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Compared to the beginning of 2008 Fannie Mae's shares have fallen 61% and Freddie Mac's shares have fallen 65%. Congress has failed to overhaul regulatory supervision of the 2 companies that are now supposed to with the Federal Housing Administration support the mortgage markets. They are government chartered companies that provide the bulk of the finding for USA home mortgages. They own or guarantee about $5.2 trillion of home mortgages, or roughly half of all loans outstanding. The two have suffered combined losses of $11 billion in the 9 months ending march 31, 2008. There is no effective regulation of the 2 companies. The House has passed legislation creating a new regulator for the 2 companies and the Senate will vote probably this week on similiar legislation. The new regulator would have powers to increase the capital requirements of the 2 companies.

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Questions are raised after a 16% drop in Faniie's share price and 18% drop in Freddie's share price whether the common equity in both will have any value left once the housing crisis has taken its toll. If capital raining by Fannie and Freddie do not get done at the right size which could be upto $46 billion of capital for Fannie and $26 billion for Freddie according to a Lehman Brothers report then the government may be forced to do something like takeover Fannie and Freddie leaving shareholders with pennies.

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A deal with Yahoo Japan will give Google a 90% share of the search market in Japan. Yahoo Japan Corp.'s internet portal will use Google's search-engine and search-advertising platforms as part of the deal. Yahoo Japan's home page acounts for 50% of the searches done in Japan.

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Taa Consultancy Services is building a modern office complex with new architecture in Chennai, India, at a cost of $200 million. When completed it will house 24,000 of its 180,000 employees. Tata and other software consultancy firms in India use the modern office space to attract software engineers from elite colleges.

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The tensions that exist in Australian society, as a result of the large Chinese investments and imports of infrastructure building commodities such as iron ore, natural gas and other commodities. Australia's Pilbara region in the northwestern part of the country, has become one huge quarry for China, as an estimated 1 million tons of iron ore raw material is loaded onto 2 story high trucks each day- with automated driverless trucks system being implemented- and shipped by 2 mile long trains to waiting ships on the coast. Australians remember this done on a smaller scale in the 1980's by Japan. At the time Japan brought in Japanese workers. The same is true today but on a bigger scale, with China bringing in workers with lower pay. The concern now is what it was then, as one local leader put it- are we going to have towns with mines or mines with towns, he asked. The mining companies are looking at it purely as a commercial venture, and not investing in the towns. The towns now fear they will find the boom times gone someday and nothing tangible to show for it, no schools, hospitals and no infrastructure. And because the mining project companies fly people in and out, the 8000 aboriginal people in Pilbara- the original people of this land- see little of the mining expansion's benefits. Wandoan, a small place with 300 homes in the outback in Queensland, in eastern Australia, is an example of the gut wrenching change taking place in the mining areas. The lives of the people from the local pharmacy, the local supermarket, and the local ranchers, depend on the mining decisions made in China. This area was part of a planned, on again off again, $6 billion coal mine -part of a A$150 billion complex of natural gas and coal projects for exports to Asia in Queensland- and involved Xstrata buying 70,000 acres of the best grazing land for 7 coal mines. With the locals selling off, the mining uncertain, the supermarket closing, the whole town has the feeling of being up in the air, and fading out someday. Australian public sentiment recognizes this feeling, and at the same time is ambivalent about the impact. Polls conducted by the Lowy Institute for International Policy, show 73% of Australians feel Chinese economic growth has a positive impact, and at the same time 57% feel that there is now excessive Chinese investment, and 46% feel China will be a military threat in 20 years. Australians remember the same feeling about Japan's investments in raw material sources in the eighties. In 1988, polls then showed 70% of Australians saying there was too much Japanese investment, even though they also recognized that Australia had benefitted. The difference now is that there are also fears of China's influence, and foreign investment guidelines limit investments in Australian mining companies to below 50%. China's investment in Australia's natural resources comes in several ways: in the year upto July 2009 A$42 billion in export demand, A$3 billion in direct investment in Australian companies, and about A$5 billion in project financing. Iron ore sales to China amount to A$22 billion each year, and about one fourth of Australia's exports went to China, growing at a rate of 31% in 2009. According to the chief economist of Austrade, the government trade organization, Australia benefits from the economic relationship with China- this adds A$3,400 per year to every Australian household. Efforts to use some of the profits made by mining corporations for infrastructure and other public purposes, by increasing the mining tax have failed; as the mining industry launched a campaign against the government of Kevin Rudd, who was removed from office by his party. In the recent national elections, the ruling Labor party lost its majority, after losses in the resource rich states of Western Australia and Queensland. In the meantime the Australian currency has become the currency used by currency speculators who cannot use the yuan to make a bet on the currency- as the yuan is pegged to the dollar- and instead use the Australian dollar as a proxy. This makes it volatile, with the Australian dollar losing 10% of its value in a single day, when pessimism increased about China's growth forecasts. It also shows how much of the good story of employment and gdp growth in Australia is tied to the story in China, and the extent of the negative impact a reversal in this area can mean for Australians; especially now that the bad debt in the post-2008 explosion of bank lending poses risks to China's banknig system. ...

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This WSJ Investigation shows Facebook is aware of the acute flaws in its product, that the product is riddled with flaws that only Facebook fully understands. Yet it says the company has not acted in a way that correct these flaws. Some of the flaws of how this app affects teenage girls was a subject of one part of this report. In other parts it looked at how the Facebook app in social media use could increase the level of division in society, and affect the achievement of public interest goals, as users make use of the app and apps like Facebook such as Twitter to increase discord. This is becoming an issue as public interest goals are now seen as critical for recovery. Vaccination for coronavirus in US and Europe, national infrastructure development in India and developing nations, effects of social media on women's health, are critical areas in which social media may have failed to deliver constructive results, and actually gone the other way to make things worse for all. This may also be why leaders of large nations including Mr. Biden, and leaders in India and Europe, have lost patience with social media. ...

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The US Federal Reserve Report on Economic Wellbeing of US Households 2024-May 2025 gives some insights into the well being of American households. It shows food insufficiency households the same in 2023-2025 at 7%. The situation for cost of living remains a concern in 2024 as well as 2025. Retirement savings have improved for many middle class Americans, as confirmed by reports from Fidelity and Vanguard. The people earning less than 25,000 are 19% and about the same in 2024 under Biden as under DJT in 2025. 39% make $100,000 or more and 26% make $50,000 -$100,000. Combining the 19% making less than $25,000 and the 16% making between $25,000 and $50,000 shows about one third of the population under $50,000 living paycheck to paycheck. It would appear that $2000 DJT rebate putting $160 billion out of $550 billion of tariff revenues for 2025-2026  in the hands of 79 million households that make less than $100,000 would go a long way to keep the situation stable with optimism and hope arising from the restructuring of world trade that would bring trillions of dollars of investment into the US from Europe and Asia. A this investment plus domestic investment should bring back jobs and higher incomes to US manufacturing in small towns across America. The rest of $550 billion tariff revenue of $390 billion would go to reducing the deficit which would improve prospects for the economy in 2027 and produce a more resilient economy in 2027-2028. As shown on this page the popular Democratic Governor of Michigan in her op-ed in Washington Post supports strategic tariffs, and supports using the revenue for a check to American workers of $2000 per worker or per worker household and offers to work with the opposite party to get a WIN-WIN for the American People.  In the whole process of trade tariffs it must be remembered when seeing the inconsistent cases of tariff use by this Republican administration that these were special reason situations not aberrations or whimsical. First, it should be borne in mind that behind the appearance of DJT making tariff decisions is a carefully thought out process that took ten years to form under Reagan era Trade Representative Lighthizer who negotiated with Japan, and his deputy Jamieson for 2016-2024, and the economic and capital markets experience of Scott Bessent as Treasury Secretary. The two cases of inconsistent application of tariffs relate to the 50% tariff on India and the reduction of tariffs on China agreement on rare earths, and the imposition of a large tarif on Japan and the EU. In the first instance with India it was intended to give Ukraine breathing room from Russian attacks as Germany steps up its military preparedness and assistance to Ukraine. With both countries it was about saving face important in Asian or any societies and it has achieved it's purpose. Reports show both Indian and Chinese refiners have quietly cut purchases of oil from Russia leading to Russian oil selling at about $20 discount to Brent crude oil. In the case of Japan the quick action to raise tariffs was intended not to get into long drawn negotiations and show serious intent- Japan is known for dragging out negotiations for years if not decades. The same is true for the European Union. With the Swiss it was about a certain disrespect of the US coming from attitudes that Swiss products were somehow superior. Not just in the long run, in 2026-2028 history will show that the effort done right - and it takes effort to get this right- to restructure world trade so that other nations are not siphoning off the benefits and leaving the US to lose its manufacturing and factories is the right one. And taken with courage and sincere desire to create a fair distribution of the benefits of world trade for too long distorted by egregious practices of competitors. It has nothing to do with 2 senators from the 1930's who were from places like the Mountain West in the US, having no concept of world trade, Smoot and Hawley, who under a irresponsible president Hoover got everything wrong. This is a carefully set out plan to evenly balance the benefits of world trade to all nations.   ...

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This report by David Sanger in the NYT cites insiders in the Obama administration suggesting that the Saudis never really considered the peace talks in the region organized by Secretary of State Kerry as a serious effort with the escalation in the bombing by Russia, and other events including Iran's two ballistic missile tests. Turkey was drawn into the conflict with Russian bombing of ethnic Turkish groups at the border with Syria. By ignoring these events affecting Turkey, Saudi Arabia and other countries, the Obama administration appeared to be calling for a peace effort that seemed to have little prospect of succeeding. As Trofimov suggests in a separate report in the WSJ the Saudis were more focussed on winning domestic support from conservative Sunnis, seeing the Obama administration as ineffective on the issue of refugees from Syria and the conditions for the civilian population.

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A sad picture of how GM, Chrysler, and Ford came up with the Jobs Bank in 1984, which has turned into a corrosive influence since then. How the UAW overreached thinking this increased job security. Only to end up being an object of national ridicule and a handicap for the car companies.

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Costs and benefits to GM from the deal with Delphi. What the UAW is giving up and gets in return. Benefits to GM in the long run in cost savings from Delphi purchased auto parts of about $12 billion a year. It also takes away the uncertainty about Delphi off of GM's shoulders.

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Content Links 1. CANTARELL OIL FIELD LIVING UP TO WORST CASE SCENARIO OF INTERNAL PEMEX REPORT. That worst case scenario detailed in an internal oil company report suggested earlier in 2006 that the field's output could fall by about 75% by 2008. Output at Cantarell fell from 1.92 million barrels a day in January to 1.74 million barrels a day in June according to the Mexican Energy Ministry. (Mexico's total crude oil production was 3.3 million barrels a day and it exported 2 million barrels a day in 2005). 2. POLITICS AND HISTORY CONSTRAIN PEMEX EXPLORATION. The Mexican constitution bars Pemex from joining with foreign oil companies to conduct exploration in difficult environment like deep water exploration using the technology of privte oil companies. Mexico however depends on oil revenuesfor a third of its federal budget and declining oil output and future price declines could severely dent Mexico's finances. So there is a new awareness that this situation requires change and action to encourage collaboration and investment in exploration and new technologies. Felipe Calderon who won narrowly in the July Presidential election promised such changesto allow private oil companies to participate. Industry analysts believe that Mexico could find new fields in the deep waters of the Gulf of Mexico if it could use advanced exploration technology....

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Ben Rooney of the Wall Street Journal interviews Mike Lynch of Autonomy. He tells Rooney that the main reason he sold his company to H-P was that H-P had no legacy database business, and this made it possible for H-P to take a new look at how to make data human friendly and to do new things with data that haven't been done before. He describes this as the 85% of what data is about that none of the legacy database companies have shown interest in doing. H-P's size means that it can bring more resources to this effort. He calls this an alignment of values that was the main attraction of H-P to Autonomy. The canny Lynch also says H-P's price, an 80% premium over the share price, was not a blow-out or over-paying by H-P. The London listed technology firms are about 25% undervalued. The acquisition by H-P of Vertica, an advanced database company, also converged in the same direction, says Lynch. And the potential for H-P is to use these resources as a major advatage in developing new products. On the UK technology scene, Lynch says the access to high quality graduates from Cambridge, Imperial, Herriot Watt, and Warwick is an advantage. He worries more about problems lower down with standards of math failing in high schools. ...

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Auto sales for 2010 are expected to come in at 11.5 million, a significant drop from the 17.5 million in 2000. A better job market expected to push the unemployment rate down a bit to 9.7% from 9.8% in November will help, but not by enough. Credit Suisse analyst Christopher Ceraso says each percentage point that the rate is above normal ( about 5%) keeps sales back by about a million auto sales on an annual basis. To get sales back to a 16 million range this would require an unemployment rate of 6%. Economists expect a better US economy in 2011 but the prospects remain uncertain for 2012, bringing unemployment down to about 8-9% if hiring picks up. The other concerns are high consumer debt and a rise in gasoline prices. If gas prices rise and buyers shift back to smaller vehicles, as they did in 2008, this would squeeze margins and profits. This is especially a concern as automobile companies have increased profits with a larger truck and large size vehicle component of sales, in a reverse shift after the shift to smaller cars in 2008-2009. Ford Motor is one example of this. It helps Ford use the extra profits to reduce its debt load but automakers have to be prepared for a sales shift to smaller cars in the face of higher gas prices....

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Fiat plans to pay Chrysler $1.27 billon to increase its stake to 46%. This will happen after Chrysler refinances $7.1 billion in U.S. and Canadian debt to pay off government loans. A debt offering is expected in coming weeks. Fiat's Sergio Marchionne sees this as critical to the next step forward for Chrysler- the speedy approval of $3.5 billion or more in low interest loans from the U.S. Department of Energy for projects that increase fuel efficiency. Marchionne would like to leverage as much as he can from DOE as they will be essential to Chrysler's investments in improving the fuel efficiency of its vehicle lineup. Chrysler paid $1.2 billion in interest on its debt in 2010. Much or all of the $1.27 billion from Fiat will be used by Chrysler to reduce government debt. Chrysler will not use any unused funds from the government. Chrysler is also planning to add a revolving line of credit for $2 billion. By the end of 2011 Fiat will add another 5% stake to bring its stake up to 51%, and make it the majority owner. Fiat and Chrysler are operating as an integrated company. Marchionne says it makes little sense to have separate legal entities for Chrysler and Fiat, as the two companies are already developing, building and selling vehicles as one company. The Chrysler financials will be consolidated with Fiat's....

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Jeremy Grantham and Jason Zweig share the view that this market has gone up too fast too quickly. Stocks that went down the fastest of companies in industries like finance and banking, insurance and autos, went back up with government support. And many of these companies that have poor earnings prospects are issuing more shares to raise capital now that the credit markets are working, so that they have some cushion if credit markets tighten again. Grantham thinks this dilution of shares spreads future earnings thin over a larger number of shares. Zweig says whatever was garbage has done good, which suggests that what is seen as a recovery in the stock markets is not perceived as a healthy recovery. Grantham's comment that "the junky companies may be diluted to hell just to keep them alive," and Zweig's comment that these "garbage" stocks are hot, but can be expected to sink for precisely that reason, do not offer a reassuring view of this kind of fragile recovery. Companies with stable businesses and stable earnigs prospects haven't done as well as these so called "garbage" businesses to use Zweig's term. Companies like Microsoft, Procter and Gamble and Johnson, and Wal-Mart which have low debt and stable returns. Grantham sees them as offering value in today's market. ...

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Comparative effectiveness research will be conducted to evaluate what is the best treatment for any ailment or disease or health problem under the $1.1 billion allocated for this in the Stimulus Plan. What are the alternative methods of treatment, what is the effectiveness of each treatment, what are the comparative costs and so on. Is it better to treat neck pain with surgery or acombination ofphysical therapy, exercize and medications? If there is ablockage of arteries in the lower leg and leg pain, how does drugs and watchful waiting compare with surgery? For chronic heart failure how does home monitoring of blood pressure and weight and exercise in addition to medications provide an alternative route as opposed to just medications. Dr Fisher of Dartmouth Medical School cites these as examples of questions that can be asked in comparitive effectiveness research. The money will be available to the Health and Human Services Department and will be used over several years. About 15 federal employees will form a council to coordinate the research and advise President Obama and Congress on how to use the money. In 2007 the US spent $2.2 trillion, or 16% of GDP, on health care, and the Congressional Budget Office says it will grow to 25% of GDP at the rate its growing by 2025 if left to its own devices. ...

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Prices of gasoline for automobiles is in the range of 8 dollars a gallon. In France its about 1.40 euros a liter or about $8.20 a gallon. In Spain gasoline costs 1 to 1.25 euros a liter. The cost of a liter of gasoline is up 17% in the UK, 15% in Austria and 8% in France and 7% in Russia, compared to 12 months prior. So are Europeans used to paying higher taxes on gasoline and higher prices for gasoline complaining. Forthe first time gasoline prices are becoming a serious issue in Europe. And there have been strikes across Europe by truckers, fishermen, port workers, farmers and others asking for tax rebates or tax reduction. While Sarkozy in France called for the EU to cap fuel taxes, Gordon Brown of the UK is not in favor of this idea. Many European countries depend on gasoline taxes to support their budgets. European Commission's position is that artificially lowering prices would not help energy conservation and efficient use and is supported by consumer groups. The European Commission said last week that short term relief should be focussed on the poorest families. On the other side the German Federation of Consumer organizations is lobbying the government to spend 5 billion euros in public transportation and 10 billion euros in subsidies to households that install energy saving devices. ...

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Policies and actions taken today to reduce future consumption and to conserve oil will create expectations for lower prices in the future in relation to today's price. It will lower price pressures as these expectations get embedded, and as this makes it more profitable to produce more oil rather than leave it in the ground. In addition see the supply of Iraqi oil, and efforts to reverse the oil supply situation in Iran which may happen with a different administration in the US. The reduction in fuel subsidies in Iran would lower oil consumpion in Iran. Efforts to reverse years of decline in Mexican oil fields, and increase supplies in the US by drilling in new areas, would create new supplies. While supply would see changes, demand would see a new fuel efficient car fleet on the streets in several years, and better use of mass transit and rail transit, and oil conservation across the board, this would then create anew and favorable dynamic. But look for oil prices to stabilize at lower levels in relation to current levels of about 140 and higher as it rises in 2008 and 2009 till new expectations get embedded, and not a sharp decline in prices, as pressures from the developing world's demand will continue for years to come. Think a billion people being absorbed over time into urban type economies....

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A locally produced ton of hot rolled coil steel in India, an industry benchmark, is up 42% in price to $675, since January 2008, when Tata unveiled the Nano. Raw materials account for a higher portion of the costs of making a car like the Nano, and account for 23% of the costs of making the Nano, according to consultants Global Insight. This means margins will be harder to preserve on the Nano. As Ratan Tata, Chairman of the Tata group of companies put it at a shareholder meeting July 24, "if we passed on all costs to the consumer, it will affect demand, and if we don't it will affect margins". Tata is accomodating suppliers like Rico Industries that make the engine blocks that use steel for increased costs of raw materials. Other costs also are going up. For new car loans the interest rates are between 14 and 16% and fuel prices are going up making the cost of operating the 50mpg Nano costlier for those riding motorcycles. Tata faces other higher costs, its managng director Ravi Kant says the project for the Nano plant in Singur is costing more. The $470 million invested so far is 18% more than it had projected in January and double the amount stated when the prject was started in 2006....

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Civil rights song of Rutha Mae Harris of Albany, Georgia. I'm going to vote like the spirit say vote I'm going to vote like the spirit say vote I'm going to vote like the spirit say vote And if the spirit say vote I'm going to vote Oh Lord, I'm going to vote when the spirit say vote. Says Miss Harris who participated in all the civil rights struggles since 1961 of Obama, "he's of a different time and place, but he knows whose shoulders he's standing on." At the time in 1961 fewer than 100 of Georgia's Dougherty County's 20,000 black residents were registered to vote. Literacy tests made a mockery of due process, one field worker remembers being asked by a registrar how many bubbles are there in a bar of soap. And bosses made it clear to black workers that registration might be incompatible with continued employment. Repeatedly civil rights workers draw connections between their work and the colorblindness of Obama's candidacy. Says 103 year old Daisy Newsome who was in the early civil rights struggles, "it ain't because he's black, because I've voted for the whites. I know he can't be no worse than what there's done been. I think he would be just as good a President as one of those whites ever made."...

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On World Soil Day DW.com provides this reminder about how important soil is to our life. It is a reminder too of the all things that are really important during the pandemic. Few remember the words of FDR in 1937 during the Dust Bowl days in America when overplowing and displacement of prairie grasslands that anchored the topsoil reduced once-fertile plains to parched, barren wasteland that were swept by dust storms. This was brought to life in Steinbeck's novel Grapes of Wrath. American president Franklin Delano Roosevelt (FDR) said in 1937 that "a nation that destroys its soil, destroys itself."   This is true for India and all parts of the world, now more than ever. The promotion of ancient grains by Mr. Modi in India helps in the way that crops can be varied so that the soil can regenerate itself, and is not drained of nutrients with one or two crops such as rice and wheat. A 2015 study by University of Sheffield in UK showed that one third of the world's arable land  was lost to pollution and erosion in the last 40 years. That study says it takes 500 years to form one inch of topsoil. Countries like India cannot afford land degradation and Modi's emphasis on improved practices in agriculture away from pesticides and careful use of chemical fertilizer, with natural substitutes in traditional agriculture taking precedence, cannot come at a better time. Healthy soils also create carbon sinks storing greenhouse gases and reducing climate change. A square meter of soil can contain 10,000 different species of worms, insects, bacteria and fungi, with a single gram home to a billion bacteria. Rich fertile earth that nourishes ecosystems is a world apart from the dust storm swept land that led to crop failures in Depression period America, leading to farmers migrating and poverty, Some of the agricultural practices that promote biodiversity are more labor intensive, and suited to India, and can actually increase agricultural production. With the added advantage of produce being organic. It can increase crop yields through better biodiversity, to yield 2.3 billion metric tons of additional crop yields per year worldwide, worth 1.24 trillion euros, (imagine that) according to the International Union for Conservation of Nature, cited by DW.com. For Indian farmers this is a great opportunity in agriculture to improve agriculture and increase incomes. It is also an opportunity for farmers everywhere, in Europe, America, other parts of Asia, Latin America and Africa. ...