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Pope Francis is strongly critical of the manner in which the capitalist system has functioned in recent decades, increasing inequality, and hurting the marginalized, the working class and poor. Pope Francis tells people during his visit to the poorest countries in Latin America, Ecuador, Bolivia and Paraguay, that the Catholic Church committed grave errors during the period of Spanish colonialism by allying with the ruling classes and creating great inequalities and suffering. The director of the Institute for Policy Research and Catholic studies at Catholic University of America, Stephen Schneck, says the Pope is reflecting a century of activism on social issues since the Pope Leo XIII encyclical in 1891, calling for social and economic fairness for labor, with the encyclical "Rerum Novarum" - or "On the Condition of Labor." The Pope's message in Santa Cruz, Bolivia, to nearly 2000 social activists, farmers and trash workers, neighborhood activists, was that change has to come from grassroots, that the local communities have acquired the knowledge which is valuable to act for economic and environmental betterment. He praised cooperatives and local organizations that enhanced the value of labor. His message resonates say Catholics because he has stayed in close contact with local communities, and the poor, working class people in Argentina. It is focussed on empowerment of local communities. In Bolivia the left government has adopted measures that attract foreign capital and investment, so that it is a model that stays away from socialist ideology, while at the same time embracing the grassroots idea of empowering local people and communties. In this way it has improved living standards in Bolivia and received favorable ratings in capital markets....

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Nokia shifts its headquaters from White Plains, New York., to Sunnyvale, California, to be close to developers and competitors. From U.S. sales at 20% of global sales in 2003, U.S. sales have dropped to 2% of global sales even after the introduction of the Lumia smartphone. The efforts to change the mindset of the company in its new location.

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In a major policy move India's Modi government makes major changes for foreign investment in India. In different sectors, pharmaceuticals, defense, civil aviation, and retail stores, the move is designed to attract investment and create new jobs. Foreign investors can now take 100 percent ownership in defense, civil aviation, and food products sectors with government approval. In pharmaceuticals foreign investors can take upto 74 percent ownership with no government approval needed. In retail stores, such as for Apple and Ikea, the rules offer new incentives. From now on the requirement that Apple and other companies buy 30% of their supplies locally for single brand retail stores will be relaxed with a 3 year exemption on local sourcing, which can be extended to 5 years if the products sold are "state of the art" and "cutting edge technology," according to a government announcement. The changes were made by executive order. Apple CEO Tim Cook visited India and lobbied for this change recently. In combination with a national GST goods and services tax to be passed in July 2016, which is to be instituted nationally to replace a old set of state by state requirements and taxes, the two changes could have a bigger impact than the 1991 reforms that moved India away from a socialist managed economy. Poor job report numbers may have increased the pressure for taking action. In the defense sector the earlier change to allow 49% ownership had resulted in few new proposals. The changes in foreign investment rules also follows the resignation of the head of the central bank, Raghuram Rajan. ...

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Experts say there may not be much difference whether a voluntary deal is reached between Greece and the Institute of International Finance or a deal is forced on private bondholders by Greece for the 93% of Greek bonds that are based on Greek laws. Most of the large banks that hold Greek bonds will be subject to persuasion by European authorites (EU, ECB) to accept the deal offered by Greece that brings debt down to 120% of GDP by 2020. The remaining holdouts are the hedge funds that will want to opt out of a voluntary arrangement anyway, because a forced deal by Greece would allow them to collect payments on their credit default swaps. Adam Lerrick, an expert on sovereign debt restructurings, says the hedge funds and other private bondholders are framing the discussion into one of a voluntary agreement that is orderly and an involuntary agreement that is disorderly, as a tactic to scare the European authorites (the EU, ECB) and Greece. He says not only can forced restructurings be orderly, but in this case the improved prospects for Greece with serious debt reduction would lead to a ratings upgrade for Greece. Some hedge funds have said they will sue if forced into the deal. Michael Waibel, at the Lauerpacht Centre for International Law at Cambridge University, says the case would first go to Greek courts where it would be received without much sympathy, and then to the European Court of Human Rights. Only the small number of bonds under Swiss and English law with pari passu clauses insisting on equal treatment of bondholders have any prospects, and even then legal enforcement of any awards is uncertain as shown in the case of Argentina. The 93% of bonds under Greek law have no such clauses and this gives Greece the option for special treatment of bonds held by the ECB....

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Ben Van Heuvelen documents in the Washington Post what Ali Nabhan and Bradley pointed out in the WSJ in May 2009, that the officers in the Iraqi army lacked the training and discipline to act as an effective fighting force. These early indications proved correct and were ignored by the Iraqi government and the Obama administration till it was too late with the fall of Mosul and the ensuing chaos in Iraq.

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Zardari is asking for $100 billion when Pakistan has in its central bank enough foreign currency reserves for 2 months of imports of oil and food. He also wants to defeat the Taliban and militants and find those responsible for the death of Benazir Bhutto. This interview with Bret Stephens who gives an account of it and his own comments, ends with some remarks by Zardari about wanting to defeat the militant elements that killed Mrs Bhutto in a manner where "not letting them get away with it" referring to those responsible, is something he wishes to do before his own life ends. It suggests that this war is likely to take a new turn as the military in Pakistan takes on the militants and Taliban and as General Petraeus looks for a way to reverse Taliban gains in southern Afghanistan and other parts of the country.

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Americans loaded up with debt may be turning to older thriftier ways of an earlier generation. This this will affect consumer spending, have an impact on Chinese exports, and on the Japanese economy which is dependent on China for growth. Some argue that there is a culture of consumer spending that runs through recent American history. Even after one boom was over the stock boom was replaced by a housing boom, each boom and easy credit offering free spending and borrowing lifestyles. Is it going to change now? But it could be that a point has been reached where the finances of households and of the nation's credit system can only go so far, and culture won't matter if banks tighten up credit. There is a limit for the Fed to act to lower rates, and household debt has reached highly serious proportions. The savings rate went from one tenth of income in 1984, to 5% in 1994, to slightly negative in 2008. Today for those who borrowed against their homes in 2003-2007, 34 million households or one third of the US households, savings rate was negative 13% in 2006 June. Thhis came down to 7% in end of 2007, according to Moody's Economy.com, which suggests that the cutback in consumer spending from this group of people had already begun. What will this mean for consumer spending in the USA? It means that even though the top fifth of American earners who generate half of all consumer spending according to Barclay's Capital, will continue spending though a bit more carefully than before. The rest of the American people will be cutting back, especially the one third of the nation that is heavily in debt, and the unemployed if job numbers aren't that good. Which could be why Goldman Sachs predicts that Japan is already in recession using the Japanese definintion of decline in output, and China may be slowing down more significantly than is understood because of the poor data that is coming out of China. The Chinese economic activity too chaotic to accurately measure, and with large time lags before what is actually happening is detected and quantified correctly. ...

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The costs of fraud in medical care from spurious Medicare claims to kickbacks for unecessary services is estimated at $125 to 175 billion. Costs of unnecessary care from overuse to unnecessary lab tests are between $250-325 billion. The amount wasted for on treatment for preventable conditions such as heart disease and diabetes. is $25-50 billion. This number is much higher when all the complications from obesity are figured in. These amounts alone add up to $500 billion. Add to it the problems and the costs of medical errors leading to bad drug reactions or other misdiagnosed procedures which cost an estimated $75-100 billion and the the total is upto $600 billion. These amounts are not going to be tackled by computerization of medical records. The whole manner and ways in which medicine is practiced today and the manner in which the public takes care of its health would have to change for an impact to be made in these numbers.

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Huaxi, Jiangsu province, a few hours car ride northwest of Shanghai, is a village of 2000 residents. It has built a 74 story skyscraper, with a concert hall and a revolving restaurant. The village residents have joint ownership through Jiangsu Huaxi Corporation with the companies 2009 report claiming it has investments in businesses that return 50 billion renminbi or $7.7 billion in income. About 25,000 workers, mostly migrant workers, are said to be employed by the village. These workers work and live in an area outside the village. The whole story appears to be more that a bit bizarre. There is no other information on where this money is coming from and who is managing it. If anything this kind of story suggests how inflated and bizarre the property market in China has become. Even the word bubble may be understating what is happening. A massive misallocation of capital is taking place with the lack of transparency and corruption making this possible, which will very likely affect long term development....

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Chinese company investments in Korean companies are not doing well because of widespread feeling among Korean workers in these companies that the Chinese company is only interested in transferring the Korean company technology to China. Also hopes of selling products in the Chinese market have not been realized. Instead the experience is that the Korean company ends up up laying off most of the employees after being hollowed out. In 2003 BOE a Chinese company paid $380 million for Hydis, a Korean maker of displays for cellphones and laptop computers. After the transfer of technology to build a new display panel factory in Beijing, Hydis was left o hollow out and went into bankrupptcy protection in 2006. Shanghai Automotive Industry Corporation bought a controlling stake in Ssangyong Motor of South Korea in 2004. Shanghai Automotive Industry Corporation, one of China's top state owned companies saw this as a push abroad, as China accumulated large dollar reserves from foreign trade, and a chance to acquire foreign technolgy for SUV and luxury car manufacture. Shanghai Automotive has partnerships with GM and VW to use foreign technology to make cars in China. The Korean economy after the financial crisis of 1997 was opening up to foreign investment. In this climate the Korean side was expecting China to open its market to Korean cars from Ssangyong, but this did not happen. Instead Korean workers say the company transferred technology to its Chinese parent, and after 5 years the partnership is falling apart in protests by the workers, layoffs and bitter battles amid declining sales. The Korean workers even have a word for such foreign companies that have come to Korea, during Korea's opening to foreign investors after the 1997 banking crisis, when Korean firms went for fire-sale prices. That word is "meoktwi", a slang term that means "a thief who eats and runs away." This has hurt China's reputation in South Korea, and its reputation as an enlightened investor in other countries. It also is what may be happening with Taiwanese investment in China in this downturn. Companies like Hon Hai, with its Chinese subsidiary Foxconn, are reported by the Economist to be shrinking their Chinese operations in a large industrial city sized campus employing 250,000 workers in the Shenzen area, to 100,000 workers. That factory city made laptops, PC's cellphones for Western companies using foreign technology....

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An average of major opinion polls compiled by Real Clear Politics website shows 50.5% of Americans opposed to the Obama U.S. health care law.

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Stricter warnings on Amgen's Epogen and Aranesp, and J&J's Procrit, Anemia drugs.

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A Republican move for a 3 month extension of the U.S. debt ceiling to provide time to reach a negotiated deal with Democrats.

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As Mr. Maliki resigns from the premiership in Iraq, a former aide says of his eight years as prime minister that Maliki never battled to preserve the state, only to preserve his own premiership. And other colleagues says he thrived on demonizing the Sunnis and the regular crises under his leadership. The new prime minister Mr. Abadi is also from the same Shiite Dawa party that Maliki belonged to, and it is not clear how is leadership will turn out. The final push for Maliki's ouster came from Ayatollah Sistani of Iran. The U.S. and western allies also pushed for a new leader. The use of sectarian Shiite militias by Maliki to fight the Sunni insurgents from ISIS in 2014 further aggravated Iraq's religious divide.

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A civic group plans to continue showing a woman's statue representing 'comfort women' in front of the Japanese embassy in Seoul. South Korean media is critical about the lack of merit in generating goodwill of the agreement between prime minister Abe and prime minister Lee on 'comfort women.' Some South Koreans see an uncomfortable association between history showing Ms. Lee's father being an officer in the Japanese Imperial Army, and the agreement that does not do much to put the issue behind by offering $8.3 million. Japanese prime minister Abe considers the 1965 agreement normalizing relations between the 2 countries with no reparations as final, with no exceptions for the situation where many South Korean women were used by the Japanese Imperial Army. An exception might open up claims from other survivors of the war in other situations, Japan fears. Japan offered $8.3 million as an humanitarian gesture for the surviving 46 comfort women, which is seen as insulting for the women in the South Korean media. The women say they were never consulted. ...

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AT&T had 4.3 million iPhone activations in the first quarter of 2012, down 43% from the prior quarter. Of the most valuable subscribers who signed up for 2 years AT&T showed 187,000 additions. All but 7000 of these were in tablets. . This indicates that the smartphone market in the U.S. is being saturated. AT&T used the iPhone introduction in 2007 as a way to take subscribers from Verizon and Sprint. That advantage is now fading.

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Anat Admati, is a professor of finance and economics at Stanford University School of Business. He says banks should depend on generating 30% of their assets from equity, something the banking industry of today in the U.S. and Europe considers heretical. More of the bank's assets should come from equity and much less from borrowed funds. Outside of banking healthy corporations in the U.S. carry debt at about 70% of assets and there is no reason banks should not do the same. In 2013 says Admati, the situation is not much different from that after the 2008 global financial crisis- large banks carry liabilities and debt at over 90% of their assets. The $2.2 trillion in debt at JP Morgan Chase bank is about 91% of assets of $2.4 trillion. Basel III regulations allow banks to borrow upto 95% of assets, and proposed banking regulations in the U.S. put this at 95%, with the way this is measured still being debated. At such high levels of debt the margin of error is small, and systemic risk which is high in a globally interconnected banking system means the whole banking system can freeze from one large bank going into failure such as Lehman Brothers. This happened in 2008 and the margin of error is still small, which is why global banking is such a high wire act with the U.S. Federal Reserve, the ECB and other central banks issuing regular warnings and regulators faced with the task of keeping the banking system in check through vigilance and investigations of banks violating laws. How much difference has Dodd-Frank legislation in the U.S. made after 2008? Jason from Atlanta says in response to Admati's article, that the Glass-Steagall Act of 1933 was 37 pages and the banking system did not freeze up in the way it did in 2008 for the rest of the twentieth century until its repeal. The 879 page Dodd-Frank legislation of 2011 is overly voluminous and still leaves 243 rules to be written by regulators in consultation with the financial industry. Banks are larger now than they were in 2008 and have an outsized influence in shaping the rules, leaving the U.S. Federal Reserve's supervisory committee and Fed Governor Daniel Tarullo with the job of somehow keeping banks out of trouble. JP Morgan Chase, Admati reminds readers, has $2.4 trillion in assets as of June 30, 2013, and debts of $2.2 trillion, with $1.2 trillon in deposits and $ 1 trillion in other debt owed to money market funds, other banks, bondholders and the like. ...

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Chrysler's sales are dropping the fastest of all the car companies . April 2009 sales dropped 24% from March 2009. Ford sales are doing better than Toyota, as they declined in April over same month prior year by 32%, compared to 42% for Toyota. It appears that the Buy American factor may be helping Ford Motor more than the other American car companies, and that Chrysler also suffers from the lack of new models with new technology and investment in new features. At GM the situation is better at Chevrolet, Buick, Cadillac and GMC, where sales in April 2009 declined by 29%, over same month prior year, which compares with a 55% decline in sales, of Pontiac, Hummer, Saab, and Saturn brands which are likely to be dropped. See the related link on same day on steep fall in Chrysler sales.

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The People's Bank of China lowers the benchmark lending and deposit rates by 0.25 of a percentage point, and cuts the reserve requirement ratio by 0.5 of a percentage point. The PBOC said the move was designed to offset "the persisting downward pressures on the country's economic growth." It was also designed to offset the large volatility in China's stock markets. The PBOC also removed the upper limit on interest rates for fixed term deposits of more than one year, as part of interest rate liberalization. The move also counters the large capital outflows affecting China, as is happening for all emerging markets, of $70 billion in July. These outflows may have accelerated in August 2015 with declining investor confidence. Experts say the reserve ratio cut should inject about $100 billion into the banking system.

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House Majority Leader Eric Cantor rejects the McConnell plan for raising the debt ceiling. Senate Minority Leader McConnell says on a conservative talk show- "all of a sudden we have co-ownership of a bad economy. That is very bad positioning going into an election." McConnell's plan is to shift the responsibility for raising the debt ceiling to President Obama, by separating debt reduction talks from debt ceiling talks. Cantor believes its best to push on with cutting back spending. Obama's response was to offer $1.7 trillion in spending cuts, at which point he expected Republicans to support tax increases, telling Cantor in negotiations "enough is enough." The McConnell plan is supported by Senate Majority Leader Harry Reid and Republicans in the Senate. The details of the plan are being are being worked out, with one strategy being to add to it the $1.5 trillion in spending cuts identified in bipartisan talks with Vice President Biden. Both sides are looking at this jockeying for advantage for the 2012 election. At one point in the talks with Cantor, Mr Obama is reported to have told him- "Eric, don't call my bluff. You know I'm going to take this to the American people." Cantor for his part, wants to limit the duration of the debt ceiling increase so that it would be a short term extension and would come up for a vote before the 2012 presidential election....

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The IMF's managing director, Christine Lagarde, pointed to the urgent need to recapitalize European banks in September 2011. European banks face potential losses of 120 billion euros for Belgium, Spain and Italy, 60 billion euros for Greece, 20 billion euros for Ireland and Portugal, and 100 billion euros for other banking exposure, for a total of 300 billion euros, according to the International Monetary Fund. In the absence of recapitalization there could be further damage to EU economies from restricted lending by banks. IMF estimates show that deteriorating credit conditions could damage growth in the eurozone countries by 3.5 percentage points, and in the U.S. by 2.2 percentage points, creating another recession.

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The transformation of Fiat Auto. Marchionne relying on "my kids", getting good people throughout the Fiat global operations and outside of a younger generation, who were open to doing things in a new way. He had the courage to unassumingly go about the business of remaking Fiat, by removing middle and upper managers who produced a kind of paralysis or sclerosis in Fiat, making change impossible after years of a failed culture embedding itself. And in their place he brought in an energetic courageous bunch of younger managers and designers. It would be fair to say that he tore up the old plans, tore up the old organization charts, tore up the car plans and designs in the pipeline, tore up the failed models and put in place new ones- the Bravo for the Stilo, and tore up the old management, put in new people and tasks and wedded them in an informal way, with their own culture developing along the way. The were teams and their tasks, all wedded together in an informal arrangement, in close proximity, with informal communication. Marchionne saw his role as helping people reach decisions, setting stretch goals, and encouraging levels below him to take responsibility and make courageous decisions. He saw the Cinquicento as his version of the Apple iPod, and benchmarked Fiat against Apple, so he was looking outside the auto industry for people to emulate and for new ideas. He himself was from outside the auto industry. ...