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The loan-to-deposit ratios on average for European banks of over 110% are much higher than the average in the U.S. of about 78%, according to analysts. The loan-to-deposit ratios for Spanish and Italian banks are much higher, with 160% for Bankia. If Spain leaves the eurozone and places a moratorium on loan payments the Greek loans on the books of France's banks in Greece would be in default, especially Credit Agricole. The French banks would suffer an estimated loss of 20 billion euros, and German banks 4.5 billion euros. German banks have been more aggressive in reducing their loan protfolios at risk than French banks during 2010-2012, hence their smaller exposure.

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In addition to the efforts by protests to preserve Hong Kong's special autonomous status, there is a protest by students "Occupy Central," similiar to the "Occupy Wall Street" protests. That aspect of the protest is aimed less at Beijing than at the financial establishment in Hong Kong. Because of its role as financial capital in Asia a lot is at stake for the U.S., Britain, and for China itself, in preserving the special role that Hong Kong has enjoyed for two decades since 1997 transfer from Britain. That independent role and separate status is needed for a world financial centre and access to the best human resources.

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Areddy describes the choices facing China's president Xi Jinping as he faces protests in Hong Kong demanding the resignation of Chief Executive Leung Chun-ying. Protestors are also calling for canceling of a plan to limit nominations for chief executive to a committee loyal to Beijing. Xi Jinping has experience with Hong Kong affairs as he held the portfolio for Hong Kong affairs as part of the leadership when he was vice president. There are precedents where Beijng has changed course, as it sees it important to put memories of Tiananmen protest suppression behind. In 2003 six years after Britain handed Hong Kong to China -under an agreement for "one country, two systems," that granted separate status and system of government to Hong Kong- an anti-subversion law was pulled back. And the unpopular Chief Executive Tung Chee-hwa, a shipping magnate, resigned after 18 months. Beijing has to balance its concern for the "contagion effect" of protests on other parts of China, with the need to maintain the right climate for business and investment in Hong Kong and other financial centres. With slowing growth and limits to overexpanding credit, a crackdown in Hong Kong would further exacerbate problems with the international community, and create tensions in Taiwan about future reintegration with China. China warned foreigners not to interfere, and the American Consulate in Hong Kong stated it "strongly supports Hong Kong's well-established traditions and Basic Law protections of internationally recognized fundamental freedoms, such as freedom of peaceful assembly, freedom of expression and freedom of the press." The British government also pointed to Hong Kong's "fundamental rights and freedoms, including the right to demonstrate," which were in the spirit of the 1997 transfer agreement....

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Krugman points out the risks for the U.S. economy as the U.S. loses export competitiveness with the euro reaching parity with the dollar. The huge shift from $1.50 to the dollar at one point to parity gives Europe a sudden strong boost. Europe needs the boost to escape a deflationary trap, and there is little that can be done for capital flows and exchange rates, says Krugman. He points out that many Federal Reserve governors were clueless of the impact this could have on U.S. growth, sanguinely assuming the U.S. would boost growth in 2015. Better says Krugman for the Fed to be very careful about raising rates at a time when wage growth is sluggish, and inflation low.

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As its economy slows and facing high debt levels, China benefits by an estimated $18 billion a month from lower oil prices in 2015. The estimate is from Starfort Holdings, investment and private equity group. The estimates as China benefits from lower prices of all commodities, including oil, are of about $250 billion annually as China replenishes its stocks of commodities. With $12 million barrels imported daily China is a major emerging market beneficiary, along with India, of the drop in oil prices. Continuing pressure on prices from the expected resilience in shale oil production in the U.S. with learning and the development of new production methods means the benefits are likely to continue. China has also not renegotiated price points in deals made earlier at higher prices with China and Venezuela, as it pursues its foreign interests. Stockpiling of grains and edible oils are being increased by 33% in 2015 by $24.7 billion.

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Brazil faces a debt crisis in 2015-2016. Between 2010 and 2015 foreign debt of local governments and Brazilian firms increased from $100 billion to $250 billion, and dollar debt in local currency from 210 billion reas to 655 billion reas, according to Bank of International Settlements data. State banking institutions BNDES and Caixa Economica Federal financed 35% of loans in 2010, by 2015 this increased to 55%. Subsidized loans at 5.5% by BNDES to firms make Brazilian banking a fiscal operation, requiring additional funding. Petrobras increased debt issuance enormously during this period, and now needs government support as its debt is now one notch above junk status. Interest payments on Brazil's debt is 6% of GDP in 2014. Public sector debt is 66% of GDP, and credit to the private sector is 55% of GDP up from 25% in 2005. It will take Brazil years to recover from a huge borrowing binge.

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Greece's pension system was unraveling even before the crisis. Generous provisions from earlier days of political influence led to early retirement by age 50 for some people. People taking early retirement after the crisis started has increased the number of retirees. The aging population has increased the size of the retirees relative to people working, especially with young people unemployed. About 16% of the GDP of Greece goes to pensions. Early in the crisis the retirement system took a hit of 10 billion euros on the declining value of Greek government bonds, wiping out 60% of reserves. Greece's banks were supported, but the retirement system was further weakened. In 2015 45% of the retirees of 2.6 million live at or below the poverty line, having seen cuts of 35-48% in the pensions since the crisis began. With the changes for retirees pensions of 900 euros a month are now about 700 euros for some of the retirees.

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The steel and chemical industries are bright spots in the Russian economy, helping Russia weather the economic downturn of 2014-2015. Costs denominated in rubles have fallen much further increasing profits for companies like Severstal.

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The Commerce Department report shows personal consumption expenditures price index, an inflation guage preferred by the U.S Fed increased by 0.9% in Feb. 2014 over the prior year month. Inflation excluding food and energy costs was at 1.1% in Feb. 2014. This is well below the Fed's 2% target for 22 consecutive months.

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Urban renewal in Detroit, Michigan, at one time the fourth largest city in the U.S., which was hit hard by the decline in jobs in the auto industry.

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Mark Frazier, a professor at the New School, is the author of the book "Socialist Insecurity: Pensions and Politics of Uneven Development in China." Here he describes the situation in China for the elderly and pensions. There is no Social Security Administration in China like the one in the U.S. Pensions are the responsibility of local authorites. Urban pensions were established in 1951. Pensions for rural areas and farmers came only in 2009. The situation in China for pensions is much like that in the U.S. before FDR's New Deal, being run by a patchwork of local programs- about 2500 county and city governments running pension funds. The problems of pension programs being run for the benefit of well connected groups and making risky investments exists in such local programs. Local governments taking on large levels of debt is a serious problem. The pension program in Shanghai came under scrutiny because of risky investments. A report in Dec 2012 cited by Frazer cites empty accounts at 2.2 trillion yuan or $353 billion. The National Social Security Fund has only $140 billion. Overall pensions account for about 3% of GDP in China compared to 4.9% in the U.S....

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Lahart says adjusting for inflation the DJIA average in early March 2013 would be about 12,900 instead of 14,254, much less than it was in Oct 9, 2007 peak. If dividends are reinvested the Dow would be at 16,600. With inflation and dividends taken together the Dow would be around 15,000. Lahart does not cite his source. Browning in a separate piece says the DJIA adjusted for dividends, inflation and taxes, according to Bespoke Investment calculations is still below the 2000 level in 1994 dollars, and provides a different view.

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According to a senior defense industry official Defense Secretary Robert Gates worries that counterinsurgency may not work in Afghanistan. According to the official even 40,000 troops would not give enough troop on the ground to protect the Afghns if the north and west continue to deteriorate. Gates is concerned about sending large amounts of additional US troops to Afghnistan. This is acountry with people very sensitive to occupying powers. A veteran of the soviet intervention there says they have an allergy to foreigners and attributes the soviet defeat to this. See the links in Intelilinks He is aware of the the dangers of this, if the expanded military footprint is seen as that of an occupying power especially when the government in Kabul is hugely unpopular, then this would galvanize new armed opposition to the US and draw US forces and NATO forces into aguerilla war of the type the soviet union faced there. It may do much worse if it galvanizes opposition in side Pakistan. The question Obama is focussing on is whether there is athreat to the US homeland security if other options than expanding troop strength are explored....

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Gikas Hardouvelis was finance minister during a crucial period of impementation of the 2012 bailout program for Greece from June 2013 to Jan. 2015. Here he outlines the mistakes he sees made by the IMF in not agreeing to the 7.2 billion payment to Greece in 2014, 4% of Greece GDP, with one third of that not a loan. At the fifth review of the 2012 bailout the EU commissioner for economic affiars, Pierre Muscovici , said Greece had completed its requirements and the 7.2 billion euro funding should be released. Yet he says the IMF to preserve leverage over a future Syriza administration in the 2015 elections decided to hold back. This made it harder for the Samaras administration to tell voters that it had completed the program a year earlier, and the lack of the funds hurt the Samaras administration as it erased signs of growth that had appeared in early 2014. Following this error he points to 4 mistakes made by the Syriza Tsipras government. The first was that it was bitterly opposed to the lenders (IMF, EU and ECB) and failed to focus on the economy. Hardouvelis points out that the maturity of the debt of 16.5 years and low interest rates meant that it was not the immediate issue facing Greece, and he calls it very manageable. This was not to say that it was important but with creditors worried about moral hazard, other issues could be taken up first. Another mistake was to allow a loss of liquidity to the private sector so that prospects of growth were erased. The new finance minister acted as if the $7.2 billion infusion was not important and let payments be delayed. Tsipras and Varoufakis let the uncertainty increase in the private sector, and let the economy decline all the way to the closing of the banks. How costly was this is evident from the IMF's own paper in Juy 2015 and the 3 page update of July 14, 2015, on the Greek debt, showing it cost Greece a total of 60 billion euros in additional financing needed and an additional 25 billion euros for the shock from the closing of the banking system. That 3 page IMF paper shows that within the space of one year a shocking amount of damage was done by Syriza left government- it says Greece went from being on track for reaching Debt to GDP of 105% by 2022 under the Samaras-Hardouvelis administration in July 2014, to 142% by June 2015, and with the closing of the banking system to 170% by July 2015. Some of this would have come from the IMF's own withholding of the 7.2 billion euro payment to the Samaras government. ...

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MaC Group, a risk advisor to Spanish banks, says Spanish banks hold about 30 billion pounds of distressed real estate and unsellable land. Prices are down 28% from the peak in 2007, according to a report by the IESE Business School, and are expected to fall a further 15-20 percent in the next 2-3 years by some experts. Much of the bank owned land is far from city centers and there is no demand for this. One Madrid based consultant R.R. de Acuna Asociados, says 43% of bank owned land is poorly located and there may be no demand for unfinished residential units for decades. The new government of Mariano Rajoy plans to take action to cleanup the banking system. Louis de Guindos, director of PricewaterhouseCoopers and IE Business School Center of Finance is expected to become the new finance minister. Guindos says strict rules need to be implemented, with some banks able to handle this and others that won't. MaC Group's Cantos, a managing partner, says the gap is huge between prices offered by banks and what investors will pay- as much as 70%. Prime assets can be sold for 30% discount but the land, residential and commercial real estate will require discounts of 70%. Banks have made provisions for losses of 30%, and are now facing the prospect of another 40% in losses. As a result many of the medium and small sized banks which operate only inside Spain may have to be shut down or consolidated by the government of Mariano Rajoy. Only the larger banks like Banco Santander, Banco Bilbao, La Caxia, and Bankia are likely to surivive....

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Mark Gilbert, a visiting associate professsor of European History at the John Hopkins School for Advanced International Studies in Bologna, describes the crisis of the political culture in Italy that goes deeper than the economic crisis and has lasted for most of the post war period. Gilbert says the political parties have avoided implementing financial discipline and opening up the economy for most of the last two decades, except for brief periods, and did not take the opportunity of joining the eurozone to make serious changes. Italy has many parties with the Democratic Party having 25-30% support in the polls and Berluconi's People of Liberty (PdL) having the support of 20-25% of voters. There is also the Northern League, the Third Pole of centrist Catholic parties, the Italy of Values party, and the Ecology Freedom party. Italy lacks a national consensus on making the changes. The risk is that Monti will not have enough time to make the changes, as new elections may be held by April 2013. His government was formed as a government of technocrats led by former EU commissioner Mario Monti, after President Napolitano forced the PdL, the PD, and the Third Pole to work together to support the new government. Changes are needed in the legal system, local government, the health sector, and in the university system. One factor favoring Monti is that 90% of Italians voters are dissatisfied with the political parties, according to Italian think tank ISPI. For Italy the EU crisis has in this sense a positive aspect as it has forced Italy to come to grips with economic and cultural changes under a leadership from outside the political system....

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Strikers at a Honda transmission factory in Hoshan, 100 miles northwest of Hong Kong are asking for raises of $117 or 800 renminbi in cash above the $132 a month or 900 renminbi that they are now paid. About 950 of 1900 workers at the plant are trainees, young people from vocational schools or high schools earn $132 a month. Older employees earn upto 1500 renminbi or $220 a month. The significance of this strike is that the Chinese government is tacitly encouraging the strike as it begins making moves to increase domestic consumption and make the economy less dependent on exports. This requires consumer's having larger purchasing power and higher wages. It also means that China will not remain the low cost manufacturer for manufacture goods makers around the world for very long. Consider the size of the increase and the policy change of the government and this implies a significant shift by China.