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German chancellor Angela Merkel arrived for a meeting of eurozone leaders in Brussels on October 23, 2011. She said: "I believe that now we have reached a more realistic view of the situation in Greece and that we will provide the necessary means to be able to protect the euro." Germany has insisted that bondholders take writeoffs of between 50-60% of Greek debt so that Greece would have sustainable debt. A review of Greece's debt by the European Commission in coordination with the ECB and the IMF shows that Greece's debt situation is totally unsustainable and will require a bondholder writeoff of around 60%. according to that report a 60% writeoff for bondholders would be required to bring Greece's debt below 110 percent of GDP by 2020. This has supported the German "realistic" view and Jean-Claude Juncker of Luxembourg, who heads the euro group of finance ministers stated that "we agreed yesterday (Friday, Oct. 21) that we have to have a significant increase in the banks' contribution." France also backed away from the plan it was supporting for the European Financial Stability Facility (the fund established to lend to troubled countries) to borrow from the European Central Bank, something Germany opposes. French finance minister Francois Baroin, said the issue was "not a definitive point of discussion for us,... what matters is what works." The Dutch support the Germans on these issues and Dutch finance minister, Jan Kees de Jager, said the use of the European central bank was "no longer an option." Options being considered are for the European Financial Stability Facility to offer insurance against a portion of losses on Italian and Spanish bonds....

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Blackston and Karnitschnig describe the European Central Bank's role in the current crisis and buying of bonds of troubled eurozone countries. And the resistance in Germany to the ECB's purchase of bonds of eurozone countries to prevent contagion effects in the eurozone. ECB President Trichet only reluctantly pushed the ECB into bond purchases in the recurring crises, and saw the ECB's role as strictly limited to controlling inflation and maintaining a stable euro currency. There is resistance in Germany to the ECB printing money to cover eurozone debt of Greece, Ireland, Italy and Spain. This comes from the searing experience with hyperinflation, an economic crisis similiar to that of the U.S. with the Great Depression, when the Reichsbank printed money in the 1920's to buy large quantities of government bonds. The Bundesbank that ensured Germany's postwar recovery focussed on a single mandate to control inflation, and this is a key part of the ECB's charter. The first president of the ECB when it was founded in 1998, was Dutchman Wim Duisenberg, who would tell politicians: "I hear you, but I don't listen." When Frenchman Trichet became the second ECB president, he focussed on inflation fighting efforts. He warned against the extravagant spending and fiscal irresponsibility of some eurozone countries saying "we are dancing on a volcano."...

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Joe Nocera compares the German insistence for tough austerity measures in Greece, Italy, Spain and Portugal, to the insistence ofthe Allies for large reparations from Germany after the First World War, which Germany was not able to pay and left it bankrupt by the late 1920's. He cites the failure of orthodox positions on financial and monetary policy to tackle complex issues such as the overvalued currencies of southern Europe, as productivity moved in opposite directions between Southern Europe and Germany. Austin Goolsbee, a former chairman of Council of Economic Advisors, makes the same point in an op-ed piece in the Journal, 11/29/2011. Nocera says this position is simiiar to the position on debt reduction for homeowners facing U.S. foreclosures with government intervention, where little action has been taken worsening the housing crisis and derailing the U.S. economy.

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Larsen says the EFSF should get the funding it needs to recapitalize troubled European banks, as the first step to solving the eurozone financial crisis. Banks in Spain and Italy that failed stress tests would get funds to build up their capital. Creditor haircuts should be part of the effort to reduce the debt burden of troubled eurozone countries.

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Moody's downgraded its outlook on Germany's triple-A credit rating to negative. It also shifted to negative the outlook on triple-A ratings of Netherlands. Spain's ten year bond yield went up to 7.51% on July 23, 2012 according to Tradeweb. Analysts estimate Spain needs to issue 28 billion euros of debt for the rest of 2012 to cover deficits and repay maturing debt, and 50 billion euros in short term Treasury bills. An additional 30 billion euros may be needed if tax revenues decline increasing the deficit, and to meet the needs of regional governments. In changing the outlook for Germany, Moody's emphasized the costs Germany would incur if Spain needed a full bailout and if the situation spread to Italy, including the large exposures of German banks to Italy and Spain.

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Prime minister Monti of Italy played a key role in getting Germany to accept short term measures for the eurozone crisis. This includes having the European Financial Stability Facility, the eurozone's bailout fund, buying govenment bonds of Spain and Italy directly in private markets to reduce the unsustainably high yields on these bonds. The plans proposed by the EU include setting up a European banking regulator.

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A NYT report on Donald Trump's long standing relationship with his lawyer Roy Cohn,  who was also an advisor to Senator Joseph McCarthy. The report says Roy Cohn used aggressive legal tactics in lawsuits and influenced Trump's style of doing business in his real estate dealings. It is a detailed report of Roy Cohn's influence on Trump, which the reporters say has influenced the way  Trump ran his 2016 election campaign. It shows Cohn as protecting Trump in lawsuits, and Cohn's sense that Trump would someday play a big role in New York's real estate business, as Cohn's first meeting with Trump started when Trump was beginning his career in the early 70's. 

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On Monday August 8, 2010, the Dow Jones Industrial Averages went down by 634 points and closed below 11,000 points. This is not far from the 10,165 level of the DJIA on August 27, 2010. It was on August 27, 2010 that Fed chairman Ben Bernanke made the speech at the Kansas City Fed's Jackson Hole conference about the strategy for a QE II. Its about the time for this years Jackson Hole conference and the gains in the stock market are melting away. The DJIA closed at 12810 by April 29, 2011, then went below 11,000 by August 8, 2011. With higher inflation the Fed's options are limited.

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Gillespie lists the myths and describes the reality about Ron Paul. Ron Paul is not a "top tier" candidate- with many Republican candidates assuming top tier status and fizzling out this has become a term that has lost meaning. Paul is a doctrinaire libertarian- he has positions similiar to libertarians but also has his own views on immigration and abortion. His views on the U.S. central bank, the Federal Reserve, such as "ending the Fed" are crazy- actually Ron Paul's legislation on auditing the Fed is gaining credibility, and Fed policy is viewed skeptically by both the Tea party and Occupy movement, as well as some in the Federal Reserve such as Kansas City Fed chairman, Thomas Hoenig, and respected economists such as Alan Meltzer of Carnegie-Mellon University.Ron Paul is anti-military- Paul has support from servicemen in the military and raised more money from them than any other candidate including Obama. Ron Paul has youth support because he is against the war on drugs- the war on drugs has not worked that well and new approaches are needed. His support among youth comes from a believing that individuals are better at making the right decisions, his idealism, and his faith in making the U.S. a better place. ...

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Jorg Asmusen, member of the executive board of the European Central Bank, and Jens Weidmann, president of Germany's central bank, the Bundesbank, argue on opposite sides before the German Constitutional Court in Karlsruhe. Weidmann says the bond buying of sovereign bonds of Italy and Greece by the ECB is unconstitutional, Asmussen defends the ECB's plan to lower the borrowing costs for Italy and Spain in 2012. Both Asmussen and Weidmann are students of Manfred Neumann, professor of Economics at Bonn University. Neumann says such action is unconstitutional. The Federal Constitutional Court takes public opinion into account in its rulings.

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Blinder cites the reasons why the stock market declines are showing a disconnect with the economy in the U.S. which benefits from low oil prices, and the small impact of a slowdown in China on the U.S. economy. Yet other reasons may account for nervousness of investors, as Grep Ip points out in the WSJ, the lack of support from the Fed with its gradual rate hike path, and lack of support from the Chinese government with its policy of reducing debt and no significant stimulus.

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In remarks published in English on the Bundesbank website, Jens Weidmann, Bundesbank president and member of the ECB governing council said: "The ECB should be aware of its independence. This also requires it to respect, and not to overstep its own mandate." This is seen as a pushback by the Bundesbank to ECB president Draghi's comments on July 23, 2012, about doing all that is necessary to keep the eurozone together. Weidmann referring to the situation in France recollecting his days as a student in France in 1987, said there were "two different worldviews colliding." And that this situation prevailed in all political debates right up to the present day. He says about deflationary tendencies -"If these countries go through adjustment processes which result in decreases in wages and prices, then this constitutes one-off shifts in the wage and price structure and not deflation."

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Jon Huntsman, Republican candidate for President in 2012, calls for a fee on banks with a size that is above a certain percentage of the GDP. This would cover the cost banks impose on taxpayers when they are bailed out. It would eliminate the advantage banks gain from "too-big-to-fail," a subsidy Huntsman estimates to be one half percentage point in today's market. He points to efforts by the UK and Switzerland for more stringent financial standards than the U.S.

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In the most recent Global Financial Stability Report out in Sept. 2011, the increase in the ratio of a country's outstanding credit to GDP is highlighted as a key warning light indicator for country economies. An increase in this ratio of over 5% signals a warning light according to the IMF. It tells us that borrowing is expanding at significantly faster rate than the growth of the economy. Using this indicator would have set a warning light up for the U.S. before the 2008 mortgage crisis, and a warning light well before the financial crises in Greece, Portugal and Ireland. The outstanding credit to GDP ratio went up for China by 24 percentage points in 2009, with 4% percentage point increase in 2010. The ratio was up 30 percentage points in Hong Kong for 2010. The warning light is also up for Turkey and Vietnam. Capital inflows into countries that can be suddenly reversed, and overvalued currencies are a danger for emerging market countries and act as supplemental indicator warning lights. Brazil and South Africa have overvalued currencies. Turkey has high capital inflows. Only a small portion of this is foreign direct investment, the rest helps support a high amount of lending and credit provided by the banks. That a significant portion of this is in short term borrowing poses additional risks, as evident in the 1997 Asian financal crisis for S. Korea, Thailand and Malaysia....

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Proposed ideas being considered at the EU headquarters in Brussels include the European bailout fund, the European Financial Stability Facility (EFSF), being made a bank with funding from the European Central Bank. The EFSF would be able to buy the bonds of Spain and Italy in primary and secondary markets alongside private buyers. As an alternative the ECB would be able to buy Spanish and Italian bonds directly. Here the problem is keeping private investors in the market given the large financial needs of Spain and Italy. In the restructuring of Greece's government bonds the ECB took the position that it would subordinate the claims of private investors in Greece's government bonds and not take loss. Concerns of private investors could be addressed by the eurozone governments giving an explicit indemnity to the ECB to cover any losses suffered in the purchase of Spanish and Italian bonds. Both steps, the direct purchase of Spain's and Italy's bonds by the ECB or through the EFSF would mean doing something that is not in the ECB's charter- the financing of government debt- and would be done cautiously and only in a crisis situation. The caution would also be motivated by the need to ensure there is action to improve the competitiveness of Spain, Italy and other eurozone countries through specific measures, and no backtracking bygovernments....

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Transcripts released for the U.S. Federal Reserve's Federal Open Market Committee (FOMC) 2006 meetings show Fed chairman Bernanke and then New York Fed president Geithner ignored the risks of a hard landing from the mortgage and housing bubble. Geithner even went so far as to say about retiring chairman Greenspan, who also ignored the risks from the bubble and set the tone during his long period as chairman at the Fed: "I'd like the record to show that I think you're pretty terrific, too...And thinking about the probabilities, I think the risk that we decide in the future that you're even better than we think is higher than the alternative." In evaluating the risks facing the U.S. economy in December 2006, at the height of the bubble, Geithner stated: "The current weakness in the economy still seems principally to stem from the direct effects of the slowdown in housing on construction activity... The softer than expected recent numbers don't argue in our view, for a substantial reassessment of the risks in the outlook." The Fed chairman, Ben Bernanke, said at the first meeting in March 2006: " Strong fundamentals support a relatively soft landing in housing... I think we are unlikely to see growth being derailed by the housing market." When a Fed economist gave a presentation in March 2006 on the risks in Iceland, Bernanke said- "We'd like a full report on the Icelandic," at which point the rest of the group erupted with laughter. Iceland defaulted on its debts in 2008. Warnings about housing by Fed Governor Susan Bies were ignored by Bernanke and Geithner. Two highly leveraged Wall Street investment banks collapsed in 2008- Bear Stearns in March and Lehman in September- from the impact of the bursting of the bubble in housing and mortgages. When they collapsed these banks were leveraged at about 30 to 1, as most of the warning signs had been ignored by regulators including the Federal Reserve....

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Stevenson and Caselli describe the mood in Buenos Aires as negotiations with hedge fund holdout bondholders fail in July 2014.

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Trofimov provides a much needed perspective to the situation in the Middle East in 2015. The title about redrawing borders on ethnic lines is misleading, as the essay's conclusions point to the need for various communities to find a way to live together without ethnic cleansing and intolerance in attitudes. With modernization different communities, Sunni and Shiite, already live together in the larger cities in the Middle East. Trofimov points out that the original intentions of U.S. president Woodrow Wilson were for diversity, and building modern institutions of government as the best way forward. This was not carried out by British and French rulers following struggles for independence against the colonial authorites. Following the collapse of the Ottoman Empire in 1918, Britain and France were the dominant powers, and the boundaries were drawn up for Syria, Iraq, Jordan, Palestine, Saudi Arabia and other states, under the British-French Sykes-Picot agreement of 1916. Britain and France increased the role of minority groups to maintain their control following independence struggles in Iraq and Syria, a situation which helped Alawites gain control in Syria and Sunnis in Iraq. Shiite rule in todays Iraq has not lessened tensions, and intolerance only creates tensions in the broader region. Which makes redrawing boundaries around ethnic lines in a defacto acceptance of the current situation, not the lasting road to peace in the Middle East. In Iran, Russia with Britain was involved in the partition of parts of Iran into three zones, a Russian zone including Isfahan in the north, a British zone in the south east and a neutral zone in the middle. This happened in 1907 soon after a independence movement helped write a constitution in the 1901-1907 period, showing that many foreign powers were involved in the region, not just Britain and France. The discovery of oil in 1908 by a British company created the question of how to distribute the profits, which led to 70 years of disagreement and tensions in Iran. The resulting tensions exacerbated the conflict between religious authorites and Mossadegh in the early fifties with the fear of Communism, and exacerbated the conflict between the religious authorites and the government under the Shah by 1979 with misuse of oil wealth, ending with his overthrow and the supreme authority of the Ayatollah. Oil has proved to be as divisive, and wasteful of development opportunities, in Iran as it has been in Nigeria and other oil dependent nations. Multiple issues exist in the Middle East, not just the artificial redrawing of boundaries by the French and British, which makes the defacto redrawing of boundaries along ethnic divisions, not the answer but another step with its own dangers, along the path towards peace and economic development in the region. ...