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Britain's Office of National Statistics said that GDP declined by 0.2% in the first quarter of 2012 from the prior quarter. GDP declined by 0.3% in the fourth quarter of 2011. This means Britain is officially in a recession, with two consecutive quarters of negative growth. The ONS said GDP was 4.3% below its precrisis peak in the first quarter of 2008. The UK registered growth of a mere 0.4% since the coalition government of David Cameron took over in May 2010. This presents problems for prime minister Cameron in tackling the UK deficit. It also shows how difficult it will be for EU countries to address their deficits without economic growth. This has come into increasing focus with recent events in the Netherlands with the collapse of the government and upcoming elections on the issue of austerity cuts, and in France with the presidential elections and the swing to parties questioning austerity measures without economic growth.

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The inflation rate in the eurozone showed a decline of 0.2% in December 2014, showing the first signs of deflation. This is the first sign of deflation since 2009. The unemployment rate for the eurozone remained at 11.5% in November, with the rate in Germany improving to 6.4% in Dec. from 6.5% in Nov., but unemployment reaching 13.4% in Italy. Dutch finance minister Jeroen Dijsselbloem, points to low energy prices, and core inflation data showing that excluding energy and food prices the core inflation rate increased to 0.8% in Dec. 2014 compared to 0.7% in November 2014.

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The stronger dollar, low inflation, slowing economy in China and slowing global economy, are factors that the U.S. Federal Reserve is considering in its plan to raise interest rates in 2016.

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U.S. Federal Reserve chairman Ben Bernanke tells the House Financial Services Committee hearings that the Fed will give importance to underemployment, not just the unemployment rate, in making decisions about bond purchases. The unemployment rate could be a false indicator of the labor market if the rate falls below the Fed's goal of 6.5% before raising interest rates, and yet labor markets are still weak because of underemployment. Bernanke said: "There are a number of problems with the labor market. Unemployment is one problem, but long term unemployment and underemployment- and by 'underemployment,' I mean people either who are working fewer hours than they would like or possibly working at jobs well below their skill level- is also indicative of a weak labor market." In this situation of high underemployment combined with low inflation the Fed may hold off on raising interest rates when the unemployment rate reach 6.5%. In Bernanke's words: Reaching 6.5% unemployment "would not automatically result in an increase in the federal funds rate target." Since 2010 financial markets in the U.S., and to a lesser extent worldwide, have looked to U.S. Fed policy for raising interest rates, as guidance on the degree of support for the economy and by extension for markets....

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The changing situation in the second half of 2013, in which U.S. stocks are trading at values less in correlation with the overall market and policies of the Federal Reserve and more in line with individual stock performance and prospects.

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U.S. government policies of "financial repression" to lighten government debt servicing burdens that could have adverse effects on bondholder returns.

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Coordinated action by the central banks of the U.S., Canada, Switzerland, the EU, and Japan to ease liquidity problems, as Italy's borrowing rates edged up to 8%, and other EU countries faced similiar problems in November, 2011.

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Under the coordinated action by central banks in the U.S., Canada, Japan, Switzerland and the ECB, the U.S. Federal Reserve lends dollars to the ECB, getting euros in return, and the ECB in turn provides European banks with the U.S. dollars. The European banks were facing a shortage of U.S. dollars in November 2011. Money market funds in the U.S. had pulled back from investing in eurozone bonds in the third quarter of 2011, adding to the shortage of dollars. This action eases liquidity concerns.

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U.S. S&P 500 index stocks now show a correlation of 80%, based on one-month trailing movements, according to Credit Suisse. This exceeds the correlation of 73% reached during the crisis in 2008, and shows the large influence of macroeconomic factors on stock movements.

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Deepening frustration and economic diffficulties in Iran over sanctions. The Iranian currency, the rial, loses a third of its value.

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The U.S. responds to Iran's threat to close the Straits of Hormuz, a vital route for oil tankers.

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Gordon Brown, former prime minister of Britain from 2007 to 2010, chaired the April 2009 G-20 meeting that came up with ways to tackle the global financial crisis. Brown also led the way by recapitalizing British banks, a step the U.S. followed. He comments on the volatility in financial markets in August 2007 following the S&P credit downgrade of the U.S.. Brown gives an incomplete grade to the tasks the 2009 G-20 set out to accomplish. He points to three goals the G-20 had set in the middle of the financial crisis in April 2009. The first was to prevent a recession from becoming a depression. The other two were to establish a financial stability regime, and a compact for growth. These two became paper promises says Brown. Brown sees the best approach to prevent a lost decade is for U.S. and Europe trading their way out of a downturn as the Asian market absorbs more industrial goods from Europe and the U.S. This includes policies that would keep commodity prices low and ways of coping with currency shocks. Analysts have pointed to an export led recovery as one of the solutions the U.S. was hoping to achieve with a lower value of the dollar. This has had only limited success because of deep structural problems- high consumer indebtedness, bad debt at the banks, weak housing sector following the mortgage crisis, and a rising U.S. deficit- which will take some time to clear. Brown does not come to grips with these underlying imbalances built up during the boom years of the last decade, both in Britain and in the U.S., during which he was the finance minister of Britain....

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India's crude oil imports were sharply higher in 2011 and 2012. India's imports of crude oil for the first 11 months of the 2012 fiscal year ending March 31, show a 40% increase over the same period in 2011 fiscal year. India's import bill was $128 billion for crude oil imports for the 11 months of fiscal year 2012. Indian subsidies to lower prices for fuel are $30 billion annually. The higher prices for crude create inflationary presssures in India and restrict economic growth.

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The UK's Office of National Statistics said construction output fell by 3.7% in the first quarter of 2012, compared to prior year. Output fell 3%. The revised decline in GDP for the first quarter is 0.3%.

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This article in the Economist says the bad loans in the financial system threaten to derail India's rapid growth. It points out that about 17 percent of all loans are estimated to be non-performing. Government plans to set up a bad bank and have bad loans transferred at steep discounted rate to the bad bank are still at an early stage. India weathered the 2008 financial crisis with a financial system in better shape. Since then a surge in lending has led to an increase in the bad loans. Today both banks and corporate firms are facing this problem. The political system and dysfunctional governance with frequent changes for management at state controlled banks are part of the problem.