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The consumer price index in China was 4.9% year to year in January 2011. The one year deposit rate was 3%. This means a negative interest rate of 1.9%. The real interest rate for China was an average of negative 1.1% in 2010.

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Investors moved $24.3 billion into European equity funds in Jan 1- Feb 19, 2014, according to fund tracker EPFR Global, and U.S. stock funds saw outflows of $5 billion.

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Juan Montes of the WSJ describes the problems facing states in Mexico as the governors have accumulated power, debt has risen rapidly, and accountability of state officials is at a new low. Half of the states with elections in 2016 have doubled their debt in 6 years, according to government data. The federal audit office points to irregularities in $13 billion of federal funds transferred to states. Elections in states in 2016 shows public discontent with poor governance, corruption, and the lack of rule of law. This is leading to a close election in Veracruz with the PAN and PRD parties challenging the PRI in the state.

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European banks borrowed 529 billion euros from the ECB in Feb. 2012 at interest rate of 1% for three years.This follows the lending by the ECB of 489 billion euros to European banks in December 2011. The total lending now exceeds $1 trillion under the European Central Bank's Long Term Financing Operation. It is designed to inject additional liquidity into the European banking system and shore up confidence in the economy. This time 800 banks applied for loans compared to the 523 banks in December. The actual amount of money going to banks is about 520 billion euros as many banks moved money from shorter term ECB loans to the three year loans under the Long Term Refinancing Operation. The operation helped bring down the borrowing rates on Italian and Spanish bonds- the rate on Italian 10 year bonds is down to 5.2% as of Feb. 28, 2012. Spanish and Italian banks were able to borrow at 1% from the ECB and buy Italian and Spanish bonds paying 5%. Intessa Sanpaolo bank in Italy doubled its borrowing to 24 billion euros. Smaller banks, including banks in Germany, participated in the February 2012 ECB lending, moving the number of banks up to 800 this time. VW's financing arm also borrowed under this operation so that it could provide credit to customers....

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Speaking at a banking conference, advisors including the head of Russia's largest retail bank Sberbank, German Gref, minister of the economy, Aleksei Ulyukayev, and head of the central bank , Elvira Nabiullina, express deep concern about the economic prospects in 2015. Foreign investment is down from about $90 billion in the 1st quarter of 2013 to a negligible amount in the 3rd quarter of 2014. Capital outflows following the Ukraine crisis are estimated at about $110 billion by former finance minister Alexsei Kudrin. The ruble dropped to its lowest level against the dollar since the 1990's. And the sharp decline in oil prices with Brent crude at about $90 is another risk factor as 50% of the budget comes from oil and gas revenues and 60% of exports are still oil and gas, with no serious or effective effort to diversify under the Putin adminstration. Putin told the banking conference that a deficit free budget and reserves of $460 billion are "fundamental factors supporting stability." Advisors and leading bankers remain unconvinced. The problem is that even at the beginning of 2014 before the Ukraine crisis foreign investment had slowed to a trickle, similiar to what India experienced in 2013. The central bank head says her effort to open up the bond markets in Russia to foreign investors is now in vain because there are few foreign investors. Instead of reversing the situation as is happening in India with the new Modi administration, policy under Putin and the Ukraine conflict may have scared investors away with the increasing western sanctions and stagflation (estimated 8% inflation and about 0.5% growth in 2014). The head of Sberbank Mr. Gref told the banking conference- "The Soviet Union broke apart because of the mind boggling incompetence of the Soviet leadership. They did not respect the laws of economic development." The problem with sovereign reserves is that it can protect a sovereign currency such the Russian ruble or the Brazilian cruzeiro to some extent, but today's vibrant economies need foreign investment and foreign technology for growth. Even a country such as China with a trillion dollars in reserves needs the reserves in its special case because of its billion plus aging population, and is no exception to these laws of economic development about the need for foreign technology and foreign investment. ...

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Laurence Meyer of Macroeconomics Advisors, a former Fed governor, says monetary policy will offset the effects of tighter fiscal policies and budget cuts. This is not stated explicitly he says, but Bernanke will counteract the effects of budget cuts and austerity policies by putting off rate hikes. The expiry in December 2011 of a compromise reached between the GOP and Obama to lower payroll taxes and offering business a tax break on capital investment will lead to a reduction in GDP by 1% in 2012, according to Mark Zandl, of Moody's Analytics. Pressure for budget cuts could add another half percentage point reduction in GDP, according to IHS Consultants. Bernanke will be mindful of these considerations as he considers any rate hikes in 2012.

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Michelle Obama warns about complacency in the 2016 presidential election. She says Republicans are saying the election outcome is already predetermined to lower Democratic turnout from black people and millenial Democratic voters. In North Carolina president Obama won by one half of one percent in North Carolina in 2008 largely because of enthusiasm among black and younger voters. This enthusiasm and lack of complacency is critical said Michelle Obama to win this election, who is popular with these two groups, more than Mr. Obama and Mrs Clinton.

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The CDU party selects Annegret Kramp-Karrenbauer as its next leader. Chancellor Merkel favored the state premier of Saarland, a small German state, as the next leader. Merkel told CDU delegates that the party was not the party it was in 2002 and praised the work of Karrenbauer in Saarland, in an indirect endorsement of the female candidate over Mr. Merz who favored taking the party to its conservative roots.  Merkel has pushed the CDU to the centre and sometimes to the left in an effort to sideline the Social Democrats, which worked till the migration and refugee influx led to a fragmentation in German political parties and decline in support for CDU. The election was close with Karrenbauer winning in the second ballot by a bare majority. Merkel plans to stay in office till 2021 and the party post in the hands of a close ally helps Merkel consolidate her legacy. Merkel made Karrenbauer Gerneral Secretary in 2018 in a move that was intended to move her to the top position. ...

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Japan's economic growth was 1.0% over the previous quarter in the 4th quarter 2013. Economic growth for the full year 2013 was 1.6%.

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Martin Caparros describes the deadlock in Spain with no two parties on the right Ciudadanos and Partido Popular, and on the left, Podemos and the Socialist party, able to have enough seats i parliament to form a government. An agreement between Ciudadanos and Partido Popular of prime minister Mariano Rajoy, has brought the 2 parties close to 170, 6 short of a majority in the 350 member parliament. New elections will have to be held for the third time in December 2016 as a result of this impasse. The two main parties in Spain the Partido Popular and the Socialist party, alternated in forming a government during the period since the restoration of democrati government after Franco's dictatorship. Following the deep recession in Spain since 2012 two new parties have been formed Podemos on the left, and Ciudadanos a centre right party. Both parties are critical of corruption, and the cuts in spending for education and healthcare following the financial crisis in Spain and bailouts by the European Union. Caparros describes the cynicism that voters express about not just the two main parties, but also for Podemos and Ciudadanos, as voters voice their rejection of politicians and parties on the left and the right. A similiar process is taking place in other countries, in Britain most recently with Brexit and the departure of prime minister Cameron. In the U.S. with the Sanders and Trump movements, and the Beppe Grillo movement in Italy.  ...

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The Spanish government said on May 23, 2012 that it will provide 9 billion euros to help Bankia cover capital provisions for bad loan losses. The government took control of Bankia in early May 2012. Bankia was formed by merging 7 troubled cajas savings banks. It has about 10% of Spain's loans and deposits. Bankia has the largest exposure of financial institutions in Spain to real estate loans. Of 37.52 billion euros in loans for real estate, about half or 17.85 billion euros are troubled loans. Spain's approach to the banking crisis from the real estate bubble was to merge failing banks with smaller amounts of government money as aid, and having the new entities raise cash through initial public offerings. For Bankia most of the nonperforming loans were separated and placed in BFA, the parent company. Bankia did an IPO in July 2011 raising 3 billion euros. Since the IPO Bankia has lost half the value in its share price for large losses to investors. Under new capital provisioning rules set by the government for banks to adequately cover nonperforming real estate loans, Bankia needs 7.1 billion euros. An additional 1.9 billion euros is needed for capital requirements for a total of 9 billion euros, which is the amount of the capital injection by the Spanish government. Finance minister Guindos told parliament that the rest of the Spanish banking system can withstand adverse scenarios....

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Su Liping, professor at Tsinghua Unversity, says there were 180,000 protests, riots and other incidents, protesting economic injustice in 2010. Most of the incidents were against land grabs, corruption and abuses by local officials, and unpaid wages. Inflation has hit the poor, migrant workers and people with low incomes hardest. Food prices were up 13.4% in August over the same month prior year. Pork prices were up 52.3%. Other problems are now meshed in with inflation. Local government debt in China, according to the National Audit Office, was 10.7 trillion yuan in June 2011. The National Audit Office estimates 23% of this, or 2.5 trillion yuan, depends on land for repayment. Analysts say China's local government made repayment in 2010 using the 2.9 trillion yuan in revenue from land sales. The same amount of land has to be sold in 2010 to make repayment. At lower prices even more land may have to be sold. The danger say Orlik and Jie, is that inflation and the pressure to acquire more land- and consequently more land grabs- will pose severe risks to the social contract in China....

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The ECB's Long Term Refinancing Operation is working as planned with the lowering of borrowing costs for Italy and Spain. Spanish government two year bond yields are down to 3.3% in January 2012 from a high of over 6%. Italian government two year bond yields have declined to 3.9% in Jan 2012 from a high of 7.8% in November 2011. Experts say the response is much more positive than the market was expecting. Morgan Stanley anaysts expect the banks to borrow extensively when the ECB makes new loans under this program in February 2012, which they estimate could reach 400 billion euros. Spanish banks are expected to borrow 15-45 billion euros to use for buying Spanish government debt, which would take up about half of the debt Spain needs to issue in 2012. For the banks the 3 year loans at 1% interest with flexible terms for collateral given to the ECB, offers a way to earn higher interest rates on sovereign government debt of their national governments.

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Bachelet was president from 2006-2010 with high popularity ratings. She was reelected in 2014.

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Airbus is making the Airbus 380 superjumbo model plane about 25% slower than originally planned say Airbus executives. This is partly because manufacturing is sequenced between France and Germany. The way the production system for the A380 is organized today is to split work between the French and German operations. The plane structure is built in Toulouse, France, and the cabin and interiors are fitted together in Hamburg, Germany. Tom Williams, Airbus executive vice president for programs, says this slows the completion and increases the cost. On the A330 models the work on the interior is done along the way as the structural work is being done, and this reduces cost and speeds up completion. Part of the problem is the sensitivity of the issue of moving work for unions and governments, but he now plans to push the A380 cabin outfitting back up to the earlier stage when the airplane is being built. A slower production rate means workers and engineers are learning more slowly how to build these planes efficiently by structuring tasks in a certain way and using different production methods. Boeing has also experienced similiar production delays and is working on moving up the learning curve the way EADS Airbus is doing. The A380 program has suffered delays over the years. In 2009 wiring the cabins was a problem. In 2010 a Rolls Royce engine on a A380 flight by Quantas Airways blew up on a flight after takeoff from Singapore. Because of manufacturing issues there were delays in delivery of Rolls Royce engines in 2011. Bot problems were resolved. In 2012 Airbus has found cracks in metal parts inside A380 wings which has slowed output. Airbus has delivered 77 A380 planes since 2007. The production rate is 3 A380 planes a month, compared to plans to make 4 a month by 2012. About 30 A380's are expected to be delivered in 2012, compared to 26 in 2011, 18 in 2010....

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One of the problems facing the Republican People's Party, the CHP, is how to connect with religious voters. CHP is the party that is most closely associated with modern Turkey's founder, Kemal Ataturk. CHP was the main party in Turkey till the recent dominance of the AKP Party in elections. AKP drew support from the more religious and rural population in the parts of Turkey outside cities such as Ankara and Istanbul. CHP rarely identified itself with street protest and remained aloof from ordinary people making it hard for it to contest elections against the AKP - winning Ankara and Istanbul but losing the elections in the last decade. The AKP also allied itself with Turkey's Ottoman heritage and appealed to nationalist sentiment against a conservative aloof CHP leading to a split in Turkey between the secular urban and the religious minded more rural people. CHP also did not work with minorities such as the Kurds to build a broader coalition. This is changing with the march from Ankara to Istanbul led by CHP leader Kilicdaroglu. The march came after the justice system appeared to be allied with president Erdogan, and a 25 year sentence was given to one of Kilicdaroglu's deputies. Erdogan now appoints the judges in the judiciary and the crackdown on the opposition since the failed coup of 2016, has led to a sense that Turkey is now run as a one party state. An estimated 1.5 million Turks participated in the rally in Istanbul, according to DW, showing that the opposition is forming to the arbitrary rule since the emergency powers assumed by the president. For the last decade Erdogan and the AKP Party formed the government. What changed since 2016 is the new constitution that gives new powers to the president and the arbitrary rule since the crackdown on the opposition that intensified after 2014, and which has increased since the failed coup in 2016.  ...

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The risks of the Fed's reinflation policy in 2010-2011. It risks increasing "bad" inflation, the kind that fall heaviest on low income households. Commodities are on fire, and the increase in the price of oil and food, would only leave consumers drowning in the new inflation, says Kelly Evans.

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Zweig points out that P/E multiples fall quickly in the midst of higher uncertainty. Benjamin Graham's "cyclically adjusted" P/E refined by Yale economist Robert Shiller smooths out the top and bottoms of the market by averaging the past 10 years of earnings and incorporating effects of inflation. This "cyclically adjusted" P/E for the U.S. market for the last 50 years is 19.5. The P/E for the market when the S&P 500 was at 1325 in late July 2011 was 22.9, and at the low in the first week of August 2011 of 1167 was 20.2. With the higher uncertainty- as for instance Bank of New York Mellon charging clients to hold cash- the P/E multiples are in a different territory. The P/E dropped to 13.3 in March 2009 after the financial crisis of 2008. Larger macroeconomic trends and uncertainty may have yet to play out and not registered fully in the market indexes. Jack Hough throws light on this from a different angle in the Wall Street Journal, August 5, 2011 comparing stagnant wages and its relationship with corporate earnings....

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U.S. commercial oil inventories cover about 164 days of net imports by Jan. 2015. Excluding net imports from Canada and Mexico this reaches 279 days of net imports from other countries. When strategic oil reserves are included this goes up to 450 days, which will put pressure on oil prices in 2015 as the price of oil drops below $50. The surge in oil production in the U.S. by 1.2 million barrels a day contributed to this buildup.

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Best performing stocks in 2014 include American Airlines, Micron Technology, Facebook, Tesla Motors, Yahoo.

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Ian Talley provides this excellent account of how this drop in oil prices is likely to add to economic growth in major world economies, removing any ambiguity about the positive effect on the global economy. West Texas Intermediate crude dropped to about $65 from $105 between June and December 2014. The IMF estimates growth in 2015 will increase from 3.1% to 3.5% largely because of the lowering in energy costs. JP Morgan Chase economists see an addition of 0.7% points in global growth in the first half of 2015. ECB president Draghi sees the lower oil prices as an unambiguous positive. Estimates from Rhodium Group show major oil importing countries seeing import bills cut by $500 billion if prices remain low for 6-8 months, with $90 billion going into the U.S. economy. IMF estimate is that only 20% of the drop in oil prices is from lower demand, about 80% from higher fuel efficiency, increased supply using new technologies, decisions by OPEC to lower oil price, increases in supply. Based on estimates by the Rhodium Group, IEA and the IMF, the extra money flowing into the economies of the U.S., Asia and Western Europe from reduced oil import bills, as measured in percentage of GDP is: the U.S. 0.5%, Germany 0.8%, Japan 1.2%, China 0.8%, India 1.8%, South Korea 2.4%. Italy and France and other oil importing countries benefit. The impact comes at a time when Japan, China, India and eurozone economies badly needed a boost after significant slowdown in growth in 2014. It could not have come at a better time and because it is technologically driven as in the case of highly fuel efficient automobiles and new oil exploration technologies, a self sustaining process. The corresponding impact for oil exporters is: Russia -4.7%, Nigeria -5.4%, Venezuela -10.2%....

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A Washington Post Univision poll in Feb. 2016 shows 8 of 10 Hispanic voters with a negative impression of Donald Trump, and 7 of these 10 having a "very unfavorable" impression of him. The poll shows Trump's standing with Hispanic voters deteriorating, with a Univision survey in summer 2015 showing 7 in 10 with a negative view, and 6 in 10 "very unfavorable." This is in line with Trump's increasing anti-immigration rhetoric and calls for a wall at the border paid for by Mexico, upping the anti-immigrant rhetoric in 2016.

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The Washington Post points out the damage to civil society and the rule of law in Egypt in 2014-2015. It cites the Working Group on Egypt's conclusions that repression only works to increase the extremism in the region. A bipartisan group of seven senators including John McCain and Marc Rubio, in a letter to Mr. Kerry, the U.S. Secretary of State, says the U.S. foreign policy must always support human rights, political reform and civil society. It calls these core principles.