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Brazil faces a debt crisis in 2015-2016. Between 2010 and 2015 foreign debt of local governments and Brazilian firms increased from $100 billion to $250 billion, and dollar debt in local currency from 210 billion reas to 655 billion reas, according to Bank of International Settlements data. State banking institutions BNDES and Caixa Economica Federal financed 35% of loans in 2010, by 2015 this increased to 55%. Subsidized loans at 5.5% by BNDES to firms make Brazilian banking a fiscal operation, requiring additional funding. Petrobras increased debt issuance enormously during this period, and now needs government support as its debt is now one notch above junk status. Interest payments on Brazil's debt is 6% of GDP in 2014. Public sector debt is 66% of GDP, and credit to the private sector is 55% of GDP up from 25% in 2005. It will take Brazil years to recover from a huge borrowing binge.

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The U.S. ranked first in an annual survey of executives rating places with favorable prospects for foreign direct investment. The survey by consulting firm A.T. Kearney has questions for executives of 302 large companies, all with sales above $500 million, about how likely they are to invest in countries over 2013-2015. It was done in October and November of 2012. On a scale of 0 to 3, the U.S. scored 2.09, China 2.02, Brazil 1.97, Canada 1.86, India 1.85, followed closely by Australia and Germany at 1.83 and the UK at 1.81. Mexico and Singapore are at No. 9 and 10 with 1.77. The survey shows the U.S., and Mexico gaining, China and India slipping, and English speaking countries UK, Australia and Singapore, as part of the 6 that are English speaking of the top 10 countries. Brazil's hosting of the Olympics and World Cup helped it maintain its position. The emerging market countries performance has slipped further since the survey, including Brazil, and the U.S. has made further gains in investor sentiment. The unrest among young people in Turkey, India, China, and Brazil as seen in street protests and credit financed booms may have further affected investor sentiment. The increase in natural gas production, revival of the midwestern economies, and a recovering housing market have boosted the U.S. economic prospects compared to emerging markets and the eurozone....

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India's central bank, the RBI, said inflation is expected to moderate to 7% by March 2012. RBI's economic growth forecast for India was lowered to below 7.6% for 2012.

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Several factors make it likely that oil prices will remain low for an extended period of time into 2016 and beyond. As Ailworth points out nobody is blinking. The Saudis plan no change to their high production. U.S. oil producers in the Gulf of Mexico have already made investments for deep sea drilling wells following the end of the moratorium on drilling in the Gulf. Many of these wells are producing at very low marginal cost as most of the investments have already been made. It makes economic sense to produce even in a low price environment, according to Andarko. Shell continues to invest in the deep waters of the Gulf. Its production is up 10% to 250,000 barrels a day. American shale oil drillers have not cut back as much as expected, partly because many companies with large debts need the cash flow to pay interest on debt. And some of the 1200 wells that were drilled but left untapped may also be brought on stream to slow production declines. As a result the overall production of American crude, according to monthly federal information, has declined by about 3% to 9.3 million barrels from the peak reached in April 2015. This helps the U.S., Europe, China and India, at a time when their economies are experiencing different problems. It hurts Russia, Venezuela, Nigeria, and Iran. Russia is coping as its exporters convert dollars into rubles after the sharp depreciation in the ruble, and helps local industry including steel producers, as well as wheat exports. Venezuela's economy is the worst hit. And Iran now has to produce at high levels in 2016 to improve its economy following the lifting of sanctions....

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The impact on ASEAN countries of the monetary expansion policy of the Bank of Japan, Japan's central bank, and the policies of the Abe administration. Infusion of new liquidity into Malaysia, Singapore, Indonesia, Thailand and Vietnam.

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A major shift in foreign investment may be taking place as the 2014 St. Petersburg International Economic Forum takes place in May 2014. Russian policy in Ukraine and tensions with the U.S. and Germany could lead to a shift in investment to other emerging market countries. China's tensions with Japan could lead to a similiar shift of Japanese foreign investment. At the same time India has elected a new government with an absolute majority and an overwhelming mandate from young people to accelerate development. The new government under the BJP party's Modi has a decade of experience attracting foreign investment in western India. Indonesia, Vietnam, Africa and other emerging market countries, could benefit from the shift in investment. Investment could also return to the home countries with lower labor costs in Southern Europe, lower labor/energy/transport costs in North America. For Russia the debate at the St Petersburg Economic Forum was about pursuing one of three policy paths with some riskier than others, or some combination also risky and uncertain- depending on state banks and oil windfall funds, increasing ties with Asian countries, continuing on the current path with lower foreign investment and continued capital outflows. The failure to use the time wisely to diversify the oil based economy which could have been better accomplished in an economy not overly dependent on crony capitalism and centralized economy, both current characteristics, will affect future progress. A key weakness for Russia compared to China is the centralization under one person Putin, more so in the third term. In China the two man team Keqiang and Jinping is part of a larger team chosen by consensus and negotiation and part of a rotational scheme. It has senior leaders who initiated the changes to a market driven economy in the nineties determined to see China on track....

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Kaushik Basu, economist at Cornell University, and Chief Economist at the World Bank, says the U.S. Federal Reserve should consider the current low labor participation rate and low inflation in its rate policy setting decisions in 2015. Basu points out that in the recent past unemployment has gone below the current 5.5% without increasing the risks of inflation. He cites the period from July 1997 to August 2001 when inflation was below 5%, and at some points below 4%, yet inflation in 2002 was close to 2%. The large number of discouraged workers in this economic cycle has placed the unemployment rate below what it really is, says Basu.

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Bilateral trade between China and Russia is down 31% for the first half of 2015, and Chinese investment in Russia down by 20%, according to Moscow Carnegie Center. This is a result of the fall in oil prices, declining demand for commodities in China, and the economic downturn in Russia. After the western sanctions on Russia Chinese investors are cautious about making investments. This means Russia's large expectations that this would act as an offset for economic relations with Germany and other western nations is not working out in reality. The contract for the second gas deal for gas from western Siberia, for which a memorandum was signed with China in Nov. 2014, was not signed during Putin's visit to Beijing in September 2015. Experts say the economic environment is not favorable for gas deals with the uncertain economic outlook in China.

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Turkey's lira depreciates by 21% in 2013 and an additional 7% by January 24, 2014. The central bank uses up a third of its foreign exchange reserves or $19 billion in intervention to support the lira since June 2013. The intervention on June 24, 2014, did not work and the lira continued its downward slide to 2.30 to the lira. The political protests in Turkey and divisions within factions in the government about corruption probes has led to a political crisis and investors pulling back from Turkey. The central bank failed to increase interest rates as expected by investors and suggested by the IMF. Inflation is running at 7.4% for 2013. In August 2001 a currency crisis caused the banking system to collapse. The financial position is stronger than in that crisis, yet the recent political crisis and the large current account deficit has badly dented investor sentiment.

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Casey describes the crucial policy errors in Brazil with over spending and lack of transparency in the years leading to the crisis in 2014-2015. Brazil raised interest rates half a percentage point in May 2015 to 13.25%. Inflation was at 8.13% in Brazil in March 2015. Brazilian companies have large dollar denominated debt accumulated during the boom years which needs to be refinanced as its currency the real declines. With current policies economic growth is likely to continue at 0-1%. Russia made policy errors with the departure of Kudrin as finance minister for Putin's second term as president. Policies to attract foreign investment, controlling military expenditures, and continuing growth were reversed as Russia took positions on Ukraine that led to western sanctions, capital outflows, and a sharp decline in the ruble. By May 2015 the ruble and oil prices had recovered from lows, but the ruble was still 35% below the level in June 2014, and the oil prices were still only two thirds of the peak in 2014. Russia sees the decline in the ruble as a way to reduce imports and increase import substitution for many products. The economy is weakened by high inflation- inflation was 6.9% in March 2014, going up to 16.9% in March 2015. In May 2015 Russia lowered the target repo rate by 1.5 percentage points to 12%. Russia faces stagflation- high unemployment with low GDP growth, and high inflation....

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Economic growth in India has slowed to 6.9% for the June to September period 2011, compared with the prior year, according to a government report. The sequence of rate increases by India's central bank have failed to slow inflation, and foreign investment is declining. Economists now forecast growth at 6% for 2012, a low rate of growth for India, which has a growing population approaching 1.2 billion people and serious infrastructure problems. This creates a scenario of stagflation- high inflation and low growth. The fears are now for a combination of high government debt, infrastructure issues, and lack of foreign investment. This is leading to moves by the Indian government to bring up long delayed efforts in the area of opening the retail industry to foreign investment. And lifting quotas on foreign ownership of Indian bonds, allowing foreign pension managers into India. The value of the Indian currency has declined 15%, in 3 months since August 2011. The eurozone crisis and the combination of slowgrowth and high unemployment in the U.S. are leading to foreign investors withdrawing from emerging markets, with a sharp impact on India. A combination of domestic and international factors are hitting India after two decades of high growth. ...

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The International Energy Agency lowers its global oil demand forecasts on Dec. 11, 2014, leading to further drop in the price of oil with oil futures in electronic trading for WTI at $58.89 on New York Mercantile Exchange, and Brent crude at $62.83 on ICE in London, for January 2015. The price of WTI U.S. oil dropped to $59.95 on Dec. 11, 2014.

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India's crude oil imports were sharply higher in 2011 and 2012. India's imports of crude oil for the first 11 months of the 2012 fiscal year ending March 31, show a 40% increase over the same period in 2011 fiscal year. India's import bill was $128 billion for crude oil imports for the 11 months of fiscal year 2012. Indian subsidies to lower prices for fuel are $30 billion annually. The higher prices for crude create inflationary presssures in India and restrict economic growth.