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Arminia Bielefield is one of Germany's well known soccer teams today. One cannot say it is a unknown town. I took a picture of the stadium and the passionate soccer fans on a major television station on German television just yesterday. It is in North Rhine Westphalia, and like other German teams in the Bundesliga has a whole soccer fan culture behind its stadium, the city and its surrounding areas, that one can only find in Germany. Entire families different generations grow up attending and cheering for their team.

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Amazon makes an offer to buy the whole of TikTok on April 1, 2025 before a April 1, 2025 deadline. A law passed in Congress in 2024 was upheld by the US Supreme Court requiring the sale of China based TikTok to American buyers for national security reasons or be closed to US users altogether. Amazon has connections to TikTok where TikTok users refer other users to products which can be bought on Amazon with revenue being passed on to influencers who get a cut on the transactions.

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Pollock's interview with Geroge Shultz, Reagan's senior economic advisor and Secretary of State, at his office in the Hoover Institution, Stanford University. He says the U.S. can find its way out of the current economic crisis the way it did during the early Reagan years. On the Fed's loose monetary policy he says the Bernanke Fed's contribution to the economic crisis was very easy money. Now that we have it we realize that its going to take something different from easy money to get the economy moving- not just more money. Three quarters of the debt issued by the U.S. in the last year was bought by the Fed, and the Fed is monetizing debt when it buys debt because at some time this ends up getting out into the economy. Shultz sees the tax rules as being about more than rates. Corporate tax rates should be lowered by cleaning up preferences. But what is most important is predictability and an environment where business feels there is less uncertainty when investing. Shultz says Romney should read his memo to Reagan before Reagan assumed office, excerpted in the WSJ, "Advice to a New President," May 26, 2012. He also recommends John Taylor's new book- "First Principles: Five Keys to Restoring America's Prosperity." ...

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Boeing is just completing the design work on the 787-9 model which seats 290 passengers and can go 8,500 nautical miles.

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Shipping and freight statistics show an increase of shipments from Mexico. Trains and truck shipments from Mexico to the U.S. increased by 8.7% by weight in the first 11 months of 2011 compared to the prior year. By comparison shipping containers entering the ports of Los Angeles and Long Beach went down by 0.2% in 2011. Mexico stands to benefit from the shift in dynamics as manufacturing costs in China increase with labor constraints, higher wages, higher commercial land prices and recent Asian supply chain issues making firms wary of unanticipated problems. This is expected to benefit the U.S. with the return of some manufacturig jobs and a serious rethink of outsourcing. Because of highly automated factories and advanced technologies the manufacturing process requires fewer and more skilled operators, reducing the labor component of costs. Carlisle Companies CEO, David Roberts says he is expanding tire manufacturing plants in Tennessee. He says he can make tires as cheaply or cheaper in the U.S than in China. This has serious implications as the U.S. gets down to rebuilding and renewal of its manufacturing industry....

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Pearlstein lists the names of insider investors for Facebook- Peter Theiel and Founders Fund, Jim Breyer and Accel Partners, Greylock Partners, Microsoft, Li-Ka-shing, Bono and Elevation Partners, Alisher Usmanov and DSL. For full disclosure he states Washington Post Co. chairman, Donald Graham, is on the board of Directors of Facebook. Venture capitalists are leveraging their position in Facebook to get new investors, share prices of companies involved are up. Goldman benefits by the $60 millon for placing client money in Facebook, a cut of 5% from any profit they earn, and the hundreds of millions of dollars from being a lead underwriter for Facebook's IPO. What all this does is create the conditions for a bubble for internet stocks similiar to the bubble in late 1990's, with insiders reaping most of the benefits and the public taking on most of the risk as the internet stock loses its dominant position with the entry of new technologies and competitors in the market or a change in consumer preferences. As was evident in the earlier bubble this is not hard to create. Some of these bubbles are in fact already taking place for Chinese internet stocks on US stock exchanges, with investigation staking place into accounting practices of some of these companies. With the financial electronic media and analysts doing their part in the hype and sell such a bubble is underway, just when the debt burdened US middle class can ill-afford any losses that may take place. ...

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Donald Trump in the week before the Republican caucuses in Iowa. Trump says he will be the winner in Iowa. He is introduced at an event in Pella, Iowa, by Senator Chuck Grassley, who has not formally endorsed Trump. He stays at an Holiday Inn Express in Sioux Center, Iowa, and attends church sunday service at Muscatine, Iowa.

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Friedman on the need to build more economic clusters around university towns similar to the ones at Cambridge, Austin, Boulder, Ann Arbor, Palo Alto to generate new innovations. The impact of globalization and the internet is creating new opportunities through knowledge exchange and generation. These are part of the technological developments predicted by IBM for 2012-2016.

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New York Yimes editorial calls the Conservative party coalition government's austerity budget (the plan to cut 500,000 public sector jobs and terminate unemployment benefits after 12 months), as a gamble on an improbable theory that the private sector can make up for $130 billion in cuts. The editorial says these budget cuts could suffocate a feeble recovery.

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Obama says oil sand leave a big carbon footprint in his interview with the Canadian Broadcasting Corporation, just before his visit for talks with Candian Prime Minister Harper in Ottawa, Canada. The talks will focus on climate change, whether the oil sands can continue to be exempt from regulation, and other issues including a "Buy America" provision.

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Related to Mervy King's stand as Governor of the Bank of England about moral hazard, that if you let them off easy then these crises will recur and no penalty for excesses. But we can see that when this happens people who committed wrongdoing will be investigated, their reputations destroyed and the prospect of jail time.

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Fed Vice Chairman Donald Kohn speaking at a conference in New Orleans comments that the USA economy is in uncharted waters because the financial system is so disrupted, and because of uncertainty about how credit conditions will evolve and how businesses and households will react to the changing conditions there can only be less confidence in the economic forecasts.

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A new sense of optimism pervades Athens with the new government's standoff with international creditors. After governments from the centre left Pasok party and the centre right New Democracy Party from the country's elite, a new government led mostly by academics from Greece's universities and a fresh young face of Tsipras, has created a new spirit in Athens following 5 years of austerity and protests. Tsipras's Coalition of the Radical Left won 36% of the vote in the recent parliamentary elections of Jan. 2015, a month later polls show public support has increased to 70%. Even New Democracy supporters says the young Tsipras provides a breath of fresh air to Athens and Greece as he negotiates for an easing of the strict austerity measures leading to 25% unemployment. Signs of the change are everywhere. The riot police have been pulled back, and there is less security around parliament, 2000 bodyguards for senior politicians will be disbanded. Coffeshops in downtown Athens are filled till by young office workers and students as Greeks discuss the changes taking place. The ECB and the EU are taking a tough line in negotiations as the new government develops its negotiating stance, with much public posturing but deeper down a sense that a resolution needs to be reached that gives Greece the opportunity to return to growth. One aspect of the new government is a welcome change both for the EU, the ECB and Germany, as well as for the Greek people. As in Italy with Matteo Renzi following Berlusconi, leadership has passed to a younger generation better able to tackle the problems facing Southern Europe. In Italy Merkel personally intervened at one point calling Italy's president and creating momentum for the resignation of Berlusconi, followed by the shift to pro-EU Monti and Letta, and then to Matteo Renzi. Renzi received 40% of the vote in Italy's elections. In Greece a series of parliamentary elections shifted administrations from Papandreou to Samaras, and now to Alexis Tsipras. With fewer ties to the old governing elite the new administration can better deliver on prudent economic management in the long run to meet the concerns of Germany, Netherlands, the UK and other countries....

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The Economist points out that China's total debt of government, corporate and households has grown by about 100% of GDP since 2008. The 2009 crisis led to rapid increase in debt. It is now about 250% of GDP, according to the Economist. Slower growth of below 7% risks reducing China's ability to service this debt. About half of this debt is owed by state owned companies and property developers. China can use its sovereign reserves to continue supporting bank and state owned companies. Investor's are pricing bank shares to reflect about 10% of this debt as bad debt even though government estimates are much lower. The reserves provided China time to fix the banking system since 2008, yet the debt keeps growing and China has failed to take strong action in the last 6 years. Complacency is a problem, and the incentives for local governments to continue prior practices that increase debt continue. As Krugman and other experts have pointed out at some point the rules of finance will apply to China as they have for other countries that faced a debt crisis- Japan in the late 1980's, South Korea and other Aisan countries in 1997, and the U.S. in 2008. Even without a crisis through deft managemen and use of reserves China risks zombifying the economy as old loans are backed up by new loans, with the further risk of misallocation of capital or poor use of capital. This lowers productivity of capital and hurts development. With poor statistics such as the figure of 1% of debt being bad debt cited here, the problems of complacency can be magnified, as there is less reason for a strong response....

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Mexico's president Enrique Pena Nieto describes his plans for increasing economic growth in an interview with Lally Weymouth. He looks back at the changes made through the Pacto de Mexico in energy, education and telecommunications, and in other areas. Changes made will allow political parties to form coalitions after 2018 following a presidential election, to form a majority in the legislature so that new legislation can be passed. A new criminal code for the entire country will override a patchwork of laws in different states. Economic growth is a high priority after disappointing 2.6% growth in the last 3 years, with infrastructure projects planned- new airport for Mexico City, doubling port capacity, new rail lines and high speed rail line Mexico City to Queretaro.

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GM has advertised the Volt and it can't just back off from it without losing face. New battery technology is needed sy experts before the Volt can be manufactured and there is no plan to put such a battery plant up. Meantime the new Volt has been given a target date of 2010 for a new plant in the GM-UAW agreement.

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Greece's economy is expected to shrink by 6% in 2012 by many private sector economists in Greece. This means Greece will have a deficit closer to 10% of GDP. Antonio Samaras, leader of the New Democracy Party, is expected to win the elections in Greece to be held by spring 2012. Opinion polls show his party getting 24% of the vote, and Papandreou's Socialists getting 15%, showing how little support any party can gather in Greece. Samaras told the Journal in an interview- the contagion is spreading rapidly, and what he fears is political and social contagion from high unemployment and austerity measures. Samaras says his government would continue with the spending cuts, but also reduce the tax burden on Greek households and businesses, which he views as having worsened the recession in Greece.

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Glassman cites Ronald Reagan who once said economists are people who look at things in practice and then see if they can prove this in theory. He co-authored a book on "Dow 36,000" in 1999. What happened and why? He correctly says the Dow is up to 12,000- and this only after Fed chairman Bernanke's $600 billion quanitative easing on top of low to zero interest rate policies after the 2008 crisis- in the 12 years since. So what happened? Glassman says what he did not account for is the huge decline in the prospects for the U.S. economy, with Congressional Budget Office estimates of 2% growth over the next 70 years, compared to the 3.5% growth in the first 50 years of the 20th century. A lot goes go into this, including the debt buildup, the lack of investment in human capital and K-12 education. The other is the huge volatility in stock returns, and the "discontinuous" risks stemming from things like the home price crash, terrorist 9/11 attack and other such developments. He says he is tired of telling investors to hold on in the face of such huge volatility and uncertainty. He advises a cautious strategy, a pull back from stocks to reduce the downside on returns and a smaller allocation to stocks....

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Much of India's relations with Britain as a colonial power, and the US as the first real democracy (defined in a new way without colonial interests) after Britain in the modern world, were set in the period when Gandhi mentored by Gokhale and Tilak in 1900 set the independence struggle of the 1930's and 1940's. Modi merely restored the Gandhian spirit with a development focus and honest administration. This enormous contribution of Gandhi revered by all leaders including Modi is a benevolent one recognizing the important and one might say virtuous role played by the US under Wilson and Roosevelt to colonized nations such as China and India as can be seen in the personal letter to FDR written in the 1940's by Gandhi. There are two defining relations of the US, the first related to its founding as a British colony and a war of independence fought with the help of the French. And the other related to Asia, to Japan, China, and India as they modernized in 1900-2000. Of this the relationship with the most ancient of ancient civilizations in India is the dominant US relationship in 2025, because it unlocks the mysteries of westernization without the religious ethos of Buddhism in an imperialist Japan and now expanding Communist China. This religious ethos of China, Japan and Vietnam lies in Indian soil and in the ethos of the Indian people, and where Gandhi drew his inspiration. From this ethos comes the idea that India as a true friend of America and a Europe (that includes Russia) cannot ignore the devastation of Ukraine and inadvertently find itself a participant through its purchase of Russian oil at $119 billion a year (even when China under a expanding Communist government purchases Russian oil at $136 billion a year). The cost of the war is about $213 billion in a Russian wartime economy which also hurts the Russian economy and the cost of living through inflation for the Russian people. India will seek to do some soul searching and find the right path Gandhi would hold on to for Britain, America, and rest of Europe including the Russian people. ...

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Apple is in a quandary about what straegy to pursue in the large China market. Apple's pricing depends on its image of bringing in exciting new products. With growth slowing in iPhone sales and lack of new products like the iPhone Apple can go after the market of lower end smartphones to maintain growth. In that segment Apple faces strong competition from manufacturers who make products in-house and have the scale to compete effectively such as Samsung. Other manufacturers such as Lenovo are also surging in this part of the market. Sales figures for the smartphone market give some idea of the problem Apple faces. Smartphone sales for the industry slowed to growth estimated at 41% for 2013, compared to 136% in 2012. In 2014 IDC forecasts growth slowing even further to 17% and by 2015 the smartphone segment looks even less promising with only 12% growth. And much of this growth is likely to go to regional smartphone companies such as Lenovo Group of China, and other brands which are better at competing in the lower priced smartphone segment of below $100, say analysts. Apple sales were 7.9% of the smartphone market in China, Samsung had 15.4%, and Lenovo 13.1%, in the 4th quarter of 2012, according to IDC....

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Ford CEO, Alan Mulally, says the electric battery in the newly designed Ford Focus EV electric car costs about $12,000 to $15,000. The car price is $39,200. The similiar gasoline powered car price is about $22,000. This car has a 23 hour kilowatt hour battery pack. Based on this information the cost is $522- $650 per kilwatt hour. The U.S. Department of Energy has set a goal reaching $300 per kilowatt hour by 2013, as it funds new electric car development in the U.S. The Ford Focus EV is directly competing against the Nissan Leaf. The Leaf starts at $35,200, with a range of 73 miles on a full charge compared to 76 for the Focus EV. The Focus can be recharged in three and half hours using a 240 volt charger, compared to 7 hours for the Leaf. What the battery cost tells us is that the electric car development has to bring costs down rapidly for electric cars to become price competitive.

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Tata has a couple of things going for it to make a car at a price under $2500- a different vision behind it and a longer term idea of the market and its opportunities for Tata Motors. This is a personal vision of Ratan Tata, the last in the series of Tata family members who have run a company that was at the leading edge of industrialization in India since British times in the closing years of the 19th century. He sees this as a way to bring a car that is affordable to millions of Indians, the average Indian, just as his father and great grand father were pioneers in India's early steps towards industrialization. This also will serve another purpose. It will provide momentum to India's manufacturing base by putting India's auto industry on its way to sell cars by the millions in the next ten years. The cost was a challenge to Indian engineers ingenuity. It would help them develop something from scratch from a clean slate, and as he hoped reinvent the car if possible. The cost also was doable in India because of the wages paid to Indian engineers and workers are different. The entire cost structure with suppliers like Bosch providing the engine also and internet purchases of parts coming under a completely different way of doing business, again a reinvent of things. And the skimping on a lot of basics like a radio is possible in the Indian context where the inital target market is the scooter family of which in India there are millions. People who would simply be waiting for such a bare bones car, not see it as such because it is a great advance over a scooter even in terms of safety. What most people who have never been to India would not be able to grasp is that a whole family of four can be seen riding on a scooter or motorbike in India on weekends in Indian urban areas. Tata's idea of the market potential is the way it can ride the next stages of increasing incomes in India. Once it has come up with this car it can come up with enhanced versions with an airconditioning and radio and so on, and still price it way below competitors with Tata's quality and brand name and innovative design. As long as Tata can sell all the cars it makes it can expand production rapidly. Tata's costs for engineering a top selling model may be only 20% of the $350 million it costs western companies, according to Alix Partners, with savings of $300 to $1000 per car right there. Labor costs are about $1.20 per hour in India, less than what auto workers make in China, this provides more cost savings. Tata plans to supply kits to dealers who will do the final assembly in small workshops. This distribution strategy will save Tata another chunk of costs, as about 20% of the car's cost is in distribution in the USA. ...

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The skills to navigate different personalities and work patiently on the issues surrounding changes to the U.S. tax system of Rep. Dave Camp (MI), chairman of the U.S House of Representatives Ways and Means Committee, will be immensely useful in the effort to make changes to the U.S. tax system. Camp works well with fellow House Republican leaders Boehner, Ryan, Cantor, and his Democratic counterpart in the U.S. Senate Max Baucus. Camp is a good listener, refuses to engage in partisan criticism, and has the patience to work through difficult issues of achieving savings and keeping fairness in the the tax changes. Earlier efforts to achieve consensus in late 2011 failed, making it even more important to have leadership which can create productive debate and bridge the differences. The tax changes are part of the overall effort for U.S. economic recovery by reducing the deficit.

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Wonder who makes the Lysol and Dettol so common in the U.S. and Europe, India, other parts of Asia. It is a British Company Reckitt & Colman, going back to 1817, founded in Lincolnshire, and based in Slough, that merged with Benckiser of Netherlands in 1999. It operates in 60 countries with 40,000 employees and 3.5 billion pounds in sales last quarter. Dettol soap is a household name in India and its push for better hygiene can be seen in ads on Indian television. A 32 million pound fund was set up to promote better hygiene after sales increased by double digits.

This fits in with prime minister Modi's effort for good sanitation, toilets for 1.2 billion people, and the Clean India or Swacch India campaign that is helping India in the fight against coronavirus today.

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A group in the Tory party of prime minister Johnson sees a bigger risk for Britain in allowing 35% content in nonsensitive parts of Britain's 5G network as approved earlier. Tory views have changed since the coronavirus crisis and after the U.S. government decision on May 20 to require a government approval before U.S. companies can sell any semiconductors made abroad with U.S. technology. The use of other alternatives increases the risk for Britain, say Tory MP's. The National Security Council met to reconsider the earlier decision and called for a reassessment.

Britain would be left out of the Five Eyes Club of intelligence sharing with the U.S. if it does not also exclude Huawei from 5G networks. Mr. Trump says the U.S. will not share intelligence with Britain if it continues with the earlier decision.