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Differences between Mr. Suzuki, CEO of Seven and i Holdings, the parent company of 7-Eleven and investor Daniel Loeb of Third Point LLC, on the right strategy for the company. Loeb favors focussing on the 58,000 7-Eleven convenience stores in N. America, China and Japan. Suzuki had expanded by making acquisitions and kept a money losing Ito Yokado retail chain in Japan. Following a boardroom fight Loeb wins and Suzuki who ran the company since 1992 resigns. Ito Yokado ran the Japanese 7-Eleven chain till it acquired the U.S. 7-Eleven in 1991. A new corporate governance code setup by the administration of prime minister Shinzo Abe, calls for more outside directors to be appointed to Boards, and greater attention to interests of shareholders. This is seen as a test of the new corporate governance rules. Akira Kiyota, CEO of the company running the Tokyo Stock exchange sees it as a positive step.

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Toshiba sets up a new board of directors in August 2015 following the accounting scandal. Seven of eleven directors are from the outside, all Japanese. Outside directors will head the audit, compensation and nomination committees.

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Grady Cash is an active runner at age 71. A sports hernia sidelined him at age 50 but he has found his way back into running. After a 2 year hiatus he returned to the track. He entered his first national track and field competition in 2004, and by 2015 eleven years later he was running in the 200 metres at the 2015 USATF Masters Indoor Track and Field Championships. Here he cam in last and had a revelation. Most of the runners were shaped differently than the long distance 1500 metres runners. These people were V shaped with tiny waists, broad shoulders and big leg muscles. From this he learned to do weightlifting at a local gym in Nashville and hired a trainer. After his retirement from financial planning he set up his own routine. He runs with a group at the Vanderbilt University track two afternoons a week ages from mid 20's to 76. A typical workout is eight repetitions of 200 metres that are sequentially faster. He does easy recovery runs on the trails. Mot important he tries to remain injury fee in the kind of routine he selects and listens to his body all the time not to overwork it and run  injury free the next day.  ...

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Japan's prime minister Naoto Kan said after a loss in the Upper House parliamentary election, that he had not explained his plan to increase the consumption tax well enough to voters. He sees this as a big reason for the defeat in the upper house election. A small party called Your Party increased its seats from one to eleven seats. This party is popular for advocating small government.

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Eleven members of the panel on the US Deficit Commisssion supported the plan, and seven opposed it, in a 11-7 vote. The panel members supporting it include Senator Durbin, Senator Coburn, Senator Crapo, Senator Gregg, and Senator Conrad. In the House the following House members voted against it- Rep. Becerra, Schakowsky, Camp, Hensarling, Paul Ryan. The House Democrats opposed it because of the changes to Social Security, and the House Republicans opposed it because they said the report did not tackle federal health-care spending sufficiently.

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President Trump says he will reconsider his decision not to join the Trans Pacific Partnership. Trump says he will look for a "substantially better" deal that the one negotiated by president Obama. Trump added that the U.S. already has bilateral trade deals with six of the eleven nations in the TPP and negotiations are taking place with Japan a country with which the U.S. had difficulties in trade. This change of mind comes as Republicans in Congress and other groups including farm exporters are calling for using TPP as a way to pressure China. Wheat exporters in the U.S. say joining TPP would give them a level playing field with Australia and Canada for exports. This means reopening the negotiations with Japan conducted by the Obama administration and seeking more concessions from Japan. Japan's chief cabinet secretary says Japan has made all the concessions it could.  U.S. president Trump would have to come up with a better deal to justify joining TPP.

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Federal Reserve chairman Bernanke said the Fed would target a 2% inflation rate and keep short term interest rates near zero till late 2014. Eleven of seventeen Fed officials at a two day policy meeting ending Jan. 25, 2012 supported this policy. The announcement is part of the Fed's new communications policy which hopes to lower long term rates to stimuate growth and employment by signalling intentions on rates on a longer term basis. The Federal Reserve has lowered its estimate for growth in the U.S. to between 2.2-2.7% in 2012 from 2.5-2.9%.

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Elelven of twelve Fed Governors support the U.S. Federal Reserve's decision to keep rates low till unemployment falls below 6.5%, as long as inflation remains subdued at 2-2.5% and inflation expectations are low. Only the Fed governor of Richmond expressed a dissenting vote. The Fed in its policy statement said it was addressing the problems of the last three years in housing and joblessness. Charles Evans of the Chicago Fed put it this way in a Sept 2011 speech- suppose the inflation rate was 5% when the target was 2%, then central banksers at the Fed would have acted as if their hair was on fire to tackle inflation, then why shouldn't the Fed do the same for unemployment. He succeeded in convincing Bernanke, Yellen and other Fed governors. Bernanke emphasized the enormous cost in human potential and productive capacity of the U.S. economy from high unemployment and people dropping out of the labor force.

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Reorganizing a large and ineffective sales force at H-P is one of the biggest challenges facing new CEO Mark Hurd, who took the job in 2005. Under CEO Carly Fiorina the situation had deteriorated. The H-P sales force has become a large bureaucracy which takes much longer to get things done, with the added problems of duplication, redundant layers of management, delays getting approvals and so on. Corporate customers had difficulty reaching salespeople, and getting simple tasks done such as price quotes or getting a sample product took way too long for customers. Salespeople spent only 30% of their time in front of customers, with the bulk of their time spent navigating the large H-P bureaucracy to get things done. Out of 17000 salespeople only 10000 sell to customers, 7000 or 40% are in support or administrative positions. Four people from different groups can be found chasing the same customer, and different quotes from different salespeople cause duplication and confusion. H-P corporate salespeople did not specialize in any particular product area. And salespeople used 30 different types of software to track sales because of years of acquisitions, including the acquisition of Compaq. There are 11 layers of managers between the CEO and corporate customers. Hurd's solution was to organize the sales force so that it was responsible for specific products and specific countries, similiar to the situation he had seen at his previous company NCR. Responsibility and authority for decisionmaking were matched and clearly assigned. Each salesperson had a narrower focus and was to be limited to 3 accounts. H-P's 2000 corporate accounts would have just one salesperson to interface with. Sales would only use one type of software from Oracle Corporation. Changing an organization the size of H-P is a slow process. A year after these changes, the VP of Information Technology at Lear Corporation, says he still does not know who has been assigned as the salesperson for Lear. He has not seen much change in H-P sales. Hurd also reduced the number of employees by 10%, or about 14,500 people. After these layoffs the layers of management have been cut from eleven to eight between Hurd and the corporate customer, still too big a set of layers. ...

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Zweig, Light and Pleven reflect on the experience of the last 5 years in the stock market. Investors who went through severe anxiety for higher investment allocation in stocks in 2009 now feel the opposite for low investment allocation in stocks. What does one make of this, and what have we learned, is the question posed. One lesson is that investors should be wary of relying too much on predictions. At one point predictions of Goldman Sachs and other bank economists was for the S&P at 1250 at the end of 2012, when it was 1421 in April 2012. The eurozone crisis and the sluggish U.S. job growth, debt overhang, were major factors in their assessment. The eurozone recovered faster than expected and the Iranian nuclear crisis risks were reduced through negotiations. QE 1, QE 2, QE 3 by the U.S. Fed under Bernanke provided support to the market. Banks recovered faster than expected with help from the Fed. Another lesson is that this can happen with higher volatility, 900 point drops occured in May 2010 and there were drops in April 2012 and other dates. Zweig gives April 2011 as a date for the start of a 5 month bear market, citing Oct 4, 2011 as another date with the market dropping 21% from the April 2011 peak. Another lesson is that performance statistics can play tricks, a month or a year can make a big difference. If 2013 is not included the statistics look very different, if 5 years go back to Feb 2009 when there was a 11% decline instead of March 2009 when there was a 9% improvement the numbers change quite a bit. Another lesson is that macroeconomic news played a major part in the story of the stock market in 2009-2014 and continues today, with continuing support and vigilance from the U.S. Fed and the ECB. The bad news from the eurozone throughout 2011 and into 2012, and sluggish job markets in the U.S., took a positive turn in 2013. The U.S economy is improving and the eurozone is returning to growth gradually in 2014. Because of different timing in their recovery P/E ratios are higher in the U.S., than in Europe....

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A former Wall Street trader says banning bonuses for investment bankers would take out much of the risk in the financial system. The current system is different from the one he joined as an intern in the 1980's, he says. At that time banking was a bland business, where the head of a financial firm made about the same as a junior trader makes nowadays. Large bonuses of today were rare at the time. What large incentives to take risk in the form of bonuses do is to encourage extreme risk taking, especially when the downside or pain as a consequence of these decisions is passed on to other individuals or institutions, or the government.

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Banks in the UK are considering giving investment bankers allowances to make up for lower bonuses mandated by new EU rules. This is one of the mechanisms banks are considering to be able to pay competitively. EU rules do not limit total compensation making it possible to shift pay given earlier as bonuses to the new 'allowance' category. For instance a 1.8 million euro bonus might be dropped to 1 million euros and 800,000 euros given as an allowance. Such an arrangement means banks can adjust the allowance as markets and regulations change. Increasing fixed salary would mean effects such as higher pension costs. Most of the 35,000 higher level banking employees to which the EU rules apply work in London, England. The UK Prudential Regulation Authority has come out against the EU bonus rule and the UK has taken this up in a legal challenge at the European Court of Justice. U.S. and Asian banks are deferring parts of bonuses and paying in a mix of shares and cash.

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Britain's banks still owe the government 100 billion pounds ($158 billion) from the bailouts that followed the 2008 financial crisis. The incentivizing of risk by pay structures and bonuses was seen as a big part of the problem. LIBOR manipulation abuses by banks are still on regulators minds. The Financial Conduct Authority and the Bank of England's Prudential Regulation Authority, have set new rules to correct the problem. Earlier EU rules limited bonuses to 100% of salary. The new FCA rules require a 3 year period for traders and risk managers have to wait 5 years for performance awards in full. Top executives have a ten year wait to be certain claw back provisions do not go into effect. Andrey Bailey at the PRA says the rule is designed so "that people in positions of responsibility are rewarded for behaviour which fosters a culture of effective risk management and thus promotes the safety and soundness of individual institutions. "

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Wall Street Journal analysis shows top earners at 38 U.S. banks and securities firms will get $145 billion in 2009, an 18% increase over 2008. This even after increasing public anger about exceedingly high levels of executive compensation with no relation to performance, and at a time of high unemployment.

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Thomas Frank writing about the public outrage about executive compensation quotes Bill Black, a Professor of economics and law at the University of Missouri-Kansas City, who makes an important point. Beyond the size of this compensation there was something else happening that was perverse in its design and in its effects. Black says that at each point in the development of the disaster of mortgage securitization, it was the pay for performance systems that sent the wrong signals to loan officers, real estate appraisers, accountants, and bond rating agencies. The compensation or reward systems actually encouraged wrong, unethical and ultimately disastrous behaviours for the companies and the economy. Another way to look at it, the way it happened on Wall Street- especially at Merrill Lynch and some other financial institutions- the bonuses and other compensation was a way for executives to recklessly milk (loot is the other word) the companies for all they could yield regardless of the results afterwards. And as Black says, to do this through normal corporate mechanisms. A whole range of behaviours of this type took place in the final years of the boom. See other articles by Thomas Frank. ...