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Bloomberg View says it is important for the living wills for U.S. banks that are "too big to fail" to be ready by the end of August 2011. This is required under the Dodd-Frank legislation. The living wills are designed to provide the government and the FDIC with an orderly pathway for winding down the business of a bank. On August 8, 2011, when the Dow Jones Averages dropped by 634 points, shares of Bank of America and Citigroup led the decline. Bloomberg points out that investors think Bank of America's net worth is only one third of what the bank claims, and for Citigroup this is less than half. Investors view the stocks of these banks as risky because they are likely to need to raise fresh capital and this would dilute the value of existing shares.

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The terms of the Greece bond deal with private bondholders of March 2012, in which Greece's bondholders (mostly French and German banks) took about 53.5% loss from the face value of exisiting bonds. The deal was accomplished through a swap of new bonds with extended maturities of 10-30 years for bonds with shorter maturities and by reducing the face value of the new bonds.

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The Indian government's chief economic advisor, Kaushik Basu, says the opening up of India's retail sector would have benefitted everyone including middle traders. This would happen because the retail sector would go through a vast expansion creating room for more players even though the per unit margin from products would go down. Experts say the infusion of new technologies and investment in India's supply chain and cold storage setup would help reduce food prices and inflation. Basu made the comments at the launching of the New Oxford Companion to Economics in India in Feb 2012. Basu is co-editor and it has contributions from Ratan Tata, Pranab Mukherjee, and Nandan Nilekhani.

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Reited Gen Gantz appears to be the likely head of a new government after winning the most seats in parliament. Policy towards Iran is not likely to change. But a Gantz led government is likely to reduce the divisiveness in the country, and provide a more unifying effort in Israeli society. The role of religious groups in daily life would also be held back. Better relations with Jewish people in America would result and peace negotiations with Palestinians would be encouraged. The prime minister would concentrate less power in his hands. By temperament Gantz is a quiet leader who preferred not to engage in the back and forth attacks in the election campaign even when Mr. Netanyahu  did not hesitate to do so. As the head of the military from 2011 to 2015 he also has the confidence of people in Israel looking for a new start after a long period of Netanyahu rule. The current prime minister could be indicted soon after a hearing next month on charges of bribery and fraud. Mr. Trump has said that U.S. relationship is not with any leader but with the country Israel. Gantz makes it clear after Netanyahu's style of politics has rocked Israel for many years- "We will bring about a real change in priorities, and heal Israeli society in all its parts." Mr. Gantz has said that he think the Obama administration could have done more in securing a better nuclear deal with Iran. Yet at an event in 2015 when the deal was being set, Mr Gantz said he also saw "the half full part of the glass." That the deal would keep Iran 10 or 15 years from making a nuclear weapon "with the right price." At this juncture in world affairs this is important because Mr. Trump has shown flexibility in dealing with Iran following the firing of National Security Adviser Bolton. Trump held back on a response at several points during the attacks in the Straits of Hormuz and the taking of ships hostage by Iran and the UK. The attacks on Saudi oil facilities and the difficulty of protecting oil installations in the region, Iran's increasingly difficult position under tight U.S. sanctions and pressure on Asian buyers of Iranian oil to cut back purchases, the efforts of Japan and India dependent on Saudi and Iranian oil to reduce tensions, all point to a new policy in the region with a new Israeli government playing a useful role to keep policy control in the hands of Asian countries dependent on oil supplies for their economies, and in the hands of a U.S. president better informed about a policy course that is in U.S. interests of avoiding unnecessary engagements overseas when there are other pressing priorities. ...

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A new generation of younger leaders takes over at the European Central Bank under Mario Draghi. Belgian economist Peter Praet succeeds Peter Stark of Germany in the Economics Department. Portugal's Vitor Constancio is vice president. Jorg Asmussen, 45, from Germany is on the ECB executive board, so is Benoit Coeure, 42, from France, and Klaas Knot, 44, from the Netherlands. Asmussen will head the ECB's International Division. Jens Weidmann,43, is the new head of the Bundesbank. The result experts say could be a reorientation of the ECB's outlook away from the rigid anti-inflation stance of Draghi's predecessor, Claude Trichet, and a willingness to try new approaches to help Europe tackle this recession.

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Prime minister Renzi of Italy resigns after defeat in a referendum to change the constitution. Renzi had said he would resign if there was a "no" vote on constitutional changes to make it possible to pass further reforms. The results show the "yes" vote with about 41% of the vote, and 59% saying "no." About 65% of 47 million registered voters voted. The referendum called for cutting the size of the upper house Senate eliminating some constitutional bodies, and increasing powers at the federal level. Renzi may have made the mistake of making the vote for or against constitutional change a vote for his democratic left party, and not understanding the depth of public skepticism of established parties. Parties such as 5 Star M5S  have appealed to a public skeptical of how economic reforms would help bring more prosperity to the middle class, and a desire to try out new options. Virginia Raggi of M5S was elected mayor of Rome recently and Renzi's referendum move similar to the way prime minister Cameron moved for a referendum on an old issue of euroskeptisim, may have failed to grasp grassroots changes. The irony is that in 2014 elections to the European parliament Renzi's democratic left party won 40% of the vote and was seen at the time as a success, and the same size vote in the referendum is seen as a failure. In a referendum all other parties votes are added together from right to left parties and new parties. In the Brexit vote the Labor party "no" vote including Labor voters who never voted added to the votes of Brexit supporters and the newer UKIP party giving Brexit the slight edge needed. The singular feature of the trend is that working class voters are combining with right leaning voters to upset established parties, in the midwestern U.S., in the north of England, and in the north of France. In the medium to long run this means the left parties are likely to move to realign themselves with their base of support. ...

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The tensions that exist in Australian society, as a result of the large Chinese investments and imports of infrastructure building commodities such as iron ore, natural gas and other commodities. Australia's Pilbara region in the northwestern part of the country, has become one huge quarry for China, as an estimated 1 million tons of iron ore raw material is loaded onto 2 story high trucks each day- with automated driverless trucks system being implemented- and shipped by 2 mile long trains to waiting ships on the coast. Australians remember this done on a smaller scale in the 1980's by Japan. At the time Japan brought in Japanese workers. The same is true today but on a bigger scale, with China bringing in workers with lower pay. The concern now is what it was then, as one local leader put it- are we going to have towns with mines or mines with towns, he asked. The mining companies are looking at it purely as a commercial venture, and not investing in the towns. The towns now fear they will find the boom times gone someday and nothing tangible to show for it, no schools, hospitals and no infrastructure. And because the mining project companies fly people in and out, the 8000 aboriginal people in Pilbara- the original people of this land- see little of the mining expansion's benefits. Wandoan, a small place with 300 homes in the outback in Queensland, in eastern Australia, is an example of the gut wrenching change taking place in the mining areas. The lives of the people from the local pharmacy, the local supermarket, and the local ranchers, depend on the mining decisions made in China. This area was part of a planned, on again off again, $6 billion coal mine -part of a A$150 billion complex of natural gas and coal projects for exports to Asia in Queensland- and involved Xstrata buying 70,000 acres of the best grazing land for 7 coal mines. With the locals selling off, the mining uncertain, the supermarket closing, the whole town has the feeling of being up in the air, and fading out someday. Australian public sentiment recognizes this feeling, and at the same time is ambivalent about the impact. Polls conducted by the Lowy Institute for International Policy, show 73% of Australians feel Chinese economic growth has a positive impact, and at the same time 57% feel that there is now excessive Chinese investment, and 46% feel China will be a military threat in 20 years. Australians remember the same feeling about Japan's investments in raw material sources in the eighties. In 1988, polls then showed 70% of Australians saying there was too much Japanese investment, even though they also recognized that Australia had benefitted. The difference now is that there are also fears of China's influence, and foreign investment guidelines limit investments in Australian mining companies to below 50%. China's investment in Australia's natural resources comes in several ways: in the year upto July 2009 A$42 billion in export demand, A$3 billion in direct investment in Australian companies, and about A$5 billion in project financing. Iron ore sales to China amount to A$22 billion each year, and about one fourth of Australia's exports went to China, growing at a rate of 31% in 2009. According to the chief economist of Austrade, the government trade organization, Australia benefits from the economic relationship with China- this adds A$3,400 per year to every Australian household. Efforts to use some of the profits made by mining corporations for infrastructure and other public purposes, by increasing the mining tax have failed; as the mining industry launched a campaign against the government of Kevin Rudd, who was removed from office by his party. In the recent national elections, the ruling Labor party lost its majority, after losses in the resource rich states of Western Australia and Queensland. In the meantime the Australian currency has become the currency used by currency speculators who cannot use the yuan to make a bet on the currency- as the yuan is pegged to the dollar- and instead use the Australian dollar as a proxy. This makes it volatile, with the Australian dollar losing 10% of its value in a single day, when pessimism increased about China's growth forecasts. It also shows how much of the good story of employment and gdp growth in Australia is tied to the story in China, and the extent of the negative impact a reversal in this area can mean for Australians; especially now that the bad debt in the post-2008 explosion of bank lending poses risks to China's banknig system. ...

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Friedman describes how the farmers who left the rural areas in search of work and settled outside Aleppo and other towns after a severe drought were radicalized by the lack of help from the Assad regime. About 800,000 people migrated from their farms in the countryside to cities in Syria, and settled outside the cities without help and basic services from the Assad regime. When the call for democracy came they were the first to join the protests.

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Protests in Egypt follow the protests in Tunisia against decades of one-party rule. The lack of freedom of expression in Arab countries as government and politics are controlled by the same party and leader for decades.

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The World bank president Robert Zoellick in an interview with Sudeep Reddy of the Wall Street Journal. He says its frustrating to see Europe respond to problems in banking, sovereign debt and competitiveness that have a chance to work, but only to find that the action is a bit late and a bit short every time. He says the Germans are right in insisting that credit cannot be given away freely, and that reforms have to be made. Yet these reforms in the case of Spain and Italy to increase competitiveness will take time and in the meantime both countries will need bridge financing. A direct recapitalization of European banks by the European Financial Stability Facility is needed to avoid this slow and continuous decline in confidence from negative news and uncertainty. Because the problem now is of a longer term nature with debt issues that will take time to resolve and energy price volatility, Zoellick says simply doing short term stimulus and monetary will not work, and a longer term plan needs to be implemented. Zoellick supported the China Development Report of the World Bank and China's DRC which called for a shift in the economy away from reliance on state owned companies and heavy infrastructure spending. Here he says the new stimulus plan for China was necessary because of slowing growth. Yet he hopes China's leaders keep this in mind as they develop solutions for the long term that avoid the rampant credit expansion and investment of the 2008 Stimulus, and come up with a new policy mix....

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Three million additional Americans get access to Medicaid as a result of the Obama Healthcare Law (Affordable Care Act). Under the law states could expand Medicaid to people less than 65 years old with income of 133% of the federal poverty level of $15,521 for individual or $31,721 for family. About half of U.S. states expanded Medicaid and the rest kept the prior income guidelines. The figures are from a report by the Centers for Medicare and Medicaid Services, which show 58 million Americans on Medicaid in third quarter of 2013, and up to 61 million in March 2014.

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All the danger signs are flashing red says Prof. Simon Johnson of MIT's Sloan School of Management, as Citigroup stock loses 26% on November 20, 2008 and 50% of the stock's value in just 4 days. The fear is that Citigroup faces still bigger losses as home mortgages, credit card loans, commercial real estate debt all deteriorate further in a deep economic downturn, and that Citigroup will need large sums of additional capital from the government. There is similiar to the Detroit auto industry executives and public opinion a big gap in how Wall Street investors and Citigroup executives see the company's situation.

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How short sellers target Citigroup and work havoc with its share price losing half its value in afew days. The need for reinstating the uptick rule but a mystery that no action has been taken. And Paulson scores himself as a ten from 1 to 10 in a question from Alan Murray at the WSJ CEO Council, even as lack of comprehensive action on foreclosure prevention, the failure to reinstate the uptick rule, and time lost in the debate in Congress and afterwards over buying up toxic assets, remain a mystery.

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JP Morgan CEO Dimon, says the lack of enough worker training is hurting the U.S. with unemployment one or two percentage points because of this. The lack of enough training efforts by business and government to add technical skills to workers existing skills is resulting in many jobs going unfilled in manufacturing and other fields.

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Sinn Fein is very different today from what it was decades earlier as the political wing of the Irish Republican party. When Ireland became independent Britain retained a third of the country as part of the UK as Northern Ireland. Sinn Fein's goal was to reunify the country.  It is popular today along the border and in regions struggling with poverty, including rural areas. As a left of centre party it is unique in Europe as both the main parties are right of center. Housing is an issue for Sinn Fein because it is the first to call for government to play a role in building new housing to tackle a severe housing shortage. With social policies that include government involvement to support social programs, Sinn Fein is likely to be the largest party winning 25% of the votes, with Fiana Fail the current party getting 24%,  and Fine Gael 20%. Yet rival parties are not likely to form a coalition with Sinn Fein. It also shows how much has changed when Irish reunification is now on the agenda with a referendum in 5 years proposed by Sinn Fein, as an accepted feature of the political landscape with Britain leaving the European Union. Under Mary Lou Macdonald who is from Dublin, replacing Gerry Adams, the image of the party is very different today, compared to the violence tinged past of the links to the Irish Republican Army. Most supporters today have few memories of that period, growing up in the period after peace was established in Ireland between different factions.  The exit of Britain from the European Union has provided momentum to the idea of reunification of Ireland from all sides for the first time. The links to the EU are popular in all parts of Ireland and Northern Ireland. The links to the economic crisis of 2009 and free markets have tainted the record of Fiana Fail, long the dominant party.  In Northern Ireland Mr. McGuiness is succeeded by Michelle O'Neill, who was just 21 when the peace deal was signed. In Ireland Mary Lou McDonald entered politics after the peace deal and has a Dublin accent.  The new generation looks at the EU as a natural partner, distancing itself from England. It also thinks and acts differently than Sinn Fein of the past. In just the way Scottish independence has found its way as an accepted idea in Scotland, Irish unification is seen as a positive idea with its association with the European Union, ...

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About $70 billion in Greek credit default swaps are outstanding. But after all sides settle their accounts only $3.2 billion will have to be paid out. The International Swaps and Derivatives Association made the decision to set off the swaps payment after the Greek debt restructuring and bond swap on March 8, 2012.