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Martin Feldstein says China is gaining control of three problems it faces of shrinking export markets, the effects from a large stimulus in response to the 2008 financial crisis, and inflation especially high real estate prices. The economy is shifting to higher role for services and less dependence on exports under the new five year plan. The real estate prices are levelling off after steep increases. And inflation is under control. New investment will go into infrastucture needs such as power development and low income housing. As the economic problems are being tackled, the political problems remain. China faces an aging population under its one child policy, and it will have to support an increasing number of retired people in the future. Inequality and corruption are two problems that continue to grow and present challenges to the new leadership taking over in 2013.

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GDP growth in the eurozone was 0.3% for the 4th quarter 2014. For 2014 eurozone GDP growth was 1.4%, according to Eurostat. Growth in GDP for Germany was 0.7% for the 4th quarter and 2.8% for 2014. Retail sales in December were particularly good in Spain and Germany, with sales up 2.8% for the eurozone over the prior year. Italy's GDP growth was stagnant and France's was 0.1% for the 4th quarter, showing that Germany and Spain are leading the way for eurozone recovery.

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Research firm Dragonomics says real estate prices fell 4.9% in April from the prior year for nine cities in China. In 2010 prices in these nine cities went up by 21.5%, the increase in 2009 was 10%. Standard Chartered estimates China's second tier cities, such as Dalian and Tianjin, could have 20 months of housing inventory by the end of 2011. Standard Chartered says price declines of 10-20% can be expected. Government data understates the extent of the bubble and the drop in prices say analysts. Beijing real estate consultant, Soufun, confirms the slowdown in price increases, saying its data show average property prices went up by 5.1% in May over the prior year, compared to the jump in prices in 2009 and 2010. Prices of copper and steel are coming down after rapid increases. The price increases in the Chinese real estate market have put housing out of the reach of ordinary couples. In 2006 an average price of a new apartment in Beijing cost $100,000, by 2011 this had gone up to $250,000. It woud take 57 years of saving for an average person to buy the apartment at todays cost. The government's response has been to boost down payments on mortgages for second homes to 60% from 40%, prohibiting state owned enterprises outside the real estate sector from investing in real estate, and raising the reserve requirements of banks....

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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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Otis Elevator is moving a plant based in Nogales, Mexico, back to the U.S. This plant was moved to Mexico in 1998 for cost reasons. Now Otis CEO, Didier Michaud-Daniel, says producing at a new South Carolina plant will cost less than Mexico. Logistics and freight costs are 17.3% less in the U.S. than Mexico, and an additional 20% in savings come from "efficiencies" gained by having all its white collar workers associated with elevator design and production. Most companies that manufacture in China and Mexico keep their design and engineering jobs in the the U.S. It is not clear to what extent American companies have considered all the costs of separating design and engineering from manufacturing, including the opportunities for close cooperation possible in one location that are lost when everything is so spread out. At Otis toolmakers in Dallas and engineers and designers located in Indiana and Arizona traveled to the Nogales, Mexico plant. This can be especially important when as in Otis's case the new plant in Florence, South Carolina, plans the launch of a new generation of elevator designs. In this case there is an added benefit by making it easier for customers to visit the plant and look at the product. The new plant will have more automation and use fewer workers on the factory floor. The new factory will employ 360 workers including white collar workers, the same as the Nogales, Mexico, plant with a lower number of factory floor workers. ...

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The documentary "Last Train Home," directed by Lixin Fan, shows the life of migrant workers and their families in China. Fan sporadically spent 3 years with one family, Zhang Changhua and Cheng Suqin, to capture glimpses of this family's life as one of China's 130 million migrant workers. The family left a village in Sichuan province, to work in a factory in Guangzhou, which manufactures denim jeans. For 7 days a week -once working 15 hours a day for 29 days straight- the Zhang family works continuously, just to send money back home to the grandmother who raises 17 year old Qin and another child. The daughter is rebellious as she is resentful of the parent's absence. This is the story of migrant families throughout China, the quiet hidden ordeal, that is behind the cheap products available in western countries. And Fan documents this well with scenes at the railway station, as the family catches the last trains back to Sichuan, for the yearly trip back to the village. There is a whole society in transition, and there are many sides to this story, this is the human one of families caught up in this transition. Lack of farm subsidies and taking over of farmland for building and construction has hurt life in agricultural areas. The Communist party has made dissent difficult. And the imposition of a decades old registration system that denies education and social services to migrant workers from the villages, creates huge strains on family life. Fan says- before the showing of this film at the IFC Center in Greenwich Village- that he hopes to raise questions in the minds of viewers. Does the blame for this go to the government, the factory owners and companies, or the West, something Fan says he is not able to answer. That there is little official opposition to the film- in the same manner that the suicides at Hon Hai, and the factory conditions there and in other factories across China, are being freely reported- suggests that China is coming to terms with the different angles from which to view the economic transition that has taken place over the last two decades. It is also a belated recogniton of the whole range of questions raised by a singleminded policy of manufacturing for western markets, especially when these markets with debt-laden consumers may present huge uncertainty in the future....

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Saudi Arabia needs current oil price of $60 a barrel to move up to $80 a barrel to balance its national budget. To do this OPEC needs to coordinate its oil production cuts with a group of 10 countries led by Russia that includes Mexico. These countries include countries in the former Soviet Union.  In December cuts of 1.2 million barrels a day were coordinated between the 2 groups to push up oil prices. Now the OPEC cartel plans regular meetings with the Russian led group to push up oil prices. Under a draft document an alliance between the 2 groups would last 3 years and include regular meetings. Earlier Prince Salman led Saudi government proposed replacing OPEC with a new group combining Russia and Saudi Arabia and the other countries in OPEC, yet giving most of the decision making power to Russia and Saudis. This was rejected by Russia and was received poorly by Iraq, Iran  Nigeria, Angola, Algeria. The Iraqis reminded Saudis that OPEC was started in Baghdad. ...

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The approval of 254 investment projects in China, accelerating investments in infrastructure and construction as part of a second stimulus plan in 2012, folllowing the first stimulus in 2009. The risks are higher this time because of the inflated housing prices in China, the increasing lack of affordability of housing for average families, and the continuation of policies that emphasize infrastructure spending at the expense of consumption and earnings on savings for ordinary families. With that kind of spending has come increased levels of corruption. The glut in the steel industry will grow worse with more spending on steel plants.

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Chrysler-Fiat's efforts to ramp up Jeep's global sales in 2012-2014. Plans to build 120,000 Jeeps annually in St. Petersburg. Chrysler CEO Marchionne sees Jeep as Chrysler's global brand. The problem with sales in Russian and Chinese markets is price, because of high import duties. In Russia this can add upto $22,000 to price, and in China $37,000. This put Jeep prices in Russia at about $86,000 for a Grand Cherokee, forcing it to compete with luxury SUV's like Land Rover. Production locally in Russia and China should make Jeep prices competitive. For covering the international market Chrysler's plan is to build 6 Jeep models with new designs for a sleeker appearance as a lifestyle vehicle. In the past the Jeep was seen largely as a off-road SUV in emerging markets rather than a lifestyle vehicle.

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In an effort to address global uncertainty, Australia's Treasurer, Wayne Swan, presented a budget designed to move to a surplus of A$1.5 billion from a deficit of A$44.4 billion for fiscal year ending June 30, with large cuts in defense spending. Savings and cuts amount to A$33.6 billion. The trade deficit is widening, and Australia faces uncertainty about the prospects of the mining boom continuing to sustain economic growth with the slowdown in China. The budget plan is based on assumptions of 3.25% growth in the next fiscal year, unemployment at 5.5% slightly above the 5.2% today. The growth in GDP for the last quarter of the prior fiscal year slowed to 2.3%. Australia's widening trade deficit for the first quarter 2012, was A$3.2 billion. New taxes on mining profits will generate A$6.5 billion in 2 years, and taxes on carbon pollution A$7.4 billion. With elections set for 2013, the government plans to continue payments supporting low and middle income families.

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As unemployment rises and industrial production drops Democrats in the states with dependence on heavy manufacturing and use of coal are going to have to make the difficult tradeoffs between their support for controlling emissions and favoring the environment versus their interest in keeping industry. According to the Department of Energy, in 2005 the state of Ohio derived 86% of its electricity from coal compared to California which derived 20.7% of its electricity from coal, 40% from hydroelectric power and renewable sources. Other Great Lakes and Plains states are similar to Ohio. Yet the key committees in Congress and the Senate are controlled by Ms. Boxer, Mr Waxman, and have the backing of Speaker Pelosi.

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Pessimism about the pace of democratization in China with the continued dominance of the Communist party in the business and economc structures of the country. The interrelationships of the party with state owned companies and the role of its 80 million members in running all aspects of life in China. Experts in China say the 18th party Conress showed no signs of change in the party's control and no sign of experimentation to allow for change comng from within the system so that China could establish a constitutional democracy with the rule of law. Experts in China say the new leaders Jinping and Keqiang may not be able to make changes even if they wanted to, because of the party's control and the earlier presidents and prime ministers from the last two decades who still retain a strong influence on the direction of the country.

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Migrant workers in China are not allowed to bring their children with them when they move to work in factories located in urban areas. This is the large price being paid for the rapid industrialization in China for 2 decades 1990-2010 by the 61 million children of migrant workers. Lixin Fan's documentary "Last Train Home" documents the life of children of migrant workers separated from their parents for long periods of time. Analysis from the All China Women's Federation shows 75% of the 61 million children left behind by migrant workers have parental visits once a year mostly during the national Spring holiday. 82% of these children want their parents to come back home and 42% say they have no one to talk to when they feel bad. A large proportion of the children are missing parental attention at the most sensitive age when they most need it- 38% left behind are ages 1-5, 32% ages 6-11.

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This editorial in the Economist says China faces risks of a steep fall in the currency in its management of the currency. It suggests temporarily using capital controls to stabilize the currency and later gradually lift the controls. In any case it says the exercize will not be painless because of high debt of companies and in the Chinese economy.

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Ford Motor's reliance on the redesigned F-150 and other large pickup trucks for its higher profits in 2015. The price tag on these vehicles keeps rising, with some pickups sold at about $50,000 and having interior leather seating, amenities resembling luxury cars in 2015. Higher fuel efficiency engines, body redesigned with lighter materials including aluminium, other innovations, combined with the lower price of gas, lower interest rates for financing, have led to a resurgence in these larger vehicles.

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India's crude oil imports were sharply higher in 2011 and 2012. India's imports of crude oil for the first 11 months of the 2012 fiscal year ending March 31, show a 40% increase over the same period in 2011 fiscal year. India's import bill was $128 billion for crude oil imports for the 11 months of fiscal year 2012. Indian subsidies to lower prices for fuel are $30 billion annually. The higher prices for crude create inflationary presssures in India and restrict economic growth.