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Three homes built in Boston to show the potential of passive home construction that are designed with solar panels, heat pumps, wood construction, and modern technology design that minimizes loss of heat in winter and reduces temperature increases in the summer. The cost of the electricity bill for each of these three homes is nearly zero. Passive home construction cost is about 15% more or in this case $1.4 million for homes that would otherwise cost $1.2 million in the Boston area. The design and technological aspects can be incorporated in lower cost affordable housing and 40% of passive construction is planned in that field.

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French regional elections show a defeat by Conservatives of Le Pen's far right party and president Macron's party. Conservatives maintained a lead of 10% of the vote over Le Pen's party. Macron's party failed to make it to double digits in the vote with about 7%. Sixty six percent of voters stayed away from the poll. The Conservatives and the Socialist parties did well holding on to their regions. This changes the landscape for the presidential election in 2022. 

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The difficulties the new U.S. Treasury Secretary faces as she tries to navigate the politics in Congress and the tries to reach out to moderates and progressives within the Democratic party. All have different views on spending, and where stimulus money should go in a second stimulus. Her long experience with the Fed is seen as not preparing her for the political role of evaluating different opinions that are described by some experts as ten times more political than anything going on in Fed meetings. As a student of Prof. Tobin Yellen sees government intervention as needed in times of economic crises. Twice in ten years the U.S. and the rest of the world has been struck by economic crises- the bank leveraging behaviours and poor lending practices that induced the 2009 financial crisis and in 2020 the coronavirus pandemic. Lessons learned Yellen says about the 2009 recession are that not enough stimulus was provided after the initial stimulus to get a strong enough recovery. Democrats are eager to spend over $2 trillion in a second stimulus. Republicans much less so particularly with a new president. Even under Mr. Trump spending was set at under $700 billion by Republicans for a second stimulus. Another economic crises is one of the U.S. strategic economic position in the world. On this issue of trade Yellen's husband George Akerloff, also a economist is more skeptical of the value of free trade. The failure of the World Trade Organization to ensure a level playing field as China subsidized key industries, and the loss of America's manufacturing advantage over three decades is now the defining issue in American politics. It takes the shape of manufacturing communities that were once a part of Democratic party support shifting away after devastated local economies from the loss of manufacturing plants to China. It takes the shape of a Republican party that is committed to bring back American manufacturing, and a Democratic party that under Biden is seeking the same result. How much each party will invest in terms of making things happen to get this done is one of the issues facing all parties, Congress, the administration, Ms. Yellen, and the new president. Economics does not have the answers. As economists could not have predicted the increase in women participation in the workforce, the drop in Black and Hispanic unemployment rates under the Trump administration. The lack of moral will to get trade to work for the American worker was more of an issue under Democratic and Republican administrations for the last 2 decades, so that issues of growing inequality were never better addressed by any party. It depended more on focus of the president elected to help American workers, and to avoid the cost and distraction of foreign wars when American interests could be protected in other ways. Yellen was not able to make a difference at the Fed because of these reasons and low interest rates have both helped and hurt the middle class, as low interest rates meant Americans were less able to accumulate savings for retirement since 2000. Determination and action counts for more than ideology or policy is the lesson learned in building strong economies and manufacturing.   ...

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In the end only concerted pressure from the U.S. including the personal intervention of president Trump, calls from Republican senators to Prince Abdulaziz, Saudi energy minister, salvaged a deal for OPEC+ oil cuts. The Saudis insisted Mexico cut production by 300,000 barrels a day, Mexico stood firm at 100,000 barrels a day. As the Mexican energy negotiator Ms Nahle withdrew to call Mexican president Lopez Obrador, the Saudi energy minister called this "disrespectful." Then president Trump intervened with calls and offered to make up with additional 300,000 barrels a day of cuts from the U.S. North Dakota senator called Prince Abdulaziz and stated that it could affect the U.S.-Saudi relationship if the Saudis did not come to an agreement. The agreement is for 23 countries to in total withdraw 9.7 billion barrels a day from the market, or 13% of world production. Oil production is expected to fall by as much as 30 million barrels a day in April 2020 as a result of the pandemic so it is not clear how much this will raise oil prices, yet it averts a complete collapse of oil prices from the $22 today when markets open on Monday April 13, 2020.  The U.S. Canada, Brazil and G20 countries outside OPEC will make a combined 3.7 million barrels a day in cuts. Saudis, Kuwait and United Arab Emirates combined will cut 2 million barrels a day above their quota.  In addition to warning both sides Saudis and Russia to come to an agreement, president Trump threatened to retaliate to protect U.S. producers from very low oil prices sending many into bankruptcy. Prince Abdulaziz took a tough stand with Mexico and other OPEC countries to present a unified stand. He is the son of the Saudi king and took the energy ministry in fall 2019. He has had difficulty in managing OPEC plus Russia called OPEC+ as its new chief with divergent views from small producers such as Angola and large producers such as Russia. At a conference in February he continued the standoff with Russia saying Russia would regret not making the production cuts he was calling for. The split with Russia after a 3 year collaboration for cuts ended in an all out price war right in the middle of a pandemic.  The Russians underestimated the size and impact of the pandemic. The Saudis took a firm position. Only president Trump's swift and active intervention and offering to make up Mexico's share of cuts saved the day for all oil producing countries, who would all be severely hurt by sinking oil prices below $20 a barrel.     ...

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It took a week longer for each country to impose a lockdown. In China first Wuhan then the whole country went into lockdown and quarantine. The same process is repeated in Europe and in America as authorites see numbers of infections increasing rapidly without strict controls. First the Lombardy region in Italy around Milan, then the provinces in Northern Italy, followed by a complete lockdown in the country on March 10 as infection spread faster without lockdown and enforcement of lockdowns. Germany and Britain follow Spain and Italy on March 20. France followed Spain in the days after Italy's complete lockdown. Macron ordered the lockdown on March 16 with stringent enforcement. Infectious Disease specialists at Imperial College warned of "unintended consequences for the entire nation" if a lockdown of Britain did not take place. The goal is to limit the spread of infections from rapid to slow as public health systems and economic measures are ramped up in preparation for the crisis. Most countries were lacking the preparatory steps having lost time waiting to see what happens next or analyzing data in the vain hope the virus does not spread.  Bad economic results of lockdowns were initially a concern, but this concern became less important as the coronavirus spread rapidly in Europe. Decision makers in Europe decided that not acting forcefully would lead to equally or worse economic outcomes. Public health systems overwhelmed would diminish public confidence rapidly and lead to equally bad or much worse economic outcomes. The European Union executive body has supported state aid, stimulus action and border controls in this crisis. In America and in Europe the hope is that shoring up the safety net with massive aid to businesses and households would buy time to tackle and overcome the coronavirus through a combination of lockdowns, quarantines, contact tracing, large scale testing and medical technology measures. The examples of China, South Korea, Taiwan showed this pathway exists for phased control and reducing fatalities to zero. ...

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The U.S. Federal Reserve Flow of Funds report for 2011 shows Fed purchases of 61% of total net Treasury issuance. Goodman points out that the net issuance of Treasury securities for covering U.S. budget deficits is normally 0.6% to 3.9% of GDP on average for the last six decades since 1950, compared to on average 8.6% of GDP today. A big jump in Fed purchases with a corresponding steep fall in the participation of foreigners and the private sector. Foreign purchases declined from 6% of GDP in 2009 to 1.9% of GDP in 2011. U.S. private sector- mutual funds, banks, corporations and individuals- purchases declined from 6% of GDP in 2009 to 0.9% of GDP in 2011. This helps keep interest rates low and funds U.S. government needs. Lawrence Lindsay pointed out in the WSJ in 2011 that Fed has itself boxed in being forced to keep interest rates low for years. If the government borrowed at a more normal rate of 5.7%, instead of the Fed induced rate of 2.5% today, Lindsay estimated the U.S. government would face an additional $800 billion in interest costs by 2021....

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Buffett's view that higher capital gains taxes will not result in less business investment. He favors a $500,000 figure instead of the $250,000 proposed by president Obama for Bush tax cuts for incomes below that level.

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Imposing losses on senior bond holders is acceptable under EU law during a liquidation process, say experts. Having them take losses in a restructuring would require changes to European and national laws. The uncertainty this creates coud hurt Spain's larger banks such as Santander and BBVA, which have so far not been affected by the crisis. A new European banking supervisory authority could insist on losses for senior bond holders to reduce the amount needed from the EFSF or ESM rescue funds.

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Hyundai says it can meet the 35 miles per gallon target for its automobile fleet by 2015 instead of 2020, 5 years ahead of schedule. It can do this without relying too much on hybrids, concentrating efforts in the direction of lighter materials, new engine and powertrain technologies such as direct injection, dual continuously variable valve timing, and eight speed automatic transmissions. And Hyundai can do this, says its head of R&D division, Lee Hyun-Soon, by increasing the price of the automobile by only a small amount. Lee says by increasing the cost of an automobile by a mere $100 or $200 a gain of 10% in fuel efficiency can be achieved. Meanwhile US automakers are arguing that the current requirements in a law signed by President Bush in December 2007 for 35mpg by 2020 is too stringent. The standard this year is 27.5 mpg for cars and 22.5 mpg for light trucks. See the group " Was America asleep at the spigot?"

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Deborah Solomon interviews Abby Cohen of Goldman Sachs. Cohen is asked about bank bonuses and compensation, about the role of the banks in the financial meltdown, and whether she and Goldman Sachs felt any responsibility for the economic crisis.

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Merkel of Germany's approval rating for her handling of the coronavirus pandemic is up to 67%, in South Korea Moon won a landslide victory. In the U.S. Mr. Trump has 49% approval rating 6 points above his average. Boris Johnson in UK gets personal sympathy but his government's response is being questioned.

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The new president of Brazil, Jair Bolsonaro, says in his inaugural speech that he wants a national pact to free Brazil of corruption, crime and economic mismanagement. And also of ideology.

After being elected Bolsonaro picked Brazil's famous anti-corruption judge, Segio Moro, as his minister of justice. Moro was involved in the investigation called the Car Wash that looked into the state owned oil company of Brazil.

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Delivering the mail by boat across Penobscot Bay, Maine in the northeast U.S. The mail has been delivered to six small and rugged islands here in Maine's coastal area by the same family since 1905. This could be the last year as Maine has a 14 day quarantine for visitors from outside. Maine has the largest median age in the country at 45. Known for its coastline it gets millions of visitors in the spring and summer months adding $6.5 billion to its economy. Depending on this tourism are thousands of small businesses. Coronavirus is changing the rhythm of life even here in a place which has known quieter rhythms.

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Rates are increasing in the $4 trillion repurchase agreement market. The repurchase agreement market or repos market is the main source of short term funding for firms in the financial markets. Borrowers put up Treasury securities as collateral. The difference beween the value of the collateral and the cash loan amount is known as the "haircut." The current collateral requirement is $102 of Treasurys for $100 in cash loan. If the U.S. is downgraded to AA the collateral could go up to $103 or higher. This would lead to firms coming up with more Treasury securities for loans. The rate for overnight transactions also goes up. The rate was up form 0.01 % to 0.1% in the last week. The result could be dislocation in financial markets as firms have to come up with more collateral and pay higher repo rates, and some firms prefer to hold cash.

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The NYT editorial on December 5 the day after the second effort by the automakers to present a case for a bailout loan, this time for $34 billion. The NYT says this time the automakers CEO's left 2 things behind in Detroit. One is their resignations, and other is plans to truly achieve the fuel efficiency gains possible comparable to what the European Union is aiming for, which is 50 miles per gallon in 2015. Instead the congress enacted under the influence of automaker lobbying groups a watered down fuel efficiency bill according to NYT, of 35 miles per gallon by 2020. It says experts believe that 43mpg could be achieved by then (2020) even without any technological breakthroughs and 50mpg could be achieved by making smaller cars. Only new management says the NYT could bring the deep cultural change needed for the industry in Detroit.

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Till 1997 there was a limit on how many and what drug ads could be placed on television. During the year Bill Clinton was president  the US Food and Drug Administration under Acting Commissioner Michael Friedman is reported by the WSJ as opening up American television for a flood of drug advertising that is damaging for the Nation's health leading to overuse of drugs in the US for three decades. 31% of ads on US evening television news programs are from drug brands in 2024. DJT said while appointing RFK Jr as Secretary of Health and Human Services- Drugmakers and  big food companies, “have engaged in deception, misinformation, and disinformation.” RFK Jr. says- "We are one of only two countries in the world that allow pharmaceutical companies to advertise directly to consumers on television. US and New Zealand. Everybody agrees it is a bad idea. Not surprisingly, Americans consume more pharmaceutical products than anyone else on the planet. As I said earlier on my first day in office I will issue an executive order banning pharmaceutical advertising on television." ...

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John Harwood's interview with Govenor Rick Perry. Harwood asks Perry tough questions about his 20% flat tax, spending cuts and the deficit (response: the only way to get the country working again is to reduce the tax burden across the board and create the incentives to invest), raising the retirement age for Social Security (response: will discuss this one with Congress), views on regulation (response: regulators did not do their job, nothing wrong with the old regulatory system). Perry saying that this is the way America has always worked- by creating the incentives to invest. Perry say he is for a bold plan not something that will trim things at the edges as Romney would do.

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The artificial nature of the target of debt to GDP of 120% for Greece in 2020. This is the target being followed in negotiations by the troika of the ECB, IMF and the EU. Experts say the sustainable level would be much lower for Greece -this would be much lower because of the aging population in Greece and lower level of workers to support retirees in future years, the inefficient tax collection system and poor prospects for changing it, the degree of control over monetary policy and the rate of change of debt. A recent study by the Bank for International Settlements shows debt sustainability at 85% after studying 18 countries from 1980 to 2010. No precise source has been found for the 120% target. An IMF Report in 2011 said the 120% was the "maximum level considered sustainable." Alan Auerbach at UC Berkeley and Michael Woodford at Columbia University, say the additional factors are relevant to Greece. The many unpredictables over the course of ten years is another serious difficulty.

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A recent poll shows Mr. Trump increasing his support from a bloc of voters that disapprove of his job performance but still give credit to Mr. Trump for an improving economy. A new WSJ/NBC poll shows 51% of Americans disapprove of his overall job performance, with 46% approving. The same percentage that say they disapprove of job performance are also saying they give him credit for a stronger economy up from the 44% in April 2017 who said they approved his way of handling the economy. Wages have increased 3.2%  in each of the last 2 months and unemployment is at an historic low over 50 years. One group that has a 10 point gap when it comes to the economic performance is among Independents, where 38% approve of Mr. Trump but 48% approve his economic performance. A big jump is among Hispanics who have benefited greatly with new jobs in construction and other areas of the economy. Trump's 46% approval rating in May 2019 is among the highest he has achieved, rising 3 points since the last identical poll in March 2019. About 29% still think the Mueller Report clears Mr. Trump of wrongdoing as they did in March. Still things can change as 42% believe the Mueller Report does not clear Mr. Trump of wrongdoing, and another 29% haven't made up their mind. On impeachment hearings about 48% think Congress should let Mr. Trump finish out his term, 49% think there is either enough evidence or Congress should continue investigating with an eye to future impeachment hearings. The survey margin of error is about 4 percentage points, covers 900 adults.  ...

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Boeing's goal is to make 10 Dreamliners a month by late 2013. The current rate is 2 per month, which Boeing hopes to move up to 2.5 a month by November 2011, and 3.5 a month by early Spring. Boeing CEO, McInerney, says it will take a few years before each Dreamliner turns a profit. He expects this will happen before 2020. The large investment during this decade should see returns in terms of an annuity for 25-35 years, said McInerney. The Dreamliner is the first jetliner to be made largely of plastic-composite materials, in place of aluminium. To build the Dreamliner Boeing had to accomplish what McInerney calls "game-changing innovation," and at the same time achieve improvements in production techniques. Jim Albaugh, head of Boeing's Commercial Airplanes division, says the next step is to take what takes an hour and half to assemble and bring this down to 15 minutes. This will help meet a long backlog of orders. Boeing has 820 orders for the Dreamliner as of Sept. 2011. The first Dreamliner was delivered on Sept. 26, 2011, to All Nippon Airways....