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There is concern that though President Da Silva has had success in his term in office, he is leaving problems for the new administration. One expert says he leaves a giant question mark behind him. One of the problems is high spending by his administration. After the financial crisis of 2008, the government flooded massive state run banks with cash, ordering the banks to to lend heavily to businesses and consumers. The government also increased its own spending on contracts and projects. Public spending has continued to grow since 2008, and federal expenditures as a percentage of the economy have doubled during Da Silva's term in office. In an editorial recently, the newspaper O Estado de S. Paulo, says the government should have used the high growth in the economy to cut public spending and improve the public finances. Because the Rousseff administration is a continuation of Da Silva's administration, and includes many of the same people, the daily asks if the Rousseff team's promises to cut spending in 2011 are believable. Inflation in 2010 is at 6%. The other serious problem is an highly overvalued currency, and volatile capital inflows from developed countries. The boom in China has helped Brazilian commodities and agricultural exports, a slowdown there would affect Brazil's economy. ...

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Boris Johnson leads a new British government that is composed mostly of ministers who want to see Brexit happen, and giving the positions of Home Secretary and Foreign Secretary to persons who do not care what happens as long as Britain leaves the European Union. Johnson's date is October 31st for leaving the EU. Sajid Javid, a former Deutsche Bank AG executive is the new chancellor of the exchequer. Priti Patel is new Home Secretary. Dominic Raab a former lawyer who has called for parliament to be suspended if need be so that Brexit can be pushed through is the new Foreign Secretary. Dominic Cummings who headed the Leave campaign for the Brexit referendum in 2016 is the new adviser at 10 Downing Street. Johnson's strategy is to pack the cabinet with people loyal to his vision of leaving the EU October 31st regardless of what the EU does.  The EU has not changed its position and is even less likely to consider any new Irish border proposals. Three top ministers are opposed to Mr. Johnson's views and resigned. Treasury chief Philip Hammond, Deputy primeminister David Lidington, Justice Secretary David Gauke, all resigned in opposition to Mr. Johnson simply pulling Britain out of the EU. Johnson once said all he feared from Britain abruptly leaving the EU was a shortage of Mars bars. During the election in the Conservative party Mr. Johnson was mostly quiet and avoided any gaffes to sound statesman like, yet as the process unfolds Mr. Johnson is likely to face the same problems faced by his predecessor Mrs. May. Added to this is the new opposition of moderates like Mr. Hammond and Gauke in the Conservative party that could topple the government and lead to a general election with just three vote swing in the other direction doing this. Mr. Johnson has prepared for this by having Mr. Cummings as a top adviser in the event he faces a general election. Meantime the Labour party initially not favoring a second referendum with Mr. Corbyn's ambiguous views on Brexit, as shifted gradually to the leadership and the rank and file all favoring a second referendum and for Remain. As Greg Ip has pointed out in the WSJ this week the conditions have changed with protectionism, nationalism and hostility to globalization, and president Trump not planning concessions of any sort even for the UK in trade negotiations. This means to low productivity of less than 1% to support stifled wages, one would have to add a 3.5% hit to GDP from a no deal Brexit such as Mr. Johnson approves according to the IMF. With the migration issue not what it was three years ago and reduced to a trickle this new situation must be on the minds of Mr. Corbyn, Labour and Conservative moderates. ...

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President Obama proposes changes in taxes to fund programs to aid students such as free 2 years of community college, aid for student loans, and financial help for middle class families. Senate Majority Leader McConnell says the proposals to raise income taxes for high income Americans with $320 billion in new revenues over 10 years, reduced prospects for changes in the tax system. He said the Obama proposals were designed " to excite the base but not designed to pass." Obama says "the shadow of crisis has passed," and calls for "middle class economics," and improving incomes for anyone making the effort. The call comes as inequality widened during the long recession and some of the Obama administration's policies such as on homeowner foreclosure, and lack of focus on unemployment during the first term, may have actually worsened inequality. The call also comes late in the second term in Jan 2015- with presidential elections in 2016- after the Republicans gain control of both Houses of Congress, which is why Republicans dismiss this as mere political talking points for the base....

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Julia Preston of the NYT looks at Mr. Trump's speech on August 31, 2016 in Pheonix, Arizona, and compares what one can discern about the Trump policies on immigration with that of president Obama. She points out that it is similar to the deportation that was conducted under president Obama in some ways, but is more extensive in its dimensions. It includes sanctioning sanctuary cities, expanding the deportation law enforcement personnel, and deporting about 2 million people with criminal backgrounds. The estimate under the Obama administration is for about 176,000 people with such backgrounds. The Trump estimate appears to include people with minor offenses says Preston, because it is so much higher. As a result this could also include people who have no criminal background and disrupt families on a large scale, with hundreds of thousands of longtime residents and families deported. Under the sanctuary example of Trump, Denver, New York and counties in California would be places where Trump would cut off federal funding. On the wall itself, Mexico's president Nieto says he told Trump Mexico would not pay for the wall, and Trump says exactly the opposite that Mexico would pay for the wall in his speech to supporters.  A Gallup poll shows that 76% of Republicans, 91% of Democrats favor a path to citizenship for those here in the U.S. illegally. For the whole population only 15% oppose giving illegal immigrants a pathway to citizenship and 84% support doing this. Which suggests that Trump is only appealing to his base of support, not adding to it, as Cillizza points out in the WP fact check.   ...

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Brooks says no to the current health reform bill as most experts say it does little to control the bulging healthcare cost curve which will take it from 17% of GDP to 22% and beyond. He goes over the pros and cons. Passing this gets little done for health care reform in a fundamental way that is so badly needed today. Says Brooks the system today is rotten to the bone with opaque pricing and insane incentives, with consumers insulated from the costs of their decisions, this won't change with the current health care bill. In fact he says according to the chief actuary for Medicare it will cause health care spending to grow faster. At this rate we will be giving more money to insurance companies and programs that have great social value like expanded preschool and other needs that America has will be shoved aside. In coming years as the population of America ages there will be growing needs for health care. With no increase in supply, and the perverse incentives still in place, prices will continue to grow rapidly without the focus on efficiencies that is badly needed. Brooks points out that its not the politics is the chief obstacle to reform as most people say, but the reverse is the truth, unless one gets the fundamental incentives right politics will be terrible forever. ...

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The decision reached at the OPEC meeting on June 5, 2015, was to maintain production at current levels of an official level of 30 million barrels a day. This official level now acts as an indicator, as actual production is estimated at 31 million barrels a day.

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Restaurants in UK have large price increases. UK restaurant owners say they are facing a squeeze with 55% of revenue going to pay taxes in 2026, and 45% left for rent, employees wages, electricity, food and other costs. Unclean streets and closure of restaurants during covid affect the prospects in the restaurant business. 38% of restaurant customers say they cannot afford to go to restaurants the way they used to.

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There is a major contraction in the supply of leased cars to the used car market. This used to be the major source of used cars on dealer's lots. The contraction is so large it will take years to fix, some say 2027. The contraction of leased cars is expected to be 23% from 2024 to 2025 for expiring 3 year leases. Another factor leased cars are a good deal to buy at the end of the lease seeing how sticky used car prices are these days. A 3 year old leased car now costs $28,000 up 45% since 2020, and for new cars it is $48,000 up 25% since 2020 This is significant because a key part of inflation is not only cost of groceries (eggs for example), it is also the cost of cars and housing. For cars used cars are a major part of it as it is basic transportation needed to get to work for a majority of Americans. There are Americans where a car breakdown leads to a loss of a job because it costs too much to repair and young people just don't have the money. Stories in WSJ now point to how DJT won in 2024 largely because of immigration, fentanyl and transgender, and the frustration with high inflation. The challenge is now for action where Mexico, Canada and China cut off fentanyl flows to be able to access the US market. It is also for finding a way to cut housing and car costs. ...

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This WSJ story provides a fascinating look at how Italy planned for too long, but failed to finally execute the final step of using the submersible steel floodgates that were already built to tackle just the kind of flooding that happened recently.  Problems include the use of submersible steel floodgates that would go back under water  after use in a flood, causing an additional complication to building the floodgates. The city itself was not entirely behind the plan so that execution was delayed. The politics and corruption added additional delays that astonishingly delayed the plan for over 10 years. About 80% of Venice was flooded with waters rising 6 feet above normal levels on November 12, 2019. It is hard to believe that 78 yellow steel barriers stayed on the seabed instead of blocking the three points at which water could enter from the sea into Venice. Most of the area has normal land barriers and the steel gates were designed to block water from entering at the smaller points that separate land barriers. It is also unbelievable that the plan started after a bad flood in 1966, construction beginning in 2003 after approval by over 12 public bodies, expert panels and courts on the complicated design. Costs went up as years passed from $1.7 billion to $5.5 billion. Ordinary Italians say Rotterdam has similar problems and has dams and no flooding, that the underwater design of the gates did not make sense just for aesthetics. Some experts say the underwater design doomed the project by making it costly and difficult, bureaucratic delays did the rest. The longer the delays and higher the cost the faster it eroded support in Venice and Italy, leading to this improbable result of building the flood gates with the underwater design, testing them but not making it operational in the final step, and not authorizing the use on November 11, 2019. The gates were in disuse astonishingly for so long that rust was discovered at one point.  Venice is now losing much of the population near its canals with only 50,000 remaining from a one time population of 171,000. The latest flood damage is over $1 billion and inexplicable after so much effort building the 74 yellow floodgates under water. ...

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France's response to the Paris attacks in Nov. 2015 was to invoke the Lisbon Treaty for aid from other states in the European Union, and not to invoke a clause in the NATO agreement because this would be seen differently by Russia. Another reason is that by avoiding invoking the NATO Article 5 clause France decided not to ask for something that was not going to happen considering president Obama's reluctance to intervene in the Syrian conflict, say French diplomats. President Hollande plans a visit to Washington and Moscow for coordinated action against terrorist groups in Syria and Iraq. Strobe Talbott, former deputy secretary of state in the Clinton administration (1994-2001), and president of the Brookings Institution, one of America's most respected diplomats, says Russia has still to prove that it is a part of the solution as the talk does not match its actions on the ground. President Obama is deeply skeptical as he points to Russia's initial incursion into Syria as creating the problems taking place there....

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This editorial in the WSJ, says its a surprise the protest vote in EU parliamentary elections did not come earlier, considering 11% unemployment in Europe and about 50% youth unemployment in some countries. Italy's Renzi government did well in the elections with 41% of the vote. The CDU got 30% of the vote. The French UMP party getting 20% and the Socialists 14%, a poor showing in France compared to the Natonal Front 25%. UKIP Independence party took 27% of the vote in the UK, with Labor and Conservatives a close second and third. Overall the results in Italy and Germany salvaged the situation, says the editorial, by making the pro-EU European People's Party (EPP), the largest group. It includes the UMP in France and CDU in Germany, and has 213 seats for then next 5 years, the largest group in a 753 member EU parliament.

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Krugman puts it best when he says in the NYT that he's got a sick feeling in the pit of his stomach. Its just that the Republican challenge of not a single vote in the House for the $789 billion Stimulus bill just makes it harder to go back for more money which most definitely will be needed. The Congressional Budget Office predicts that over the next 3 years there will be a $2.9 trillion gap between what the economy could produce and will actually produce. $789 billion won't be enough, and more so because the weightage shifted in the direction of tax cuts from the original version. And considering the accelerating nature of the crisis on the housing front and in layoffs and consumption, the absence of a clear action plan with specifics to deal with the bad debt in the banking system, is what gives this sick feeling in the stomach. Because as is stated on these same pages by experts from Japan on February 12, NYT, see the link, Japan went through this same soul searching, public anger, controversy, and political leaders were afraid to take strong action for years from the mid 1990's till 2003 after Koizumi's election. Each action or set of actions each year during that period before 2003 was behind the curve, and did not match what was needed. For the USA this has happened already for 2007, 2008 and is heading in that direction for 2009, with a lack of consensus for the strong action needed. Would 4 million new jobs be generated by the current stimulus if that is a measure of success, as Obama indicated at his first press conference? With less going into spending for education, infrastructure, energy and other green projects, in favor of tax cuts and the AMT, and the feeling that going to Congress for more money will be harder and a partisan affair, will this become difficult to achieve? ...

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RIM's management change with new CEO Thorsten Heins is received positively by analysts as the co-CEO arrangement was not considered responsive enough to losses in market share- RIM's share in the smartphone market dropped below 10% in 2011. However the statement by Heins that there would be no "seismic" change at RIM was received with caution. One analyst pointed to the need for fresh thinking and thought it would have been better to bring in someone from the outside, though Heins only joined in 2007 and worked for 23 years at Siemens. The need for a new Chief Marketing Officer was pointed out.

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Economic progress in South Asia may finally put behind it simmering political tensions is evident from nature of this proposal on Kashmir by Pakistan. This proposal by President Musharraf is for India and Pakistan to recognize the "line of control" as a de facto border, gradually withdraw troops, and support a new body to run the government in Kashmir. Musharraf say Pakistan then "will have to, yes," give up its claims on Kashmir. The region would have to be given more autonomy to run its affairs. Musharraf would still have to win support from the political parties for this proposal to take shape and be able to control militants in the region who oppose a settlement.

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Public opinion in France is divided about France's dependence on nuclear power. Ifop's survey of Nov. 13, 2011, shows 40% of the French are now "hesitant" about nuclear power, about 33% favor nuclear power and 17% are against it. About two-thirds of the ruling UMP party of Nicholas Sarkozy supports nuclear power, while half of the Socialist party supporters say they are not sure about the path ahead. The issue is becoming important in the election, as the UMP claims the Socialist party's proposal to shut down 24 of the 58 reactors if elected will cost thousands of jobs and solar power cannot take its place overnight. The French are a bit puzzled by the nuclear issue in contrast to Germany where the issue arouses strong emotions, because nuclear energy had become accepted in France till the Fukushima nuclear disaster raised safety issues. EDF which operates the plants plans to increase spending on safety measures and on maintenance after audits by the French nuclear regulator. EDF's share price was down 40% since the nuclear accident at Fukushima, Japan....

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Wildfires burn on 1.4 million acres in California as it seeks help from Australia and other places. These fires are the second largest in its history.

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Kirkpatrick and El Shaikh give an account of the days and events leading to the ouster of president Morsi of Egypt in July 2013. Morsi and the Muslim Brotherhood forge an alliance with the military under Gen. Sissi, a younger officer open to working with the Muslim Brotherhood in power. Morsi is elected with the support of liberals and the military under Gen. Sissi against a Mubarak era candidate. Morsi wins with 51% of the vote, which liberals say would not be possible without their help. Morsi fails to form an inclusive government. His authoritarian tendencies from decades of working under a strictly hierarchical leadership in the Brotherhood, a personal style that does not take into account opposing views, and a lack of experience in democratic forms of governance where the opposition, the media and the judiciary, are important to balancing powers of the executive, lead to alienating liberal opinion and younger protesters who initiated the struggle against Mubarak. Gen. Sissi tries repeatedly to achieve a compromise including appointment of a new prime minister and cabinet but Morsi rejects all efforts, leading to the takeover by the military and appointment of the chief justice as president and ElBaradei, as prime minister....

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Deutsche Bank has legal risks of over $3 billion euros according to analysts. 1 billion euros have been set aside as required by Germany's financial regulator BaFin to cover potential legal settlement losses. This is separate from 822 million euros in other provisions. At the same time Deutsche Bank has to raise 10-15 billion euros to meet regulatory reserve capital requirements.

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China's central bank owns roughly $1 trillion of Treasury bonds and mortgage debt issued by Fannie Mae and Freddie Mac. It is earning low interest on its AMerican securities and losing money on its ownership of these securities when one figures in inflation and currency exchange. China's central bank has a small capital base with the bank's capital at $3.2 billion.

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The Afghan government says the U.S. helicopters took off from Jalalabad 170 miles away. But this cannot be verified as the helicopters would have to go through Pakistani airspace.