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Healthcare, climate change, pensions and social benefits, are three issues uppermost in the minds of German voters. Three million new young voters most of them only about 2 years old when Merkel started 16 years in office, look for change. They are well informed and for these young voters climate change is the most important issue. DW.com shows three voters and how they plan to vote. One voter has cast a mail in ballot for The Greens party. The second voter will vote for the Greens. Both because of climate change concerns. The third voter Thurid says her mother is a geriatric nurse and is not vaccinated. She is vaccinated but had talks with her mother and understands her worries about vaccination. She will vote for the Free Democrats because they oppose compulsory vaccination. The three leading parties for young voters are the Greens party, the Free Democrats, followed by the Social Democrats all in the range of 16-18% of support. The Greens have sent out 2 million brochures to voters. Out of 60 million voters in a German population of 80  million, 3 million is only 5% of the vote. What makes a difference is that it is consistent with the general direction of voters young and old, all looking for change in Germany as the CDU party attracts only about 20% or one fifth of German voters. Social Democrats Scholz is way ahead of Christian Democrats Laschet in how voters view each candidate. Will German voters be well informed enough to make a decision based on their desire for change after 16 years of Merkel or will the CDU bringing back in the last days of the campaign the old fears that the communist Left party would somehow find its way into the government using the Greens as a way in- this is a question for German voters. In1994 during the Cold War with Soviets Kohl used this to keep the Social Democrats out and Greens out and formed a coalition with the FDP. Yet today Merkel has grown close to both Russia and China and away from the Western alliance in a way that was unimaginable under Adenauer who helped build the new Federal Republic of Germany after the war. Merkel refuses to even immediately accept a call from a new US president Biden, American president who is closest in style and temperament to Harry Truman who faced off the Soviets in Berlin in 1948.  The FDP opposes a wealth tax or any form of taxes in which the wealthier pay a fair share of what is needed to build crumbling infrastructure in Germany neglected in the Merkel years. In Germany social and economic disparities have grown during the pandemic with poverty increasing during the pandemic as has happened throughout Europe and the world. The US is already committing to increase taxes for the upper incomes. This is where voters have a choice- do nothing with infrastructure, health or climate change or do something by increasing taxes. The choice is now before the German people.  With this question comes a choice for western civilization, with the recent election in the US, and two elections in Germany and then France. Will it look with optimism to the future or will it huddle up in a deeply cautious and slightly pessimistic view of the world that is embedded in Angela Merkel's cautious vision that ended up only responding to crises- some self inflicted as in migration policy, and even self inflicted in tackling euro problems created in the euro currency's faulty design. In fiscal policy as in migration policy Merkel has reversed her position- by supporting European solidarity. Will Germans vote for optimism or never ending caution? Are lessons learned?     ...

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Pope Francis is strongly critical of the manner in which the capitalist system has functioned in recent decades, increasing inequality, and hurting the marginalized, the working class and poor. Pope Francis tells people during his visit to the poorest countries in Latin America, Ecuador, Bolivia and Paraguay, that the Catholic Church committed grave errors during the period of Spanish colonialism by allying with the ruling classes and creating great inequalities and suffering. The director of the Institute for Policy Research and Catholic studies at Catholic University of America, Stephen Schneck, says the Pope is reflecting a century of activism on social issues since the Pope Leo XIII encyclical in 1891, calling for social and economic fairness for labor, with the encyclical "Rerum Novarum" - or "On the Condition of Labor." The Pope's message in Santa Cruz, Bolivia, to nearly 2000 social activists, farmers and trash workers, neighborhood activists, was that change has to come from grassroots, that the local communities have acquired the knowledge which is valuable to act for economic and environmental betterment. He praised cooperatives and local organizations that enhanced the value of labor. His message resonates say Catholics because he has stayed in close contact with local communities, and the poor, working class people in Argentina. It is focussed on empowerment of local communities. In Bolivia the left government has adopted measures that attract foreign capital and investment, so that it is a model that stays away from socialist ideology, while at the same time embracing the grassroots idea of empowering local people and communties. In this way it has improved living standards in Bolivia and received favorable ratings in capital markets....

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How in the last days before bankruptcy Chrysler executives pushed dealers to take therir allottment of cars even though they had unsold inventory sitting in their showrooms as sales plunged over 50% for Chrysler, the worst hit among all the carmakers. Dealers say this was aveiled threat to take the cars or face being terminated. For Jim Press and Chrysler this was about "You can help us, or burn all of us down," as Chrysler sturggled to show its viability to the government. See link to where White House economic adviser Summers argued against Obama adviser Austan Goolsbee's advice to let Chrysler go out of business, as there was too much capacity in the car business.

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The WSJ editorial pages which have for years warned of the situation at Fannie Mae and Freddie Mac where government guarantees for these two companies are provided without adequate and appropriate oversight resulting in huge risks if these companies go under in this mortgage crisis. WSJ opinion thinks its a bad idea to let these companies borrow from the Fed's discount window as Senator Dodd has suggested and is wary of the collusion between politicians who get campaign cash from these companies and the companies, and argues for government help given in condition of overhaul and strong supervision and gradually a winding down of these companies because of the risks they pose.

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Anthony Faiola provides this exceptional look at the thinking of Chancellor Merkel and German experts, about the refugees creating more opportunities than risks for Germany. Germany is an aging society, with low birth rates. How to reverse this, so that there will be more young workers to meet future needs long term ten or twenty years from now, is a problem facing Japan and Germany. Germany is also fortunate with the timing, with Germany's unemployment rate at a low of 6.2%, and years of growth ahead from a eurozone recovery. A fortunate circumstance in the nature of refugees from Syria, is that many of them are young, well educated, skilled workers, doctors, engineers and architects, from a relatively moderate Arab country. This is a better immigrant pool than the one Germany took in from Turkey in early postwar years, in terms of education, youthfulness and skills, and one in which the lessons learned from that pool's inadequate integration could be applied here. This is why Germany is not only willing to take in 800,000, but German leaders are saying they could take in 500,000 a year for several years. Just as Germany has taken a long term view, and has the strength to execute it in its shift to renewable energy, Germany's centre right Christian Democrats and centre left Social Democrats in the coalition government see the issue long term around which they can bring a cohesive understanding and consensus in their country. Merkel addressing parliament said on September 9, 2015- "The refugees need help to learn German, and they should find a job quickly. Many of them will become new citizens of our country. If we do it well, this will bring more opportunities than risks." The decision to shift to renewable required a whole new mindset and leadership, in the same way German leaders are articulating the position based on a careful understanding of the situation and Germany's long term interests in reversing Germany's population decline and lower working age people. There are about 3 million Turkish people in the country, adding about 1.8 million Syrian and other refugees would still bring the percentage of people of foreign origin to less than 6% of the 81 million population, just a little bit less Christian and just a little bit less German in origin, which is in keeping with changes in a globalized world and no different than its neigbor France. What looked like a problem, if handled and managed well could be an opportunity knocking at Germany's door. Merkel's genuine convictions about universal civil rights make the "wilkommen refugees" very real in other ways....

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Five rules the editors of the WSJ say should be followed when working on cleaning up the banking system. A clear no, as Krugman and other experts point out is for the government to make the rather imprudent move to take on all the debts of the banks as in Ireland. A second rule is not to underestimate the size of the problem and delay action till the problem gets much worse, when its harder to deal with. ECB president, Mario Draghi, pointed out the problem at Spain's handling of Bankia bank as a clear example, telling the European parliament recently: "There is a first assessment, then a second, a third, a fourth. This is the worst possible wayof doing things. Everyone ends up doing the right thing, but at the highest cost." A third rule is to set clear rules about banks, who gets rescued and who gets closed and why- so that its not left upto the discretion of officials. On this rule Spain's outgoing Zapatero administration gets good marks from WSJ for settting clear rules to the cajas svings banks. A fourth rule applicable to Europe is to first setup the expertise and conditions for a European banking regulator before setting up a banking union and direct injection of funds by the EFSF into banks of individual countries. A fifth rule is to avoid creating even larger mega banks by consolidating failing banks with large banks, and continuing the government's implicit guarantee of the bank because it is "too big to fail" and creates systemic risk- this is the situation after action by the U.S. Federal Reserve, regulators and the U.S. Treasury....

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Next stop in the crisis on Wal Street Alt-A mortgages, mortgages that are like prime mortgages in credit scores but lack the documentation to be prime. For investors the fact that a large part of these securities have good mortgages has not made much difference because a chunk of them are perceived to be shaky. This is what happened to Thornburg as investors let its shares drop to below $1 a share even though at Thornburg only one half of 1% of borrowers are delinquent with payments. It shows how nervous markets are. And now Alt-A mortgages comprise about $500 billon to $1 trillion of the mortgage market so a lot can happen now in this region.

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Improving business conditions and lower unemployment are helping president Macron of France recover from a drop in popularity following the yellow vest protests. Macron tackled the crisis by changing his style of governance from top down to a listener style with regular town hall meetings and meetings with people who were critical of his government. Recent poll from Elabe shows 33% approve of the French leader compared to 23% in December 2018 at the height of the yellow vest protests. The yellow vest protests were from people who felt left out at the lower end of the wage scale who were protesting increasing inequality. Macron also offered minimum wage earners billions of dollars and shelved his economic agenda till he had a better grasp of the French public's opinions. The recovery in the economy means Macron has more flexibility in taking up priority items in the national agenda. The French pension system is fragmented with about 43 different plans, with some plans for transport workers offering generous retirement by age 52. The system is also likely to go into deficit of 10 billion euros in 2022. Brazil has run into major economic crisis from generous pension plans taking up a major part of the budget. Macron wants to increase the number of years people work before they collect pensions, not just increase the retirement age of 62. Most major European countries are at 65 years retirement age, the U.S. is at 66 years. Transport workers paralysed the nation's transport system including subways and bus systems recently to keep their generous benefits. Macron sees himself as promoting a national agenda similar to India for GST, and other countries tackling shortfall in pension systems by increasing the retirement age, even though in the short run people who benefit from the old system oppose it. By addressing grievances at the lower wage levels and tackling glaring issues in the way benefits such as pensions are distributed Macron can win enough support to offset the opposition of entrenched groups. Lawyers will see their pension contributions double for lower benefits and are opposing the pensions overhaul. For decades workers in different groups or sectors took to the streets in protest making any changes even if well thought out and in the national interest hard to make in France. By taking on entrenched groups tactically and first letting the groups express their sentiment before announcing top down changes, and by being an empathetic listener, Macron is showing that he has learned a lot from the past year without losing his sense of what is best for France. It just maybe that in the short run there is an offset gaining some support from neutral groups and losing support of entrenched groups. Yet in the long run when the dust settles there is more overall support particularly through empathetic listening and carefully planned flexible approach to making changes that improve the economy and reduce unemployment. ...

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Nawaz Sharif allies himself with the lawyers movement which has popular support in the country. With all the chaotic politics and military's role in politics, the rule of law is seen by many as the best way for the people of Pakistan to have a better future. Ifthikar Chaudhary is reinstated as Chief Justice of the Supreme Court.

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Musharraf facing growing upopularity with one poll showing over 75% do not approve of him is about to resign as he faces impeachment by the newly elected government.

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The lawyers who organized a movement for respect for the judiciary and reinstatement of all judges fired by Musharraf say their goal is the rule of law in Pakistan and look beyond the present political parties to a system of government that respects the law and the judiciary as in a parliamentary system like that of the United Kingdom which offers the earliest prcedent of judicial systems in Pakistan from the days of the British in India. This bodes well for Pakistan as the lawyers and their supporters can provide some fair and judicial basis for good government when the politicaians and the military have failed.

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Pakistan's foreign currrency reserves of $8.14 billion as of Sept 27 and falling for 14 straight weeks, falling from $16.39 billon in November 2007, are creating a situation in which Pakistan may have to turn to the IMF for emergency assistance. Especially because this covers hardly 2 months of imports of food and oil.

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Pakistan has $3 billion in commercial foreign debt and $38 billion in concessionary loans from the IMF and the Paris Club an informal lending group of 20 countries according to an estimate by Credit Suisse. Debt servicing costs for 2008 are $3 billion according to a government estimate. Pakistan could default on its foreign debt unless it get help from the IMF.

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Pakistan gets a $7.6 billion IMF loan with $4 billion disbursed this year and the rest in 2009. Interest at 3.51% to 4.51% with repayments beginning in 2011. Pakistan faces 25% inflation and reserves enough for 2 months imports. It needs between $10 billion to $15 billion over the next 2 years say Pakistani officials.

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Welch believes India will rebound from the Mumbai attacks and it has a bright future ahead of it in spite of the huge problems with infrastructure and the troubles with Pakistan. To rebound India will have to come to grips with India's internal problems from greatly improved security to responsible government and business will have to take the initiative to provide new momentum for growth. He credits India's people with insights, creativity and positive energy and credits its entrepreneurs with indomitable spirit. And he says over the last 20 years India has shown that it can educate managers and front-line workers alike. He sees India's greatest obstacles to progress as not just terrrorism but India itself. Something internal that can be tackled from the inside as India's neigborhood will take some time to change.

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The Labor Department says the US lost 598,000 jobs in January 2009. And the figure for December 2008 was revised upwards from 524,000 to 577,000. The figures from December 2007 were revised upwards by 400,000 and is at 3.6 million jobs lost. First time jobless claims reached ahigh of 626,000 last week. The current unemployment rate of 7.6% does not correctly reflect the true unemployment rate because it excludes those adults who have given up looking for a job after failure to find anything. One estimate of this based on labor force participation at the level it was when President Bush took office, is 9.4%, by Peter Morici, economist at the University of Maryland. Though the Fed is creating money at a prolific rate to support failing financial institutions and support consumer debt, having more than doubled its reserves from $900 billion to $2 trillion, the problem remains one of creating demand. Falling demand as nervous and shaken consumers reduce buying of all kinds of products, leads to buildup of inventories, cutting production, layoffs, and even more incentives to save leading to the downward spiral. As more companies layoff there is a general tendency for all businesses who already face tight credit to plan on a longer downturn and not to invest. The self reinforcing pattern is just as strong in a downturn as it is in an upturn....

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According to Goldman Sachs David Kostin the S&P at 500 is quite possible, and its not abig stretch. At earnings per share estimate of $40 to $50 a share and a P/E ratio of 10 which are realistic in this climate, you get the S&P in the 500 range. the notion of the Dow at 5000 and the S&P 500 at 500 are not unrealistic especially if the stimulus is not adequate or not as effective.

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Boston's John Hancock Tower is sold in a foreclosure auction held by an investor group for $660 million, at half the price paid by the private equity firm Broadway Partners in 2006.

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Mario Draghi faces his first test as head of the European Central Bank as Italian bond yields approach 8%. Draghi has limited purchases of bonds of troubled EU countries to 5-10 billion euros each week. This has been sufficient to keep Italian bond yields from going out of control, but high enough to keep pressure on governments in Italy, Spain, Portugal and Greece to make necessary changes. France, Germany and other countries in the EU are working on new rules for making strict budget discipline legally binding, with enforcement sanctions by a EU budgetary authority. Germany is pushing for the new rules. France's Sarkozy with a legacy of Gaullist reluctance to surrender sovereignty in such matters had resisted such calls in the past, but is moving in the direction of convergence of fiscal policies as the only way to preserve the euro currency and the EU idea alive. Draghi is taking a flexible stance on inflation and lowering rates compared to his predecessor, Trichet. He sees signs of slowing manufacturing activity and credit tightening in Europe as signs that inflation will come down from above 3% to something closer to the 3% target set by the ECB. Economists expect him to lower interest rates for the eurozone to 1% from 1.25%, when the ECB meets in a week. The manufacturing purchasing manager's index went down to 46.4 in November, below the breakeven point of 50, which signals a contraction. Output and orders were down across all of Europe, including Germany. Economists say Draghi has left open the possibility of larger bond purchases if the new rules are made legally binding on eurozone members....

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David Brooks of the NYT says the Republican party is failing when it embraces Trump's version of populism with its racial division, tax plan that favors Republican donors and ignores fiscal conservative concern over deficits that affect future generations, supporting the election of Moore in Alabama, the constant Twitter comments that show prejudice. He says this will have destructive effects that could last an entire generation. This isn't the Republican party he has known for so long, says Brooks. The time is passed says Brooks when sensible republicans could go along in the middle by not agreeing with Trump, yet avoiding the task of opposing the elements of Trump policies that conflict with America's long held ideals shared by both parties. He calls its a corrupt deal that Republican party leaders in the Senate and Congress have agreed to make with Trump thinking that somehow this will all work out for them even if it doesn't for the party. Selling one's soul is somehow not an option that people would take in their right mid, so he wonders aloud what is happening in the party- and calls it a rot besetting the party of Lincoln, TR and Eisenhower that won't get it to any good place.   ...

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This report in DW.com looks at the response of Germany to the coronavirus epidemic and says Germany may have let a window of opportunity to act quickly slip from its grasp. It says Germany's leader Merkel has not shown the leadership required by the health crisis. Germany DW.com points out recorded its first case on January 27, yet Merkel's first press conference on the subject of coronavirus came on March 11, when Italy was on lockdown quarantine for 2 days.  Germany lacks a quarantine and effective government action to mandate and require social distancing across the country to limit the spread. The steps this report points out pale in comparison with the actions taken in other neighboring countries. Spain earlier and Belgium on March 17th joined a lockdown in Italy. Merkel called on Germans to stay home, yet enforcement is lacking.  In this situation the calm and reacting with reason may be obsolete, a proactive approach being the right one. And a braver one because it would anticipate what happens a week two weeks from now based on experience of China and Italy, and act quickly with a lockdown and quarantine to prevent spread. Waiting in this manner risks too much says DW.com.  ...

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Within minutes of the SNB's decision to lift the cap on the euro the Swiss Franc surged 30% against the euro and 18% against the dollar. FXCM, retail currency broker, suffered severe losses and the company needed a $300 million investment from Leucadia National Corp. to survive. Citigroup and Deutsche Bank AG each had losses of $150 million. Hedge Funds Discovery and Comac also suffered losses. FXCM losses stem from use by FXCM clients of borrowed money, along with higher leverage the company also has lower margin requirements. Interestingly FXCM fought CFTC efforts under Dodd-Frank legislation to limit leverage to 10 to 1- saying "it would have a devastating impact and drive it overseas." The limit finally set at 50 to 1, meant that an investor could borrow $50 for every dollar he put in of his own. The leverage meant large losses for inexperienced investors and threatened the survival of FXCM in a matter of minutes.