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This editorial deserves an award for best editorial on international economic matters in 2011. The editorial, goes right to the point, when it says the French, the Germans, and the European Central Bank are deluding themselves if they call this weeks resolution of the Greece debt crisis a realistic solution. It is anything but a solution. The Journal calls it a French deception. It is unworkable because the main problem, the high ratio of Greek debt to GDP -which is now 155% and is expected to reach 170% by the end of 2011- is sure to get worse under the arrrangement designed in the interest of French and German banks. Under the arrangement French and German banks and other creditors will get to double their return from 4-5% today to an effective interest rate of 10% if Greece grows by 2% a year, on 49% of the bonds they hold. These bonds will be converted into 30 year bonds. This effectively doubles the interest cost for Greece in servicing this debt. On the other approximately 51% of the bonds the French and German banks would redeem the bonds for cash and a triple A, sovereign zero coupon bond. The Journal asks what is the point of making Greece's debt problem worse than it is now and calling it a solution. The austerity cuts are already expected to lead to a deep recession, something that is also happening in Portugal, leading to a worsening of the debt situation. Creditors are not sharing in the losses under this arrangement, as Germany and the Netherlands have insisted. As the Journal points out they are instead taking out half of their investment and doubling their return on the remainder. And the fears of contagion for Spain are not lessened, as financial markets can clearly see through this for what it is- unworkable and unrealistic. ...

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Concern about stimulus spending for infrastructure. Are the best projects being funded? Are some projects that are shovel ready but not the ones we should be doing first going to get done before other essential projects. The lack of acoherent plan for rebuilding the nation's crumbling infrastrure of roads, bridges and highways. Martin Feldstein says that this recession will last longer than others, so the stimulus spending even if slow will show its impact in 2010 and 2011.

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RBS CEO Stephen Hester steps down in 2013 after 5 years of UK government ownership of RBS. Finding good leaders at the British banks has been difficult for the UK government. Hester's stepping down comes as the Board plans to return RBS to private ownership. The fragile health of British banks and weak lending to business is holding back Britain's economic recovery.

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Lahart says adjusting for inflation the DJIA average in early March 2013 would be about 12,900 instead of 14,254, much less than it was in Oct 9, 2007 peak. If dividends are reinvested the Dow would be at 16,600. With inflation and dividends taken together the Dow would be around 15,000. Lahart does not cite his source. Browning in a separate piece says the DJIA adjusted for dividends, inflation and taxes, according to Bespoke Investment calculations is still below the 2000 level in 1994 dollars, and provides a different view.

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Kessler in the WP corrects Obama's claim that he created 800,000 jobs. He says this is clever arithmetic as it takes a low point in Feb. 2010 following the financial crisis. Kessler points out that according to the Bureau of Labor Statistics, U.S. manufacturing jobs were 12.56 million in Jan. 2009 when Obama became president. In Nov. 2016, early estimates show there were 12.26 million manufacturing jobs, a loss of 300,000. This loss does not reflect the problems in the U.S. auto industry and older industries in the midwestern states as a result of trade and globalization that speeded up with the rapid industrialization of China. And led as Greg Ip pointed out in a recent WSJ report to a rapid acceleration of job losses in a decade that did not happen in the same scale during Japan's industrialization and urbanization in the sixties. This aggravated the situation in Michigan, Ohio, Wisconsin, Indiana, and Pennsylvania, and was met with a feeble response from Democrats. Even a economist like Krugman favoring the Obama administration's efforts came to the conclusion that TPP did not add much to gains from trade as most of the gains had already been realized. More of the gains went to tech and IT in California, at the expense of the auto industry based in the midwest. A report in WP show a president too close to IT in California and failing to grasp the situation in the midwest. Voters punish whoever is in power, regardless of being Conservative or Liberal, in Canada the hollowing out of manufacturing under Harper in Ontario and Quebec led to the win by Trudeau's Liberals.  ...

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Britain's National Institute for Health and Clinical Excellence (NICE) says Glaxo's drug Benlysta for lupus is not "good value for money." The drug is priced at 10,000 pounds a year in the U.K. ($15,600) and much higher at $35,000 a year in the U.S. Benlysta is covered by insurers in the U.S. and some European state run health systems according to Glaxo. NICE also rejected a new multiple sclerosis drug Gilenya, which costs 19,000 pounds a year in the U.K. ($29,700), and $48,000 a year in the U.S.

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CNN reporter Cassie Spodak provides this exceptional report into the minds of New Hampshire Democratic voters who gave Bernie Sanders a 22 percent lead in the New Hampshire Democratic primary over Hillary Clinton. In October 2016 Hillary Clinton has the support of Bernie Sanders against Donald Trump in the U.S. presidential election. She described it as "100 percent support" in television debate. Sanders has appeared with Clinton twice, and campaigned 4 times in New Hampshire, and continually across the country. Younger New Hampshire voters still long for Sanders as their favored candidate. Older voters and some who have been motivated by Sanders to run for local office see the shaping of the Democratic Party platform as a victory for Sanders. Key planks of Sanders, taxes on the wealthy and higher incomes to pay for student tuition, infrastructure, and helping working class families, are now key parts of the Democratic platform. These voters see this as a pragmatic step and are enthusiastic in their support for Hillary Clinton. Overall Clinton now has 87 percent of Democratic voter support in New Hampshire according to a WMUR/UNH poll in mid October 2016, and she is doing well with millenials and independents nationally, a critical bloc of voters for Clinton to show nationwide support. One member of the steering committee for Sanders in New Hampshire named Dudley Dudley, reflects the opinion that has shifted the party to emerge united during and even more so in the final months of the presidential campaign of 2016- she tells the CNN reporter Spodak that she supports Hillary because "of the way she has grown, and stretched," and the way Clinton and Sanders are now campaigning together and working together. Both Clinton and Sanders deserve credit for their extraordinary ability to grow during their campaigns and during the party's way to shape the way forward. ...

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The increasing competitiveness of Mexico compared to China and India as an investment destination in 2013. Foreign companies are investing heavily in Mexico because of investment advantages in labor cost, supply of engineering and management talent, and proximity to the U.S.

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Simon Nixon of the Econmist on the report's findings for the future of the world economy. He points to the heavy debt overhang for individuals and banks that will take years to overcome resulting in entrenched unemployment and sluggish growth, somewhat reminiscent of Japan's years of stagnation after its bubble. The entrenched unemployment he argues will permanently lower the economic potential of developed countries of US and Europe. Public debt will rise so that private debt can fall. Bank lending that is cautious will only slow any recovery for a long time. And the grim facts he presents are that about 25 million jobs will be lost in the 30 rich countries of the OECD before all this is over during the coming decade, and several million jobs probably will never come back. Auto manufacturing and manufacturing in general is an example where some jobs lost may never be regained. There is no room for complacency here.

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In nominal terms China's currency, the yuan, appreciated by 3.7% in 2011. The real effective exchange rate, measured on a trade weighted basis and adjusted for relative consumer prices is the more significant rate. The real rate shows the yuan up by 5.3% in 2011, according to the Bank for International Settlements. In November 2011 the yuan appeared to be weakening, and China's prime minister, Wen Jiabao, says China wants to see the renminbi more flexible "in either direction."

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Jim Dwyer discusses proposed legislation in the New York City Council in November 2011, to set a "living wage" of $10 per hour, plus benefits, for workers at new developments receiving more than $1 million in public money. Under this legislation employers who do not include benefits would pay an hourly wage of $11.50. Discussion in the City Council has led to questioning this legislation on the grounds that the developments would not be built under the new rules. Dwyer points to San Francisco, which has set the minimum wage at $10.24 for January 2012, plus mandatory contributions to health insurance funds. The number of low wage workers in New York City with some college education has increased by 70%, according to the Fiscal Policy Institute. Wages at the bottom were $10.85 an hour, adjusted for inflation in 1990, in 2010 the wages were $10. What this does is further increase the income disparities and inequality in the U.S. Because of the demographic changes in America with Hispanic children representing a large proportion of young children, and the high rate of dropouts from highschool in the Mexican American community in New York, this means more children in New York City growing up below the poverty line....

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David Super, a professor at Georgetown University Law School, says letting the fiscal cliff cuts in spending go into effect is fairer to the poor and middle class than the $1.2 trillion in spending cuts proposed by president Obama and the Democrats. He says the pressure of public opinion would lead to some minideals for the Bush tax cuts to go to lower incomes and for restoring some funds to defense after the fiscal cliff agreement goes into effect, leading to a fairer outcome.

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Simms looks at the Plaza Accord of 1985 and the 60% appreciation of the yen, the lowering of interest rates and the real estate bubble that followed, and what this tells China's economic planners about managing the renminbi. A academic member of the People's Bank of China, Yu Yongding, sees one of the lessons as how Japan mismanaged the aftermath and creation of the asset bubble. There may be different complexities in China's situation with the increase in local government debt and loans in the shadow banking system, so that China cannot become complacent.

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Former Senator Jim DeMint lays out his reasoning for the Republican fight to defund ObamaCare, as the healthcare legislation is now called by Republicans. He points to problems with the legislation with issues about how much the added entitlements will cost in the future( more than the $250 billion by 2023 estimate of CBO insists DeMint based on the general lowballing of projections), and higher premiums for the young and elderly on exchanges. He says the 2012 elections were fought on economic issues not ObamaCare, and that the public he has met in visits to different states as president of the Heritage Foundation continues to be skeptical about ObamaCare. He sees the correct role of the Opposition party to point out the deficiencies in the law and call for corrections in the path for healthcare.

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Serious doubts remain about the effectiveness of value at risk or VAR quant models used by JP Morgan Chase to measure potential losses on a trade on a bad day. A newer model used by Chase in the first quarter showed smaller losses. When the old model was run this trade showed double the losses according to Chase managers. Greenberger, a former CFTC official and a professor at the University of Maryland School of Law, says if the trade become hard to unwind it shows poor risk management. And experts say it is not much of a hedge if it is done in an obscure part of credit markets and hard to unwind without serious losses. Peter Tchir, a former head of index trading at RBS bank, says CEO Dimon must have seen these kinds of hedges as part of his overall strategy, which is why he supported them in April 2012. The problem lies in that the bank size has grown to such proportions that its simply too big to manage, with trades it has to make becoming massive as a consequence.