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Brazil's GDP increased by 0.34% for the 4th quarter of 2011 from the prior quarter. For the full year GDP increased by 2.7%, with an actual decline in GDP for the third quarter of 0.1%. The GDP growth for 2010 was 7.5%. The slowing economic growth reflects an overvalued currency, weak manufacturing competitiveness, and inflation. Brazil's growth will be lower than potential say analysts, and it will be tough to get to even 3.5% growth in 2012-2013. A similiar process is seen in other emerging markets. China's premier Wen Biao announced lower growth targets of 7.5% and a shift in priorities recently. And India's growth rate for 4th quarter, 2011, was 6.1%.

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Fitch Ratings downgrades Brazil's bonds to double-B-plus in Dec. 2015, a junk rating from an investment grade rating. The yield on Brazil's 10 year benchmark dollar denominated bond increased to 6.97% from 6.7%. Other emerging markets such as Turkey and South Africa now expect ratings downgrades in 2016 as the U.S. Fed raises interest rates. Standard & Poors downgraded Brazil's sovereign debt to junk status in September 2015. GDP in Brazil declined 4.5% in the third quarter of 2015 from a year earlier. Brazil's currency, the real, declined by 32% in 2015, making it harder for companies that borrowed in dollars to pay off debts. President Dilma Rousseff is facing impeachment proceedings following a corruption scandal at Petrobras.

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Declining manufacturing wages in the U.S. and the return of manufacturing jobs. Indiana's experience with new manufacturing plants.

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Jack Hough points to other important factors that affect the Dow Jones Industrial Averages and the S&P 500 Index. The quality of earnings, the relationship between wages and corporate earnings, and macroeconomic factors, all affect the level of the indexes. The historical average of wages relative to earnings would leave shares at 24 times earnings says Hough. This would mean a further decline of 40%. As U.S. companies earn more of these profits overseas compared to the past, they could sustain a higher level of earnings relative to wages says Hough, but this may not be the level at which they are today. In Hough's view the earnings numbers are made to look better than they actually are, which should be taken into account. He does not mention macroeconomic factors which add to the volatility, and policy decisions which create higher levels of uncertainty affecting decisions on consumption and investment in the economy.

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About 400 million or one in 4 people people smoke in China. State ownership of the tobacco industry only makes this worse. Enforcement of bans on smoking is lax. Experts warn that this would become a major healthcare problem in China.

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The Saudi government announced sharp cuts in spending and subsidies to cut the deficit in 2016. The deficit in 2015 was about $98 billion or 367 billion riyals , according to Al Arabiya Saudi news channel. In 2016 the budget is designed to cut the deficit to $87 billion or 326 billion riyals. The 2016 budget is for 840 billion riyals, compared to 975 billion riyals in 2015. Saudi Arabia's foreign exchange reserves of $640 billion could be exhausted at this rate by 2020, experts say. Actions being taken by the government include increasing the price of some grades of gasoline sold domestically by 50%, as subsidies are being cut. The drop in oil prices to about $35-$40 is hurting Russia, Saudis and Venezuela. The Saudis have increased defense spending for conflicts in Yemen, and in other areas, as they oppose Iran and Russia in the Iraq- Syria conflict.

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This WSJ editorial in September 2014 describes the Russian threat to the NATO alliance and the nations bordering Russia in Eastern Europe. This follows the Russian army's intervention in the Ukraine-Russia border regions in the end of August and early September 2014.

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Caterpillar is asking workers at its Canadian plant to accept a large cut in wages and benefits. Wages and benefits at Caterpillar's rail equipment plant in LaGrange, Illinois, are less than 50% of the costs at the Caterpillar locomotive assembly plant in London, Ontario. According to the U.S. Bureau of Labor Statistics U.S. manufacturing labor costs per unit of output were 13% lower in 2010 than in 2000. This compares with an increase of 2.3% in Germany, increase of 18% in Canada, and increase of 15% in South Korea. Caterpillar is also asking for more flexible work rules at the Canadian plant. The flip side of this is that U.S. workers are earning significantly less in manufacturing, especially considering inflation, and the middle class is shrinking in the U.S. At the same time wages in the U.S. that are more competitive with wages in Mexico and China with flexible work rules and use of automation and technology, is helping to reverse the shrinking of the manufacturing sector in the U.S....

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Sharp drop in oil prices in Dec. 2015.

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Kenneth Rogoff of Harvard University, expert on debt crises, and author of "This Time is Different," says China is one of the best examples of the idea that this time is different, with the idea created that somehow China was impervious to the massive build up of debt. The debt is now over 250% of GDP, and this was possible for so long because of the high savings rate of 30% of disposable income and the millions of young migrants moving to cities to work in manufacturing. The growth of shadow banking, opaqueness in decisionmaking, unreliable data, use of local government financing vehicles, the bubble in housing with a large portion of loans tied to the real estate market, all combine to create serious problems that will take a long time to sort out. Rogoff says the crisis in Tianjin with the deadly explosions in the port area, and the government's inability to provide answers to questions from a alarmed public, only added to the uncertainty and loss of credibility. Rogoff says he hopes the trillions of dollars in reserves will provide China with the tools adequate to tackle the debt problems before they spread to other countries....

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Francesco Gurrerera, Money and Investing Editor for the WSJ points to the risks in the U.S. and global economy in April 2012- overdependence on the U.S. Federal Reserve and the European Central Bank, not enough "de-leveraging" of financial institutions after the 2008 global crisis, and the increasing risk associated with individual investors and businesses investing in risky securities in search of yield in a low-interest rate environment.

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Russian president Putin tells Russians at an annual news conference on Dec. 17, 2014, that the West wanted to deprive Russia of its natural resources. He says steps taken by the central bank and his administration were proper, including avoiding capital controls, except that the decision to raise interest rates to 17% in mid-Dec. should have been taken earlier. He deflects criticism that the sanctions and the decline in the ruble were "payment for Crimea" (Russia's takeover of the Crimea) by saying it was "payment for our independence, our sovereignty." Putin expressed unease with the expansion of NATO to Russia's borders. He told Russians to expect that the crisis will last for 2 years and during this time the Russian economy will adapt, in particular shifting its heavy dependence on oil exports. During the 10 years of the Putin administration since 2004, Russia has not made a vigorous effort to diversify away from oil dependence. Progress was made primarily in better integrating the economy with the European Union, entry into WTO, building a sovereign reserves fund, until the crisis in Ukraine. The Putin years may be seen in the future as the transition years towards a more diversified economy, and may lead to a shift away from the kind of management of economic and foreign policy by a single leader that may have led to the disruption in relations with Germany, a critical economic partner for Russia. Chancellor Merkel said Germany would continue to support sanctions as long as Russia opposed the right of self- determination of people in Europe and European values. Germany continues even now to maintain dialogue with Russia through Social Democrat Foreign Minister Steinmeier, which is why Putin continues to refer to it as "our partners" and cites the differences with our partners, very different from the Cold War period when no such close relations with Germany existed. ...

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U.S. exports reached $2.34 trillion in 2014, increasing by $760 billion over the figure in 2009, according to the Commerce Department. Exports accounted for one third of the U.S. economic growth since 2009, say Pritzker and McNerney. Goods and services for exports supported 11.7 million U.S. jobs in 2014, and a Commerce Department 2010 paper shows these jobs pay 18% higher than jobs unrelated to exports. Commerce Department Secretary Pritzker, and McNerney, chairman of the President's Export Council, say free trade agreements and investment by private business is critical to supporting export promotion, but make no mention of the effect of the stronger dollar on future exports. In a period of a few months in 2015 the euro is approaching parity with the dollar and the yen is now 120 to the dollar, giving European and Japanese business a significant advantage, and raising questions about the strength of the U.S. recovery going forward.

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Crude from Canada's Alberta oil sands brings about $65, a large discount from the $115 for Brent crude and the $97 price in the U.S. The increase in U.S. oil output is causing a surplus in the U.S., reducing demand for Canadian crude. The lack of enough pipelines to bring this crude to the U.S. also affects prices. The $50 discount to Brent crude affects Canada's oil revenues and economic growth. Canada's central bank cut the growth rate forecast for 2013 to 2% from 2.3%. This is also likely to weaken Canada's currency.

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GDP growth in the eurozone was 0.3% for the 4th quarter 2014. For 2014 eurozone GDP growth was 1.4%, according to Eurostat. Growth in GDP for Germany was 0.7% for the 4th quarter and 2.8% for 2014. Retail sales in December were particularly good in Spain and Germany, with sales up 2.8% for the eurozone over the prior year. Italy's GDP growth was stagnant and France's was 0.1% for the 4th quarter, showing that Germany and Spain are leading the way for eurozone recovery.

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Bolivia's economy showed 6.5% growth in 2013 and the portion of the people in extreme poverty has dropped from 38% in 2005 to 24% in 2013. Policies of president Morales are winning praise for being prudent from the IMF and the World Bank. A greater share of the revenues from natural gas production and high natural gas prices, Bolivia's main export products, has enabled the government to build international reserves to $14 billion. This is half the country's GDP, and the highest ratio of reserves to GDP in the world. Morales has adopted socialist policies and at the same time provided fiscally responsible management, showing the two are not inconsistent and can be adapted to local conditions to build a middle class and improve living conditions.

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Chancellor Merkel visits Latvia in August 2014 and calls for a "persistent NATO presence" in the Baltic states. Merkel also visits Ukraine for talks with Ukrainian leaders. Germany is also mediating in the crisis and helped to arrange a meeting between Russian president Putin and Ukraine president Poroshenko in Belarus.

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Mikhail Gorbachev calls the Russian parliament Speaker Sergey Naryshkin's idea of looking into the reunification of Germany as an annexation of East Germany, a form of "nonsense." This was originally stated by a Communist member of the Russian parliament Nikolay Ivanov, who sees this as "a retaliatory step" to Chancellor Merkel's criticism of the annexation of Crimea. Merkel said at the Davos forum- "The annexation of Crimea is a violation of something that has made up our peaceful coexistence, namely the protection of borders and territorial integrity." Merkel and Putin now have profound differences. Putin sees the world of Russia in terms of its relations with border states such as Ukraine, the Baltics and Poland in terms of the Soviet Union and Czarist Russia's influence in Eastern Europe, as a part of Russia's legitimate interests. Merkel and Germans see it differently, with the collapse of the Prussian military state and Czarist Russia, and the collapse of Nazis and the Soviet Union, in succession, Germany is fully committed to a new view of relations between states in Europe based on democratic processes, respecting the views of people in Kiev to decide their own future. This reflects a new mood in Europe with increased funding for Deutsche Welle, Germany's broadcasting service to the world, in response to increased broadcasting by Russia Today, Russia's news service....