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The IMF report on Italy in July 2012 says Italy faces another year of recession. Debt as a percentage of GDP is expected to reach 126% in 2013. One bright spot is that Italy is expected to post a primary surplus by 2013- that is government revenues will cover promised services, excluding interest payments on oustanding bonds of $2 trillion. Because of the recession small shocks could change the outlook says the IMF, and it emphasized the importance of the changes being made to the labor market and for improving competitiveness. These changes need to be implemented early because of elections expected in spring 2013. A key concern is borrowing rates which are near 7% for Italy and Spain. The European Stability Mechanism, the rescue fund, was authorized to make purchases of Italian and Spanish bonds in the June 2012 summit. The ESM becomes operational in the summer of 2012, after the German Constitutional Court makes its ruling about it being legal and after ratification by national governments....

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Inflation in Britain falls to 0.5% annualized rate in December 2014. Bank of England Governor Mark Carney says this is good for British consumers as long as this does not become generalized. Food prices and utility prices are stable. The services economy which makes up 77% of Britain's economy shows inflation of 2.3%, and unemployment is at 6%, making it less likely that this would become generalized. With lower oil prices inflation could fall further.

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Japan's Business Federation Keidanren chairman, Sadayuki Sakakibara, says he "expects companies to make aggressive action" to increase wages. Keidanren says wage increases of at least 2.2% should be given. Prime minister Abe attended the new year's eve party hosted by Japan's three business lobbies and asked business leaders "to make a brave decision, when can you take action if not now?" Bank of Japan chief has talked to corporate leaders asking for wage increases. He also visited the new year's eve reception of the Japan Trade Union Confederation, as a way of supporting labor's demands for higher wages. BOJ's target is for 2% inflation, and Kuroda says wage movement is critical. About 17.5% of the total workforce are union workers at large companies who are affected by union-company wage negotiations in spring. Non-regular workers make up 38% of the workforce, and the wages for this group also need to be raised to have a serious impact on overall wages.

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Marie Le Pen and the National Front performed very poorly in French elections. Perceptions of voters are changing. The efforts in tackling the coronavirus, effective vaccination drives, public health protection, and building access to vaccine supplies, have shown the need for good leadership that believes in a science driven direction. Immigration is no longer the issue it once was and in some polls it is seventh on the list after climate change, economy,  education, pensions. The National Front in France and AfD are losing regional elections and popularity is dropping to about 10%. The Greens party in Germany and the Gaullist Republicans in France are being revitalized. Other factors are also present. The search for authenticity and effectiveness. After dismissing a popular prime minister who tackled the health crisis in 2020 France's president Macron fared badly in recent regional elections. His party En Marche was hastily put together in the last year of the administration of Mr. Hollande, the predecessor from the Socialist party. Its initial popularity has not turned into grassroots support. Mr. Hollande, Mr. Macron, are now seen as one term presidents. It is not so much that the centrist parties are gaining as a search for parties that can provide effective alternatives in the face of the challenges placed on the world by the pandemic- renewal of supply chains. climate change, public services, infrastructure, health, education, lives of the elderly. In the US, Europe, and India, countries in Latin America, there is a growing awareness of the need to rebuild with the people in mind, the people who have suffered badly in this health crisis and the financial crisis that preceded it in 2009. ...

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Eric Bellman's intervew with Rajiv Lall, chief executive officer of Infrastructure Development Finance, India's largest infrastructure financing company. Lall says the conditions are right for power development to be the next telecom of India's growth story, with some of the same impact that telecom has had bringing mobile phones to hundreds of millions of people in India. IDFC expects 20% growth in net profit in 2010 and 30% in 2011.

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After years of rapid growth and rapid rate of credit creation China's economy is stalling. Each $1 of new credit generates only 17 cents in GDP growth, according to Bloomberg. This compares with 83 cents of GDP growth for each credit dollar in 2007. Local governments cannot find projects that are worthy of investment. Financial repression with low interest rates for savers is further depressing consumer spending when it is needed to rebalance the economy away from exports.

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Faces of the U.S. unemployment, foreclosure and housing crisis in Hagerstown, Maryland, in 2011.

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Alan Reynolds of the Cato Institute questions the value of QE II when it pushed up commodity prices, lowered the value of the dollar, and acted as an anti-stimulus by slowing growth in the private economy.

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The military and the old order in Egypt, including the lack of an imaginative Muslim Brotherhood party, remains a stumbling block for Egypt's return to democracy and the constructive channelling of the people's energy.

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Clive Crook points to the dangers of complacency in 2010. He reminds readers that the critical thing is as Charles Goodhart mentioned in the Financial Times, that capital and liquidity requirements must be time varying and strongly anti-cyclical. He points out that in good times when lending is expanding quickly and financial institutions are least concerned about capital, liquidity requiremets must tighten, something that is not happening under current rules. Repairs in areas of "too big to fail", separating investment banking and commercial banking, and others, will not succeed unless this principle is adopted. And this he says will be opposed by financial institutions because it reduces their growth. But this fight has to be won. It goes back to William McChesney Martin's idea of taking away the punch bowl before the party gets going.

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Malpass call sfor astrong dollar policy as the way to prosperity for the US, at atime when other countries are looking to promote domestic consumption for growth by having stong yen in the case of new Japanese policy and a stable but stronger yuan in the case of new Chinese policy. With high levels of debt is easier for the US government to let a weaker dollar reduce the size of its debt, but ith has other bad consequences in promoting jobs and growth in the domestic economy.

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With the effects of the government tax credit fading, Commerce Department numbers show a 33% drop in sales of new single-family homes from 446,000 units in April to 300,000 annual rate in May 2010. The supply of homes for sale went up by 47% to 8.5 months in May from 5.8 months supply in Aprill 2010.

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Obama says oil sand leave a big carbon footprint in his interview with the Canadian Broadcasting Corporation, just before his visit for talks with Candian Prime Minister Harper in Ottawa, Canada. The talks will focus on climate change, whether the oil sands can continue to be exempt from regulation, and other issues including a "Buy America" provision.