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Foreign institutional investors responding to negative sentiment for emerging markets in general took out $2.6 billion from India in August 2015. Yet average allocations to India for emerging market funds have increased to about 10.7% in July 2015, because India looks much better than other emerging markets. By comparison China is at 20.25%.

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As expected Iran boycotts the talks in Doha of 16 major oil producers seeking to stabilize oil prices. Saudi Arabia, Russia, Qatar and Venezuela sought to stabilize oil production at January levels to support oil prices. Wth the Saudia and Russia producing all out, Iran seeks to do the same, effectively closing the door on any agreement to freeze production levels.

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Austin, Texas and growth in "middle skill" jobs which offers ways to increase jobs growth in the U.S. in 2012-2015.

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Major decline in oil prices in Oct. 2014 as prices drop to $81 per barrel and are forecast to reach $70. U.S. oil production increased by about 56% or 3.1 million barrels a day since 2004. U.S. demand for gas and fuel declined 8% compared to 2004. Initially instability and wars in the Middle East sustained high oil prices in 2012-2013. Yet with growing output from shale and other sources in N. America and slowing economies of Europe and China, the situation reached a point in 2014 where supply exceeds demand. This shift more than offsets any instability in trouble spots. The situation affects the U.S. consumer favorably with an estimate of $1 billion in savings for American consumers with every one cent drop in price at the gas pump, by one estimate from Deutsche Bank analysts. Typical American families gained an extra $50 a month from the decline June to October 2014, according to analysts at Gasbuddy.com. The declines are a boost for the slowing economies of Europe, Japan, China, S, Korea and India. China's imports for 2015 are estimated at 61% of oil consumption, using official estimates. In the current slowdown the lower prices offer relief. India which imports 75% of its energy benefits signficantly, as this helps lower inflation and reduces cost of fuel subsidies for state run companies. Russia is adversely affected by the declines as it depends on oil and gas exports for 50% of the nation's budget. Estimates by AFK Sistema economists show the Russian economy contracting in 2015 with oil at near $90 per barrel (Brent crude is at about $85, and WTI at $81 in early Oct. 2014). Russia's former Finance Minister Alexei Kudrin reflects opinion among Russian executives and politicians, when he told state television that Saudi Arabia may be pushing prices lower to target Russia's oil resource based economy and Mr. Putin, in an effort to broaden the effect of sanctions. (The Saudis have strongly protested the Putin intervention in Syria.) Venezuela has used $120 per barrel and Angola $98 for its budget, leading to a strong hit for the economy. ...

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Joseph Stiglitz writes that keeping the dollar as the reserve currency is no longer the option. He tells us that it comes with some hidden costs such as a weaker global economy. Having developing countries keep hundreds of billions of dollars in the US in low interest earning reserves makes no sense considering the needs of developing countries, and the improved prospects for the USA and Europe in exports to a growing developing country economies. He points out that a new global reserve currency, with an orderly transition, may be the most important reform to ensure the longterm health of the world's economy. Its bad for the USA to keep exporting T-bills, says Stiglitz, as it does not create jobs. And its bad for all concerned as it lowers global economic growth. Especially he says when it is so unseemly for developing countries not to use the money to improve living standards in their own countries, with the help of exports from developed countries, that in the end improves global growth and the global future....

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The increasing competitiveness of Mexico compared to China and India as an investment destination in 2013. Foreign companies are investing heavily in Mexico because of investment advantages in labor cost, supply of engineering and management talent, and proximity to the U.S.

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Norway's sovereign wealth fund, the Government Pension Fund Global, is run by Yngve Slyngstad. The fund has $570 billon, $100,000 for each of Norway's 4.9 million people. The fund took a 23% loss in 2008. Then the fund made a shift from 40% equity holding to 60% equity holding, which has paid off. The losses were reversed with a 26% gain in 2009 and a 10% gain in 2010. The fund gets all of Norway's oil revenues less about 4% of the fund's value that goes to the state budget. Slyngstad became CEO in 2008, and persuaded finance ministers to take on greater risk, leading to $175 billion in stock investments during the financial crisis. He has told Parliament that he will get returns of 4% after inflation- higher than returns of 3.1% that were made since 1998. With assets equal to 2% of the total market value of stocks trading in Europe, the Norwegian fund is a major investor. Rules set for the fund prohibit investments larger than 10% in any one stock.

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India's inflation rate declined to 4.4% in Nov. 2014 and 5% in Dec. 2014. Price pressures are moderating throughout the economy. With lower oil prices in 2015 and long term trend for lower prices the outlook has improved for controlling inflation. The central bank governor Rajan cut rates by one quarter of a percentage point in Jan. 2015 and indicated further rate cuts are ahead to boost economic growth. The financial markets reflect a 1% decline in interest rates and the stock markets were up 2% in Jan. 2015

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A number of issues came up at the Women20 Summit in Berlin. Annette Niederfranke, Director of the International Labor Organization, brought up the issue of family reconciliation as "one of the toughest challenges for working women worldwide," that in order to meet obligations women tended to work in "non standard forms of employment and in part time work linked to lower wages, lower social security, lower benefits, and fewer training possibilities." Childcare was also an issue that was prominent considering the lack of adequate childcare in many countries including in the European Union. With responsibilities for the elderly, babies, and small children women tend to be in the workforce for shorter periods leading to men taking up many of the higher positions. Angela Merkel pointed out that Gemany tended to take a narrow view of professions available to girls, saying- "So it is very very important that we take a broader view of things while girls are still at school." Merkel also supports a Africa compact that would help women set up small and middle size businesses in poor countries. The "Digital" aspects of this and other efforts for women were a major topic being discussed. One idea that came up was that more cooperation from men was needed to make things happen. This is the third Women20 Summit after ones in Turkey and China, and a sense of momentum was felt by women. ...

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In a program of gradual change the new leadership under premier Li Keqiang steers China's economy in the new direction set by the DRC Report: China 2030 and the Third Plenum in Nov. 2013. New priorities listed under major Tasks in the annual work report by Li Keqiang place setting up deposit insurance at the top of the list. Policy changes include allowing cities to issue bonds directly to increase transparency in construction spending and control burgeoning debt.

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In an interview with the Wall Street Journal, Mark Carney, the head of Canada's central bank and the head of the Financial Stability Board, says China is falling behind in its earlier committments made at G-20 meetings to move towards rebalancing the world economy. He pointed to the fact that consumption in China has moved from about half of China's GDP to about a third, in the last ten years. China's investment has also declined from half of GDP to about one third. Carney also raised concerns about the strength of the Canadian dollar for Canada's competitiveness. The report "China: 2030" by the World Bank and China's Development Reform Commission also calls for changes in the way China's economy has increased its dependence on state run companies.

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John Taylor, says Obama and Alan Krueger (Obama's new head of the U.S. Council of Economic Advisors), said some of the same things in early September, 2011, that were part of Obama's old plan to revive the U.S. economy. And the old plan has failed to produce results. The part that puts construction crews to work on the roads, railways and airports was tried earlier in the stimulus plan. Because of a lack of showel ready projects, and the state governments putting most of the money in their state coffers, this only increased infrastructure by a miniscule 0.05 percent of GDP, according to research by Taylor and John Cogan. Taylor's sees the moves by the Obama administration and the Bernanke Fed as not only being ineffective, but having the opposite effect of lowering investment and consumption demand through increased concerns about the federal debt, another financial crisis or the risk of inflation or deflation. The U.S. private sector has the money to make the investments that create jobs but their concerns have led to holding back. Taylor points to the need for a comprehensive economic strategy to replace these temporary interventions. The debt limit agreement of 2011 is a part of this strategy, and he agrees with reducing spending in a gradual way in a weak economy. The other parts of this strategy he says are entitlement reform, tax reform, regulatory reform, monetary reform, including a reappraisal of the role of government in the economy. This should lead to a more stable and predictable economic environment and reduced uncertainty about the future, which is critical to improving supply and demand....

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Energy Aspects, London based consultancy, estimates non-OPEC production declines of 700,000 barrels a day, up from previous forecasts of 200,000-300,000 barrels a day. Demand is expected to be higher than supply by June 2016, and drawing down inventory from that time. Agreement to freeze production is uncertain at a Doha meeting of OPEC countries, with Iran planning to increase production from 3.1 million barrels a day currently to 4 million barrels a day. Saudis increased production to 10 million barrels a day in 2015, and Iran is determined to increase its production to the higher level. The price of U.S. oil rebounded to $42.17 by April 2016.

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An indepth look at Mexico, its assets, its huge potential and what is holding Mexico back. It ranks much higher than Brazil in many respects- higher investment as a fraction of its GDP, technical education, an easier place to do business, less regulation, better management talent, more industrialized. In 2010 Mexico had $400 billion of business with the U.S. With rising Chinese wages Mexico is an attractive place for foreign investment, with a hardworking and educated workforce. Mexico suffered badly during the 2008 recession in the U.S. It is trying to reduce its dependence on exports to the U.S in key areas such as the automotive industry. Exports to the U.S. by the automotive industry are now 65% of the total, and the auto industry association in Mexico is working to bring this figure to 50% by exporting to Latin America and Europe. Economic growth was 5.4% in 2010, and expected to be 4-5% in 2011. Drug violence may have reduced the growth by one percentage point according to some estimates. The think tank, Mexican Institute for Competitiveness, estimates that economic growth would be 2.5% percentage points higher if labor market and competition laws are changed, and the oil industry is opened up to foreign investment as happened in Brazil. A study by OECD and the Federal Competition Commission (CFC) of Mexico has shown that 31% of Mexican household spending goes to products operating in high price monopolistic or oligopolistic markets. The bottom ten percent spend even higher proportion of incomes, around 38%, for products supplied in such markets. This includes pharmaceuticals, airline travel, banking, and electricity. Taking on these cartels is a difficult task. The CFC is beginning to take the first steps in this direction, in what will be a long road to fair prices for Mexican consumers. Banking was opened to Wal-Mart. The collapse of Mexicana was an opportunity to auction landing slots to other airlines. An auction system has been developed by CFC for drugs. A new competition law sets penalties for collusion in pricing, with upto 10 years in jail. And Carlos Slim's telephone monopoly was fined $1 billion for its telecom monopoly practices. In 2009 the Calderon government shut down Luz y Fuerza, a state electricity company costing the governmment $3 billion in subsidies for an highly inefficient operation. ...

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A recent study by the IMF shows that China has accumulated foreign exchange reserves that are twice what would be needed for traditional purposes such as supporting the economy in a financial crisis. China is still very much a developing country with per capita annual income of $3000, low consumer spending, and rising inflation. This makes the policy of accumulating reserves and preserving an undervalued exchange rate to support export companies counterproductive. There is growing debate about this as inflation is becoming difficult to control. Yu Yongding, an advisor to the PBOC monetary policy committee says China as a developing country should not be exporting capital, which should be used to raise living standards. A rising exchange rate would increase spending power of people throughout China. Fan Gang, head of China's National Economic Research Institute, was a member of the central bank monetary policy committee. He wrote in a recent essay arguing for a higher exchange rate, and societal, tax and other changes that help increase China's household spending. Central Bank governor Zhou Xiaochuan said recently that China's foreign exchange reserves have exceeded reasonable levels that the country needs, adding to inflation risks and making it difficult to conduct monetary policy. The reserves are now over $3 trillion, pasing that mark in March 2011 after increasing 25% in the last year....

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E.J. Dionne, of Gerogetown University and the Brookings Institution, says the current situation in U.S. politics resembles the 1912 presidential election when a Princeton professor Democrat Woodrow Wilson called for stronger curbs on big financial institutions, and Republican Teddy Roosevelt, a former president, called for tighter regulation. During his presidency Roosevelt had helped pass legislation to curb monopolies, and represented the Progressive wing of the Republican party. Taft who was president was Teddy Roosevelt's protege and vice president before becoming president, and alienated Roosevelt by moving away from progressive actions taken during Roosevelt's administration. Dionne says Hillary Clinton's views are similiar to Teddy Roosevelt's views, and Bernie Sanders' views to Wilson's views. Wilson won 435 electoral votes to Roosevelt's 88, and Tafts 8. The big difference now is that on the Republican side the progressive wing that Teddy Roosevelt established is non existent, with Cruz's positions similiar to Reagan's, Kasich and Cruz at best close to Jack Kemp's views on broadening the Republican base with concern for working class issues, and Trump's views not clear because of lack of clear policy or programs beyond the personality based campaign. Dionne points to the problems facing the "progressives" of Sander's young supporters staying away from the polling booths with Hillary Clinton as the nominee, putting a Republican nominee into the White House. Overlooked here is the idea that much of the election campaign even in an advanced country like the U.S. is fought on slogans, leaving out some critical facts. The problems progressives face emerged during a period when a Democrat was president, and the influence of lobbyists had not diminished. Outsiders on the Republican side are focussed on diminishing the power of lobbyists, the political calculus of elections, and other interests that have affected policy in the last 8 years hurting the middle class and working class. ...

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This report shows an alarming trend in China which is fueling a real estate bubble similar to the one that Japan, and more recently the U.S., experienced. State owned companies are actively speculating in real estate, and are buying real estate from local governments eager to profit from the real estate boom. Local governments obtain land and build infrastructure on it to raise the price that they can get for it in an auction. In many cases one state owned company outbids another state owned company from different sectors such as oil, chemical, military, telecom and highway. Land records reveal that 82% of land auctions in Beijing in 2010 were won by state-owned companies up from 59% in 2008. The National Bureau of Economic Research in Cambridge, Massachusetts, has estimated that land prices leaped by 750% from 2003, with half of this happening in 2008-2010. In many cities housing prices have doubled in the last 2 years. The National Bureau estimates that on average these state owned companies paid 27% more for the same piece of land than other bidders. China's $586 billion stimulus and its aggressive lending program by state owned banks may have helped in other ways after the 2008 economic crisis, but in this area it has fueled a real estate speculation boom, with the local government and state owned companies being the key participants in this speculation. Local governments earned an estimated $230 billion in land auctions in 2009. The demolition of older neighborhoods and poorly compensating residents are all part of the effort by local governments to profit from this speculative boom. The implications for the banks are serious. Local governments use other companies created for the purpose to engage in this investment in land. And off-balance sheet accounts create the danger that China's state owned banks may have enormous amounts of debt that is not showing up in the regular accounting. Analysts say that the $1.4 trillion in loans made by state banks in 2009 was twice that in 2008, and a large portion of this was diverted into real estate speculation with records set in land bids and booming prices. All this is happening as China's Ginni coefficient has deteriorated rapidly. And the simple fact remains that even as apartment prices exceeded $200,000 in Shanghai, the average disposable income is about $4000 per year. Prof. Shih of Northwesten University has followed the investment companies of the local governments closely and comes to similar conclusions about the size and implications of this real estate bubble in progress. Shih estimates LIC (local investment companies) debt owed to banks at $1.68 trillion or 34% of China's GDP. See the link to BW's Dexter Roberts. ...