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This article in the Economist describes the different perspectives on the Greece crisis in July 2015 as seen inside Germany. It cites a poll showing German 51% to 41% favoring a Greek exit from the eurozone. About 85% reject further concessions in a July 1, 2015 poll, including 68% of the supporters of The Left, a post-Communist party. Social Democrats leader Sigmar Gabriel, said of the Greece timeout from the euro proposal by finance minister Schauble- that it was the appropriate thing to consider all options. And 78% polled see Greeks not keeping their side of the deal. Some experts see stronger sentiment about Greece after the events in July 2015, and the raising of the issue of the debt haircut given to Germany in 1953, because Germans see themselves as having gone to great lengths to build a strong Europe after their own troubled history in the 20th century. If the goal was to win German support in 2015, this has come across as poor tactics and poor strategy, considering how it has changed German opinion across the spectrum of political opinion....

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Living wills of BNP Paribas SA, HSBC Holdings PLC and Royal Bank of Scotland Group PLC come under increased scrutiny from the U.S. Fed. These banks were added to 11 U.S. banks required to submit new drafts of "living wills" by the end of 2015, which ensure no damage to the U.S. economic system from a bank collapse. Only Wells Fargo & Co.'s "living will" was accepted by regulators as not causing economic damage. In making the decision the Fed and the FDIC agreed that the "living wills" were "not credible."

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Philip Hampton, chairman of the Royal Bank of Scotland, tells a shareholder at the annual meeting in Edinburgh in June 2014- "compensation in the financial industry got out of line with the underlying performance of the business."

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Hispanics plan to sitout the 2014 Congressional midterm elections in protest over the Obama administration's policies towards immigrants, including deportation policies.

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"Defend blue sky and breathe together" says a painting on a brick wall in the coal producing region of Shanxi, northern China. China is finally acting seriously to impose strict environmental rules from the top. Old coal stoves are thrown into a dump as China shifts away from coal stoves to heat homes. So many new homes shifted to natural gas in Shanxi province. population 37 million, that demand overwhelmed natural gas supplies. Results are to be seen in cleaner air in Taiyuan, capital of the province and in Beijing itself.  President Xi's commitment to climate change accord reached in Paris is seen as firm in this report in the NYT. The head of the gas, coal and power markets division of the International Energy Agency, Mr. Peter Fraser, says that even though homes use only 6% of total coal used in China, the effects are disproportionately high because homes do not have any emission reduction mechanisms. Natural gas demand has increased by 16% in 2017 as provincial officials eager to meet the demands issued in Beijing to cut coal emissions even let some homes and schools go without heat in an early winter spell. This extraordinary report shows how in cities in northeastern China the people welcome the change to natural gas and cleaner air. Even in coal country, in cities like Linfen population 4.4 million, the change is seen as people welcome the clean air and officials build natural gas connections to execute the plans issued in Beijing. In Beijing itself Greenpeace estimates show 54% reduction in PM 2.5, harmful particulate matter for breathing by 54%, a startling fact showing Beijing's determination and effectiveness of its actions. Natural gas is more expensive and citizens do not complain in neighboring provinces near Beijing because the state provides adequate subsidies to compensate people. Decrees are being enforced to avoid coal stove use with people knowing they could see action by authorites if reported. Compare this to the problems of crop burning around New Delhi, in Haryana and Punjab provinces, and one can see that centralized control and direction has advantages when used in the right way for a good purpose and supported by people who want to breathe clean air. ...

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Instructions in a 2012 law say the money from fines paid by banks for LIBOR related offenses should go to communities throughout Britain. A program in North Yorkshire teaches military veterans how to use "therapeutic baking" as a way to ease stress through cooking and by kneading dough. The same social housing charity, Riverside ECHG, says its focus is on making sure people are not sleeping in bushes or cars. A program in Harrowgate uses these funds to resurface tennis courts at a treatment center for injured police. British prime minister Cameron promised during the recent election to use 227 million pounds from fines paid against Deutsche Bank in April 2015 for financing 50,000 apprenticeships. Critics say the money should have gone to people who were harmed by the banks actions, yet in the case of LIBOR related offenses it is not clear who was harmed and by how much. The idea for the 2012 law come from Chancellor George Osborne. Osborne said about sending money back into local communities- "It is fitting that the money paid in fines by people who demonstrated the poorest values in our society is used to support those who demonstrate the very best."...

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General McChrystal lacks support from Senators who backed him earlier, after comments in a Rolling Stone article showed disdain for the Obama policy team and for Vice President Biden.

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The 64 mile highway known as the Gardez-Khost Highway has cost $121 million upto this point. The final cost is expected to reach $176 million. At $2.8 million a mile the cost overruns on this projects are over 100%. Parts of the road run through Taliban territory and may never be completed. Security for the project has cost $43.5 million, according to USAID officials. This involves among other things payments to a local figure named Arafat. The road connects two provinces, Paktia and Khost, and runs through rugged mountain terrain at 9000 feet. At the original estimate of $69 million it was considered a good investment for linking these areas to Kabul.

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Greg Ip of the WSJ points to the economic changes in China's economy and the threat of deflation in 2016 with the large debt and slowing economy. For the last decade China was seen as a currency manipulator as it kept the value of its currency lower to increase imports. With the large changes in China's economic situation in 2015-2016 China may face a situation similiar to Japan with deflationary trends. China faces political pressures in 2016 with the U.S. presidential election in 2016 to not intervene with the currency. The goal of making the yuan a global currency adds to these pressures. Other factors are the need to service debt in dollars of Chinese property companies.

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The Hulme Company mail order catalog business in Minnesota may not be representative of small business, considering the errors and the scale of the debt taken on. But even if a small fraction of this debt taking tendency is representative of small business, it means that small business will not generate jobs as it did in the past. Small business will actually layoff people. And small business will not be able to provide the bounce the economy will need in years to come. The following is an an anaysis of this venture. The owners of this small business Bidwell and Ms. Guarino bought a luxury goods maker that was losing money for $600,000. Their business was to sell $500 garment bags and $1200 duffel bags. The experience of Bidwell was with Target, Tonka Toys and a cigarette distributor. Ms Guarino had a $130,000 job with a magazine publisher, running regional magazines like Minnesota Parent, which she quit. She had some experience as a handbag designer in California before that. They had never seen hard times, no, they had only seen good times. And were willing to spend heavily on the business like the $600,000 for a business, Hulme Company, that lost $150,000 on sales of $450,000 making duck hunting gear, the business they bought in 2003. All this for a tiny factory employing 3 seamstresses, and with no brand name for luxury goods like leather duffels. Their lender's experience- Kassim who founded Maple Bank in Champlin, Minnesota, considered it pretty typical of small business in those days to do everything on debt and loaned $550,000 over 5 years. So the lender was in for the ride. Another bank Stephens bank loaned on SBA approved loans which were later cut off. Guarino had no experience in this business, and simply relied on Bidwell's experience. The borrowing went on and on from friends, taking in debt with total lack of understanding of what debt means, from their daughter, the entire $50,000 savings of Bidwell's wife, and finally with banks refusing to lend after having friends put up their CD's and collateral on loans. Debt to equity ratio gets to 5 to 1. Second mortgages on the house getting Bidwell and extra $130,000. Even in the best year 2006 sales at $1.4 million, and earnings before taxes and other items at $325,000, not enough to pay the interest and other payments on loans that later totaled $2 million by year end 2007. $500,000 from friends and family including $20,000 from his daughter or two thirds of their savings. 600,000 catalogs went out in 2007. With the Hulme Company behind on payments in 2008, the catalogs mailed in 2008 dropped to 175,000. It is a very capital intensive business from the standpoint of catalog cost. $1 million in inventory at year end 2007, or two thirds of sales of $1.5 million in 2007, was a sign of how expansion preceded even getting the financing in place, and going out into the dark thinking sales wil materialize. So even in the best year 2006 the business was not viable, and would have collapsed even without the financial and credit conditions of 2008, ruining the owners in the process. By 2008 it led to the usual things in this kind of business failure, Bidwell's divorce, loss of his home as he falls behind on mortgage payments, Guarino's loss of job and friends whom she borrowed from, and both deeply in debt. Evaluation of the failure is as follows. Seamstresses and the small factory space could be obtained for a fraction of the cost in an emerging market country, even in an eastern European country, and no cost needed to be incurred for the purchase of Hulme Company or for sending out catalogs. Only travel expenses to meet high end retailers who might carry this merchandise, and go to the country where the plant was setup. Sales would come first, and expansion to meet sales very carefully done so that the plant could be downscaled if sales dropped. Even then scores of small luxury goods makers in China or other emerging market countries could put the owners out of business. The lesson if you can't watch costs, if you don't understand what debt means, then you don't pass the most basic of tests. You cannot run business on savings, home equity or credit card loans, or business loans with personal guarantees. Costs tend to just run up to the money one has artificially created. It will ruin you. If you don't have experience with the business and the product area, or can't put together a group of people with the experience to guide you on the pitfalls and what to watch for, you don't pass the next basic test. Only then does one get to the other tests about whether there is a market, the price and value of the offering and so on. This is before the current economic crisis. Now all these tests become more important than ever, or it will kill you and quickly. One has to be paranoid and very careful after 2008. Stephens Bank loaned money on SBA loans ...

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The Bank of International Settlements warns that China's "credit to GDP gap" is 30.1. A figure of 10 normally is considered to be high and needs watching. The People's Daily carried an article presumably by president Xi Jinping warning about the consequences of the debt that had been growing "like a tree in the air." The debt to GDP ratio was at 255% at the end of 2015, and is up 107% since 2008 when the financial crisis led to a huge stimulus that has accelerated debt growth. The corporate debt is at 171% of GDP. The article in the People's Daily warned about reflexive stimulus every time growth slows and said that China cannot any longer "force economic growth by levering up." Cross border liabilities is one area of progress falling by a third to $698 billion, as companies cut debt quickly before the U.S. Federal Reserve raises rates. In the future China is more likely to roll over debt as Japan had done following its debt surge and bad debt with zombie companies, which would in turn lead to lower growth. In the past the government was able to absorb the growing debt because it was not as high as it is today, and the economy was growing rapidly. This is no longer the situation, the reason for alarm at the situation facing China. A spike in interest rates of 250 basis points is cited as one situation which could affect China adversely. ...

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Leonhardt says that there is little reason to think that the flatter rates are better always. With the need to finance Medicare and health care for all, the government can use the extra dollars from taxing the very wealthy, the very rich in different tax brackets. The top bracket in 2008 started at 357,000, and you paid 35% whether you made 400,000, or $4 million, or $40 million. So basically the upper middle class was lumped in with the extremely wealthy. And considering the cost of college tutions for 2 or 3 kids, the upper middle class is only middle class. It makes sense not to lump the two together. Considering that there has been a lot of wealth accumulated at the the very high end, it would also reduce inequality, generate tax revenues for health care, and not have much effect in the incentives for generating economic growth. It is something he says the Obama adminisstration may and should consider.

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The Labor Department figures showed the U.S. added 157,000 jobs in January 2013. The unemployment rate edged slighly higher to 7.9%. Government jobs declined by 9000 in January, and the risk remains that drastic job cuts under a sequester of government spending cuts supported by some in Congress would hurt the job market.

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Dexter Filkins shows here how something is changing that may have been missed by American commanders and the new US administration- the evidence of a crumbling and unpopular feudal structure that the British maintained in Afghanistan to continue the imperial presence, and which has remained that way under the government of Pakistan for the last 50 years. Baitullah Mehsud and other Taliban leaders are from the lower strata of society, the porters and street cleaners and other occupations. The British operated through the malik system of tribal elders who were supposed to maintain order, and the British pretty much left them alone. The Pathan or Pastun people on both sides of the border between Pakistan and Afghanistan are going through some major social changes that are pent up for centuries. The malik system is beiing destroyed on one hand , and on the other hand the Taliban enjoy support among ordinary people in Pathan country as being good Muslims, and in parts of Pakistan itself. This creates a dangerous mix for American forces, popular sentiment of the lower strata and ordinary Afghans, with clandestine support from Islamist officers within the Pakistan army and intelligence services for more sophisticated warfare. Which only means that disproportionate resources would be needed for an expanded American project in Afghnistan, without much to offer in return....