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Carrie Lam, Chief Secretary for Administration of Hong Kong SAR government from 2012-2017, led the negotiations on Beijing's side with the Hong Kong movement for more autonomy. She did not back down in the negotiations and is favored by Beijing over the former Financial Secretary Mr. Tsang. Tsang spent some years in the U.S. compared to Lam who spent some time in the UK for education. Chinese official are skeptical of Mr Tsang because he said in the past that more legitimacy for Beijing could be gained with further autonomy for Hong Kong.  Tsang is supported by the autonomy movement in the election to be decided by the 1200 member election committee, and Ms. Lam by pro-Beijing members. Tsang also has good relations with the Chinese government and has higher popularity with the public, but his early years in the U.S. are paradoxically making Chinese officials skeptical, even though Ms. Lam's husband and two sons are British citizens.

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Asking for broad powers for the government to seize non-financial firms like AIG, Treasury secretary Geithner argued that if these powers existed the government could have seized AIG and incurred a far lower cost of rescuing the company. Fed chairman Bernanke supported Geithner in this position before a Congressional committee hearing.

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Prime minister Modi cites the successful Mars mission "Mangalayan" as showing India's technological capabilities and its ability to do things speedily at very low cost. For foreign investors India offers a stable politcal climate because his party has an absolute majority in parliament and controls many state governments, as well as being a democracy with a vibrant and internet connected young generation. A young population with 55% of the people under age 35 makes India the manufacturing powerhouse of the next two decades, said Modi. And the consumer base of over 1.2 billion people an attractive market. It was a rare combination of hands on salesmanship rarely seen ever on television from a prime minister. In one exceptional response about the condition of women, Modi said he personally led his ministers and legislators through Gujarat state's rural areas house to house in 45 degree centigrade summer heat on June 11-13 school opening days. He did this urging parents to send their daughters to school with the slogan "Send your daughter to school, Save a Girl." The result he said was 100% school enrollment in these rural areas for girls. A rare person at a special moment in India's history pushing the goals of development with uncommon tenacity....

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The PRI party defeated the ruling PAN (conservative nNational Action Party) of Presidetn Calderon in midterm elections. PRI won five of six governorships and won 237 seats to the PAN's 143. Mexico is facing its worst economic crisis since 1995 with the devaluation of the peso and American loan assistance. THis time it is aflow-through of the American economic crisis, adrop in exports, a collapse of the auto sector, and drop in remittances from Mexican workers in the USA as well as tourism. The GDP of Mexico dropped 5.9% in 1st qusrter 2009. Unemployment and underemployment have doubled leaving one in six Mexicans without ajob. Poverty also has risen in this situation. Meanwhile a stalemate in the legislature has led to stagnation in terms of addressing critical areas of education, investing in the petroleum sector. And monopolies and oligopolies in a range of industries from tecommunications to cement trim GDP growth by 1% according to Guillermo Ortiz, central bank governor. Oil revenues are dropping, and proven reserves now are equal only to 13 years of current output. And public spending on infrastructure is declining. Disillusionment with the political system is growing, so much so that 5.4% of the ballots were spoiled in response to a campaign by political activists fed up with corruption and paralysis in the political system....

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To gauge economic progress and improvement in living standards, instead of GNP alone look at number of indicators. Look at healthcare and education, cleaner skies and cleaner air, water and land. This is what areport commissioned by President Sarkozy of France, done by Siglitz and Amartya Sen, esentially emphasizes. And be careful when you see more cars and gasoline and more driving drive up GDP numbers and growth because this may actually work in the wrong direction, and have unusual negative effects as the SUV buildup and later collapse led to destroying companies and jobs in Michigan and the midwestern USA.

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Scientists at the RCA Materials Research Labs did the first work on LED's in the late sixties. The Nobel prize winning scientists from Japan doing research on LED built on the earlier work of these scientists in the U.S.

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Stock markets have declined about 1% during the current banking crisis. This shows that the action taken by president Biden quickly taking over Silicon Valley Bank and closing Republic Bank is working. Treasury Secretary Janet Yellen and the central banks of US, EU, Swiss, worked together to take immediate action. Swiss central bank and the government stepped in to arrange the backing for UBS to takeover Credit Suisse bank.  The crisis affected market sectors in differing ways. Information technology stocks were up 5.7%, energy stocks went down by 7%, bank stocks declined 6%, sensitive materials sector stocks went down by 3.5%. Risks remaining are that the loss of confidence in regional banks could affect lending. The Fed's policy of containing inflation by raising interest  rates could continue say experts leading to information tech stocks losing any gains. Any drop in the price of oil could help the economies of the US and EU, India, Japan and China. By March 15 prices of US crude had dropped for West Texas Intermediate benchmark to $67. Any drop of prices to the $60 level increases growth in the EU, US, China, India and Japan, reducing chances of a recession. ...

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Krugman says in NYT that inflation is receding and its causes lie mainly in pandemic related supply chain issues not fiscal efforts to fix dilapidated infrastructure, invest in fighting climate change, or help for needy workers and families.  He looks at Fed chair Jerome Powell’s discussion on inflation and this he says shows that fiscal policy or government spending to fight the pandemic and US needs for infrastructure and science/chips played at most a distinctly secondary role. What Krugman does not say is that this does not mean that inflation is not an issue for many families living from paycheck to paycheck. Harris clearly spelled out a Plan for housing costs and cost of food and this is the kind of effort needed to tackle this issue secondary or not in astatistical sense. Also not given recognition is that the government spending is changing the very nature of the US economy by creating more potential for it to grow till 2030 in a way that would not be possible if this investment by president Biden was not wisely made. One has only to look at Germany to see its crumbling rail system and failing infrastructure to see that what Biden did right and Merkel did wrong. ...

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  In a way that recalls FDR Biden backed dockworkers on wages that fell behind.  Former Fed Governor chief economist at the White House, Lael Brainard, together with the Transportation and Labor Secretaries Buttigieg and Julie Su, with White House chief of staff Zient, all in a Zoom call at 5.30 am with shipping company management in the EU and Asia. Brainard made proposal the shipping companies accepted for 62% increase in wages over 6 years, increasing top wages $24. The dockworkers union Longshoreman's Association asked for 77%, a decent share in the large shipping company profits after decades when wages lagged behind cost of living. Zient told the shipping companies in that Zoom call- “I need the offer today — not tomorrow. I’m going to brief the president in an hour that you believe you can get this done today.” Stein, Duncan and Gurley tell the extraordinary story of how Biden backed the call for raising 45,000 workers wages on the port docks along the East.  Coast. ...

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Hilsenrath points out that Japan's central bank, the Bank of Japan's holdings of securities and loans has increased by 35% in 2008-2013 compared to an increase of 2, 3 and 5 times respectively in the assets of the ECB, the U.S. Federal Reserve and the Bank of England. Experts in Japan say what was considered commonsense by Bank of Japan chief Shirakawa and others, that aggressive monetary policy doesnt work, is considered nonsense in other parts of the world. They say aggressive monetary policy was never tried and Shirakawa diluted its impact by saying he did not think it would make much of a difference. Communicating the right message to financial markets was part of the approach taken by Draghi at the ECB, Bernanke at the U.S. Fed and King at the Bank of England. Anil Kashyap of the University of Chicago agrees. He says the Bank of Japan missed its inflation target for 15 years. BOJ also bought shorter term bonds in its bond buying efforts, with maturities of three years compared to the average maturity of nine years for bonds being purchased by the U.S. Fed. This reduces the effect. The Abe administration is careful to present the approach as similiar to that in other countries, and intended to spur growth in Japan, which in turn should spur global growth. U.S. Fed chairman Bernanke has supported this effort. Prime minister Abe was on a visit to the U.S. communicating Japan's approach and winning support, something never done before....

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The first use of chemical agents in Europe since 1945 in the poisoning of a former Russian spy led to strong coordinated action by the European Union countries, Germany, Britain and France with the U.S. Trump administration. This NYT report shows how the action was taken and the meetings of Macron, Theresa May and Merkel that led to strong action. Because Russia is energy supplier to Europe and the Social Democrats in Germany as part of a coalition in Germany not favoring strong action earlier governments in the EU shied away from such action.

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The revival of De Gaulle who led post war France and created the Fifth Republic is taking place in France as France looks for renewal following the devastation caused by the pandemic and other crises. Following the crisis of the Second World War and the defeat of France in 1940, it was General Charles De Gaulle who brought modernization to France and the self-belief that led to France joining Germany in setting up the European Union. It was De Gaulle who set setup the presidential system in France after weak coalition governments persisted throughout the period between the tow wars. As Barber points out here in the Financial Times this has a good claim to be France's most stable political system since the absolute monarchy of the 18th century. It was also De Gaulle who set French agriculture on the path to modernization and started the infrastructure building that created the France we know today. De Gaulle also appealed to all segments of French society and engaged them in the process of national development unlike the different administrations of the last three decades. ...

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The last time the FBI involved itself in elections was with Edgar Hoover in the election between Harry Truman and Dewey for U.S. president in the 1948 election, when Hoover made clandestine efforts. One Georgetown scholar says it may be an unfair comparison for Comey, but it raises questions about his bringing up the email inquiry a week before the election. Other experts say it may be a sort of moral hubris of Comey that led him to this. An expert at New York University School of Law, Mr. Gillers, is cited by NYT. Gillers says the letter to Congress was a second or third mistake to cover up a previous mistake, that Comey should not have made repeated public statements, not the statement criticizing Hillary Clinton about the email practices, not writing a letter to Congress a week before the election. Michael Chertoff, a Republican who led the criminal division of the Justice Department under Bush, says Comey violated longstanding Justice Department rules and practices in July and this week, and provided fodder for all kinds of speculation.  ...

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DJT and Treasury's Scott Bessent taking a "call" not a "put" on the economy March 2025. Tariffs as short term bargaining chip, primarily domestic policy on CMC (Canada, Mexico and China) tolerance for fentanyl flows into the US. Taking fentanyl, drug trafficking, and migrant trafficking out of the Nation, will revive the spirit of America's neighborhoods across America's vast landscape. It is incumbent on CMC countries, Canada, Mexico and China, to stop fentanyl flows into the US across their borders that have caused hundreds of thousands of American deaths. Tariffs are a last resort for America to get action and save America's neighborhoods from this scourge. Investment in the US manufacturing in the private sector as the long term policies shape the economy, the cutting of waste in spending, have the potential of reviving the economy and leading a second stage of growth led now by the private sector investment after the government led spending under the Biden administration on restoring American infrastructure. ...

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Ian Shepherdson of High Frequency Economics explains to the NYT's Gretchen Morgenson why growth will be sluggish in 2010, below 2%. He says the debt overhang over consumers and banks is resulting in afree fall in bank lending. He sees troubling signs in recent NFIB data,(National Federation of Independent Business) which shows credit tightness peaked this fall for small businesses. This is where jobs growth takes place and where tens of millions of people work. He says bank credit peaked at $7.3 trillion in October 2008 and is down to $6.72 trillion, he says banking sector loan and lease assets have to fall by another $2 trillion and that will take several years. He says the Fed's asset purchase program i about trying to prevent acollapse in the money supply. When the Fed buys assets it creates deposits, which in turn help offset a credit contraction which he estimates would be 1% a month in the absense of the Fed actions.

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Brian Wesbury puts together some math as to the estimated cost of the subprime mess. Agrees on what the Bernanke Fed has done. Sees need not for liquidity in the system but concedes need for it to prevent seizure in credit markets, and sees need for more certainty and confidence in the long run.

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This editorial in the NYT says Bill Clinton moved the Democratic Party to the centre in 1992. In 2016 about 25 years later, after the removal of the Glass Steagall Act led to the 2008 global financial crisis and a deep recession, after the trade relations with China led to loss of U.S. manufacturing jobs over two decades and the hollowing out of industry in the midwest, things have changed. The revolution led by Bernie Sanders, a shrinking middle class, smaller access to college education for the middle and working class, and wide disparities in income, are putting the Democratic Party closer to its roots and the days of FDR. The Democratic Party platform calls for a 21st century Glass Steagall Act to separate normal banking from investment banking, opposes the TPP to prevent any further export of jobs overseas, and goes for a $15 minimum wage. This was also evident at the opening day of the Democratic National Convention when Sanders told the gathering in Philadelphia that even though he was not the candidate, these are the planks of the platform that Hillary Clinton will be pushing for in her presidency. What the editorial does not point out is that the Republican economic platform also calls for reinstatement of Glass Steagall Act, opposes TPP and opposes any loss of American jobs to overseas locations. It differs on the minimum wage leaving it to the states, and it is likely to skew tax cuts towards the wealthy, but also possibly removing the lower income brackets from taxes as Britain has done under the Conservative Party. Both parties today are looking for support from the middle and working class and have directed their appeal to these two groups which are in upheaval. The election of Trudeau in Canada recently also followed this trend, after the hollowing out of Canadian industry in Ontario and Quebec in a similiar pattern as in the midwestern U.S.  ...

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16.3 million acres wildfires in Canadian West burn in August 2025- the smoke reaches midwest and northeastern US. Wildfires in San Luis Obispo County in California 2025 bring smoke to Los Angeles.

The Air Quality Index in Detroit, Montreal and Toronto reaches levels of 147, 144, and 158, it reaches. On August 4, Cairo was 122, Dubai 107, Kolkata 112. It shows how these fires are affecting air quality in the US and Canadian cities. Northeast New York Boston will be affected by Aug 8 Fri as it eases up with winds in Detroit, Toronto by Aug  6 Wed.

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Bernanke's plan to address the deep downturn is very aggressive and he is pulling out all the stops. This includes the purchase of mortgage backed securities, Fannie Mae and Freddie Mac corporate debt and other assets, Since it stated its intention in late November to buy such securities, the 30 year mortgage rates have fallen to 5.2% from 6%, and refinance applications have tripled. Now the purchases will be greatly expanded. See the related link to this in Hubbard and Mayer article based on their research paper, in the WSJ, that shows that at a mortgage rate of 4.5% the housing market prices could stabilize. Next step the Fed will, starting early 2009, pump money into markets for student, auto, credit card ansd small business loans in hoping to bring life to those markets. How much money is involved? Quite a bit. All told the Fed's assets could add up to $5 trillion says Ed Yardeni of Yardeni Research, up from $2.2 trillion now. Its these sweeping moves and decisions that have overshadowed the December 16 announcement cutting the target federal funds rate to a range from zero to 0.25%, the lowest in its history. Whats the thinking behind this? Coy of BW points to Bernanke's research on the depression years and the lost decade years in Japan. In 1999, in a book he contributed to, Bernanke referred to Japan's monetary policy and passive approach as a self induced paralysis, including all the zombie loans that were allowed to continue on company books and no effort to clear up the bad assets quickly. He always thought highly of the aggressive approach taken by Franklin Delano Roosevelt, and felt that more tools available and a better understanding of the market system since FDR's day enabled a lot more actions to be taken to reverse the kind of steep global downturn that might occur. Yardeni's view is that even though this huge asset buildup could lead to inflation down the road, the economy in the medium term faces a deflationary environment, and the only way to cope with this series of bubbles bursting is to create another bubble, rather than risk anything going seriously wrong. Basically Bernanke is making an assessment of the current situation, and he sees bad credit situation getting worse, bad unemployment situation getting worse, consumer spending falling off and getting worse, continued home foreclosures and falling prices, the transition between administrations and lack of policy direction for a few critical months complicating things, and he sees the economies of all trading partners in Asia and Europe weakening in great speed, and sees very tough years for 2009 and 2010 no matter what the administration and the Fed do. Not enough aggressive actions to forestall the worst is as bad as inaction in Bernanke's view. And with all the aggressive moves, including the $1 trillion stimulus and infrastructure spending to create 2.5 million jobs that Obama administration plans, the US and global picture for the next 24 months will still be a long uphill climb. So the risks for Bernanke are all in the region of not doing enough and not doing it vigorously and speedily to get the best results. ...

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The Bank of International Settlements warns that China's "credit to GDP gap" is 30.1. A figure of 10 normally is considered to be high and needs watching. The People's Daily carried an article presumably by president Xi Jinping warning about the consequences of the debt that had been growing "like a tree in the air." The debt to GDP ratio was at 255% at the end of 2015, and is up 107% since 2008 when the financial crisis led to a huge stimulus that has accelerated debt growth. The corporate debt is at 171% of GDP. The article in the People's Daily warned about reflexive stimulus every time growth slows and said that China cannot any longer "force economic growth by levering up." Cross border liabilities is one area of progress falling by a third to $698 billion, as companies cut debt quickly before the U.S. Federal Reserve raises rates. In the future China is more likely to roll over debt as Japan had done following its debt surge and bad debt with zombie companies, which would in turn lead to lower growth. In the past the government was able to absorb the growing debt because it was not as high as it is today, and the economy was growing rapidly. This is no longer the situation, the reason for alarm at the situation facing China. A spike in interest rates of 250 basis points is cited as one situation which could affect China adversely. ...

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This picture essay in The Guardian shows the 700,000 additional people displaced inside Afghanistan in 2021 in addition to the 2.9 million displaced people by 2020. The British stayed out of Afghanistan except for brief forays from concern about Russia entering close to British India. Not much happened till Zahir Shah, the King of Afghanistan was seen as not doing much for a famine that struck the country in 1972. Drought struck much of the country in 1972 leading to the deaths of over 100,000 people from starvation. The King had ruled since 1933. And for a brief period his cousin and brother-in-law Daud Khan had actually run the administration between 1953 to 1963, before being dismissed with a new constitution adopted not allowing the royal family to rule the country without consulting parliament. The poor handling of famine relief led to the fall of the government appointed by King Zahir Shah in 1972. In 1973 Daud Khan violates this constitution and assumes control of the country. British India was in 1972 the India of the Nehru period, with his daughter Indira Gandhi the democratically elected prime minister. India fought a brief war with Pakistan in 1971 that set up the new nation of Bangladesh from territory of East Bengal. India preoccupied with Bangladesh refugees did not do what the British had done to keep outside powers out of Afghanistan and maintain a stable monarchy. Daoud Khan's repression of Communist party leaders led to Communist party military factions in the army taking over the country in 1978. The Afghan military led by officers in the army's Communist factions had little support in the traditional Islamic nature of the countryside for their land reforms. Leading to a rebellion and entry of Soviet troops under a friendship treaty signed in 1978 with Soviets under Leonid Brezhnev. It is this disrupting of the stability of the Afghan monarchy or the entry of Soviets or Americans or any other foreign influence that was carefully prevented in British India by Britain's India policy, which resulted in a period of peace and stability in that region. The events of 1974 with the fall of the monarchy, and the entry of Russia in 1978 broke two of the main rules the British had observed from 1750- a stable monarchy and no outside influence in Afghanistan. A policy the British also followed for Tibet. When China entered Tibet in 1950 Nehru was too preoccupied with the millions of refugees from Pakistan and failed to prepare in the years 1947-50 for following British policy on Tibet by preparing or anticipating the entry of foreign powers. The entry of China into Tibet in October 1950 led to the Sino India border war of 1962, and led to the current situation of India facing a Chinese army all along the border of Arunachal Pradesh, Ladakh, Nepal and all the way in the Himalayas to Kashmir. The result has been billions of dollars spent by the US every week starving domestic priorities, as president Biden observed this week, and a burial place for empires. Ten years for Russia, and twenty for the US with the same result. It has left the whole region poorer and in humanitarian crisis for 50 years, and created crises for Russia, Pakistan, India, and the US. ...

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Analysis of its findings in the WSJ story on August 18 shows the FDA unnecessarily delayed private labs from developing and using their own tests from Feb 9 when FDA test for coronavirus failed for its third component. The FDA said it would correct the flaws but repeatedly failed to do so until it finally allowed private labs to go ahead on their own- a costly delay of 3 weeks that made the test and contact trace strategy inoperable, because the time window was lost in those 3 critical weeks. In March through August the pandemic has now taken up about 5 million cases in the U.S. and 170,000 deaths, with no end in sight. During times like these and in a swiftly moving current of a river such as the time of a pandemic, the  teaching hospital labs and labs with resources and scientific reputation with their lightning speed have to have the freedom  to immediately respond. In this case the FDA should have released the private labs of teaching hospitals and the the highly reputable labs of well known medical companies to immediately start developing their own tests and using them, starting  on Feb. 10 the day after it was evident that the FDA test's third component was not working. ...

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WSJ Analysis of government data shows on Feb 22, the actual savings from cutting fraud and waste, misspent funds of $2.6 billion less than the $7 billion shown on the DOGE website. Of this 2% of savings are attributed to DEI closures. What it shows is that generating savings is a long term effort requiring weeks, months and years of hard work with patience and perseverance, as shown by the Truman Committee of 1941-1948 of the US Congress during the War and the early part of the rebuilding of Europe. DJT corruption, fraud and waste cutting efforts owe it to the American public to take a long term view similar to the Truman Committee of 1941. That Committee was setup with unanimous support in Congress for Resolution 41 of Senator Harry Truman of Missouri in Feb 1941. This type of unanimous support remains a hope, yet just as the efforts of president Biden were needed for investment in crumbling infrastructure, there is also today the need to see that $4 trillion in the US budget is wisely and prudently spent, even if this effort is led by the opposite party. As the articles alongside show the Truman Committee lasted till 1948 for the better part of the decade. It helped Harry Truman replace Wallace for the Vice Presidency in 1944 under FDR, and within months to the White House till 1952. A period of spending for the Greece-Turkey and Marshall Plan for Germany aid efforts similar to aid to Europe today, on top of the wartime spending comparable to the 5 year effort against the pandemic starting in 2019.     ...

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Pakistan is seeking a bailout from the International Monetary Fund. As part of the negotiations the IMF is asking for a cut in fuel and other subsidies. This week the new government of Pakistan under Mr. Sharif increased fuel prices by 17% after removing some of the subsidies. Economic mismanagement has led to a lack of funds to support the economy and import needs. Political instability is making finding solutions difficult.

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The future both of Turkey and Europe at stake in the elections in Turkey. Turkey has been hit by inflation of over 60%, a severe earthquake, difficult relations with the EU and the US, a lack of foreign investment. The mayoral elections in Ankara and Istanbul went to opposition parties. A civil servant is heading the opposition parties contesting the election with Mr. Erdogan who has led Turkey for 2 decades.