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Even though E-Bay executive Meg Whitman has outspent Jerry Brown by $130 million, much of it her own money, she trails Brown by 8 percentage points in an Oct 20 survey by nonpartisan Public Policy Institute of California. That survey showed Brown leading 44% to 36%. She had a hard line stance on illegal immigration in her ads for the primaries, which changed later in the campaign to attract Latino voters. Her campaign crafted by consultants focussed on three themes- cut government spending, create jobs, and fix education. Brown is a former Governor of the state and current attorney general. Experts attribute the lagging Whitman campaign to voters leery of 2 kinds of politicians- the first is the career politician and the second is longtime corporate executives. In other polls Senator Barbara Boxer is leading Ms Fiorina, former HP executive, 43% to 38%. Because of last minute surges in the polls, a lead of 8 points or more is considered necessary for the governor's campaign, for a candidate to win. Another factor is that Governor Schwarznegger came in with no political experience, and was beset by the state's fiscal troubles, with his poll ratings now at 28%....

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Applebaum talks to two researchers at the University of Chicago and Princeton, Prof. Sufi and Prof. Mian, on the record of U.S. president Obama and Fed chairman Bernanke in helping homeowners facing foreclosure and underwater borrowers, comparing that record with their record in helping the banks. The issue is relevant as the policy and handling of homeowners had to be part of an overall effective plan for recovery in the U.S. economy, because ultimately without the U.S. consumer any recovery would be weak in the long run- a situation the U.S. faces in early 2014. The response to the issue of irresponsible homeowners borrowing beyond the limit without an equally robust response to irresponsible bank management that allowed wildly excessive leveraging of assets, and successful aggressive lobbying by banks in a shortsighted policy of going through with a wave of foreclosures; besides creating questions of fairness and equitable handling of the problem, also had major ramifications for the future of the U.S. and global economic growth. Here Christina Romer and other administration advisors say Bernanke was right in tackling the problem from the perspective of the banks needing to be recapitalized. Thoughtful advisors looking at the entire problem, Martin Feldstein and Sheila Bair strongly pushed for providing the same help to homeowners without getting caught up in the issue of who was responsible home buyers or the banks, and looking at the interests of the U.S. economy and the U.S. people. Proposals by Feldstein and Bair were equally robust in helping banks as they were in helping homeowners, only the banks understood their interests narrowly and had more access to policymakers in the Bush, as well as the Obama administration, Paulson as well as Geithner. This leaves us with the ultimate irony of the Obama administration pushing for the minimum wage, even to the point of electoral posture, when lasting damage had been inflicted on homeowners from the weaker portions of America's middle class by a policy that went against what two respected financial and economic experts from the Reagan period, Sheila and Bair had strongly advocated. See links and groups on Feldstein and Bair. Applebaum has followed most aspects of this problem closely and continues to provide exceptional reporting including the piece on the thinking of new Fed chairman, Janet Yellen. Private enterprise rules that require management at banks just as for other companies to take responsibility for failures, and be replaced with new management, was largely avoided leading to a fundamental failure in how a free market economy such as the U.S. and western European economies are supposed to function. Rules aggressively pushed by Geithner's mentor Treasury Secretary Rubin for a vigorous cleanup at banks in South Korea during a similiar situation in 1997, were not followed in any way here, also setting wrong precedents for the long run. ...

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One of the favorable factors for Iraq in recent years was the surge in oil production, adding 1 million barrels a day to reach 3.3 million barrels a day. It surged to an average of 3.7 million barrels a day in December 2014 after a deal with the Kurdish region in northern Iraq for an additional 550,000 barrels a day in exchange for Kurds getting a 17% share of federal revenues. This helped Iraq overcome other problems. The drop in oil prices has led to a 40% drop in revenues and the invasion by Islamic State in a loss of some production.The federal budget of $101 billion planned revenues is based on an oil price of $56 and exports of 3.3 million barrels a day, resulting in a $20 billion deficit. It assumes $10 billion in new tax revenues which may be hard to achieve with a lack of strong central government. Experts on Iraq's oil industry say large investments are needed to offset declining oil production from older oil fields in southern Iraq. Oil exports were 2.5 million barrels a day in 2014, and experts say even this will be hard to achieve for 2015. Investments could come from western oil companies, but Iraq and the Kurdistan region are behind in payments to oil companies. Iraq is considering issuing bonds for $10-$15 billion....

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Kissinger on great power diplomacy and balance of power in the Middle East. He ignores the Arab Spring, the aspiration of peoples in the region, the role of the Maliki administration in reviving Sunni-Shiite antagonism and its corrupt incompetent administration that led to the rise of ISIS, the Obama administration's policy of paralysis in the Middle East and errors in policy that has led to some of the chaos in the region, and the vacuum left by the U.S. lack of any interest or involvement with partners in Turkey, Saudis, moderate Sunnis and Shiites in Iraq. Most of the people want education, civil rights, protection from religious militias, and U.S or other countries score a win-win only by aligning themselves with the interest of the people in the region which will assert itself in the long run.

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The Italian cabinet of prime minister Mario Monti, includes Corrado Passera, CEO of Italy's largest retail bank, as minister of economic development and transport. In selecting his cabinet Monti brought in respected members from academia, banking, business and the higher levels of the civil service. Monti's agenda includes cutting public spending, increasing revenues, changing the pension system, reintroducing a property tax on first homes, and making it possible for business to hire and fire workers by changing Italy's rigid labor laws. Emma Marcegaglia, president of Confindustria, Italy's business association, says he is the right person to restore credibility and to put Italy back on the road to economic recovery. She had a high regard for the selections in the cabinet. The big challenge in her view was now to get the Italian parliament to approve the changes.

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Ian Thompson takes over as the new Chief Credit Officer at S&P. He replaces Mark Adelson, who will remain as a senior fellow at S&P. He was hired by the previous CEO, Deven Sharma. Deven Sarma was replaced by former Citigroup excutive, Doug Peterson, in September 2011, weeks after the downgrading of the U.S. sovereign credit rating. Ian Thompson reported to Mr. Adelson, as the head of the Asia-Pacific region. Adelson joined in 2008 with the task of making it difficult to earn the highest credit rating for issuers following the subprime mortgage crisis, in which credit rating firms gave top ratings to lower quality mortgage securities. Mr. Jacob, the structured finance chief, will also be leaving S&P. The frequent management changes are viewed as making it harder for S&P to win back credibility in its ratings.

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The Netherlands, home of the Maastricht summit, is seeing public opinion shifting to negative opinions about the euro and supporting countries such as Greece. Some experts say the idea was right but the method was wrong. Some polls show a majortiy supporting going back to the old currency, the gilder. An EU survey in 2009 showed 80% of Dutch people supporting the euro. Frits Bolkestein, former EU commissioner for internal markets, points out that Chancellor Kohl insisted on Italy which had not met its debt criteria becoming a founding member of the monetary union, something that made it possible for over-spending Greece to join the euro only 2 years after the 11 founding members. Bolkestein led the party that now runs the Dutch government. His view is that political romanticism overwhelmed sound economic thinking and realities in the formation of the eurozone.

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The lack of demand for Italian bank Unicredit's rights offering. The European Banking Authority is requiring European banks to increase their core Tier 1 capital ratios to 9%, to improve the cushion against a financial crisis. Unicredit will have to raise its reserves by $10 billion. Unicredit's shares have fallen sharply in January, with a decline of over 40%. Spain's Santander which has operations in Latin America was able to raise the $19 billion it needed for the higher capital reserves. Santander converted $6.8 billion euros in bonds into shares, retained profits and sold a stake in its Brazilian operations. The risk is that Unicredit and other European banks might cut lending to meet the new capital standards, leading to credit tightening and reducing economic growth further, says Carl Weinberg, chief economist of High Frequency Economics.

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The strong U.S. job gains of 243,000, according to the Labor Department for January 2012, is a result of unusual factors and is not likely to last. Warmer than usual winter has permitted more construction activity and construction payrolls increased in Dec. and Jan. Another factor is that businesses are making up for labor requirements after the pause during the middle of 2011 from the tsunami and earthquake in Japan, and the uncertainty created by the debt ceiling crisis. The eurozone crisis, and weakness in housing will continue to affect the economy and hiring. The average for jobs created in the last 12 months was 163,000 each month. This rate of growth in jobs will reduce the unemployment rate in 2012, with fluctuations as an improved job market will bring more discouraged workers back looking for work.

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Municipal yields are back up. The Center on Budget and Policy Priorities says states in the USA will have to close budget gaps of $140 billion in fiscal year 2012, ending in June, down from $160 billion this year. But real shortfalls will increase because federal stimulus funds that helped state and local governments will fall from $59 billion this year to $6 billion next year. Local governments depend on states for one third of their revenue, according to a Congressional Budget Office report, which makes them vulnerable. Property taxes account for a quarter of local government revenue and this too will be declining with declining assessed values. The Federal Reserve Act limits open-market purchases of munis to ones with maturities of less than 6 months, which reduces the scope for help from the Fed.

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GDP growth in the second quarter of 2010 was at 6.2% annual rate. GDP growth in 2009 was 4.5%. Foreign Direct Investment was $3.7 billion in the second quarter of 2010, according to the Investment Coordinating Board in Indonesia. This year foreign direct investment is expected to exceed the $14.87 billion of 2008. Indonesia still faces problems ranging from the lack of infrastructure building, a weak university system and corruption. The government of President Yudhoyono was reelected to a second five year term in 2009. Yudhoyono has made changes with more power going to local governments and efforts to reduce corruption. Indonesia has a large consumer market which is about two thirds of GDP. With a young population of 240 million, government policies for stimulus and popular cash transfer programs for the poor, the consumer market continues to grow.

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One U.S. military official describes Boko Haram insurgency as similiar to where Islamic State was 2 years ago. The U.S. military has stopped training Nigerian military units, because of corruption, human rights abuses by soldiers, and infiltration of the Nigerian military by Boko Haram. Another story in the NYT describes the tensions in Nigeria as a former military ruler runs for president on a platform of restoring law and order. Boroko Haram militants are active in the Muslim north and the Nigerian military riddlled with corruption and lack of proper equipment and training has failed to control the militants. Nigeria has a long history of corruption in government and the current government of Jonathan faces the same problems, with oil revenues not going into development of the country- most Nigerians cannot depend on the electrical grid, and infrastructure is in bad shape.

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Krugman makes these comments after a visit to Athens, Greece, in 2015. He sees discouragement in Greece with the negotiations between the Syriza government in Greece and the EU. Years of austerity and high unemployment are leading to fraying tempers in Greece, and impatience from Germany and the EU. Krugman says the irony is that the Syriza government was elected at a time when a settlement is possible. Greece has a small budget surplus and this should make it possible for a settlement to be reached, without a bad outcome for Greece and the EU of Greece's exit from the eurozone. The lack of experience of the new government leaders makes the situation more difficult, but Krugman says patience is needed on all sides because there is hope in the midst of pessimism for a way out of the crisis.

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One of the key findings of a joint panel of the WHO and South Korea on the MERS outbreak is the lack of transparency in the South Korean government's handling of MERS. Lee Jong-Koo, leader of the South Korean side in the panel said at a news conference: "One of the things South Korea failed to do was a transparent and rapid distribution of information, which is the most important thing to do." What caused serious concern for health officials is the speed of the outbreak- between May 20 when the first patient was identified and June 10 at least 145 people were infected. The chief WHO official on the panel, Keiji Fukuda, says South Korea needs to enforce a robust quarantine and monitoring system, and invest more in public health with more epidemiologists and laboratories' capacity.

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Statistics bureau CBS says unemployment in the Netherlands increased to 6.8% in June 2013. Household spending declined by 1.8% on an annual basis in May, following two years of declines. Fall in house prices since 2008 have led to smaller spending and decline in sales of cars, appliances and household products. As the household sector cuts back, the banks and government are also working to reduce debt and improve finances. The cutbacks are happening at the same time leading to the paradox of thrift, says a professor at Erasmus University in Rotterdam, where all sectors are saving leading to a reduction or collapse of aggregate demand. The government of prime minister Mark Rutte is adhering to financial discipline to meet EU requirement in 2014 and implementation of 6 billion euros in spending cuts by Sept. 2013.

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The New York Times editorial on the violent military action against Morsi protest camps near Cairo University on August 14. NYT calls for cutting off the $1.3 billion in aid to Egypt. Baradei, Morsi, and the moderates are seen as complicit in letting the military take advantage of the split in the political parties through their failure to reach a compromise on constitutional and other issues. NYT calls it a foreign policy disaster for the U.S. and a tragedy for Egypt to return to military rule. U.S. president Obama is seen as having shown lack of leadership for both Egypt and Syria. The likely conclusion being that the low key approach has failed and the opportunity for a more peaceful Middle East focussed on improving the living conditions of the people in the region has been lost through inaction.

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Texas regulators approved a new wind transmission project which will add a network of transmission lines from west texas to the big cities like Dallas, Houston, Austin and San Antonio. These lines will handle 18,500 megawatts of power, enough for 3.7 million homes on a hot day when air conditioners are running. It will add to the 5300 megawatts of already installed capacity. The project will cost $4.93 billion and will come on stream by 2013. Texas now leads the nation in wind energy with twice the capacity of the next leading state California. Texas is unique because it has its own transmission grid so it can move faster without needing approval of the Federal Energy Regulatory Commission. Transmission is a big problem because in west Texas some of the wind generators have to be turned off because of lack of transmission capacity.

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Chrysler's sales are dropping the fastest of all the car companies . April 2009 sales dropped 24% from March 2009. Ford sales are doing better than Toyota, as they declined in April over same month prior year by 32%, compared to 42% for Toyota. It appears that the Buy American factor may be helping Ford Motor more than the other American car companies, and that Chrysler also suffers from the lack of new models with new technology and investment in new features. At GM the situation is better at Chevrolet, Buick, Cadillac and GMC, where sales in April 2009 declined by 29%, over same month prior year, which compares with a 55% decline in sales, of Pontiac, Hummer, Saab, and Saturn brands which are likely to be dropped. See the related link on same day on steep fall in Chrysler sales.

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Iraqi production now up to 2.5 million barrels a day according to International Energy Agency, helping to ease some concerns about supplies worldwide for winter. About 2 million barrels a day in the southern province by South Oil Company is fairly stable. Its in the north where a lot of the supply has been erratic because a pipeline that carries the oil through Turkey to the Mediteranean has faced repeated sabotage. As security has been beefed up along the pipeline production in the north has reached 500,000 barrels a day. Poor oil field maintenance and lack of security and underinvestment are the main problems. For example even though about $2.4 billion is set aside for capital investment for 2007 only 30% of it has been spent so far. And the $2 billion allocated for 2008 is way short of whats needed.

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About 1800 people die in traffic accidents in New Delhi and most of them in motorcycles accidents, the Nano has this market in mind. Whole families riding in tricky fashion on a motrorcycle, a vision that Ratan Tata had in mind when he pursued the goal of a 1 lakh ruppee car affordable to the average Indian on a motorcycle. It meets the Euro III pollution standards and could meet Euro IV with some improvements. Part of the ingenuity of the engineers challenged with this task of affordable quality in design from scratch to reinvent the automobile- a car that has 21% more space and still is 8% shorter than the Maruti 800 the smallest car on Indian roads today. The engine is placed in the back and the wheels at the extreme corners of the car.

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On the life, achievement, and performance of Hank Paulson in the present financial crises. The skills he brings, the problems he has overcome and the legacy he will leave when he leaves office at Treasury 6 months from now. A detailed account of what makes him click, what he enjoys doing and waht he is good at and various aspects and milestones, and the people in his career. Like Ben Bernanke he is an unpretentious man, who has a good sense of his own bearings, and comes from Barrington, Illinois where he has a house and where he goes back to for renewal. He follows a simpler routine excusing himself at 8,45 at Goldman dinners so he could go to bed, did not drink, and he and his wife are avid bird watchers and he headed Nature Conservancy before Treasury.

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John Taylor on the dangers of a loose U.S. monetary policy and the effects this had in fueling a housing bubble in Spain, Ireland and other EU countries. Taylor points to the bubble ocurring in emerging market economies from low interest rates. Taylor says the ECB's interest rate moves in 2003-2005 were affected by the Fed's low interest rates. He estimates the ECB set rates about two percentage points too low leading to housing bubbles in EU countries. A similiar process is taking place today with the Fed's near zero interest rate policy. Taylor points to interest rates in a group of 18 emerging market economies- including Brazil, China, India, Mexico and Turkey, which have held interest rates on average about 5 percentage points below widely used benchmarks fueling a doubling of global commodity prices between 2009-2011. The U.S. Fed's policies make it harder for central banks in emerging market economies to take aggresssive action against bubbles developing in these countries. Taylor says his does not mean that the Fed should not pay attention to the U.S. unemployment rate and long term unemployed, but should keep in mind the negative effects of slowing demand in emerging market economies and in the EU as a result of its monetary policy of keeping rates at near zero for long periods of time. This feeds back to the U.S. economy at a critical time....