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Pat Gelsinger is right about "fighting for every inch" at Intel for everyday manufacturing chips that make up our lives, to not let market forces swinging wildly in different directions one moment this way the other way the next, decimate American Manufacturing. Regulators have a job to do to protect America's vital interests and of its people. AI surge for Nvidia make it a one trillion company one day and briefly a two trillion dollar company for a day. In 1998 only a small $15 million loan from Iramijiri of Japanese videogame company Sega helped Nvidia founder Jensen Huang survive when it took a hard turn and a design failed. Huang even says in WSJ he would not start the company if he did this again as market forces can be crippling for personal lives as well. What does this all mean? The Biden Administration has a plan to revive America's chip making genius and innovation that has driven America from 40% of the manufacturing of chips to 5%. Intel is right at the heart of this plan. The Chips and Science law will do this including $8.5 billion for Intel manufacturing which Pat Gelsinger is pushing forward for Intel Corp.  Here comes a company that has outsourced Manufacturing entirely- Qualcomm to takeover Intel. It knows nothing about Manufacturing, it cares nothing about American Manufacturing and loss of leadership in Manufacturing, and for the millions of people who work in America in factories and research facilities related to manufacturing design.  ...

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This speech by chancellor Merz to the German parliament the Bundestag, marks a major turning point for Germany since reunification in 1990. This is where chancellor Merz took up the task of Germany shouldering responsibilities in the world for its economic role and for it's role in defence of Europe. Hardly 2 months in office the Merz coalition with finance minister Kingbeil and defense minister Pistorius both of the SPD, and foreign minister Wadephul of the CDU, is setting a new direction for Germany, in a historic moment. Merz says Germany needs to be strong and reliable from now on. Huge new investment for the first time since 1990 sets the path to modernization of the Germany economy and German infrastructure, German defense. Not surprisingly Merz comes not from the professional class of politicians but from business as head of German investment fund for Black Rock. He brings a clear headed common sense approach and has the support of the Social Democrats and the Green Party in its investment program to rebuild the German economy. The media focuses on AfD yet it misses the point that fully 57% of voters back Merz and Kingbeil, that the AfD reached its high point at 20.8 percent of vote with the offset of the Left parties at 16 percent of voters and with Merz's policy on stopping all illegal migration. Merz moved quickly to remove the constitutional debt brake set by Merkel and had parliament pass a budget that supports modernization of infrastructure on a big scale. ...

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Pharmaceutical companies in the US will be required to provide rebates to buyers if they increase prices above the inflation rate. This is one of the provisions in the Inflation Reduction Act of 2022 also called the Climate and Tax bill. Medicare recipients total out of pocket costs for drugs will be capped at $2000 under the Biden bill.

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"This is a very, very, very, big deal," says Chuck Schumer about the Climate Change bill that is expected to pass in the Senate of the US this weekend August 6-7, 2022. This is the biggest climate bill in history, and may also be called the Schumer-Manchin bill after the compromise reached to give oil and gas some support with big moves for climate change action between now and 2030. It gets Biden and the US to within 40% reduction of carbon emissions over 2005 emissions by 2030, when the commitment by the US at COP26 Glasgow is for 50% reduction over 2005 emissions by 2030.

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Bill Gates of Microsoft calls the Biden climate change bill the single most important legislation in US history. He says only America can offer the vision for climate change action, and make it happen. Gates says he has talked to corporate leaders in America and most of them say they are ready to act once the climate change bill is passed. Many of the industries that need to be created are in the early stages and the climate change bill will create the right atmosphere for sustained innovation.

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The US has 124,000 charging stations for electric vehicles. The Biden administration wants to see that go up to 500,000 by 2030. For this to happen $7.5 billion is already going to states under the $1 trillion infrastructure bill of 2021. The Biden $369 Climate bill that passed the Senate last week will give companies that build each charging station 30% tax credit for maximum of $100,000, up from $30,000 earlier, to build one charging station. It costs about $100,000 to tear up pavement and build a conduit for a charging station.

Supply chain issues will linger for 2022 and 2023 with shortage of chips after which it will move much faster says this report in WSJ. For EV's to go mainstream charging stations are a priority.

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What is in the biggest climate bill in history, the Biden $369 billion Climate Bill, also called the Inflation Reduction Act of 2022? The WSJ looks at the bill that passed the US Senate and now heads for passage in the House of Representatives this weekend. 

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President Biden signs the $379 billion Climate bill and tax legislation into law. Mr. Biden told a White House crowd to standing ovation "This is the biggest Climate Bill ever." At the signing event Mr. Biden tells Senator Manchin  "Joe, I never had a doubt." Senator Schumer quietly negotiated the final bill with Senator Manchin in one crucial week just recently to get it through a 50-50 split US Senate.

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As president Biden signs the biggest Climate Bill in history Jim Tankersley says there is still more to be done. In addition to the work remaining for children, women and families, he mentions the Civilian Climate Corps with financing for $10 billion that is patterned on the Civilian Conservation Corps set up during the Depression by FDR, which is still to be passed. This would form "the next generation of conservation and resilience workers," says Biden. Much like the 3 million people who helped build parks, cut trails and planted trees around the US in the 1930's and 1940's under FDR.

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Severe impact on share price of Merck and Schering on criticism of Vytorin and Zetia, Schering's down 26% in one day and Merck's 15%. Have these companies handled the study and its findings in the best way when it comes to winning the confidence of the public and their perceptions.

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President Trump pushes forward with a deal with Mexico so that it can be signed before the new Mexican administration of Lopez Obrador takes over. This means leaving Canada out and having a separate deal with Canada later on. Mr. Trump sees negative connotations in the term NAFTA and would like to call it the "United States - Mexico Trade Agreement." Terms for Canada to join the agreement would be tougher and the pressure on Canada to strike a separate deal was increased with Mr. Trump saying there could be tariffs on imported Canadian made cars. Mexico has accepted revisions to NAFTA that make it harder for Mexico to challenge U.S. trade penalties. Mr. Trump's negotiating position is based on his conviction that the eagerness of other nations to sell in the U.S. market gives the U.S. a lot of clout. Mr. Trump also faces pressure from within the Republican Party to show results not just by imposing tariffs and playing hardball on trade but to come up with new trade deals. Steps taken by Mr. Trump were to impose tariffs of 25% on imports of aluminium and steel, and 25% tariffs on a list of imports from China including solar panels. President Trump hopes to get support from Democrats by including provisions that support trade unions in Mexico and higher wages in Mexico. The provisions also require higher wage labor in the U.S. to build the required U.S. content and are designed to support American jobs and wages in the auto industry.   ...

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This report by David Sanger of the NYT shows how the Russia sanctions that president Putin hoped to remove are likely to remain in place and somewhat expanded. Russia's economy has seen slow growth of 1% as a result of a fall in foreign investment. This is likely to continue, says Sanger. American investment in privatization will be restricted to not more than $10 million, and the investments in Nord Stream pipeline are affected. Russia needs foreign investment in its economy, and this is affected. Sanger points out that even if president Trump and Secretary of State Tillerson preferred the option of having presidential authority to lift sanctions to improve relations with Russia, this now runs into Congressional opposition. At the Aspen Security Forum in mid July, Dan Coats and Mike Pompeo, senior intelligence officials in the administration, said that there was an effort to influence the U.S. election. The problems started with the opposition movement in Ukraine, leading to the collapse of the government in 2014. Before this Russia- U.S. relations followed the trajectory set early in the Putin first  and second term of improving the economy by forging better relations with the EU and the U.S. This resulted in a stronger economy and more foreign investment. Things deteriorated after the Ukraine issue came into prominence. For the U.S., the EU and Russia, an inability to come to a better understanding and resolve differences on Ukraine has created a downward trajectory, that has not benefited any of the countries involved.   ...

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The new government of prime minister Enrico Letta in Italy suspended the summer instalment of the tax on primary residences which was unpopular in Italy. The new government plans to overhaul the tax code this summer to change the way it impacts real estate. This was one of the tax measures taken by the Monti administration. 1 billion euros will go to a wage supplement program, so that companies can retain employees during the economic downturn. Another program to provide business incentives for hiring is being considered. The new government committed itself to bring down the deficit in Italy to under 3% in 2013, which would help keep Italian borrowing costs down.

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The facts that guide one's understanding of what is happening in Greece relate to the size of the public sector for a small country like Greece, and the failure of people from all classes of society from cab drivers and civil servants to small business and the shipping industry, to pay taxes. These two twin facts and a splurge of spending during and after the 2004 Olympics without proper and correct account keeping, has brought Greece to its present situation. One estimate is that every Greek person would owe 27,000 dollars, that is how much the national debt has swollen to- a massive 300 billion euros debt for a small country. This is 115% of its GDP. And the public sector spending simply went unchecked by different governments trying to win votes. Estimates are that the public sector makes up 40% of Greece's GDP, and government workers are 15% of the active workforce. Not paying taxes has become a societal trait in Greece, as a result the government does not collect an estimated 25 billion euros a year in taxes each year. And this does not include the taxes that would be paid if owners in the Greek shipping industry were to not take advantage of an exemption from paying taxes granted by the government. The result- Greece's socialist government of Prime Minister Papandreou has accepted a $110 billion euro bailout from the European Union and the IMF which comes with cuts in public spending and austerity measures designed to reduce the deficit form 13.6% of GDP to 3% in 3 years. Its important to understand what is happening in Greece, because from Prime Minister Cameron in Britain (with his cuts in government department spending of 25% over 5 years), to Prime Minister Naoto Kan of Japan (with a planned doubling of the sales tax), the mood in Europe and Japan is shifting to austerity measures that would correct excessive government spending. In Greece Papandreou and his ministers are making serious efforts to change a culture of not paying taxes. See the groups and links for Papandreou and Greece....

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With 9.5 million barrels a day cut for U.S. G20 and OPEC+ negotiated by president Trump many Texas oil wells will be shut in. Even with these cuts price is sensitive after dropping to $22 by April 12, 2020. The cuts averted a complete collapse in oil prices when markets opened on April 13. By April 12 oil demand worldwide had fallen by 30 million barrels a day. That is how grave the situation was. By doing so the U.S. protected its oil industry. There was complete lack of leadership from Russia, Saudis, Mexico and other countries until president Trump intervened with strong action. Trump threatened tariffs on imported oil to protect the U.S. oil industry if other nations did not come to terms, including calls from U.S. senators telling prince Abdulaziz the Saudi oil minister the U.S. Saudi relationship could not be salvaged if the Saudis did not come to an agreement. Once again president Trump's tariff moves worked, this time to save the world oil industry and oil producing economies such as Russia from severe hardship. ...

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Merkel's leadership as Germany goes through the economic crisis. There is not much enthusiasm for further reforms among the Social Democrats or the Christian Democrats. Other than raising the retirement age to 67, the mood is not for any changes in that direction. The economy will contract by 6.1% but Merkel's decision is not to go in for a big stimulus under pressure from the US, and instead stay with the status quo combined with help to workers for unemployment benefits and for retention of workers by companies. As elections approach Merkel is considered favorably, and according to a recent poll by Forschungsgruppe Wahlen nearly 60% are satisfied with the grand coalition of the CDU and the SPD, 78% think Ms Merkel has done well as chancellor, and 58% want her to remain on the job. Actually Merkel's popularity is behind the CDU's prospects, the CDU itself is popular among only 35% of voters. Her analytical habits from her training as a physicist show in the way she is governing, which is thoughtful, and connects well with voters. Merkel benefits from the reduction in unemployment. Unemployment fell from around nearly 5 million in 2005 to around 3 million in 2008. The risk is that Merkel's popularity may be affected by an increase in unemployment to 5.1 million from the averaage of 3.3 million in 2008, according to an OECD estimate. Merkel stands behind a German response to the crisis which is to support the priciples of a social-market economy, make unemployment as least painful as possible to the jobless, to keep every job that can be saved in the nonfinancial sector with a 115 billion euro "Germany fund" providing guarantees and credits to companies that are in trouble because of the credit crisis. Stimulus packages of 64 billion euros supported the auto industry with subsidies to car buyers, and subsidies to keep workers intheir jobs. The idea was to come up with a German version of the response to the crisis by balancing the need to respond based on German conditions, and the concerns for inflation and the budget deficit, that is shared by most Germans. THe vision offered by Merkel is that of a physicist daughter of a protestant minister in East Germany, who is low on the rhetoric and good on substance, and willing to make decisions based on careful study and discernment rather than ideology, without sharp swings in any direction. Her vision comes from her days as environment minister, which is quietly pushing Germany into the forefront of countries developing renewable energy, moving ahead in energy efficiency, with anational goal of cutting emissions by 40% by 2020. The other areas are immigration and education, both key to the future of Germany because of the huge demographic change happening there. She has afamily minister Ursula von der Leyden, who introduced "parents pay", a14 month stipend for parents of newborn children linked to salaries, and to to improve daycare by providing places for 35% of children aged three or less by 2013. And Merkel has approved 18 billion euros of additional funding for research and universities. Says Leyden Merkel has made "daycare" an acceptable term in the CDU, and made Germans accept that they are an immigration country. Which tells you that you have to look closely to find the reasons for Merkel's popularity, which does not carry the rhetoric of an Obama, but is just as effective in German conditions. There are deepseated demographic changes going on in German society, which require a cultural change, and change in mindset, such as that for daycare, immigration, and blending the best of the old in the social market economy with the new like the changes in the educational system. The Economist says that in big cities today nearly half of the children under 15 are immigrants or their children and grandchildren, who are more likely to be poorer, unemployed and with less education. ...

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Ewen Macaskill of the Guardian travels on the bus with Jeremy Corbyn through the east Midlands region of the UK. He describes how Corbyn is handling the negative media coverage from the Daily Telegraph and the tabloids. Corbyn's response to the demonization by the tabloids underway for the last two years is that he does not let it get to him. He does not respond to personal attacks, including ones made by Theresa May, because he says it means he would have to descend to that level. "It actually devalues yourself and the process," says Corbyn. He is not stressed, says Corbyn because it would do him no good, and no good to the people around him who are putting in their best to support Labor in this election. Calm, composed, is how this reporter sees Corbyn on the trail. This means not following the latest polls but staying focussed on the goal and the day ahead. As a result the people who had only seen him through the negative image projected in the media are now becoming endeared to him. Little things count, whether the campaign workers are getting their tea and coffee, and looking for a knife to cut a chocolate brownie cake given at a prior event. Calm, composed, not letting comments or the pessimism affect him, as he is in his words "there for the long haul." This is true for the way he is careful not to allow intrusions into his family life, that would affect his wife Laura Alvarez and three sons. This is the way he has come across during his first day as Leader of the Opposition in parliament, and during the event where he launched the Labor manifesto. Preferring simplicity and ordinary life he prefers public transport, simple layout in the campaign bus, and if elected he says he would prefer to remain where he is instead of the house at 10 Downing Street. Corbyn is 68, but after the way he has tackled the challenge facing Labor, the graceful attitude and dignity needed especially today, he is likely to be around for much longer. ...

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Peggy Noonan describes the Trump candidacy for the Republican presidential nomination in 2016. She points out that this is a result of the public discontent and dissatisfaction with politicians, and government, which is seen as not able to get things done. She talks to one Tennessee woman in her 60's who describes in detail why she supports Trump. Trump has touched a chord with many voters because of how little they trust politicians in general, Republican, Democrat, or Libertarian, or some other type. As with the UK Independence Party this type of leader taps into resentment of illegal immigrants. In France, Spain, UK and other parts of Europe fringe parties are drawing increasing support because voters have lost faith in existing mainstream parties. In the U.S. this takes the form of discontent expressed through a fringe candidate within a mainstream party itself. Voters put up with inconsistent positions, extravagant claims and charges, just to have an alternative. And Noonan points out that this is not going away anytime soon. As 2016 comes closer the UK election offers some insights- it was thought initially that UKIP would split the Conservative vote, but the elections showed UKIP splitting the Labor vote in the north of England. Voters distrusted mainstream politicians, in the final result they distrusted Labor politicians more. ...

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Blackston and Karnitschnig describe the European Central Bank's role in the current crisis and buying of bonds of troubled eurozone countries. And the resistance in Germany to the ECB's purchase of bonds of eurozone countries to prevent contagion effects in the eurozone. ECB President Trichet only reluctantly pushed the ECB into bond purchases in the recurring crises, and saw the ECB's role as strictly limited to controlling inflation and maintaining a stable euro currency. There is resistance in Germany to the ECB printing money to cover eurozone debt of Greece, Ireland, Italy and Spain. This comes from the searing experience with hyperinflation, an economic crisis similiar to that of the U.S. with the Great Depression, when the Reichsbank printed money in the 1920's to buy large quantities of government bonds. The Bundesbank that ensured Germany's postwar recovery focussed on a single mandate to control inflation, and this is a key part of the ECB's charter. The first president of the ECB when it was founded in 1998, was Dutchman Wim Duisenberg, who would tell politicians: "I hear you, but I don't listen." When Frenchman Trichet became the second ECB president, he focussed on inflation fighting efforts. He warned against the extravagant spending and fiscal irresponsibility of some eurozone countries saying "we are dancing on a volcano."...

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The risks to the Romney campaign in the U.S. Republican primaries after his work at Bain Capital comes under scrutiny. In the 1994 Senate election in Massachusetts Senator Edward Kennedy defeated Romney by focussing on the loss of jobs at companies acquired by Bain Capital. Kennedy's television advertising showed employees at Ampad who lost their jobs after a takeover by Bain Capital. A study by Stephen Davis of the University of Chicago, John Haltiwinger of the University of Maryland, Jos Lerner of Harvard, Ron Jarmin and John Miranda of the Census Bureau; looks at 3,200 buyouts between 1982 and 2005. It shows private equity firms shrinking the number of employees by about 6% more than other firms in the first 5 years. It also shows the firms largely offsetting the job losses through the firms that succeed and are expanded with new employees. This study does not look at a longer time frame. A recent examination of buyouts by Bain Capital over an eight year period by the Wall Street Journal gives a better picture because some of the firms went into bankruptcy during the 8-10 year time frame. Many of the jobs added are in the retail sector with lower wage levels- at Sports Authority, Staples, Toys R' Us, and Michael's for Bain Capital. ...

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Ben Inker of Grantham Mayo sees profitability at U.S. companies at a high because of savings in labor costs while consumption has not declined because of government transfer payments and fiscal policy. He sees profits of U.S. companies declining in 2012-2013. This makes the U.S. stocks less likely to perform well in the future, especially the stocks outside of the blue chips which he sees as highly overvalued. A better choice in his view is in Europe and Japan which are undervalued. His funds have 39% in U.S. stocks and most of it in blue chip stocks. His view is that interest rate policy will not have a large effect as the changes will be very gradual, and going from zero percent interest rates to one percent interest rates will not lead to much change in economic activity. From his point of view the largest risk is in shrinking of profits at U.S. companies as the deficit comes down, because today workers are able to maintain consumption because of fiscal policy and companies are able to cut costs. In Europe the austerity cuts are being taken seriously and this will impact profits, so the U.S. will look better in 2012. But value will prevail in the long run as European and Japanese stocks are undervalued and the U.S runup leaves stocks overvalued in terms of future stream of profits....

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Indonesia continues to experience surging growth in consumer spending as more people enter the middle class and buy everything from motorbikes, consumer appliances, mobile phones and other products. It is similiar to the growth in China and India. GDP increased by 6.5%in 2011, and most of the growth comes from consumer spending. Mr. Riady of the Lippo Group says spending is growing to unprecedented levels. About 50 million people in Indonesia are in the middle class out of a population of 250 million- when measured at the level of $3000 per year incomes- and this will grow to 150 million by 2014, according to PT Nomura Indonesia. Another important demographic fact is that the average age of the population is 28.2. Motorcycle sales doubled to 8 million in 2011, twice that of 2006. Mr. Riady of the Lippos Group says its home sales are expected increase to $450 million in 2012, up from $100 million in 2010. Sales at Lippo Groups hypermarkets are expected to go up by 40% in 2012 and sales at its department stores increase by 25%. Lippo Group plans to add 10 new hospitals each year, to the 14 it plans for yearend 2012. Philips Electronics NV says healthcare equipment sales in Indonesia will quadruple in by 2015. This pace exceeds that in India and China for Phillips Healtcare....

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The home ownership rate for the U.S. in March 2012, is 65.4%, the same rate as in 1997 before the housing bubble, according to the U.S. Census Bureau. The irony of this is that the housing bubble was inflated by politicians in Congress and mortgage lenders and purchasers of mortgage securities. Fannie Mae and Countryside worked together ostensibly to promote home ownership while pursuing profits. In the case of politicians they pursued goals of raising employment and growth without understanding the risks of artificially inflating home ownership, and without consideration for incomes of subprime borrowers. A less benign view of the interests and goals of politicians comes from reflections on the impact of political lobbying by Fannie Mae and other housing lenders in the U.S. Congress. The consequences in terms of foreclosures have been devastating for minorities as well as other middle class homeowners. It has also damaged the U.S. banking system, credit growth in the economy and prospects for recovery, which will take years to correct. The federal government is also saddled with large losses at Fannie Mae because of its quasi government agency role. That role led to inflation of the bubble. Most of the consequences will be borne by middle and lower income households in the U.S. The pass-through effects in a global economy affect Europe, and emerging market countries. ...