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BJP led by prime minister Narendra Modi wins a huge majority of 325 seats out of 405 in India's largest state Uttar Pradesh for the state assembly elections. The national opposition party Congress wins only 7 seats in what was once the main source of Congress support during the period of Jawaharlal Nehru and Indira Gandhi. This will enable the BJP to push forward with the modernization program for infrastructure and roads, and other development. Opposition in the upper house Rajya Sabha and lack of support from states will not be a major hurdle in development now that BJP has won in states such as Orissa, Maharashtra, Uttar Pradesh, and Uttarkhand in recent state elections after its win in the 2014 national parliamentary election. This also gives credibility to the government's other efforts such as demonetisation to fight corruption in real estate and other areas. India's GDP is a fraction of China's and it is smaller than that of countries such as Indonesia, because of the poor administration and lack of development in India's 2 largest states of Uttar Pradesh and Bihar in the northern Hindi speaking region. To double the GDP from its current level will require doubling the GDP of Uttar Pradesh and Bihar. Bihar's state government is run by a former BJP leader, who has also pushed for improving standards of living and economic growth.  ...

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Bank of England Governor warns that British banks are undercapitalized in Nov. 2012 and need to add to reserves for additional losses.

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In the current situation where the "too big to fail" problem for banks has only worsened since the crisis with the remaining banks even larger after mergers, and no dividing wall between speculative trading in securities and the utility banking of collecting deposits and making loans, the country depends on regulators to do the job of supervision. Regulatory reforms have faced resistance from the banking industry and the reforms have been watered down in Congress. It is in this environment that Patrick Parkinson takes on the job of head of bank supervision at the Federal Reserve. He will work with Daniel Tarullo, the Fed governor who heads the committee of governors overseeing bank supervision. But he is also one of the old faces at the Fed when the Fed failed in its role of bank supervision. From 1993 to 1998 he was the top staff advisor to the Fed chairman, for matters considered by the President's Working Group on Financial Markets.

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Joe Nocera describes his personal situation which also reflects the situation of the average investor in his 401(K) for retirement - inexperience in handling the boom-bust cycles in the market and loss of savings, especially in the last two decades with sharp swings in the market. The Employee Benefit Research Institute statistics on savings of the average American are striking, dismal is the right word- only 22% of workers 55 or older have more than $250,000 set aside for retirement, and 60% have less than $100,000 in a retirement account. The average savings of an American near retirement are $100,000.

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This WSJ editorial says the U.S. should use what little influence it has to prevent Egypt from descending into civil war after the violent crackdown on protester camps in Cairo on August 14, 2013 by the Egyptian military. It says that continuing military aid will not be politically possible if the violence continues. A separate comment by Marc Lynch of the George Washington University Institute for Middle East Studies in online Foreign Policy magazine, says the Gulf States will make up for U.S. aid and the important thing is for the U.S. to be credible in the region in the long run.

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JP Morgan Chase Bank faces six separate investigations by the U.S. Justice Department in 2013. Cases from the housing crisis are still being worked out. The Justice Department has concluded that securities laws were broken in JP Morgan's selling of mortgage backed securities in 2005-2007. A new investigation is taking place into anti-bribery law violations in hiring of children of Chinese officials. The legal settlement losses could place JP Morgan Chase ahead of Bank of America in the extent of losses. One estimate is for $6.8 billion in losses above that set aside in reserves, an amount larger than that of any other U.S. bank, according to Barclays Research.

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The increasing competitiveness of Mexico compared to China and India as an investment destination in 2013. Foreign companies are investing heavily in Mexico because of investment advantages in labor cost, supply of engineering and management talent, and proximity to the U.S.

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With a low voter turnout estimated at 25% the United Russia Party which supports President Putin wins regional elections in Russia.

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Comedian and politician Beppe Grillo, from Genoa, who leads the Five Star Movement party. This party has increased its support from 4% in 2011 to about 18% in recent opinion polls. Grillo is a moderate liberal who has benefitted from the unpopularity of austerity measures taken by prime minister Mario Monti and the rapidly declining support for Berlusconi's People of Freedom party after recent coruption scandals. He has opposed traditional politics of established parties since 2005 when he pulled together people over social media and the internet. Support for political parties in Italy is rapidly fragmenting with Berlusconi's party dropping to 17% in polls and no party having significant support. In this situation business leaders support a continuation of the Mario Monti government beyond the April elections if no party gets a mandate from voters. Grillo says his movement is similiar to other movements that oppose the euro and austerity measures such as the Marie Le Pen movement in France. It is against this background that the Social Democrats in Germany have united behind Peer Steinbruck, a former finance minister, who has the best chance against Merkel in 2013 elections for chancellor in Germany. Most of the difficult and necessary actions that Merkel and the German public have supported are already taken- the changes in labor laws in Italy, France's 2013 budget that targets 3% deficit in 2013, efforts of Italy, France and Spain to improve competitiveness- and capital markets continue to provide vigilance in this direction, creating a situation where Merkel may have exhausted her effectiveness. This creates an opening for a change in policy in the eurozone that offers more German flexibility on stabilizing the eurozone and supporting the embattled governments of Monti in Italy and Rajoy in Spain facing popular protest and not enjoying the kind of support Monti says France has from Germany....

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The WSJ's Christopher Emsden and Alessandra Galloni's interview with Italy's Labor Minister, Elsa Fornero, after major changes to Italy's labor laws including Article 18. This is a major change for Italy. She describes the problems she faced and how she has tackled them to get the new labor law passed. Fornero will set up a monitoring system to ensure that the law's imprementation takes place smoothly. To make the change Fornero took apart Article 18 to its constituent elements, preserving the anti discrimination aspect and the right to appeal, but allowing employees to be terminated for economic reasons. This puts Italy on an even footing with its europartners Germany and France, and addresses one of the main reasons Italian businesses are loath to hiring new employees. It also addresses the main reason why foreign investment in the Italian economy is so scarce. In achieving this Fornero faced the lack of support from Confindustria, the business association (which does not cease to amaze her), CGIL, the labor unions, and the political class in Italy, with each side wanting to tweak the system to make gains or get special exemptions. Fornero is a pensions expert and economics professor at the University of Turin. Her ministry covers pensions, labor, welfare and equal opportunity policies....

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Spain delays setting up a financing mechanism for aiding regions short of funds by extending existing credits till Spain's high bond yields of 7% decline.

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Britain's Chancellor of the Exchequer, George Osborne, says "the integrity of the City matters to the economy of Britain," as he takes strong action to safeguard financial benchmark rates set in the City of London. Following the manipulation of LIBOR for which banks paid heavy fines this is a major issue. New legislation will make it a criminal offense, punishable with 7 years in prison. Manipulation will be determined based on the intentions of traders to place trades or share information so that their interests are served above a client's interest. Not just LIBOR, other benchmarks such as London foreign exchange benchmark rate, key gold and silver rate, ICE Brent index and Sterling Overnight Index Average (Sonia), ISADFix, are also included in this legislation.

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Mexico is close to becoming the U.S.'s largest trading partner. Trade increased by 17% between Mexico and the U.S. to $461 billion in 2011, compared to $502 billion in trade between the U.S. and China.

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Questions raised about whether the bets made by trader Iksil of the CIO at JP Morgan Chase were made to hedge risk, or to simply engage in proprietary trading for the bank in the hope of making large speculative profits. Bets made earlier by Iksil made large profits, but were simply speculative trades that increased bank profits. In late 2011 Iksil made a $1 billion bet that some companies would default on their debt in a few months. When American Airlines filed for bankruptcy protection Iksil's trades made about $450 million for Chase. But the trade had little to do with hedging risk.

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Out of the rubble of failed policies, lack of far sighted leadership, and the failure of Middle Eastern elites and leaders, must arise the right way forward.

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The system of using performance evaluations for "forced" or "stack" ranking of employees started with Jack Welch at General Electric. Microsoft adopted the system under Ballmer till 2013, when it decided that the need for teamwork was more important and discontinued the practice. Welch used it to get rid of "underperformers" or managers who did not conform to his requirements when he became CEO of General Electric. It was his personal style and way of bringing change to GE. The practice of "forced" ranking increases competition inside the company instead of teamwork, say managers, and leaves a lot to the caprice of individual managers. In December 2013 Ballmer facing criticism from his Board for missing some of the disruptive technologies in the information tech business and falling behind Apple and Google, sought the advice of Alan Mulally of Ford Motor Company. Mulally had to fight entrenched Japanese competitors and pull Ford out of a crisis in which even Ford's logo had been put up as collateral for loans. Meeting for 4 hours on Mercer Island in Seattle Mulally told Ballmer that he focussed on teamwork and simplifying the way Ford did things. Ballmer phased out the "forced" ranking system as one of the last major steps before he leaves Microsoft. In today's environment for tech companies of intense competition worldwide and disruptive technologies without teamwork and employees looking to come up with new and exciting products the future is surely lost. Having the "bottom" 50% of the employees compete for limited positions can be dangerous or suicidal without the dominant position in markets that GE and Microsoft had. It also makes no sense to substitute internal competition and capricious manager behaviours for teamwork. It is the responsibility of managers to do as much as possible to make good hiring decisions, and then motivate and help employees to achieve their best performance with frequent helpful feedback, and to promote teamwork. This is the lesson Ford learned through its crisis and Microsoft is now learning....

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This WSJ article provides a detailed account of the positions of Clinton and Trump on Wall Street, the financial industry, banks, Dodd-Frank, regulatory reform, 6 weeks before the U.S. presidential election.