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The transformation of a paper mill in Franklin, Virginia, from making copy paper to making fluff pulp for diapers. The market for copy paper dried up after the recession. A new opportunity was emerging with the soaring demand for diapers in the Asian market. This process of creative transformation takes place in industries in the free market system. Here the change took place rapidly.

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Akio Toyoda and Yoshimi Inaba answer unrelenting questioning by a Congressional panel. Toyoda reafffirms the principles his grandfather stood for in building Toyota. A rare comment by former Toyota executive Jim Press throws light on the struggle going on inside Toyota betweeen the Toyoda family and career managers from the previous two CEO's. Jim Press said that the company was hijacked some years ago by anti family financially oriented pirates as he called the two previous CEO's Okuda and others working for them. And he added these managers lacked the character to preserve the company legacy.

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Discussions in the government about what to do if there is a loss of confidence in financial markets in Fannie and Freddie, and if the companies see default rates on mortgages rise and are unable to raise aditional capital as losses mount.

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"Who are the Taliban? They are the local people," says one Afghan from Marja. Another man Hamza says he will not let foreign forces raid his house. Their is fear and resentment of night raids for antinarcotics purposes. A local leader in Panjwai, west of Kandahar, says people lay mines for the Taliban only to feed their families, and says 80% of insurgents are local people driven to fight out of poverty and despair. Offered another way to lead their lives only 2% would support the Taliban. A leader in the provincial council at Helmand says people do not trust the government as it has not kept its promises in the past, so that even if they are defeated militarily and security is 100% it will take time to restore trust. This confirms earlier reports of the deep unpopularity of the Karzai government. All this reporter Carlotta Gall of the NYT finds out on the ground, in the southern provinces of Helmand and Kandahar, as the USA launches an offensive to push the Taliban back towards Pakistan. In recent years the Taliban has established control over most of Helmand and Kandahar provinces , and many villagers prefer to be left alone without foreign forces causing bombing and fighting. ...

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The Washington Post closes its remaining domestic bureaus in Chicago, New York and Los Angeles. It will cover all domestic news from Washington with travelling reporters. The Post lost $167 million in the first 3 quarters of 2009.

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WSJ says that administration officials are considering aplan whereby on the first day of bankruptcy the government would announce the setting up of a "new GM" with Chevrolet, Cadillac, and good assets as part of it and a separate "old GM" that would hold the bad assets, retiree and health care obligations, Hummer and Saturn. The "good" GM would have responsibility for $20 billion in government loans. THe old GM could stay in bankruptcy for longer till buyers are found for parts of it or as it is wound down, with proceeds from the sales of assets going to creditors claims. WSJ sources familiar with the developments and the administration's views say that the administration prefers this route, and GM will likely will be forced into filing for bankruptcy protection in mid-May. That would be 45 days into the 60 day period President Obama has given GM to come up with a new plan that will work. The submitted plan was rejected by Obama's team on grounds that the assumptions for sales were too optimistic, none of the concessions from bondholders and the UAW that were needed had been made, the Chevy Volt was not going to pe price competitive, and fuel efficient car production was not a critical part of the plan. The government has asked Fiat to scale back its planned ownership of Chrysler to 20%, as part of an agreement for more government loans....

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Eni's investment buying Dominion Resources assets in the Gulf of Mexico for $4.8 billion, and Alaskan acitivity. This balances its investments in areas with more uncertainty such Iran, Nigeria and Kazakhstan.

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Amazing! Just fresh from the foreclosure crisis and as the worst of the foreclosures are taking place between now and 2009 for subprime and other loans homebuilders and home sellers are financing the 3% downpayment required by FHA for loans from the is government agency. What do they hope to accomplish sell homes and have the government foot the bill when these homes also go into foreclosure in a downturn? Already above average default rates for seller assisted down payment programs will make this government agency the Federal Housing Administration ask for a government subsidy for the firtst time in its 74 year history. The FHA will need $1.4 billion next year. FHA estimates that down payments provided by nonprofit groups account for 34% of all 200,000 loans backed by the FHA so far this year, up from 18% in all of 2003, and less than 2% in 2000. And FHA says that borrowers are 2 to 3 times as likely to default on their payments when they receive a down payment from a nonprofit. The reckless manner in which homebuilders are selling these homes is unbelievable, more so in today's difficult economy. See the ads for these homes in this WSJ article and its is shocking. D.R. Horton is advertising 100% financing for 2 and 3 bedroom homes near the beach in Maui, costint $498,000, and a Seattle area builder Quadrant corporation is advertising townhomes for $500 downpayment. Use your coffee budget says a online promotion in the St Louis area! And though the risks are known to housing officials in the government they face a battle from well funded and coaltition of homebuilders, lowincome housing and minority groups. though its hard to understand how a home that ends in foreclosure for a low income group or minortiy group can benefit a minority group. Yet the Black and Hispanic caucus, people in Congress like Maxine Waters and Barney Frank still think it does as they continue to support the lobbying that keeps these kinds of loans going. Two examples given here of a Dick Whitmore and a Gloria Harris one saying it was impossible for him to come up with the $5000 downpayment and the other saying she was living from week to week suggest that they are likely to end up having difficulty making payments. ...

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India's airlines together will lose $1 billion to $2 billion in 2008, twice what they lost in 2007, according to aviation analysts. The airlines face a glut of domestic overcapacity. Until recently therre were 50 flights between Bombay and Delhi with 4 seats chasing each passenger according to Keskar, Boeing vice president in charge of sales in India. Boeing and Airbus are advising airlines in India to delay deliveries of planes so that the overcapacity does no lasting damage and the industry can recover from this as they see India as a boom market in the future. Boeing expects India will need 1001 aircraft till 2027. Reasons for the airline losses are that in the 12 months ending April 2008 passenger traffic increased by only 7%, and in the 12 months before that by 31%, and in the 12 months prior by 59%. Air India is cutting its domestic flights by 15% returning 14 leased jets to their owners as the leases expire and freezing the size of its fleet. Worldwide the airline industry could lose $6.1 billion in 2008 with a third of the losses in the USA. Passenger volumes fell in China for the second straight month in June but China's airlines appear stable because of milder competition and government support....

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Could it be that Russia apart from its support for South Ossetia and Putin's dislike of Sashkavili also had other goals in mind. If alternative supplies were available of natural gas to be shipped from the Caspian area countries to western Europe would this give Europe some independent sources of natural gas, when at this time Gazprom is the major source of natural gas to Western Europe. By acting decisively against Georgia Russia pretty much kills off the idea of additional pipelines that compete with Russian supply and Russia could build its own pipelines and ship the region's natural gas by buying it from these countries. There may be much more to the Russian action than mere cold war type moves because Russia is keen on building itself up economically seeing the growth in the Asian countries.

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The job losses in October revised to 320,000, for September revised to 403,000, and for November 533,000 according to the Bureau of Labor Statistics. The unemployment rate rising to 6.7%, and including the 420,000 who had been seeking work or working but now left the labor force in November , the unemployment rate is close to 7%.