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Samsung's decision to go with Android rather than its own inhouse developed software for its smartphones, and the execution of the new plan, was pivotal in its recent success. This is what differentiates it from Nokia and Research in Motion, companies which decided to develop their own software. In the case of Nokia, it made a costly switch from its Symbian software to Microsoft software. Samsung's other business in chipmaking is not as profitable, with margins dropping to 9.5%. Operating profit declined in the fourth quarter in the chip business, dropping by half from the prior quarter. The rapid changes with one costly error changing the whole playing field, also shows the precarious nature of the mobile phone business with changing leaders every few years, from Motorola to Nokia, to Samsung and Apple.

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The EU's competition commissioner to crackdown on pharmaceutical companies that are delaying the entry of generics drugs with various tactics that are anticompetitive. EU has raided the offices of several marge drug companies and retrieved documents that show this activity was going on. About 5% of medical bills or 3 billion euros coud have been saved from 2000 to 2007, if companies had allowed generics to enter the market earlier and not resorted to these antitcompeitive strategies. Like paying off generics companies or having so many patents on the ingredients of the drug, in one case 1300 patents on one single drug, and then suing the generics companies to tie up the case in the courts.

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A Norwegian brokerage firm Terra securities files for bankruptcy protection after Norway's main financial regulator withdrew its license for violating "good code of conduct" by inadequately informing 4 Arctic towns, Rana, Hemnes, Narvik, and Hattfjelldal about possible risks of complex securities it sold them. The towns lost about $64 million which were meant for salaries. The securities were related to subprime mortgage securities packaged by Citigroup and sold by Terra Securities. Shows how far the impact of the subprime mortgage crisis has gone. These towns will not be bailed out by the Norwegian government.

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This article in the Economist points to polls showing women with college degrees favoring Clinton over Trump by large margins of 57% to 38%. A Brookings Institution expert says this could translate into a gain of 4 million voters for Clinton. Many of these voters overlap with suburban women. The Clinton campaign has presented Trump as one who could not be relied on to have responsibility for the U.S. nuclear weapons because of a volatile temperament. Other experts point to concern by women of what the anti-women comments by Trump would do to the condition of women in the workplace.

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The Chevy Volt GM's plug in electric car comes out in 2010. Toyota plans to bring its plug in electric car in late 2009. A company in China, BYD, has already come out with an electric car, the F3DM, priced at 150,000 yuan or $22,000. By contrast the Chevy Volt is expected to be priced at $40,000 when it comes out in 2010. Essentially this gives the market leadership to BYD, because it would have 2 years of experience with its cars on the road, and $40,000 is just not a commercially viable price if a competitor can sell it for half the price. So how does BYD do it? Wang Chuanfu is founder and chairman of BYD Co. a battery and car maker. BYD has built up low cost, high quality and highly motivated research and development capabilities. Wang put together about 10,000 technicians and engineers, many fresh out of colleges and technical schools in China. As it learns the efficiencies of manufacturing and design it is able to bring this to bear on the H3DM improvement, for introduction of other new electric car models. And this technical capacity comes at a much lower cost in China compared to western countries. Wang's focus on this area making it possible to price at $22,000. The CEO of Mid American an Iowa based energy producer with majority stake ownership of Warren Buffett, was attracted to BYD for this very reason, and bought a 10% stake in BYD for $230 million. Wang believes there is a more level playing field in electric cars because of the simplicity of their design and fewer parts, making for a faster move up the learning curve. Electric cars have just 2 motors (45 parts each) and 2 gearboxes (60 parts each), a total of 210 parts excluding nuts and bolts. BYD's gasoline car the F6 has 1400 powertrain parts, 840 parts for the V6 and for transmission 560 parts. Says Wang, this puts all of us on the same starting line. The F3DM is the first real electric car being able to go for 60 miles exclusively on electricity on a full charge. A car that can go 180 miles on one full charge called the BYD e6 is planned for 2009. BYD uses iron-phosphate technology which is safer because of stable chemicals and less chance of fire from overheating. This is a key criteria for this lithium ion battery technology for cars. The Chevy Volt battery being developed by A123 company at MIT uses a similiar technology. BYD started with lithium ion battery development years ago. Its founder Mr Wang was fascinated by batteries when he studied metallurgical physics and chemistry in the mid 1980's for his Masters degree. He found a research position at the General Research Institute of Nonferrous Metals in Beijing, then decided to form his own company BYD in 1995, to develop lithium ion batteries with about 20 engineers. Experience was gained selling batteries to Samsung, Nokia and Motorola. In 2002 the company went public on the Hong Kong stock exchange. Wang was attracted to the idea of electric cars at this early stage even though he did not know how to drive. In 1998, says Wang, he had his engineers start upscaling development from cellphone battery technology to electric car battery technology. At the same time to pursue his vision for the development of electric cars Wang made the decision to learn car development by making and selling gasoline cars. The first car was a small sedan called the F3 brought out in 2005. By the last quarter of 2008 the F3 was one of China's best selling automobiles. Demand for BYD's F3 and F10 models is growing even as car sales are dropping in China, helping BYD to gain in car sales relative to Cherry Automobile and Geely Holding, two of the largest competitors. ...

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Speaking at a banking conference, advisors including the head of Russia's largest retail bank Sberbank, German Gref, minister of the economy, Aleksei Ulyukayev, and head of the central bank , Elvira Nabiullina, express deep concern about the economic prospects in 2015. Foreign investment is down from about $90 billion in the 1st quarter of 2013 to a negligible amount in the 3rd quarter of 2014. Capital outflows following the Ukraine crisis are estimated at about $110 billion by former finance minister Alexsei Kudrin. The ruble dropped to its lowest level against the dollar since the 1990's. And the sharp decline in oil prices with Brent crude at about $90 is another risk factor as 50% of the budget comes from oil and gas revenues and 60% of exports are still oil and gas, with no serious or effective effort to diversify under the Putin adminstration. Putin told the banking conference that a deficit free budget and reserves of $460 billion are "fundamental factors supporting stability." Advisors and leading bankers remain unconvinced. The problem is that even at the beginning of 2014 before the Ukraine crisis foreign investment had slowed to a trickle, similiar to what India experienced in 2013. The central bank head says her effort to open up the bond markets in Russia to foreign investors is now in vain because there are few foreign investors. Instead of reversing the situation as is happening in India with the new Modi administration, policy under Putin and the Ukraine conflict may have scared investors away with the increasing western sanctions and stagflation (estimated 8% inflation and about 0.5% growth in 2014). The head of Sberbank Mr. Gref told the banking conference- "The Soviet Union broke apart because of the mind boggling incompetence of the Soviet leadership. They did not respect the laws of economic development." The problem with sovereign reserves is that it can protect a sovereign currency such the Russian ruble or the Brazilian cruzeiro to some extent, but today's vibrant economies need foreign investment and foreign technology for growth. Even a country such as China with a trillion dollars in reserves needs the reserves in its special case because of its billion plus aging population, and is no exception to these laws of economic development about the need for foreign technology and foreign investment. ...

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Hyundai is benefitting from the popularity of small cars. Hyundai increased sales in June year over year by 14% when USA auto sales declined by 8%. Its Elantra compact sales went up by 69%, its Accent subcompact sales increased by 91% and sales of its midsize sedan Sonata went up by 24%, according to Autodata. Hyundai which was trying to go upscale with the sedan Azera and the Genesis which was designed to compete with Lexus, is now focussing on small cars and trying to increase its share of the market with smaller cars. It will introduce a new Elantra wagon for the USA this year, the first of about 6 new small car models it hopes to bring out in the next 5 years. Hyundai is also considering manufacturing the Elantra at a new plant in West Point, Georgia, which was previously going to make a pickup and a SUV for its affiliate Kia Motors. The popularity of its small cars and the weaker Korean currency are helping Hyundai post large operating earnings with estimate of $2.3 billion this year, up 25% on sales of $33.7 billion, up 11%, according to brokerage Korea Investment and Securities. Sales of Hyundai SUV's are suffering the same fate that other SUV's are facing, down 41% in June 2008....

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The private sector ignores health insurance. And state coverage in China is inadequate. More than two thirds of China's 1.3 billion people have no health insurance at all. If you have insurance you still pay up front in cash, if you do not have the cash up front you cannot get a surgery, treatment of any kind or any drugs, even if the insurance will later reimburse you. The Chinese health care system is dysfunctional and in a crisis because of the way it is structured, and the faulty policy incentives. It caps prices for basic drugs and procedures at below market rates, yet it lets hospitals profit from everything else from advanced drugs to sophisticated diagnostic tests. So hospitals invest heavily in technology and expensive testing. and drug sales account for 45% of revenues. And enforcement is lax. Doctors in Shanghai make monthly incomes of about $400, about what a taxi driver makes, so they supplement their income with bonuses earned by prescribing more expensive tests and drugs. There is no utilization review so the state reimburses for whatever the hospitals charge regardless of whether the test was needed or not. So the system is dysfunctional and lurching towards a crisis. In fact heavily burdening the middle class. The private outlays and burden of total health care spending has increased from 20% to 60% of total health care spending from 1978 to 2003, as the the health care system got the same dose of unfetterred capitalism as the rest of the system. The Government's share of total health care spending has dropped sharply. In addition there are design flaws that push expensive care and build in incentives for expensive care at the expense of good medical care. The government recognizes this problem and sees it as athreat to social stability. It has committed to increase spending on healthcare. ...

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This report in the NYT says Hillary Clinton has studied policy briefings, academic papers and taken advice from 200 policy experts, including experts from Bill Clinton's administration such as Alan Blinder, all in an effort to define her own policy positions on issues facing the U.S. This happens at a time different from the period of slow growth when Bill Clinton ran against George H.W. Bush. Since then middle class families face the added problems of not being able to keep up with the rising cost of college education, health care, child care, low interest rates on savings and volatile markets dampening savings growth. For working class Americans in the middle class during Bill Clinton's time in office the problems take the shape of a sharp decline in the manufacturing wages that once supported a middle class life in industrial states of the midwestern U.S., with global competition doing the damage, and few solutions available except improving technology and technical skill of the workforce to compete in higher end products. Consider the points made by Janet Yellen, the Fed chairwoman at a Boston Fed conference in Oct. 2014- Fed information for 2013 showing the average net worth of the lower half of American families representing 62 million households is $11,000. Only this conceals the situation facing one fourth of these families who have zero wealth or negative net worth, and a significant fraction owing more on their homes than they are worth. Hillary Clinton told a audience at the New School in Greenwich Village in New York, this is the defining economic challenge of our time. " We must raise incomes for hard-working Americans so they can afford a middle class life. This will be my mission from the first day I'm president to the last."...

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The German people offer a warm welcome to refugees from Syria and North Africa suffering enormous hardships to make their way across seas and overland through Eastern Europe to Germany's borders. Germany of its own accord waived the right to deport Syrians back to the first European nation entered, and supported Syrian refugees right to stay with an 87% acceptance rate for Syrians seeking asylum. In August 2015 alone 100,000 refugees were accepted. Chancellor Merkel and Germany lead the European Union by example, and what an example it has been. Faiola of the Washington Post tells the story of Abed Almoen Alalie, a civil servant from Syria who fled with his family, and after being roughly treated in Budapest, Hungary, cannot believe his eyes seeing the welcoming crowds as he gets off the train in Munich. Never has a nation in such a short time made its way into the hearts of so many as Germany has done in 2015. The crisis found Germany, or Germany found the crisis, either way Germany embraced it and the people who came with it in a way hard to imagine. With chancellor Merkel leading the way using strong words and courage of her Lutheran convictions- "The fundamental right to asylum does not have a limitation. As a strong, economically healthy country, we have the strength to do what is necessary." Many Germans have responded in a degree and manner that is hard to imagine . They say this was Germany's effort at redemption after the war. In a poll by ARD released September 3, 2015, 88% of Germans said they would donate money or clothes to refugees or have done so, and 67% say they will volunteer to help. ...

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The leaders of Republicans and Democrats, Senate Majority Leader Mitch McConnell, Speaker Boehner, Minority Leader Nancy Pelosi, and Minority leader Harry Reid, reached a budget compromise with the White House in October 2015 after long closed door negotiations, following years of deadlock in previous years. The compromise lifts sequester spending caps agreed to previously in a previous settlement of differences, and lifts the budget ceiling till March 2017. Speaker Boehner said it was time to "clean out the barn," as he did this over the opposition of Senators Rand Paul and Ted Cruz from the right wing of his party who opposed his efforts to compromise with Democrats. On October 28, 2015, the House of Representatives passed the two year budget agreement 266-167, and the following day Speaker Boehner passed on the Speaker's position to Rep. Paul Ryan of Wisconsin. On Oct. 29, 2015, the Senate voted 64-35 to pass the budget compromise agreement. The agreement increases discretionary spending by $80 billion over 2 years, giving half to defense spending with the increase in military threats overseas, and the other half to domestic spending programs. The domestic spending goes to limit premium increases for some Medicare Part B beneficiaries, and a prevents a 20% across the board cut to Social Security Disability Insurance benefits, set for 2016. This removes the uncertainty posed by threats of a showdown on the budget ceiling and threat of defunding Planned Parenthood posed by right wing Republicans in Congress, which were bad for the economy at a time when the U.S. and Europe faces increasing threats overseas. Without a budget agreement the U.S. Treasury Department would have seen its borrrowing authority expire on Nov. 3, 2015....

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Witte, Booth and Adam of the Washington Post describe the situation Britain's prime minister Theresa May finds herself in after calling a snap election. A badly run campaign by May focusses on Brexit, and leads to election losses to Labor. Without the support of voters in Scotland who voted tactically to prevent Scotland from breaking away, the Conservatives would have no chance of forming a government. May now needs the 10 seats of the Democratic Unionist Party in Scotland to have a 3 seat majority. Labor leader Corbyn despite a barrage of negative publicity from British tabloids, maintained his cool and composure. His focus on the austerity politics of the Conservatives under Cameron and now May, enabled Labor to get 40% of the vote compared to the Conservatives 43%, with the Scottish National Party getting 3% and the Liberal Democrats 7.4%. Giving the parties that have never seen Brexit as a priority for Britain over 50% of the vote. The Democratic Unionist is a small party with less than 1% of the vote (0.9%), which in some countries makes it ineligible to take seats in the legislature. In the mixed up out of focus nature of British politics today this party is the kingmaker. The UK Independence party or UKIP party that started the whole affair of Brexit- that prime minister Cameron responded to to gain votes for the Conservatives by promising the referendum on Brexit- won just 1.8% of the votes cast, in a election where 69% of voters went to the polls, winning zero seats, down from 10.8% in the 2015 election. This is the state of British politics today  following the failure of political leaders, as Theresa May acts as if the election results are not sending a message about Brexit, say Witte, Booth and Adams.   ...

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Reeves says Reagan ever the imaginative politician seized on the idea of "supply side " economics of a not so well known economist Arthur Laffer. Ideas that were simple and appealing- you reduce marginal tax rates and generate higher revenues. This worked for some time with higher economic growth for a number of years, but the arithmetic of higher spending and borrowing and lower taxes would eventually lead to large deficits at the end of Reagan's term, just as price controls worked for awhile and then led to a surge in prices at the end of Nixon's term. When Reagan became President the deficit was 2.5%, when he left office eight years later the deficit was 5% of the economy. Interest payments on debt jumped to $169 billion in 1988, from $69 billion in 1981. Reeves says American politicians know so little about economics, to which it could be added, winning presidential and congressional elections is always a big part of the picture when it comes to economic policy. Which is why Nixon even with Milton Friedman as an advisor shifted to Keynesian policies of higher fiscal spending in 1971, and why Reagan turns to intuitively appealing and effective in the short term policies of having it all- higher spending, growth, and lower taxes. During the years of the two Bush presidencies and the Clinton administration the success of Reagan policies leads to a general sense as Vice President Cheney put it referring to Reagan and Treasury Secretary Baker's belief, that "deficits don't matter." Which leads us to the current situation where 2012 presidential election politics again frame the terms of the debate on deficits and budgets, only now the deficit is much higher and on a unsustainable path. ...

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Thomas Hoenig was Governor of the Kansas City Federal Reserve Bank for 20 years. Here he talks about the dangers of "too big to fail" with Gretchen Morgenson of the New York Times. He is due to retire at the age of 65 in 2011. Hoeinig has stood for conservative safe financial practices for U.S. financial institutions throughout his 20 year old career, and cautioned against extending the government safety net for banks that engage in risky financial activities including derivatives trading. And essential element of safe financial practice and part of necessary market discipline, he has pointed consistently, is the fear that taking on risky activities or acting recklessly has a price- creditors can take out their funds if they see a banks as unsafe, and the financial institution may have to be broken up or closed. He joins Alan Meltzer in his criticism of Federal Reserve policies under first Greenspan and then Bernanke that take on the job of stimulating the economy and creating jobs through a very loose monetary policy after the collapse of a bubble. Hoenig sees the role of the Fed in such situations as a neutral player. The reason say Meltzer and Hoenig is that the Fed has not given enough thought and attention to the long term consequences of its policies. What were the consequences of the low rate policies in 2003 asks Hoenig? It promoted another bubble and the mortgage meltdown of 2008. What were the consequences of QE II asks Meltzer in an op-ed piece in the Wall Street Journal on August 11, 2011, "The Folly of Economic Short-Termism?" It has failed to revive the economy or reduce unemployment. Hoenig also points to questions of fairness and equity that arise when banks are treated differently and farmers, seniors and other groups are asked to make sacrifices....

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The story of the Vanguard 500 Index Fund's founding in 1976, and the inspiration from Nobel Laureate economist Paul Samuelson, is told by founder John Bogle. On August 31, 1976, the first index mutual fund, First Index Investment Trust was born. It was launched by Bogle at Vanguard. The idea he put forth was that passive index management could outperform active management with its fees, load, commission and other costs. The IPO target was $150 million, but the underwiritng resulted only in $11.3 million. The underwriters suggested cancelling the deal, saying that this was not enough to own all 500 stocks in the S&P 500 Index. Bogle's response was just the opposite- he now had the world's first index mutual fund. Here Bogle talks about the early inspiration. His senior thesis at Priceton University in 1951, in which Bogle broached the idea that mutual funds could not say they were superior to market averages, received support from Samuelson. This was followed by the article 23 years later by Samuelson in "Challenge to Judgement," an article in the Journal of Portfolio Management in summer 1974, that stated: "that some large foundation set up an in-house portfolio that tracks the S&P 500 Index." Bogle took up the challenge and offered well diversified funds at minimal costs, with a focus on the long term investment. Writing in Newsweek in August 1976, Samuelson said that his prayer had been answered. Bogle describes how his inital encounter working with Samuelson's "Economics: An Introductory Analysis," was difficult. He barely made a C-. In 1993 Samuelson offered to write the foreword on Bogle's first book- "Bogle on Mutual Funds." The relationship lasted 61 years!...

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Starting in 2009 Samsung's investment in R&D exceeded the same investment by competitors Sony and Panasonic. By 2011 this gap had widened, as Samsung spent $8.7 billion on R&D in 2011, Panasonic $6.6 billion and Sony $5.5 billion for their fiscal years. This is a result of Samsung's having captured a larger portion of the market and profits in recent years. In the U.S. Samsung has 50% of the market for LCD television sets. Now Sony and Panasonic have reached an agreement to join together their efforts for production technologies to produce OLED television sets, the next generation technology for television. Sony and Panasonic are also working on changing their mindset that focussed on technological advancement and less on delivering consumer friendly technology at attractive price points. Sony developed the first e-reader in 2004, and developed the first OLED set in 2007. But the e-reader lacked the software capabilities of the e-readers developed later by Amazon and Apple. For OLED the production technology was lacking for Sony to produce it at commercially viable prices for mass production. Now Sony prefers to let S. Korean competitors take the lead, and hopes to come from behind by combining critical areas of technological development with Panasonic. Samsung and LG Electronics will bring new 55 inch OLED sets to the market in late 2012. Panasonic and Sony have new CEO's who are faced with developing strategies for a rebound. Panasonic CEO, Kazuhiro Tsuga, is keen on changing the mindset of the company back to the consumer. He told a news conference recently: "Japanese firms are too confident about our technology and manufacturing prowess. We lost sight of the products from the consumer's point of view."...

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At the end of the 2012 Communist Party Congress in Beijing, Xi Jinping assumes the post of chief of the Communist Party of China. He also assumes the post of head of the Central Military Commission, which makes him head of the armed forces of China. Li Keqiang, the incoming prime minister, is the only member of the party Politburo Standing Committee selected by current president Hu Jintao. Jinping is supported by Jiang Zemin, former president. Four of the other five members are older party leaders placed in these positions by former president Jiang Zemin, who succeeded Deng Xiaoping and started China's three decade long modernization. The seven member Standing Committee governs China by consensus. This will limit the room for change, especially as the other five members are in their mid 60-s and favor the status quo. Xi Jinping is 59, Li Keqiang is 57. Xi becomes president in the spring of 2013, and Li becomes prime minister to run the government ministries. The optimism for Li who is the best educated of China's leaders, holding a doctorate in economics from Peking University, and an early interest in constitutional law, is restrained by the institutional arrrangements that favor the status quo. Some experts in China see the new leaders likely to make major changes only if confronted by a crisis. In his live television acceptance speech Xi focussed on China's "rejuvenation," with improvements in the party bureaucracy, tackling corruption, and improving the lives of ordinary people, for better schooling, jobs, incomes, health care, better housing conditions, social security and the environment. From the rush to modernize and build infrastructure attention is now shifting to creating better conditions for the Chinese people....

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Mario Monti, the new prime minister of Italy, is taking on one of Italy's toughest problems, a pervasive culture of tax evasion. The loss to the economy is not measured ony in terms of the loss of money to the Treasury, which one estimate puts at $340 billion a year. This burdens companies and the manufacturing sector with higher taxes and reduces investment in new plants, research and development, capital equipment, which would increase jobs. By encouraging this culture of tax evasion Berlusconi undercut and jeopardized his own plans to bring new economic growth to Italy. Berlusconi prevented allegations of false accounting against his companies by passing a law through parliament that made reduced penalties for false accounting. In Italy one saying goes that "only fools pay." In a country of 60 millon people only 394,000 people earn an income of more than $135,000 a year. "Evasion totale," referred to in newspapers in Italy is about total evasion by some owners of large property. One effort in parliament is to introduce legislation that would require the use of debit or credit cards, electronic transfer or other similiar methods of payment for amounts above a certain amount- with one of the amounts proposed being 100 euros. A recent poll by Demopolis showed that 73% of Italians polled want to see strong action to prevent tax evasion. This is also a strong reason why Monti, Draghi at the ECB, Bundesbank officials at Germany's central bank, and German chancellor Merkel, do not see the ECB's large scale buying of eurobonds by essentially printing money as a solution to eurozone debt problems- it puts off taking the neccessary and essential steps for reviving eurozone economies....