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Jorg Asmusen, member of the executive board of the European Central Bank, and Jens Weidmann, president of Germany's central bank, the Bundesbank, argue on opposite sides before the German Constitutional Court in Karlsruhe. Weidmann says the bond buying of sovereign bonds of Italy and Greece by the ECB is unconstitutional, Asmussen defends the ECB's plan to lower the borrowing costs for Italy and Spain in 2012. Both Asmussen and Weidmann are students of Manfred Neumann, professor of Economics at Bonn University. Neumann says such action is unconstitutional. The Federal Constitutional Court takes public opinion into account in its rulings.

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Couple of things stand out. First an aging workforce at the oil companies. At ConocoPhillips half of the workers are eligible for retirement in 5 years. According to the Society of Petroleum Engineers about 40% of petroleum engineers are over 50 today. This also means that they are higher paid employees and takes up more of Conoco's budget for exploration of $11 billion as a compared to a younger workforce. What the industry needs is lots of people to do the explortation and drilling jobs from construction labor to project managers, to geologists and petroleum engineers to geoscientists. About half a million petroleum related jobs were lost between 1982 and 2000 when the oil industry had low prices and plenty of supply leading to large layoffs. During 1982 to 2003 petroleum related undergraduate programs saw enrolment drop dramitically by 85%. Now the industry is paying the price with severe people constraints when demand has picked up. Cambridge Energy Associates estimate is that there would be about a 10-15% deficit of people even a few years from now in 2010 because it takes time to turno out new engineers and geologists. Today there is big interest on campuses in petroleum engineering and petroleum related fields. Its the highest paid field for college grauates at $68,000 average and at schools like Texas Tech its $100,000 average. Still only 3700 petroleum engineering students are enrolled on campuses compared to the peak of 11,000 in 1983 so there is some hesitation about this field because of the cycles of ups and downs. The novel approach that oil companies are adopting of turning to the auto industry and to academia to fill the people needs is worth watching because here are 2 industries going in opposite directions and whereas one has a shortage the other has qualified people who have no opportunity, a shift makes sense and training to make that shift makes a lot of sense. The Association of Drilling Contractors has teamed up with Ford Motor Company to hold a career fair to attract auto employees who are subject to buyouts....

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A major change is taking place. Automakers around the world are shifting to smaller engines. Hyundai's Sonata for 2011 and the Tucson crossover for 2010 are going to have only 4 cylinder engines. Many V-6's offered by Detroit carmakers are being replaced with 4 cylinder engines and V-8 with V-6 engines. Ford is using the EcoBoost a turbocharged V-6 to offer new options for its Taurus, Lincoln MKT and other cars.

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President Medvedev of Russia talks with Novaya Gazeta editor Dmitry Muratov for over an hour at the President's residence. The paper specializes in investigative journalism and has been critical of the control of media and politics under Putin. Four of Novaya Gazeta's reporters were killed or died mysteriously in the past 9 years, with the last Anna Politkovskaya. But Medvedev did not go beyond offering lawyerly answers according to the report. A Russian talkshow host says Medvedev can talk nicely, but can he act, and is there followup. Others see the move as a way to reduce tensions at a time of economic suffering of the people from the impact of the 2008-2009 global financial crisis.

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The U.S. and the EU join together for stronger economic sanctions on Russia. The sanctions affecting large Russian banks ability to raise capital in financial markets are likely to affect the Russian economy. Russia was suspended for export credit and development finance. VTB Bank was one of three more Russian banks added to the list of banks with economic sanctions. The EU took similiar action against Russian state owned banks and imposed an arms embargo in July end 2014.

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Problems that may be unfixable for the Afghan national army, and for which no increase in foreign trainers could make a difference. About 3% of the army recruits are from the Pushtun south, the main part of the country, where the Taliban are strongest. Officers from the northern areas have to use translators in the Pushtun south, a bad sign. And there is a shortage of officer talent. Gereral Caldwell who is working on training the army, says he was appalled at the emphasis on quantity not quality- the Afghan army has reached 134,000 in numbers. The ratio of instructors to recruits ranges from 1 to 80 to 1 to 466. It will cost $11 billion to maintain compared to an estimated $1 million per American soldier each year. Even if training problems are fixed, having 3% of recruits from the major Pushtun part of the country where the fighting is being done, simply makes the overall problem unfixable. See the group - Defense Department biannual report on Afghanistan, for related insight.

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Shiller points out that statistical models used by economists can't quantify the risk of a double-dip recession. Confidence indexes show gradual trends so they too are poor at picking up the dangers inherent in the increasing levels of uncertainty and the increasing vulnerability of confidence in the economy. The potential of sudden events in derailing confidence is great. He cites the 10 percent drop in the U.S. stock market on May 6, as one example. And the potential of the BP oil spill creating havoc for the Gulf economy is another such event. Shiller says his definition of a douple dip recession looks at the long term, and doesn't see the short term as a way to correctly read the economic situation. He sees a douple dip recession as a rise in unemployment to high levels, and becomes sticky after that, only nudged down insignificantly. Before unemployment can be brought down a second recession occurs, and there could be years in between. Shiller's Buy-on-Dips stock Market Confidence Index prepared since 1989 shows a steady decline in individual investor confidence since 2009....

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Friedman describes the lack of decisionmaking, initiative and courage in the Eurozone, India and China to tackle difficult problems. During his visit to India he describes the problems India faces. A serious problem with lack of good governance within the democratic framework. India also has a growing population that will soon surpass China's population, which makes the task of development that much harder, with the small steps India is taking to move forward not making a serious impact. Azim Premji, chairman of Wipro, described it this way: "There is a complete lack of decision-making among leaders in the government. If prompt action is not taken, the country will face a setback. You must appreciate how serious it is." Friedman sees a similiar situation in the eurozone countries as new governments are being formed in Greece and Italy by Papademos and Mario Monti, both technocrats from the European Union. This has the added complication because these experts have not been elected. The fact that they have support and goodwill is because of the failure of the political class in Greece and Italy. The failure of the political class in the U.S. is evident from the stymied negotiations over the deficit, and the lack of leadership from President Obama....

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After 5 months as president of Egypt, Mohammed Morsi, issues decrees giving the president powers to dissolve the current deadlocked constitutional assembly. Liberals and Coptic Christians in the constitutional assembly had walked out in disagreement with the majority of about 75% appointed by the newly elected Egyptian parliament, which has an absolute majority for the Muslim Brotherhood party of Morsi. The deadline for the constitutional assembly completing its work was extended 2 months. A key demand of the opposition was that the work of the constitutional assembly was being rushed. Morsi also replaced the Mubarak appointed public prosecutor with Ibrahim Talaat, a leader for the movement for judicial independence, and ordered a new trial of Mubarak and others involved in the death of democracy protesters. The decrees were announced just as a ceasefire arranged by Morsi and U.S. president Obama has taken effect in the Israel-Gaza conflict. Morsi placed his actions above judicial oversight saying they were temporary. This came under heavy criticism from the opposition to Morsi in Egypt, as a threat to the gains from the hard fought freedom fight by creating a situation where too many powers are concentrated in one person....

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The worst flaw in the health care bill says the Economist is that "fee for service" and doctors billing for each test done continues as before.The whole idea of medical services based on medical necessity and value for money has been left out of the billsin Congress. Alan Meltzer also pointed this out in his discussion of the deficits and debt over the next decade; that the 25% reduction in medical expenditures does not look anywhere closer to reality, worsening the deficits. This is also the view expressed in the discussion of health care reform in the November 2, 2009, issue of Business Week. Never mind said BW that the doctors and hospitals account for one third of medical expenditures and there is waste in Medicare spending. Congress said BW has made no changes in the "fee-for-service" system of medical care that has inflated medical costs, by paying doctors for the volume of services delivered and not the quality of services delivered.

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A Syrian opposition group describes the mislabeling of opposition groups in Syria by the Obama administration.

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Sheila Bair says she fears the next crisis will start in Washington. Bair points to the need for urgent action along the lines recommended by the Bowles-Simpson Deficit Commission. Areas identified by Bowles-Simpson should be tackled as early as possible, she says - tax subsidies for housing and health care that lead to misallocation of resources, defense spending, special-interest provisions. She points out that the increase in the deficit is a result of the unwillingness of governments over the last two decades to make the hard choices necessary to control the structural deficit. Total federal debt doubled in the last 7 years, to almost $14 trillion, or about $100,000 for every American household. Bair, as Chairman of the FDIC, played a critical role in the efforts to control the US financial crisis of 2008-2009. Relentless federal borrowing she says, undermines the confidence private investors have in US government obligations. The cost for bond investors and others to purchase insurance against a default by the US governmet went up from 2 basis points in January 2007 to 100 basis points in early 2009, and is now at 41 basis points. With 70% of US Treasury obligations held by private investors scheduled to mature in 5 years, a decline in investor confidence would lead to higher government and private borrowing costs. She writes this just as the debt crisis in Ireland is taking place, following the one in Greece, and contagion to Portugal and Spain is feared. Bair fears a similar loss of confidence in US public debt. High and volatile interest rates could lead to losses for financial institutions holding Treasury debt and raise funding costs for depository institutions....

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Inherent conflicts between views of Reidel, Biden and other policy advisors such Richard Holbrooke, all wary of Hamid Karzai's government in Afghanistan and General McChrystal -whose experience in tactical strategy was his strong point, not an overall perspective that took into account factors outside US control such as the people, their history, recent history, the terrain, lack of viable government, neighboring Pakistan- spill out into the open. Holbrooke, the special ambassador to the South Asian region has serious differences over Karzai with ambassador to Kabul, Eikenberrry, and with Jones, National Security Advisor. Eikenberry has his own differences with Karzai. See the group "Eikenberry Cables," which provides his cable reports from Afghanistan which talk about Karzai, the Afghan military, and the prospects there, in bleak terms. The same Eikenberry is shown here telling Jones that Holbrooke's chilled relations with Karzai are not helping, and Jones assuring Eikenberry that Holbrooke is on the way out. Followed by Secretary of State Clinton supporting Hilbrooke by talking to Obama. See also the group "April 2010 Biannual Defense Departmet Report on Afghanistan," which shows that of 92 districts surveyed none supported the Karzai government, somethig that must cause policy team members to pause and think....