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The new Ford Focus being unveiled at the Detroit Auto Show in 2009, is a new kind of car for Ford. This is a new kind of effort, a new discipline that Ford CEO Mullaly has advocated from the beginning. Making one car for all markets worldwide. Early on Mullaly told Ford's chairman Bill Ford that Boeing did not have a 737 for Europe and a 737 for the US and a 737 for Asia, why was Ford building a Focus for Europe and a Focus for the USA. In fact before Mullaly the Focus for the USA was a stripped down version of the European Focus and did not make much of an impression. The new Focus will have 80% common parts and 75% of parts from the same suppliers worldwide, so that a Focus made in Germany and the USA will share the same parts as a Focus made in Russia and a Focus made in China. And all of these plants will go into production at about the same time with the new Focus. To accomplish this transformation of Ford for "One Ford" worldwide, which is also on every business card carried by Ford managers, Mullaly appointed Derrick Kuzak as head of global manufacturing. See link for Derrick Kuzak. And the strategy was announced in mid-2008 with the start of retooling of truck factories in Mexico, Kentucky and Michigan, to make small cars designed in Europe for global markets. The task of coming up with one design for a global car was given to Martin Smith, a British designer based in Cologne, Germany. Smith says tastes are converging worldwide with the internet use, and customers are more unified than one would think, and whats emerging is a new kind of global cool if one looks for it. This is what happened when Focus protypes were shown to consumer panels in Europe, the USA and Asia, with a good impression created in all 3 markets. Aligning the US and European tastes was easier, China was a bit harder and the yellow leather interior popular in Shanghai had to be crossed out. Another challenge that had to be met in adisciplined manner was the varying safety rules and emissions around the world. For example European designers liked to have the windshield further forward, and Ford's global small car chief had to tell his engineers to move it back to meet US crumple zone standards. Similiar challenges had to be met in purchasing by global purchasing chief, Tony Brown, with a massive coordination effort needed to be done globally. And plastic trim from Michigan has to fit perfectly with sheet metal stamped in Michigan, and Ford used a virtual manufacturing system that allows the car to be built in cyberspace, and the bugs taken out at that early virtual build stage. The entire change is part of a metamorphosis at Ford, a change of culture and mastering a new discipline in coordinated effort worldwide for "One Ford." One year ago the Wayne Truck plant here in Detroit made the Navigator and the Expedition large vehicles.. With a $550 million investment this plant will make the Ford Focus a year from now. ...

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Feeding America, a national network of food banks, finds that 37 million, or 1 in 8 Americans, needed emergency food assistance in 2009. Even in affluent suburbs like Long Island it found 280,000 sought assistance for food in 2009. And 39% of these were children under 18. Only 30% of those seeking help received food stamps suggesting that even that program is not reaching everyone that needs help.

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Lawrence Katz, Harvard labor economist, talks to Friedman about the jobs crisis in the U.S.. Katz identifies three jobs crises occurring at the same time today. One is the drop in the demand for goods and services that resulted from the longer term effects of the financial crisis of 2008, with rising foreclosures, weak housing markets, bad debt on the balance sheets of banks, and interest rates at close to zero reducing the scope of action by the Federal Reserve bank. The second, is the widespread long term unemployment with workers dropping out of the labor market. The third, is the nature of new factories and hiring. Work in new factories is done through increased automation, information technology and fewer workers. As a result job creation is a fraction of what it was in the past. Not mentioned here is the shrinking of the public sector under the strain of budget deficits for local, state and federal government. This leads to the question of how America will create jobs in the future. Katz believes the answer is creating more "hubs," networked urban areas like Austin, Silicon Valley, and Raleigh-Durham, by bringing together universities, high-tech manufacturers, software providers, and startup companies, to cooperate in creating new products that enhance people's lives worldwide. This has to be done by the private sector and government working together to build the infrastructure and make the investments in education, training of workers, and equipment for new job creation....

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523 European banks borrowed 489 billion euros from the European Central Bank on Dec. 21, 2011, under the newly created Long Term Financing Operation of the ECB. This is designed to meet the financing needs of European banks which are shutoff from normal financing of selling unsecured bonds to private investors because of market anxiety. Much of this is for replacing other outstanding ECB loans, with analysts estimating about 190 billion euros of new liquidity being injected into the banking system. This also has the effect of reducing the borrowing rates for government bonds. In Spain the government sold 5.6 billion euros of government bonds at an auction on Dec. 20, 2011, with the interest rates dropping from 5.7% a month earlier to 1.7%. Small and midsize banks in Spain helped surging demand by buying the bonds to use as collateral for three year loans from the ECB at 1%.

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Simon Nixon points out that most of the 490 billion in euros borrowed by European banks under the Long Term Refinancing Operation of the ECB in Dec. 2011 is for rolling over maturing debt, rather than buying of government bonds. European banks financing needs based on figures from Barclay's Capital are over 300 billion euros for the 1st quarter of 2012. This suggests huge demand for the Long Term Financing Operation in the next quarter. For Spain and Italy the newly created lending facility should lead to higher bond buying by small and midsized Spanish banks and Italian banks, as this will boost their profitability. Spanish bonds yield 5% and Italian bonds yield 6.5% and loans from the ECB using the bonds as collateral are available at 1% for three years, which makes this an opportunity for these banks to boost profitability. The proportion of government bonds of Spain of Spanish banks bank assets is 7% and the figure for Italian banks is 9%. Nixon says an increase of this ratio by three percentage points by Spanish banks would created additional demand for Spanish government bonds of 45 billion euros, which is a third of the issuance for 2012....

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The Bank of Mexico, Mexico's central bank, cuts interest rates by half a percentage point to 3% in June 2014. The consumer price index is at 3.4% for 12 months through mid-May, and the central bank sees the inflation target of 3% by early 2015 as achievable. The central bank's estimate for GDP growth in 2014 was lowered to 2.8% from 3.5%. GDP growth was annualized 1.1% for the 1st quarter of 2014. Mexico has failed to live up to the growth expectations after the new Nieto administration's efforts to jumpstart the economy and opening up of the state oil industry to foreign investment. The policy changes of the Nieto administration set the future course of the economy and will take time to deliver results in economic growth. More effective administration and execution is needed for economic growth.

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Litigation expenses and settlements for JP Morgan Chase at $17.7 billion for 2008-2012 now exceed the $16.1 billion for Bank of America, according to FBR Capital Markets. JP Morgan Chase plans to spend an additional $4 billion and commit 5000 new personnel to help it clean up the bank's risk and regulatory compliance problems. Of the $4 billon $2.5 billion go into litigation reserves, and $1.5 billion for a 30% increase in risk control staffing and other related expenses. As part of the changes CEO Dimon has put the most senior executives in charge of separate parts of regulatory problems. These executives cannot be overruled by business heads. In another change still to be made at other banks the top compliance officer reports to the chief operating officer of the bank not the general counsel. This change was made at the request of regulators who now meet about 50 times per month with compliance executives. The total control staff for compliance and risk are now at 15,000 in 2013, up from 8000 in 2012. At a 2 day business retreat at Martha's Vineyard compliance and control officers were invited for briefings and came away with equal authority as business chiefs. JP Morgan has also provided 750,000 hours of training on control and regulatory issues to its staff using McKinsey, Ernst Young and other firms. CEO Dimon sees the effort as making the bank stronger than ever and this has become a top priority for him, reflecting a change in his views from the period when the London Whale crisis first emerged. It also shows a leadership trait of Dimon as a learner who puts his full weight behind an effort after gaining new insights into hidden problems....

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Germany's calls for closer political and fiscal union for the eurozone countries to complement and support the euro currency arrangement. German chancellor Merkel calls it "more Europe," "step by step." It all hinges on French president Hollande and how well the Socialist party does in the elections to the National Assembly on June 10 and June 17, 2012. If he does well and gets a working majority with other like minded parties he will not need the support of parties that are opposed to giving up sovereignty. Hollande's mentor is Jacques Delors, a former president of the European Commission and a strong supporter of the idea of European Union. England under the Conservatives remains Euro-skeptic. France and Germany were driven closer by the idea of European Union by necessity, because of history and three wars. The European Union had strong support after 1945 from French and German leaders, Monnet and Adenauer, who struggled with political opposition but won over skeptics, with the process continued by German chancellor Kohl, a mentor of Angela Merkel....

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Prime minister Modi cites the successful Mars mission "Mangalayan" as showing India's technological capabilities and its ability to do things speedily at very low cost. For foreign investors India offers a stable politcal climate because his party has an absolute majority in parliament and controls many state governments, as well as being a democracy with a vibrant and internet connected young generation. A young population with 55% of the people under age 35 makes India the manufacturing powerhouse of the next two decades, said Modi. And the consumer base of over 1.2 billion people an attractive market. It was a rare combination of hands on salesmanship rarely seen ever on television from a prime minister. In one exceptional response about the condition of women, Modi said he personally led his ministers and legislators through Gujarat state's rural areas house to house in 45 degree centigrade summer heat on June 11-13 school opening days. He did this urging parents to send their daughters to school with the slogan "Send your daughter to school, Save a Girl." The result he said was 100% school enrollment in these rural areas for girls. A rare person at a special moment in India's history pushing the goals of development with uncommon tenacity....

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A report published by Capital Economics of Toronto, based on Labor Department data, shows the U.S. is not adding the kinds of jobs with the pay, benefits and hours of the 8.75 million jobs that disappeared during the recession. Labor Department data support this analysis. The number of food preparation and serving workers are expected to grow by 394,000 by 2018, but the pay is only $16,430 for these jobs. The good well paying jobs are continuing to be lost. Large employers such as Lowe's home improvement chain is eliminating 1700 managers, and adding 10,000 weekend sales positions and new assistant store manager positions. This use of parttime workers also reduces income levels of workers. The impact of this is to limit the consumer spending. As local government is shrinking from budget cuts, better paying jobs are being lost in state and local government, and workers are earning less in the new jobs that do similiar work.

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Prime minister Modi of India's visit to Japan in September 2014 leads to a commitment of about $35 billion in Japanese investment over 5 years. Japanese companies such as Suzuki, Toyota and Toshiba already have large investments in India.

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Alan Meltzer would like to see the Fed reverse its quantitative easing, and lower excess reserves gradually starting now. By this he hopes to see the Fed avoid the mistake of making a big shift from excessive ease to severe contraction further down the road. He also warns agains excessive deficit spending. He says a weak economy is not the time to cut spending or raise taxes, and he is not talking of draconian immediate steps. He would like to see a multiyear program to increase fiscal probity and reduce deficits size and frequency. As it stands now he takes both parties to task for lack of fiscal discipline and honest accounting. About $1 trillion in deficits each year on average for next 10 years is in the works, and is an underestimate because the savings of $200-$300 billion in medicare spending have still to be realized, and states do not have funds for increased Medicaid spending, and payments to doctors have still to go down by 25%. Chinese government purchases of half our debt will postpone the day of reckoning says Meltzer, but far better for us to strike at the problem now, before we blow a hole in the dollar and start a downturn. See the separate report on the shrinking UK economy....

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Most Americans pay less in taxes, including state, local and federal taxes, today than in 1980 in inflation adjusted dollars. The taxes have gone down by 2-3% for incomes in the range of $50,000 to $150,000, and gone down by 3-4% for incomes between $150,000 and $350,000. Taxes have gone down over 7% for incomes above $350,000. The main reason is the decline in federal income taxes.Tax rates increased in the period to 1990 and declined from 1990 to 2010. The Democratic party and president Obama are pushing for increase in taxes for incomes above $250,000. Republicans are resisting the changes citing disincentives to investment and growth for small business which generates a large proportion of new jobs created in the U.S. economy. The New York Times study shows the percent of the U.S. population that makes between $200,000 and $350,000 almost doubling in the period 1980-2010 and at the same time its share of the U.S. income remaining the same - many small business owners who hire employees would fall into this income category. Republican's response is for tax reforms that reduce loopholes, deductions and other tax expeditures that disproportionately help the wealthy. Democrats say this cannot create enough revenues to address the deficit, when mortgage deductions, charitable deductions are excluded. The back and forth is leading to stalemate but also opening up discussion for the first time on whether the mortgage and charitable deductions make sense in today's environment. A significant portion of revenues lost in the mortgage deduction goes to affluent households, subsidizing larger borrowings to build larger homes than otherwise, according to the Brookings Institution. Politicians have resisted changes that would go against powerful lobyying groups in the past, yet the impasse has opened up new thinking outside the box because of the pressing need to come up with a solution....

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A study by the National Employment Law Project shows most of the job creation in the economic recovery to 2014 in the U.S. is replacing the better paying jobs with lower paying jobs in fast food retail and similiar low paying industries.

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An indepth look at Mexico, its assets, its huge potential and what is holding Mexico back. It ranks much higher than Brazil in many respects- higher investment as a fraction of its GDP, technical education, an easier place to do business, less regulation, better management talent, more industrialized. In 2010 Mexico had $400 billion of business with the U.S. With rising Chinese wages Mexico is an attractive place for foreign investment, with a hardworking and educated workforce. Mexico suffered badly during the 2008 recession in the U.S. It is trying to reduce its dependence on exports to the U.S in key areas such as the automotive industry. Exports to the U.S. by the automotive industry are now 65% of the total, and the auto industry association in Mexico is working to bring this figure to 50% by exporting to Latin America and Europe. Economic growth was 5.4% in 2010, and expected to be 4-5% in 2011. Drug violence may have reduced the growth by one percentage point according to some estimates. The think tank, Mexican Institute for Competitiveness, estimates that economic growth would be 2.5% percentage points higher if labor market and competition laws are changed, and the oil industry is opened up to foreign investment as happened in Brazil. A study by OECD and the Federal Competition Commission (CFC) of Mexico has shown that 31% of Mexican household spending goes to products operating in high price monopolistic or oligopolistic markets. The bottom ten percent spend even higher proportion of incomes, around 38%, for products supplied in such markets. This includes pharmaceuticals, airline travel, banking, and electricity. Taking on these cartels is a difficult task. The CFC is beginning to take the first steps in this direction, in what will be a long road to fair prices for Mexican consumers. Banking was opened to Wal-Mart. The collapse of Mexicana was an opportunity to auction landing slots to other airlines. An auction system has been developed by CFC for drugs. A new competition law sets penalties for collusion in pricing, with upto 10 years in jail. And Carlos Slim's telephone monopoly was fined $1 billion for its telecom monopoly practices. In 2009 the Calderon government shut down Luz y Fuerza, a state electricity company costing the governmment $3 billion in subsidies for an highly inefficient operation. ...

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A Sept 2012 Census Bureau report shows the median income of a typical U.S. family declined or was flat in almost all states in 2011. Median household income declined in Nevada by 6%, in California by 3.8%. In Arizona and Florida incomes declined by 2.9%. For the U.S. median income declined by 1.3% to $50,502 in 2011. Poverty continues to increase, with California showing 335,760 people falling into annual income levels below $23,021 for a family of four in 2011, giving the state a 16.6% poverty rate.

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Polls show 83% of the German public support increasing the minimum wage to 8.50 euros an hour. About two thirds of the public support increasing income taxes on high wage earners. The Social Democrats talks with the CDU to form a coalition are likely to lead to CDU accepance of the condition for a minimum wage of 8.50 euros an hour, but not to the condition for raising the taxes on high income earners. The SPD sees the higher taxes as a way to pay for new infrastructure. A survey done for TV broadcaster ZDF shows 61% of Germans favoring a SPD-CDU coalition. In the 2013 elections the SPD gained 25.7% of the vote and the CDU-CSU gained 41.5%. The SPD is pushing for flexible retirement age, equal pay for men and women, a tighter financial regulation, and a growth and employment strategy in the EU.

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The Saudi government announced sharp cuts in spending and subsidies to cut the deficit in 2016. The deficit in 2015 was about $98 billion or 367 billion riyals , according to Al Arabiya Saudi news channel. In 2016 the budget is designed to cut the deficit to $87 billion or 326 billion riyals. The 2016 budget is for 840 billion riyals, compared to 975 billion riyals in 2015. Saudi Arabia's foreign exchange reserves of $640 billion could be exhausted at this rate by 2020, experts say. Actions being taken by the government include increasing the price of some grades of gasoline sold domestically by 50%, as subsidies are being cut. The drop in oil prices to about $35-$40 is hurting Russia, Saudis and Venezuela. The Saudis have increased defense spending for conflicts in Yemen, and in other areas, as they oppose Iran and Russia in the Iraq- Syria conflict.

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Greece defaulted on a loan payment to the IMF for 1.55 billion euros ($1.73 billion) on June 30, 2015.