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The shift away from Iranian oil with U.S. pressure and sanctions, and higher oil prices, could pose challenges for the Indian macroeconomic outlook in 2020.

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This NYT report by Thrush, Shear and Sullivan, looks at retired Marine general John Kelly, the head of Homeland Security till he was made the new chief of staff at the White House. He replaces Vince Priebus, who was the Republican National Party chairman during the 2016 election, becoming the new White House chief of Staff in January 2017. Priebus lasted only 6 months. This report points out that presidential family members Kushner and Ivanka Trump now report to Kelly, as part of the new discipline imposed by Kelly in an effort to reverse the chaotic situation in the White House with different quarreling factions. Kelly made this a condition for his taking the position, which Trump accepted as he was keen on firing Vince Priebus and had asked Kelly to take the job since May. Kelly is shown here as monitoring the contacts of Cabinet secretaries with the president. Who sees the president and for how long is now determined by Kelly to impose rigorous discipline. Kelly supported McMaster in the dismissal of a National Security Council member supported by Bannon and Kushner, in an effort to bring discipline. There is one area Kelly does not get into- the tweeting and personal affairs of the president. His job as he sees it is to put some bureaucratic competence around the president. In doing this he takes a tough approach that so far is respected by president Trump, as the presidency suffered from repeated setbacks from infighting and leaks. Will Kelly last where others have failed is a question posed in this report. Two people who were superiors of Kelly give their opinions. Kelly reported to Leon Panetta, a former chief of staff under Bill Clinton who was Defense Secretary, and to Robert Gates,  a Republican who was Defense Secretary. Panetta may know him closely as Kelly was his chief military aide as Defense Secretary. Panetta says of Kelly, that Kelly never minced words, said what he thought looking at you in the eye- if he thought a proposal was nuts he would say it right out. The big question Panetta says is whether president Trump will give him the authority for long. Also stated in this report is that Kelly called Comey when he was fired as FBI Director, and that Kelly even considered resigning in protest.  Less noticed even in this report is the way in which a team of experienced politicians and the senior most officials in defense and national security are working together in August 2017. In an interview with Washington Post editor Ignatius broadcast on PBS, Republican Senator Corker described how he works closely with them, and how the key people in defense and national security work together before they see the president. The appointment of Kelly helps to create a core independent group of advisors around the president, which is positive in the event the U.S. has to respond to a crisis. ...

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Germany will give 16 state authorites 2.5 billion euros to support a6 euro monthly rail pass that can take you to anywhere in Germany for a month. About 7 million tickets have already been sold. Deutsche Bahn is operating at 80% of capacity at this time. Inflation is up 7.9% in Germany last month and this is a result of the war in Ukraine.

In other aid the German government has given-

Cutting the fuel tax by 30 cents a litre for gasoline to keep prices below 2 euros.

Those in work will get a one time 300 euros energy rebate for energy costs in autumn.

A 100 euros child benefit bonus per child.

People on other welfare benefits will also receive 100 euros.

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Key donors to the Republican Party, the billionaires Charles and David Koch,  say they will conduct a grass roots campaign against the Trump administration's use of tariffs. Charles Koch is 82, and David Koch is 78 years old. The Koch brothers groups launching the campaign are - Freedom Partners Chamber of Commerce, Americans for Prosperity, and the LIBRE Initiative. David Koch ran in 1980 as vice presidential candidate for the Libertarian Party. Both brothers are free trade advocates.

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Ford shows originality at the March New York Auto Show by showing a crashed Taurus which was intentionally crashed into a barrier at 35 mph for this display. It has amonitor which shows how the crash happened and how the electonics work to protect the occupants in a crash. Ford learned from its bland ads of taurus as the safest car in America which did not boost sales as Taurus sales dropped 13% so far this year. VW had an ad of the Jetta in a crash but nothing this original has been tried. For Ford it helps draw the attention of car buyers who have defected to foreign makes.

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Saudis are now prepared to increase oil production after weeks of US diplomacy in exchange for security guarantees against attacks by Yemeni rebels and Iran. Russian oil output has declined by about 1 million barrels a day since the start of the war says WSJ. Drops in production lead to a rise in oil prices more than making up for the decline in revenues for Russia. This makes oil sanctions a weak deterrent for Russia in its invasion of Ukraine unless Saudis and UAE step in with increased oil production to make the EU embargo on Russian oil work effectively to cut Russian oil revenues financing the Ukraine invasion. Europe has stepped up with its embargo on about 90% of Russian oil- all except pipeline supplies to Hungary and Czech Republic, Slovakia as an exception. This will reduce oil production in Russia as EU is the biggest importer of Russian oil, bigger after previous German chancellor Merkel's failure to see the risks in such dependence and increased imports. For the oil embargo to lead to sharp reduction in Russian oil revenues that reduces financing of the Ukraine invasion, and for the EU oil embargo to bring results the missing piece is Saudi action to increase production. This may now be in place as Mr. Biden visits Riyadh next month. Crown Prince Salman of Saudi Arabia has pushed Saudi Arabia to make changes to modernize the country's culture providing the US with a partner that is now different than the Saudi Arabia steeped in tradition and inward looking under previous rulers. Under president Obama Democrats favored Iran and reduced security guarantees that were set up since president Franklin Delano Roosevelt met the Saudi King in 1944 aboard an American ship during the war. The turn of events with Russian invasion of Ukraine with Chinese support have created risks of a China invasion of Taiwan with aggressive action of China. President Biden has made this clear and stated straightforwardly the American position on Ukraine- Russia winning by invading a neighboring country sets the precedent for a Chinese invasion of Taiwan. This is why the US remains resolute with its European partners in seeing to it that Ukraine remains as Biden said in the NYT  "independent, sovereign and able to deter invasion and defend itself." For Europe it is about defending its neighborhood from the Baltic Sea to Bulgaria in the Balkans with American support. For the US it is about keeping its leadership presence in Asia in an alliance with Japan, India, Australia and most of South East Asia including Indonesia, Bangladesh with a population of close to 3 billion people. China which was supported by the US throughout the period of colonial dominance since the 18th century preventing its breakup and foreign rule as happened in India, and a major recipient of American aid and investment in the 20th century is now where Japan stood in the two decade period 1925 -1945 with its aggressive expansion under Japanese imperialist rule. In this sense the world is moving back to the days of the Free World's struggle in the days after the Iron Curtain fell over Europe with Soviet expansion in Eastern Europe. Saudis, UAE, and Turkey as part of NATO, are also moving back to the positions they had over a long period for centuries from 1800. Saudi Arabia and UAE came into prominence after discovery of oil and were backwaters to Egypt and Turkey which were supported by Britain to keep Russia from advancing in Asia and Europe during that period. India under the British Empire is now in the Indo-Pacific Framework with Japan which was inward looking and under European influence for most of the last 200 years.  ...

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"It may be that this iron curtain is small, unimportant and justified, but it is a bad sign." Howard Buffett took a stand in the House of Representatives against the VOA broadcasts being used inside the US in 1947.  Warren Buffett is the son of Congressman Howard Buffett of Omaha, Nebraska, who was on the Board of Education of Omaha, started a small stock brokerage firm, and ran for US Congress in 1942, reelected twice and in 1950. He also ran Howard Taft's Republican presidential campaign in 1952. Looking at Buffett in the FDR-Truman years- one sees a young Buffett in contrast to Warren Buffet's silence on the 2008 financial crisis, raising serious issues- about the Truman doctrine in 1947 on the floor of Congress, was Acheson falling dominoes analogy a dangerous one?  It worked in Turkey-Greece with $400 million in aid in 1947 but was Acheson/Truman using a dangerous analogy of dominoes that would later hurt the US in French colonial Indochina wars, and in the reference to protecting oil resources in Middle east in Iran, Iraq and Saudi to lead to wars that exist to this day in 2024? Wars DJT and Biden have both opposed in contrast to Reagan, Bush, and Obama. There is a huge contrast between the father Howard Buffett, descendent of Huguenot ancestors from 1600 New York, and the finance professional Warren Buffett who went to Columbia University in 1951-52 as student of Prof. Graham with 70 years in finance during which financial crises destabilized the US with Buffett not taking a stand. One hedge fund manager say it is pure nepotism to pass on the company Berkshire to Warren's son Howie. But he is not surprised- who else would be sure to keep the company headquarters in Omaha, keep things simple invested in index funds and much of it in a few companies leaving the investing to managers chosen by Warren, with Howie's job to make sure his father's principles remain. Howie is Warren Buffett's 70 year old son, who Buffett 90 years is setting up as his successor as chairman who will not do investing leaving it to managers, yet be able to change CEO's. Howie worked for a few years at See Candy, a Berkshire owned company before becoming corporate VP at ADM food producer, followed by working on his own farm in Decatur, Illinois which he enjoyed doing. At ADM Howie left after an anti trust investigation began, in which the company was charged with $100 antitrust fines for price fixing says the WSJ. What is Berkshire Hathaway? It is a trillion dollars of investment funds invested in a few companies under name Berkshire Hathaway, using some of the basic ideas of Benjamin Graham, a pioneer in careful investing, adopted by Warren. Where has Buffett put his money? Berkshire top ten investments are- about $90 billion in Apple, $70 billion split between Bank of America and American Express, $30 billion in Coca Cola, and $30 billion split between 2 oil companies Chevron and Occidental. He has not invested in pharmaceuticals or in renewable energy- in just a piece of America.This has generated a compound interest of about 14% over 3-5 years and about 12% over 10 years. He holds 30% of his investments in cash or fixed, mostly cash at this time. And holds the remaining 70% in stocks. ...

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Indian finance minister Sitharaman announces a new stimulus package "Atman Nirbhar Bharat." This includes an effort to incentivize creation of employment opportunities for people making less than Rs. 15,000 a month ($215 a month), called "Atman Nirbhar Rozghar Yojana, for a period of 2 years. Sitharaman cited stock market rebound and foreign reserves reaching $560 billion to show that along with the government efforts and planned infrastructure the economy would make a robust recovery. Because of India's large informal economy help to street vendors and other small retail is critical in the Indian economy. The finance minister cited the "One Nation, One Ration Card" which allows street vendors and other retail merchants to access foodgrains from FPS of choice in 28 states and union territories in India. This is part of the effort to build demand and upward mobility in the economy. The names given for these efforts or yojanas are unique- PM SVANidhi stands for PM's Street Vendors Atmannirbhar Nidhi. Atmannirbhar is the overall plan for self reliance in the economy and the prime minister Modi has pushed for buying Made in India, to promote jobs and technology + capital accumulation in Indian manufacturing. India took a blow from the coronavirus with close to 9 million infected by the virus and lockdown in March. By September 20 the daily cases reached 100,000, and by November 10 the daily cases have dropped to 44,000. Social distancing and mask wearing are widely accepted in India. India has other advantages in the large pharmaceutical industry and access to drugs at government regulated and low prices as part of the planned effort after independence in 1947. Other aspects of Indian life are cultural preference for vegetables and fruits in the diet, and spices, herbs in cooking, yoga practice, which are anti-inflammatory and promote healthy living.  With the largest population in the world the region in the Indian ocean comprising the countries of India, Bangladesh, Pakistan, Burma and Indonesia, former parts of the British and Dutch empires, is a region where the coronavirus posed a great threat to human life. An early carefully orchestrated lockdown by prime minister Modi  helped with the message in March that India faced a singular choice - between going back 21 years in development or controlling the coronavirus in 21 crucial days. The setting up of the direct transfer of money to bank accounts  of farmers, urban street vendors and lower income people in rural areas by giving everyone a bank account under a government plan early in the first term of the current administration enabled it to send aid directly when coronavirus hit the country. Other schemes included cooking gas for women in rural areas who depended on firewood for cooking. These schemes and sanitation infrastructure setup under the Clean India campaign, helped India build an element of resilience when coronavirus hit.  The government plan to remove interstate barriers to commerce and integrate tax system collection at the federal level, bringing parts of the informal economy into the formal economy, have increased revenues that now finance an infrastructure plan that hopes to match the one in China over the next decade.   ...

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Eduardo Porter describes the choices facing Germany as EU leaders of most EU countries call for deposit insurance, European banking regulation, and eurobonds.

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Fact checking Apple CEO Tim Cook's statements on the EU Commission ruling for $13 billion in back taxes, shows that CEO Tim Cook's statement that "we never asked for, nor did we receive any special deals," is not true. Ireland let Apple determine what it would pay in tax, and Apple had the benefit of loopholes in Irish tax laws, the fact check by experts shows here. Apple's Cook also says it would hurt investment and jobs in Ireland. Another NYT article showed that the entire healthcare budget of Ireland would be covered by the $13 billion, and 66% of its budget for social support services to the public. Apple has 22,000 employees in Europe and 6000 in Ireland in 2016. Based on the $13 billion owed in taxes, for every job in Ireland the cost to Ireland is 2.17 million euros, and for every job in the EU the cost is 590,000 euros. Apple could turn around and locate in some other place, other than Ireland, in which case Ireland does not get the 6000 jobs. This is Ireland's incentive to give Apple tax benefits. Only if all EU countries had common tax laws would it be possible to avoid this situation, and generate much needed tax revenues at a time of cuts in public spending in healthcare, education, and social services, and invest in infrastructure, worker retraining. The alternative is for the EU to look at other remedies. This is what the EU Commissioner Vestager did when she announced that this was a state subsidy and illegal under EU rules. Because the appeal by Apple goes to the EU Courts the appeal is difficult say legal experts. The EU courts look at the legal aspects of the ruling, was it justified, not at the overall aspect of the ruling by Vestager, as EU Competition Commissioner. This may be why there is so much outcry from Apple, and other digital companies.  ...

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Old Lane hedge fund firm with old Morgan Stanley executives, was bought for 800 million by Citigroup partly for the executive talent of old Morgan Stanley executives. Mr Pandit reaped $165 million from the deal and Mr Guru Ramakrishnan, the CEO, tens of millions of dollars. How successful a firm was Old Lane and where is it now? Old Lane was started in 2006. It has returned all the money to original investors last summer, broke even on its original investments, and it has not lost money in the brutal market conditions. The hedge fund unit is now pretty much closed and the executives like Ramakrishnan are leaving. With Citi's worsening condition the hefty price tag for Old Lane has angered investors.

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Merkel tells a Davos meeting in January 2011, that "the euro is much more than a currency, it is the embodiment of Europe today." The idea of the euro as needed for the political and economic integration of Europe is accepted. Merkel also says "that "solidarity and competitiveness are two sides of the same coin." Suggesting that the slower economies in Europe will have to remake their economies, just as East Germany did when it joined a reunified Germany. Mathias Dopfner, CEO of Axel Springer, says Merkel knows from personal experience the traumas faced by a bankrupt economy. At the time of reunification the deutsche mark would become the national currency, even though the value of the mark reflected productivity levels and the strength of the economy of the western part. East German businesses were priced out of the job market. About 14,000 businesses were shut down and 4 million jobs were lost in the first five years after formal reunification in 1990. Unemployment jumped to 20% in East Germany in 2005. After the fall of the Berlin Wall two million people of the 16 million living in the East moved west, most of them younger people. For West Germans there was a price also. Germany has raised 1.7 trillion euros through an income tax "solidarity surcharge" for modernizing East Germany. Volker Perthes, director of the German Institute for International and Security Affairs, says Merkel knows what resistance and what dangers come with structural adjustment programs. And she has to sell the programs and insist on strict conditions for German aid to Portugal, Spain and Greece. After many years the project has paid off. The unemployment rate in the east is 11.7%, much closer to the 6.4% in the west than before, and the growth rate in the east is 2.7% compared to the 3.6% in the west. The antiquated industrial base in the east has been replaced with a solar power sector and new chemical engineering and microelectronics industries....

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As Washington Post writer points out from personal experience- he is one of those who put up 15% to buy ahome inDenver at the top of the market and now has negative equity as prices drop- negative equity is one of the most serious problems facing the US economy. It has the potential to undo many of the encouraging things from the stimulus, as rising foreclosures continue to act as adrag on the overall economy. As he says about one fourth of Americans with home mortgages, or about 11-15 million people, owe more money on their homes than the market value of their homes. As Hoffman says the administration's approach has been a Band-Aid at best for a serious injury. The Obama administration set aside only $75 billion to get banks to modify loans and also made this voluntary for banks to modify loans. Treasury Secretary Geithner testified in Congress: "This is a conscious choice we made, not to start with principal reduction. We thought it would be dramatically more expensive for the American taxpayer, harder to justify, create much greater risk of unfairness." But making it voluntary means very little of this $75 billion has gone to help achieve modifications- banks had no incentives to do this. Only 31,000 permanent loan modifications have been made. Of the 750,000 temporary loan modifications made as of Dec 2009 only 4% of homeowners signing up have qualified for permanent federal relief. See the links to Martin Feldstein's proposals for this on the pages of the Wall Street Journal in 2008 and 2009 which called for aggressive program of relief for the sake of the economy. With 2.4 million Americans likely to lose their homes in 2009 according to Moody's Economy.com estimates, following the 2 million in 2009 and 1.7 million in 2008, this may be a serious mistake of the Obama administration and drag out this recovery....

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Laurence Kotlikoff is a Boston University economist who calls the Obama administration's plans for fixing the financial system akin to "putting a Band-Aid on cancer." He outlines his own proposal in a book just out with the title: Jimmy Stewart is Dead. It calls for taking the risk out of the nation's financial system with "too-big-to-fail" banks, which threaten America's financial system, and may cost huge amounts of taxpayer money approaching by one estimate the entire unfunded liabilities of the Social Security System. He writes in the book that "the problem is the leveraging of the taxpayer by people with no formal training in finance or economics, no personal downside, an assortment of Napoleonic complexes, the money to buy ratings in New York and policy in Washington, and the ability to run circles around regulators." His proposal is to turn banks - intermediaries taking deposits and making loans- into institutions that connect borrowers and depositors with very safe mutual funds created for this reason. Each deposit would be pooled with other deposits in the new kind of mutual fund with all the money held in cash. These mutual funds would supply loans. This strips banks of their risk-taking function. It has attracted attention and support of Columbia University's Jeffrey Sachs and University of Chicago's Nobel Prize winning economist Robert Lucas. Most recently Bank of England's Governor mentioned Kotlikoff three times in a speech to Parliament as ideas worth looking at. With bankssstripped of risk-taking only one single Federal Financial Authority as the national regulator would be needed, instead of the myriad regulators in the current system that have failed in crises. MIT's Simon Johnson agrees that some strong action is needed and compares the need for action with what Theodore Roosevelt had to do to break up the once impregnable Standard Oil. By 1911 the Supreme Court had broken up Standard Oil into 34 companies....

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The feud between New Jersey Governor, Chris Christie, and the head of the state teacher's union, Ms. Keshishian. Governor Christie called the state legislature into an emergency session and pushed through a 2% cap on annual increases in property taxes, which have risen 70% over the last decade in New Jersey. The issue is whether the extent of spending on education is sustainable in New Jersey. New Jersey's median property tax is the highest in the nation, at $6,579. By comparison New York is $3,755 and Illinois $3,507. New Jersey residents pay an average of 11.8% for property taxes. Both sides have engaged in strong rhetoric and the teachers union has attacked the Governor in television ads. Governor Christie refused to discuss issues with Keshishian, and ended a meeting in his office, with "Not with you. I don't." The teachers argues that New Jersey schools provides some of the best schooling in the nation- the state's high school graduation is 82%, and it ranks among the top 5 states in key subject areas, according to the Education Law Center in Newark. Its graduation center for black males is 69%. New Jersey also has a heavily unionized public sector with relatively high wages for public workers of all kinds, including teachers. This and a state supreme court decision mandating increased funding for schools in poor communities raises the cost per pupil to $17,794, the highest in the nation, after Washington D.C. New York is at $16,981. California, and Illinois spend $11,000. The average New Jersey teacher makes $61,277 a year, well above the U.S. average of $52,800, according to the National Education Association. Medical and other benefits add $19,140 according to the teacher's union. And the unsustainability goes back to issues such as unfunded liabilities for benefits and pensions in New Jersey. New Jersey's Treasurer estimates the unfunded liabilities relating to lifetime health benefits for current and retired teachers at $36.32 billion....

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Spirit Airlines strategy to charge for almost everything from snacks to bags, reservations on the phone and other items for a flight- making it a bare bones flight like that of European budget carrier Ryanair- has proven very successful. Spirit's net profit per plane is now the highest by far in the U.S. airline industry. Spirit leads with $2.06 million profit per plane, followed by Delta at $1.21, United $1.19, JetBlue $0.51, Southwest $0.32, US Airways $0.21, and American at a negative $2.32 million, according to Ascend and FactSet Research. Spirit has stayed away from business fliers, instead pursuing the frugal flyer, other than the seat everything has a price. Boarding passes cost $5, water $3. Spirit started the trend to charge for bags. Southwest has moved away from the no frills arrangement and Spirit is gutsily moving that way. Carryons in the overhead bin run $30-$45. Compared to other airlines which get only 6% of revenues from add on charges, Spirit gets about 50%. Since 1989 Spirit earned $289 million, compared to $1 billion for way larger Southwest. Bill Franke, a former CEO of America West Airlines in 1990's, bought Spirit with the idea of modeling it on Ryanair in Europe, after Spirit could not turn a profit flying Midwest passengers to Florida. He teamed up with CEO Baldanza to run the operation on a hands on basis with only 1% going for advertising, and Franke doing some of the ads in emails. Running flight on a tight schedule means late flights and with tight seating and strict refund policies, Spirit has many complaints. It has the worst on time performance in the industry. Yet it has planes running close to capacity in today's frugal customer environment. Prices are about 30% lower than competitors according to industry analysts. Franke and Baldanza seem to revel in this, sensing that they have struck the right tone for a frugal flier, and outdone cost pioneer Southwest. ...