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Of the $17 billion in writeoffs by Petrobras for overvalued assets and bribe payments, about $2.1 billion is for bribe payments. This is affecting public confidence in the government, and exposing the weak links between Petrobras and the government in Brazil.

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Uki Goni writes from Buenos Aires, Argentina, describing the chaos and poverty of the years 2001-2003 following Argentina's default on its debt. At one point half of the population was below the poverty line. Argentina eventually recovered in 2004 under a new government of Nestor Kirchner, but had already incurred a terrible cost. This was especially hard on the lower middle class who had only their savings to live on and could not access their accounts at banks which were closed. Barter stores were common in those days as the barter currency gained wide usage for exchange of services. It is not clear whether this was due to badly implemented economic policy or defaulting on the debt. Goni says Greeks should seriously consider the cost of such a steep decline in the economy as they consider exit from the eurozone, and carefully evaluate the policies of Syriza politicians who risk a break with the EU.

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The probe into corruption at Petrobras, is known as "Operation Car Wash," because some of the payments were routed through a car wash company in Curitiba, Brazil, which caught the attention of a young federal prosecutor in that city. The investigation took a new turn with the arrest by Brazilian police of the heads of two large construction companies, Marcelo Odebrecht of Odebrecht SA, and the CEO of Andrade Gutierrez, on June 18, 2015. Investigators say construction executives in collusion with Petrobras officials inflated the price of contracts and made payments to politicians and political parties including the ruling Workers Party. The alleged amount is about $2 billion. The construction companies are active in shipbuilding, defense contracting, oil and exploration related work, and building the stadiums for the World Cup Soccer and the Olympics. This has damaged the credibility of the ruling Workers Party, former president Da Silva, and current president Dilma Rousseff, in power during the last decade. The companies and the Workers' Party denied any involvement. Federal prosecutor Carlos Fernando dos Santos Lima told a news conference in Curitiba- "We have no doubt that Odebrecht and Andrade Gutierrez headed the cartel scheme within Petrobras." Adding that the two companies "cannot pass themselves off as innocent given how much evidence we have."...

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ECB president, Mario Draghi, said on March 25, 2014, "we will do what is needed to maintain price stability." Annual inflation in the eurozone declined to 0.6% forecast for the eurozone, 0.9% for Germany, and a negative 0.2% in Spain, for Feb. 2014.

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Microsoft shares were up 7% after the announcement about the departure of Steve Ballmer from the CEO position. Steve Ballmer became president in 1998 to run Microsoft's operations. He was a college buddy of Microsoft founder Bill Gates at Harvard. Ballmer graduated from Harvard with a degree in mathematics and economics and worked for 2 years at P&G before Gates persuaded him to join him at Microsoft. For decades the duo of Gates and Ballmer ran the company till Ballmer was made CEO in 2000. Ballmer completes three decades at Microsoft. During most of this period Ballmer focussed on protecting the existing franchise of Windows operating systems software and the Office suite sold on all PC's except Apple Macs. Missteps include Windows Vista, which was followed by the more successful Windows 7. Windows 8 has failed to make a significant dent in the market. A poor decision in retrospect to acquire Yahoo for about $44 billion did not happen, as Yahoo did not pursue discussions. The efforts in smartphones with Nokia and the Surface tablet have failed to produce results. Under Ballmer Microsoft only gradually shifted to cloud computing. The departure of Ballmer comes as a major reorganization was underway in 2013, and the company was shifting its strategy to become a provider of devices and services in place of its main role making software sales for PC's....

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Pier Luigi Bersani from the northern Emilio Romagna region, head of the centre-left Democratic party, is the leading candidate for prime minister in Italy's 2013 elections. His party has 37.8% support in a recent poll. The Democratic party has an electoral alliance with the SEL Left, Ecology and Freedom party, which has 5.1% in the poll. Berlusconi's People of Freedom party has 18.2% support and the antiestablishment party of Beppe Grillo, the Five Star Movement has 20% support. Prime minister Mario Monti is being encouraged to run by business and centrist parties. Bersani said in an interview, he will continue Monti's policies if elected. He says he supports greater flexibility so that policies do not focus only on austerity, at the same time he will respect the committments Italy has gven to the EU and move forward with pro-competition actions.

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Just before the general elections of Feb 24-25 in Italy, the centre left PD party of Luigi Bersani sees its 12 point lead over the coalition of Silvio Berlusconi go down to 6 points. Former EU commissioner and prime minister in 2012, Mario Monti, has 14 points. The maverick Five Star Movement of comedian Beppe Grillo has the support of younger voters looking for a break from the past in Italian politics with 15 points. Italy's election rules automatically gives the coalition with the largest number of votes a 55% majority in the lower house of parliament. In the Senate a similiar rule gives a majority on a regional basis. For the eurozone the best outcome is for a Bersani win. Bersani looks to the Monti coaliton, which has the support of Italy's business community, for credibility and backing. The Economist provides an insight into how Italy lost competitiveness and income per capita stagnated in Italy in the last two decades. The dynamism of the sixties and seventies is missing, Italy's infrastructure is old and needs to be modernized, the productivity growth is negligible, and application of new technologies for productivity in many sectors is lagging. Political mismanagement under Berlusconi and other administrations before him has led to an entrenched stagnation and Italy badly needs to get out of this. Italy and Portugal are the only two countries with a lower per capita real income in 2013 compared to 1999, when the euro was launched. Unit labor costs have risen, and productivity has declined in the last two decades leading to lost competitiveness. The inability to resort to devaluations, and the lagging application of technology in many sectors, has increased the lack of competitiveness, with the economy becoming dependent on higher public spending, higher public debt. The result is higher unemployment at 11% and youth unemployment at 36%, infrastructure that is old and badly needs modernizing. Foreign investment is small, and the cost of doing business higher, including electricity rates 50% higher than the European average, R&D spending low, all of which need to be reversed for Italy to grow. But there is hope. The Economist cites an OECD report that shows the Monti government's reforms in regulatory, labor-markets, product-markets, can generate 4 points of GDP growth in the next decade. An IMF report of Jan 2013 looks at proposed reforms in energy, transport, professional services, judicial system and public services and more labor-market improvements, with the larger impact when done in combination, could add 5.7% to GDP growth in 5 years, and 10.7% in 10 years. Adding changes to taxation and shifting public spending towards investment for growth increases the figure to 21.9%....

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Samuelson looks at patterns of investing in stocks in the U.S. since 1982. He cites S&P's Howard Silverblatt that the P/E for the S&P 500 averaged 16.9 since 1935 and the current P/E for the U.S. is at 17.6.

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Casey describes the crucial policy errors in Brazil with over spending and lack of transparency in the years leading to the crisis in 2014-2015. Brazil raised interest rates half a percentage point in May 2015 to 13.25%. Inflation was at 8.13% in Brazil in March 2015. Brazilian companies have large dollar denominated debt accumulated during the boom years which needs to be refinanced as its currency the real declines. With current policies economic growth is likely to continue at 0-1%. Russia made policy errors with the departure of Kudrin as finance minister for Putin's second term as president. Policies to attract foreign investment, controlling military expenditures, and continuing growth were reversed as Russia took positions on Ukraine that led to western sanctions, capital outflows, and a sharp decline in the ruble. By May 2015 the ruble and oil prices had recovered from lows, but the ruble was still 35% below the level in June 2014, and the oil prices were still only two thirds of the peak in 2014. Russia sees the decline in the ruble as a way to reduce imports and increase import substitution for many products. The economy is weakened by high inflation- inflation was 6.9% in March 2014, going up to 16.9% in March 2015. In May 2015 Russia lowered the target repo rate by 1.5 percentage points to 12%. Russia faces stagflation- high unemployment with low GDP growth, and high inflation....

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Finance Minister Joaquim Levy, a University of Chicago trained economist, is replaced by planning minister Nelson Barbosa, as the new Finance Minister of Brazil. President Rousseff faces criticism as Brazil's economy contracts and ordinary Brazilians feel the effects of fiscal austerity policies pursued under Levy. Former president Lula da Silva was critical of Levy's policies.