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Comey sends another letter to Congressional committees on Nov. 6, just 2 days before the election, saying that "based on our review we have not changed our conclusions that we expressed in July with respect to Secretary Clinton." Just 9 days prior to the election Comey had written to Congress that the FBI was looking into emails found on the computer of Mr Weiner, estranged husband of Clinton aide Abedin. By doing this Comey had inserted himself and the FBI into the election in a way that was not proper said leaders of both parties. The heavy criticism continued with Vice presidential candidate Kaine, president Obama and Secretary Clinton, seeing this as a blatant political move by Comey, who is a Republican. It is likely to remain a subject of criticism long after the election, say experts.

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Krugman says voters in France, Greece, the UK and other countries are protesting against austerity measures imposed in the EU countries. The policies were based on the assumption made by the Chrisitian Democrats in Germany that the German model if applied in other countries would generate the kind of recovery Germany made in the last decade from the high unemployment under chancellor Gerhard Schroeder. German wage restraint agreement between unions, industry and government made this possible under the Hartz reforms, and France is already embarking on wage restraint, with the two major parties, unions and industry backing the plan. But for this to work France and other countries such as Spain and Italy have to be able to export to Germany or other countries. German workers are suffering from stagnant wages for many years, stemming from concessions made to reduce unemployment. Allowing wages to rise in Germany when there is a shortage of workers in industry, would benefit workers in Germany and help France and other EU countries increase exports. German industry is failing to make this normal adjustment in markets by insisting on smaller concessions, even though there is support within the government for higher wages. German growth was possible because of demand outside for its exporters. The "austerity measures" Germany supports would depress demand inside the domestic economies of France, Spain, Italy and other EU countries, and without the wage and inflation adjustments with Germany leave demand weak outside. Without needed demand output falls, unemployment rises and tax revenues decline, leaving deficits worse than before, and a dangerous downward spiral. Better management of finances as Germany has insisted has ceased to become the issue, as both Hollande in France and Rajoy in Spain, and Monti in Italy, are keen on getting control of finances, especially regional spending in Spain....

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Angela Merkel's Christian Democratic Union party suffered a major defeat in North Rhine-Westphalia. Exit polls show the SPD Social Democrats party winning 38.9% of the vote, increasing its vote by 4.4%. The CDU won only 26.3% of the vote, dropping 8.3% from the last election. The SPD state premier, Hannelore Kraft, proved to be a popular campaigner. Her opponent Mr Rottgen made debt-financed spending an issue and told voters this was a referendum on Merkel's policies for Europe. Ms. Kraft said after the win: "We made people the central focus again." This has overtones of the victory of Francois Hollande in France, a few days ago, and shows a fundamental shift in Europe. German media described it as debacle for the conservatives considering the size of the margin between SPD and CDU. The Greens secured 11.6% of the votes and this will enable Ms. Kraft to govern easily compared to an earlier minority government she led. This state is the largest in Germany, with one of every five Germans living here, with the capital in Dusseldorf. The Pirates party secured 7.8% of the vote, and the Free Democrats staging a recovery with 8.3% of the vote under a popular young leader Christian Lindner. Upto this point the SPD lacked an effective leader to challenge Merkel. The sense now is that Ms. Kraft will emerge as the SPD's challenger to Merkel in elections in 2013, or earlier. French president Hollande goes to Berlin on May 16, 2012, and the SPD win is expected to strengthen his position in negotiations....

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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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Germany is turning nationalistic in its approach to the debt crisis in Greece. This comes as Germans consider economic successes as Germany's, and failures in Europe, as the problems not of a united Europe but of these individual countries. The largest circulation German newspaper, Bild, suggested Greece sell the Acropolis to payoff creditors in the bond markets, and putting a estimate of $140 billion for this monument. A senior member of Merkel's party suggesting Greece sell off some of the Aegean islands. And a Bild poll showing a majority of Germans favor expelling Greece from the euro. There is not sufficient acknowledgement by German public opinion of the value to Germany of the export markets in Europe and the part they played in Germany's economic success.

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Wall Street Journal reporters Walker in Berlin, Forelle in Brussels, and Meichtry in Rome, reconstruct the events during critical days after the indecision and failure to reach agreement during the July summit of eurozone countries. This took the form of intervews with leading players and over 25 policy makers. What emerges are accounts of how Germany's Angela Merkel, daughter of a Lutheran pastor, and protege of Eurozone founder, former German chancellor Helmut Kohl, handled the crisis. Merkel was widely criticized in the media for indecision. What emerges is an account of a leader who took decisive action at key moments in the crisis- leading to the formation of new governments in Greece and Italy taking action to improve finances, and negotiations with banks represented by the International Finance Corporation leading to acceptance by banks of a 50% loss on loans to Greece to reduce Greece's unsustainable debt burden. Merkel also worked with the European Central Bank's departing president Frenchman Claude Trichet and new president Italian Mario Draghi to resist French president Sarkozy's efforts to have the ECB assume responsibility for the crisis through large scale buying of Italian and Spanish bonds; which was opposed by German public opinion as a backdoor way of having German taxpayers assume responsibility for European debt. Shown are three critical moments when Merkel intervened. In October 2011, after Italian prime minister Berlusconi reneged on promises to make pension and other reforms to improve Italian finances because of political resistance. He survived a parliamentary no-confidence vote by one vote. Merkel took the lead on October 20, by directly calling Italian President Georgio Napolitano on the phone, to urge him to take action for forming a new government in Italy. The result was Napolitano talking with all political parties to form a new government, leading to the formation of a government by a non-political figure respected in Italy, former EU commissioner Mario Monti. A day earlier, on October 19, French President Sarkozy met ECB president, Trichet, at an event honoring him as departing ECB president in Frankfurt's Alte Oper concert hall. Trichet, Merkel and Sarkozy met in a side room. Sarkozy asked for decisive help from the ECB for large scale buying of Italian and Spanish bonds to lower yields, which had reached 7% on Italian bonds. Trichet responded that the ECB's charter did not allow it to finance governments, with the meeting ending in a shouting match between the two leaders. On October 21, EU and IMF inspectors warned that Greece's debt was reaching unsustainable proportions and austerity measures alone would not work, unless the bondholders, the European banks, took losses of 60% on their excessive lending to Greece. At this point France agreed to the German position arguing for this level of bondholder haircuts or losses, fearing the prospect of large future bailouts that would jeopardize France's triple AAA credit rating. The July 2011 summit accord had only provided for 10% in losses for bondholders. On October 27, at a meeting that went past midnight, Merkel and Sarkozy called IIF head Charles Dallara, who headed negotiating for the banks, to EU headquarters in Brussels. Merkel handed Dallara an agreement containing the 50% bondholder loss demand, and told Dallara- "This is the last offer." Merkel was saying banks would be left with nothing if they rejected it and Greece defaulted. Dallara called bankers and the IIF accepted Merkel's agreement. The final moment that October came on October 31, when Greece's prime minister Papandreou said he would call a referendum on the bailout provisions and austerity measures demanded by the IMF, the EU and the ECB. Bond markets reacted negatively to the announcement fearing a rejection and a Greek default. The Group of 20 leaders was meeting in Cannes, France on Nov. 2, 2011. Papandreou was asked to come to Cannes for a pre-summit meeting. Here Merkel told Papandreou- "the real question" for the referendum was, "Do you want to be in the euro, or not?" Days later Papandreou, lacking support in Greece from political parties and opposition inside his party, submitted his resignation. A non-political figure respected in Greece, former ECB vice president, Lucas Papademos, was appointed prime minister to head a Unity government. Polls after the appointment showed three fourths of Greeks said that this was "a positive step for Greece," with Papandreou's party getting only 11% support and the opposition led by Samaras about 20%. The criticism leveled at Merkel is that Germany should take responsibility for debt throughout the euro area through the issuance of eurozone bonds or the ECB buying large amount of bonds of Spain and Italy. Merkel faced strong opposition inside Germany and from the Bundesbank to this idea. The other criticism was based on austerity measures worsening the finances of Greece because of a lack of growth in the economy, which is true; yet Germany may see the situation in Greece as taking a long time to be resolved in any event because of excessive and faulty financial management. For Italy and Spain putting finances in order was a necessity, and austerity measures should lead to short term sacrifice but improve prospects for the long term by returning the economies to growth. Another criticism is the installation of governments that lack popular or electoral support. As the polls in Greece showed the Unity government there has far greater support and public opinion blames the politicians for the huge mess. In Italy, Berlusconi was widely seen as losing popular support when he resigned. And in Spain Mariano Rajoy, the newly elected prime minister, was elected with a huge majority in parliament following winning in local government elections. Merkel also held her own party, the Chrisitian Democrats together at the recent Leipzig convention. Mario Draghi, was elected with German support to head the European Central Bank. He has long argued for better management of Italian finances as head of Italy's central bank. Draghi was able to support Merkel with carefully planned and managed actions. First to reduce interest rates to support economic growth in a slowing eurozone. Following this with the ECB's Long Term Financing Operation in late December 2011, to provide unlimited loans to European banks at 1% interest for three years in exchange for a broadened list of collateral deposited at the ECB. In a final twist in this drama, Charles Dallara, who was a key negotiator for the U.S. Treasury in setting up the Brady Bonds- that converted bad Latin American government debt owed to U.S. banks in the 1980's into long term debt with large reductions in principal owed and lower interest rates. This was in exchange for guaranteed repayment with 30 year U.S. zero coupon bonds. Dallara was now a negotiator for the banks to reduce the chance of the very same bondholder haircuts that he had negotiated in an earlier period to solve the Latin American debt crisis. Other players in the drama were Axel Weber, head of the Bundesbank, Germany's central bank, who resigned after strong and outspoken opposition to the ECB's large scale purchase of bonds of Greece, Italy and Spain. Jens Weidmann, his protege, who replaced him. And Jurgen Stark, German representative at the ECB, who also resigned in opposition to Germany assuming responsibility for eurozone debt. ...

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ECB president, Mario Draghi, is interviewed by Wall Street Journal reporters Blackstone, Karnitschnig, and Thomson, at his offices in Frankfurt. The reporters press questions such as- are austerity measures going to work in Greece, what happens with Portugal, what is "good" and "bad" austerity, why aren't eurobonds the answer. Draghi sidesteps the Greece question by saying it will depend on implementation of the commitments in fiscal policy and structural change. He takes the discussion to the general situation in southern Europe, in Italy and Spain, with the high youth unemployment and inflexible labor markets, making the point that there is no alternative to fiscal consolidation considering the excessive debt to GDP ratios of Italy, Spain and other countries. Good fiscal consolidation is where the taxes are reduced and government expenditure is on infrastructure and capital investments. Bad fiscal consolidation merely raises taxes, leaves current expenditures as is, and reduces capital investments. From his experience with the situation in Italy- and a similiar situation exists in Spain- Draghi points to the ways in which inflexible labor markets for the protected part of the population leads to temporary work contracts and few job opportunities for young people. The unemployment rate in Spain for young people exceeds 50%. Draghi's view is that fiscal consolidation is contractionary in the short term, but leads to growth in the longer term as structural changes are made and the confidence channel operates. It is also necessary to be put in place first, so that there is time to put the structural changes in place. He sees the program in Portugal on track. At the same time Draghi is aware of the drying up of credit in Spain, Italy and other countries even after the Long Term Financing Operation, and will respond as the situation changes. On the point of eurobonds, Draghi says it cannot be accepted that you spend and I pay, countries spend as they see fit and then they issue bonds jointly. For there to be trust its essential that each country stand on its own, and this is also a condition for setting up a durable fiscal union. This aspect of his views are consistent with the views of German chancellor Merkel and the northern European countries, Germany, Netherlands, Finland. Draghi is not new to this job after being president of the ECB for 4 months. He was on the Governing Council of the ECB for 6 years and has a good grasp of decisions made in the past. When asked if there is more that he could do for growth, Draghi's response is that the ECB will do the most it can do for price stability in the medium term and at the same time within the terms of the Treaty to promote financial stability. ...

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Mohamed El-Erian, CEO of PIMCO, on the European crisis. Things he says to watch, whether the Greece problem is treated for what it is, which is a solvency not a liquidity problem. The current solution he says relies too much on fiscal cuts which can end up worsening the recession, and keeps Greece under a cloud that will further reduce new investment and lead to drops in GDP, and the increase in the debt-to-GDP ratio for Greece is likely. He calls defending Greece's high debt not something that can be defended with the actions taken to date. Other things to watch are whether ways can be found to limit the damage for European growth and the world economy, and whether serious steps can be taken to limit market swings that are a result of investors again overleveraging themselves. See other expert opinions Shiller, Grantham, Roubini. As in earlier comments he sees slower growth ahead.

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Italy's finance minister, Tremonti, met with Jiwei, chairman of the China Investment Corporation, China's sovereign wealth fund. Italy's is trying to persuade Chinese officials to authorize buying Italian government bonds. This would reduce pressures on Italy's borrowing rates in world financial markets.

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The New Democracy party of Antonis Samaras won 29.6% of the vote and came in first in the second round of presidential elections in Greece, ahead of Syriza party led by Alexis Tsipras. The Socialist Pasok party won 12.2% of the vote. Tsipras says he will not form a coaltion government with Samaras, and prefers to remain a leader of the opposition in parliament.

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New Democracy led by Antonis Samaras comes in first with 29% of the vote compared to 26% for Syriza led by Alexis Tsipras in the June 2012 Greece elections.

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Germany's deputy finance minister, Jorg Asmussen, was nominated by the German government to the executive board of the ECB. This follows the resignation of Jurgen Stark. Asmussen was originally appointed by the previous finance minister, Peer Steinbruck, and is from the SPD party. He was retained by Finance Minister Schaeuble because he had experience with the global financial crisis of 2008. Both Asmussen and the new Bundesbank president, Jens Weidmann, are students of Axel Weber, who was a professor before becoming central banker.