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Hagel did exactly what the White House expected him to do, say experts, including not coming up with any large ideas on the defense forces, tackling the budget cuts, working with the rank and file in the military, and implementing the administration's policy of reducing involvement in foreign military conflicts. Hagel's role was limited by micromanagement by NSC officials and Hagel was seen as deferential to the military chiefs and generals who had different views of the conflicts in Syria and Afghanistan- some generals seeing the administration's response as hamstrung by keeping resource committment to the minimum in Syria and others saying not enough resources were there to extend involvement to places such as Aleppo in Syria. Hagel resigned after pressure from White House officials who realized the inadequate nature of the very things that the White House expected of Hagel- following what the public sees as failures in the Middle East.

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In a conversation before an audience at the IMF on May 6, 2015, U.S. Federal Reserve chairwoman, Janet Yellen, says about stock market valuations in early 2015- "I would highlight that equity market valuations at this point are generally quite high. Not so high when you compare returns on equity to returns on safe assets like bonds, which are also very low, but there are potential dangers there." She was responding to a question from IMF Managing Director Christine Lagarde on whether the Fed's low rate policies were creating a bubble in financial markets. S&P 500 company earnings for the 1st quarter- with 417 companies having reported results- show earnings growth of 0.2%, according to FactSet. The Dow Jones Average is up 0.1%, and the S&P 500 up 1%, for the year. Yellen said about financial stability- "Risks to financial stability are moderated, not elevated at this point. There was a great deal we missed before the crisis, I believe we are better prepared." The preparation includes the stress tests and higher capital requirements being set by the Fed to ensure banks can cope with losses, and the living wills arrangement for too-big-to-fail companies. Yellen conveyed her own sense of the proper role of the financial sector and the role of the Federal Reserve in promoting that role for social, economic and technological progress, in a clear and insightful manner- " A well-functioning financial sector promotes job creation, innovation and inclusive economic growth. But when the incentives facing financial firms are distorted, these firms may act in ways that can harm society. Appropriate regulation, coupled with vigilant supervision, is essential to address these issues."...

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Egypt's new prime minister, Hazem el-Beblawi, in July 2013, is a professor of Economics who received his doctorate from the University of Paris in 1964. He has taught economics at universities in Egypt, Kuwait, France and the U.S. After 15 years teaching at the University of Alexandria, he worked in development banks in the Middle East for another 15 years, joining the Finance Ministry in 2011. He resigned in protest against military shooting of protesters at the time. Egypt has about $14.9 billion in reserves according to Egypt's central bank, less than the $15 billion needed for three months of imports. Egypt needs to negotiate a $4.8 billion loan from the IMF. Earler negotiations were stymied by the military in 2011, and el-Beblawi will now be negotiating with the head of the Constitutional Court as president, after the ouster of president Morsi of the Muslim Brotherhood.

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Imposing losses on senior bond holders is acceptable under EU law during a liquidation process, say experts. Having them take losses in a restructuring would require changes to European and national laws. The uncertainty this creates coud hurt Spain's larger banks such as Santander and BBVA, which have so far not been affected by the crisis. A new European banking supervisory authority could insist on losses for senior bond holders to reduce the amount needed from the EFSF or ESM rescue funds.

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Before taking up the job of enforcement chief at the SEC, Robert Khuzami spent five years running the U.S. legal division of Deutsche Bank. In that job he worked with lawyers who advised on the collaterized debt obligations issued by the bank, and the details to be disclosed to investors. Like Goldman, Deutsche Bank has faced alllegations of not disclosing the proper information for its CDO's. Before joining Deutsche Bank, Khuzami was a prosecutor in the U.S. attorney's office in Manhattan for 11 years.

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This WSJ editorial says president Obama's second inaugural address missed the opportunity to bind old wounds with a reference to King on Martin Luther King day. The president chose to set forth a broader liberal agenda including climate change. The editorial points to the tone of the inaugural as setting the tone for the rest of the term and the possibility of return to the rancor that characterized the first term. "We the People" from the Consititution was mentioned several times in the sense of "collective action" that defined this text as government action. The programs of Medicare Medicaid and Social Security as "committments we make to each other." And the programs "do not make us a nation of takers; they free us to take the risks that make this country great," which are seen by the Journal as not appropriate for an Inaugural address that rises above the fray of politics.

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Ford's ways to boost fuel economy in the immediate short run. Putting Eco-Boost engines, reducing weight, using aerodynamic materials, power assisted steering, and doing this on the Ford Explorer.

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Schmidle describes how the militancy in Pakistan's border provinces is shifting to younger people who continue fighting the old battles against America and the West. He observes the opening of a campaign office of the Islamist party, the Jamiat Ulema -e-Islam or J.I.I., from a crowded rooftop in Quetta, Baluchistan, where this party runs the provincial government. The rhetoric against the U.S. is mild compared to earlier years, as a new election approaches. In the last election the Islamist parties under the alliance Mutahida Majlis-e-Amal, won 10% of the vote with pro-Taliban sentiment running high. The MMA alliance ran two provincial governments. Now there is asplit in the Islamist parties, between the factions working within the democratic process and other factions including younger militants who are against Musharraf and elections. This comes after the shooting of Benazir Bhutto by militant Islamists.

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The effort to shift China's economc growth away from the rampant overbuilding in housing and industrial capacity of the past to domestic consumption, and focus on meeting the demand for better medical care, quality of food, education and other quality of life products. China's leaders met at the Central Economic Work Conference in Beijing in Dec. 2015 to work out ways to make this shift so that growth rate of 6.5% and other goals can be met. Plans include reducing industrial overcapacity, dealing with overinvestment and unused inventory in housing, reducing financial risks from high corporate debt to GDP ratio approaching 160% estimated by Standard and Poors Ratings Services. By comparison the U.S. debt to GDP ratio is 70%. A steep rise resulted from the huge China stimulus program of 2008-2009, when the ratio was 98% for China. Experts such as Derek Scissors of the American Enterprise Institute are pessimistic about the prospects of successfully implementing reforms, saying reducing industrial overcapacity was a goal of the new Jinping Li-Keqiang leadership in 2013, but not much progress has been made in 2 years....

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Michael McConnell, was Assistant General Counsel of the Office of Management and Budget from 1981-1983. He is now a professor of constitutional law at Stanford University. Here he tries to throw light on how the budgetary process that is required by law, and which makes the formal budget proposed by the president available for public scrutiny, was circumvented through a sequence of events starting in February 2011. The Budget Act of 1974 sets specific deadlines and a process for generating revenue, setting spending priorities, and setting the debt limit. The President first submits his administration's budget by the first Monday in February. The Congressional Budget Office has until Feb. 15 to score the budget using identical metrics for all proposals for a consistent scoring. The budget President Obama put forward in February did not take into account the growing deficit and was rejected by the Senate 97-0. The President proposed a new plan in April 2011, but the proposed budget was so vague that CBO Director Douglas Elmendorf said he could not score it. The subsequent efforts in June and July 2011 were carried out in closed door negotiations between senior Republican leaders and the Obama White House. This subverts the original intention of the law. The Budget Act says that both the House and Senate hold hearings on the proposal, with testimony from the administration, "national organizations" and the "general public." Transparency, openness and accountabilility are key aspects of a proper process that is democratic and prevents the parties from engaging in blame and competing claims. The closed door negotiating sessions and the lack of a concrete written budget proposal from the President has turned the current budget process into an effort by each side to see how it can best position itself for the 2012 presidential election. ...

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China's July 2012 exports were up barely by 1%, over the same month prior year. Exports to the European Union declined by 16.2%. A big problem is cost increases for land, labor and electricity. By 2004 China's exports were growing at a peak rate of 35%. Since then prices of inputs have increased- wages by 150%, land by 70%, and electricity prices by 30%, according to Dragonomics. The yuan appreciated by 30%. Productivity is increasing by about 8% a year, according to the World Bank. As a result of the price increases of inputs the competitiveness of China, with products exported mainly on the basis of price, is deteriorating.

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Since 2004 consumer spending's share of the economy in China has fallen from 40% to 35%.

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Qualcomm's acquisition of Netherlands based chipmaker NXP for $39 billion using cash overseas is part of its diversification effort. Autos make up about 41% of NXP business, and is an effort to position Qualcomm to benefit from the high tech automobile, as smartphone business slows. After the acquisition mobile phones will make up 48% of revenues instead of 61% before the acquisition. Share price of Qualcomm was up 12% with this deal at a 34% premium on NXP's share price.

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Nossiter of the NYT describes the growing popularity of Nicolas Sarkozy in France as he tries to regain the presidency. Sarkozy's book, which has placed the importance of preserving France's identity as the main question in the upcoming general election, has climbed to the top of a popular best seller list. With weakness on the right in local elections, Mayor Juppe of Bordeaux and Francois Hollande appearing content with the status quo, Sarkozy hopes to gain the support of voters dissatisfied with the way France is tackling terrorism and its sense of identity as a predominantly Catholic and Christian country. France's political scene which makes it harder for outsiders to break into politics is likely to help Sarkozy, says Nossiter. The other factor is the campaigning style of Sarkozy and projection of strong leadership- which may be more attuned to the present voter sentiment shaken by terrorism than it was in the last election when he was seen as arrogant and self-centred. Sarkozy also lost the last election because of the economy, something that has not improved under Hollande, more likely because the economy takes many years to change to a pattern of growth following a crisis and beyond the control of any particular party. ...