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A violent military crackdown on Morsi supporter protester camps near Cairo University leaves 525 dead. A complete breakdown in political dialogue in Egypt and a return to military rule in Egypt that prevailed under Mubarak.

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This WSJ editorial says U.S. president Obama's message in Kenya and in Ghana before this trip, that Africans are responsible for their own future and how they treat their fellow citizens, is the right message. Coming from personal experience of his family the message should persuade people in Africa, particularly politicians and business people, of the need to put the common good before their own. And the need to improve the economic condition and living standards of the people on this vast continent that is nowhere near its potential.

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Keir Starmer of Labour says he stands behind every word in the ad that shows Tories including Sunak are weak in prosecuting crimes against woman and children. Labour says it will halve violence against women and girls. Starmer says- he will "make absolutely zero apologies for being blunt." That Labour will continue to use the Conservatives record on crime as legitimate criticism no matter how squeamish it made some people feel. "For the first time in my lifetime, everywhere you look from the economy to the NHS to the chaos on our streets- we have been set on a path of decline." Starmer said the last decade had seen the UK "become a country where thugs, gangs and monsters mock our justice system and make decent people's lives a misery." Starmer was head of public prosecution in Britain from 2008 to 2013. As early as 2002 he was Queen's Counsel. He was also a human rights adviser for Northern Ireland Policing Board and Association of Chief Police Officers. Starmer cites his work in improvements in Northern Ireland policing as one of the key factors in his decision to pursue a political career. The issue in the ad is a subject in which Starmer has much experience. ...

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Important year end reveiw of the oil price forecasting work of so many anlaysts and where they failed . The IEA and the US Enery Dpt forecast have year after year underestimated this pirce by over 20%. Analysts change the price forecasts within a couple of weeks based on changing information and assumptions. Of all this the Saudi Arabian forecasts have ben within 12 % of what has actually ocurred according to a study by Ronald Berger Strategy Consultants of Muich, Germany. And whats their forecast for 2008. By extrapolating from the Saudi budget and the assumptions, used such as giving a wide margin to avoid a deficit in the budget if oil prices undershot by a wide margin, one gets $75 for US benchmark crude. Forecast by experts are in the neighborhood of $80 average for the whole year 2008. Goldman recently revised theirs upwards from $85 average for 2008 to $95 within a 4 week period. How good is the Goldman forecast. No one really knows. Lehman has a forecast of $84 average for 2008 and bases it on the opacity of the market because no one knows what OPEC will do with supply and China does not provide good information on demand. So basically anlysts are adding an uncertainty premium to the price of oil. And this is especially so because as the Chief Economist at IEA says global space capacity is so thin and any event can influence price. Last year the rhetoric about Irans nuclear intentions was enough to stir up the price, as were other smaller events disrupting supplies. But the Iranian situation has since cooled down and diplomatic solutions are in the works. So what to expect in 2008 in the way of political uncertainty. Iraq, Iran, Palestine, Lebanon have all seen a cool off in the ast couple of years and the Bush administration rhetoric has become outmoded as has other rhetoric from Iran so that does'nt look like it will stir up oil prices in 2008. Still there will be some uncertainty premium about supply from OPEC and demand from China and India. And demand from the Middle Eastern oil producing countries themselves as well as the increasing demand in India and China will mean that lower demand in the US because of a recession will still mean an increase in global demand over 2007 of 1.5 million barrrels a day over 2007's 85 million barrels a day. What will change the dynamics of this situation is the government mandated fuel economy for all vehicles on the road with Europe more aggressive in this area under the pressures of global warming. If this impacts India, China and Russia as these fuel saving technologies are transferrred there overall consumption should see an impact. Europe's targets are only 4 years away for 2012. And the environment may cause China to bring in newer technologies that both contribute to improving environment and conserving energy. Because China's environmental record is almost catastrophic one could see some of this happen much sooner than expected after the Olympics in 2008. All that might change the way the world looks at oil and its use, and all energy sources and their use. ...

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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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Europe has something that is just as bad as subprime mortgages that have troubled the US, its the bad debt of European banks to Eastern European emerging market countries. This plus the high indebtedness of companies in Western Europe is creating serious problems for the economies of western Europe. In addition to the property bubble in Ireland, the UK and Spain, Germany is facing falling demand for its exports as a result of the steep descent of the global economy, especially China. As a result of all this the EU is facing a problem of the magnitude of that faced by the US, if not worse. In much of Europe especially in Germany and the Eastern European countries what generates growth and jobs is exports. Three quarters of the cars made in Germany are exported, and many of the parts used in BMW's and VW's come from plants in the eastern european countries, some form Slovakia, Poland and from plants elsewhere in Eastern Europe. With the collapse of some Eastern European economies and serious problems in others these markets are shrinking. The same thing is happening to exports from Eastern European countries where factories there manufacturing goods for Western Europe are closing. And banks in the western European economies like UniCredit Group of Italy, Germany's Commerzbank, and Belgium's KBC Group have large loans outstanding in the eastern European countries to companies and consumers. And some of these countries have run up huge current account deficits. Bulgaria the deficit is 20% of GDP. Increasing the risk and hitting consumers in the east is that banks issued low rate mortgages and other laons in euros and swiss francs. With the Hungarian forint, Romanian leu, and other weaker currencies seeing big drops, the cost of repaying these loans has jumped. Instead of consumers being overstretched from overspending as in the USA, or facing foreclosures, these consumers are facing huge loan repayment problems from borrowing in other currencies. Morgan Stanley says more than half of the private debt in Hungary, Romania, and Bulgaria is in foreign currency. And customers in Eastern European countries owe foreign banks loans equal to one third of their combined GDP, according to the Bank of Internatonal Settlements. A lot of these loans could end up turning into bad debt if the economies of Eastern Europe deteriorate further as consumers there pull back, factories close and job losses mount, and currency values drop even more. This would create huge problems for Western European banks and restrict lending in Western Europe as these banks make fewer loans creating more problems for Western European economies, in the same manner as ricotcheting effects have done in the USA....

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Vikram Pandit's style at Citigroup after 4 months, thoughful, asking lots of questions, fixing the little things that actually matter a lot, like the unwillingness of some heads of divisions to sit together in the same room, some hiring decisions and new lines of reporting and responsibiity and interaction in the organization structure that call for teamwork, discussion and collaboration. The oldtimers like Krawcheck used to clear lines of reporting are now getting used to the new culture of collaborative working. His style is first to come to grips with issues and not to come to snap decisions based on intuition, such as interviewing at length and asking tough questions at length to Ajay Banga, head of Citi's international group about the extensive defaults in Citi's consumer loan business in Japan. One of his views is that only if you get the foundation right can you talk about vision. Regarding pettiness in management and small grudges, its either going to be a partnership or you're not going to be here. some of his colleagues like James Forense say that they would take substance over form, judgement over form, any day of the week. And while he does not shy away from details like expecting lower level employees to pay for sporting event tickets Citigroup earlier gave out free, and he himself rides the subway sometimes, he has made some of the bigger decisions. Among these, getting capital from outside sources by travelling extensively abroad, urging Citigroup's board to slash the dividend for the first time in 20 years, selling off 2 peripheral units that did not belong and a third Primerica on sale also. And urged by his mentor former Treasury secretary Rubin who also used a note pad and a thinking thoughtful style like Pandit's at Treasury during the Asian banking crisis and the Mexican financial crisis, Pandit has been direct and realistic. He tells Wall Street that the fate of Citigroup is going to be decided to some extent by the duration of the environment we are going through, the twin perils of the debt-market crisis and the sluggish US economy. And that for now issues like these are going to overwhelm our actions. Pandit's father was a senior executive of one of India's leading pharmaceutical companies when the family moved to New York, so he has grown up around business, and is able to ask the question quite sincerely and matter of factly of his managers at the beginning of every meeting. "What are you doing with the shareholder's money?" After which come the torrent of well thought out questions, probing deeper each time, especiually where issues are festering for a long time, and remain unresolved. ...

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Arvind Panagriya, Prof. of Economics at Columbia University, points out the key initiatives of the Modi government in its first four years which will show results in future years for development of the country.  He mentions the Swachh Bharat Mission and cites results that show rural households with toilets are now 84% up from 38%.  By 2019 the whole country will be defecation zone free on the 100th anniversary of the birth of Mahatma Gandhi. The Dhan Jan Yojana DJY accounts opened for rural households are up to 316 million. Aadhar cards for identification are up from 650 million to 1.2 billion. The Aadhar and DJY work together to enable direct transfer of benefits to poor households, eliminating the leaks in benefits transfer and ghost accounts of the period since independence in 1947. Not mentioned by Panagriya is the Health Insurance scheme for lower income households that enable families to survive a sudden medical expense that could put them in dire straits.  These efforts work in a way to change India from the ground up from its villages and rural areas as envisioned by Mahatma Gandhi in the struggle for independence. The land acquisition law amendments were put on hold till farmers concerns could be better accomodated, an area of concern for industrial development cited in an editorial in the Hindu newspaper. Fiscal consolidation and inflation targeting have resulted in an average inflation rate of 4.3% for the 4 years of the Modi government. Inflation was over 9% in the last 2 years of the previous Congress UPA government with GDP growth dropping to 5.9% for the last two years. Average GDP growth for four years for the Modi government is 7.3%, even after the changes to implement GST taxation for one national tax eliminating state barriers in interstate commerce and demonetization to fight corruption and black money. Rate of GDP growth should be higher after the gains from the initiatives and the new GST integration of the country are felt, with increase in investment and FDI, after infrastructure improvements and land acquisition arrangements are made. Transportation infrastructure modernization initiative pushes ahead with the first bullet train in the pilot project for Ahmedabad- Mumbai set to start in 2022. This is a $17 billion project financed for $13 billion by the Japanese government at 0.1% loan for 50 years, moratorium on repayments for 20 years, using E5 Shinkansen series technology. Implementation of this project on a sound financial basis should lead to transformation of the Indian rail network, raising the level of technology implementation across the entire Indian rail system. Such an achievement would rival the first introduction of railways into India in the nineteenth century under the British. A new bankruptcy law is intended to free up capital for investment by putting behind the large number of non performing loans in the Indian banking system. Changes made by the central bank RBI are designed to speed up this process so that loss making enterprises are absorbed, consolidated or shut down, a legacy from the earlier period.     ...

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Efforts to develop the next generation Ukrainian aircraft industry from its current moribund state by discarding the old Soviet model. Attracting new foreign investment alongside state investment, modern management, preserving intellectual property rights, and looking for contracts across Europe, is critical for future development. Ukraine has a history of technology development and design in the aircraft industry, which makes this industry a good candidate for export revenues. The first mass produced helicopter was made in the U.S. and used a Sikorsky design in 1936. Igor Sikorsky is from Kiev, Ukraine, and immigrated to the U.S. in 1919, as Soviets took control of Russia. His son was a vice president of United Technologies Sikorsky helicopter division. (Wikipedia). MacFarquhar describes this industry in its new form at its early beginnings- a decade from now the industry under good management could provide large export revenues. Many of the old Soviet auto plants also developed in this direction with investments and technology from companies such as Renault, GM and others, helping revive the industry. There are no spheres of influence in modern industry- Ukraine, Russia, Europe, and the U.S., all benefit from openness to new technology and investment, which improve the economy and living standards. ...

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The 525 seat Airbus A380 launched in 2007 is expected to reach the breakeven point in 2015. Higher deliveries of the A380 led to a 41% decline in net profit for the 3rd quarter 2014. Production improvements on the A380 increased operating income by 14%. This will enable Airbus to benefit from the fuel efficient long range A350, which completed a maiden flight in the 3rd quarter 2014, with the first deliveries by the end of the year. The A320 neo also will add to profitability, as it is sold out to 2020, according to UBS. The A380 will be profitable by 2020, with more investment needed to upgrade the engine's fuel efficiency to compete with Boeing's competing version, the 777X. The uncertainty is reflected in Airbus share price, declining 8% in 2014 and trading at 5.7 times earnings before interest, tax, depreciation and amortization, compared to Boeing's 8.7, according to FactSet.

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About 1.17 million jobs were lost in 2008 according to the Labor Department, with half of these job losses in the last 3 months, as unemployment reached 6.5%. Bu the the labor underutilization rate is the one to watch, the measure of total unemployment including parttime workers who seek full time employment but can't get it. This hit 11.8% in October up from 11% a year earlier. This is what happened in Japan where companies began using parttime workers to reduce costs and not to have to pay benefits, a trend that has already started in the US. See link to trend. Over a long period like 5-10 years this can lead to depressed consumer spending as workers see an uncertain future, as ocurred and is still the case in Japan. Also note that the unemployment rate reached 10.8% in the 1981-82 recession and this is shaping up to be something bigger, and half of the 1.2 million job losses ocurring in the last 3 months so this is accelerating. The economy is expected to shrink at an annual rate of 4% in the 4th quarter, and could see these kinds of declines or worse in 2009 and beyond....

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This editorial in the Economist says Spain's economy has recovered to pre crisis levels by 2018 with growth at 3 percent. It says Spain had a bigger crisis than Italy and took stronger measures under prime minister Rajoy to fix problems in its banking system, address the housing crisis, and unemployment. Italy's steps by comparison were timid and faltering. Mr. Rajoy had his problems including corruption scandals in his party and a poor handling of the Catalan drive for independence. Yet Spain owes muchas gracias to Rajoy for his leadership in bringing Spain out of the housing and economic crisis, and for running the country for two and a half years after losing his majority in parliament.  Another difference with Italy is the generally favorable attitude to immigration for all parties. Of the newer parties Ciudadanos remains at the centre and the Podemos party remains to the left in politics, as part of the populist changes in Spain during the economic crisis. The new government of Pedro Sanchez has a positive attitude to immigrants and to women, with the largest number of women in the cabinet of any European country. ...

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Gordon Brown, former prime minister of Britain from 2007 to 2010, chaired the April 2009 G-20 meeting that came up with ways to tackle the global financial crisis. Brown also led the way by recapitalizing British banks, a step the U.S. followed. He comments on the volatility in financial markets in August 2007 following the S&P credit downgrade of the U.S.. Brown gives an incomplete grade to the tasks the 2009 G-20 set out to accomplish. He points to three goals the G-20 had set in the middle of the financial crisis in April 2009. The first was to prevent a recession from becoming a depression. The other two were to establish a financial stability regime, and a compact for growth. These two became paper promises says Brown. Brown sees the best approach to prevent a lost decade is for U.S. and Europe trading their way out of a downturn as the Asian market absorbs more industrial goods from Europe and the U.S. This includes policies that would keep commodity prices low and ways of coping with currency shocks. Analysts have pointed to an export led recovery as one of the solutions the U.S. was hoping to achieve with a lower value of the dollar. This has had only limited success because of deep structural problems- high consumer indebtedness, bad debt at the banks, weak housing sector following the mortgage crisis, and a rising U.S. deficit- which will take some time to clear. Brown does not come to grips with these underlying imbalances built up during the boom years of the last decade, both in Britain and in the U.S., during which he was the finance minister of Britain....

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Luis Almagro, president of the Organization of American States, from the small South American nation of Uruguay, says he has decided to speak up on Latin American issues, for respecting the sentiments of the people and democratic process. This is a welcome trend and more Latin American voices need to be heard, for Latin Americans to make their own assessment of the needs of the people, the problems and how to tackle them. More dialogue is needed between the government and the opposition parties to come up with better approaches and throw light on problems. The effort of Mr. Chavez however well intentioned, following neglect of social spending and needs of neglected groups under previous administrations, has gone to the other extreme leading to isolation from the rest of the industrialized world's economies- something no country can afford to do today because of the pace of technological change, much less smaller oil or commodity dependent economies. Large petroleum subsidies need to be addressed in Venezuela, as Mr. Maduro now says, and opening of a dialogue with the opposition parties is one result of Mr. Almagro's efforts. At some point a transition is needed with support of all political parties to bring Venezuela back into the global economy. Inflation of 141%, and contraction of the economy by 10% hurts all Venezuelans. Not even faint traces of the Monroe doctrine that asserted U.S. dominance in South America exists today, and it is upto Latin Americans to tackle problems of corruption, misguided policies, lack of emphasis on innovation and education. The Washington Post's deputy editorial page editor Jackson Diehl, does a service to Latin America by calling attention to such voices for dialogue and problem solving....

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With his dwindling popularity and failure to support the socialist parties alliance Macron has made the party En Marche his own creation, a failed project. Macron started out in the Socialist Party in Amiens, France, was a minister in the Socialist government of Francois Hollande 2012-2017. Socialist voters twice voted for Macron in 2017 and 2022 elections to keep the Le Pen National Rally out. After the last election 2022 Macron faced union protests on pension age changes and on issues related to fairness for workers as he failed to take cost of living action and protect workers. He now faces a divided parliament and becomes a lame duck president till the next presidential election in 2027. He called the party he created during the last year of socialist Hollande's term as president initially En Marche, later En Marche El Republique and Renaissance, initially tapping into support for reviving France with younger people in political life. Yet he failed to live up to this instead put himself at odds with working class people and families and the problems they face across rural and urban areas of France. He has run out of support after the yellow vest protests, union protests, and protests over the pension age during his first and second terms. By calling the socialist parties of which he was a member in derogatory terms Macron increased his isolation and created a situation in which the RN of Le Pen is vying to be the leading party in the National Assembly. Only by making large investments in the French economy of $140 billion that the Socialist parties alliance proposes can France's economy and infrastructure be revived, not by the programs of either the RN or En Marche which make no effort to increase investment in the French infrastructure and economic strength. A modest tax on the top 1-4% of the wealthy finances this investment of $140 billion which RN, En Marche and Macron seek to avoid calling this program in derogatory terms to protect a tiny minority of the affluent who in the right way would want to contribute a fair share to the growth and revival of France. ...

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This editorial in the WSJ argues against Trade Representative Lighthizer's move to increase the percentage of North American content in a vehicle so that it creates more jobs. Currently Nafta rules require 62.5% of a duty free vehicle be made in North America. Lighthizer wants to lower the content coming from Asia or Europe. This is not favored by Canada and Mexico and it makes Mexico less competitive than it is now.

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The heavy monsoon rains this year and the lack of adequate storage facilities may result in the loss of 10-15% of the wheat and rice harvest this year, according to Indian government sources. This means food prices are rising because of this loss of grain. India badly needs more and better warehouses to store grain and control food prices.

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Foxconn announces salaries for workers would increase by 16-25% to about $400 a month before overtime. Foxconn plans to reduce overtime. Foxconn is a major supplier in China for Apple Computer.

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Concern about slowing growth in China with rising inflation. The problem of opaqueness of the financial system and of banks that are both listed companies and run by the government, and how this could accelerate a slowdown at some point with accumulated problems in the financial system. A sense that China's growth model has reached a limit, and whether there will be a soft landing.

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The People's Bank of China's decision to reduce the reserve requirement for deposits at banks by 0.5% is not likely to have much impact, as banks already have enough money to lend. The problem is more a lack of demand for loans as the economy slows. Inflation fears restrict the use of growth tools such as lowering interest rates and the housing bubble limits the use of construction spending to increase growth. Political uncertainty with a leadership transition, and economc uncertainty in Europe also limit options.

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Schumacher of DW.com provides insights into the referendum in Italy in which the "no" vote has a lead. Some aspects of the constitutional reforms are not positive and reduce representation, Renzi's failure to guage public frustration especially after the failure of Mayor Marino in Italy to improve services and infrastructure, the coalescing of different strands of public opinion from right to left in a referendum such as in Brexit especially with a failure to improve economic conditions for the middle class, make a "no' vote likely.

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John Taylor, says Obama and Alan Krueger (Obama's new head of the U.S. Council of Economic Advisors), said some of the same things in early September, 2011, that were part of Obama's old plan to revive the U.S. economy. And the old plan has failed to produce results. The part that puts construction crews to work on the roads, railways and airports was tried earlier in the stimulus plan. Because of a lack of showel ready projects, and the state governments putting most of the money in their state coffers, this only increased infrastructure by a miniscule 0.05 percent of GDP, according to research by Taylor and John Cogan. Taylor's sees the moves by the Obama administration and the Bernanke Fed as not only being ineffective, but having the opposite effect of lowering investment and consumption demand through increased concerns about the federal debt, another financial crisis or the risk of inflation or deflation. The U.S. private sector has the money to make the investments that create jobs but their concerns have led to holding back. Taylor points to the need for a comprehensive economic strategy to replace these temporary interventions. The debt limit agreement of 2011 is a part of this strategy, and he agrees with reducing spending in a gradual way in a weak economy. The other parts of this strategy he says are entitlement reform, tax reform, regulatory reform, monetary reform, including a reappraisal of the role of government in the economy. This should lead to a more stable and predictable economic environment and reduced uncertainty about the future, which is critical to improving supply and demand....