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Reinhart and Rogoff say it takes over 7 years for the economy to recover completely from financial crises. This is the lesson from other financial crises in the last century. Economic contraction lasts about 2 years. Housing prices from peak to trough takes about 6 years. Unemployment takes longer to heal in developed countries. Unemployment goes up by about 7 percentage points, and increasing unemployment lasts an average of 5 years. And the debt that builds up from lower tax revenues and more spending needed in stimulus acts to slow growth. The big message from other crises studied by the two American economists is that debt tends to go up by about 85% in real terms during the first 3 years of a banking crisis. They says this means an additional $8-9 trillion for the U.S. A key point they make is that restructuring is necessary for the financial system, and the U.S. needs to allow financial institutions to be restructured through accelerated bankruptcy, temporary receivership, and only afterwards recapitalizing and reprivatizing....

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Carmen Reinhart formerly at the Federal Reserve, says after a severe banking crisis it takes about 4 years to see a return to normal growth. With the current crisis having other facets like the overextended consumer intertwined with banking crisis, it is likely that it would take this long. He cautions business not to be overoptimistic.

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Paul Ryan brings an inclusive stye to his job as Speaker of the U.S. House of Representatives. He has shown a sharply different approach to his predecessor Boehner who preferred to keep matters close to himself and his inner circle. Ryan has put drafting legislation into the hands of members of the House, organized meetings where moderate Republicans get to meet conservative Republicans so they can agree on common goals, shared information with Republican members on meetings with Democrats, and communicated with the media at frequent intervals to keep the public informed. The approach is welcomed by Republican members of the House after the divisions and disagreements under Boehner.

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Saudi inflation went up by close to 9% in February, from January's 7% figure. Rents increased in February by 18% and food costs by 13%. The peg of the Saudi currency to the dollar accounts for 35% of inflation. Saudi peg is at 3.75 riyals to the dollar. The Saudi Monetary Agency cut interest rates 0.75 % in line with the Federal Reserve to maintain its peg, even while the Saudi are pouring money into construction of new cities in the desert and building new refinig and aluminium plants so the liquidity in the economy gets a further boost from lower interest rates when it does not need one. And the lower rates will only create more pressures on inflation in addition to those already present from all the money the governmet is spending from increasing oil revenues.

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Duncan Moore of the University of Rochester points out what makes Pittsburgh, San Diego and Rochester different from Detroit, Cleveland and Fresno. The investment in the local community, large universities and the research money they bring in, the small businesses using advanced technologies and connecting with the universities, have helped these communities thrive even when a dominant employer or a dominant business has suffered decline. In Detroit's case it is also learning some of these lessons- the areas around Detroit such as Dearborn are recovering with the recovery of Ford Motor Company, and the University of Michigan in Ann Arbor is a major research hub with large federal funding, the Fiat engineered recovery at Chrysler is also giving new life to the region.

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John Frisbie, president of the US-China Business Council, says the single most important issue over the last year for the council's members is China's innovation policies and how they link to government procurement. Concern about China's "indigenous innovation" policy.

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The Obama administration's foreclosure prevention programs were designed for subprime lending situations. They were not designed for the high unemployment experienced in the U.S. A Treasury Department effort allows jobless people to postpone mortgage payments for 3 months, the average length of unemployment however is 9 months. Only 7,397 participants are in this program. As part of the bailouts Treasury had $46 billion to spend to prevent foreclosures, as of May 2011 Treasury has spent only $1.85 billion. Because housing provide so much of the underpinnings for the U.S. economy, it is essential to put housing back on a stable footing for an economic recovery. The lack of a sensible plan in this area is simply incomprehensible. Morris Davis, a former Federal Economist, has estimated that a million more homeowners went into foreclosure because of a lack of help for the unemployed. Davis is an associate real estate professor at the University of Wisconsin. He says its simply outrageous that the Obama administration has done so little. President Obama recently took credit for a recovery and jobs saved in the auto industry in Detroit. The failure to come up with a workable plan and to do so little in the larger area of housing and unemployment, is likely to overshadow everything else. This is especially so with the Fed approaching its limits after QE II, and with the administration and the Congress in a stalemate over further stimulus and the deficit....

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After overly aggressive bank lending following the financial crisis of 2008 China is now badly overextended. China has also learned from the U.S. experience about the risks inherent in growth generated from a credit boom. In 2009-2010 China was also getting less bang for the buck in terms of the increase in lending needed to generate growth compared to earlier periods. Orlik says don't expect China to help the global economy the way it did in 2009-2011, and that there is no Plan B for China.

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The uncertainty generated by the "fiscal cliff" in the U.S. is hurting the U.S. economy as businesses hold off on investment and hiring.