundamentally changed. 2. The second link is with the "Putinand Russian Oil Policy" group. It provides details about the Kovytkta field owned by BP-TNK and what is happening there. Alastair Ferguson, director of BP-TNK's gas operations describes the situation in a interview with NYT at his Moscow offices. Ferguson says it makes sense to do what Russia is doing if you are the Russian government. By letting BP-TKN build its own pipeline Russia would lose influence over gas prices. According to Gazprom allowing private companies to ship gas independently would drive down gas prices. And Ferguson says this gas field is huge and supplies going to China and rest of Asia could lower prices of liquefied natural gas in California. Medvedev, Gazprom's deputy CEO was also interviewed in his Moscow offices. Gazprom and the government would answer the question about export sales, not BP-TNK. Medvedev's view is that this is a technical question for Gazprom and Russia to decide and has little to do with the G-8....

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Proposals being considered by the Obama administration for overhaul of Fannie Mae and Freddie Mac. One proposal being considered is to keep Fannie and Freddie in a reduced role with safeguards such as an insurance pool of money created by a fee the firms would charge mortgage lenders and banks. The insurance pool would act as a fund to cover losses before the government stepped in. Another safeguard would be to require the firms to hold adequate reserves to cover potential losses. The earlier preferential advantage for Fannie where it ony needed to keep a fraction of the reserves banks had to keep would be eliminated. Under this proposal both firms would shrink their mortgage portfolios over coming years. The White House says it wants to see a winding down of Fannie and Freddie and let private capital be at the heart of a new housing system.

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Mr Carney's calm demeanor and performance as head of the Bank of Canada, Canada's central bank, during the period before and after the financial crisis of 2008, and his 13 years of private sector experience at Goldman Sachs including handling of sovereign debt and emerging market debt, were part of the invaluable experience considered in the selection process for the next Governor of the Bank of England. Britain's chancellor of the Exchequer, Mr. Osborne, encouraged Mr. Carney to apply for the position. Carney is head of the Financial Stability Board, which has responsibilities to reduce systemic risk. This experience is also considered valuable because of the expanded responsibilities of the Bank of England, Britain's central bank, which now include overseeing and regulating British financial institutions. The Financial Services Authority was scrapped and its responsibilities placed in the central bank with the Governor overseeing a committe inside the bank that is in charge of regulatory affairs....

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Andrew Higgins tells the story of the China Power Investment Corporation's hydro electricity generation project on Burma's Irrawady river. The project is located in the northern part of Burma, in Myitsone, Kachin state. This was to be the first of seven hydroelectric dams on the Irrawady river. Initial opposition to the project by local people turned into a national opposition movement against the projects as it became clear that the huge project which would generate as much electricity as the Three Gorges dam in China, or seven times the Hoover dam in the U.S., would for the most part benefit China. Burma's economy was too small after decades of neglect to need this much electricity. The fears of ecological damage, uprooting the people living in the area, took on a new dimension as national opposition coalesced around the issue of Burmese sovereignty. The former general, President Thein Sein, who assumed the position in March 2011, had second thoughts. One former military officer, leading one of the opposition groups, expressed fears that Burma would become a colony that helped China meet its energy needs under the arrangement with China Power Investment Corporation. China was already working with regimes in Sudan and Angola to meet its energy needs. In September 2011, President Thein Sein halted work on the project. This happens just as the country's military is relaxing its hold on the media and allowing opposition leaders to express their views. The two developments may be connected as the military sees the need for getting public support to counter China's pressure to go along with the project. Years of external pressure failed to create an opening for democracy in Burma. This event appears to create the atmosphere for a genuine expression of Burmese feeling and desire for protecting its sovereignty, which would help it join the world community, with the military finding a common ground with public sentiment....

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The EU statistics agency Eurostat reported that the eurozone countries GDP declined by 0.3% in the 4th quarter compared to the third quarter of 2011. The decline for Germany was 0.2%. For Italy the decline was 0.7% over the prior quarter according to Istat, the Italian statistics agency. Spain 0.3% decline over the prior quarter. France experienced 0.2% growth over the prior quarter with larger exports by Airbus and more business investment. Italy plans cuts to military spending reducing aircraft purchases, buying 90 instead of 131 Lockheed F-35 fighter jets. Only France and Slovakia showed quarterly growth.

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The New York Attorney General Andrew Cuomo filed a civil fraud lawsuit against Ernst & Young LLP. Cuomo wrote in the complaint that "Ernst & Young substantially assisted Lehman Brothers, now bankrupt, to engage in a massive accounting fraud." The suit says Ernst & Young ignored warnigs from Lehman employees and from its own staff about the improper transactions. Lehman shifted $50 billion in assets off its balance sheet to foreign banks at critical financial reporting periods with a promise to buy back the securities at a premium price a few days later. With the cash held in the meantime, Lehman would pay down other debts, appearing to have less debt and give investors a better impression about the firm's financial condition than was really the case. Lehman and Bear Stearns were the most highly leveraged investment banks during the financial crisis of 2008. The unraveling of Lehman led to cracks in the world financial system because of interrelationships in the banking system. By taking this action the New York Attorney General's office is taking an important step to prevent the recurrence of such systemic crises from buildup of excessive leverage in the financial system....

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The share of new mortgage loans backed by the US government through Fannie Mae and Freddie Mac is at 92%. This makes the fast overhaul of the two agencies much more difficult. Treasury Secretary Geithner said last week that overhaul of the two agencies could take 5 to 7 years. The problems with Fannie and Freddie are real. The U.S. government subsidizes mortgages through Fannie and Freddie, encouraging Americans to take on more debt. Their balance sheets pose serious risks in another crisis, as long term investments are financed with short term borrowing. Any losses will be the responsibility of the US government. A recent paper from the US Treasury outlined some of the steps needed to wind down both agencies and to reform the way they operated including- requiring larger down payments and lowering loan limits, and increasing the fees charged for the government's guarantees to be more in line with the risk being taken. Slower reform in this area means additional systemic risks in the event of another crisis....

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The Tappan Zee bridge with 140,000 cars crossing each day. The number is expected to go up to 200,000. The bridge is structurally deficient. The cost for a new bridge is up to $16 billion. The needs throughout the New York area are shown.

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This New York Times editorial points to the poll showing Americans oppose ending bargaining rights for public unions by a margin of nearly two to one. Twice as many people said they prefer increases in taxes to cutting benefits of public employees or cutting spending on roads. This New York Times/CBS poll was published at the end of February 2011.

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The Economist's view is that trade and currency tensions are too high to result in an accord along the lines of the 1985 Plaza Accord. There may be a general underestimation of how strongly the American public feels about trade and jobs issues, and the currency issues that are intertwined with trade issues. This includes the Economist. See the 2010 survey of American public opinion (Murray, Belkin, WSJ, Oct 2, 2010, Americans Sour on Trade), which shows that better educated and higher income professionals are also shifting to firm opinions on trade that impacts jobs in the U.S. Also see Roubini's recent analysis (interview with Peter Stein, WSJ, 10/2/2010, Yen Revaluation for China's Own Sake), on why it is imperative in China's own interest to move forward with a currency revaluation. Economist Robert Gordon of Northwestern University (Peter Coy, Business Week, 9/30/2010, Why One Economist Predicts Slow US Economic Growth), recently pointed out that his models show a significant slowing down of the U.S. economy over the next two decades, the slowest growth since the Presidency of George Washington. This means growth slowing down to 1.5% in the period 2007-2027, from 1.93% in the prior three decades, which he says leaves less money for everything from tackling carbon emissions to infrastructure needs. ...

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The close contest between Republicans and Democrats in Wisconsin to recall Governor Walker five months before the presidential election. Grassroots activists pushed hard for the recall after large protests at the state Capitol. The national Republican party has invested resources in this and sees this as part of the national campaign. Walker has raised $25 million, according to the Wisconsin Democracy Campaign, and has far larger election campaign funds. Romney needs to win in the midwest in states like Wisconsin and Ohio, to win in November, and this recall election is being taken seriously by the Republicans.