The UAW agreed to a tentative contract that ends a two-day country wide strike. GM and the UAW confirmed that the deal creates a GM-funded, UAW-run trust to administer retiree health care. The deal would give workers bonuses and lump-sum payments and would pay newly hired workers at lower rates. The agreement is expected to set a pattern for contracts at Ford and Chrysler.

The current situation where the Big 3 is losing market share and cost competitiveness to its Japanese counterparts is due to the incompetence of the Big 3 management and the UAW’s push for costly labor agreements. How could a corporation stay economically viable if it continues to pay laid off workers and fund the retirees’ pensions and health care? It cannot in an open market.

For the UAW to fight for jobs for its members, they will have to make concessions to the domestic automakers. Given the current situation, it will continue to be an uphill battle to win new membership from the Japanese transplants, particularly Toyota. Why would worker want to pay union fees to negotiate concessions? Most of the new auto jobs in the United States are non-union.

For both the UAW and Big 3 to stay relevant, they’ll have to change the way they do business. The Big 3 must manufacture well designed, high quality vehicles that the market wants. The UAW needs to be realistic in what kind of labor agreements they can get for their members.

Wal-Mart has formed a partnership with the Carbon Disclosure Project to look for ways for its suppliers to better manage their energy efficiency, as part of its environmental campaign. Under the partnership with the not-for-profit organization, which collects greenhouse gas emissions data from large companies, Wal-Mart will measure the amount of energy used across its supply chain, and then look for ways to make procurement, manufacturing and distribution more energy efficient.

The retailer said it will initiate the plan with a pilot group of seven commonly used products: DVDs, toothpaste, soap, milk, beer, vacuum cleaners and soda.Suppliers will be encouraged to monitor and manage their greenhouse gas emissions and lessen Wal-Mart’s “total carbon footprint.

It seems that Wal-Mart is doing more than paying lip service to make the environment better. There is no doubt that their suppliers will have to foot part of the bill. One can wonder whether it applies to China where 80% of its goods are sourced. Never the less, the big retailer seems to be acting on its green initiatives.

They seem to be doing more to combat greenhouse emissions than the celebrity types that wrap themselves under the green label. The Hollywood crowd will show up at environmental causes in their hybrids but still travel in their private jets and still live in their huge, energy sucking mansions. At least Wal-Mart is walking the walk.

Ben Bernanke surprised the markets with a bigger-than-expected rate cut because he thought the risks to the economy were greater than the risks of inflation. After all, the economy is losing jobs, people are losing their homes and their confidence to shop. During the last few years, the American consumer was driving the economy. Thanks to rising home values, they dipped into their home equity to finance all sorts of purchases. They included new vehicles, renovations and investment properties.

Thanks to the implosion of the subprime mortgage market, credit suddenly tightened up. Banks were no longer lending to each other because they did not trust each other. As a result, some businesses and consumers had trouble getting funding to finance their activities. The rate cut was meant to give financial institutions an incentive to start lending to each other again.

An economic slowdown by the United States this time should not drag the global economy down with it. Strong economic activity by developing countries such as China and India will pick up the slack. A weakening US dollar is driving demand for its products and services. Not surprisingly, US exports are thriving and the job market is still relatively strong.

Because of this and the Federal Reserve Board’s actions, the US should avoid a recession. One should never underestimate the flexibility of the US economy and the American consumer. So, buy techs, energy and agriculture on dips. I would still avoid the financial sector.

Lehman Brothers Holdings Inc. said its fiscal third-quarter net income fell 3.2% on big write-downs of mortgage securities and leveraged buyout loans, which is much better than expected in light of the subprime mortgage fiasco. Investors reacted positively to the results. The company said it took what it called “very substantial” reductions in the value of its loan commitments to private equity firms and its residential mortgage-related assets. The decline of $700 million would have been even bigger without large gains Lehman recorded from hedging positions, the company said.

Despite the promising numbers, questions still persists how open Lehman is with their asset exposure to bad debt. During the last quarter, did they write off everything they could or are still holding off on more asset write downs? There are still too many variables to deal with to justify buying their shares on strength. I would personally buy these shares on weakness.

Meanwhile, I think better plays can be found in the energy and agricultural sector. A growing global economy means more demand for these commodities. Despite the higher input costs, companies in these sectors should enjoy strong demand and high prices. At this point with financial stocks, there are still too many skeletons in the closet.

With more recent data showing that the American population are getting fat, particularly our kids, the blame is being put on companies that produce unhealthy food. Fast food companies and soda pop makers are particularly being singled out. They are accused by parents and politicians for purposely marketing their products directly to kids. Kids are getting fat because they are gorging on cheeseburgers and washing it down with pop.

Are these companies also to blame for kids not being physically active? Where are the parents to make sure that they eat properly and get enough exercise? What about the schools? Do they put aside enough funds for sports and exercise? Instead of putting more money towards physical education, politicians rather spend our tax money on headline grabbing but often useless programs.

It’s easy to lay the blame elsewhere. As parents, we have to take the responsibility for the physical and mental well being of our kids. They usually eat what we eat. We have to set the example for our children. Too often, we eat fast food because its convenient. We want to please our kids rather than do what’s right for them. If we’re fat, our kids are likely to be fat also. They are a reflection of our lifestyle.

Ultimately, we are responsible for the health and well being of our children. Sure, a lot of these companies are marketing unhealthy food choices to our kids. We are also guilty of feeding them junk food because its so convenient. We let them make the selections and eat what they want. Sometimes, we have to make the choices for them. After all, they’re still kids.

Crude oil closed yesterday at a record price of $78.23 a barrel in New York on speculation that OPEC’s agreement to boost production by 500,000 barrels a day will not be enough to meet growing demand. The previous high was $78.21.

According to the Energy Department, oil for 2007 will be at 85.7 million barrels a day and 2008, go to 87.2 million barrels a day. Meanwhile, oil production is expected to average 84.64 million barrels a day and for 2008, output will be at 87.1 million barrels a day. These numbers indicate a shortfall in oil supply.

Either way one looks at it, oil prices are undoubtedly going up. The worries are that higher energy prices will be a drag on economic growth. Oil is needed for transportation and running factories among many other things. The economic prosperity of many nations depend on securing a stable supply of oil. As a result, users will pay up for this dwindling resource.

For the rest of the year, $80 plus oil is a possible reality. As for 2008, $100 oil is the price targets set by various analysts. As a consumer, one should trade their SUVs for a smaller economical vehicle. Live in a smaller home and be close to work. For the United States, whose economy was built on cheap oil, the adjustment will be harsh. To look at how we might live, look at the Europeans.

Last Friday’s August job report saw losses of 4,000 jobs, not the expected gain of 110,000. This was the first job loss in 4 years. Not surprisingly, there are talks that the U.S. is going into a recession. According to most economists, we have a 30% chance of this occurring. The economic picture in the U.S. does not look good.

The subprime mortgage market collapse is resulting in record foreclosures. There are thousands of layoffs in the home loan and housing industry. The inventory of unsold houses are at record highs. Not surprisingly, sales of consumer durable goods such as cars and furnitures are also suffering.

Never the less, the outlook is not as bleak as one might think. U.S. exports are booming. Corporations are flushed with cash and are embarking on capital spending programs. The global economy is doing fine even if the U.S. slows down. The economies of China and India are still strong and are not likely to slow down just yet. The Federal Reserve Board will probably start cutting rates in a bid to steer the U.S. away from a recession.

What Apple is doing to its competitors is similar to what tennis great Roger Federer is doing to his competitors, keep moving the target. Once the competition thinks they had them figured out, they raised the bar once again. Both are showing that they are hard to beat at their respective games. The case in point with Apple is their next generation iPod.

In addition to the significantly lower prices of the new iPods, these new devices feature Wi-Fi, a Web browser and the “cover flow” software to virtually flip through your music collection with a finger. Furthermore, iPod do not need to sign up contracts with any phone service providers.

For Apple, the new iPod means creating huge demand for the upcoming holiday season. The new features with a lower price means it will be on the wish list of millions of consumers. Their new device also means that Apple has more ways of making money from their devices. Their agreement with Starbucks mean consumers at the coffee retailer’s stores can buy and download music thorough a new wireless iTunes service.

As for Apple’s competition, it’s back to the drawing boards. They will have to come up with something better and cheaper. They better do it soon. The Christmas season is not that far off. As for Federer’s competitors, they’ll have to keep raising their game if they want to beat him.

Regardless of one’s political stripes, all politicians are going green because it gets votes. To build up his pro-environment credentials, President Bush have announced initiatives for the United States to use more biofuel from corn in a bid to cut our reliance on foreign fuel. On paper, it sounds great. Using a renewable resource means we can cut our dependency on fossil burning fuel. Great news for the powerful corn lobbyists.

The problem is there is only so much farmland to go around. All of a sudden, food companies and livestock breeders are competing with government subsidized biofuel producers for the same product. In this situation, the biofuel producer can afford to pay the higher prices. Corn prices go up and the costs get past on to the final user, the consumer. For those who regularly does food shopping, prices are indeed going up.

The price of wheat are hitting record highs thanks to healthy demand and lower production. The situation is also pushing up the prices of other agricultural goods such as corn and soybeans. If food prices continue to go up at a significant rate, there could be food riots. Ultimately, governments that cannot feed its people get booted out. In this scenario, expect governments to cancel their biofuel initiatives.

People can cut down on their driving and even heating, but not their eating. One should only look at China to see the possible future of biofuels. To avoid a potential riot due to surging pork prices, the Chinese government has announced an end to their biofuel program. Because of the greater demand from biofuel producers, input costs such as feed for pork producers have surged. Just imagine what Americans would do if we can no longer afford steaks.