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Much of the cost for Canadian oil sands are fixed costs and once these costs are incurred production increases can take place over decades say Canadian oil sands company executives. CFO Corey Bieber of Candian Natural, says costs at it large Horizone mine are at $37.13 Canadian dollars per barrel in Jan 2015. He expects to cuts costs by at least $10 Canadian dollars per barrel by higher volume production cutting the operating expenses. Increasing production says Bieber does not mean adding people. As a result most of the Canadian oil sands producers can operate at oil well below US$47 a barrel, as low as $30, and are increasing production in 2015. This means Saudis will have to face competition from Canadian oil. It also means the Keystone pipeline will still be needed to transport Candian heavy oil to Gulf Coast refineries in the U.S. Suncor, the largest Canadian oil-sands producer, is increasing capital spending to C$7.2 and output by 11% in 2015. Canadian Natural is increasing production by 7%, and Syncrude Canada Ltd. is planning a 6% increase for 2015....

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Mark your calendar for May 29 when You Tube will host screenings  of the virtual film festival from multiple locations- Cannes France, Venice Italy, Berlin Germany, Toronto Canada, and New York. This is the "We Are One- Global Film Festival," with virtual cinema program for 10 days with feature films, documentaries, shorts and round tables. Films can can inspire and bring people in different countries together in a useful virtual format combining many of the best film festivals worldwide.

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In a new twist drugmaker AbbieVie will bring out less costly versions of Humira in Europe where its patents have expired and still keep the U.S. market at higher Humira prices using a thicket of patents. Reports show pharmaceutical drug pricing as a major issue in U.S. midterm elections. Biologic drugs are costly. In this case Humira will sell at a 10-20% discount in Europe. Abbie Vie countered by getting hundreds of new patents in the U.S. to continue selling at high prices.

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The Congressional Budget Office says the U.S. is likely to experience "a significant recession" if Congress does not prevent tax increases and spending cuts setup for January 2013. If the Bush era tax cuts expire as scheduled at the end of 2012, these tax increases and spending cuts of $100 billion on military and other programs would reduce the deficit in the fiscal year ending Sept 30, 2013 to $641 billion from the $1.13 trillion level at fiscal year end Sept 30, 2012. The impact would be to reduce the budget deficit from 7.3% of GDP to about 4%. The result- a contraction in GDP by 2.9% in the first half of 2013, and 0.5% for the full year, and unemployment would rise to 9.1% at the end of 2013 from about 8% today. If Congress postpones the tax increases and spending cuts the deficit would be at $1.04 trillion or 6.5% of GDP and unemployment would remain at about 8% at the end of 2013. A 9% unemployment rate with the "fiscal cliff' means 2 million fewer jobs. Romney's plan is to extend all the Bush era tax cuts for 1 more year and no spending cuts till he has a chance to make hs own review on spending cuts in 2013. Obama's plan is for extending all Bush era tax cuts except for those earning more than $250,000- resulting in savings of $2 billion in 2013 and $824 billion in 10 years- and making smaller spending cuts than Romney....

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Russian and China sign a contract for Russian natural gas from undeveloped fields in Siberia during Putin's visit to Beijing in May 2014. The 30 year contract is for about $400 billion. China gets natural gas at prices about 25-40% below the current cost of importing liquefied natural gas from Australia, Qatar, Malaysia and other countries, according to RBC Capital Markets. For the last decade China and Russia have failed to agree on a price. In these negotiations a price was reached but is being kept a commercial secret. China imports large amounts of natural gas by pipeline from Turkmenistan at about $10 per million British Thermal Units (BTU's). Gazprom needs about $12 per million BTU's to break even. The two Siberian fields are the Kovykta field and Chayanda field which would remain undeveloped without the deal to supply China. Russia will spend about $55 billion for pipelines and infrastructure on its side, and China $20 billion. China's needs for natural gas were 170 billion cubic metres in 2013, growing to about six times consumption of about 30 billion cubic metres in 2000, according to China's NDRC. This is expected to reach 420 billion cubic metres by 2020. Currently 17.7 million metric tons come by pipeline mostly from Turkmenistan and 15.5 million metric tons of LNG mostly from Qatar and Australia, according to China General Customs Administration. The deal will put on hold higher cost LNG projects for Asian countries and make mores gas available at reduced prices in Asia, according to analysts....

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Vernon Smith asks the question why when $10 trillion in losses were experienced in equities in 1999-2002 the financial system did not collapse, and in 2008 losses of $3 trillion in mortgages held by homeowners resulted in a collapse of the financial system. In the 2002 period the losses, he says, were borne largely by institutional and individual investors who largely owned the assets outright. In the 2008 crisis homeowners purchased about 90 to 100% of the housing assets on margin, and declines in value of 50% or more in the low price tier were seen for homes bought at the peak of the bubble. These losses were transmitted to banks and lending institutions. The consumption binge added to the debt of households. The result is that lending went down sharply for durable goods consumption, and this is seen in the decline of auto sales of 41% from Feb. 2008 to Feb. 2009. The collateral damage then occurs in retail and labor markets. This is similiar to how Ben Bernanke viewed the Great Depression crisis in an important paper- the inability of the financial system to perform its economic role of lending to households for durable goods consumption and to companies for production and trade. This understanding is different from the Friedman view of a contraction of the money supply, and the view that excessive speculation caused it. Bernanke's experience studying the causes of the Great Depression uniquely qualified him to address the causes of the global financial crisis of 2008....

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Under the Energy Independence and Security Act of 2007 the government is authorized to give upto $25 billion in low interest loans to auto companiesto retool plants to make smaller fuel efficient cars. Lobbyists for the auto industry are trying to increase that to $50 billion. The package of loans is presented not as a bailout but as a way to offset some of the $100 billion it is estimated it would cost the industry to meet the new fuel economy standards enacted in that bill. GM's 7.2% bonds due 2011 were trading at 64.25 cents on August 27, 2008, translating nto a yield of 29% for that debt. In the credit default market it costs $4.5 million upfront and 0.5 million anually to insure $10 million of GM bonds for 5 years. The govenment loans at 4-5% would cost significantly less as borrowing costs are very high for automakers at present. Both Senators McCain and Obama see Michigan and Ohio as crucial to a win and support the loan package. It would cost $3.75 billion in insurance costs for the $25 billion loan package. Because of the automakers precarious financial condition and no improvement in consumer demand or in financial markets in sight in the next 2-3 years as a plausible scenario, and more losses looming for automakers, this package may turn out to be a crucial element in the recovery of the American auto industry and in turning over almost America's entire fleet of cars on the road into more fuel efficient cars....

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The Impossible City Paris in the 21st Century by Simon Kuper is reviewed in the Washington Post. It shows the incredible revival of the French capital and its suburbs as France has done an exceptional job of preparing the city for the Olympics. No other city has done so much for its population. Martin Gelin says after visiting the city now compared to 4 years back- parking spaces have become cafe patios, heavily trafficked boulevards bike lanes, new bookstores and galleries popping up everywhere, the city building sports and cultural facilities in neglected neighborhoods. Attention to social housing and huge expansion of public transit. Car traffic halved so air is cleaner than in 1990's. Paris is different from New York and London- it is avoiding "plutocratisation" of the city so that the best spaces do not go to banking and finance. In Paris the social housing units have tripled since 1990's including in 13th, 19th and 20th arrondisements. Paris does not want to become a city of millionaires,  tourists and poor people like San Francisco, says Kuper. Anne Hidalgo, Mayor of Paris wants 30 percent of all Parisian homes to be social housing by 2035, and another 10% as affordable housing (with rents  at least 20% below market rates). Grand Paris project will create 68 new subway stations so all of Metropolitan Paris is within 10 minute walk to a subway station. Diversity can be seen and it creates a healthy human experience in cities so that people are less likely to act with prejudice. ...

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In an interview with the Wall Street Journal Deutschland, Hans Werner Sinn, head of the Ifo Institute in Germany, says Greece's bondholders are overly exaggerating the effects on the eurozone of an exit by Greece. He sees it in the best interests of Greece to improve its competitiveness and return to growth by going back to the drachma. Just to get to the level of Turkey Greece would need to reduce prices by 31%, which is impossible to do within the eurozone without risking a complete breakdown in civil order. The best way to use the 130 billion euro second bailout package is to use it to recapitalize its banking system, says Sinn. Sinn says Portugal's faces the risk of a debt crisis following the crisis in Greece.

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Wal-mart has a$10 promotion for the top 10 books coming out in November, and it is selling 200 bestsellers for 50% off of their list price on Wal-mart.com. Amazon responded by matching this price.

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European banks have been slow to get rid of risky assets such as collateralized debt obligations, subprime mortgages and other risky assets after the 2007 financial crisis. As a result sixteen top European banks hold 386 billion euros of suspect credit-market and real estate assets, according to Credit Suisse analysts. The Royal Bank of Scotland has 79.6 billion of assets dating from the 2007 financial crisis. Over the three year period since the 2008 financial crisis, the top three U.S. banks shed 80% of this type of risky assets, compared to 50% for European banks. The four largest British banks have reduced these risky assets by more than 50%, and four French banks have reduced these assets by only 30%. At 29 billion euros, French bank Credit Agricole had the largest amount of such risky assets among the leading French banks. This adds to the difficulties facing French banks which also have large amount of loans to customers in Greece and Greece's sovereign bonds. Deutsche Bank has 20.2 billion euros in commercial mortgages and whole loans and 2.9 billion euros in U.S. residential assets including subprime loans. Mediobanca analysts estimate that Deutsche Bank's exposure to such assets is more than 150% of its tangible equity....

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The advanced technology on the Noble Bully 1 oil drilling rig in deep waters 140 miles south of New Orleans. It is jointly owned by Shell and Noble Corp. The technological improvements on the rig could only have been imagined a few years ago. A Eiffel tower shaped structure is completely enclosed in the rig compared to open derrick structures used on earlier rigs. The technology includes GPS, wind sensors, motion sensors, hydraulic systems, computer controlled thruster propellers on the bottom of the vessel to drill wells with precision. It can operate in water 8250 feet deep to 12,000 feet with safety upgrades, and upto 40,000 feet. A similiar ship Noble Bully 2 operates on the coastal part of Brazil. A new platform called Olympus will be a tension leg platform floaing on the sea like a cork, held together by tying it to the ocean floor using cables. The project is called the Mars B development. New sensors use seismic technology with devices closer to the ocean floor in the Gulf picking up data. The data is sent to Shell scientists working onshore and produces four dimensional maps of oil reservoirs using computer chips. The cost savings for the smaller structure include less steel and less fuel used, zero toxic emissions, and operating with 160 workers- 40% less workers than previous rig designs. Veteran drillers say its a lot better working environment and lot safer. Chief drillers sit in "drill chairs" and adjust the speed and direction of drill pipes using joy sticks and computer screens. It is this kind of technology that countries like Mexico, Brazil, Argentina and India need to develop their off shore oil fields, creaing new opportunities for oil companies such as Chevron, Shell, BP, Exxon and Total. The new technology equiped drilling ships, platforms and LNG processing ships are a way for Shell to reduce costs and improve capital efficiency, the new focus for CEO Van Beurden in 2014-2015....

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Kyle Wingfield meets up with Robert Mundell, Nobel winner in 1999. What does he have to say now? He thinks the oil prices are on track and would reach $130 by 2020 with 3.5% inflation, starting with $34 a barrel in 1980 doubling to $68 in 2000 and doubling again to $136 in 2020. Today its already at $136 but he thinks it will settle down lower to about $100, so hethinks were not so far off track. On inflation he looks at the price of gold at$850 an ounce , and now its still about the same, with high inflation gold should be at $1500, so he does not see the public thinking high inflation is coming. He was in favor of the Reagan tax cuts and set the groundwork for this and aslo supported the euro. He believes the Bush tax cuts should be kept as it would be disastrous for the world economy. Mundell has always believed that there is a link between economic growth and lower tax rates. He advocates corporate tax rates of 25%. Tax rates went down to 28% under Reagan back up to 40% under Clinton and down to 35% under Bush. Hewould like to see a ceiling on marginal rates of 30%. He would like to see a fixed exchange rate so that there are not these large currency rate swings, the euro should be valued somehwehere between 90 cents to the euro to $1.30. The US has a growing population and better adoption of innovation with a younger population than Europe so he sees the USA as a leader in innovation and growth and the dollar or some new global currency should be formed for a global economy. Just as he supported the euro he supports a currency for Asia. He does not see overvaluing the Chinese currency as doing much good as he sees the Japanese economy hurt by the overvaluing of its currency after a period of Japoan bashing. He is an advisor to China on currency issues....

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Saudi Arabia needs current oil price of $60 a barrel to move up to $80 a barrel to balance its national budget. To do this OPEC needs to coordinate its oil production cuts with a group of 10 countries led by Russia that includes Mexico. These countries include countries in the former Soviet Union.  In December cuts of 1.2 million barrels a day were coordinated between the 2 groups to push up oil prices. Now the OPEC cartel plans regular meetings with the Russian led group to push up oil prices. Under a draft document an alliance between the 2 groups would last 3 years and include regular meetings. Earlier Prince Salman led Saudi government proposed replacing OPEC with a new group combining Russia and Saudi Arabia and the other countries in OPEC, yet giving most of the decision making power to Russia and Saudis. This was rejected by Russia and was received poorly by Iraq, Iran  Nigeria, Angola, Algeria. The Iraqis reminded Saudis that OPEC was started in Baghdad. ...

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The House bill on health care cleared the House Committee on Energy and Commerce with a vote of 31 to 28. Five Democrats joined all 23 Republicans. Compromises were reached with Blue Dog Democrats, centrist Democrats who had concerns about the cost of the health care overhaul. The bill will be taken up again in September after the August recess, when Congress will be faced with the task of recociling the House and Senate versions and reaching common ground on a number of proposals. Some common ground has already been achieved between centris and Blue Dog Democrats and Democratic members who support Obama's proposals. Among the changes on which consensus was reached in the House version: 1. Access Insurers will have to accept all applicants and will not be able to charge higher premiums because of medical history or current illness. All insurers will have to offer a minimum package of benefits, to be defined by the federal government, and nearly all Americans will be required to have insurance. Insurers will have to get prior approval from the government before increasing premiums over a certain amount. About 95% of Americans will be covered this time. The cost will still be approaching $ 1trillion over 10 years. Federal subsidies will be given to those who cannot afford health insurance and Medicaid coverage will be expanded. And the insurance will be made more affordable for the uninsured. Democrats also reached a consensus on creating some sort of government insurance plan or nonprofit cooperative to compete with private insurers. 2. Mobility And under this new plan it will be easier to change jobs as one would retains one's health insurance. This should actually help the job market, and help promote the mobility that is needed, now that jobs are shifting out of sectors like autos to sectors like energy. 3. Cost The Energy and Commerce Committee voted 47 to 11 to set aprocedure for the government to give federal approval of generic versions of expensive biotechnology drugs. By one estimate this saves $9 billion over 10 years. The Democratic proposals from the Energy and Commerce Committee would authorize the Health and Human Services Secretary to negotiate prescription drug prices for Medicare benificiaries. The agreement and consensus among the conservative, liberal and centrist Democrats, and Democrats with ties and connections to the health care industry was reached after intensive negotiations, and adoption of a package of amendments that helped bridge the differences they had. ...

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This unbelievable story from Berlin, Germany, where dozens of police officers are injured and three hospitalized trying to disperse 20,000 people gathered to protest anti-pandemic measures. 130 people had to be arrested. 1100 officers had to be deployed to monitor the gathering even though there is a spike in cases in Germany. The gathering was done with people not wearing masks and not social distancing. Berlin mayor Michael Muller said they risked the health of other people. The gathering was a mixture of hard left and hard right supporters in a strange mix with shouting "we are the second wave" as the protest reached the Brandenburg Gate. Police had to use loudspeakers to get people to leave the area. And launched legal action for "non-respect of hygiene rules." Some officers were hit by shards of glass.

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The sharp upturn in the price of AIG stock, which was in adeep slump a few months ago. Another aspect of this is that the government spent $180 billion to keep AIG afloat, even with the current upturn in price AIG is worth only 6.4 bilion. Speculators could be behind the upturn. Its also asign of sharp swings in this market.

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China is planning an additional $101 billion in stimlus for airports and power infrastructure and other projects, a total of 23 projects. Some analysts say it could be a repeat of previous spending and not all fresh spending. It is also seen as a necessity, as China's growth could fall sharply without the help of sustained government expenditures on infrastructure.

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The reason for contagion effects from the crisis in Ireland are the sizable exposure of UK and German banks, according to BIS. The UK banks have $222 billion in exposure to Ireland, followed by German banks which have $206 billion in exposure, and the US banks which have $114 billion in exposure. One British bank alone, RBS, has exposure of 54.4 billion pounds.

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The 1608 foot, 118 story International Commerce Center going up in Hong Kong, will be the tallest in China after the World FInancial Center in Shanghai. Sun Hung Kai Properties , the developer of the ICC, says it is almost completely leased with Credit Suisse and Morgan Stanley taking multi story space because they are shifting from the more costly central district.

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Regional banks lose more than a third of hteir stock values in Ohio, the southeast and western states. In some cases banks have lost half their value. These banks will neede another $65 billion on top of the $120 billion they have raised so far according to a Goldman Sachs report. The declinig market for commercial real estate will also hit these banks.

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Gabriele Steinhauser's interview July 16, 2015 with the chief of eurozone finance ministers, Dutch finance minister Dijsselbloem. He tells Steinhauser the lowest moment in the crisis came on the night of July 5 when the referendum results were announced. He expected a "no" vote as he knows this is the way this sort of referendum turns out. He was present in all the critical moments of the crisis. And this moment gave him a sad feeling because of his conviction that it would take tough measures to sort out something like Greece, and the Greek people had been given the idea that this vote could change things. He says Tsipras heard a lot from European leaders on July 7 about lack of trust. Following an ultimatum to Greece about Grexit or acceptance of the measures to be taken, and Greece's acceptance on July 9, more hurdles emerged on July 11, 2015. One came from the IMF with an estimate of 86 billion euros as the cost of new loans to Greece, and possible writedowns on 180 billion euros already loaned. He says Greece's new finance minister, Euclid Tsakalotos, a Oxford educated economist, who was Alternate Minister for International Economic Affairs in the Syriza government from Jan to July 5, 2015, showed a remarkable ability to absorb the criticism as a lot of the bad news surfaced. A Wikipedia note on Tsakalotos shows a similiar background 10 years apart for George Osborne, Britain's chancellor of the Exchequer, and Tsakalotos- both educated at St. Paul's school and Oxford, and Tsakalotos's wife Heather Gibson also from Britain. Tsakalotos was seen as being at ease with the EU ministers, who thanked him for his attitude, of grace under a lot of pressure, and the way he handled the matter. Another piece of difficult news, says Dijsselbloem, was the insistence of German finance minister Schauble on a default scenario of Greece opting out of the euro for a number of years being included in a eurozone statement. After 17 hours of drafting, the final statement left this scenario out. It included a 50 billion euro privatization fund with half to be setup to help capitalize Greek banks, quarter to pay down debt, and a quarter to generate economic growth. Compared to the day following the referendum, Dijsselbloem says he feels it will be a difficult road with many problems, but he feels now that it can be sorted out. Stangely he does not make any mention of the role of the French under premier Valls and president Hollande between July 6 and July 9, including sending advisors to Greece to help draft proposals, in turning the situation around. Only saying he is relieved- possibly of not having some of the burden of the failure to resolve the crisis falling on the Dutch finance minister....

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Bond investors are looking to Japan for clues after the U.S. credit downgrade and two years of zero interest rates. William O'Donnell, chief Treasurys strategist at RBS Securities sees similiarities with what happened in Japan- short term rates near zero and long term rates headed down. strategists see the U.S. 10 year Treasury note dropping to less than 2%, from 2.23% today. Japan's 10 year Treasury note yields 1.05%. O'Donnell's forecast is for 10 year rates to be at 1.70% by mid-2012.

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Jeanne Whalen on the Two Speed Economy in the US September 2025- diverging paths of low and high income Americans. With the new administration in 2025 priorities shift to immigration and what to do about 14 million illegal migrants from Latin America and other places, war on fentanyl and drug trafficking gangs with hundreds of thousands of lives lost to fentanyl and drugs in the US, crime and safety which includes the unprecedented illegal movement of drug trafficking in the Nation, and to a bold posture on using US advantages of its huge market to get European Union, Japan, South Korea, and China to level the playing field on trade bring jobs home.The Biden administration had already conceded to DJT's approach in its one term presidency by shifting on uncontrolled illegal migration but not fast enough, by not removing DJT's tariffs, and failing to take an aggressive posture on fentanyl and drug trafficking. Of the DJT plan US has tariff based revenues of 10--15% for all countries imports into US can that it redirect to groups to soften any effects of tariffs. DJT administration oil transition policy of stretching out the transition to give middle class and lower classes cost of living relief was also accepted by the Biden administration and is now the policy of Democrat run California state government.  The US economy was slowing in 2024 under the Biden administration. What has changed in 2025 is that the US stock markets are responding to steps taken by the DJT Republican administration to lower the cost of doing business by softening regulations, and giving US business the upper hand in different industries, and rebuilding the manufacturing sector with calls for EU and Japan/South Korea to invest more in the US as a quid pro quo for market access. This has led to increase in the value of market portfolios of the income earners above 250,000, or 10% of American households. As this happens the process of trade renegotiation has introduced some uncertainty in 2025 and businesses are looking for more clarity before increasing investment and slowing job hiring which hurts younger people entering the job market and lower income Americans. Were things better under Biden? Government Covid assistance and payouts in the early years 2020-2021 helped lower income workers, as this faded and the cost of living autos, housing increased sharply under Biden in 2022-2024 the situation deteriorated. The situation today is similar to the situation in 2024 with the difference in 2025 that inflation is coming down just as government help is receding. And added factor is the DJT administration plan to tackle head on the increasing cost of Medicaid to about $1 trillion by adding new requirements and reducing subsidies. The federal workforce had a disproportionate share of black workers and the policy changes to reduce the federal workforce have increased black unemployment from 6.1% under Biden in August 2024 to 7.5 % a year later. Hispanics have seen slight improvement in unemployment to 5.3% in 2025, and the middle class incomes also have held up and are holding steady. Meantime Bloomberg points out that one third of people in the top 10% are living paycheck by paycheck because of high cost of housing, university education for children, and inflation.     ...