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The European central bank increases interest rates by quarter percentage point taking the deposit rate to 3.5%. The US Fed held off on increases. The US Fed started early with its increase in interest rates and maintained a steady posture with 8 interest rate increases over 2022-2023 in a period of just over 12 months. It has strengthened the dollar against the euro. The slow response of the ECB and price gouging in Europe has worsened the inflation picture there. The US Fed's policy combined with consumers resisting price gouging by halting purchases from stores, untangling of supply chains, the Biden administration's series of actions to tackle the cost of living increases, and overall investment in the economy that keeps employment resilient including government investment for the first time, is creating a better economy for America than most of the last two decades. 

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This WSJ editorial makes an excellent argument of how the wrong conclusions can be drawn from Hamas, as an offshoot of the Egyptian Muslim Brotherhood gaining participation and winning of the elections in Gaza. It calls this a mistake in 2006, which does not affect the liberal democratic openings of the Bush administration in the Arab world. Hamas had an armed militia and rejected the 1993 Oslo records, so the necessary committments which are required for democratic processes to work were not put in place, primarily on the advice of Secretary of State Condoleeza Rice who made an exception in this case. The Journal says the mistake was not about free elections, but elections before the proper groundwork had been prepared, which requires that anti-democratic parties cannot be part of a democratic system and elections- a lesson that goes back to 1933. If the Brotherhood in Egypt wants to participate in elections says the Journal, it has to promise to play by democratic rules , and work to establish religious and social pluralism, and honor treaty commitments. And the constitutional system has to setup a system of strong checks and balances that prevent an elected party from subverting the democratic process for future generations whatever its support at any particular time. This is significant as it puts things in the proper context and also clearly establishes a well established point- democracy can only work for democrats. And at the same time preserves what is best about America's heritage and core values in America's stance with the rest of the world, and in this case with the Arab world....

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Susan Jaccoby brings up a major issue facing healthcare in America from personal experience. A third of the Medicare budget, she says, goes to the last year of life, and a third of this goes to the care in the last month. At the same time public opinion polls show Americans see the problem being too much medical intervention rather than too little. Especially when there is no hope except to prolong life for the patient with an highly deteriorated qulaity of life for a few months or a year, doing no service to the patient or future generations who may see their basic services cut when they most need it as a result of the unaffordable spiralling cost of Medicare. A Pew Research Center poll in 2006, shows 22 percent say a doctor should not always make efforts to save a sick person's life, and 70 percent believe that patients should be allowed to die in some situations, when it only prolongs life for a few months for instance and patients live in pain. The problem only gets worse in future years as an estimated 8.5 million Americans are expected to be over 85 years in 2030 with these same choices facing patients, their families, Medicare and the country....

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Jack Welch, former head of GE (General), says there is something that does not add up in the Labor Dept numbers for unemployment in Sept. 2012 showing that the unemployment rate declined from 8.1% to 7.8%, because experts estimate the economy has to generate more than 150,000 jobs each month just to keep up with population growth. The number of jobs generated for 2012 are lower than this number. Another measure of unemployment which shows the underutilization of labor in America, which the U.S. Federal Reserve's Bernanke looks at because it is ameasure of how effectively the U.S. is using the productive resources of the country, is U-6. U-6 covers people in parttime jobs who cannot find full time jobs and this has remained unchanged at 14.7% for Sept. 2012 according to the Labor Department.

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It will take some time for AI software firms (Apple, Amazon, Microsoft and Google)  to generate returns. Yet AI enabling goods, the AI chipmakers (the hardware) made by Taiwan, South Korea and the US's Nvidia are making large profits from the boom in AI investments worldwide. South Korea's Samsung SK Hynix, Taiwan's TSMC and Nvidia in the US are chip makers making huge sales revenue in AI enabling goods- $2.6 trillion for Asian makers including Japan, $1.4 trillion for all US chip makers. This report in the WSJ says whether and when the AI software makers (Google, Microsoft and Amazon)  turn a profit the AI boom is changing the habits of ordinary investors, surging the market capitalization of TSMC, Samsung, SK Hynix and Nvidia, and creating a big surge in stock markets in Asia and a bit smaller by comparison in the US. Total spending in 2026 for worldwide AI services, infrastructure and software was $2.6 trillion in 2026, going up to $3.5 trillion in 2027. The most astonishing aspect of this is how much the AI boom has increased the Asian stock market indexes- TAIEX index of Taiwan which has gone up 55% year to date Jan-June 2026 in value and South Korea's Kospi index which has increased 110% in value. Taiwan's TSMC shares doubled in value. Japan's stock market index Nikkei up year to date Jan-June 2026 32%.  Another aspect of this is that just one company TSMC makes up 42% - market capitalization as a percentage of the overall stock index- of TAIEX Taiwan's stock market index. And just 2 companies Samsung and SK Hynix make up 55% of South Korea's KOSPI Index. By comparison the US S&P up 11% in the same period year to date Jan-June 2026. This report looks at the speculative fever as ordinary investors in the middle and lower income classes in Asia in Taiwan and South Korea from cab drivers, insurance agents, software programmers and elementary school teaches, to high school students with parental sponsored accounts, are all engaged in speculative trading in AI related stocks. What all this means in terms of the cost of living issues, the price of oil and gas with Hormuz and the Memorandum with Iran to open it, the social fabric splintering, the cultural issues splitting electorates in the US and Europe, the migration issues, the issues on world trade is a separate question. It is similar to the railroads and steamship building in the 19th century and the construction of the interstate highway system in the 20th century (in the 1950's in US and in 2000's in China, 2020 in India) different aspects of the Industrial Revolution that overlap with the social and political changes of each period in history. Speculative booms in financial markets accompanied these changes till they returned to a degree of normalcy. It still required regulation, oversight, building the modern institutions of government that improved the economic life of nations and people during the FDR/Truman/Ike  period, and the period after the sixties that shaped the European Union and economic progress in Europe, similar changes in China and India, Brazil. And the many changes now needed in 2026 in the US, and Europe for reindustrialization, and modernization in India, continued development in China. ...

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Benny Gantz, a former Israeli army chief of staff, failed to take advantage of the situation Mr. Netanyahu finds himself in with corruption charges from the Attorney General and a sense that it was time for Israel to move on beyond the Netanyahu years. In a close election contest Mr. Gantz needs to put forward his own message which he is only now beginning to do. He says Mr. Netanyahu's office leaked news of a hack of his mobile phone by Iran which went on the Israeli television network. Mr. Gantz's view of the election is that a clean campaign would resonate with voters after the rough and tumble politics of the Netanyahu years.

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About half of American states went on lockdown including the largest New York and California, covering about 100 million people. Here is a state by state account of the measures taken by each state to limit movement outside the home to essential activity such as getting groceries from stores and medicine from pharmacies. In German states there is a fine of 2500 euros for violations and similar fines in other countries. Most American states have not resorted to specific fines for the lockdowns. Britain also has not specified a fine, but police enforcement will take place with possible fines and jail time for violations. Italy has a fine similar to Germany, with the public calling for stricter action. 

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German chancellor Angela Merkel took a lot of criticism during the height of the euro crisis in 2010-2012, but maintained her composure, sense of direction, and flexibility to a changing environment. She emerges from the leadership test more confident than ever during the 2013 elections for chancellor. Relations with Greece under president Samaras are also being mended after the riots in Athens during 2011-2012. She has also shown flexibility coupled with firmness in the setting of deficit targets for eurozone countries, and the courage to address issues of equity and fairness by calling for setting minimum wages industry by industry. On social and womens issues members of her cabinet have pushed for fairness. She will be remembered for her leadership, ability to learn from mistakes as time progressed during the eurozone crisis and taking firm action when needed, as the eurozone recovers from its financial crisis.

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U.S. president elect Trump meets with the heads of tech businesses on Dec. 14, 2016. CEO's of Amazon, Facebook, Google, and Microsoft were present. Trump was exuberant about the advantages secured by U.S. tech companies in global business, saying- "there's nobody like you in the world. Anything that the government can do to help this go along, we're going to be there for you." The discussions covered need for more vocational education, advantages and disadvantages of trade with China, and immigration. Quarterly meetings of this type are now planned with a smaller group organized by Jared Kushner to cover immigration and education.  Jeff Bezos of Amazon described the meeting as "very productive." Bezos says he told the group that the best way was to use innovation to create jobs outside of tech in agriculture, infrastructure, manufacturing elsewhere, to create large number of jobs. Ginni Rometty, CEO of IBM, and other executives are part of the Strategic and Policy Forum set up to provide business input to the president. ...

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WSJ on Intel CEO Lip Bu-Tan and ties to Chinese chip making since 2001 and as an investor through investment firm Walden. Senator Tom Cotton, chair of Intelligence Committee in Senate, questions ties of the new Intel CEO Lip-Bu Tan to China. DJT calls for a new CEO, saying there is no other solution that Tan should resign immediately. Under the Biden Administration and the previous CEO Pat Gelsinger the US government offered $8 billion in aid to Intel to maintain it's leadership in chip making technologies. Gelsinger was ousted by the Board last year after Intel's recovery effort was taking time and replaced with Lip-Bu Tan who was an early investor in Chinese chip makers. There are questions why the acting CEO Yeary is cited in WSJ reports to have considered offering Intel's chip making manufacturing for sale to TSMC to exit manufacturing, after the help Intel had gained of $8 billion from Biden to become the dominant maker of advanced chips in the US- recovering a position lost to TSMC when the US had invented the computer chip. Under DJT that is still the American goal under MAGA.   ...

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Russian proposals for settlement in Ukraine including giving up the whole eastern Donbass region, recognizing Crimea as part of Russia, and limiting its army and long range weapons. These are the same conditions set in 2022. There is a new situation developing in Europe as Germany, France, Britain and most of Eastern Europe looks to be firm in support of Ukraine. Germany is stepping up its military preparedness under chancellor Merz of the CDU led coalition government. The US under DJT is working under two pathways seeking engagement with Russia and at the same time seeking a way to settle the Ukraine conflict. With German, British and EU support it appears unlikely that Ukraine would agree to all the Russian terms as Russia is using some gains on the war front to gain a clear win in 2025. By 2026 with European support Ukraine may look for a settlement that offers better terms than currently offered by Russia. For the US DJT faces pressures from within the Republican party that would oppose giving Russia a win after its role as the aggressor in the Ukraine conflict, and after the bombing destruction of Ukraine's cities.   ...

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Chancellor Merz New Year Message to Germany 2025, reflects on the events of 2025 with the DJT US administration distancing itself from Europe in favor of a peace agreement in the Ukraine war- with Europe left to take responsibility for defending it's region. By December 2025 the US asserted the Monroe Doctrine and made securing the western hemisphere the top priority, not Europe. Merz and SPD's Lars Klingsbeil removed the constitutional brake on spending placed by Merkel and passed a bill in parliament by December 2025 for a one trillion dollar infrastructure buildup and defense buildup. “Germany is a great country that has, time and again, reinvented itself, emerged stronger from crises, given rise to new cohesion and offers all of its citizens a livable and lovable home.” “We are not the victims of extraneous circumstances. We are not at the mercy of great powers. Our hands are not tied.” A similar situation is happening in South Asia as India faces China over a long border in the Himalayas and India puts up roads, bridges, tunnels and airstrips in the Himalayan border regions.   ...

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A much smaller contraction of 7.5% in the third quarter after a drop of 24% in the second quarter is good news for the Indian economy, says this editorial in the Hindustan Times. The Indian government investment should be increased to sustain the recovery, as second generation reforms made by the Modi administration have increased the potential growth in the economy, it says.

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Supporters of prime minister Netanyahu's judicial overhaul in Israel say there is an overreach by the Supreme Court and it has struck down laws passed in parliament. Opponents of the judicial overhaul say the changes would give the government control of a nine member committee that appoints Supreme Court judges. A simple majority of 61 would make it possible to override decisions of the Supreme Court. At the heart of this struggle is the vision of a secular and pluralist state from the time of its founding by Europeans opposed to a religious and nationalist Israel represented by Netanyahu.

The protests may have begun a new trend that in which parts of the religious right see that things have gone too far too fast for such changes. And the need for new ideas to get a better life for all Israelis without the constant elections and legal battles, the focus on cultural differences of the Netanyahu period.

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Lengthy conversations between Scholz, Macron and Putin for over 80 minutes on Saturday last week in which German and French leaders tell Russia that it is getting deeper and deeper into a situation that is bad for Russia. At the same time Scholz and his chief of staff Schmidt emphasize that Russia should not be winning the war. With Russian gains using artillery in the east the situation is again moving in a direction where additional US military assistance would be needed for Ukraine to defend itself. The WSJ Editorial Board says today that such additional assistance should be given to Ukraine.

Germany and France see a shortening of the war as a way to reduce the impact of a sharp recession. Macron and Scholz are making an effort to get Russia to talk directly with Ukraine to reach a settlement to end the war. 

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Coronavirus has given time for developing world to prepare as it hit Europe first, but now that it has hit Brazil, Mexico, India, South Africa, it is following a pattern that keeps it there for months with no end in sight. This is straining hospital and doctor resources to the limit and leaving doctors stressed and exhausted. This report looks at the nonstop flow at one of Mexico City's largest hospitals Salvador Zubiran.

The informal economy in these countries makes it harder to lockdown completely or for a long period. Now that the economy is reopened the larger population and congestion and the inability to have further lockdowns or tightened restrictions for economic reasons makes for the flow of new coronavirus patients over many months. Some restrictions have been reintroduced in India and the higher recovery rate of close to 70% has offered some glimmer of hope, yet more needs to happen to win this fight.

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Brazil's debt at 57% of GDP which is not likely to decline in 2014, is a concern for analysts at Moody's. Heavy spending and lower tax revenues with high interest rates will increase the deficit to 3.7% in 2014 from 2.48% in 2012, according to central bank estimates. Inflation is about 5.98%. Trade surplus is lower at about $2.6 billion for 2013. Brazil's foreign reserves are much higher than Argentina at $359 billion, ten times short term debt, Argentina at 109% of short term debt and Turkey at 84% of short term debt- which protects Brazil compared to its reserves in the 1997 financial crisis.

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ECB president Draghi reiterated the ECB's committment for 2015 to support the eurozone economy to bring inflation to the 2.0% level. For the eurozone annualized inflation declined to 0.4% in Oct. 2014, and growth in GDP declined to 0.6% annualized rate in the 3rd quarter 2014. Financial markets responded favorably to Draghi's comments before the European parliament: "We need to remain alert to possible downside risks to our outlook on inflation, in particular against the backdrop of a weakening growth momentum and continued subdued monetary and credit dynamics." He added: " If necessary to further address risks of too prolonged a period of low inflation, the governing council is unanimous in its committment to using additional unconventional instruments within its mandate." To skeptics citing the low growth issues, Draghi said the monetary policy of the ECB has been "extraordinarily successful," pointing to the low bond yields for Spain, Italy and France. He emphasized "we need time for this monetary stimulus to go and carve its way through the economy."...

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Indian finance minister Nirmala Sitharaman answers questions about India's 20 lakh crore or $280 billion aid package in this interview in the Hindustan Times. She says Mr. Modi's foresight in setting up the various people aid schemes including bank accounts for all citizens have helped the government send direct help to farmers and workers. She sees a multiplier effect of the aid package.

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Hillary Clinton returns on September 15, 2016, to the campaign trail after 3 days of rest to recover from pneumonia. She chose to speak at the University of North Carolina in Greensboro, with N. Carolina  now considered a state that is winnable, and with a new focus on young people on campuses where she wants to regain her once large lead in the summer. She said that the break had given her time to reflect on what it is she represents. "The campaign trail doesn't really encourage reflection and its important to sit with your thoughts every now and then. It helped me reconnect with what this campaign is all about." Adding that it was about quality health care, financial security, clean water and other critical needs of people.

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Markey and Dingell are supporting diiferent fuel efficiency standards in the House. Vote on the legislation in the House has been postponed after a meeting between Speaker Pelosi and Ed Markey. This gives Markey more time to build a consensus for stricter fuel econonomy standards among House members to be voted on later this year. Meantime rising crude oil prices which are close to $80 a barrel and reaching new highs may nudge the House in his direction while giving the automakers time to adjust their thinking.

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A chance to look at the birth of the universe 3.5 billion years ago. What was there before Brahma's thousand yugas and farther back in time to creation of the universe.  How are such images taken by the Webb telescope? What is a light year and what does it mean to say that the images shown here are 13 billion light years away. Hint: A light year is how long it takes for light to reach us from the vaccuum of space far out in the skies. Light travels at 186,000 miles per second. In one year it has travelled 6 trillion miles through the vacuum of space. For these most distant objects detected by the Webb telescope, the particles of light have traveled some 13 billion light years, traveling across space for 13 billion years. It tells what the distant objects were like 13 billion years ago.  The light of a thousand suns mentioned in the Bhagavad Gita is not just a metaphor. When on sees the immensity of space everything down here on earth looks insignificant before the Creator. ...

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It calls for balancing it, taking into account tradeoffs and people's lives in 2025 after the pandemic, cost of living, health and housing vs net zero and speed of net zero targets. Opinion in UK on Net Zero cutting emissions changed over 4 years to split 50-50 on other spending priorities social care immigration NHS, in a focus group of The Times of London. In 2025 40% want to spend less on cutting carbon emissions net zero, large numbers favor more for NHS, then social care, policing and education in equal importance, followed by social housing. 

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Friedman says the American voter basically said Obama did not get it right the first time but we are going to let you have a second chance. The voters did not have the same enthusiasm for Obama this time. The biggest challenge he says is the lack of enough well paying jobs generated in the American economy. The good wage jobs are declining in manufacturing and in other industries. These jobs have formed the core of middle class jobs in the years since the 1950's and are now endangered. The situation has worsened since the 2008 financial crisis. Zuckerman pointed to this in a recent op-ed in the WSJ, with most of the jobs generated since 2008 being in low wage part time work in retail and other related industries. It is a problem that needs solutions that go outside party ideologies- a new level of imagination says Friedman, educational reforms and collaboration in new ways between schools, universities, business and government.