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Nine states in India will have elections for the state assembly in 2023 before the Lok Sabha parliamentary elections in 2024. The states include Karnataka in May, in the northeast Tripura, Meghalaya, Nagaland in Feb-March, and Madhya Pradesh, Rajasthan, Chhatisgarh, Telengana in Nov-Dec. India's modernization depends on strong execution of development plans between now and 2030, which will require a strong and stable government for the country.

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This analysis by Gerald Seib in the WSJ shows the FBI chief Comey reopening the investigation into Clinton's email server just one week before election date November 8, as a move that does not enhance the democratic process because either way it will lead to questions why this was done at this late stage. The emails were found on a laptop used by Huma Abedin, an assistant to Hillary Clinton. Experts say the emails can be processed in a few days, and the FBI, the Justice Department are moving quickly to do this. 

Election experts say most of the decided voters for both parties will not be affected by this especially since most people will have made up their minds by now. Some voters who had questions about Trump might be moved to vote for him, and some undecided voters may be less enthused to come out to vote, though it is not clear at this stage. By mid week a clearer picture is likely to emerge. 

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Much of this report concentrates on big name schools ignoring the facts about student debt and value delivered, and the shifts in perceptions in companies that see big name schools as not necessarily an asset as inthe past. In this new situation looking objectively at value delivered the US state university system is its strongest asset and the state universities offer higher value for local students without the unneeded debt loads of big ticket institutions with a lot of debt overhang, and little additional value. In the end education is about persistence, hard work, grit and determination. A  Kamala Harris at Hastings in San Francisco can do as well or better than someone from the big name schools. After the Supreme Court decision opposing quotas for affirmative action the first results of enrollment by ethnic group and race are mixed and sometimes confusing. Some colleges and universities are seeing the same enrollment and some are moving in opposite directions for ethnic groups and race. This NYT report says if universities can get to a fair enrollment for different groups without racial quotas then these quotas may not be essential to achieve their purpose. Schools are looking at students from rural areas in ways they did not in the past, and trying innovative approaches to building a better America after the pandemic because they think it is the right way. ...

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Paris Olympics organizers want this to be the smallest footprint on climate at 1.58 million metric tons of CO2. This is half that in 2012 London Olympics of 3.4 and 20% less than in Tokyo Olympics of 1.96. No rhetoric, actual facts is the goal even with 13 million spectators from many countries.

It was an opportunity for us to stage this Games in a different way, both for us to prove that the Games can be done differently, but also to leave a legacy,” says Georgina Grenon, Paris 2024’s director of environmental excellence." It is not that difficult to get 50% cut in emissions by using wood or low carbon cement. New construction is a big source of emissions. Paris organizers plan to use existing or temporary infrastructure, and also reuse what is built, and build some facilities in underserved deprived areas to use later for affordable housing. It is a remarkable and commendable effort.

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India imports 2 million barrels a day of oil from Russia. It now faces the need to address the problem this has created for Germany and US seeking an end to Russian missile attacks on Ukraine. Without other leverage DJT and indirectly Germany are putting pressure on India to shift these purchases to the US and cut India's $46 billion deficit with the US.  India needs to accept that the reprieve it got during the covid years to import from Russia to help it control inflation at home would at some time come under increasing pressure from the US. That time may be now as DJT and Merz see this as the only few areas of leverage they have to get Russia to reconsider its position for settling the Ukraine war entirely on its terms. Just as in the India Pakistan war the current talk of nuclear escalation resulting from the Ukraine war has to be a major consideration for US, EU, Russia, China and India, all the world's leaders, to step back and see ways to work for an overall interest than in time to come will help these nations national interests.  It will require brave moves from India, China, the US and Russia. Yet this is the new course that alone can bring a return to a world focused on modernization and improving the lives of the people of these nations. ...

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Putting a distance from the negative thoughts of the mind is essential to getting a good healthy mindset. This means not believing what it says. It also means woking hard to be able to change one's life in many positive ways and believing that you frame your own destiny. It is said that a wandering mind is often more of an enemy than a friend, in ancient wisdom. Developing a new calmness, being able to meditate, requires putting a distance from negative thoughts and not believing the thoughts of a wandering mind. This is called cognitive defusion. It is also part of what is needed for yoga and meditation. 

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California's economy is going through tough times during the coronavirus. Unemployment is up to over 20% which compares to 14.7% for the U.S., closer to that of New York. The state depends on the tourism industry, agriculture in the San Joaquin Valley, and entertainment industry around Los Angeles for jobs. Tech in the San Jose area does not account for as many jobs. The state also has a public university system and foreign students mostly from China bringing in $7 billion.   Its port system around Long Beach and Los Angeles connects with the Asian economies and China, for goods mainly transported to the rest of the U.S.  All these sectors are the ones most badly hit during the coronavirus.  California now has a deficit of $54 billion and was the first state to borrow from the federal government to pay $13 billion in unemployment claims. Undocumented Californians are not able to collect unemployment because of their immigration status, creating an American version of the informal economy that is found in India and Italy or Spain. California has 83 million people taking plane trips to the state for a tourism industry that normally brings in $145 billion. 600,000 travel industry jobs were lost in the state. Taxes related to travel are a significant source of revenue for cities in California bringing in $12 billion. The only sector that is less affected is the tech industry, yet this makes up only about 10% of the jobs or 1.7 million higher paid but fewer jobs. This tech sector at about just 15% of the California economy GDP, is of a precarious nature with a boom bust pattern, the last boom one that happened since the 2009 financial crisis. It in no way forms a significant support for employment or income for people in California or the U.S., and may even be responsible for distortions in the allocation of capital away from infrastructure and public services, through its disproportionate influence on how the nation's capital is allocated. The broader changes underway during coronavirus are likely to affect the state over many years, as supply chains shift away from China, and as infrastructure and public services investment assume their rightful role again in the nation rebuilding effort, agriculture and rural America become a part of the American renewal story.   ...

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When you remove the 7 Californians and 4 Independents  only about 9% of 264 Congressional Democrats, or 26 Democrats have reservations about the president running, 91% covering every part of the country, the vast majority of American states and congressional state delegations, have confidence in the president to make the best decision. The chances of California going Republican or Trump Republican are  very, very small. Wash. Post shows 37 members of Congress on July 19, 3 weeks after June 27 debate issues, saying don't run. This is of 264 Congressional Democrats. Aug 1 is only 11 days away for planned Aug1 roll call of delegates committed to Biden. Of this 37 only 1 each from Michigan and Wisconsin, and 2  from Arizona from swing states, none so far from Georgia or Nevada or Pennsylvania. What does this tell us? It says that 264 minus 37 or 227 Congressional Democrats think Biden should run only about 15% of Congressional Democrats vs 85% of Congressional Democrats. And of the swing states only 4 Democrats. Polls- 4 months before elections polls are not really useful and not meaningful, a lot can change. Congressmen in swing districts are likely to have questions, and it is not uncommon for this to happen before the election say people who follow Congressional history. The fact that 7 are from Republican states like Texas or Ohio and could be impacted may give some idea for their reasoning. Of the others 7 are from California and 3 from New York. Which suggests the largest group is from California, remove the 7 and take out the 4 Independents and 34 goes down to 23 or about 9% vs 91% of the rest of the country having faith in president Biden. In any case California is unlikely to go Republican or Trump Republican by a long shot. ...

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Li Keqiang, China's new premier, is a member of the "Class of 77," who gained entry to Peking University when university entrance exams were reinstated after Mao's death. This is a period of great curiosity in China about the outside world. Li described it this way in 2008: "In this period knowledge was expanding with the speed of an explosion. I came here not just for knowledge, but to mold a kind of temperament, to master a kind of academic discipline." This he did by working extremely hard trying to master the English language and Western legal theory. He is now the only leader in China who can speak fluent English and is familiar with western concepts of law. For this he owes much to one of his professors, Gong Xiangrui, who studied at the London School of Economics in the 1930's and supported a multiparty system for China. Li was selected as one of the students to translate "The Due Process of Law" by Lord Denning, a British jurist. He spent the next 15 years in the Communist party's Youth League and moved up through the ranks. Many of the "Class of 77' " are still close friends and in academic positions in Singapore, Hong Kong and other universities. He understands the weaknesses in China's legal system because many of his close friends are lawyers, judges and law professors. Evidence of his intellectual openness, is his return to Peking University for a masters degree in economics years later, his thesis on urbanization, and his sponsorship through the Development Reform Commission think tank and the World Bank's Zoellick, of the report published in 2012, "China 2030." That report called for China to change course and reverse the role of state owned firms in the economy, giving consumers a bigger role. Like many of China's leaders this openness also meant during the period of turmoil of the Mao period and the decades following this, of a reticence to talk about political change that came over the entire country, in the words of the 2012 Chinese Nobel Prize Laureate's name, Mo Yan, a kind of "Don't Speak." Taking any kind of political position was simply too risky. The presence of 4 older Politburo members in their mid-60's who are close allies of former president Jiang Zemin and likely to preserve the status quo, also suggests a cautious approach in making changes. One key difference between Jinping- Keqiang from the Jintao-Wen Biao leadership is that Jinping has experience in provincial leadership positions in Hebei, and Keqiang was provincial leader in Henan, China's most populous province, as well as leader in industrial Liaoning province. By odd contrast Hu Jintao was a leader in the remote Tibet region and Wen Biao was a geologist in the northeast for many years. This gives the new leadership team a first hand knowledge of conditions in populous provinces, and the connections with the World Bank's Zoellick a kind of window to the outside that no other leader has had. Jiang Zemin, a former mayor of Shanghai, China' most westernized city in the 1930's and today, was himself a experimenter in his own right when he initiated the changes tht gave China entry into the World Trade Organization. His support of Xi Jinping gives Xi the needed backing for making change happen when the time comes....

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US GDP growth annualized for the 1st quarter is reported to be 1.6% and inflation at about 2.8%. The prospects of continued strong growth and higher inflation suggests the Fed's Powell will not make any interest rate cuts in coming months.

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Kashmiri shawl weavers were mostly women. Mechanization has pushed many from earning their livelihoods from the shawl industry. New ways are being found to revive the older shawl weaving methods and give Kashmiri women an opportunity to work and be financially independent. A lot can be learned from the French who have a thriving industry using hand weaving with new technology and marketing techniques for hand woven fabrics using new designs. Some of these French companies could actually collaborate with Kashmiri makers to relaunch this industry in a new way and employ many women in making shawls and other specialty fabric designs. This manufacture would also command higher prices in a niche market segment in India and in world markets.

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Issues of inequality and lack of upward mobility came up in the last presidential election. A Federal Reserve Survey for 2018 shows the financial fragility facing many Americans. One quarter of working individuals say they do not have any retirement savings. About 17% of households say they cannot pay all their monthly bills. About 40% of Americans say they do not have enough cash to cover an unexpected $400 expense, and would have to rely on credit cards balances or loans from family to make the payment. This survey by the Federal Reserve is done each year since 2013, after the financial crisis hit in 2009 it became more important. Still Americans are showing unusual resilience and upbeat spirit. About 75% say they were doing Ok or living comfortably up from 63% in 2013. And two out of three described lovcal economic conditions as "good" or "excellent."  This shows that the financial vulnerability resulting in the loss of jobs in the U.S. both from jobs lost in manufacturing going overseas,  jobs lost through automation or industrial decline in some sectors, and the hit from job loss during the financial crisis and its aftermath years of 2009-2014 is still leaving a lot of families financially vulnerable. Low interest rates and stagnant wages also meant savings growth for ordinary Americans was less than it should be in a healthy economy without booms and busts. This is also the environment in which the U.S. is tackling challenges to its technological leadership in 5G following a decline in sectors such as autos and electronics, with job losses to Japan and South Korea. New trade agreements are focussed on correcting the imbalance, first with Mexico, South Korea, and now with China. Focus is also on fair wages and labour overseas to raise American wages in key sectors. The damage done by a low interest rate to savings of ordinary Americans outside the stock markets is also being seen as a downside in the boom bust cycle, that includes loss of jobs for vulnerable American families. The rise of the tech sectors has diluted the traditional protections of working class Americans with the shifts and realignment of the major parties. ...

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This Editorial Board editorial in the WSJ should be titled Ukraine Corruption and Ukrainian people's interests in good governance. The reason is that beyond ensuring that the $187 billion sent by the US is used without corruption and this editorial cites evidence that this is the case through many oversight authorites US and EU has set up- there is the larger interest of the people of Ukraine battered and fatigued by 4 years of war. Corruption becomes an accepted practice in many democracies. Nations such as India that were mired in corrupt practices in state governments are seeing major changes in the last decade with public funds dedicated to infrastructure going to build the new infrastructure India needs to modernize its economy. It is proving that this is possible in Asia, as is shown in Taiwan, South Korea, Japan, China and now India. There is every reason to believe Ukraine can achieve this good governance with sufficient efforts and this is the goal set by the European Union, by Germany, Britain and France, for Ukraine. ...

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This WSJ editorial says about the US Fed guaranteeing the 90% of uninsured deposits at Silicon Valley Bank to prevent systemic risk, that the 250,000 limit was set by Congress to protect average Americans not venture investors in Silicon Valley. Venture capital investors and startups in Silicon Valley put large amounts into the bank. It says the San Francisco Fed regulates Silicon Valley Bank and failed to perform its regulatory function. And adds that the idea of elevating San Francisco Fed president Mary Daly to the Federal Reserve Board of Governors now seems preposterous. Fed, Treasury, and the bankers all have to take the blame. The Guardian reports that the CEO of SVB lobbied to reduce the regulatory impact on his bank. By choosing higher returns from long term Treasury bonds and expanding too quickly this created the conditions for the collapse, and then rescue by the Fed and Treasury in the all to familiar pattern since 2008.

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Ivan Rogers, UK ambassador to the European Union for three years till 2017 was sharply critical of the British government and forecast some of the Brexit problems. He has a book "9 Lessons in Brexit," which appeared in Feb. 2019. Here he is interviewed by Der Spiegel. He says he expected some of the problems but is still surprised that 4 weeks before the deadline the political class in Britain has not yet figured out what kind of Brexit they want. Here he points out that Cameron and Blair represented the centre in British politics. But that centre has now collapsed after the financial crisis and the period of austerity led to widening gaps between the different parts of British society. The public is now deeply alienated from both major parties. In both parties the populists on the left and the right have gained a bigger influence, as a result there are no centre right or centre left figures who command public influence. Rogers is a civil servant of high rank who has worked with several prime ministers including Blair and Cameron. His comments are worth listening to.  Was Theresa May the right person to tackle Brexit? Her problem says ROgers is that she started with a hardline position of reducing the number of people entering the UK from inside or outside the EU. Once you do this you cannot have free movement of goods, services and capital, so you have to leave the single market. And if Britain wanted a fully autonomous trade policy then it cannot stay in the customs union. Rogers thinks Theresa May never really understood what this meant- that it was going much further out of the European Union than Norway or Switzerland, or even Turkey. Now as she is trying to go back her right wing cries betrayal. Do British prime ministers understand the single market, the customs union, or how the EU really works? Rogers worked on European issues for a long time and he says after working very closely with British prime ministers that none of them had a deep understanding of how the European Union works. Plus they lack any emotional attachment to the EU, because of the mercantile relationship Britain has had with its neighbors. About the relationships in Europe between the Germans, the French, the British, what is it and what will it be like? Rogers says he has not seen a thinner relationship in his lifetime. He thinks the European political elites are not talking to each other anything like what was done 20 or 30 years ago. He says the Brits have to take a lot of the responsibility because the British political class lost interest in Europe. What could the Europeans have done? Rogers says the chaos continues because the British don't really know where they want to go. It opaque about the relationship on purpose. Have the Europeans thought about what kind of a continent they want to see after all this is over? This interview tells you more about the Brexit problem that many reports and opinions, bringing a thoughtful way of looking at the problem. ...

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Questions about the true cost of the Obama health care legislation and the assumption that the legislation cuts the deficit by billions of dollars. This WSJ editorial says one has to look at this closely, and not merely look at CBO projections, which may be based in a certain context and not reflect the true costs, especially because many accounting gimmicks and use of numbers to present a particular picture is taking place. The information this editorial cites is that: it uses 10 years of taxes to fund six years of subsidies, Social Security and Medicare revenues are double-counted to the tune of $398 billion, a new program funding long-tem care frontloads taxes but backloads spending, and the assumption of an automatic 25% cut to physician payments that Congress is unwilling to authorize. Rep. Rand Paul has tried to present an alternative view which needs to be studied just as closely, because of the enormous impact of a jump in spending at a time when the public finances are fragile. WSJ also cites the work of Richard Foster, the chief Medicare actuary, as an alternate perspective of how things could turn out, Doug Holtz-Eakin, and Eugene Steuerle. It calls for common sense in evaluating programs, entitlements, defense or other government spending. They not only cost money, but costs escalate over time as history has shown over decades, till they eventually are discovered to be not affordable unless the middle class is willing to dig deeper into its finances to pay for them. Alternate perspectives from a range of informed opinion, Howard Dean, Martin Feldstein, and the head of Harvard's Medical School show that the issue needs to be looked at closely and carefully and cannot be something in which CBO numbers can be trusted to tell the whole story. Especially when common sense, history, and informed opinion across a spectrum of thought advises caution, and fragile public finances also suggest caution. Howard Dean, former Governor of Vermont, says the health care bill is not real reform, and may do more harm than good. He says in a Washington Post article, December 17, 2009, the Obama health care bill does not insert competition into insurance markets, does not significantly reduce costs, and does not improve the delivery and use of health services. It was he says done with a political calculus and crafted for votes not real reform. Jeffrey S. Flier, Dean of the Harvard Medical School, gave the Obama health reform bill an "F" grade, saying in a Nov 18, 2009, WSJ article, that it was disingenuous to call this reform, Congress and the White House were simply deceiving the public. He said the bill will accelerate US health care spending, postpone most of the major health care problems, expecially the ones that drive cost, including the "fee for service" system and delivery of health care. He says in his discussions with economists and other health care leaders the opinion was unanimous that the bill will accelerate health care spending. He cites Massachusetts as an example, where access to care was expanded under the same dysfunctional system, and spending went up, and it doesn't work. Feldstein, who in early 2008 suggested proactive solutions to the mortgage debt crisis which were never adopted, says that the Obama health care law means higher taxes in the long run to pay for the $1 trillion cost of health care for the uninsured group over 10 years. Feldstein says that the Obama plan is to cut Medicare to cut spending, and will reduce the amount of medical services, as reduced spending comes from fewer services, not reducing payments to providers. And he asks if the cost reductions are weighted too heavily towards reduced services and not reduced payments to providers ,would this result in large cuts to services to affect the quality of healthcare for the 85% of the American people who are accustomed to a different pattern of healthcare. ...

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This WSJ podcast looks at the influx of 3 million refugees into Poland from war torn Ukraine. During the last two decades many people from Poland left the country to find jobs in the European Union and Britain. As a result there were more elderly in many parts of Poland and acute shortage of workers. In the long run Polish officials see the refugees as assimilating easily and welcomed by the people in Warsaw and other cities. The influx of new people is seen as a positive for Poland in the long run. Yet in the current situation there are concerns about the ability of Poland to cope with social services needed for the elderly and traumatized refugees.  About one million of the three million refugees now in Poland from Ukraine are children and there is a dire need for school teachers and other help. Many are women and elderly with young men remaining in Ukraine. Poland has asked the US and Canada for help with dealing with the huge influx of refugees in a period of 2 weeks. ...

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Interview with Jim Press by Michelle Krebs of Business Week. It gives deep insights into the thinking of Toyota- its approach to the automobile business and the marketing of its cars. Being admired by the new generationof buyers, the perception of Toyota in the mind of buyers is important to Toyota. It will try to be strong in each community. The example of San Antonio is given so its roots will stretch deeper. Press tell Krebs that being part of the community is important for Toyota. See the related article by Ed Wallace, Business Week, May 25, 2006. Press says attrition is one of the reasons GM lost its high regard and perception with buyers. By that he means the older generations, two generations, that respected General Motors for its innovation and contributions, has passed away. This is replaced by younger people and a new generation which does not have the same recorded perceptions in its memory. In fact it may see just the opposite, in terms of Detroits attitude perceived as arrogant, in terms of fuel efficiency perceived as wasteful, in terms of quality perceived as not upto the higher bar set by the Japanese competition of Toyota and Honda. Toyota does not look like a pioneer in the ethanol vehicle field, so GM and Ford have a opening here they can use. Toyota will continue to set the bar higher on Quality. And this is not a company about to be complacent about its success . Press sees Toyota's success stemming partly from the failure of GM and Ford to maintain market share and only partly from its own better qualities. One of Toyota's goals is to keep increasing local content so it can show that its a truly American company to this new generation....

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The pandemic came to young German people at a time when the trend was for less opportunity, more inequality. These trends are now aggravated and the loss of opportunities, and the loss of hope is even worse now in 2021. Job searches are being conducted while experiencing intense social isolation, boredom and lack of physical acitivity. The job competition is described here as horrendously competitive, a few roles and so many job seekers jostling to get them as companies have been hammered during the pandemic. 

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The full report on the BBC's future funding by a committee of the UK parliament on the 100th birthday of the BBC in November 2022. The universal license fee is being abolished in many European countries. It generates 5 billion pounds that meet 75% of the cost of the BBC. Giving open access to all as done by BBC and Manchester Guardian is still a viable and necessary model in a democracy such as ours. Yet the increasing costs for poorer households can be offset with other ways of limiting the cost for the households at lower incomes. The other hurdle for BBC is to increase its viewers beyond the 60 plus years older viewers as the choice is now wide and prolific in channels and apps. Under Conservatives BBC was getting less support. With Labour the BBC gets a new opportunity to revive its programming and fulfilling its vital function of serving the people of Britain and English speaking countries around the world.

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Christoph Hasselbach of DW.com says the idea of European Union brings so much good for Europe that it should not be diminished by use of pressure or punishment. He refers to the firm opinion in Brussels, of Mr. Juncker and Merkel, that there can be no cherry picking when it comes to remaining in the EU. This led in Jan. 2017 to British prime minister May saying Britain would not go begging to Brussels, and would simply opt out of the European Union and the single market. Hasselbach offers an interesting and plausible explanation for the Brexit vote shifting by a small margin to the exit side. He says rightly that uncontrolled immigration fears were used by the politicians supporting exit. Interestingly he says the worries in the UK were not just for current people but for future citizens from the hundreds of thousands of refugees who would become German citizens in a few years. Would they try to settle in the UK- prime minister Cameron failed to provide a convincing answer, says Hasselbach. He is right to point out as we have at Lyrarc that it is healthy to have questions and even some skeptical views about Brussels, that the appeal of the EU must depend on not being dogmatic about it, but being open and willing to accept questions.   ...

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The worry about vaccination passports for coronavirus to enable unrestricted travel, is that the immunity may not last into winter 2021. Relaxing all restrictions and having a repeat of the summer of 2020 on beaches and unrestricted intermingling could result in new dangers in 2022.

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There is strong cirticism from many quarters about low interest rates as a prime culprit in causing the bubble in housing prices. In comments before the American Economic Association, America's Fed Chairman Bernanke defended his role as Fed governor in 2003 when he along with Greenspan was an advocate of the decision to cut the Fed's target interest rate to 1%, and to leave it here for a year and raise it only slowly. Bernanke says countries like Britain, New Zealand, and Sweden had tighter monetary policy but there home prices rose more, and monetary policy explains only 5% of the variation in home prices. Analysis has shown he says that capital inflows such as those the U.S. received from China and other Asian countries explains 31% of the variation in home prices, supporting a contrasting theory that that its these global imbalances that drove the crisis. He also placed the primary fault for the housing bubble on relaxed lending standards and views that housing prices would rise forever. Alongside these comments Fed chairman Bernanke also said that bank supervisors and other financial regulators of which the Fed was one, has a better ability to contain the excesses that led to the economic crisis including housing bubble and other excesses, than the Fed as a monetary policy maker. By saying this Bernanke is acknowledging that the failure of regulation was a key part of what happened in the economic crisis. The failure to fix the regulatory system even now leads Bernanke to say that he is open to using monetary policy as a supplementary tool for addressing risks should another bubble develop, if the regulatory system isn't reformed. Still Bernanke and Greenspan were quite complacent at the time of the low interest rates and did not point out the dangers of global capital imbalances which were evident at the time, preferring to say that the United States could benefit from the inflows of capital from overseas without serious risks. And the Fed did not exercize its role of vigilance in alerting the country to excesses in the way the housing industry operated and in exercizing its own powers to that effect. Instead the Fed as regulator and in role as asafeguard for serious risks let itself become part of the cheering section as the worst excesses in housing were being exposed....

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Theresa May, the new British prime minister, announces her choice for cabinet positions- Liam Fox is new minister for International Trade, David Hammond is the new Chancellor of the Exchequer replacing Osborne. Hammond was Foreign Secretary under Cameron and helped negotiate the Iran nuclear accords. David Davis, a former minister for Europe, is in charge of a new ministry created to arrange Britain's exit from the EU. Boris Johnson replaces Hammond as Foreign Secretary. Johnson was Mayor of London and was a key figure in the Leave campaign. Michael Gove is out. David Davis and Johnson were in the Leave campaign and are now given responsibility for working on Brexit, a move that puts to rest any doubts about steps to be taken for Brexit, and is an effort to reunite the Conservative Party. With Osborne out, a principal architect of the austerity budgets of the 6 years of Cameron's government is now replaced by Hammond, who will now reflect the desire of Theresa May to come up with policies that "benefit everyone" and fight "burning injustice" to use May's first words as she assumed office at 10 Downing Street.  ...

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The New York Times reports from the comments of current and former members of the Chase Chief Investment Office (CIO), that risk officers at Chase were ignored when they raised issues about the complex trades made by trader Iksil. Iksil's trades had the support of his manager Mr. Macris, and Ms. Drew who was in charge of CIO. The comments also indicate that at one point Mr. Macris brought in a Risk Officer with whom he had worked closely for many years. Risk Officers are supposed to be independent and their concerns seriously heard, with the authority to halt trades that pose excessive risks. Which made this kind of cozy behaviour in the CIO trading offices in London cause for alarm. These reports also say Mr. Braunstein, the new CFO at JP Morgan Chase, did not strengthen controls after he assumed office in 2010. Bank officials disputed this. The New York offices did not fully grasp the complex trades being made in the CIO London offices, and upper management let the CIO operate pretty much on its own, especially with CEO Jamie Dimon's confidence in Ms. Drew's management of the CIO. This led to another gap in the process of risk management. Dimon had other priorities and distractions, from problem mortgages coming with the acquisition of Washington Mutual, pushing back aginst financial regulation after the 2008 crisis, stress tests and others. At the same time the U.S. Federal Reserve, regulators, and Treasury's coordinated effort to merge failing banks with other larger banks- because of the lack of the process of unwinding failed banks provided later under Dodd-Frank legislation- created mega financial banks. Unlike what the U.S. under Treasury Secretary Rubin pushed for in the case of S. Korea during a banking crisis in 1997, Treasury under Geithner and Fed officials did not push for unwinding of failed financial institutions such as Countrywide and Washington Mutual in 2008-2009 Chase's own portfolio of assets under the CIO, increased by an astounding amount from $76 billion in 2007 to $356 billion in 2011. Even if Ms Drew had managed CIO well before, managing a portfolio of this size is most likely to have presented a whole set of new challenges and problems for which the CIO office was not prepared. Similiar concerns were raised by other Fed officials such as Fed governors, Hoenig and Fisher, who raised the issue that such mega-banks posed unacceptable risks and were too big to manage. Pressures to increase investing profits, growing complacency, relaxing risk management controls, led to the situation where a single trader Mr. Iksil, who had only joined the bank in 2007 according to other reports, could create large losses. This follows a situation at UBSin 2011, where a novice trader made bets that resulted in large losses....