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President Enrique Pena Nieto proposes changes to the constitution in August 2013 to modernize Mexico's Pemex and open it up to working with foreign oil companies. Recognizing that a majority of public opinion is opposed to changes, Nieto gets the support of the PAN opposition party for a two thirds majority in parliament. He also navigates the difficult waters of Mexican history and the nationalization under President Cardenas in 1938, by saying: "Pemex will not be sold, nor privatized...The spirit of this reform recovers the best of our past to conquer the future." Previous reform effort in 2008 failed because of protests on the streets of Mexico City. A stalling Mexican economy and lower oil production has created new momentum for the effort to modernize Pemex and introduce better management for oil resources and new technologies. A consensus between the ruling PRD party and the PAN opposition party gives Nieto the two thirds majority needed, and sufficient support from the right and centre political parties to carry this through. The example of Brazil's Petrobras, which has discovered oil in the deep waters of the Atlantic and developed its own technological capabilities by working with foreign oil companies, also gives Mexico an example to follow. Under President Cardozo Brazil opened up its oil industry to work with foreign oil companies in the 1980's....

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The new Bank of Japan governor Haruhiko Kuroda, faces the task of developing a consensus in the board for further monetary easing. In this task he will have an ally in deputy governor Iwata. A look at the stands taken by other seven members, including deputy governor Nakaso, shows only three other members having an open attitude to further quantitative easing. The members who are open to further easing are Miyao, Ishida and Shirai. Other members have to be persuaded by Kuroda.

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This WSJ editorial says the EU bailout deal for Cyprus of March 25, 2013, which shut down Cyprus Popular Bank, and aggressively downsizes Bank of Cyprus, is the right move. Under this bailout deal no money from the EU's $10 billion to the Cyprus government goes to bailout banks. Cyprus Popular Bank is allowed to go bust, with only insured deposits below $100,000 protected. Larger depositors are compensated with equity shares in a "bad bank," holding this bank's questionable assets. The good assets of this bank are transferred to the Bank of Cyprus. Bank of Cyprus, the largest bank, will have depositors and creditors take haircuts so that it can maintain a 9% capital ratio- estimated losses of depositors being 35%. All this leaves Cyprus with lower debt of 140% of GDP than under other plans. A large part of these losses will be borne by Russian depositors taking advantage of Cyprus as an offshore tax haven. Germay's Angela Merkel and finance minister Schauble face German voters in 2013 elections. Merkel and Schauble did not want to be seen burdening German taxpayers for bailouts in Cyprus to help affluent Russian depositors....

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Ajami points out the risks of the deal secularists and liberals in Egypt have made in calling on the military to upset the elected government of prime minister Morsi. The liberals and the Muslim Brotherhood were both equally opposed to the military and police intervention in politics in the period following Mubarak's ouster. The six decade rule of the military in Egypt has little to show for it in the modernization of Egypt and improving economic conditions. Egypt has seen this script before, says Ajami of the Hoover Institution- in 1952 the military stepped in after corruption in the political parties and political violence. The results were dismal extending throughout the period of modernization in Asia and Latin America. It has left Egypt frightfully behind in most dimensions of education, healthcare, and technological progess. The lack of training in parliamentary and democratic governance, and in the institutions of democracy are painfully evident- the poor roadmap for democracy laid out by the military, followed by the election, the decrees and authoritarian style critics describe of prime minister Morsi in failing to incorporate liberal opinion in policy, and the flawed secularist calls for the military to overturn the elected government with only one year in office. These institutions will take a long time to build and require patience, flexibility and the gift of wisdom on all sides....

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This essay in the Economist magazine describes the voter rejection of ruling parties and their candidates in France. Two presidents and two former prime ministers from the Socialist party and the Republican Party, Hollande and Sarkozy, Valls and Fillon face rejection. And another candidate from the Republican party Juppe also has fared poorly. This leaves two outsiders LePen of the National Front, and Macron a former Economy minister in the Hollande government who launched En Marche as his own movement for moderate change alternative in 2016. The rural-urban and less educated-more educated divide which was evident in voting in the U.S. election and the Brexit referendum is now seen in France, says this essay. Research from the Economist shows National Front support highest in outlying areas of major cities. The fears of immigration, terrorism, and globalization leaving parts of the working class behind are factors in this election. Support for the European Union is also a factor as it has suffered in recent years.     ...

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Adly Mansour, a judge with the Supreme Constitutional Court in Egypt, is appointed by the military as president of Egypt. He was to take office as Chief Justice before the June 2013 protests in Egypt intervened to delay this. On July 3, 2013 he was sworn in as president before the Supreme Court. Mansour is one of two judges selected by president Morsi. He is a graduate of Cairo University, and studied public affairs and management in Paris before joining the judicial sytem in 1977. His decisions as judge went against both Mubarak and Morsi, showing his independent position as a judge on the Supreme Court. The judiciary is now taking an important role in Egypt similar to the role it has played in Pakistan, another Muslim country adopting democratic forms of governance after decades of coups and military rule since the 1950's. The larger Muslim countries in the Middle East, Turkey, Pakistan, Iran, and Egypt are faced with the challenge of balancing the demands of modernization with tradition, the demands of educated urban population with the more devout Islamist rural population, and creating stable transitions in democratically elected government. Islamists such as president Erdogan in Turkey who described western democratic forms of government as a train to get to a destination have still to take in to account the need to incorporate opposing secular views in governance. In this sense Turkey is not the model for governance as it once appeared for Egypt, Pakistan Iran and other Muslim countries. A new consensus in society needs to develop that respects all aspects of democratic governance including respect for the role of the opposition in a democracy, the role of an independent impartial judiciary, and the role of independent media. This will take time to develop just as it took time to develop in Europe and North America....

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Nour Malas and Joe Parkinson report from the town of Makhmour, retaken by Kurdish Peshmerga forces following airstrikes on ISIS militant positions. The crisis situation 20 miles from Erbil, capital of the Iraqi Kurdistan region and the coordination between Iranian advisors, U.S. military advisors, and the Peshmerga to push back the ISIS. Peshmerga say young Sunnis in the town joined the ISIS in droves, something never seen before. It also reveals the situation after the failure of the Maliki administration to build a state with support from all parts of the Iraqi population- Shiite, Sunni, Kurds and tribes- leading to the radical alienation of Sunnis. The late awakening of Iran, the U.S., and moderate Iraqis both Sunni and Shiite, to the dangers of the Maliki policies. The unraveling of the decade of Iraq rebuilding by the U.S. in such rapid manner leads to the stepping down of Maliki and beginning of a new non-sectarian approach and policies. The vacillating in the Obama adminstration's policies towards Syria and Iraq leads to a lack of direction in the region. ...

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Donald Trump's economic advisory team includes in addition to Harold Hamm, shale energy billionaire, Steven Mnuchin, CEO of hedge fund Dune Capital Management, hedge fund billionaire John Paulson, Dan DiMicco, CEO of steelmaker Nucor, bankers Stephen Calk, and Andy Beal, tax expert Stephen Moore, and David Malpass, a columnist for the WSJ. The team is headed by Stephen Miller, an aide to Senator Jeff Sessions of Alabama. The Washington Post points out that the selection of the team with many hedge fund businessmen including John Paulson, who bet against faulty mortgages before the 2008 financial crisis, is at odds with his criticism of Hillary Clinton for her contacts with Wall Street and his message of not having any connections with Wall Street so that he could better represent the interests of ordinary Americans- people hurt by the 2008 financial crisis with the high jobless rate for older white men. In the 2008 election both candidates John McCain and Barrack Obama were shown in media articles to have connections to lobbyists for Fannie Mae and Freddie Mac. In the 2012 election Mitt Romney as a private equity executive at Bain, was a part of the financial industry. This time in 2016- after all the noise and tumult about who represents Main Street- is no different for Trump and Clinton's connections to the financial industry. Only Clinton has to respond to the movement within her party from Bernie Sanders for providing a genuine example, and breaking with the past. The team of economic advisors put together by Jeb Bush led by Glenn Hubbard may be little different in substance than the one put together by Trump in its connections to the financial and real estate industry. The only person who took on the financial industry to fight for homeowners interests shown in Lyrarc since 2008 is Sheila Bair of the FDIC, a Kansas Republican. She could truly represent the interests of working class and ordinary Americans simply from a notion of fairness that  is so much a part of the American experience. Yet she has said running for office and fund raising in the way it is practiced today makes the thought too difficult to accept. Recent developments do not offer encouragement. Yet ordinary Americans ought not to forget, and ought not to let anger affect a discerning view of things. ...

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Japan's new LDP prime minister, Shinzo Abe, supports targeting the yen at around 90 yen to the dollar to support Japanese exporters. He sees this happening through monetary easing by Japan's central bank. At a rate of 85 yen to the dollar or above Japanese exporters would be in a position to become profitable and pay taxes. Abe says central banks around the world, including the U.S. Federal Reserve, are printing money to support their economies and increase exports. Switzerland and S. Korea pursued policies to keep their currencies from becoming too strong to support their exporters. China has managed its exchange rate to maintain export competitiveness. Exchange rate intervention has not been effective for Japan, and the focus now is on monetary policy and setting a 2% inflation rate target.

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Stanley-Becker of the Washington Post looks at the story of Horst Kasner, Lutheran pastor in East Germany, Angela Merkel's father. In 1954 when Angela was born, her father moved the family to East Germany, then called the German Democratic Republic. The family settled in 1957 near the town of Templin in the Brandenburg countryside. He had an idealism based on the Lutheran faith and believed at the time that it was possible to build a East German Protestanism that reconciled with the professed socialist ideals of the GDR. Over three decades that faith was tested and by 1990 Kasner was known for his dissent to the state repression practiced by the GDR limiting free expression and religious beliefs. He worried about the domination of economic thinking even in the churches after the reunification.   Angela Merkel was close to her mother, Herlind Kasner, who joined the Social Democrats after reunification. Her brother joined the Greens. Merkel joined the movement called the Democratic Awakening in 1989, which merged with the Christian Democrats after reunification. Horst Kasner died in 2011 about 6 years after Merkel became chancellor. Speaking at a church in Templin in 2014, Merkel said what she believes- "God created every human being. We should strive for perfection. But we can make mistakes." To some Merkel remains inscrutable, hard to make out. This may be because she retains some of the thoughtful way her father meditated on what life was about and how best to live it.  ...

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Local elections for 181 local councils in Britain in April 2012 show the toll taken on the Conservative party led coalition government of David Cameron from austerity measures and general dissatisfaction with the government. The Conservative party Mayor of London won the election in London over Labor's Ken Livingstone, with a slim majority, largely determined on personality issues. Throughout Britain the Conservatives lost seats in local government. BBC projections with most of the votes counted show Conservative share of the vote dropping from 35% to 31%, Labor moving up from 35% to 38%, and the Liberals remaining at 16%. Labor gained 823 seats, Conservatives lost 405 seats, and Liberal Democrats lost 336 seats. Voter indifference was shown in the voter turnout at 32%, the lowest since 2000, according to the BBC. Cameron said he would continue with his austerity program and cuts in spending, saying "these are difficult times, and there aren't easy answers."

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As expected Iran boycotts the talks in Doha of 16 major oil producers seeking to stabilize oil prices. Saudi Arabia, Russia, Qatar and Venezuela sought to stabilize oil production at January levels to support oil prices. Wth the Saudia and Russia producing all out, Iran seeks to do the same, effectively closing the door on any agreement to freeze production levels.

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Huruhiko Kuroda, the new Governor of the Bank of Japan, Japan's central bank, told parliament in confirmation hearings: "If I am confirmed as governor, I will clearly communicate to markets that I am prepared to do whatever it takes to beat deflation... The Japanese economy has suffered from deflation, for over 10, almost 15 years, which is a global anomaly of the most extreme. As prices have fallen, corporate profits and wages have shrunk, depressing consumption and investment and triggering even lower prices in a vicious cycle." Kuroda also emphasized that the weakening of the yen was a side effect not the goal itself- "There is evidence that currencies tend to fall for countries that ease monetary policy on a large scale, but the BOJ's policy is not targeting currencies... The important thing is to ensure price stability and achieve the 2 percent price stability goal, although it could affect currencies in that process."

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Walter Mead describes the roots of the refugee crisis in 2015, as millions of refugees flee Syria, Iraq, and other countries in the Middle East, lying in the failure of governments throughout the Middle East to accomodate modernity, women's rights and technological progress into the old Islamic thinking. He says he sees this in Egypt, Saudi Arabia, Turkey, Pakistan, Iraq, Syria, Libya, Tunisia, and other countries in the Middle East. The Arab Spring which aroused so much hope for the people of the region has floudered in the failure of both the Islamic leaders, the military elite, and civil society to come up with a consensus rooted in what a modern Islamic society that accomodates modernity, women's rights, the participation of people in their government, technological progress should look like. The Western nations of Europe and the U.S. also underwent soul searching to come up with a modern Christian society through its own struggles, which the Islamic societies have failed to do; and as a result floundered and broken up by sectarian, religious and military conflicts. Mead takes the long view, yet falls short when it comes to how European leaders and societies face individual challenges to bring their own Christian faith and ideals into the real world, in the way chancellor Merkel has responded in Germany. Europeans have had their own period of conflicts and civil wars, the refugee crisis and refugees in chancellor Merkel's words who "have gone through the hell of a civil war" are very real, and how each European responds defines who he is and how far Europe has come from its own dark days....

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President Obama's proposed legislation for the fight against Islamic State proposes a three year effort with use of Special Commandos, but no major ground combat effort. It also rescinds a broad Bush era 2002 legislation for the Iraq war, but leaves in place 2001 legislation for the war against al-Qaeda and affiliates.