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France's finance minister says the government will focus on growth and set deficit targets that will support growth. There is a feeling in the business community that France has reached the limit for tax increases. The government has given up the goal of reducing the deficit to 3% of GDP in 2013. The government says the deficit will be about 4.1% in 2013 and 3.6% in 2014. Economic growth is expected to be only about 0.1% for 2013, and 0.9% for 2014, lower than earlier forecasts. Muscovici has said the French are fed up with higher taxes, and he is looking for savings in spending. About 15 billion euros of savings are planned in the 2014 budget from ministry expenses and healthcare spending. Extra taxes of 6 billion euros planned for the 2014 budget will now be cut to 3 billion euros. To increase growth it is necessary to stabilize taxation and give business a clear picture for 2014-2015.

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Thomas Frank writing about the public outrage about executive compensation quotes Bill Black, a Professor of economics and law at the University of Missouri-Kansas City, who makes an important point. Beyond the size of this compensation there was something else happening that was perverse in its design and in its effects. Black says that at each point in the development of the disaster of mortgage securitization, it was the pay for performance systems that sent the wrong signals to loan officers, real estate appraisers, accountants, and bond rating agencies. The compensation or reward systems actually encouraged wrong, unethical and ultimately disastrous behaviours for the companies and the economy. Another way to look at it, the way it happened on Wall Street- especially at Merrill Lynch and some other financial institutions- the bonuses and other compensation was a way for executives to recklessly milk (loot is the other word) the companies for all they could yield regardless of the results afterwards. And as Black says, to do this through normal corporate mechanisms. A whole range of behaviours of this type took place in the final years of the boom. See other articles by Thomas Frank. ...

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Paul de Grauwe, a economist at the London School of Economics points to two problems with the June 28, 2012 EU deal that allows the EU rescue fund to buy Spanish and Italian bonds and provide capital aid directly to Spanish banks. One is the limited funds of the rescue fund, European Financial Stability Facility or by its other name European Stability Mechanism. The EFSF or ESM lacks credibility because it lacks resources, it has only 248 billion euros, and has to first raise money in the bond markets. A better approach would be for the ECB to buy Spanish and Italian bonds aggressively, allowing a smaller spread between these bonds and the German bonds, says Grauewe. Germany is the largest shareholder at the ECB and opposes this move as a form of mutualizing of debt in the EU. Grauwe's recent paper shows that the depressed bond conditions for Spain and Italy are driven largely by a psychology of fear and not hard true economic numbers. Christopher Marks, global head of debt capital markets at BNP Paribas, says it is important to create the confidence to get longer term core investors such as pension funds, sovereign wealth funds and insurance companies back into this market for Spanish and Italian bonds by reducing volatility and yield. These longer term investors have left the market creating a severe problem. The shorter term investors, who came into this market in the last 1-2 years, are now the loudest voice saying Spain and Italy are likely to fail. These shorter term investors are either selling these bonds short or getting credit default swaps. A big problem coming out of the June 28, 2012 agreement, is that it is short on details. The details of how the rescue fund will operate, its funding, and the conditions for making making direct loans for stakes in banks or buying government bonds are still to be clarified. Germany's Constitutional Court also will rule on how this would be conducted and the Merkel government would continue tough negotiations on the details creating added uncertainty. ...

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A call for immigrant friendly policies in the Republican party in this WSJ editorial. It shows immigrants are not looking for a handout and immigration today is net zero from Mexico.

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Biden sees his plan for American workers and families put together in the $3.5 trillion spending package that covers child care, education, healthcare, services, climate change proposals, infrastructure building, as a way to show that democratic governments can work for the people. After two decades when American workers and families were largely put aside in the nation's priorities during a tech driven and capital markets driven expansion that benefited large corporations, America is returning to its core concept of government by the people, for the people, of the people. White House officials say this is to be seen even in the program he put forward in his upset victory many years ago for the US Senate from Delaware. Because economic strength of America depends on a strong middle class, and strong working class, strong families, and underpins the world leadership role of America, even Republicans and hesitant Democrats, cannot give in to the current situation of doing nothing or too little for workers and families which weakens America. And at a time when its leadership role in Asia and Latin America, Africa is sorely needed. The size of the package in $3.5 trillion is because too little was done in the past in the mistaken acceptance of Reagan policies of no government role in the economy- surrendering this role of guidance entirely to the capital markets driven from New York, London, and Silicon Valley. The rise of China today, and also of Japan and South Korea, and of India as it plans for 2030 shows that government guidance of the economy is needed in global competition. Trade entirely driven by capital markets, without a role for government to emphasize national priorities in spending can lead to disastrous results such as we see today where manufacturing even in critical fields such as healthcare, semiconductor driven technology, entire parts of the economic structure are ceded to China and supply chains outside the US. German elections are also leading in the same direction with Social Democrats emphasizing national priorities in child care, education, healthcare, and delivery of social services, building of infrastructure. And the Greens emphasizing climate change. Merkel in Germany and in the European Union, her predecessor Schroeder, pursued policies of no government role in emphasizing and articulating national priorities, in a way that past US presidents have done, resulting in the CDU falling to 20% support in the September German elections. Across all parts of the world, from India, China, to Europe and the US, the focus is on government voicing the national priorities  and allocating funding instead of capital markets driven from London, New York and Silicon Valley, or capital markets in Shanghai or Mumbai, as the pandemic runs into its second year. ...

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Barley points out the resignation of prime minister Monti in Italy is not a cause for panic, as his likely successor Luigi Bersani, head of the centre left Democratic party which leads in the polls with its electoral alliance having about 43% support, has committed to following through with Monti's policies and committments to the EU. Berlusconi is not the factor he once was with only 15% support in the polls, and anti establishment parties opposing public corruption such as Beppe Grillo's Five Star Movement appealing to younger people have about 20% support changing the political landscape in Italy. Other factors favoring Italy- a lower level of debt redemption in 2013 of 158 billion euros compared to 200 billion euros for 2012 will lower Italian bond issuance, Italy's primary budget surplus, the Italian economy bottoming out, and credit conditions improving. Year to date Italian bonds have returned 19.5%, and he sees no reason for an exit from Italian bonds. If polls continue to show a committment to the policies introduced by Monti, Italian bonds will continue to be attractive for investors. By setting Italy on the path to restoring and strengthening governance Monti has removed a key element for volatility in Italian bonds....

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The lack of education mobility in the U.S. with rising student debt and soaring tution.

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Russia's State Statistics Committee says growth slowed in the second quarter of 2013 to 1.2%, declining from 1.6% in the first 3 months. Inflation is at 6.4% for August, according to the Economy Ministry. The Russian central bank has resisted lowering rates because of the inflation target of 6%. The Putin adminstration is seeking 4-5% growth, after an average annual growth rate of 7.2% from 2000-2009, during the period of high growth in Putin's first term as president and second term as prime minister. There is a slowdown in foreign investment in the Russian economy, as investors in Europe and the U.S. shift away from emerging markets in 2013. In addition to this commodity prices are declining.

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Two of Amgen's drugs that treat anemia in cancer and kidney-failure patients have questions raised about their safety and marketing. The two anemia drugs Epogen and Aranesp generate about half of Amgen's sales. THey now have ablack box warning placed on them by FDA requirements.

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Coal India, is a state run monopoly which is a huge stumbling block for India's economic development. India lags behind Brazil, Indonesia, Thailand, Vietnam and Malaysia in the percentage of the population having electricity. Production methods do not use modern technology similiar to mines in other countries, and the average age of the 333,000 employees is 45-50 years. An eight hour shift at some mines produces as much coal as a mine in the U.S. does in 5 minutes, because of the lack of modern technology. About 300 million Indians lack electricity. The Modi administration's focus is on improving efficiency, introducing competition, and bringing major technological changes to the coal industry. Piyush Goyal, India's Coal minister faces one of the biggest challenges in the Modi administration. His focus is on efficiency, and the Modi administration has set a target of 1 billion tons for 2020, a 15% increase in production each year for the next 5 years.

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China's new leadership and 2 members of the Standing Committee in the 50's who have experience with social issues and handling the poorer provinces who are next in line for the leadership one from Shanghai and one from Laoning province in the poor northeast. China's problem continues to be how to see that national policy is implemented in the provinces as the system that was adopted after Deng's changes towards freemarket reforms was one in which the provinces were given free rein when it came to economic development and industrial growth, which now is being questionned because of damage to the environment and other social issues.

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From the 1998 Corolla to the 2009 version the fuel economy has remained the same contrary to Toyota's image on fuel economy improvements. The revised EPA estimates for the 1998 Corolla 27 mpg city and 34 highway. 2009 Corolla with 1.8 liter is rated 27 city, 35 highway. About new imagination in design : very little except some tweaking here ad there, boring? yes according to some who were Toyota customers. Toyota has not been a leader as the Scion would suggest but with the Tundra and the Corolla more of a follower, consider that 370,000 Corolla were sold in 2007 making it the third best selling car in the USA.

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India's central bank chief, Rajan, favors a lower inflation target of 4%, with fluctuations of 2% up or down. Lower inflation is critical for India to achieve higher growth rates. The World Bank lowered the rate of growth in the global economy but kept the rate of growth of 6.4% for India unchanged. Rajan also favors creating a more formal system for setting rates, with a committee like the Open Market Committee in the U.S. deliberating over the different factors for such a decision. Rajan was a professor at the University of Chicago, and chief economist at the IMF, before joining the central bank. Central bank policies have helped stabilize India's currency, the rupee. The lower cost of oil for India with an oil import bill of $100 billion is a big boost for economic growth. For the global economy this comes at a time when China's growth rate is slowing to below 7%.

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Meg Whitman, H-P CEO, repeated her statements that a recovery was four or five years away. She sees little sales growth till 2015 and predicts losses. H-P's share price fell by 13% on Oct. 3, 2012. Whitman said in an interview that H-P has failed to invest in research and development. She was critical of lack of R&D investment under Mark Hurd. But says many of the problems go back to when Carly Fiorina was CEO in 2005 and made the acquisition of Compaq. The acquisition approach has worked poorly for H-P, with lack of R&D within H-P. H-P's financial position also worsened with the $10 billion paid by Leo Apotheker, Hurd's successor, for Autonomy Corp. Internal software systems disconnected costs from revenue, so that in 2011 field selling costs increased by $1 billion even as revenue decreased by $5 billion. A series of management changes made things worse through poor decisions, inconsistency and lack of focus, all of which will take years to correct.

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Britain's Office of National Statistics said that GDP declined by 0.2% in the first quarter of 2012 from the prior quarter. GDP declined by 0.3% in the fourth quarter of 2011. This means Britain is officially in a recession, with two consecutive quarters of negative growth. The ONS said GDP was 4.3% below its precrisis peak in the first quarter of 2008. The UK registered growth of a mere 0.4% since the coalition government of David Cameron took over in May 2010. This presents problems for prime minister Cameron in tackling the UK deficit. It also shows how difficult it will be for EU countries to address their deficits without economic growth. This has come into increasing focus with recent events in the Netherlands with the collapse of the government and upcoming elections on the issue of austerity cuts, and in France with the presidential elections and the swing to parties questioning austerity measures without economic growth.

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Mexico is likely to move ahead with long term deep water oil exploration tenders in 2015, and delay tenders for shale and other oil fields. President Nieto's popularity has dropped to 40%, an all time low, reducing political capital. Other problems are staffing the agency that will put together the bid round, which will take time. The initial bids for 109 exploratory blocks and 60 production fields were earlier planned for 2015. Shallow water fields are likely to go first. Oil companies are expected to be choosier in making investments at the current oil price, yet retain interest in long term deep water oil exploration.

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Issues relaed to tech startups driving up rents in residential neighborhoods of San Francisco, London, Berlin, Stockholm, and other cities.

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Breakdown of negotiations between Greece and EU finance ministers led by Dijisselbloem of the Netherlands on February 16, 2015. Dijisselbloem says the best way forward is for Greece to take a 6 month extension of the current program, because more time is needed to work out the details. Finance minister Varoufakis of Greece says Greece should not have to make cuts that are clearly recessionary. The bailout ends on Feb. 28. Without an agreement reached Greece loses access to 7.2 billion in funds from the EU, needed to make repayments due in March.