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Anger in Greece at the austerity measures was evident in the results of the April 2012 elections. The two major parties polled even less than the low poll numbers that they expected. The Socialist Pasok party of former premier Papandreou received only 13% of the vote and not the 15-18% expected, the New Democracy party of Antonio Samaras received only 18.8% and not the 25% expected. As a result the two main parties that have ruled Greece received less than one third of the vote combined. The second largest party after New Democracy is now the Coalition of the Radical Left or Syriza, which received 16.78% of the vote. It is led by young Alexis Tsipras, 38, who has said the bailout treaties witht the EU and the IMF were "not salvation, but a tragedy." Syriza opposes the austerity measures and prefers to exit the eurozone. A extremist far right anti-immigrant party New Dawn received 7% of the vote showing the desperate situation. New Democracy's Samaras tried hard but failed to form a government, and under the Greek constitution each party gets a few days to form a government. The outcome is likely to be new elections in June 2012 and a caretaker government appointed by the president....

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Inflation was a little above the eurozone average of 0.7% for Jan. 2014 in Germany and below the average in Portugal, Spain, and Ireland.

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Focus on billionaires and remote parts of the world distract from the vital issues of infrastructure renewal, cost of living and incomes growth that affect everyday lives of Americans. In an economy the size of the US the $5 trillion of billionaires out of a $31 trillion US GDP, is about 15% of the nation's wealth. Many of the billionaires such as at Amazon lead product and service companies that generated new products and services. Five of the top 25 in the US are from Walmart a large retailer in the US, 2 from Amazon, three from Microsoft in personal computers, 3 from chemical industries.This accounts for 13 of 25 or half. Removing these billionaires would take out $2.5 trillion leaving the billionaires controlling 7-8% of the country's wealth. The focus by Bernie Sanders in the US and Jeremy Corbyn in the UK on remote spots in the world and on billionaires distracts from the real issues of cost of living, of incomes of ordinary families, of everyday issues of health and quality of life faced by all. It also does not help in the discussion because of the need to move away from the poor leadership of the Blair-Brown, Cameron- Johnson years and the Bush-Obama years in the UK and the US. Here no ideologies are needed just common sense solutions to common problems that affect lives of all the people, with the cooperation of all the people. ...

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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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If the decline in manufacturing in rural southern Virginia for 500 workers in a low tech deli meatpacking plant can devastate whole communities, then imagine what happens  when manufacturing in chips and science with high paying jobs are put at risk by market forces focused on AI.  This week WSJ carried a story about Qualcomm which does design and does no manufacturing is planning a takeover of Intel, a leader in manufacturing for advanced chips in the US, a key part of Biden-Harris strategy to regain a American foothold in Chips manufacturing. Such a takeover makes no sense for America's long term interests. Qualcomm could simply jettison the manufacturing capabilities -a key part of America's long term chips and science strategy just because AI focus has distorted market forces. IMAGINE THE DAMAGE. Regulators need to safeguard the Nation's long term interests for reliable chips manufacturing within the US, to avoid the crisis experienced with chips outsourced overseas leading to severe shortages in 2021-2023. How this has happened is that AI has created distortions in the market so that companies are valued differently. So that an Nvidia gets valued at $1 trillion and even for a day at $2 trillion then going back down to half that, all within a 12 month period. AI is distorting the market in ways that a chip leader like Intel now gets valued at $90 billion a third of the $290 billion it is valued at only a short time ago, making talk of takeovers possible even from smaller design only companies such as Qualcomm. The market failure in this case comes from markets being distorted by not reflecting true costs of shortages America experienced in chips from lack of its own advanced manufacturing during 2021-2023.   ...

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As China's food retail stores landscape has changed with more and better options offered to consumers, they have shifted upscale, especially with the rapid growth of incomes in China in the last decade. With a decline in growth for Yum Brands in China the company has decided to spin off its operations in China into a separate company, in the hope of giving the local company more room to respond to competitive changes in the food retail store business. As Chinese consumers urban disposable income showed rapid growth from 7700 yuan in 2002 to 23,700 in 2015, the market for food retail chains has changed. With this growth came other competitors such as Pizza Express, a UK chain at the higher end with local Chinese partners, and at the lower end Taiwanese competitors Ting Hsin International Group with its Discos fried chicken chain competing with KFC Yum Brands stores. Local Chinese competitors also moved upscale with Xiabuxiabu Catering serving hot pot, for consumers to cook meat and vegetable in broth doing it themselves. Other factors hurt Yum Brands growth and brand respect with the media reporting use of growth hormones and antibiotics by Kentucy fried chicken suppliers in 2012. And a local media report in 2014 saying that a KFC supplier supplied expired meat hurt sales with adecline of 14% in the fiscal 3rd quarter 2015. The opinion for Pizza Hut, a Yum brand has changed from as recently as 2012, with one survey showing a drop from 39% to 25% for consumers who see it as a desirable brand. A Beijing teacher for example now sees Pizza Hut as a cheap option compared to spending 128 yuan or $20 on a better quality pancetta and sun dried tomato pizza. More discriminating Chinese consumers means this trend will continue, and the media constantly looking for flaws in quality standards. As many companies are finding out the Chinese market is not going to be easy for the complacent....

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Merkel tells a Davos meeting in January 2011, that "the euro is much more than a currency, it is the embodiment of Europe today." The idea of the euro as needed for the political and economic integration of Europe is accepted. Merkel also says "that "solidarity and competitiveness are two sides of the same coin." Suggesting that the slower economies in Europe will have to remake their economies, just as East Germany did when it joined a reunified Germany. Mathias Dopfner, CEO of Axel Springer, says Merkel knows from personal experience the traumas faced by a bankrupt economy. At the time of reunification the deutsche mark would become the national currency, even though the value of the mark reflected productivity levels and the strength of the economy of the western part. East German businesses were priced out of the job market. About 14,000 businesses were shut down and 4 million jobs were lost in the first five years after formal reunification in 1990. Unemployment jumped to 20% in East Germany in 2005. After the fall of the Berlin Wall two million people of the 16 million living in the East moved west, most of them younger people. For West Germans there was a price also. Germany has raised 1.7 trillion euros through an income tax "solidarity surcharge" for modernizing East Germany. Volker Perthes, director of the German Institute for International and Security Affairs, says Merkel knows what resistance and what dangers come with structural adjustment programs. And she has to sell the programs and insist on strict conditions for German aid to Portugal, Spain and Greece. After many years the project has paid off. The unemployment rate in the east is 11.7%, much closer to the 6.4% in the west than before, and the growth rate in the east is 2.7% compared to the 3.6% in the west. The antiquated industrial base in the east has been replaced with a solar power sector and new chemical engineering and microelectronics industries....

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Erlanger and Castle look at the reasons given for the resounding defeat of the Labor party in 2016 British elections. Mr. Blair's view is that Labor as a traditional left wing party going against a right wing party produces a traditional result, reflects the Thatcher years when Britain was looking for a new way forward after the previous Labor governments and state involvement in the economy. More forces were at work in this election, say experts. Peter Mandelson of the Labor party and Bloomberg Editor-in-Chief Micklethwait, say other forces are at work, with Scottish nationalism depriving Labor of a core constituency it had relied on, with 40 seats in the 2010 elections going down to 1 in 2015 general election. English nationalism meant the only gains for Labor in England came from Liberal Democrats not from Conservatives. Cameron appealed to Englsih voters that a Labor left oriented government in alliance with the Scottish National Party, which is more to the left than Labor, would be bad for England. Other commentators have suggested that liberal economics of the type espoused by Blair and Gordon Brown had failed to reduce inequality or improve living standards of working class people, led Britain into the 2008-2009 financial crisis, and lost credibility. Globalization, the decline of heavy industry in Scotland, and other changes in the global economy have also changed the playing field. The Conservatives showed flexibility in relaxing deficit rules after 2012, and were intent on protecting the National Health Service, giving their campaign theme about putting Britain on the right path to economic recovery more credibility. Other issues such as immigration also played out against Labor, hurting labor more than the Conservatives, with the defeat of Labor's Ed Balls in Leeds attributed to the increased votes going to the UK Independence Party from working class and centrist voters. In the end Labor received only 30.1% of the popular vote. ...

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After a long year of uncertainty this is what it comes down to. The new turnaround plan developed by CEO Fritz Henderson and the government's auto task force will leave the government owning more than half of GM. Under this plan GM will get an additional $11.6 billion in loans from Treasury, on top of the $15.4 billion already received. THer government will get half of the ownership of the company in payment for half of these two loans. And GM will use stock instead of cash to pay off half of the $20.4 billion it owes a United Auto Workers fund to cover retiree health care. That transaction will leave 39% of GM in the hands of the UAW. This happens just as another agreement was reached to leave the UAW with 55% ownership of restructured Chrysler, and FIat SpA getting 35%, with the US government and lenders owning the rest. What happens to bondholders? They were told to swap $27 billion of unsecured debt for a 10% company stake. GM and the government give bondholders little choice, if they do not do so GM's Fritz Henderson says GM will file for bankruptcy. In 2011 hourly workers will be less than 40,000. Market share will shrink to 18% in 2014 from 22% in 2008. The number of dealers will drop to 3605 by 2011, down 42% from 2008, and GM will kill the Pontiac brand. Much of the company will have disappeared, showing how market forces are at work in our system in destroying companies, and leaving them as a fragment of what they once were, if management gets complacent and makes a series of errors. Its a big development and shows the savy shown by the government auto task force's leaders in setting up the arrangements. A smaller GM will emerge. But this is an understatement if ever there was one. Here is a company that had close to 200,000 workers in 2000, with hourly workers close to 150,000. See the graph. ...

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Was the deal with Cerberus to let it own a significant part of GMAC bad for GM, along with other decisions and missteps that led to disaster. The decision by GMAC to raise credit standards just when the full force of the credit squeeze was hitting financial markets has to have hurt GM sales, and aggravated a bad situation in which consumers first turned away from SUV's and trucks, which were big in GM's and also Detroit's product lineup, and then in November simply postponed purchases of automobiles. The November numbers coming in at over 40% below 2007 numbers for the same month, were a disaster for GM, making it necessary to turn to the government for help. Brian Johnson of Barclays Capital says GMAC financed just 1% of GM's sales in November compared with as much as 45% in a normal month. Thats huge for impact. And Cerberus appears to be responsible for the decision to raise the credit standards, and it has not acted in the best interests of GM but more in its own interests as a private equity firm. And its decisions have been heavily influenced by its souring investment in Chrysler, and its desire to extricate itself from Chrysler without putting in any more funds than it has absolutely need to put in. Now with government help to GMAC, the situation is being restored to where the credit standards are set at the minimum acceptable credit score of 621. Johnson of Barclays Capital estimates that with this lower score GMAC should be able to recapture about one third of its former loan volume, which considering that it had 45% of GM sales is only 15%. This still leaves GM in a bad situation compared to things before October 2008. And with the deteriorating unemployment situation in 2009 and further economic strain in 2009, this will not be enough for the uphill climb facing GM sales. ...

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How globalization which for over a long period since China and India and other emerging nations joined the global trading system helped bring disinflation and lower prices to the developed countries is now closing that chapter. And starting a new one in which the rapid development of these developing countries is strengthening their currencies and the growth of the middle class and increasing demand for commodities, food and energy, in this way driving up prices. China wants to move up to manufacturing more sophisticated products and is no longer interested in the kind of development where workers wages suffered so that domestic consumption suffered, where lax environmental protection caused serious damage to the environment and where the fous was on production of low value added products in textile, toys, shoes, furniture. This means a lot of factories from this era will close and those that operate will raise prices to reflect increased costs to meet new laws and loss of rebates for low value added products. All this means the disinflationary impact of production and export from China is over. Meanwhile a number of trends have gone to raise prices of food products and commodities. Its astonishing but the price of rice has gone up by 147% over the last 12 months. The World Bank estimates that food prices have gone up by 83% over the last 3 years. This adds to the distress of communities across the developing world. And iron ore producer Vale of Brazil pushed through price increase of iron ore by 65%. This will be reflected in price increases in everything made of steel like Caterpillar tractors and so on. Baosteel in China has raised prices by 17-20% recently. Countries with pegs to the dollar and exporters of commodities like the Middle Eastern countries are seeing inflation from both the peg as the dollar loses value and everything costs more and from the boom fueled by government spending....

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About $200 billion in speculative or hot money entered China and landed mostly in bank deposits which pay 4% interest rate compared to 2% for dollars in the USA with the idea of profiting from the interest rate and the appreciation of the yuan, in the first 5 months of 2008, according to economists at Logan Wright, an economics research firm and at Beijing University's Guanghua School of Management. Beijing's foreign exchange reserves are at 1.8 trillion dollars at the end of May 2008 so even if their is an abrupt reversal of flows of this hot money China would not be protected but an abrupt outflow could hurt the banking system. Amore relevant fear is that this speculative inflow will raise inflation in China as the central bank prints more yuan to buy dollars and keep the yuan from appreciating and then sterilizing the excess liquidity by issuing bills or increasing bank's reserve requirements. Sterilization is now upto its limit and the central bank has raised the reserve requirement 16 times since January 2007 from 9% to 17.5%. The Peoples Bank of China, China's central bank only pays i.9% on reserves so this hurts bank profits and there is a limit to raising reserve requirements also. This leaves one time appreciation of the yuan but this would have to be of some magnitude about 20% to stem the speculative inflows of money trying to take advantage of the appreciation of the yuan. Another problem this situation presents for the central bank is making monetary policy tools like increasing interest rates to calm inflationary expectations not available as the increase in interest rates would only increase the profit to be made in bringing in speculative money into China. So where does this leave the Chinese economic policy managers? Monetary policy will continue to be losse and with large amounts of speculative inflows in the rest of 2008 and into 2009 inflation is likely to continue its upward climb. Inflation was at an annual rate of 7.7% in May. 2008....

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Vietnam has an excellent record in the coronavirus epidemic with zero deaths and 324 cases. No locally originated cases are seen. The country has an astounding 792 tests per confirmed case compared to 144 for Taiwan and 57 for South Korea. Vietnam acted quickly to close its borders, quarantine foreign travelers in camps, close schools, and imposed an early lockdown.  This gives Vietnam an opportunity to restart its economy and maintain its growth. With the reallocation of supply chains away from China underway, Vietnam sets an ambitious growth rate of 5% for 2020, down only slightly from 7% for 2019.  The coronavirus also had some positive effects including the digital transformation that is taking place-  the rate of online transactions in public services increased from 12% to 24% during the 2 month lockdown. The discipline showed in Vietnam for tackling the crisis contrasts with other countries in Europe and America. This report says some small businesses and export industries in clothing and shoes are affected, yet even a 3% growth rate in 2020 makes Vietnam a winner, as the future in 2021 looks good. ...

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New Democracy has 22% and Pasok 18% in polls before the Greece elections. A New Democracy-Pasok coalition is one possible outcome of the election. New Democracy leader Samaras sees a coalition government as tying his hands for policy actions, and feels he can win another election if it took place later this year. By then the thhinking goes Greeks will have vented their anger and will be looking for a stable government. Both parties have seen supporters shift to fringe parties with 22% unemployment and rising taxes.

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Athens is far from being her normal self with high unemployment, shuttered shops and periodic violence. Unemployment at about 23% and the worsening economic crisis is leading to dwindling support for the main parties Pasok and New Democracy. Support is growing for fringe parties, including neo-nazi type parties. The mood is shifting in Europe, with the presidential elections in France and the likely election of Socialist candidate Hollande, who has described the EU's handling of Greece as deplorable. New elections will take place later in 2012 in the Netherlands.

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Francois Hollande becomes the first Socialist candidate to be elected president of France since Francois Mitterand 17 years ago.

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A sense that the policies of Hollande in France are better aligned with the Obama administration's position on economc issues.

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Brazilian President Lula's interview witht the Economist, just before leaving office. It is not still clear how Lula will be seen, even though his popularity at the moment is helping elect his chief of staff Ms. Rousseff, as his successor. Lula's success in office is seen as a continuation of the policies of President Cardozo, who helped tame Brazil's inflationary crisis. Lula has benefitted from the continuation of the policies of his predecessor, and also from the boom in exports to China for soya, metals and other exports. By helping expand Brazil's middle class and the aid to poorer segments of society with the Bolsa programme, he has earned credibility and wide popular support. The dangers lie in the areas of an extremely overvalued currency- see the link to the Brazilian currency Real- with the Real at 1.7 and analysts with computer models showing the Real really worth 2.65 dollars. Part of the problem is government deficits to finance increased spending which require inflow of foreign capital and higher interest rates. Brazil is very dependent on exports to China for the increased level of growth, this poses risks if China's growth slows as expected from the high growth rates of the past. This poses risks for the level of infrastructure spending the Lula and Ms. Rousseff goverments plan on developing. Brazil's educational system is weak and efforts to improve this under the Lula government have not produced results. So the longer term assessment of the Lula goverment will have a balanced score card of wins and losses, without the euphoria of the moment....

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Increasing demand and profitabilty of the newer fuel efficient twin engine planes seating 250-300 passengers for Airbus and Boeing- the Airbus 321, the Airbus 350, the 777X, 787-9, 787-10.

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In 2013 the Greece government of Antonis Samaras made a study of wartime costs incurred by Greece for damaged infrastructure during the Nazi occupation of Greece and Nazil loans forced on Greece between 1942-1944. The estimate exceeded 200 billion dollars. Die Linke, a socialist party in Germany in the European parliament allied to Syriza, also supports debt forgiveness.