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The vast expansion of the Indian middle class takes on a different dimension a few weeks before the election say experts, as India heads into a general election after the India Pakistan conflict in February 2019. This is because national security now has a wider constituency. It could help the incumbent party the BJP with urban voters and swing voters as the issue of security remained prominent in the northern states. In other states where caste and regional politics, farmer agricultural related issues are prominent, this could be less of a factor. Overlooked in this is the manner in which new investments in infrastructure have been pushed forward for rail, road and bridges, and in other infrastructure such as hospitals and universities. The government slogan is that what was once considered impossible is now possible. New metro lines are being inaugurated in many cities including Ahmedabad, Mumbai. The speed with which the Metro in Mumbai is being built, with the head of the project saying it should have been built yesterday, is an example of the urgency given to infrastructure. The government is pushing hard to convey the image that the next 5 years would lead to an infrastructure building boom that it has shown can be done. A recent report in the Guardian shows that China is pouring every 2 years more concrete than the U.S. did in the entire 20th century. This fact drives India under Modi as it heads into the 2019 election, the sense that previous governments had never pushed India's potential for modernization similar to its East Asian neighbors, Japan, South Korea and China.    ...

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With crushing one million percent inflation, workers at state enterprises are now meeting Mr. Guiado as he works to setup a new government that can tackle the economic problems facing the country. 

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WSJ provides tips for getting the best airline ticket prices. 

Fly on a Tuesday or Wednesday.  The best time to buy is 3 weeks out, 3 months to 3 weeks is the best time after that you are at the mercy of the airlines, says WSJ. Fares can be 20% lower on the weekend or on if you buy on a Sunday. Nonstop flights can be cheaper than connecting flights nowadays. You find lower fares by staying on a Saturday, maybe 25% less costly to Europe, only 3% for inside the U.S.

One thing has changed- airlines cost for oil is only a quarter of operating cost. So if oil prices come down don't expect airline prices to come down. Consolidation, reduced flights and strong demand have led to a different climate for airlines.

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More evidence in Commerce Department trade figures that president Trump's strategy of imposing tariffs on $200 billion of Chinese goods and renegotiating trade pacts with Canada, Mexico and South Korea was not sufficient to reverse the huge U.S. trade deficit. The international trade deficit in goods and service increased 19% in December from prior month to $59.8 billion. Excluding services that U.S. sells to foreigners such as tourism, intellectual property and banking, the deficit grew to $891 billion the largest on record.

Mr. Trump's tax policy of increasing the fiscal deficit increased growth in the U.S. at a time when the rest of the world economy was slowing leading to higher demand for imports, and the 4 increases in interest rates by the U.S. Federal Reserve helped strengthen the U.S. dollar that pushed up imports.

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Former Nissan head Carlos GHosn is released from a Tokyo jail on $9 million bails after 108 days in jail. He will live in a court approved residence to prepare for trial The surprise arrest of Ghosn took place on Nov. 19, and earlier bail requests were rejected until this one. Prosecutors say Mr. Ghosn had used Nissan money for personal benefit when Nissan assumed the loss on a derivatives contract made by Ghosn, and for failing to include $80 million in compensation in financial disclosures.

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Germany's biggest bank Deutsche Bank is described here in WSJ as one of the banking industry's biggest basket cases, having suffered legal investigations, management turnover and legal fines over many years. This time the German government is working on merging the bank with Commerzbank AG in a last effort to straighten out the huge mess and losses at the bank, says WSJ. A former JP Morgan manager, Mr. Zames, 48 years old, who joined the bank at the time of the London whale scandal is now working for Cerberus Capital which is acting in a multilayered relationship with Deutsche Bank  as adviser to management as well as having complex financial dealings with Deutsche Bank. In the process says WSJ he would be rescuing a soured bet on Deutsche Bank by Cerberus which owns 3% of Deutsche Bank as well as 5% fo Commerzbank. The investment made in 2017 was shown as $1.1 billion but is worth half that today. The arrangement is unusual for Deutsche Bank and shows how far the bank has changed from its early years as Germany's leading bank. It was founded in 1870 and in 1998 acquired Bankers Trust for a presence on Wall Street. This turned out to be a bad investment as $4 billion premium paid for Bankers Trust was later written off. Deutsche Bank never really recovered from these moves into Wall Street banking. The SDP in the German coalition government sees the merger with Commerzbank as one more move to get out of the mess, though no one really knows considering the complex dealings of the bank and its problems with legal authorites in Germany. ...

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A meeting of the Financial Action Task Force in February gave Pakistan months to move against the money sources and assets of terrorist groups. This could lead to action against banking links with the outside world.  This financial group acts against money laundering and terror financing. It is arguing for sanctions in the event no action is taken. Pakistan's deputy interior minister says Pakistan is taking a proactive approach and banning one group, detaining members of another group named Jaish that operates in the Kashmir region.

Similar action was taken since 2002, and since then the ebb and flow of terrorist groups in Pakistan has taken place over 2 decades, with the groups also attacking internal targets in Pakistan.  In the period of Soviet invasion of Afghanistan the U.S. trained and Pakistan supported jihadist groups so that the problem goes back to 1979.

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A long overdue wage agreement gives pay raises to teachers and state employees in public sector. State employees will get 8% pay raise implemented over 33 months. By end of 2021 state employees would make at least additional 240 euros per month. The deal impacts 3.3 million people in Germany- 1 million state workers and 2.3 million civil servants and pensioners. Extra money was allocated for health care workers who receive additional 120 euros per month. Child care workers at daycares and teachers also get upto 105 euros additional per month on top of the raise.

There are severe shortages in schools, daycare centers, hospitals, and this helps to make the public sector more attractive for people to join. Making these professions more attractive was a dire need in Germany not tackled earlier.

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Ken Adelman, who headed arms control negotiations under Reagan with Russia under Gorbachev, says the Reykjavik summit in October 1986 between Reagan and Gorbachev was a failure because Reagan refused to give up the U.S. Strategic Defense Initiative. Months later Russia restarted arms control talks that led to 80% reduction in nuclear missiles and weapons. He says like Reykjavik the failed Trump Kim Jong-Un summit could lead to new talks with important results in denuclearization and normalization in the Korean peninsula. Both leaders Trump and Kim adore being in the spotlight and could return to continue talks he says. Failed talks are not always dead ends is the view expressed by Adelman.

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As the old rules are being rewritten or changed there is considerable ambiguity about the new nuclear rules for India and Pakistan, says The Times. This happens as Mr. Trump is distracted by the international problems such as North Korea and Venezuela and the Mueller probe into Trump and the election of 2016, and as UK prime minister May is distracted by Brexit. 

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This report in WSJ says president Trump's trade policies have flopped so far. Part of the reason are Mr. Trump's tax policies which acted like a stimulus to the U.S. economy at a time when the world economy and China were slowing, even though this created a large fiscal deficit. Increase in interest rates by the U.S. Federal Reserve increased the value of the U.S. dollar against other currencies making imports cheaper. The Trump tariffs are in play in negotiations with the Chinese government, and the WSJ argues that Trump's tax policies are in play too. Not that the Trump threat of tariffs has not accomplished its initial intent of getting China to the negotiating table in a serious way for the first time since it joined the WTO, and reminding it of its WTO obligations and obligations for maintaining a level trading field free of state sponsored subsidies to reduce competition. Economists argue this proves that the trade deficit is influenced only by macro or larger economic influences such as the strength of your currency and demand for imports. In the long run the Trump tariff action may work, yet the tax policies may prove inconsistent in increasing the fiscal deficit without producing gains in investment in infrastructure and other vital areas of investment in the economy that would provide benefits to society. ...

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Dropping birthrates in China are a major concern especially in the northeast states.Women are pushing back against pressure to have 2 children after 3 decades of one child policy. State subsidies and incentives are not working as birthrates continue to drop. Improving education standards and incomes have delayed marriage and childbirth. In 3 decades more than a third of the population could be over 60 years of age. A struggling economy in some states and cities places extra burden to delay childbirth. In Hubei province hospitals have offered to cover the costs of childbirth as well as give 500 yuan subsidy for first child and 700 yuan for second child. Extended maternity leave is also offered. A beautiful families campaign is being run by some organizations.

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Israel looks to the future imagining a future without Netanyahu as his rivals gain a big lead in the polls following the announcement of corruption charges against Netanyahu by the Attorney General. Benny Gantz the rival is heading a new party that brings together people in the middle of Israeli politics including Mr. Lapid. 

Gantz is focussing on pocketbook issues even though his credentials as former head of the armed forces makes him a suitable choice for Israelis concerned about security issues. He promises to end economic inequality, build new roads and affordable housing, overhaul the education system and end consumer price gouging. Gantz also brings to Israelis worried about Netanyau's politics of division something different- a sense of openness and a fresh start after the Netanyahu years.

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Are there constituent "nations" or "nationalities and regions" in Spain? Seven people drafted the Spanish Constitution that was signed by King Juan Carlos I of Spain in 1978. Two from Catalan region wanted the word "nations" instead of "nationalities and regions" instead the pro-Spain supporters including aformer minister in the Franco government wanted to keep the words "nationalities" to limit the interpretation of self-government to one that would be within Spain. Today a far right party wants to se the clauses that give self government to regions and nationalities removed from the Constitution. Catalan independence supporters say the Constitution allows the right to call a referendum. Left parties see the promises for housing, healthcare and pensions as too vague in the Constitution. What was seen as a huge advance in the early years of democracy in Spain are now seen as creating room for dissension and strife in Spain, with a fragmentation in the political parties and loss of confidence in the two main parties.   ...