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Mr Bogle of Vanguard Group, says we live in an agency society, not an ownership society. Ownership society was 50 years ago. The mutual fund managers and the pension fund managers make the decisions as institutional investors for us, they are agents. And these managers had the power as corporate citizens, controlling some 70% of the shares of public companies, but decided to exercize forbearance. They did not play the active role they could have played in board structure and governance, director elections, executive compensation. Money managers did not do the kind of due diligence that was required. The securities analysts and researchers could have, but failed to question the toxic assets on the balance sheets of banks, investment banks and especially of places like Citigroup and Merrill.

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WSJ looks at the 75 years of the US Saudi Arabia relationship that started when US president Franklin Delano Roosevelt met Saudi king Ibn Saud at Bitter Creek, Egypt, on a US Navy destroyer ship in 1945. It has gone through many phases over this period and mainly involved the Saudi kingdom maintaining its supply of oil to the US and Western Europe. This relationship went through an oil embargo during tense periods of Israeli Palestine conflict as in 1983 with an oil embargo that pushed up oil prices. What is different this time is the situation in Yemen where Iranian supported Houthi rebels near the border with Saudi Arabia are engaged in a conflict with the Saudis. Democratic administrations under first Obama and Biden today support reaching a deal with Iran on nuclear weapons development and limit US military support for the war in Yemen. The Saudis for their part are not keen on a regional war and turned down efforts by president Trump to respond to attacks from Yemen. Mr. Biden's envoy has arranged for a deal to reduce tensions between the Houthis in Yemen and Saudis. The diplomatic impasse in relations stems from the Kashoggi incident and president Biden's concern for the human rights situation in Saudi Arabia. Other factors making relations difficult are the economic interests of the two countries diverging. The relationship Roosevelt started in 1945 has changed in its fundamental character. Oil supplies for imports into the US is no longer a factor for the US which was the original interest of president Roosevelt in Saudi Arabia. This changed by 2015 as the US fracking industry enabled US to become self sufficient in oil and able to supply LNG to western Europe. Instead of the US Saudi oil now goes to China. Russian oil also goes to China as its industry expanded with American investment. This has led to a new Saudi relationship with China which has changed the dynamic of the American Saudi relationship. Some of the new aspects of this can also be seen in Saudi relationship with South Asia. Saudi ties have increased with India and India in 2021 was the first country to provide vaccine supplies to Saudi Arabia. Saudis, Qatar, United Arab Emirates are building relationships with India as a close neighbor in the region. Relationships are in some ways improving in the Asian region compared to the period when oil was simply exchanged as a commodity for defense supplies from the US without regard to cultural, educational and other changes in Saudi society. In a sense US and Western Europe paid little attention to the huge democracy of over 1 billion people right in the middle of Asia and followed policies that led to major investments in China and little or no investment in India, and without realizing it followed a policy that the British had pursued in the British Empire of treating different communities and religions as separate as opposed to one community of people in South Asia that were engaged in modernizing, building infrastructure and changing centuries old ways of living. The British Empire was sustained by this kind of thinking, and as long as Indians were complacent and lacked the will to make their aspirations for a better life and infrastructure for modernization this kind of thinking prevailed. The economic crises in Asia have reinforced the idea that there is one community entirely focused on development and modernization in South Asia. The people in South Asia care most about the cost of living and the infrastructure and services for the quality of life they live and their children can aspire for- same in European Union that chose the Greens and chancellor Scholz, and same in the US that chose president Biden to invest infrastructure and people, the same in China and the same in India and the rest of Asia. This is the situation that the US and Britain, and the European Union are now beginning to learn and adapt to that is a constructive aspect of these changes to rebuild the connections and supply chains that were sorely neglected before now. ...

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Reserve bank of India's Governor Dr. V.Y. Reddy, who was a strong regulaor and did not allow mortgage securitizations, derivatives, and increased the reserves banks had to hold in case things went wrong. He had strict rules for bank lending in the real estate industry even as a real estate bubble developed in India, all of which is keeping India's banking system in good shape as it faces the global credit crisis. Criticized at the time by bank executives for his strict no nonsense rules, he is now regarded highly by Bank CEO's in India. One of this no nonsense rules was that banks had to hold on to loans they made on their books as banks all over the world have always done in the past, because it made good sense as banks were likely to police themselves for loans they were responsible for. Vague and possibly dangerous experimentation in the name of productive change was frowned upon and the tried and tested rules were followed.

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How brokers could earn a "yield spread premium" which could amount to $8000 on a 400,000 loan, or 2% of the loan amount, i f the borrower's interest rate was an extra 1.25% higher than lender's listed rates. These yield spread premiums encouraged brokers to push borrowers into more expensive loans. A study done for the Wall Streeet Journal has shown that borrowers with credit scores above 620 who would be able to get a conventional loan were a large part of the subprime borrowers since 2000. In 2005 borrowers with such credit scores got 55% of all subprime mortgages, with this rising higher to 61% in 2006. In 2000 that figure was 41% according to this study. A sizable number of people with top notch credit signed up for expensive subprime loans. The analysis looked at $2.5 trillion mortgage loans since 2000. The study was done by a San Francisco research firm, First American LoanPerformance.

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Jan 22, 2003 in New Delhi, Atal Bihari Vajpayee, who revived Gandhiji's Indian vision for the 21st century, said on the Golden Jubilee of India's Parliament-  "If the 20th century saw the global growth of democracy, the new century should see its further expansion and enrichment. Especially, we should develop democracy as an effective instrument for fulfilling people's aspirations and resolving conflicts and contentious issues. History has proved time and again that free and democratic societies are the ones that are creative, self-corrective and self-regenerative. The holding of regular elections, the victories and defeats of individuals and parties, and the periodic change of governments have many benefits. These make elected representatives accountable; keep the rulers in check if they develop hunger for power; prevent rigidity in governance; and dislocate social and economic interests that would otherwise get vested."   "At the same time, we cannot overlook the many ways in which the Parliamentary system, including ours, needs to be strengthened. All democracies, especially in developing countries that have considerable diversities and carry the burden of developmental imbalances, have had to grapple with one paramount challenge. And that is: how to harmonise the legitimate self-assertion of communities that suffered deprivation and disempowerment in the past with the imperatives of good governance?"   "One obvious answer lies in the need to protect and further strengthen the institutions of democracy. Our ancient seers taught a guru mantra: Dharmo Rakshati Rakshitah. Dharma, protected, protects. In the same way, institutions, protected, protect. They can function well only if each of us adheres to the norms that are the essence of each institution. If we adhere to the norms of our institutions, the effectiveness of democracy would go up ten fold, even a hundred fold. If we don't, it is imperiled."   "There is a second imperative. Our economies are becoming increasingly integrated. The demands of our people are ever more pressing. Thereby governance has become more complex, demanding newer competencies from elected representatives. All parliamentary democracies, therefore, face a common challenge: how are we to ensure that the rough and tumble of electoral politics brings such persons to office who can actually handle the complex tasks of governance?" ...

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Arizona remains a state where the Republican and Democratic parties are very close. As Senator Krysten Sinema a Democrat, supported the Republican filibuster that required 60 votes for major legislation and thwarted some of president Biden's legislation to help workers and families in the US. Having alienated some Democrats she is now running for the Senate as an Independent. Her likely opponent from the Republican party is Kari Lake. Arizona is split three ways evenly for Republicans, Independents and Democrats. The question for Sinema says a Republican strategist is whether there are enough independents and soft Republicans who will vote for Sinema. Rep. Ruben Gallego is running for Democrats, Kari Lake for Republicans. Another question is whether Kari Lake's association with Mr. Trump could hurt Republicans in Arizona. Synema faces a difficult three way race as Democrats see her flagging support on key initiatives of the president as a serious problem.

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The Glasgow COP26 summit could be the beginning of a new era for mankind as the city that started the industrial revolution in Britain takes the world on a turn into a new era of ecologically conscious living. This BBC report looks at changes we should be experiencing in 2022 to 2030. Electric cars that take the place of current automobiles, increasing use of construction materials other than cement and concrete, use of solar and wind energy. From a mental health standpoint lifestyles built around walking and cycling, more forested areas and green spaces in and around cities, cleaner air, quieter cities, food choices and agricultural choices made around health and better ecology. Personal investments, corporate investments and pensions of $139 trillion invested in a way that cuts carbon emissions. Governments and private citizens enabling transparency and regulation, weekly monitoring on matters relating to emissions in one's own neighborhoods and local region.  ...

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The coronavirus is changing the office that people were used to and changing how many days they spend in the office. Hybrid scheduling is a new term that means workers can combine say 2 days working from home with three days in the office.

This will be an acceptable way for companies to operate. Companies are finding out that it is not necessary for employees to spend all their time 8 to 5 in offices to be productive. In fact studies have shown even in offices the distractions of meetings and other distractions on the phone cuts into productivity, so that some time or days need to be set aside to work without such distractions. 

Internet companies and software companies in particular are finding that it is not necessary to have employees work from offices. Another change is that smaller satellite offices could open up in less expensive locations and the workforce becomes less centralized.

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Denmark's shipping company A.P. Moeller-Maersk plans to split into 2 different divisions, one for transport and one for energy. Maersk Line, the largest container operator in the shipping industry, will become part of the new Transport and Logistics Division. Oil interests of Maersk will be combined to form the Energy Division. In June Maersk replaced CEO Nils Anderson with Soren Skou from the shipping business. The container shipping industry is suffering from a sharp downturn with freight rates falling in price wars, and shipping lines barely covering fuel costs. Hanjin Shipping is a South Korean company that has filed for bankruptcy protection. There is a process of consolidation taking place in the shipping industry as smaller lines are finding it difficult to survive on their own. Experts say the 20 biggest container operators could lose about $8-10 billion in 2016. Maersk has shifted to $139 million net loss in 2nd quarter 2016.

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Mexico replaces China as the U.S. top trading partner in the first half of 2019. U.S. imports from China fell by 12% and exports fell by 19% in first half 2019, according to Commerce Department. The total value of trade with China of $271 billion was less than the trade with either Canada or Mexico.

Mr. Trump said yesterday to China- "If they don't want to trade with us anymore, that would be fine with me. Until such time as there is a deal we will be taxing them." He went on to say he would place 25% tariff on additional $300 billion of Chinese goods on Sept. 1, 2019.

Meanwhile in first half 2019 the U.S. imports increased to 34% from Vietnam. Some of this could be Chinese goods transhipment through Vietnam. Japan, South Korea, India, Europe, all increased exports to the U.S.

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The U.S. and India face difficult trade negotiations as India moves to build its Make in India campaign, building capabilities of Indian manufacturing companies for global supply chains. Mr. Trump will sign a $3 billion defense deal with India for supplying helicopters and other equipment to India. Indian policy on trade is to ensure local content and transfer of technology to build capabilities of local companies. The goodwill generated by the visit by Mr. Trump to India, and deals on defense could lead to agreement on other trade issues, as India and the U.S. balance other considerations such as the rise of China into the picture. This will take time and is likely to be done after the elections. Differences on tariffs will continue in the same way that differences with China led only to a partial deal, with contentious trade issues on technology left for the future.

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Japan is meeting a shortage of workers by bringing in workers from other countries including China. In jobs ranging from apple picking to airport baggage handling Japan is getting foreign workers, and making changes in its immigration laws. Prime minister Abe is pushing for these changes to increase growth of the Japanese economy. In the past 4 years the number of foreign workers has nearly doubled to 1.46 million and a new visa system will accelerate the process to bring in more workers. Out of 27 countries in a Pew Survey Japan is the only country where more people favor immigration to rise than those who think it should decline. The Chief Cabinet Secretary Mr. Suga says- " In my view that shows how real the labor shortage problem is." Immigration authorities say they gave visas to only 82 refugees in 2018, less than 1% of those applying, so that there is not a sense of recasting Japan as a nation of immigrants or fulfilling any obligation to accept people from war torn nations. The problem Japan is facing is that 3 in 10 people are over 65 years old. In 2018 the population declined by 430,000, causing a need for job applicants. In fact cities and towns are looking for new ways to hire older workers who retired by offering flexible hours. ...

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Car sales in Germany are up 40% from ayear ago. This is not about to happen in the USA. The cash for clunkers program in Germany is broad and less complicated.In Germany eligible cars have to 9 years old and the subsidy covered the purchase of any new car, regardless of size and fuel efficiency. In the US the program just signed by President Obama covers a narrow profile of customers. In the US customers who benefitare economically challenged and in the midst of adeep recession. Cars can't be over 25 years old, and can't have a combined highway and city fuel economy rating of more than 18 miles per gallon as calculated by EPA. To get the full $4500 credit customers must buy either a new truck or sport utility rated 5mpg higher than the clunker or scrapped vehicle, or a passenger car rated at least 10 mpg higher.And the credit is given instead of the trade in value, so if the trade in value is higher it doesn't help. The German government is giving away upto $4500 but it started out with 1.5 billion euros to get 600,000 clunkers off the road, but because of the popularity of the program has expanded it to 5 billion euros for 2 million cars and extended it to end of 2009. The US program only has $1 billion for 250,000 cars or one eight of what the Germans are doing for amuch larger car market. Because of the dire shape Detroit and much of the midwest is in, because of the slump in the auto industry, this may be a mistake and a missed opportunity to do what the Europeans are doing, and get an even bigger impact. The American car market and industry is taking a severe blow from the deep recession. Because of the depressed region the impact of a real clunkers for cash program that targets a broader profile, with bigger financing and designed to give a boost to the market, could make a real difference. At this point it is more of a program designed to help people turn in their gas guzzling trucks for passenger cars, and those driving a $200 car are not likely to be the kind of customer who goes out and buys a new car say dealers. See the link to Alan Blinder's stimulus proposal in July 29, 2008, that suggested a $20 billion program even before the current crisis. The present program has only $1 billion....

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Ashwani Lohani, head of the Railway Board for Indian Railways says the bullet train is creating a paradigm shift in how people travel in India. That the distance from the city where Mahatma Gandhi had his Ashram to Mumbai is covered in less time than it takes to travel by air is a huge shift for India. Some media reports have incorrectly stated that the money used for the bullet train could have been used for improvements to the railway system. Lohani says it is important that people understand that the money for the bullet train is coming from Japan and would not be available if the bullet train was not built. It is also at interest rates of 0.1% and a moratorium period of 15 years making the loans almost free. The advantage of the project is also that it has a demonstrative effect showing that a lot can be done in bringing Indian Railways into the pattern of rapid rail travel prevalent in Europe and now in China. China has shown the way by developing its rail system and also developing the technology for bullet trains using Kawasaki technology from Japan and building on this. It is imperative that India do this and modernize its own system. This is an aspect of infrastructure also that has a massive impact on people's lives. When trains can travel at bullet speed between city centres in India it also creates a new energy for bringing the rest of the system to higher technology standards.     ...

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Barbara Wesel of DW.com says 2017 will be a difficult year for the European Union. Elections will be held in the Netherlands, France, Germany, and possibly in Italy. The Netherlands election is coming up this month and the far right party led by Wilders is likely to gain as much as 25% of the vote but have to negotiate with other parties in a fractured parliament to form a government. Elections in France show Marie Le Pen winning the first round, with an uncertain result in the second round between Le Pen and Macron. A win by Le Pen could lead to the unwinding of the EU. In Germany another coalition government is expected with the SPD playing a larger role as it regains favor with the voters under the EU's Martin Schulz. Wesel says Germany and Merkel are looking like a beacon of stability and hope as the world looks for leadership with America looking inward to fix problems at home.

 

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Views of East Germans in the city of Erfurt on the eve of the 20th anniversary of Germany's reunification. Disparities remain after over a trillion dollars were invested to improve conditions in East Germany, yet the positive changes are visible. In this city of Erfurt the burning of lowgrade coal for heating homes made the air less breathable. It could take years just to buy a car. Still Germans in the east are disappointed, as their expectations were high during reunification. Wages in the east are 80% of wages in the west and unemployment is 12%, and the average wealth of east Germans is 40% lower than west Germans. Young people have immigrated to the west, leaving older people and retirees. Because of this the term reunification is less used than the term "die Wende"- meaning the turn or the change. A sense of the loss of the old values forged in a socialist state is still felt deeply by some east Germans and the change has been largely positive but wrenching in terms of a loss of identity, a sense of being treated as immigrants in their own country....

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The question remains why the defamation law has remained a part of the Indian Constitutional law and the Indian  Supreme Court has upheld it. Under Britain there must be the sense that this would have put the unified subcontinental government at risk. Under India post independence this could be seen as an effort to keep the unified country India that emerged from the British Indian rule together as one nation. It may not be individual to individual defamation that underlies the spirit of this law. Its spirit may lie in keeping together as one nation a country with many languages and people after centuries of foreign rule by not letting the spirit that keeps it together be undermined in any way or form. Gandhi and the independence movement before Gandhi created the spirit for a new nation from many peoples and languages, this has now taken the form of timely delivery of the services and infrastructure that these peoples are entitled without any dilution of any sort, after all the hard work, sacrifices and aspirational effort of an earlier generation of leaders. ...

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Wisdom shared by students on picking a place to study. Ten people look back to reflect on how their college was chosen, their experience at that college, the cost of tuition. Some changed to other schools where they fit in better, others struggled with large tuition bills when the same education could be obtained at state universities with lower tuition fees. You are never stuck says one of them as you can change schools if it is not the right one. Others point out the risk of relying on "the best school", the most "rigorous program," and one engineering student points out that one can get a good engineering education at many less costly or famous schools. The general feeling is find what will be good for you without being overawed by big names, consider cost carefully, one can get a good education at most universities and colleges just find the place where you feel valued as a person and which fits in with your sentiments and mental makeup. The rest is effort studying and concentration which is entirely upto you.  ...

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M.r Modi recalls the blessings of Mr. Mulayam Singh Yadav given to him with his advice in 2014 when he became prime minister and met Opposition leaders in India. Mulayam Singh was mentored by Ram Manohar Lohia, a socialist educated at Humboldt University in Germany in the 1930's and an early activist in India's Independence struggle under Mohandas Gandhi. PM Modi who has translated many of the ideals of Mr. Lohia into practice with development work for water, sanitation, electricity, gas stoves, housing, for tens of millions, says Mr. Mulayam Singh's advice has stayed with him even today. Without the stability given by leaders such as Lohia and Mulayam Singh India could not have navigated carefully the difficult period of the first 50 years after independence in 1947. For democracy to prevail leadership of this kind is essential. America turned from time to time to leaders such as Lincoln, FDR during its history, India is in a formative period for its democracy as it goes through modernization for a country with 1.2 billion people and many languages.  ...

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This report in the NYT says a little known donation raising method used by the Republican National Senatorial Committee may affect Republican chances of taking control of the Senate in the US. The method is considered part of hyper aggressive methods that ask people provocative questions such as "Should Biden resign?" in millions of text messages sent out and asked to reply click YES to Donate, the amount is then processed immediately, says NYT. It was so controversial that WinRed the main Republican donation processing platform banned the practice. It appeared to be working earlier but with the cost of living crisis in 2022 donors are holding back. NYT says the digital ads to get these donations cost more than the donations in some situations. It cost $23.3 million for digital ads and expenses and raised only $6.1 million leading to a $17 million deficit, according to NYT. Senate Minority Leader Mitch McConnell now thinks it could affect chances for the Senate. The NSRC Republican group has $23 million about half what the Democrats have. ...

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Turkey's inflation rate continues to rise even after a government effort in December to stabilize the economy by stabilizing the lira. Annual inflation jumped from 21% in November to 36% in December, according to the Turkey Statistical Institute. The true inflation rate could be much higher. The ENAGrup estimate after assessing thousands of prices is that true annual inflation is 82%. Ordinary Turks have difficulty affording essential food supplies, says this WSJ report. Turkey has overdependence on the US dollar in its government and bank borrowings which has intensified the impact of the cost increases world wide with the supply chain problems and higher energy prices. Food imports now are much costlier. Depreciation of the lira currency by about 50% added to the impact of the overall global inflation. The lira has come back a bit to 40% loss of value after an unorthodox government plan, yet inflation continues to rise. Deeper problems within the economy that were hidden when the economy was in high growth years are now apparent as the world sees an inflationary surge during the second year of the pandemic. ...

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President Biden's scorecard for the first year- 3.9% unemployment down from 6.4% in January 2021. Created 6.1 million jobs the most since 1939. $ 1 trillion infrastructure building plan approved in Congress with support from Republicans, the money going quickly and directly to specific much needed rebuilding projects all over the USA for the first time.  73% of the population of American adults fully vaccinated with two shots. And $1.9 trillion relief to Americans to restore their finances. Suspended student loan payments during the pandemic. Action on climate change, children's education, help to women, held up in Congress by two Democratic senators joining the Republicans opposed to Biden. It could be said that more was accomplished in 1 year than at any time since the presidency of Franklin Delano Roosevelt in the thirties and forties. And this comes in the middle of the pandemic of coronavirus with 853,000 Americans dead from the virus. Biden puts is faith not in the polls but in getting things done.   ...