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Class of 1977 was first after the Cultural revolution. In 1977 China held its first competitive national university entrance examination since 1965. A period of 12 years of the cultural revolution till 1977 were a lost decade in terms of education and getting the best minds and training them for careers in various fields for development and modernization. The year 1977 with the reinstatement of university entrance exams was remarkable in the outpouring of energy as young people prepared for entrance exams in a period of a few weeks. Textbooks were hard to find, for over ten years most had no schooling and worked in rural areas doing farming work. Students scrambled to find teachers to guide them. 273,000 were admitted to universities that year- only 4.7% of the the students taking the test. In comparison 58% of nine million students in 2007 were admitted to universities three decades later in 2007. Li Keqiang is one of these students who worked really hard to get into Peking University. He is the new prime minister, part of the new generation of leaders in China. Others include Zhou Qiang, governor of Hunan province, Wang Yi, party secretary of Foreign Affairs Ministry, and Jin Liqun, vice president of the Asian Development Bank, filmmakers Yimou and Kaige. and the writer Chen Cun. ...

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The Economist warns in this editorial and cover issue that if Germany and the European Union do not act fast the Greek crisis could have a Lehmann like effect on Europe's banking systems, with a sovereign default. This would threaten the weaker economies of Portugal, Spain and Italy. As Simon Johnson has done on the pages of the New York Times, the Economist calls the German government and Chancellor Angela Merkel's handling of this crisis filled with ineptitude. Instead of leading the German people and giving a true account of things she followed public opinion- to see that Greece was punished for its mistakes and to provide a lukewarm show of support. A true account would have shown how Germay has gained from the euro, the huge portion of Greek debt that German banks hold, and the losses that the government would have to step in and avert in its banking system if Greece defaulted. Waiting till after a big regional election in Germany on May 9, was to show a lack of grasp of how such a crisis could explode if Greece in the meantime was shut out of capital markets (yield on Greek bonds shot up to 20%). Helping Greece was more in Germany's interest than an act of charity that public opinion in Germany seems to think it is. Other mistakes the Economist cites are- the idea that going to the IMF would be humiliating thus not bringing in the IMF actively much earlier. In the view of these experts it is the ineptitude that led to the loss of confidence in financial markets that now necessitates a much larger aid package for Greece, from $60 billon to $150 billion. The other is to have a slow decision making machinery in the Eurozone and knowing this not to have taken more aggressive action. Suggestions from the Economist as an adhoc measure- set up a single crisis management committee to make quick decisions. Set up a firewall between Greece and the other states like Spain and Italy so that contagion does not spread, with these countries also being shut out of financial markets at some future date if the situation deteriorates. The other is that the European governments should setup inter-governmental liquidity lines, and the European Central Bank act using the new arrangements....

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The U.S. Justice Department files a civil lawsuit accusing S&P and parent company McGraw Hill of giving improper ratings to poor mortgage investments which allowed them to inflate in value, creating the conditions for a crash in these investments when the crisis happened in 2008. The penalty sought by the Justice Department and the attorney generals for 16 states is $5 billion to cover losses to investors such as state pension funds and federally insured banks and credit unions. The civil suit comes 5 years after the onset of the financial crisis of 2008, which created the greatest financial crisis since the 1930's. Negotiations for a settlement were conducted by the Justice Department with McGraw Hill for an extended period of time. The talks broke down in January 2013. In these negotiations the Justice Department sought a penalty of over $1 billion and S&P's acceptance of wrongdoing. S&P countered with a proposed settlement of $100 million. The government pushed for admission of guilt on at least one count of fraud. It is not known why the Justice Department filed this lawsuit 5 years after the crisis when the public's memory of the ratings issue is beginning to fade. Is it because the preparation of the case required this much time, the action not taken because it would be seen as punitive in 2011 when S&P downgraded the U.S. sovereign credit rating, the fragility of the economy in 2011, because of the approaching election in 2012, or some other reason. One of the reasons why it was important to take corrective action early was to preserve the integrity and credibility of financial markets, so critical for public confidence. An additional reason was to secure from credit ratings companies the internal reforms and change in leadership and culture that would prevent recurrence and damage to the economy. An example of this change is the change in leadership and culture underway at Barclays bank in Britain after the investigation into the manipulation of the London Interbank Offered Rate or LIBOR. The Justice Department action in this respect is an advance from the policy at the S.E.C., which has not insisted that companies involved in the crisis admit wrongdoing, setting up the process for changes in leadership and culture such as the one at Barclays....

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As securitization falls off, and banks cannot package and parcel out the loans they make inthe form of new securities they create, banks will hold more of these loans on their balance sheets and the Fed will require that they remain on their balance sheets for everyone to see.

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Speaking at a fireside chat at the Peterson Institute for International Economics in Washington D.C. Indian finance minister Nirmala Sitharaman describes the task of lifting hundreds of millions from poverty in India done over the last 10 years. When China did this for about 400 million people by 2000 it had the support of the people of the US and Europe and the US opened its doors to favor China in its supply chain. How will the US and European Union respond to the same situation in India? This was accomplished in the US and Europe by the 1930's building on the work in the 1900 period. "We are reaching near saturation in providing the basic facilities to the people of the country. Have we removed these many number of people from poverty and lifted them out." "And that is to give them some good house to live in which is made of concrete and not of thatched roof with toilets in them, with drinking water reaching them through pipes, electricity, and a good road, not just the village, but also to streets in the village, and then connect them to the nearest highway; connect them with good transport facility and so on. And financial inclusion so that each member of the household has a bank account and they get every such benefit, which has to reach them, but directly into their bank account rather than through a middle agency. On skilling people "We are now focusing very much on skilling people, each according to their level. Skilling centers are now spread all over the country. The gradation of the skilling varies according to the individuals. Businesses and private sector entrepreneurs are also tied into it so that there is a link between the kind of training businesses want and actually those who are getting the training so that immediately they can get recruited. There will be a lot of skilling emphasis. On expanding the formalization of the economy getting rid of "the grey layer" India's digitization programme will be going on at full throttle and it'll cover most aspects of our lives. Today it covers health, education, and financial transactions. We expect it to move on to other areas as well so that there is greater ease of living and transparency, the economy gets even more formal. And therefore with that, you find  the economy gets its full strength coming on board, rather than having a second layer, which remains in the grey area. ...

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The Global Summit  2024 organized by the UAE under Mohamed Bin Zayed. The PM of India opening the Summit says- After 13 years leading a state government and ten years leading the federal government, I am convinced that  there is a need for Clean government distancing itself from corruption, that is transparent. Governments that are sober in the international crises, that are green, providing ease of living, ease of justice, ease of innovation, ease of doing business to their people. The confidence won during the pandemic was gained by giving attention to the needs and aspirations of the people through Inclusiveness that is the mark of good governance. Minimum government, maximum governance, is the way that was the approach taken in India, taking the whole of society, and putting people's participation at the heart of all activity. This is true for sanitation drive, digital innovation, women's empowerment, social finance inclusion. We attached 500 million people to their own bank accounts where they had none. As a result we have advanced in digital payments. We have made laws for participation of women in government. We have focused on skills development for young people. Third in startups. Last Mile Delivery is the goal of the government that the government reaches people and does not differentiate between people. Differentiating among people of diverse origin disappears under Sab Ka Vikas, Sab Ka Saath, that is Development for All, With All Involved. We have in this given 250 million a way out of poverty. 1.3 billion people have a digital identity. With the use of technology we have a system of Direct Benefit Transfer and in 10 years have transferred $400 billion to people's individual bank accounts, and prevented $33 billion into falling into the wrong hands. This has eliminated leakages of funds. Our culture is that our efforts should match the opportunities before us. Mission Life is a new road we take for the climate. When we look at the future every government faces many questions by international interdependence and national sovereignty, the international rule of law, and how to contribute to the global good, and bring the wisdom of our culture to this good. As we transform our countries should we not transform global financial and governance institutions? For this we require future planning, that brings cohesive, collaborative effort. This means Global South voices must be heard. And its priorities moved up front. And that we share our technologies and resources with them who lack the basics of life. In doing this we will give Vishwa Banduthwa, World Unity and Harmony, in line with India as Vishwa Bandhu, a Friend to the World.   ...

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Damian Paletta of the Washington Post says that credit goes to Gary Cohn a former Goldman Sachs president, and head of the president's National Economic Council for the way he has quietly built up a group of leading experts on major initiatives of the Trump administration such as tax reform, infrastructure plans. Compared to the infighting and other problems in the first 100 days of the Trump presidency, Cohn is credited with building a core of ideas and experts that bring Trump more to the centre and with the prospect of winning Democratic party support. He has helped shift the president to set up a more balanced approach, less confrontational with China and not calling China a currency manipulator, getting support for the Export Import Bank, and more receptive to the Federal Reserve led by Janet Yellen. This report says an alliance of moderates is centering around Adviser Jared Kushner, Cohn, and in other reports Tillerson in foreign affairs is seen as being part of this group. On NAFTA the president has moved to a less confrontational approach with Mexico, which has helped the Mexican peso recover and improved prospects for the Mexican economy.  On infrastructure new ideas to find financing are needed and a plan to tax carbon emissions is intended to draw Democratic support as well as provide some of the funding. About $200 billion in taxpayer money and $800 billion from private investors is being discussed at the National Economic Council. This report says Cohn suffered from dyslexia in childhood, graduated from American University, and joined Goldman Sachs in an unconventional way. He shares a passion for deal making with president Trump, yet at the same time values the views of experts he has brought to formulate concrete plans for the way ahead. About 25 experts with extensive experience in government helped put together new tax changes, infrastructure plans, and international trade deal plans. His predecessor at the NEC, Gene Sperling, gives him credit for quietly pulling together the experts and doing the planning that the Trump administration now depends on. ...

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Italy's prime minister, Mario Monti put it best when he said in a speech in Brussels in April 2012: "If a country becomes more productive and competitive, but there is no demand for its products domestically or around it, growth will not materialize." There is a new shift in opinion towards a balance of fiscal discipline with growth measures to get Europe back on track. The feeling in different parts of Europe is that the German view of austerity alone will not work for Europe. And the view is coming from the far right to the far left, from Marie Le Pen, far right presidential candidate in France, to the far right leader whose move to withdraw support to the government in Netherlands on the issue of austerity measures led to its collapse. Geert Wilders, leader of the Freedom Party in the Netherlands, said: "we don't want our pensioners to bleed just to meet the dictates from Brussels." The IMF has put out research that questions what is now called "the German hypothesis." The "German hypothesis," is based on the unique experience of Germany with the Hartz reforms under chancellor Schroeder which were based on wage restraint by workers, the German "kurzarbeit" program of government support for retaining workers with lower pay during cyclical downturns, improving competitiveness of German companies, and conservative budget practices. There appear to be two exceptions to this. One is that demand has to be strong outside or domestically for a country to reduce unemployment and improve productive capacity utlilization as it increases competitiveness. This was the case as Germany made the Hartz reforms under Schroeder. Wage restraint acts as a form of devaluing currency for reducing the cost of its products to improve exports. All leading parties and the unions are now in favor of wage restraint and lowering wages to preserve jobs to improve France's competitive position. Germany had the benefit of a decade to implement these reforms to reduce unemployment, because demand was not declining domestically or around it during its reforms. The situation is different in Spain where in all likelihood demand would shrink further with unemployment rising from 25% to higher levels, and higher sales taxes. This is why Francois Heisbourg, special advisor at the Paris based Foundation for Strategic Research, says about the current situation in Europe, that destroyiing Greece with strict austerity alone wasn't something the EU can look back at with the sense of having done the right thing, for Spain it appears misguided and lacking careful thought. The editors of the Wall Street Journal expressed the same sense when they described the March 2012 bailout of Greece as a tragic sideshow, because the main purpose was to buy time and insulate the other larger economies in the EU by giving the French, Spanish and German banks time to improve their financial position. The Journal called it bad for Greece leaving it with debt at 120% of GDP till 2020 and no economic growth, and bad for democracy as it was done against overwhelming Greek public opinion- The Tragic Greek Sideshow, Feb. 22, 2012. Volker Perthes, director of the German Institute for International and Security Affairs, a Berlin think tank, says the Germans have always viewed German leadership in Europe with discomfort, and would prefer a leadership where several states, France, Italy, Spain, and other countries in the EU coalesce around consensus positions. This is historically true for the German position since chancellor Adenauer. With the Free Democrats in decline, and the Social Democrats and the Pirate party doing well in recent German elections and favoring consensus in Europe, Merkel's Christian Democrats need to rethink their policy to give greater weight to economic growth for a consensus position in Europe. ...

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Zhu Changhong plays a key role in investing China's $3.5 trillion dollars in foreign reserves. He is part of the management at China's State Administration of Foreign Exchange or SAFE, a division of the central bank. He maintains a low profile, yet he has played a critical role in shifting investment into Japanese and U.S. equities and bonds issued by the European Financial Stability Fund, reducing the risk exposure to U.S. Treasury's as the U.S. Federal Reserve changes monetary policy. From 45% of China's foreign reserves invested in U.S. government bonds, or $1.11 trillion, in June 2010, SAFE under Zhu's guidance reduced the allocation to 35%, or $1.14 trillon, in June 2012, according to a Wall Street Journal analysis. He has an interesting background. Coming from Anhui province, he studied physics at the University of Chicago, then shifted to life as a trader in financial markets at Allianz's PIMCO investment firm. After spending 20 years in the U.S., Zhu returned in 2009 as chief investment officer of SAFE. He was drawn back to China by another expatriate Yi Gang, a SAFE director who was an economics professor at Indiana University- Purdue University, Indianapolis....

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The wounds left behind in S. Korea from the 1997 Asian financial crisis when the IMF imposed conditions for $21 billion in loans as part of a $60 billion loan package to prevent a sovereign debt default. The conditionality imposed for loans led to layoffs and economic hardship for the working class. S. Koreans remember the crisis as the "IMF crisis." It also has a particular stigma in S. Korea which the IMF is now trying hard to erase. One laid off employee from an automobile plant describes the period as a hard hitting IMF typhoon. So struck are S. Koreans with the term that it has become synonymous with financial hardship. In the 12 years since the crisis the IMF itself has changed. It is now trying to provide help to countries on better terms and is conscious of the problems of austerity policies. During the 2008 financial crisis Seoul stayed away from the IMF. Seoul is host to the G-20 in 2010 and now has a participatory role in international meetings. The IMF has created a emergency loan facility that could be useful for Asian countries and wants to change the perception of the IMF in Asia....

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Speaking at a banking conference, advisors including the head of Russia's largest retail bank Sberbank, German Gref, minister of the economy, Aleksei Ulyukayev, and head of the central bank , Elvira Nabiullina, express deep concern about the economic prospects in 2015. Foreign investment is down from about $90 billion in the 1st quarter of 2013 to a negligible amount in the 3rd quarter of 2014. Capital outflows following the Ukraine crisis are estimated at about $110 billion by former finance minister Alexsei Kudrin. The ruble dropped to its lowest level against the dollar since the 1990's. And the sharp decline in oil prices with Brent crude at about $90 is another risk factor as 50% of the budget comes from oil and gas revenues and 60% of exports are still oil and gas, with no serious or effective effort to diversify under the Putin adminstration. Putin told the banking conference that a deficit free budget and reserves of $460 billion are "fundamental factors supporting stability." Advisors and leading bankers remain unconvinced. The problem is that even at the beginning of 2014 before the Ukraine crisis foreign investment had slowed to a trickle, similiar to what India experienced in 2013. The central bank head says her effort to open up the bond markets in Russia to foreign investors is now in vain because there are few foreign investors. Instead of reversing the situation as is happening in India with the new Modi administration, policy under Putin and the Ukraine conflict may have scared investors away with the increasing western sanctions and stagflation (estimated 8% inflation and about 0.5% growth in 2014). The head of Sberbank Mr. Gref told the banking conference- "The Soviet Union broke apart because of the mind boggling incompetence of the Soviet leadership. They did not respect the laws of economic development." The problem with sovereign reserves is that it can protect a sovereign currency such the Russian ruble or the Brazilian cruzeiro to some extent, but today's vibrant economies need foreign investment and foreign technology for growth. Even a country such as China with a trillion dollars in reserves needs the reserves in its special case because of its billion plus aging population, and is no exception to these laws of economic development about the need for foreign technology and foreign investment. ...

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China's limited monetary and fiscal options in 2012, with the housing bubble limiting the option of increasing construction spending to spur growth, and inflation limiting monetary policy. The central bank's decision to reduce the reserve requirement by 0.5% is not expected to do much for economic growth, as there is enough money to lend. The problem is that there is not enough demand for loans in the current environment.

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Canada has still not figured out a way to assimilate the 800 or so Indian bands, who are the native peoples of Canada, and still help them keep their languages, cultures and traditions, and independent existence. The bureaucratic structures set up to adminster the Indian Act and post colonial policies act as another hurdle to creating apolicy that fits in with the new values of a new generation of multicultural Canadians.

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How shares of British and American banks are being hit hard in the stock market. Barclays went down by 24 % in 1 month. And rumors are rife about huge losses at many banks, for Barclays the rumor is that it has losses of $10 billion that will be announced as writedowns.

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House members frustrated and angryover high unemploymet and the rescue of Wall Street that is doing little for americans who are losing jobs and shrinking small business, traded insults with Secretary Geithner and some called for hime to quit. A measure calling for for Congression Government Accountability Office to conduct audits of the Fed that includes interest rates and lending to individual banks that was proposed by Ron Paul was passed 43-26 by the House Financial Services Committee. At one point a Hopuse Republican told Geithner "the public has lost all confidence in your ability to do the job." And Geithner shot back with "what I can't take responsibility for is the legacy of crises you've bequeathed this country." Rep. Fazio (Dem. Oregon) was one of the voices calling for Geithner's resignation and said in an interview that Mr. Geithner is too close to Wall Street: "Quite frankly, all the gamblig on Wall Street is doing nothing to put people back to work in America and rebuild our economy." Geithner is coming in for criticism for the rescue of AIG that indirectly rescued Goldman Sachs. Congressman Ron Paul is the author of a best selling book "End the Fed." Mr Paul says his amendment would not hinder the Fed pusuing an independent monetary policy. What he is concerned about is that "ther's plenty of political influence goig on now- presidential politics, influence by Goldman Sachs and the banking industry, and its all done in secret." See the links to Geithner and contacts with the banking industry. It was in 1978 that a law was passed shielding the Fed from Congressional auditors reviewing the Fed's monetary policy operations, loans to foreign governmets and direct lending to banks. The Fed isn't disclosig interest rate deliberations and only agreed to do this with a5 year lag in the 1990's and Ron Paul/s proposal would reduce this time lag to 6 months for the GAO access to this information....

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A former Wall Street trader says banning bonuses for investment bankers would take out much of the risk in the financial system. The current system is different from the one he joined as an intern in the 1980's, he says. At that time banking was a bland business, where the head of a financial firm made about the same as a junior trader makes nowadays. Large bonuses of today were rare at the time. What large incentives to take risk in the form of bonuses do is to encourage extreme risk taking, especially when the downside or pain as a consequence of these decisions is passed on to other individuals or institutions, or the government.

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UK bank, HSBC Holdings, is in negotiations with a buyer to sell its 15.6% stake in Ping An Insurance Group of China. This stake is valued at $9.17 billion at current prices. The deal could give HSBC an estimated profit of $7.5 billion at a time when it needs to boost performance.

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The Jal Jeevan Mission (tap water for all), Swacch Bharat Mission (Clean India), cooking gas for rural women, digital bank accounts for all, and other projects pushed forward by Mr. Modi are changing life for India's 1.3 billion people. Gati Shakti is a master plan for integrated development of infrastructure by bringing in all ministries of federal and local governments together to work together in an overall plan. Because of the new digital capabilities in 2021, and large technical capabilities India is witnessing development in a way that is unprecedented. Uttar Pradesh, India's largest state in the north with a population of 230 million, is the focus of a major development transformation through infrastructure building with determined effort at the state and federal levels. For the first time Mr. Modi is ensuring projects are part of a master plan for transforming the country making certain projects get done on time, efficiently and without leakage of funds. The best evidence of this delivery of services is the vaccination drive with nearly 1.4 billion people vaccinated. And projects to complete new vaccine development including mRNA vaccine that does not require cold storage, and is easier to provide. ...

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The dangers of crypto currency have not gone away says Eswar Prasad of Cornell University. Crypto currency companies have simply joined the bandwagon for acceptance using the two political parties into the 2024 elections, he says. He calls this a cynical bid by political parties for Silicon Valley cash and young voters. If anything he says the risks are greater today. Sam Bankman and FTX scandal are just the tip of the iceberg of these risks.  Prasad says not to be fooled. China, India and Japanese governments have kept crypto at a distance because of the dangers inherent in a currency that cannot have the backing of the central bank. Prasad says that crypto itself still has dangers of speculation, financial engineering and outright fraud. These dangers can then spillover into traditional banking and financial markets. The information technology that crypto has used is already being used in traditional banking so that this is no longer something that is characteristic of crypto just something that it has been using. This is a scant regulated market and crypto companies like tech companies in social media that threatens education and democracy through misinformation want to keep it that way.   ...

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Increasing concern about inflation at India's central bank. A willingness to accept lower economic growth to control inflation. The Indian government's acceptance of the RBI's inflation fighting efforts and the increase in interest rate of half a percentage point to 7.25%.