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Peter Coy says that as long as unemployment numbers keep going up and foreclosures keep increasing as aresult of the job losses housing prices will keep falling. He says that they may have to fall 20% more than the level they are at today. And that the foreclosure levels could become atidal wave if it becomes easier for alot of people to just hand their keys to the banks. This was what Martin Feldstein warned aginst in the WSJ oped pages several times in 2008. As more people are under water it makes sense to just hand the keys to the banks, and as long as this goes on, the economic recovery will be put off. A study cited by Coy done by Reinhart and Rogoff shows that housing crisis of this magnitude last about 6 years before all the bad effects wear off. And in addition to housing there are other things at work in this crisis especially in the job loss rate which is increasing (663,000 jobs lost in March), and the readjustment in savings rate upto 6.4% according to BW for 2009 till March, which suggests a serious drop in the consumption rate is underway and may go on for several years crimping demand and increasing unused manufacturing capacity. The stories in the media and other information reinforce this statistical information. The bit of good new from hard hit housing markets in California and Nevada and other staes has to be seen as no more than a limited play in the foreclosure markets, that does little to the broad brush strokes that are ocurring on the national and world landscapes in job losses and consumption. Coy a veteran analyst who has covered the housing market and warned during the boom of the likelihood of abust in a cover issue at the time, brings experience and reflection to the developments, and urges serious caution in interpreting signals that may have no broad meaning....

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This opinion in DW.com says modernization of Saudi Arabia will take many years and a different mindset from the ultraconservative nature of the country, and cannot be accomplished by a few megaprojects that are announced by Prince bin Salman. He says the 32 year old leader lacks experience. The cost of the new project of $500 billion he has announced to be built in the northwest of the country is extremely high with no clear source of investment funding. Efforts for a more moderate Islam are also seen with much skepticism as Wahhabism has dominated the region for many years with little change. Change from the ground up is needed more than top down says DW.com. This is particularly true for gains to be made in women's rights and other social issues.

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European banks borrowed 529 billion euros from the ECB in Feb. 2012 at interest rate of 1% for three years.This follows the lending by the ECB of 489 billion euros to European banks in December 2011. The total lending now exceeds $1 trillion under the European Central Bank's Long Term Financing Operation. It is designed to inject additional liquidity into the European banking system and shore up confidence in the economy. This time 800 banks applied for loans compared to the 523 banks in December. The actual amount of money going to banks is about 520 billion euros as many banks moved money from shorter term ECB loans to the three year loans under the Long Term Refinancing Operation. The operation helped bring down the borrowing rates on Italian and Spanish bonds- the rate on Italian 10 year bonds is down to 5.2% as of Feb. 28, 2012. Spanish and Italian banks were able to borrow at 1% from the ECB and buy Italian and Spanish bonds paying 5%. Intessa Sanpaolo bank in Italy doubled its borrowing to 24 billion euros. Smaller banks, including banks in Germany, participated in the February 2012 ECB lending, moving the number of banks up to 800 this time. VW's financing arm also borrowed under this operation so that it could provide credit to customers....

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The ECB's second phase of the Long Term Financing Operation provides 800 European banks with 529 billion euros in 3 year loans at 1%. The impact of the first phase in Dec. 2011 with 489 billion euros in loans was greater on borrowing rates for Italy and Spain than it was this time. The larger number of banks participating in Feb, 2012- 800 banks compared to 523 banks- with many smaller banks included, is expected to provide a boost for lending to small and midsize businesses in Europe. The total net amount of liquidity added as a result of the operation in the two phases is expected to be 520 billion euros, as some of the loans were a transfer of existing loans to the longer term 3 year loans provided under the Long Term Financing Operation. The operation has helped bring confidence to the European banking system and will help the recapitalization of European banks.

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Heidelberg, in southern Germany, and smaller cities like Freiburg and Tubingen are seen as "green cities" in the sense that the people there have an open international outlook, are well educated, look at new ideas, and are idealistic. The Green party is in power in the southwestern state of Baden-Wurttemberg since 2011, where these three cities are located. Greens have about 20% support in elections here compared to 8% nationwide. Here Dr. Franziska Brantner, the representative in the Bundestag describes the orientation of people in the state. Heidelberg was able to handle the 600 refugees coming at the peak of the crisis very easily. Heidelberg's university, the oldest in Germany was founded in 1386. Students make up a quarter of the population of 156,000, and most of the Green party voters have university degrees, more than any other party according to Die Welt.

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Foreign institutional investors responding to negative sentiment for emerging markets in general took out $2.6 billion from India in August 2015. Yet average allocations to India for emerging market funds have increased to about 10.7% in July 2015, because India looks much better than other emerging markets. By comparison China is at 20.25%.

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A new generation of politics with an effort not to be defined by race while race still remains in the background. How politics is being shaped in the USA in 2008 due to a confluence of factors, events and leaders. The emergence of a new generation of younger people, blacks, whites and other minortities who don't carry all the baggage about racce of the previous generations and are open to a lot of different things, the global economy, changing Africa, Asia and Middle East, the integration of America into a global patern of manufacturing, trade and consumer demand, the emergence of 2 billion people from China and India to share in the development of science and technology and modernization are the confluence of factors. The events are the Iraq war, the Iran confrontation and the Afghan war, the confrontation with militant Islamist ways, which are seen as having been badly handled leading to a loss of confidence in the US in the world, the general mood of people looking at 2008 like they did after the war and the Truman period for a fresh face in a changing world in another confluence of factors. Then the independence of countries in Asia and Africa and the Middle East from centuries of colonial rule, in the case of India independence, in China's case a new ideology based government but striving for the bread bowl for a billion people, in the Middle East and Africa from Egypt to Kenya new aspiration for progress and development. The events then were the Korean war and weariness with it, now the Iraq war and Iranian confrontation, and Afghan war and weariness with it. A Irish Catholic face then, a mixed race face now, new generations and aspirations then and now. Leaders then in John Kennedy the ability to present oneself in a youthful way appealing to the new generation so that one is not perceived in the old ways, partly because like Kennedy talking to a new generation of people who did not carry the old baggage, easier to do because John was himself part of this new generation. Same thing with Barrack because he like the new generation both do not carry the old baggage and see things in a race neutral way concerned more with other things such as confidence in the future and the role of America in the world. How will this turn out? If electedthese leaders are still human and would still face the same difficulties like John faced in the cold war and Cuba and Vietnam situations, and the lack of experience would also show not that greater experience would necessarily help solve intractable problems. But the aspirations and desire for a fresh face and youthful energies of a whole generation of younger people and of other people in general who are weary of the old ways may carrry the day in election voting. ...

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Risks to stable long term growth of too much liquidity in the global financial system.

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Spain and Italy's 10 year government bonds yield declined to 3.2% in April 2014, compared to 2.68% on U.S. 10 year government bonds and 1.56% for German 10 year bonds. This is a far cry from the dark days of 2012 when these yields for Italy and Spain hovered at 7-8%. Italian bonds reached a peak in Nov. 2011 of 7.408% and yields declined to 3.221% on April 8, 2014, according to Tradeweb. Spain's bonds reached a peak of 7.637% in July 2012 and declined to 3.204% on April 8, 2014.

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Kessler in the WP corrects Obama's claim that he created 800,000 jobs. He says this is clever arithmetic as it takes a low point in Feb. 2010 following the financial crisis. Kessler points out that according to the Bureau of Labor Statistics, U.S. manufacturing jobs were 12.56 million in Jan. 2009 when Obama became president. In Nov. 2016, early estimates show there were 12.26 million manufacturing jobs, a loss of 300,000. This loss does not reflect the problems in the U.S. auto industry and older industries in the midwestern states as a result of trade and globalization that speeded up with the rapid industrialization of China. And led as Greg Ip pointed out in a recent WSJ report to a rapid acceleration of job losses in a decade that did not happen in the same scale during Japan's industrialization and urbanization in the sixties. This aggravated the situation in Michigan, Ohio, Wisconsin, Indiana, and Pennsylvania, and was met with a feeble response from Democrats. Even a economist like Krugman favoring the Obama administration's efforts came to the conclusion that TPP did not add much to gains from trade as most of the gains had already been realized. More of the gains went to tech and IT in California, at the expense of the auto industry based in the midwest. A report in WP show a president too close to IT in California and failing to grasp the situation in the midwest. Voters punish whoever is in power, regardless of being Conservative or Liberal, in Canada the hollowing out of manufacturing under Harper in Ontario and Quebec led to the win by Trudeau's Liberals.  ...

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To get an idea of the scale of paralysis in the Congress party administration of Manmohan Singh in India in 2011-2014 consider this- more than $100 billion in critical infrastructure projects were held up by slow growth and red tape, according to estimates of the Centre for Monitoring the Indian Economy. The Congress party was too preoccupied with fighting charges of corruption adding to the lack of leadership from Singh and Gandhi, and focussed on programs of subsidies for voters to prepare for the 2014 elections. In the last 12 months alone ending in March 2014, manufacturing projects of about $54 billion were shelved, according to the Centre for Monitoring the Indian Economy. The climate of uncertainty led to Indian companies investing overseas, or simply holding back instead of investing in the Indian economy. Industrial production declined for the first time since the 1990's during the 12 months ending in March 2014. It is in this vaccum in leadership since 2012, and a seriously troubled economy, that the 2014 parliamentary elections were held. Impatient young voters- with about 100 million new young voters added to voting lists- gave Modi and the BJP party an absolute majority and mandate for coming up with new solutions to India's problems in jobs and infrastructure....

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As sales decline in the USA auto industry even the Japanese take a hit. Toyota sales down 10% in March 2008 compared with March 2007 only slightly less than the 12% for the US auto industry as a whole. About one assembly plant worth of idle capacity exists at Toyota. Sales declines at GM and Chrysler19%, at Ford 14%. In fact Shoichiro Toyoda visited Toyota's Indiana plant last October concerned about the idle capacity at the plant. See the link to this and Toyota's senior people like the honorary chairman were concerned about what is happening to Toyota fearing that Toyota may be facing some dangers and was getting complacent.

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Polls on Deutchland opinion trends show Merkel has gained support with her careful handling of Brexit, and the AfD has lost support. Only a month ago media reports covering the immigration issues had put AfD in the light of gaining using this issue. The infighting in the Conservative Party and the lack of any plans of ministers in the British government favoring Brexit for leaving the EU have Germans questioning this kind of politics compared to Merkel's promise of a "calm and composed manner" in dealing with issues of people's lives and the future of Europe. The extensive coverage in Germany of the vote for Brexit, the EU referendum in Britain, increased awareness in Germany of the benefits of the European Union. Merkel and other leaders offered their assessment of how the European Union has brought peace to Europe and improved the lives of the people during the pre Brexit media coverage. Now Infratest Dimap polls show the popularity of Merkel has increased to 59%. Compared to a June poll before Brexit things look better for Merkel-  the AfD Alternative for Germany has lost 3 percent of support dropping to 12 percent, the Christian Democrat party of Merkel is up by 2 percentage points to 34 percent in popular support, the Social Democrats also increasing support by 1 percent to 22 percent.The vast majority of people said the European Union provides security (74 percent) and prosperity (79 percent). Germans are skeptical about the value of referendums on such major decisions as EU membership because of swings in popular opinion such as that on immigration that swayed British voters- 49 percent saying parliament does better in these situations than a referendum, 42% saying referendums are better. For voters who said Germany was hindered by membership only 11% supported that proposition and 52% said the EU is beneficial for Germany. Over 75% actually favor more cooperation on refugees, data policies and energy, setting the prospect for a stronger European Union. Also proving the importance of responsible politics, and honest, flexible leadership, responding to people's concerns yet not pandering to swings in opinion for temporary advantage. A separate piece in the Guardian by Yonge points out that Cameron actually won only 23 percent of the eligible voters for Conservatives in the 2015 elections in Britain, reflecting a two decade slide. Brexit only made this failure widely visible, and did not escape the attention of the German people.   ...

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Republican voter sentiment in Springfield, Ohio. Warren Davidson is running for former House Speaker Boehner's seat in this Congressional district in Ohio with the support of Tea Party activists. The median income in the city is $31,635, $15,000 less than the Ohio median. The population has declined from 80,000 in the sixties to less than 60,000, according to Census Bureau. Only about 15% of the Springfield population has a college degree compared to 30% in the U.S. Speaker Boehner had a small group of loyalists and tight control of the Republican party in his district, leading to charges that he was too close to the establishment and business. Trump has support from Republican voters who feel the party has drifted away from them.