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Biden's very conservative choices for his cabinet which one British reader of The Times calls UK One Nation type choices. Many of the cabinet members could easily have served under a Republican administration before Trump or a Democratic administration in the tradition of Harry Truman in the 1950's. No members of the cabinet belong to the Bernie Sanders wing of the Democratic Party.  A look at the Truman administration after 1950 shows John Wesley Snyder, who headed a bank in St Louis and worked for the Reconstruction Finance Corporation under Franklin Roosevelt performing a key role for integrating 8 million GI soldiers into the economy, and implementing the Marshall Plan. A similar job awaits another banking official Janet Yellen in Biden's cabinet to keep people employed during the pandemic. Xavier Becerra, currently attorney general of California, and formerly Congressman for 24 years, who endorsed "medicare for all" is the new Health Secretary. He grew up in a one room apartment with his Mexican parents. Secretary of State goes to Anthony Blinken, Dean Acheson was in this role under Truman as the Cold War surged with the Berlin crisis and the Iron Curtain in Eastern Europe. Today the challenges from Russia and China are taking the shape of a revival of tensions. George Marshall who led American forces in the war, was secretary of defense. This position is given to a soldier Gen. Lloyd Austin who led forces in the wars in the Middle East. This has the potential to deliver better results after the years when America veered off course under the administrations of Reagan, Clinton, Bush and Obama, following the Truman, Eisenhower administrations that setup the recovery after World War II. Today after the banking crisis of 2009, disastrous healthcare and infrastructure neglect in the U.S., followed by the pandemic, a recovery like the one after World War II is needed.   ...

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Donald Trump is acquitted in the second impeachment trial with a vote in the Senate of 53 in favor to 47 against. A two thirds majority is required to impeach a president. Senators Burr of North Carolina and Cassidy of Louisiana were Republicans who joined the expected ones to vote for impeachment- the Republicans Mitt Romney of Utah, Pat Toomey of Pennsylvania, Ben Sasse of Nebraska, Susan Collins of Maine, Lisa Murkowski of Alaska. The Republican defense lawyer insisted that Trump's speech to his supporters was not an intention to incite them on the day of the Capitol riot on Jan. 6, 2021 but an expression of his rights to free speech guaranteed under the U.S. Constitution First Amendment. He made the point that the prosecution lawyers had selectively focused attention on the words "fight like hell" and taken them out of the entire context in which they were made, ignoring key parts of Mr. Trump's speech. The defense argued that the president had already left office and this made an impeachment unconstitutional. Seventy five million voters voted for Mr. Trump and he cited this as the most number of votes won by a sitting president. President Biden is shifting his attention to the president's agenda and needs Republican support to pass key legislation including financial help to households, unemployed, and business to recover from the pandemic. The U.S. health effort behind the vaccination drive and seeing the struggle in Europe to access key medical supplies of vaccine is also leading to new efforts to move beyond the rhetoric to the hard work ahead with support of all parties. As part of this the trial once it reached the Senate was quickly resolved in about 5 days. The defense used only a small fraction of the time allotted with bipartisan effort to not let the trial drag on, bipartisan effort to putting some statements simply on the record and not calling witnesses.   ...

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Connors and Magalhaes provide an exceptional account of the work of nine young prosecutors in Brazil, including Deltan Dallagnol, a Harvard trained law graduate, Carlos Santos Lima, a Cornell law graduate, and Paulo de Carvalho, in looking into the corruption and money laundering at Petrobras. Contracts for work given out by Petrobras to construction firms were inflated in value, and 3% of the inflated value was given to executives at Petrobras, or to the fund of the ruling Workers Party of Brazil. Dallagnol is a prosecutor in Curitiba, a small provincial city. He detected unusual movement of money, where a local car wash showed a new Land Rover being gifted to a Petrobras executive, in an apparent money laundering effort. Appointments at high levels are made by the government, and the current president who has not been implicated, was at one time chairman of Petrobras. In Brazil, as in India, Nigeria, and other developing countries, politicians were known to have misused public funds, but were able to act with impunity because the legal system made it difficult to impose strict penalties. The effort by the young prosecutors in Brazil is an effort to bring changes to the legal system so that this type of near impunity no longer exists. It is the first step to bringing serious changes and increasing public awareness for change. The result in Nigeria is a huge loss in Africa, with the electricity system for the entire country the size of what it would take to light up one medium sized American city. In India with the lack of roads and electricity in rural areas of many states, the misuse of public funds is a similiar burden on the people. Brazil is coming out of a borrowing binge in the last ten years which is leading to a credit crunch in the country and near junk bond status for Petrobras, Brazil's largest company, which experts predict will lead to a contraction in the economy in 2015-2016. ...

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Melloan says President Bush is rightly offering Eisenhower's proposal for peaceful use of electrical energy as a friendly gesture to India. Ike made the "atoms-for-peace" proposal to the United Nations in Dec 1953, saying: "A special purpose would be to provide abundant electrical energy to power-starved areas of the world." This also helps in other ways- 1. Takes pressure off gas prices with rising demand in India met by nuclear energy. 2. Gives American exporters a big market for nuclear energy equipment (companies like GE). 3. Improves prospects for other American exporters and businesses in India as the economic relationship grows larger. India is not receiving anywhere near the foreign investment China is receiving, actually minscule in comparison. This gets the whole relationship rolling. 4. Nuclear energy is an attractive option for India as it has few oil resources, and reduces dependence on coal from the standpoint of global warming and greenhouse gas emissions.

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By offering the prospect of higher returns in a low return environment venture capital firms are raising new funds at the highest rate in 15 years in 2016. Venture Capital firms have raised about $13 billion in the first quarter of 2016 from pension funds, endowment funds, and other sources, with about 50% of the funds going to about 7% of the total number of firms, according to Venture Source- including $2 billion to Accel Partners, other firms are Andreeson, Founders Fund, Kleiner Perkins. The returns for ten years from venture capital are about 11% compared to 6.8% for S&P 500 index, according to Cambridge Associates. Usually the fund capital raising lags behind market downturns. Much of the returns for some of the startups are not reflected in cash inflows with returns being large on paper, and startup financing has increased for firms, resulting in capital shortages and more fund raising in the industry.

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Activist investors such as Starboard Value hedge fund are pushing Yahoo to sell its Yahoo businesses and keep its investment in Yahoo Japan (35% stake valued at $8.6 billion) and Alibaba (16.5% stake valued at $35 billion). This would mean the sale of the Yahoo brand with 210 million visitors to its website each month. Yahoo's board has tried changing CEO's, and Marissa Mayer in office for 4 years has tried different strategies including acquisitions but failed to make a difference. Yahoo is not able to generate profits from its business the way Google and Facebook have done, and large investors are losing patience with Mayer. Mobile's importance has grown in recent years benefitting Facebook and Google but not Yahoo in generating more advertising revenues. Yahoo's content is seen as commoditized not commanding the advertising revenue of sites that help navigate the internet (Google) or social media sites (Facebook) that offer unique value to users.

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Mistakes French bank Societe Generale made with acquiring a controlling stake in Greek bank Geniki. Credit Agricole bank had a similiar experience with its stake in Greek bank Emporiki. In 2010 Societe Generale was forced to set aside 400 million euros for bad loans. Credit Agricole had to remove the CEO and higher executives in 2009 before introducing good loan criteria at Emporiki. Today Emporiki has loan loss provisions of 12.5% of gross loans, and Geniki has 21%, according to analysts. Dirk Hoffmann-Becking, analyst at Bernstein Research, estimates that a default that took out 30% from the value of these Greek banks loan book and 70% from Greek government bonds would result in a loss of 3 quarters of earnings for Credit Agricole and for Societe Generale 1.5 quarters of earnings. This would mean that the French banks would take 3 quarters longer to get their capital reserve ratios to 9% for new Basel III regulations.

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The new price of the Leaf is $35,200 for the 2012 model year as more features were made standard by Nissan. The Leaf will now cost $27,700 after a $7,500 federal tax credit in the U.S. The higher price also reflects the stronger yen as the Leaf is made in Japan. Every Leaf is sold from a waiting list, with sales in only some states- including Arizona, California, Hawaii, Oregon, Tennessee, Texas and Washington. Nissan's marketing chief, Brian Carolin, says about 1000 vehicles a month will be sold for the remainder of 2011. The average customer of the Leaf drives the car with an all electric range of 75 miles, for 30 miles each day and charges it for 3 hours a day. Average household income is $140,000. The 2012 standard model comes with a cold weather package, heated seats, battery warmer and steering wheel, and a fast charging arrangement that gets it recharged in 30 minutes, instead of the 8 hours.

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Chancellor points out that economists from Irving Fisher in 1929 to Ben Bernanke in the mid-1990's have often played the role of academic shills during each successive period of "This Time its Different, " claiming that there was some new event, technology, or innovation, that justified higher valuations of assets and higher institutional debt levels. He quotes Walter Bagehot who says about merchants and bankers of his day-" they fancy the prosperity they see will last always, that it is only the beginning of a greater prosperity." The significance of the book is that it suggests an hypothesis that is quite different from the general idea in 2011 that there won't be a protracted period of slow or marginal growth after a bubble of this nature. Because the bubble is also in other countries, in countries of the euro-zone, China, Turkey, Brazil, and other countries, the situation takes a much longer time to heal.

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Jack Hough points to other important factors that affect the Dow Jones Industrial Averages and the S&P 500 Index. The quality of earnings, the relationship between wages and corporate earnings, and macroeconomic factors, all affect the level of the indexes. The historical average of wages relative to earnings would leave shares at 24 times earnings says Hough. This would mean a further decline of 40%. As U.S. companies earn more of these profits overseas compared to the past, they could sustain a higher level of earnings relative to wages says Hough, but this may not be the level at which they are today. In Hough's view the earnings numbers are made to look better than they actually are, which should be taken into account. He does not mention macroeconomic factors which add to the volatility, and policy decisions which create higher levels of uncertainty affecting decisions on consumption and investment in the economy.

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Russia does not face the risks it faced in 2008 when $80 billion was owed to western and other foreign lenders, according to the chief economist of financial firm Otkritie. This debt has been brought down by paying down much of it and extending the maturities. In the fourth quarter of 2011, about $35 billion will be coming due. Russia still faces a serious risk from another direction. Every $10 drop in the price of a barrel of oil reduces Russia's GDP by 1%, according to Kingsmill Bond, chief Russia strategist for Citigroup. Government spending has increased rapidly and the government estimates it would take an oil price of $120 a barrel to generate enough tax revenues from the oil export tariff and mineral extraction fees to balance Russia's budget in 2011. The government needs to borrow the extra money from domestic and foreign investors. A slowing global economy could mean significantly lower prices than the current price of $87 a barrel on August 17, 2011.

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The State Budget Crisis Task Force is co-chaired by former Fed chairman Paul Volcker and Richard Ravitch, a former lieutenant governor of New York. The Report of the Task Force says rising pension expenses and healthcare costs for public sector employees and Medicaid costs are severely reducing the ability of states in the U.S. to fund essential infrastructure improvements, education for low income students and other services. The report said there were six major threats to the fiscal situation of states- including Medicaid spending, underfunding of retirement, "budgetary gimmicks" to address the short term needs, and uncertain tax revenues. Ravitch told a news conderence: "It will be a hell of a lot more expensive to deal with theses problems in five or ten years than to deal with them now." The report focussed on California, New York, New Jersey, Illinois, Virginia and Texas. It was funded by the foundation of Blackstone Group co-founder Peter Peterson, and George Soros's Open Society Foundation....

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The dangers of a second term as president in the history of the U.S. The difficulties and sometimes disastrous experiences of Adams, Jefferson, Grant, Wilson, Truman, Nixon, Clinton. Truman's popularity rating dropped to 22% during the last years of his second term. He was largely ignored when he left office, as was president Hoover. In addition there is the lame duck effect in the last two years when little in the way of new initiatives are undertaken and the president merely continues in office to finish up his term. Missteps are common- Jefferson with the blockade of trade with European powers, Grant and corruption scandals, Wilson with a tragic effort to get public support for the badly designed Versailles Treaty having a stroke, Nixon and Clinton with the impeachment process for the Watergate and the Lewinsky scandals, Truman's missteps in the Korean War and the firing of Gen. MacArthur leading to precipitious drop in ratings.

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In this editorial the Wall Street Journal says it supports the "sequester" or trigger of automatic cuts in 2013 if the Supercommittee in the U.S. Congress fails to reach agreement on budget cuts. Across the board budget cuts are not the best option, but says the Journal given that politicians have failed to come to agreement this is the best option available. This will generate $68 billion in savings in 2013. The Congressional Budget Office estimates cuts will be 7.8% for domestic programs, and defense will take a 10% cut. Medicare spending will fall by 2%, mostly payments to providers. To put this in perspective the Journal points out that total domestic discretionary spending doubled to $614 billion in 2010 from $298 billion in 2000, providing a higher starting point for cuts. It says some of the cuts in defense could be restored through a supplemental bill as planned by Sen. McCain.

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The breakup fee of $4 billion and the $1 billion in "book value" of spectrum AT&T is giving to T-Mobile as part of the fee are part of the cost of the failed acquisition of T-Mobile. Other costs are that this puts AT&T at a significant disadvantage in relation to competitor Verizon, because Verizon is at least one year ahead in bringing out its next generation LTE network. By the end of 2011 Verizon's LTE network will reach 200 million Americans compared to AT&T LTE coverage of 70 million. Apple's next iPhone in 2012 will be an LTE model. AT&T's network congestion will mean it will have to do more capital spending than Verizon in the years ahead. Verizon has early mover advantages from its early investments in LTE network. From 2008 through the first 3 quarters of 2011, Verizon invested $29.3 billion in its wireless network compared to AT&T's $28.1 billion.

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Global infrastructure needs are expected to go up by 20% to 2.1 trillion dollars annually for the next 10 years compared to the previous ten years, according to the Samsung Economic Research Institute. India's investment in infrastructure will double to 1 trillion dollars in 2012-2017. compared to the prior five year period. Toshiba hopes to increase sales by 20% to $38 billion for nuclear power generation and distribution equipment and railway equipment, by the year ending March 2013. This is 38% of total revenue for Toshiba. Hitachi has set a goal of a 46% increase in sales to $29 billion, or 20% of total revenue for Jan 2011- March 2016. The Japanese Government and a consortium of Japanese companies are working together on deals such as the deal signed with Vietnam in October 2010 for nuclear power. The International Nuclear Energy Development of Japan entity, includes 12 companies and the Japanese government. The consortium was critical to negotiating the Vietnam deal.

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France's foreign minister Michele Alliot-Marie is criticized for vacationing in Tunisia during Christmas, when demonstrations were taking place in the country. Ms. Alliot-Marie also took a flight on a private jet owned by a Tunisian businessmen connected to the family of the ousted President Ben Ali. Reports in the French press say France had approved the export of police equipment and crowd control devices to Tunisia as the demonstrations were taking place, and that the French ambassador in Tunis had no idea of the extent of anger of the Tunisian people. Sarkozy later replaced the French ambassador. Ms Alliot-Marie said that it was her intention to spare the lives of Tunisians by supporting better police tactics. The Socialist leader in Parliament, Jean-Marc Ayrault, asked Ms Marie to resign. French President Sarkozy supported Ms. Marie, who has held positions as minister of defense, interior and justice. French prime minister Fillon says that calls for her resignation were "a purely political polemic."...

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The issue says the New York Times is whether the financial meltdown was caused by one of these frequent crises of capitalism as bankers would have us believe or was there malfeasance involved. This is its comment on the SEC filing civil charges against Goldman Sachs in the Abacus case in which Goldman helped Paulson put together a batch of bad mortgage securities into a security that it sold to its institutional clients, without disclosing what Paulson had done and without disclosing that Paulson had structured these securities precisely so that he could bet against them. As other financial houses are also involved in dealings of this type, the New York Times editorial says this will mean people at these firms will also not be sleeping well in the coming days and months. This is a story that Gretchen Morgenson and Louis Story of the New York Times wrote about for the first time several months back.

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Diet consultant Tallmadge says be careful about reduced fat peanut butter, enhanced water, energy bars and multigrain foods. She says reduced fat peanut butter is worse than ordinary peanut butter because it takes away the nutrients in the oil. Enhanced water can be nothing more than sugary drinks with vitamin added, better to drink clean tap water. Sugar is a major ingredient in energy bars. Better to snack on fruits and veggies and yogurt, or carry nuts and dried fruits if hiking or doing outdoor activity. And watch out for the marketing words saying its multigrain, what you want is whole grain not refined starch. Don't be fooled by the marketing of the packaged foods industry, check the ingredients carefully, because labels such as "low fat," "high fiber," "multigrain," and "natural," don't mean much. Eating right starts with selecting food carefully and diligently, and goes a long way in preventing many of the diseases and problems coming out of poor eating habits.

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Total student debt in the U.S. passed the figure of $1 trillion in late 2012, according to the Consumer Financial Protection Bureau, the federal agency recently created. This figure is about 16% larger than an estimate made earlier in 2012 by the Federal Reserve Bank of New York. The surge reflects increasing numbers of people going back to college to get new skills in a faltering job market. Tution increases with cuts in state funds to colleges mean larger loans need to be taken. Another factor is that about 25% of borrowers are behind in payments, resulting in higher interest payments, according to New York Fed data. Experts say this could delay the recovery in the housing market, as potential home buyers take longer to build up funds for a down payment. Parents are co-signers on some loans for children and professional changing careers are also taking loans, creating larger effects of rising student debt.

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Krugman questions whether the assumptions behind the austerity policies are true- that they would inspire confidence in economic recovery, or that in the absence of austerity policies borrowing costs would go through the roof. The recent events in Holland with the collapse of the government in the Netherlands- when a party leader supporting the government said he did not want to hurt pensioners in the Netherlands just to satisfy German opinion- and the mood in France with economic anxiety vote going to Marie Le Pen and Francois Hollande in the first round of presidential elections, shows that very little confidence has been created. High unemployment and economic anxiety are leading to a reappraisal of austerity cuts that depress the economy and reduce tax revenues, but Krugman says no changes are taking place to correct these policies. This is true for Spain with its high unemployment, and Britain which now has two quarters of negative growth.

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Local elections for 181 local councils in Britain in April 2012 show the toll taken on the Conservative party led coalition government of David Cameron from austerity measures and general dissatisfaction with the government. The Conservative party Mayor of London won the election in London over Labor's Ken Livingstone, with a slim majority, largely determined on personality issues. Throughout Britain the Conservatives lost seats in local government. BBC projections with most of the votes counted show Conservative share of the vote dropping from 35% to 31%, Labor moving up from 35% to 38%, and the Liberals remaining at 16%. Labor gained 823 seats, Conservatives lost 405 seats, and Liberal Democrats lost 336 seats. Voter indifference was shown in the voter turnout at 32%, the lowest since 2000, according to the BBC. Cameron said he would continue with his austerity program and cuts in spending, saying "these are difficult times, and there aren't easy answers."

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The European Central Bank says it will no longer accept Greek bonds as collateral for loans. A similiar move preceded negotiations in 2012 for revisions to loan conditions from the ECB-EU and the IMF. Greece's banks will no longer have access to cheap loans at 0.05% from the ECB. The banks can still use the Emergency Liquidity Assistance facility for loans without which Greek banks would face serious problems. The ECB's reason for this action was that it no longer had confidence that Greece would comply with the bailout terms and could not conduct an ECB review in the current conditions. Both sides are staking out initial positions in the negotiations. Greece's prime minister Tsipras says he wants to work within the eurozone rules and at the same time respect the mandate from the Greek people for better terms on the loans. Tsipras met with the EU's Martin Schulz, and the ECB's Draghi, as the EU and ECB begin discussions.