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Blinder cites the reasons why the stock market declines are showing a disconnect with the economy in the U.S. which benefits from low oil prices, and the small impact of a slowdown in China on the U.S. economy. Yet other reasons may account for nervousness of investors, as Grep Ip points out in the WSJ, the lack of support from the Fed with its gradual rate hike path, and lack of support from the Chinese government with its policy of reducing debt and no significant stimulus.

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The BBC's Soutik Biswas takes a look at prime minister Modi as he seeks a second term in India's general election in May 2019.  Modi's first term is marked by exceptional development schemes, efforts to provide health insurance to 500 million people who cannot afford health insurance, bringing cooking gas cylinders to hundreds of millions of Indian women especially in rural areas, efforts to jumpstart building of infrastructure projects such as airports and metro subways. A new law for GST brings together the country with one tax instead of a hodge podge of state taxes for interstate commerce, something India needed for a long time but different governments failed to implement. A failed effort to fight corruption by removing from circulation large denomination currency notes reduced economic growth briefly during the first term, though it may have accelerated the shift to formal economy needed in the long run to improve tax revenues for development needs. One of the problems for the Modi government is how do you put a value on something like Swach Bharat Mission, the achievement of the goal of defecation free India in 2019 by 100% on the 150th anniversary of the birth of Mahatma Gandhi, getting rural toilets up from 38% to 100%. Development had to start from the bottom up. Similarly in a country where middle men took up a lot of the transfer to poor families of government assistance- the delivery to hundreds of millions their own bank accounts.- how do you put a value on something like this, but it is essential for development from the ground up. More than missiles or other talk this has got to be the spirit of any development oriented administration in India. Ground up, big goals and rapid delivery and an apology for the difficulties that the people suffered earlier for lack of this infrastructure. For both China and India it is the same - moving quickly to make up for 100 years of colonial rule and stagnation. The Modi government has responded to rural farmer distress with support for guaranteed crop prices. As more young voters vote for the first time an important factor is how the new voters see the years ahead under either a government led by the BJP or by a patchwork of parties as the previous ruling Congress party depends on alliances with other parties with conflicting agendas or lack of rapid development agendas. The Modi government sees itself as setting the stage for the next phase of development that would change the economy through new infrastructure development and create jobs in construction and engineering, and other areas. The criticism is that not enough jobs were created in the first term. Yet bold infrastructure development targets such as transformed the Chinese economy could be the answer for job creation. The question then is who is better qualified to launch that effort based on its track record. The Congress party's main criticism is that it has to make alliances with parties that could stall development with conflicting agendas. The other is that in the the 2 years leading to the election of Mr. Modi the Congress led government of Manmohan Singh was stalled due to corruption charges, leading to a lack of decisionmaking at the highest levels, and stalled efforts for the rapid development that could deliver the kind of jobs India needs.  Young Indians would like to see growth first and foremost, only something rivalling China's transformation over 2 decades can do this. It should be kept in mind that China poured more concrete in the 21st century so far than all the concrete the United States poured in the 20th century, according to The Guardian report. The question then is who is best qualified and in a position to deliver this needed economic miracle.    ...

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As corruption investigations proceed in Turkey and the split in the ruling AKP party becomes irreversible the effects are felt on the Turkish lira. Turkey's lira declined to 2.097 to the dollar on Dec. 20, 2013. Turkey's borrowing costs jumped with yields on 2 year government bonds at 9.61%.

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Soren Skou, the head of the container division of Demark shipping line A.P. Moller Maersk A/S, says the volumes worldwide are expected to increase by 4% in 2012 over the prior year, compared to the 7% increase in 2011. This reflects the deteriorating conditions especially in Europe for goods from China. China is also losing competitiveness in relation to countries like Vietnam and Bangladesh for shoes, toys and labor intensive goods. Tim Smith, Maersk's head for the North Asian region, says the container shipping industry will see annual growth slow from double digit increases to somewhere between 5 to 7%.

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Stress-testing a portfolio and diversification, by Jonathan Burton, the Money and Investing Editor at Market Watch in San Francisco.

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Several factors make it likely that oil prices will remain low for an extended period of time into 2016 and beyond. As Ailworth points out nobody is blinking. The Saudis plan no change to their high production. U.S. oil producers in the Gulf of Mexico have already made investments for deep sea drilling wells following the end of the moratorium on drilling in the Gulf. Many of these wells are producing at very low marginal cost as most of the investments have already been made. It makes economic sense to produce even in a low price environment, according to Andarko. Shell continues to invest in the deep waters of the Gulf. Its production is up 10% to 250,000 barrels a day. American shale oil drillers have not cut back as much as expected, partly because many companies with large debts need the cash flow to pay interest on debt. And some of the 1200 wells that were drilled but left untapped may also be brought on stream to slow production declines. As a result the overall production of American crude, according to monthly federal information, has declined by about 3% to 9.3 million barrels from the peak reached in April 2015. This helps the U.S., Europe, China and India, at a time when their economies are experiencing different problems. It hurts Russia, Venezuela, Nigeria, and Iran. Russia is coping as its exporters convert dollars into rubles after the sharp depreciation in the ruble, and helps local industry including steel producers, as well as wheat exports. Venezuela's economy is the worst hit. And Iran now has to produce at high levels in 2016 to improve its economy following the lifting of sanctions....

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The WSJ's Juan Montes, in an exceptional report from Mexico City, tells the story behind a landmark achievement for Mexico- Pacto Por Mexico of Dec. 2, 2012. The major political parties of the right, centre and left forge an agreement for the way forward for Mexico- beyond monopolistic pricing and industry structures in Mexico that hurt consumers, to increase foreign investment and new technlogies to modernize the national oil company Pemex operations, change labor laws, and create a climate for higher growth. The pact is broad ranging, shows a grasp of the problems facing modern Mexico, and ranges from anti-monopoly laws to getting junk food out of schools considering Mexico's high obesity and diabetes rate. It covers 95 goals. It is hard to overstate the significance of this achievement for modern Mexico. Montes describes the initiative of the PRD leader Zambrones in rebranding his PRD party as a moderate left wing party open to new ideas. This happened after the departure of Lopez Obrador from the PRD to form his own party in September. Zambrano and PRD moderates brought up the idea based on what happened in a landmark deal in Spain in 1977, that helped transform Spain after decades of stagnation under the Franco dictatorship. Around July after the presidential election, PRD president Zambrano, and the PRD's Jesus Ortega, held meetings in Mexico City with Jose Murat, a senior PRI politician, and PRI president elect Nieto's top advisor, economist Luis Videgaray. The decision was made by president Nieto and economist Luis Videgaray to pursue the discussions for joint agreement on vital issues facing Mexico. The PAN party was brought into the discussions. By mid-September nine people from the PRD, PRI and PAN started work on a draft agreement at Murat's home. The ground rules were set for discussions to be private, to have agreement on all points or assume nothing had been agreed, and not let current events disturb the talks. The nine participants set up the broad principles, and then a group of three, one from each party was given the task of coming up with the right language for the pact. By the end of November a 34 page draft was put together. A night of intense work to 2 a.m. followed the inauguaration of president Nieto on Dec. 1, with the Pact ready for announcement on Dec. 2, 2012. The Pact is a landmark achievement in its potential for changing Mexico and creating decades of economic progress similiar to that envisioned by the Spanish parties for Spain in 1977. ...

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The Washington Post survey of 1200 readers on how the Republican healthcare plan of Speaker Ryan and the House of Representatives looks to them, how it affects them in their lives. Here Somasekhar of the Post gives the stories of 5 Americans. Some see the prospect of losing their insurance under the Republican plan even as they reach an older age, others a smaller segment says the Post, whose premiums jumped under the Affordable Care Act say they faced high premiums and high deductibles. The Post says the large majority of opinions have expressed anxiety over the proposed Republican Ryan House plan for healthcare. One of them is an uninsured poor farmer, Mr. Woosley,  income about $18000 who gained benefit from expanded Medicaid under the Affordable Care Act,  one Mr. Smith, 32 years, a personal injury attorney who faces paying $10,000 if he did not take insurance and $10,000 if he took insurance because of high premiums so a wash either way deciding to do without it, one a tech worker Mrs. Powers, 62 years, income $22,000 on year and $4000 the next, from middle class during the tech boom but facing fewer opportunities and uncertain income from part time work, hit by the deep recession facing fewer opportunities as she gets older and now the prospect of losing insurance without government subsidies, one who is from the middle class who sees little benefit from the Affordable Care Act and is forgoing insurance because of the high premiums yet faces a penalty for not being insured under the ACA, another Mr. Blanchard, 52 years, is from the middle class, a computer programmer who lost his job in downsizing, earns $100,000 as a consultant self-employed, pays $767 in premium a month and relies on the Affordable Care Act which helps him gain freedom from working at a company that could downsize,  another is a middle class programmer Mr Riffle,age 44, and his wife, who does not qualify for a subsidy with a $71,000 family salary from working 4 jobs between himself and his wife- this person finds it too expensive for his salary to buy insurance $900 a month and $14,000 deductible under the Affordable Care Act. His views are worth listening to as they go to the crux of the problem- he says he may not be any better with the Republican plan. He sees the real problem as the high cost of health care in the U.S. and the only way this can be fixed is for members of Congress to be asked to use the insurance exchanges they create. If this sample is representative it shows that there are real problems with both the Affordable Care Act and the Republican plan, that the high cost of health care the problem lurking behind every plan that does not squarely address this, and till that happens and members of Congress experience what ordinary people face, this problem can never by fully solved.   Woosley, Smith, Powers, Blanchard, Riffle, and their personal experience is at the crux of what is right and wrong  with the Affordable Care Act, and also with the new Republican plan of Speaker Ryan and the House of Representatives. For every Woosley, Powers and Blanchard who benefit, there is a Smith and a Riffle who are indifferent or are affected by the high cost under Affordable Care Act and the current system of medical care with its high cost. The Affordable Care Act does not  tackle high cost, for that to happen the culture in America that makes it possible and acceptable to charge high prices must change. Another problem apart from bringing health care costs is that any solution needs to have the whole country behind it. If the notion that all people are entitled to basic health care is to stand, the whole country needs to believe it as they do in countries like France, Britain, Germany and Japan. If this has to be made a workable proposition health care has to be offered at a price that makes this possible to achieve, and that idea also needs the deep and broad sense of support from the culture in America similar to that in these other countries. Until that happens politicians in America will get elected and turned out of office in turns on issues such as health care, based on which side they take and which problems they choose not to face squarely and responsibly. ...

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Greece shows the first sign of returning to positive economic growth after years of decline leading to a drop in GDP of about 25% since 2008. The Greek economy contracted by 2.6% in the 4th quarter of 2013 compared to the 3rd quarter, according to Hellenic Statistical Authority. For 2013 the economy contraced by 3.7% instead of an estimated 4%. Growth is expected to be flat in 2014 or growth of 0.6%. For the first time manufacturing and retail sales are showing signs of growing and new car registrations increased in Jan. 2014. Finance ministry data show Greece's budget with a surplus of 691 million euros in 2013, compared with a deficit of 3.46 billion euros in 2012, before debt payments. The figure is higher at 812 million euros when money from the EU coming in for public works is added. Unemployment remains high at 28%.

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Germany's social-affairs minister, Ursula von der Leyden, presents the "fourth poverty and wealth report," in March 2013. The issue of inequality is arousing public sentiment in Germany with this becoming an election issue along with the euro crisis and energy reform. The term Gerechtigkeit means "justice" in German and is associated with the idea of equality. The Social Democrats Party and the Greens talk about this in terms of "social scissors" opening wider. The Minder Initiative which passed in Switzerland enabling shareholders to restrict executive pay has led to public discussion in Germany for a similiar approach to be adopted by Germany. The ruling Christian Democratic Party (CDU) of Angela Merkel and the Bavarian Christian Social Union (CSU) party are different from other parties in Europe because of their Catholic and Lutheran roots which favor social solidarity. The FDP party in the ruling coalition supports free market principles but lacks popular support. The Economist cites the work of the German think tank DIW on inequality, which shows inequality showing sharp rise after German reunification around 1991, especially in East Germany. The situation moderates with improvements in inequality in East Germany and a slight improvement in West Germany after 2005. Both East and W. Germany have moved up overall in the Ginni coefficeint which measures inequality from about 0.4 in 1991 to about 0.5 in 2010, showing that the situation has stabilized at a higher level of inequality. Part of this could be because of the shift to temporary workers at lower wages about this time as German industry made efforts to keep wages down and improve competitiveness, even as overall conditions in the economy improved in the last decade. The Economist cites another study by the Initiative for a New Social Market Economy, a German think tank, which compares Germany with other members of the OECD. Germany ranks closer to Scandinavian countries in seventh place in this study, but does poorly in equal oportunities with 14th place. Germany lags behind other OECD and European countries in opportunities for women to work full time. Germany lacks enough daycare facilities for small children so that their mothers can work full time. There is a shortage of about 150,000 for preschool daycare openings in Germany, acccording to information cited by Deutsche Welle from government sources....

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John Taylor on the dangers of a loose U.S. monetary policy and the effects this had in fueling a housing bubble in Spain, Ireland and other EU countries. Taylor points to the bubble ocurring in emerging market economies from low interest rates. Taylor says the ECB's interest rate moves in 2003-2005 were affected by the Fed's low interest rates. He estimates the ECB set rates about two percentage points too low leading to housing bubbles in EU countries. A similiar process is taking place today with the Fed's near zero interest rate policy. Taylor points to interest rates in a group of 18 emerging market economies- including Brazil, China, India, Mexico and Turkey, which have held interest rates on average about 5 percentage points below widely used benchmarks fueling a doubling of global commodity prices between 2009-2011. The U.S. Fed's policies make it harder for central banks in emerging market economies to take aggresssive action against bubbles developing in these countries. Taylor says his does not mean that the Fed should not pay attention to the U.S. unemployment rate and long term unemployed, but should keep in mind the negative effects of slowing demand in emerging market economies and in the EU as a result of its monetary policy of keeping rates at near zero for long periods of time. This feeds back to the U.S. economy at a critical time....

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Compared to the situation in 2008-2009 during the global financial crisis with the excess supply of labor, China in 2012 faces an excess in demand for labor. In 2009 about 20% of migrant workers were unemployed when the crisis hit, and wages dropped 10% for migrant workers, according to the Chinese Academy of Sciences and Stanford University. The situation three years later is one of tight labor markets and higer wages. A large stimulus in not only not needed today in the way it was in 2008-2009 as a way to maintain social stability, it would reduce the benefits of the anti-inflationary steps taken in 2011-2012, by putting more pressure on wages and prices. Manufacturing sector wages increased by 20.1% in 2011, according to China's statistics bureau. This may be why the Chinese government is taking measured steps to avoid creating more bad loans through indiscriminate lending, and being more selective in accelerating development projects in the pipeline. According to Hong Kong's new Chief Executive Officer China plans to have about 7% growth. This shift in approach would help China refocus on growth strategies recommended in the recent Development Reform Commission and World Bank Report on China....

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Increasing regulation on Mexico's telephone monopoly of America Movil, and Telmex, part of Carlos Slim's telephone business in Mexico. Mexico's three main parties have agreed to increase regulation on the monopoly to reduce the high charges paid by Mexico's telecom users. Estimates by OECD show Mexicans paying an extra $13 billion a year from 2005 to 2009 because of the monopoly and high prices. The administration of Pena Nieto made controlling telecom and other monopolies an important part of its program. To get an idea of the extent of the monopolistic control - 70 percent of the cellphone market and 65 percent of fixed lines are controlled by companies run by Slim.  AT&T is now a competitor and is helping bring down high cellphone plan prices.

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A proposal by U.S president Obama to increase the minimum wage to $9.00 per hour from $7.25 to reduce poverty and inequality. This was announced in the State of the Union address of 2013.

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Krugman points out that the federal tax rate for the top 1% is 34% in 2013, according to the Congressional Budget Office, because president Obama let the high end Bush tax cuts to expire. It is the number to remember says Krugman- 34. In 2008 the figure was 28.2. Under Hillary Clinton the average tax rate for the top 1% would go up by 3.4 percentage points, according to the Tax Policy Center. Some of this would help pay for the tution plan to provide access to the middle class to public universities. Under populist Trump, Krugman points to the elimination of the inheritance tax and tax rates going down substantially, and no such programs to promote the upward mobility that everyone is talking about, and no way to pay for a big infrastructure building effort for growth and jobs- upward mobility that is the focus of every candidate's election campaign including Sanders, Trump in appealing to older white working class families, Clinton, Ryan, Bush, and others in both parties.   ...

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Bernanke in reflections on his policies for quantitative easing in response to the 2008 financial crisis, says the policies were intended to protect Main Street and the average American, even though this is not readily apparent. He says the policies did not lead to inflation as critics have stated, and one has only to look at today's inflation statistics to know this- referring critics to the government CPI report in Jan 2014 that consumer prices went up by 1.5% in 2013 and less than 2% for 2012. Bernanke says he hopes he took the right actions, and still retains the conviction that the American economy will recover losses from the 2008 financial crisis- even though the answers to this questions won't be seen for some time.