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Sheila Dewan provides analysis of the figures on household debt for the fourth quarter of 2013 put out by the U.S. Federal Reserve. U.S. households added $241 billion in debt in the 4th quarter 2014, increasing by 2.1%. It shows says Dewan, that American households were beginning to spend on homes and consumer purchases such as autos. Certain groups such as students and young people were restrained in spending by high levels of student debt. Debt increases were $152 billion for new morgages, $18 billion for car loans, and $53 billion for student loans up by 5.3%. Total household debt to income ratio went up to 130% by 2007, and has since declined to above 100% at the end of the 3rd quarter of 2013, going up again in the 4th quarter of 2013. Credit card debt showed only a small increase of 1.6% as households focussed in cutting credit card debt with high interest rates. Increases in credit card debt and in mortgage debt were shown to be for people with very high credit scores of above 720 in the Federal Reserve analysis, a sign of the caution exercized by households and banks following the overleveraging in 2008....

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The Brazilian Real drops to 2.9836 to the U.S. dollar in March 2015. The year to date March 2015 decline for the Real is 10.9%. Increase in interest rates will depress growth even further.

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Hernando De Soto, a prominent economist, heads the Institute for Liberty and Democracy. He has an intimate knowledge of the workings of the Egyptian economy, and describes the socio-economic marginalization of large parts of Egyptian society as Economic Apartheid. Simply put Egypt has fallen behind the times, way behind the economic progress in large developing countries.The Institute was hired by the Egyptian government in 1997, with the financial support of the US Agency for International Development, to look into what reforms were needed. It presented its 1000 page report in 2004- after years of work involving 120 Egyptian and Peruvian technicians, participation of 300 local leaders and interviews with thousands of ordinary people- to the Egyptian cabinet. The then Finance Minister Hassanein supported it and the cabinet approved it. What followed was a cabinet shakeup, and blocking of any reforms by hidden interests wanting to protect the status quo. De Soto's objective was to find out how many people were marginalized in Egypt, and how much of the economy operated outside the legal system- small business that did not have the protection of property rights or access to normal business tools and credit, that makes businesses grow. He found that 9.6 million people were employed in this sector operating "extralegally" with no protections. This being the largest sector of employment in Egypt. His action plan was intended to remove the legal impediments to these people and businesses urban and rural, so that they could grow. He says the value of these businesses outside legal protections is $248 billion or 30 times larger than the total value on the Cairo stock exchange, and 55 times greater than all the foreign direct investment in Egypt since 1800 including Suez Canal and Aswan Dam. De Soto says that because of burdensome, discriminatory and bad laws it takes 500 days to open a small bakery, getting a legal title on a vacant piece of land would take 10 years of red tape. This barrier of bad laws, poorly trained bureaucrats, inertia of the status quo, prevents people from legalizing their property and business. As a result whereas one of these types of small businesses is now India's largest company called Reliance Industries, and another Infosys is the second largest software company, most Egyptian enterprises are stuck being small and relatively poor, and do not generate jobs for the demographic surge of young people. De Soto's point is that Egypt will need good leadership to pull off this task of legal reform, and democracy alone will not be enough. Empowering the large majority of the Egyptian people operating outside the legal protections will mean giving property rights for $400 billion of assets, De Soto says. And this would unlock an amount of capital hundreds of times larger than what foreign direct investment and aid has brought to the country....

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Olivier Blanchard, chief economist of the IMF says that as government borrowing around the world surges, interest rates will go up. Governments borrow by selling bonds to investors, and to attract investors the government competes with stock and corporate bond markets for investor's money, leading to rising yields for investors. As the confidence has returned to corporate bond markets this is already happening. From the end of 2008. the yield on the benchmark 10 year Treasury note has increased by one and ahalf percentage points, rising to 3.54% from 2%, the sharpest upward movement in 15 years. In Germany the yield on German 10 year bonds has also risen, rising to 3.57% from 2.93%. Similiarly British bond yields have risen to 3.78% from 3.41%. Congressional Budget Office estimates are that net government debt for the USA will rise to 65% of GDP at the end of fiscal 2010, from 41% at the end of fiscal 2008. In 2009 and 2010 the US government will sell $5 trillion in new debt, according to Citigroup. A decade from now the government's outstanding debt could equal 82% of GDP, or about $17 trillion. Every one point rise in interest rates costs the Treasury $50 billion annually over a few years, and Kenneth Rogoff estimates that this could reach $170 billion annually if the average yield on 10 year Treasury note goes up to 4.7%, as the Congressional Budget Office estimates. This will dampen the effects of stimulus spending. It is a big issue says Rogoff. A year ago under old policy and assumptions before the financial crisis the Congressional Budget Office projected outstanding debt at $5.3 trillion in 10 years. Now the estimate is $17 trillion, which is triple the old number and an increase of $11 trillion. A recovering economy would make these numbers less relevant. But with struggling industries like autos and banks needing more help from the government, and with consumers having to reduce a mountain of debt, a weak economy for a long time and small growth for a decade would make this a story that won't go away. Rogoff says its like what happened to the subprime borrowers, people assuming that the funding is always going to be there. In 2009 and 2010 Citigroup says, the Euro zone countries will sell nearly 1.6 trillion euros or $2.6 trillion in new debt, and Britain will offer 490 billion pounds or $799 billion in new debt. Over the next decade this would slow Europe's recovery and prolong the downturn. Britain faces a bigger problem in the near term as Britain's governmetn debt equals 55% of GDP, and Standard and Poors estimates it could approach 100% by 2013. South America and Eastern Europe will also face the situation of rising rates. Asian countries like China with lower levels of debt are in a better situation, IMF's Blanchard says....

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The WSJ Dollar Index tracks the U.S. dollar's performance against 16 other currencies. It surged by 12% in 2014 with a strengthening U.S. dollar. The rise in the dollar is likely to adversely affect the 15% of U.S. GNP that comes from exports and the $200 billion plus tourism industry in the U.S.

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Sudeep Jain provides a discussion of the policy tools India's new central bank chief, Raghuram Rajan, could use to stabilize the rupee. This includes, intervention in financial markets, sovereign bond issue, and further control of liquidity measures. The rupee stands at 61.80 to the U.S. dollar on August 6, 2013, after depreciating in 2012-2013.

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The Census Bureau reports that 46.2 million Americans were living in poverty in 2010. This is an increase of 2.6 million over 2009. This is the highest number of Americans living in poverty since 1958, when this statistic was first measured. Poverty is defined for 2010 as income at or below $22,314 for family of four. Also relevant is the median household income which went down to $49,445 in 2010, a decline of 2.3% from 2009. The typical household earned less in 2010 than in 1997, in inflation adjusted terms. The Census Bureau reports 16.3% of Americans had no health insurance coverage in 2010, the same as 2009.

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The BBC looks at the divisions left behind by the Brexit campaigns and the healing needed for Britain to look to the future. Prime minister Boris Johnson has called for healing divisions. What is meant by "healing," and what is needed to do the healing. To understand this one needs to know why people feel strongly. One of the dangers in describing people, places and regions as "Leave" or "Remain" is that no place is entirely one or the other. Even in the most pro-Brexit places as Lincolnshire a quarter of people opted for Remain. In London called a "Remain" city more Londoners voted to leave the UK than voted for the Remain supporting Mayor. New polling done for the BBC gives one a better understanding of core beliefs. The phrase "influences from other countries and cultures makes Britain a better place to live" was preferred by Remain voters. The phrase "Britain will be stronger in the future if it sticks to its traditions and ways of life" was preferred by Leave voters. Leave people were more likely to celebrate Britain's history, heritage, Christian tradition and national identity. What the BBC points out is that the two ideas are not exclusive. This is also suggested in the percentage of Leave and Remain supporting their core beliefs, which hovers around 50 to 55%. Part of the problem is the way politics is organized to be for or against, part of it from echo chambers and living in relative isolation from people with other ideas, sort of in different bubbles. This means getting everyone out of their comfort zone to embrace what they have "More in Common." Organizations and institutions need to work to bridge divides not only in Britain, but also in the U.S. and Europe, with more people to people interface and more of the conversation shifting to beliefs held "More in Common." Wanting to value one's own culture and traditions and wanting to be part of the global conversation are not mutually exclusive ideas. This is the key point, and a balance has to be found between continuity and change, between respecting traditions and grappling with change, and most importantly listening to unheard or neglected voices.  ...

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That Chrysler was pushing its new Dodge Ram pickup with a cattle drive through the streets of Detroit in January 2008, and GM and Ford were counting on new redesigned pickups to help them through the year shows how badly the three companies miscalculated the market and how costly it will end up being. The Big Three may end up being the Big Two as Chrysler depends even more on larger vehicles like vans, SUV's and pickups and sales decline is the highest on Chrysler vehicles in June, and Chrysler does not have the money to come up with a completely new product line like its competitors. It also does not have the overseas operations that are earning money. For all three companies its finance arms which used to bring in earnings now are at a loss especially as loans go sour and the resale value of pickups and trucks is in a sharp decline. See the Manheim US auction prices May 2008, source of graph Morgan Stanley.

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In May 2008 the Honda Civic takes the leader position with most sales for a brand passing the Ford F 150 pickup, Honda's Accord and Toyota's Camry and one other car probably the Corolla also passed the F150 in sales, as the sales of the F150 plunged by 33% in May. This according to figures from Autodata, an industry statistics firm. A lot of new things are happening which will change the face of the industry forever. Japanese cars outsold American cars in the American market for the first time with 48% of the market compared to 44% for the US carmakers. And American carmakers now see the changes that are taking place to be permanent. In a sense economics and public perceptions are doing what makes sense in a globalized economy and a global workforce and globally shared aspiratuions for a better life in rising middle classes throoughout the develping world. For Americans to drive around in gas wasting vehicles was riding against the face of scarce energy resources being used in the best possible manner around the world to meet the aspirations of a global workforce of global companies. IBM now has as many or more people working for it in other countries and a huge number in India, how can scarce energy resources be used to meet in the best possible way to meet the aspirations of all of IBM's people, or for that matter the people of any other global company? Its only by Americans shifting to smaller cars and fuel conserving cars that this could happen. ...

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Government bonds will be purchased by central banks of each country roughly in proportion to the size of their national economies in the eurozone. Risks for 80% of the purchases of bonds in the $1 trillion program will be borne by the central bank of each country. For 12% of the remaining bonds purchases will be made in the European Investment Bank bonds, here risk will be shared with the ECB. For the remaining 8% the ECB itself will make bond purchases. This avoids a situation where the risk of bonds going down in value is borne by that country and not passed on to other countries in the eurozone, as a matter of fairness in distributing risks. This also limits moral hazard where painful budget decisions are not made by countries in need of budget overhauls because risk can be passed on. A big reason why this can work in 2015 is that the eurozone has already emerged from the crisis period of 2012-2013, and is beginning to experience growth in 2015. Just this kind of boost to lending was provided by the U.S. Federal Reserve when the U.S. emerged from its crisis period in 2009-2011, and helped the economy grow in 2013-2014....

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U.S consumer spending declines by 0.9% in Dec. 2014 over the prior month, according to the Commerce Department. Consumer spending was up in Nov. 2014 by 0.4%. Excluding auto sales and falling gas prices the Dec. 2014 decline in consumer spending was 0.3%. This shows that consumers are saving most of the money saved as a result of gasoline at about $2 a gallon, or using it to pay off debt. Analysts had estimated a significant increase in retail spending which turned out not to be happening.

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Experts at Stanford Law School say the fewer IPO's expected in coming years will be a good thing as it reduces the boom and bust cycles in tech and internet IPO's of previous years. New technologies enable firms to reach breakeven at a much earlier stage with smaller investment- using founders money and capital from angel investors and less reliance on venture capital- so that companies can focus on the long term. The result will be fewer jobs created in investment banking and more in other places.

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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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Portfolio manager Robert Arnett, who manages two of PIMCO's funds, has some alarming things to say about the environment retirees face in the future. In ten years for every working age person added to the workforce there will be 10 new retirees, the complete reverse of what it was ten years ago when there were 10 new working age persons for every new retiree. The impact of this will take the shape of many more retirees selling stocks and bonds to live on and fewer buyers for the bonds and securities, lowering the prospects for higher prices for bonds and securities. He expects the demand for goods and services to continue with higher prices. He sees stocks giving a nominal return of about 5%, bonds a nominal return of 2-4%, for a balanced portfolio yield of about 4%, during the next 10-20 years. After inflation and taxes the returns will be very thin. Expectations of 10% returns do not take into account deficits, debt, and demography in developed countries, says Arnott.

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The bleak situation for Americans facing retirement as most people age 65 are likely to outlive their savings. The median financial net worth of an American household is $10,890, according to work done by Edward Wolff, an economics professor at New York University. This estimate is based on 2010 Federal Reserve data updated for the movement in market indexes. Even the ten percent of Americans who have saved $1 million will have difficulty as a 2% withdrawal rate would provide only $20,000 to supplement Social Security income. Earlier generations of Americans could depend on income from bonds. In today's low interest rate environment, the benchmark 10 year Treasury note is at 2.2% in 2013, bonds will provide only a fraction of the income generated in earlier periods. Stock markets are volatile and pose additional risks for seniors in retirement.

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U.S. Federal Reserve chairwoman, Janet Yellen, says the Fed's promise to be "patient" before raising interest rates means it will hold off for 2 months to check economic conditions before taking action. This would put the decision off till June 2015. The Fed will look at a range of factors including inflation, says Yellen. Yellen's comments to the Senate Banking Committee on Feb. 24, 2015 were- "I don't want to set down any single criterion that's necessary for rate increases to occur. We will be considering a range of evidence that pertains to the inflation outlook." In testimony Yellen said she wanted to be "reasonably confident" that inflation will return to 2% before raising rates. The Fed's measure of inflation, Commerce Department's personal consumption expenditures price index is below the 2% inflation target of the Fed for 52 of the past 68 months, and for 34 consecutive months.