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The next tranche of aid to Greece is 31.5 billion euros on Nov.12, 2012. Greece has agreed to a package of austerity measures of 13.5 billion euros of spending cuts and tax increases. About 85% of this will go to recapitalizing Greek banks which took losses on sovereign Greek bonds under an agreement. The hope is that Greek banks will lend to businesses but there is skepticism in Greece about bank's willingness to lend. The economy is expected to contract by 6.5% in 2012. Under the agreement civil servants on "special salaries" will see cuts of 35%. Associate professors at universities will see the count reducd from 15,226 to 2000. A majority of tax exemptions will be ended. About 5000 civil servants in 2012 and 20,000 in 2013 will face salary cuts and be transferred to other jobs or dismissed. The package has to be passed in the Greek parliament. Finance minister Stournaras says Greece needs to reduce the interest rate on its debt and extend payback periods. Stournaras says Greece will be given more time to implement the austerity measures. The Merkel approach to the Greek crisis is causing a rift within the eurozone with France's president Hollande and the SDP opposition leader in Germany critical of the way it is being handled....

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What happened at BP-TNK appears to be a misjudgement on the part of Hayward, Dudley, Dupree and other BP managers about who counted and to what extent in the Russian government and state run oil companies. Its still clear that Putin and his appointed head of the energy sector Igor Sechin are in charge here. As head of Rosneft the state run oil company and in his role as head of the energy sector Sechin had more influence on the eventual outcome than the lowere ranking Gazprom officials after Medvedev left Gazprom to be President. And Putin may simply have respected Sechin's judgement on the need to keep Rosneft as a significant player in the oil business as Gazprom itself may be becoming too large, to maintain some competitive forces in the state run oil industry as opposed to concentrating everything into one large bureaucratic enterprise. And Sechin, Putin and Medvedev could let AAR do the work of ridding BP of its notions of a large role in controlling Russian oil resources in a combination with Gazprom. At some other point the oligarchs of AAR could be bought out by the state run companies, especially when oil prices were expected to come down, for a much lower cost....

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Ulrich Volz of the German Development Institute says the $250 billion the IMF has- counting the $100 billion Japan has contributed- may not be enough to prevent some countries in Eastern Europe and Asia or Latin America from defaulting. Especially because a lot of debt is coming due and has to be renewed. There may be some sovereign country defaults. Even China and India have a lot of debt coming due. India and China have external debt payments of $260 billion and $2.4 trillion respectively this year. According to ING Wholesale Banking emerging market governments and companies have to repay some $6.8 trillion of debt, bonds, loans and interest payments and trade finance, and this excludes any debt taken on for stimulus. Russia has $600 billion to renew this year. Latin American governments according to Harvard economist Hausmann need to rollover $250 billion in debt. The US and developed countries are soaking up a lot of funds, with the US eexpected to issue $2 trillion in government bonds, and the big developed countries placing another $1 trillion. So there will be severe competition for limited capital. Mr Volz suggests a Global Support Fund to which the developed countries would contribute to help emerging market countries....

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Khalid al-Falih, chairman of Saudi Aramco, says at the World Economic Forum in Davos, on Jan. 26, 2016- "If prices continue to be low, we will be able to withstand it for a long, long time." With $630 billion in foreign currency reserves the Saudis are following a long term policy of full production. Gasoline subsidies are being reduced, IPO of Saudi Aramco being discussed to raise additional capital, and other steps being taken to plan for long term oil prices. Flexibility for a change in policy is diminished with the addition of Iranian oil production to supplies following the lifting of sanctions. The events in 2015-2016 of Russian bombing campaign in Syria, and the cutoff of diplomatic relations with Iran, have worsened the standoff with Iran and Russia in the Middle East conflict. As a result it appears that the Saudis are settling down for a long term policy of full production which would keep oil prices low for the long term. India, Japan, China, the U.S. and the European Union, Turkey and other countries benefit from low oil prices when their economies need a boost in 2016-2017....

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Leonhardt points out in the NYT that Hillary Clinton actually won in the popular vote by a substantial margin, by more than 2 million votes and more than 1.5 percentage points. He says that Democrats need to pay more attention to the working class in midwestern states- the job losses, crumbling infrastructure, and the plight of communities such as Detroit, Michigan which suffered through the bankruptcies of Chrysler and GM, and again with the foreclosure crisis, the financial crisis of the City of Detroit. With a similar situation in the neighboring states of Wisconsin and Ohio, in places like Toledo and other parts of communities facing industrial decline. While the Silicon Valley centred region powered the economy in California, and the financial industry and real estate powered New York, older midwestern communities never really recovered from a long decline stretching over 2 decades. The result was the loss of faith in Democrats among union workers and young people, leading to the loss of Wisconsin, Ohio and Michigan. For most of its history the Democratic Party was based on its union and working class base including a large number of white voters. Only under Obama because of his unique candidacy was the coalition so dependent on the minorities vote. Before minorities were part of the Democratic coalition, but not in the way under the Obama candidacy. A return to its historic and normal base among whites in unions and working class communities, liberals, minorities, is a way to go back to the historic and natural base of Democratic support. In a sense dependence on tech communities for election funding and the tech booms, globalization, may have distorted Democrats sense of their historic role as champions of the working class and middle class communities throughout the country. There is now an opportunity to restore this lost mission of protecting the interests of the middle and working class who have seen huge drop in net worth as reported by Janet Yellen of the Federal Reserve at the Inequality Conference on October 17, 2014-"62 million households with a net worth of $11,000 for the year 2013." Poorly covered in the media and not made the utmost priority by Democrats (or Republicans). In the words of Janet Yellen, this was in the past several decades "the most sustained rise in inequality since the 19th century after more than 40 years of narrowing inequality since the Great Depression." She added the shocking words "by some estimates, income and wealth inequality near their highest levels in the past hundred years, and probably much higher than much of American history before then." Even discussion in the media goes back to the Obama coalition and treats it as a way forward for Democrats, when history shows it was different and the situation described by Yellen calls for a serious response. ...

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The India-Pakistan-Afghanistan issues are still framed in the old way in terms of communalism, cold war then and the war on terrorism now. These policies were a legacy of the colonial policies of an earlier empire designed to preserve foreign rule, with a policy of perpetuating divisions between communties on religious and other lines. Modernization, the spread of mass communications that makes possible the reduction of prejudice and division by assimilating different values and beliefs into acommon aspiration for progress and better living standards, and the spread of education, commerce, and technological progress, create the conditions that should put this behind us. Put behind us communalism, and the political and military structures of communal states. Pakistan needs to be transformed from a communal state with a military structure designed to preserve that state - resulting in conflicts with its neighbors- into a state that represents a community and a religion, but in all other ways seeks peaceful coexistence and economic integration with the rest of South Asia. A good example of this is Mexico with its own culture, language and religion (Spanish Catholicism), and Canada with its own bilingual French-English heritage and British political structures and allegiances, both arriving at an arrangement of peaceful coexistence and economic integration with the USA with its different political structures and culture and sporadic conflicts with Canada and Mexico. This has promoted the peaceful development of the North American region. The US involvement in the region can then be seen as a misguided effort that continued framing the region's differences in the old British way or in a cold war stereotyping, first with John Foster Dulles in the India-Pakistan conflicts, and then with Reagan in the Afghan anti-Soviet war. This has worked to exacerbate the conditions that led to slow progress in the drive for economic development, infrastructure building and modernization in all of South Asia. Just as in Europe, as in North America, the processes of economic development work best when a policy of inclusiveness and integration of different communities and people is followed. ...

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Reeves says Reagan ever the imaginative politician seized on the idea of "supply side " economics of a not so well known economist Arthur Laffer. Ideas that were simple and appealing- you reduce marginal tax rates and generate higher revenues. This worked for some time with higher economic growth for a number of years, but the arithmetic of higher spending and borrowing and lower taxes would eventually lead to large deficits at the end of Reagan's term, just as price controls worked for awhile and then led to a surge in prices at the end of Nixon's term. When Reagan became President the deficit was 2.5%, when he left office eight years later the deficit was 5% of the economy. Interest payments on debt jumped to $169 billion in 1988, from $69 billion in 1981. Reeves says American politicians know so little about economics, to which it could be added, winning presidential and congressional elections is always a big part of the picture when it comes to economic policy. Which is why Nixon even with Milton Friedman as an advisor shifted to Keynesian policies of higher fiscal spending in 1971, and why Reagan turns to intuitively appealing and effective in the short term policies of having it all- higher spending, growth, and lower taxes. During the years of the two Bush presidencies and the Clinton administration the success of Reagan policies leads to a general sense as Vice President Cheney put it referring to Reagan and Treasury Secretary Baker's belief, that "deficits don't matter." Which leads us to the current situation where 2012 presidential election politics again frame the terms of the debate on deficits and budgets, only now the deficit is much higher and on a unsustainable path. ...

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Republican Senators Corker and Blount are confident that a solution can be devised for the sticking points on a deal between the Republicans and the Democrats. The Republicans consider the savings in the Reid plan from the wars in Afghanistan and Iraq a "gimmick," but essentially the Reid and Boehner plans say analysts are similiar in the inital cuts in spending. The sticking point for Democrats is on the whole process of the debt ceiling extension having to be redone in early 2012. For Republicans the sticking point is in in tax increases which the Reid plan leaves out in the initial period for debt limit extension into 2013 when a new president takes office. House majority leader Boehner is facing opposition within his party and this restricts his leeway for striking a deal- the Boehner plan passed in the House by a vote of 218 to 210 on July 29, 2011, with 20 Republicans voting no. It was voted down in the Senate that same evening with a vote of 59 to 41, with 6 Republican senators joining all 53 Democratic senators. As it stands now, the weekend before the August 2 deadline, President Obama concedes that there is "rough agreement" about the size of the first round of spending cuts, and the "next step" to rein in borrowing. He went on to say that "if we need to put in place some kind of enforcement mechanism to hold us all accountable for making these reforms, I'll support that too, if it is done in a smart and balanced way." Its the design of this enforcement mechanism that is the main point in the remaining negotiation. The nature of the committee selected from both parties for the next phase of savings, its powers and the trigger in the sense of what it can ensure happening if no decisions are taken by both parties. ...

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Governor Pawlenty of Minnesota will be in a quandary if he vetoes the Minnesota Subprime Borrower Relief Act because he will be described as insensitive if chosen as McCain's running mate. Essentially this bill helps needy borrowers. Minnesota according to a research group Housing Link will see a 39% increase in foreclosures in 208 and is described by some homebuilders as F- in its rating for conditions in the housing market.

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Raghuram Rajan, Professor of Finance at the Graduate School of Business, University of Chicago, was appointed chief economist at the IMF in 2003. He presented a paper, titled "Has Financial Development Made the World Riskier," at the annual Jackson Hole meeting of economists and central bankers for 2005. Rajan says he had planned to write about how financial developments during Greenspan's 18 year old tenure had made things safer, but the more he looked the more evidence came up that the risk reward relationships in a normal functioning financial market had been terribly distorted. Market participants were being rewarded for wins but were not being asked to take on commensurate risks and impacts on their bonuses and rewards. He also cautioned about the use of credit default swaps which acted as insurance against bond defaults, and said insurers were generating big returns on this but with the appearance of little risk- even though the pain could be immense in a default. Banks were carrying credit securties on their books that posed risks to the whole financial system if things went wrong with the credit securities. Reaction from the gathering was unfavorable. Lawrence Summers, a former Treasury Secretary said, "the basic, slightly lead eyed premise of the paper was misguided."...

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Social media accounts of visa applicants will be screened for perceived hostility to the US.

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New legislation that cleared Congress on helping homeowners about 400,000 homeowners avoid foreclosure. Congresspromises to get tough on lenders and loan servicers if they do work to honor what Congress has mandated. The Federal Housing Administration will run the program and it will insure upto $300 billion in refinanced 30 year fixed rate loans The mortgages cannot be for more than 90% of a home's newly appraised value. For mortgages that exceed that value the lender would have to voluntarily write down the principal to the qualifying level. If the home goes up in value the borrower must share newly created equity with the FHA. THe program begins October 1 and ends Sept 30, 2011. Borrowers will not qualify if they have intentionally defaulted on the loan or if they had a debt to income ratio of less than 31% as of March 1. This is the first serious effort by Congress and the Administration to work in bipartisan fashion to put a serious dent in the housing foreclosure levels which are at the root of the present financial crisis and Secreatary Paulson, Bernanke, and Barney Frank and others in Congress have helped support this effort which should eventually help the financail markets recover from failing mortgages that caused this crisis....

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Vladimir Putin presents his views on democracy in Russia, on prevalent corruption, and ways to introduce democratic processes through internet referendums on legislative initiatives, the election of governors and local officials. He says democracy cannot be built overnight, that sovereignty of the people of Russia is the true basis of democracy and this was achieved through the fight with the oligrachy and anarchy of the 1990's. Rights that Russians want to see democracy ensure are: right to work, free medical care and education for children. In addition with the development of civil society and the advance of the middle class in Russia democratic processes have to keep pace. But he doesn't see democratic processes working with what he calls " a circus of candidates making unrealistic promises" with "spin doctors and image makers controlling politicians." And he does not see modern democracy limited to casting votes, and calls for internet based democracy and referendum based democracy to be integrated into the overall development of institutions, particularly at municipal and regional levels. He calls for a change in the mindset of Russians away from corruption in public service, saying that as long as the mindset is there one set of thieves are unmasked only to be replaced by another set of thieves. And cites polls that show teenagers aspire to be public servants because of the easy money to be made in public service. To correct this he proposes salaries that are high enough and at the same time have absolute transparency, declaration of expenses and family purchases, residences, vacations etc. Other steps include separating executive power and property and separating executive power from the system of checks over it....

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Taxpayers not the banks are Secretary Paulson's clients and he needs to remind himself of that says the NYT editorial page. It wants to see the government bring in new more competent management and not use the management that got us into this mess in the first pace especially where that management has demonstrated poor judgement and made errors that caused the bank to be in trouble. And it does not want to see the government a passive investor. It want the government to have a sy in mergers an acquisitions. Its not saying tha the government should take on the job of running the banks but protecting its investment means Treasury has to be involved in critical decisions that affect its investment and in the way the business is run and what risks are taken. Also Treasury is asked to watch for and take steps against conflicts of interest. Many of the same banks that are selling their assets to Treasury will also be asked to help Treasury to run the troubled asset program. Treasury to take care that these banks do not end up writing the rules on one side for Treasury and selling Treasury the assets by being on the other side because it won't be good for taxpayers. See Guillermo Ortiz's advice to Fed chairman Bernanke at the recent G20 meetings which says says be sure to take ownership stakes, as there was serious, lasting and damaging political fallout in Mexico during the 1994-95 peso crisis, from conflicts of interest and the failure to take ownership stakes and dividends on preferred shares. ...

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Mervyn King, Governor of the Bank of England, wants to see stricter requirements than Basel III on capital reserves for U.K. banks. The Bank of England has expressed its strong disapproval of UK banks lobbying activities in Brussels to push for a dilution in Basel III standards. The British government and the Bank of England want to have the flexibility to set their own stricter standards and not to be bound by a relaxed standard set by the EU. The risk to British taxpayers is a principal concern. In the U.S. Fed governor Daniel Tarullo is pushing for capital reserve requirements stricter than Basel III's 7% requirement- calling for a requirement of 10-14%.

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The relationship from college years at Amherst College in the U.S. of Greek political leaders Antonis Samaras and George Papandreou. The efforts to setup a national unity government that failed. The increasing support for the opposition New Democracy Party led by Samaras- with 16% unemployment- and the prospect of new elections. Samaras supports spending cuts. He also favors tax cuts, and a flat tax rate of 15% on business. Greece has a long history of tax evasion and distrust of central authority going back to centuries of Turkish rule. Samaras believes that the lower tax rate of 15% would help change the Greek cultural trait of evading taxes becaue it would be on the honor of people to pay such a basic tax. EU leaders are skeptical that lower taxes are the right policy to reduce the deficit. This adds to the political uncertainty as the new government would have to implement the measures agreed to between the current Greek government and the EU leaders. A similiar situation existed in Portugal but the recent elections there, participation of the opposition party in talks, and the newly elected government conducting its own negotiations, has removed that element of uncertainty which exists in Greece. ...

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The Fed's balancing act in cutting rates but at the same time seeing an orderly decline in the dollar and no sharp decline. Can it get the ECB to cut rates also? The situation after the Fed's rescue of Bear Stearns and the three quarter point cut in March 2008.

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Sony's CEO, Kazuo Hirai, talks to WSJ staff in April 2015, on ways in which it has changed as it adapts to the new competitive environment. He says the basic DNA remains the same with its focus on innovation. What has changed is the sense of urgency, accountability starting at the top, and the ability to adapt quickly to the competitive environment. Hirai describes his personal life at home alone in his condo, with his family in California. He spends the quiet time on the weekends in the condo thinking over decisions to be made, testing the logic, and adds that he rarely changes once he has made up his mind.

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The 2016 Republican platform is written to express the ideas in the Republican Party for family values, child rearing using the Bible and traditional values, calling pornography a "public health crisis."  The Family Research Council and tradition or family focussed groups played an important role in writing it, with Mr. Trump playing less of a role. Instead of "physical barrier" with Mexico, it says "a wall"  should be built in a taking up Trump's idea, but in general it is a clear expressing of traditional family values that Republicans have supported for years and expressed frustration with the movement of social lives in an opposite direction. The same sex marraige decision by the Supreme Court and transgender debate were not present in 2012 election, so in that sense the Republicans see the country as moving in a different direction. More of the pendulum having swung too far in another direction is how Republicans perceive it, and their response is to go back to how things used to be and the world they knew, based on what they see as positive outcomes for the whole of society. Hence language that encourages teaching of the Bible in public schools, condemning pornography as a menace particularly for children, and insisting on "man made laws being consistent with God given natural rights." A good understanding of the Bible is considered "indispensable for the development of an educated citizenry."   Amendments opposing gay and transgender are being added. ...

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David Stockman, director of the Office of Management and Budget under Reagan, is interviewed by Tom Keene. Stockman says the US has $52 trillion of debt on a $14.5 trillion economy, a ratio of 3.6 times GDP. Historically, before 1980, it has been around 1.6. This debtification of the US, he says, is the major problem facing the US today. Stockman sees little or no economic growth in the next 5 to 10 years, as debt reduction progresses.

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Ukraine is in a position after the refugee outflow and closure of some industrial operations to send energy to Poland, Romania, Hungary and other countries in the European Union. Ukraine is speeding up synchronizing power lines in Ukraine to that in Poland so that energy can be exported easily. Ukraine could send 1.6 gigawatts of energy a day to EU countries up from 350 megawatts today once the changes are completed to the energy transmission infrastructure. Ukraine energy is cheaper than energy produced in Poland because of nuclear energy plants in Ukraine from the Soviet period. 

Workers are restoring a now defunct power line from a 2 gigawatt nuclear plant in western Ukraine to a nearby Polish city. Projects that would take decades are being done in months with US aid. Energy exports could bring Ukraine $1.6 billion a year.