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Toyota's market share in China is about 5-6%, lagging behind GM and VW. After a "willful pause" since 2012 when Toyota ran into quality issues following an aggressive expansion in manufacturing, Toyota is beginning to make investments in new assembly plants. New assembly plants will be built in Mexico and China with a $1.25 billion investment.

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The suicide of celebrity chef Anthony Bourdain who had a popular television program, brings new attention to the increase in middle age suicides ages 45 to 64 in the U.S.  The CDC figures show a 60% increase for women and 37% for men between 2000 and 2016. A clinical instructor in psychiatry and medicine at Cornell, Ms. Boardman says life satisfaction is low at this age,a dip in satisfaction called the U curve. A 2016 study in the American Journal of Preventive Medicine  shows stress factors as problems with intimate partners job/finances, health, family, and criminal/legal problems.  The demographic group driving suicide rates up is mainly white people without a 4 year college degree, who have done poorly compared to that group in a previous generation, say experts at Columbia University. 

Generally isolation and loneliness is also a factor, and social connections a big antidote to depression type stress.

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Chancellor Merkel of Germany proposed bilateral or trilateral deals between smaller groups of countries as a temporary solution till some agreement can be reached on immigration. She said "The European Council will not yet provide an overall solution to the migration problem." Hungary, Poland, Slovakia, Czech Republic which have opposed a quota system for asylum seekers did not attend.  Austria, Denmark, and Italy with the new government openly opposing immigration, attended the summit. Merkel said  a "lot of goodwill" was created, and leaders agreed that borders need to be better protected to prevent people from entering illegally, and reducing immigration at its source points in Africa. The migration problem has persisted as an issue long after the huge surge in immigration in 2015 has diminished to a trickle, and after chancellor Merkel has accomodated critics with new policies strictly limiting new immigration. New governments in Denmark, Austria and Italy, and the government in Hungary under Viktor Orban, have kept the issue alive by running on anti-immigration platforms. The European summit in 2018 was used by Merkel to reduce disagreement on this issue by allowing different countries to express their views and working in smaller groups for mutual benefit. It also reduces tension inside her CDP-CSU coalition after Bavaria based CSU decided to run in 2018 state elections on a platform calling for securing borders. ...

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Bennhold and Erlanger of the NYT point out that prime minister Theresa May has remained vague about the nature of the negotiations for Brexit. The snap election increases the confusion with a hung parliament and no party getting a majority. The result can be seen as sending mixed signals. The British public by supporting parties such as Labor, SNP and Liberal Democrats with over 50% of the vote, is saying that it is not sure about Brexit being a priority for Britain, given the uncertainty for the British economy and other pressing problems. All this had been lost in the debate about hard and soft Brexit, in the political rhetoric taken up by Ms May when the basic questions about Brexit have not gone away. Here Erlanger and Bennhold take leaders back to these questions posed by former finance minister George Osborne. Osborne as Editor of The Evening Standard asked readers 10 questions- How is withdrawal going to increase trade when you leave the biggest free trading bloc in the world? How can withdrawal help London as the financial capital of the world? How is migraton going to be tackled when its not clear which business will have its labor supply restricted or curtailed. For these reasons- apart from many others about the whole process of withdrawal and the cost to Britain- the whole idea of Brexit appears to have not been thoroughly thought through. As a result the referendum vote may be seen in Europe as a temporary reflection of British opinion at that point of time, and subject to change over time.   ...

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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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Erlanger and Castle look at the reasons given for the resounding defeat of the Labor party in 2016 British elections. Mr. Blair's view is that Labor as a traditional left wing party going against a right wing party produces a traditional result, reflects the Thatcher years when Britain was looking for a new way forward after the previous Labor governments and state involvement in the economy. More forces were at work in this election, say experts. Peter Mandelson of the Labor party and Bloomberg Editor-in-Chief Micklethwait, say other forces are at work, with Scottish nationalism depriving Labor of a core constituency it had relied on, with 40 seats in the 2010 elections going down to 1 in 2015 general election. English nationalism meant the only gains for Labor in England came from Liberal Democrats not from Conservatives. Cameron appealed to Englsih voters that a Labor left oriented government in alliance with the Scottish National Party, which is more to the left than Labor, would be bad for England. Other commentators have suggested that liberal economics of the type espoused by Blair and Gordon Brown had failed to reduce inequality or improve living standards of working class people, led Britain into the 2008-2009 financial crisis, and lost credibility. Globalization, the decline of heavy industry in Scotland, and other changes in the global economy have also changed the playing field. The Conservatives showed flexibility in relaxing deficit rules after 2012, and were intent on protecting the National Health Service, giving their campaign theme about putting Britain on the right path to economic recovery more credibility. Other issues such as immigration also played out against Labor, hurting labor more than the Conservatives, with the defeat of Labor's Ed Balls in Leeds attributed to the increased votes going to the UK Independence Party from working class and centrist voters. In the end Labor received only 30.1% of the popular vote. ...

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ECB study put out in April 2013 shows household wealth and income in eurozone countries based on 2009-2010 data for 60,000 households throughout the eurozone. The household wealth in southern European countries is higher than that in Germany. The study shows why ordinary Germans oppose bailouts for banks, Greece, and eurozone countries that experienced a boom in the 2000-2010 period, a period in which German workers took small pay raises to improve German competitiveness. Germans also see Portugal and Ireland in a different light compared to Greece, Cyprus, Italy and Spain where real estate speculation, lax accounting, tax evasion and favored treatment of certain groups, has created or aggravated the debt problems. Wealth is defined as total assets, including real estate, vehicles, bank deposits, investments and pensions, minus liabilities for mortgages, credit card debt and loans. By this measure German households had an average of 200,000 euros in wealth, and lower than this in Finland and Netherlands. At the median or midpoint German households had 50,000 euros, the lowest in the eurozone, for Greece the median was 102,000 euros. The impact of home ownership is significant in the report, as home ownership is lower in Germany than in Southern European countries, and mortgage interest is not considered favorably in German tax laws. The decline in value of homes after 2010 is also not reflected. Another indicator for comparitive wellbeing is income, and this is shown in figures released in March 2013 from the European Statistics Agency for GDP per capita. For Germany per capita GDP was 29,000 euros in 2010. The average GDP per capita for the eurozone is about 24,000 euros. By this measure Greece is at 21,000 euros, 24,000 euros for Italy and for Spain. Germany being 18-19% above Spain and Italy. If Germans, Dutch, Finns and Austrians are less well off then the argument favors having the banks, creditors, and including depositors, in a burdensharing arrangement for bailout of troubled eurozone economies. ...

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The last thing we want to do is to bring back the images of the 1953 American sponsored coup, which ousted Prime Minister Mohamed Mossadegh and returned Shah Pahlavi to power, says Senator John Kerry in an op-ed article in the NYT. He cautions America getting involved in Iran, letting Iranians decide on their own, as the CIA supported coup that overthrew Mossadegh's elected government and put a king in his place because he would be more friendly to American oil and other interests in the region, may arouse bitter memories of America's influence in avery negative way in an earlier period. Most Americans may not remember the American sponsored coup. Mossadegh was a socialist during the Cold War and wnated to nationalize the oil industry run by foreign companies in the country. During those days the interests of American oil companies, the Cold War with the Soviet Union, and British-French colonial era interests in the Middle and Africa and Asia, were all intertwined. The Korean war had just ended, Suez crisis of 1956 with the nationalization of the Suez Canal by Egypt, was a few years away, the French were fighting to keep their colonial empire in Vietnam, and America was supporting Pakistan with Sabre fighter jets bringing a version of the cold war to the Indian subcontinent even though India was the largest democracy in Asia. Partly because its leader Jawaharlal Nehru, was an independent minded socialist, who avoided joining the cold war with his non-alignment policies. Adlai Stevenson, Democratic candidate for President against Eisenhower was very enthusiastic about Nehru in his speeches, but Republican Secretary of State Dulles saw things differently, just as today there are huge differences between the way a Rumsfeld and an Obama see the world. Many of the problems today in places like Pakistan Afghanistan, Iran and Iraq had their beginning during this period....

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Motorola considers selling its handset business, or some other arrangement to separate it from its other businesses. It has fallen behind as competitors launched phones with new features and sleeker designs like the iPhone from Apple and Nokia's new line of phones, with a whole set of new features and careful attention to customers future needs, constantly staying ahead of the curve. Motorola has had one shot hits like the recent Razr phone but has not had the management vision, leadership and structure to keep ahead of the changing customer needs and development of new technologies- which together have created new kinds of phones and new designs for different market segments in different countries. The companies successful in such an industry have to have mangement direction, capabilities and drive and speed to keep coming up with new features and combinations of features for different sets of customers in different countries. New technologies mean faster internet access, iPhone type features, exchanging pictures, being able to see internet information on their phones and changes every year or two years. The nature of this industry requires companies to stay ahead of technologies and customers, and have good people on the field who can help you understand the changing markets in each region. This includes designers and technology access, with execution abilities and people to do it who can put it all together, again and again each time the customers needs change and the market takes a new turn. Nokia has in contrast to Motorola stayed ahead of the game. Even if it has missed a step it has regained the momentum quickly, and set up a structure of people that can generate the new phones customers want before other companies. Here Motorola is having a free fall in market share and no product to meet the competition at least not till the end of this year, a long time in this fast paced industry....

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Bill Ford answers some very pertinent and good questions with confidence and clarity in a meeting with Maria Bartiromo of CNBC and Business Week. His answers are direct and show his thinking today and throughout his difficult experience of the last few years struggling to establish his presence at Ford Motor and then struggling to get the right person to run the company. "It hurts us to see the employees of the company suffer," and this has made this experience at Ford have a personal impact as Ford traumatized over the layoffs of employees with many years of service. And he himself was not easily accepted in the prevailing culture of the time at Ford, and asked to drop his contacts with environmentalists when he joined the Board, which he says he told them he had no intention of doing. He knows his managers had foresight in borrowing a "ton of money" just before the credit crisis struck, and which will be a key to going through any further deterioration of the market in the next 2-3 years. Much clearer than any of the other manufacturers is Ford's new vision under, Bill Ford, Mullaly and Farley, with the finance guys in the background, of Ford as a car company and focused on smaller fuel efficient automobiles. And Bill Ford's vision and aspiration has a lot do with it, who he helped bring in and what he supported and pushed for in the old Ford culture helped Ford to grasp a vision of its future with clarity and purpose like a new beginning. Ford will continue to make trucks but it believes as Bill Ford does that the market will never go back to its old ways, that the absolute price of oil will have less to do with it than the psychology which will push for smaller more fuel efficient cars. And as he points out its European cars are" extremely well appointed and very, very succesful and extremely profitable"....

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Spiegel Online describes the discontent with the Tsipras government after two years in which it failed to keep promises of reducing the impact of austerity cuts on pensioners. government employees, teachers and other groups. Now riot police buses are situated in the street facing the presidential residence in Athens. In early 2015 after Tsipras won the election the police were removed from the area. German Foreign minister Schauble is for no further concessions for Greece's debt programs till after federal elections in 2017, and austerity cuts continue to affect people in Greece. About 90% of Greeks are dissatisfied with the Tsipras government according to a recent poll. Tsipras had said he would stop privatization projects when elected, now he is moving forward with privatization for airports and other state assets.

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Jonathan Cheng of the WSJ reports from Seoul that the sense of alarm at the escalating rhetoric between the U.S. president and North Korea seen elsewhere is missing in the South Korean capital. A city of 10 million only 45 minutes from the border with North Korea is within artillery range from the North. There is a sense that North Korea would not attack the South because of long ties of culture and ethnicity. The new government of Mr. Moon was elected with its plan to improve relations with North Korea that had deteriorated under the previous government of Mrs. Park. An effort is made by Rex Tillerson, the U.S. Secretary of State to tamp down tensions from the rhetoric. South Korean officials say recent experience shows the Trump administration is capable of making sound policy even with Mr. Trump's tendency to tweet strong comments. The South Korean government urged the media to present the situation without aggravating tensions. In fact the popular online news portal Naver in South Korea did not show the escalation in its top ten trending topics. An earlier report in the NYT shows the use of underground bomb shelters in drills is ignored by many South Koreans. ...

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Jan 22, 2003 in New Delhi, Atal Bihari Vajpayee, who revived Gandhiji's Indian vision for the 21st century, said on the Golden Jubilee of India's Parliament-  "If the 20th century saw the global growth of democracy, the new century should see its further expansion and enrichment. Especially, we should develop democracy as an effective instrument for fulfilling people's aspirations and resolving conflicts and contentious issues. History has proved time and again that free and democratic societies are the ones that are creative, self-corrective and self-regenerative. The holding of regular elections, the victories and defeats of individuals and parties, and the periodic change of governments have many benefits. These make elected representatives accountable; keep the rulers in check if they develop hunger for power; prevent rigidity in governance; and dislocate social and economic interests that would otherwise get vested."   "At the same time, we cannot overlook the many ways in which the Parliamentary system, including ours, needs to be strengthened. All democracies, especially in developing countries that have considerable diversities and carry the burden of developmental imbalances, have had to grapple with one paramount challenge. And that is: how to harmonise the legitimate self-assertion of communities that suffered deprivation and disempowerment in the past with the imperatives of good governance?"   "One obvious answer lies in the need to protect and further strengthen the institutions of democracy. Our ancient seers taught a guru mantra: Dharmo Rakshati Rakshitah. Dharma, protected, protects. In the same way, institutions, protected, protect. They can function well only if each of us adheres to the norms that are the essence of each institution. If we adhere to the norms of our institutions, the effectiveness of democracy would go up ten fold, even a hundred fold. If we don't, it is imperiled."   "There is a second imperative. Our economies are becoming increasingly integrated. The demands of our people are ever more pressing. Thereby governance has become more complex, demanding newer competencies from elected representatives. All parliamentary democracies, therefore, face a common challenge: how are we to ensure that the rough and tumble of electoral politics brings such persons to office who can actually handle the complex tasks of governance?" ...

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Sweden gets a centre left government led by Stefan Lofven, who gets a second term in office. He managed to put together an alliance of centre left parties with the Green Party and Liberal paties after the elections gave 40% of the vote to centre left and centre right and proved inconclusive. Lofven governs without a majority in parliament because the minority government has support form other parties with 77 votes in parliament that abstained. Both centre right and centre left did not want to join with the far right anti-immigration Sweden Democrats. Lofven says Sweden chose a different path than other governments that sought to form governments with anti-immigrant parties. He said "in Sweden we stand up for democracy, for equality. Sweden has chosen a different path." To get Centre and Liberal parties support Lofven promised to cut taxes, reform the rental housing market, and relax strict employment laws.

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The Hulme Company mail order catalog business in Minnesota may not be representative of small business, considering the errors and the scale of the debt taken on. But even if a small fraction of this debt taking tendency is representative of small business, it means that small business will not generate jobs as it did in the past. Small business will actually layoff people. And small business will not be able to provide the bounce the economy will need in years to come. The following is an an anaysis of this venture. The owners of this small business Bidwell and Ms. Guarino bought a luxury goods maker that was losing money for $600,000. Their business was to sell $500 garment bags and $1200 duffel bags. The experience of Bidwell was with Target, Tonka Toys and a cigarette distributor. Ms Guarino had a $130,000 job with a magazine publisher, running regional magazines like Minnesota Parent, which she quit. She had some experience as a handbag designer in California before that. They had never seen hard times, no, they had only seen good times. And were willing to spend heavily on the business like the $600,000 for a business, Hulme Company, that lost $150,000 on sales of $450,000 making duck hunting gear, the business they bought in 2003. All this for a tiny factory employing 3 seamstresses, and with no brand name for luxury goods like leather duffels. Their lender's experience- Kassim who founded Maple Bank in Champlin, Minnesota, considered it pretty typical of small business in those days to do everything on debt and loaned $550,000 over 5 years. So the lender was in for the ride. Another bank Stephens bank loaned on SBA approved loans which were later cut off. Guarino had no experience in this business, and simply relied on Bidwell's experience. The borrowing went on and on from friends, taking in debt with total lack of understanding of what debt means, from their daughter, the entire $50,000 savings of Bidwell's wife, and finally with banks refusing to lend after having friends put up their CD's and collateral on loans. Debt to equity ratio gets to 5 to 1. Second mortgages on the house getting Bidwell and extra $130,000. Even in the best year 2006 sales at $1.4 million, and earnings before taxes and other items at $325,000, not enough to pay the interest and other payments on loans that later totaled $2 million by year end 2007. $500,000 from friends and family including $20,000 from his daughter or two thirds of their savings. 600,000 catalogs went out in 2007. With the Hulme Company behind on payments in 2008, the catalogs mailed in 2008 dropped to 175,000. It is a very capital intensive business from the standpoint of catalog cost. $1 million in inventory at year end 2007, or two thirds of sales of $1.5 million in 2007, was a sign of how expansion preceded even getting the financing in place, and going out into the dark thinking sales wil materialize. So even in the best year 2006 the business was not viable, and would have collapsed even without the financial and credit conditions of 2008, ruining the owners in the process. By 2008 it led to the usual things in this kind of business failure, Bidwell's divorce, loss of his home as he falls behind on mortgage payments, Guarino's loss of job and friends whom she borrowed from, and both deeply in debt. Evaluation of the failure is as follows. Seamstresses and the small factory space could be obtained for a fraction of the cost in an emerging market country, even in an eastern European country, and no cost needed to be incurred for the purchase of Hulme Company or for sending out catalogs. Only travel expenses to meet high end retailers who might carry this merchandise, and go to the country where the plant was setup. Sales would come first, and expansion to meet sales very carefully done so that the plant could be downscaled if sales dropped. Even then scores of small luxury goods makers in China or other emerging market countries could put the owners out of business. The lesson if you can't watch costs, if you don't understand what debt means, then you don't pass the most basic of tests. You cannot run business on savings, home equity or credit card loans, or business loans with personal guarantees. Costs tend to just run up to the money one has artificially created. It will ruin you. If you don't have experience with the business and the product area, or can't put together a group of people with the experience to guide you on the pitfalls and what to watch for, you don't pass the next basic test. Only then does one get to the other tests about whether there is a market, the price and value of the offering and so on. This is before the current economic crisis. Now all these tests become more important than ever, or it will kill you and quickly. One has to be paranoid and very careful after 2008. Stephens Bank loaned money on SBA loans ...

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Toyota CEO Akio Toyoda, grandson of founder Kiichiro Toyoda, assumes new role just as net revenue is down 38% for the second quarter 2009, and a loss of $819 million. Akio says he is extremely frustrated with the situtaion and wants to start again from the ground up. With the restructurings at GM and Chrysler and focussed effort at Ford, efforts of Korean carmakers, and new competition from China and India looming, Toyota expects severe competition in the American and global markets. About 40% of Toyota's senior management has been retired or reassigned.Four of five executive vice presidents are new to their jobs, and only one Takeshi Uchiyamada, the product development chief is left from former CEO Watanabe's team. The outward looking Akio, whose background includes an MBA from Babson college in Massachusetts, and overseas experience including America, is likely to give the relatively insular culture at Toyota, a jolt. Under the new arrangement each of the executive vice presidents has been put in charge of a global region. One of the biggest problems Toyota will face say experts is the mundane looking lineup of vehicles bought mainly for reliability, just as competitors are making big strides in quality and new design, with new technology reshaping what the automobile might look like. The focus on the Tundra truck and SUV's like FJ Cruiser now looks misplaced. Yoshimi Inaba, a Toyota executive with experience overseas, will take charge of the American operations. Inaba says that without N. America, Toyota is unlikely to come back to global proficiency....

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The politicians in Japan are seen as aself-selecting elite, not just the LDP which has been the party in power for mostly all the post war years, but also the Democratic Party of Japan. Mr Ozawa the DPJ leader was from the LDP, and the new leader Hatoyama's grandfather was an LDP founding father. The LDP prime minister is Mr Aso whose grandfather was Shigeru Yoshida, a prime minister after the war. Mr Hatoyama and another DPJ leader are defectors from the LDP, and both have large family fortunes, as do many LDP leaders. Mr Hatoyama has abrother in the current cabinet. And LDP olitical families treat seats in the paliament the Diet, as inheritable sinecures. Actually half of the current cabinet of Mr Aso are offspring of former politicians. So the Economist is pessimistic about the prospects of real change and fresh ideas for Japan from this crowd of politicians. It sees the need for new ideas. The economy has seen asharp decline in exports. Companies like Toyota are seeing a drop in sales. Government debt is twice the annual output, larger than Italy's. Export led growth which was the basis of recovery since 2002 has crumbled. The demographics estimates show that Japan's working age population will fall fastest as its overall population drops significantly in coming decades. This makes the schemes of the LDP like sending back immigrants of Japanese descent to Brazil with no chance of return as a particularly nutty in the light of the demographics. Leaving change to Mr Hatoyama and Ozawa of the DPJ now makes the prospects of new ideas just as elusive as before. And the public is just as disillusioned, considering the very low ratings of Mr Aso and other politicians....

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August 12, 2015 marks the change in shareholding structure at The Economist. Pearson, which sold its stake in the Financial Times newspaper to Japan's publisher Nikkei, sold its stake in The Economist, as it shifted its focus to the education industry. Pearson had a non-controlling 50% stake in the magazine since 1928. Three fifths of these shares are being sold to a minority shareholder, Exor, the holding company of the Agnelli family in Italy. The rest of the Pearson shares are being bought by the parent company, The Economist Group. In this editorial the magazine's editors describe the background in which this takes place, and the reasons why this will be good for the magazine and its independence. The shares held by The Economist Group are controlling shares, which ensure the independence of the publication.

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At the conclusion of the summit of the G-8 the Obama administration had to drag along other countries to get to the $12 billion goal for 3 years of food aid to the rural poor and farmers, which is well short of the $15 billion discussed a few days earlier at the summit. Of this $4 billion a year, the USA will provide $500 million a year. THe $15 billion is itself a floor for such assistance in prior years. says Gawain Kripke, policy director for Oxfam International, "at this point the money is not looking all that good." See the link to food aid for this summit in NYT, Baker and Dugger, July 9, 2009, where the Food and Agriculture Organization says 100 million more people will be pushed into hunger by the global economic crisis of 2008-2009.

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Jack Ewng's interview with Norbert Reithofer, CEO of BMW, in Nov. 2012. Reithofer tells Ewing about the time in 1997- 2000 when he was in charge of the BMW Spartanburg plant in the U.S. Reithofer made a list of problems and presented this to managers. Managers at the plant told Reithofer that in the U.S. the company did not have problems, it had challenges and every challenge was an opportunity. This made a deep impression on him and he sees the current problems in the European auto market in that light. BMW has an agreement with unions to cut production quickly as it did in 2008, if there is a sharp decline in the market. It will continue to invest in R&D, bring out a light weight battery powered car in 2013, and build a new factory in Brazil.