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Gabriele Steinhauser's interview July 16, 2015 with the chief of eurozone finance ministers, Dutch finance minister Dijsselbloem. He tells Steinhauser the lowest moment in the crisis came on the night of July 5 when the referendum results were announced. He expected a "no" vote as he knows this is the way this sort of referendum turns out. He was present in all the critical moments of the crisis. And this moment gave him a sad feeling because of his conviction that it would take tough measures to sort out something like Greece, and the Greek people had been given the idea that this vote could change things. He says Tsipras heard a lot from European leaders on July 7 about lack of trust. Following an ultimatum to Greece about Grexit or acceptance of the measures to be taken, and Greece's acceptance on July 9, more hurdles emerged on July 11, 2015. One came from the IMF with an estimate of 86 billion euros as the cost of new loans to Greece, and possible writedowns on 180 billion euros already loaned. He says Greece's new finance minister, Euclid Tsakalotos, a Oxford educated economist, who was Alternate Minister for International Economic Affairs in the Syriza government from Jan to July 5, 2015, showed a remarkable ability to absorb the criticism as a lot of the bad news surfaced. A Wikipedia note on Tsakalotos shows a similiar background 10 years apart for George Osborne, Britain's chancellor of the Exchequer, and Tsakalotos- both educated at St. Paul's school and Oxford, and Tsakalotos's wife Heather Gibson also from Britain. Tsakalotos was seen as being at ease with the EU ministers, who thanked him for his attitude, of grace under a lot of pressure, and the way he handled the matter. Another piece of difficult news, says Dijsselbloem, was the insistence of German finance minister Schauble on a default scenario of Greece opting out of the euro for a number of years being included in a eurozone statement. After 17 hours of drafting, the final statement left this scenario out. It included a 50 billion euro privatization fund with half to be setup to help capitalize Greek banks, quarter to pay down debt, and a quarter to generate economic growth. Compared to the day following the referendum, Dijsselbloem says he feels it will be a difficult road with many problems, but he feels now that it can be sorted out. Stangely he does not make any mention of the role of the French under premier Valls and president Hollande between July 6 and July 9, including sending advisors to Greece to help draft proposals, in turning the situation around. Only saying he is relieved- possibly of not having some of the burden of the failure to resolve the crisis falling on the Dutch finance minister....

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John Cochrane provides a no-nonsense assessment of what is happening in the euro-zone financial crisis. He says Americans should stop swallowing all that talk about "contagion" from Ireland. He puts it in plain language- there is no bailout of Ireland, this bailout is about bailing out of German and British banks that made risky loan to Irish banks and the Irish government. And he says that European governments if they choose to bailout German or British banks should do so frankly and openly and not by covering it up as a country bailout. If they did this he fears the governments and the German and British banks would face some serious questioning about their risky bets on Irish debt and the Irish property bubble. The German insistence that debt-holders would have to take a haircut, or losses on the face value of their bonds, has been diluted by the French inserting a provision that this would be after 2013 and on a case by case basis. Cochrane sees the vagueness of a case by case threat as the worst combination possible. He says this relies too much on the assessments of IMF and EU officials. The result would be for big financial institutions to bet on a bailout and to lobby these same officials hard. Cochrane's says the big culprit in the problem facing the euro-zone is short term debt. If Europeans won't let governments default, then they must insist on long-term financing of government debt. It is the short term debt of these countries that creates a crisis atmosphere. If investors become pessimistic about long-term debt, bond prices can go down temporarily without causing damage. The way a crisis happens is bad news develops, and governments having financed with short term debt need new money to pay off old debts. The way to handle this refinancing crisis is to have a large forced exchange of maturing short-term debt for long-term debt, and this is what occurs in "restructuring." And this kind of restructuring ocurred with the Brady plan that helped Latin American economies recover from a debt crisis in the late 1980's and early 1990's. This is the only viable solution, as it will be virtually impossible to bail out all euro-zone countries- Portugal, Spain, Italy and so on. For the US this is an eye opener to get its own financial house in order. US government debt is also tilted to short-term debt maturities, with the majority rolled over every year. and the Fed's quantitative easing will tilt this further to shorter term debt. And in the US, many states and local governments are in serious financial trouble....

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Trofimov provides a much needed perspective to the situation in the Middle East in 2015. The title about redrawing borders on ethnic lines is misleading, as the essay's conclusions point to the need for various communities to find a way to live together without ethnic cleansing and intolerance in attitudes. With modernization different communities, Sunni and Shiite, already live together in the larger cities in the Middle East. Trofimov points out that the original intentions of U.S. president Woodrow Wilson were for diversity, and building modern institutions of government as the best way forward. This was not carried out by British and French rulers following struggles for independence against the colonial authorites. Following the collapse of the Ottoman Empire in 1918, Britain and France were the dominant powers, and the boundaries were drawn up for Syria, Iraq, Jordan, Palestine, Saudi Arabia and other states, under the British-French Sykes-Picot agreement of 1916. Britain and France increased the role of minority groups to maintain their control following independence struggles in Iraq and Syria, a situation which helped Alawites gain control in Syria and Sunnis in Iraq. Shiite rule in todays Iraq has not lessened tensions, and intolerance only creates tensions in the broader region. Which makes redrawing boundaries around ethnic lines in a defacto acceptance of the current situation, not the lasting road to peace in the Middle East. In Iran, Russia with Britain was involved in the partition of parts of Iran into three zones, a Russian zone including Isfahan in the north, a British zone in the south east and a neutral zone in the middle. This happened in 1907 soon after a independence movement helped write a constitution in the 1901-1907 period, showing that many foreign powers were involved in the region, not just Britain and France. The discovery of oil in 1908 by a British company created the question of how to distribute the profits, which led to 70 years of disagreement and tensions in Iran. The resulting tensions exacerbated the conflict between religious authorites and Mossadegh in the early fifties with the fear of Communism, and exacerbated the conflict between the religious authorites and the government under the Shah by 1979 with misuse of oil wealth, ending with his overthrow and the supreme authority of the Ayatollah. Oil has proved to be as divisive, and wasteful of development opportunities, in Iran as it has been in Nigeria and other oil dependent nations. Multiple issues exist in the Middle East, not just the artificial redrawing of boundaries by the French and British, which makes the defacto redrawing of boundaries along ethnic divisions, not the answer but another step with its own dangers, along the path towards peace and economic development in the region. ...

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Pearlstein touches on the main issues raised by Obama's regulatory reform proposals. A thorough and independent analysis by a panel of seasoned regulators and independent experts would have done better, Pearlstein says. It would take more time, but the regulatory reforms need to be thorough, considering the damage that has been done to the financial system, and considering the opportunity to do something serious about this. It would have also shielded the administration from criticism if tough action was needed in some areas. Hearing all sides of the matters at hand, and weighing the pros and the cons on each issue is helpful, but there are gaps in this approach when some of the key actors like Geithner and Summers have worked too closely in the past with the financial firms that are being regulated, and may have a tendency and bias in that direction. The President's lack of expertise in these areas, and a desire to keep the regulatory hand as light as possible, and intense obying by financial firms, can tilt things away from serious regulatory reform. The danger is that the opportunity to fix things with major structural changes where necessary, and some tough actions where needed may be lost. Some of the obvious gaps are mentioned by Pearlstein. There is no measure to tackle the situation with the ratings agencies. There will be more transparency than before but complex derivative trading can take place prettty much like before. Credit default swaps will continue as before. If you set up acouncil of regulators, then why not bite the bullet and consolidate them into a single agency, asks Pearlstein? Banks will continue to have their proprietary trading desks, from where they ran up huge losses, these act like in-house hedge funds. Ultimately a lot depends on who is running these agencies, or the Fed, and what is the prevailing opinion about markets in the country. The prevailing opinion that the less regulation the better for free markets, and the lack of independent regulators, and poor appointments, had a lot to do with the capture of the regulatory agencies by the the firms they were supposed to regulate. And on this point the President is on safer ground, as he can ensure that he appoints tough regulators and create a new culture that puts regulation right where it should be, as a necessary ingredient for free markets, just like rules of the road. And in one area the President has created a new structure, a new agency with powers- this is where consumer protections are at stake- so that the abuses that took place with mortgages do not take place....

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The Fed announced that it will review compensation policies of 28 of the large complex banking organizations in the USA. The review will be an horizontal one that compares them to each other. The other significant move is that the Fed wants to see employees who take greater risks and use large amounts of borrowed money, to receive negative points in evaluating how well they have done, and consequently to be compensated less than other employees who earn money for banking firms while controlling the risks associated with transactions. This ties in with the discussions at the G-20 meeting in Pittsburgh, where the Europeans pushed for tighter regulation on bonuses and pay, to control the excessive risktaking of banking firms. This is because the prevailing culture in global financial institutions is a high risk high return culture, which ignores the social consequences of bad decisions. There is no cost to individuals taking the risks on other people's money, and regulations discouraging risk are not in place. The question remains, is this an adequate response to prevent future crises, or too little too late? If the banking community does not see it this way, and financial regulation is watered down in Congress- see the links to this- then it will much like Don Quixote swinging at windmills. In this sense the title of this piece is a misnomer, as the Fed has not hit banks with sweeping pay limits. It only said it would review pay practices. It is jawboning of the mild kind to show the public something is done. See Paul Volcker's point that pay practices would adjust and desirable goal of less risktaking and reasonable salaries would be achieved by separating deposit taking banks from banks engaged in trading activities. Similiarly, the governor of the Bank of England, Mervyn King, made the point recently that the biggest banks should be broken up. That is supported by the intuitive sense of experts that banks engaged with depositors should be engaged in the social functions of society, lending and supporting economic activity, and the trading desks of investment banks should operate entirely separately from this. One should be insulated from the other. In this sense there is a bit of evasion in these actions. A Wall Street capture of regulatory activity continues, of regulators and senior economic advisors in the administration, as the coziness between the two lingers on from a previous era of deregulation. This has the potential to cost the country and the global economy dearly in another crisis, and the jobless and young jobless people especially. In this economy both in Europe and the USA, the jobless young have been left with the least hope. ...

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The Chinese government is concerned that lack of a safety net, fears about a general access to health care, and lack of other assistance for the farmers, elderly, rural poor, lack of unemployment protections and welfare, all are making Chinese to cramp up and spend less. Chinese households save a quarter of their income in normal times, now unless the government steps in a big way, which it has done only in small faltering steps, savings will increase even more in response to fears about the future. Lu Mai, secretary general of the China Development Research Foundation, says China has reached a point where it has to make a big decision, does it spend more on security and the police or on social benefits. He put out a report last week which estimates the government needs to spend 2.6 trillion yuan or 380 billion dollars by 2012 for the first phase of a social safety net. With a further spending of $838 billion dollars by 2020 to complete the improvement of health care, education, pensions for the elderly, low income housing, disability benefits, unemployment protections and welfare for the poorest. And these estimates may be low depending on the assumptions made, as the situation has taken a steep descent from the time these estimates were probably made. In the last few months tens of millions have been added to the jobless, and the severe drought has created a difficult situation on the farms in rural areas, even while millions of migrants return to these rural areas as businesses dependent on exports collapse in cities in coastal areas. What is the government allocation at this time? A target for health care overhaul of $124 billion was set recently. But the actual stimulus package is heavily skewed in favor of infrastructure and investment in construction. About 1% of the big stimulus package that was announced goes to health care and 7% to public housing. Says Zhuang Jian, an economist with the Asian Development Bank, this excessive investment in infrastructure, heavy industry and manufacturing will cause serious problems, if there is not strong consumption to match it. And Eswar Prasad of Cornell University, who was head of the China division at the IMF, says that an ambitious agenda is needed for higher social spending to take away the fears of average Chinese about the future. Chinese premier Wen says the government needs to do more, but the instincts of China's planners, and decades of development with built in incentives for promoting investment in construction, infrastructure and industry, have left China with huge unsustainable underinvestment in basics like education, health care and social benefits....

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The Europeans led by France and Germany demand stricter regulation and a financial regulatory system that oversees the entire financial system, and oversees all the larger countries. The US in contrast wants to see a lighter regulatory system, and lighter regulation of parts of the financial system like hedge funds. For the USA where the crisis originated, the emphasis is on larger stimulus spending. For the Europeans which have a larger safety net that they would like to see considered as part of their stimulus- and their social arrangement such as reduced hours in Germany to avoid layoffs, and the presence of a large public sector in France that is about 52% of GDP- the situation as they see it does not require breaking the EU's committment to control large deficits. The cultural and historical roots are also different. Germany was hit by hyperinflation in the period between the two wars, and there is thought there that this helped the rise of demagogic leaders and the collapse of democracy there. At that time the issue was war reparations that Germany found difficult to absorb in an economy devastated by the first war, which strained German finances. France and Germany also have no foreclosure crisis, and car sales and consumer spending are not in the deep decline that is seen in the USA. In fact car sales have increased in the two countries with the refunds for scrapping old vehicles, with no such plan in place in the USA. Making there is a credible position on the European side. Germany does see itself hit by the collapse in international trade. Germany and France face the prospect of helping their banking systems deal with the large bad loan situation facing them in Eastern Europe. At the same time Germany and France want to save some firepower for coming to the aid of key parts of the European community like Spain, Greece, and Ireland, which are facing a worsening crisis. In short both sides have credible positions, and some form of accomodation as events unfold may be a better desired outcome than some unified outcome. And little has been said of the position of the other countries in the G20, the emerging countries like Brazil, India, China, Russia, Indonesia, Argentina and others, and the position of the World Bank speaking for the poorest countries. These countries may favor stronger stimulus, and would favor the stricter regulation and supervision of global financial systems favored by the Europeans. This is because they may rightly feel that the messups in the global financial system have stolen their chance, at just the point where they were turning the corner in their efforts at bringing better standards of living to their peoples....

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The Kingdom of Saudi Arabia is building huge aluminium smelters powered by crude oil. Some of these aluminum smelters are near new economic cities coming out of desert landscape. This is part of an effort to create new jobs for young people at the cost of about $600 billion. The Saudi unemployment rate for young people is officially 12%, but probably more like 24%, because there aren't that many of the kinds of jobs which Saudis would accept. But a smelter like one being built on the Persian Gulf Coast creates about 10,000 jobs, and even 10 of these smelters couldn't create more than 100,000 jobs, and takes up 600,000 barrels a day of Saudi production. With a population of 24 million there is a need to create more jobs in which these smelters make only a small dent. Most countries use natural gas for electricity and for a high energy consuming industry like aluminium use natural gas. Because Saudi Arabia needs a lot of electricity to power heavily subsidized and wasteful use of electricity and has not been able to get natural gas production upto where it should be, the government has made the decision to use its crude oil for producing electricity to meet its growing needs. This means a lot of crude is being used in a manner that its normally not used and quite wastefully because its heavily subsidized. Because of the soaring electricity needs the head of the Saudi Electricity Company sees the need for six big power plants to raise generating capacity to 55,000 megawatts over 7 years, about what the United Kingdom uses, all using crude oil. As production is not going up by that much it means more of Saudi crude will be used up in Saudi Arabia and not available for export. The figures show that Saudis used more than 2 million barrels a day in 2006, up 6% from 2005 when Saudi production dropped by 2.3%. Just to remain level with the current production of 9 million barrels a day the Saudis have to bring an additional 600,000 barrels a day each year to make up for depleted and declining wells. And it is becoming more difficult to increase capacity. Apart from the fact that more Saudi oil will be in future used up by a growing population, there is a question about whether the investments in aluminium, petrochemicals and new economic cities estimated at $600 billion in future years is the best allocation of resources to create jobs. If oil prices decline and oil revenues decline with prices then these projected investments especially in the economic cities and costlier projects may have to be abandoned In that situation there will be more oil available for domestic use but the situation for unemployment may not be much improved. ...

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Roshe gives an independent view of whats happening in the economy and sees a recession, sticky inflation that will last a long time for the US and the world economy in a semirecession for a long time. Roche of independent Strategy consultancy in London does not see the Fed's actions to increase liquidity having any effect in resolving the issues of solvency which have resulted from the overleveraging of brokerage and mortgage firms on Wall Street, only exacerbating the effects of a weaker dollar and higher inflation over the longer term. He points out that hedge fund and broker balance sheets or nondeposit financial institutions (NDFI's) half the size of banks in the USA and a quarter of the size of banks in Europe have their assets and liabilities financed by repurchase agreements. They lend and borrow against the collateral of assets that are marked to market, which means that they can borrow more and easily in a rising market cycle and can borrow less and with more difficulty in a falling market cycle. With the contracting cycle in place now they are facing insolvency issues. This may have been delayed till now because of investment banking profits and having credit lines for the duration of a contract. Till now investmet banking profits gave them leverage over lenders who made money from fees in investment banking. Now the banks hurt by writedowns of loans in mortgages and other areas are likely to tighten lending and call in their loans. What the Fed's actions will do is delay things a bit but not prevent a credit contraction and fall in asset prices. David Roche was Global Strategist for Morgan Stanley before starting Independent Strategy to provide fresh thinking and new insights on financial markets. His estimate is that reduction in available credit for corporate investment in technology, R&D and factories as a result of contraction in the financial system will require reducing corporate debt ultimately by 11-12 %. This will generate a loss of 5% points of real GDP growth for the US and put into a recession. For Europe he estimates loss of 2% points of real GDP growth. Global credit losses of $1.4 trillion would cause a contraction in world GDP of 2.5 percentage points or half the current rate of growth. For the global economy he sees a gray dull world of semi-recession and stickly inflation that will last a long time even without any major policy blunders. If this is original thinking and he is right then the Fed, the IMF, the Council of Economic Advisors, and general thinking on Wall Street that sees a short recession lasting several quarters may be in for a big shock....

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Vikram Pandit's style at Citigroup after 4 months, thoughful, asking lots of questions, fixing the little things that actually matter a lot, like the unwillingness of some heads of divisions to sit together in the same room, some hiring decisions and new lines of reporting and responsibiity and interaction in the organization structure that call for teamwork, discussion and collaboration. The oldtimers like Krawcheck used to clear lines of reporting are now getting used to the new culture of collaborative working. His style is first to come to grips with issues and not to come to snap decisions based on intuition, such as interviewing at length and asking tough questions at length to Ajay Banga, head of Citi's international group about the extensive defaults in Citi's consumer loan business in Japan. One of his views is that only if you get the foundation right can you talk about vision. Regarding pettiness in management and small grudges, its either going to be a partnership or you're not going to be here. some of his colleagues like James Forense say that they would take substance over form, judgement over form, any day of the week. And while he does not shy away from details like expecting lower level employees to pay for sporting event tickets Citigroup earlier gave out free, and he himself rides the subway sometimes, he has made some of the bigger decisions. Among these, getting capital from outside sources by travelling extensively abroad, urging Citigroup's board to slash the dividend for the first time in 20 years, selling off 2 peripheral units that did not belong and a third Primerica on sale also. And urged by his mentor former Treasury secretary Rubin who also used a note pad and a thinking thoughtful style like Pandit's at Treasury during the Asian banking crisis and the Mexican financial crisis, Pandit has been direct and realistic. He tells Wall Street that the fate of Citigroup is going to be decided to some extent by the duration of the environment we are going through, the twin perils of the debt-market crisis and the sluggish US economy. And that for now issues like these are going to overwhelm our actions. Pandit's father was a senior executive of one of India's leading pharmaceutical companies when the family moved to New York, so he has grown up around business, and is able to ask the question quite sincerely and matter of factly of his managers at the beginning of every meeting. "What are you doing with the shareholder's money?" After which come the torrent of well thought out questions, probing deeper each time, especiually where issues are festering for a long time, and remain unresolved. ...

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A 2004 rule made under SEC Chairman Donaldson and requested by the investment banks one of which Goldman Sachs was headed by Paulson changed the whole playing field and created the dangerous situation of huge leveraging that has led to the collapse of some of these banks. Older regulations limited the amount of debt that these investment banks could take on. With the new rule billions of dollars held in reserve as a cushion against losses could now be used by these banks to invest in mortgage securities and credit derivatives, a form of insurance for bond holders. Others on the SEC who supported it included Goldschmid, an authority on securites law at Columbia who asked relevant questions but relied on the assurance of Annette Nazareth, head of market regulation that under the new rules the investment banks would also be restricted by the commission from risky activity, that under the new rule the SEC would be able to look into the books of the parent companies and subsidiaries of the investment banks. But no detailed and strict oversight methods were laid out, and instead these banks were allowed to go out on their own without any restrictions. The riskiness of investments would be measured by the computer models and brains not of the SEC but of the investment banks themselves. And these banks went on a leveraging binge with 33 to 1 for Bear Stearns which collapsed in 2008. One lone dissenter was a person who wrote the computer models to determine the riskiness of investments which were used by the banks, was at the University of Chicago, and was a risk management expert. He cautioned in a letter that these computer models had failed in the 1997 LTCM collapse and could not be relied on as environments change. At the SEC oversight was handled by 7 people and this was to oversee some $4 trillion in assets, hopelessly understaffed, and most of them believing that the investment banks would self police themselves as they were ideologically believers in deregulation. So no inspections were done for an year and half upto August 2008 even when there were clear signals of trouble according to an Inspector General's report. This group had no director since March 2007. Soon after the rule Donaldson the SEC chairman left and a Congressman from a conservative district in California became Chairman, Christopher Cox. He favored deregulation and may not have even been aware that the 2004 rule had created a new and dangerous environment, so he followed his instincts and even dismantled a risk management unit Donaldson had established. Which is why McCain has called for his firing....

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As the USA and Europe move into a deep and prolonged recession China loses some of its biggest export markets and faces a significant slowing down of its economy. China's leaders are pondering how to respond to the crisis which will affect China, and meet the challenges of lower living standards of a neglected rural countryside and farmers compared to the urban coastal areas. This is still where some 800 million of the Chinese people live by official count, so something needs to be done to improve prospects and help generate higher incomes and opportunities for people in the farming countryside. Making land use rights of farmers able to be bought or sold for the first time would generate additional income for farmers, and help consolidate farmland into larger plots, which can use technology and improvements for better yields to keep China self sufficient in agricultural production. Keeping the situation the way it has remained for the last two decades, where local party officials and local leaders controlled the land and where farmers rights were ignored leading to suppression of farmer's protests for illegal land seizures and corruption, may have made it easier for plants to be setup across China and attracted foreign investors. But it has not been good for China's farmers. Chinese party officials at the local level who realized the advantages to them by controlling land and making it easier to set up manufacturing plants with foreign investors may have steered state policy in this direction from the early days after Deng's opening to capitalism and trade. Now with a success in the urban coastal areas and in building infrastructure Chinese leaders in the central government must be faced with a difficult issue of how to move on from here with the loss of China's export markets for its heavily export dependent economy. The need to generate a domestic consumer driven economy must not be lost on the Chinese leadership in Beijing. Something that will keep China's economy moving in the new situation. This is the context in which land use rights may be extended from 30 to 70 years and able to be bought and sold to improve farm incomes and generate internal momentum in the rural areas where most of China's people live. It also offers a contrast to the situation India faces where even the Nano plant of Tata Motors had to be moved from W. Bengal state to Gujarat state over farmers rights to land which in that case was also used as an issue for political agitation. The move by China accelerated industrialization and setting up manufacturing plants as land was taken over by local officials for use with foreign investors but also ended up neglecting the countryside, and created too big a dependence on exports....

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WSJ describes interviews on 60 Minutes and on Fox News with Tom Homan, who will run Border Security.  Homan says targeted arrests for public safety threats and worksite enforcement operations, migrants who had due process and their federal judge said you must go home and they did'nt are the priorities, not mass sweep of neighborhoods.  WSJ cites the new president DJT as saying - "We have a lot of good people in this country, and we have to do something about it." “This has been going on for a long time. It’s a complicated subject.”  “I don’t want to go too much into clarification, because the nicer I become, the more people that come over illegally.” Yet after strict talk about deterrence, DJT concluded at the time he visited the Journal: “There are some human questions that get in the way of being perfect, and we have to have the heart, too.” WSJ says when it comes to children 64% of Republicans and includes the WSJ feel that new solutions have to be found. And getting Democrats to join in passing legislation to build a new immigration structure is a way forward that should be the goal building on the work of Senator Lankford. ...

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NATO was formed in the days of the Truman administration on 25th July 1949, following the Berlin Blockade, the coup in Czechoslovakia by Soviets, and the efforts to set up pro soviet governments in Turkey and Greece. It accomplished its purpose by pushing back against the Soviet effort securing democracy in Greece and Turkey in the 1950's. Much of this was achieved under Heads of NATO from the US- Gen. Eisenhower, Gen. Ridgway, Gen. Guenther and Gern Norstad proteges of Ike all from West Point by 1964, when Brezhnev was new head of Soviet Union and by 1991 Warsaw Pact of Soviets setup in 1955 was dissolved yet NATO was not. The US interests shifted to Asia - Gen MacArthur leading a UN effort in Korea and the US leading its own effort in Vietnam in the 1960's. The Soviet threat actually receded after 1964 when Brezhnev became head of Soviet Union till 1982. During that period in the 1970's till today the face of NATO as today was from a series of heads of governments of Dutch Stikker in 1970's or other small European states such as Norway Stoltenberg and Rutte Netherlands again in 2025. It could be said that none of these leaders  of small EU countries represented US interests- or even European interests- a point the DJT administration is trying to make. It hurt the US in Venezuela as Russia propped up a regime which led to millions of refugees entering the US illegally. And it hurt Europe as Russia propped up the Syrian regime with millions of refugees entering Germany and destabilizing its political structure. Going back if a new defense institution was set up to replace NATO by the Europeans in 1970's this would have been the right step which would have not led to Russia propping up regimes in the Americas or the Middle East. A goal that is being discussed with Russia by the DJT administration to refocus American efforts in a new direction and pause not just the Ukraine war but also put the US  and Russia in a new direction with the new competition from 3 billion people in China and India. WSJ Editorial Board takes the British position on the Ukraine peace proposals with centuries old skeptical attitude on Russia's intentions. The US government position put forward by DJT is that there are constructive discussions with Russia, and the need to settle the underlying issues behind the conflict. This includes NATO's future. NATO setup in 1949 for Soviets,  on the borders of Russia in 2025 after the end of the Cold War when its rival the Warsaw Pact set up in 1955 of the Soviets was disbanded in 1991. The British position comes from centuries of conflict in Europe and its interests in protecting its Empire till the 1950's remaining unchanged, and cannot reflect American interests in the 21st century as its economy competes with China and India and the EU, and seeks to do this by keeping former colonial powers out of the Americas including Russia, and China.   ...

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Efforts by banks to bring their operations in line with regulator requirements. The Citigroup bank much smaller than at the time of the financial crisis, with its "living will" approved by the U.S. Federal Reserve in April 2016.

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As China's food retail stores landscape has changed with more and better options offered to consumers, they have shifted upscale, especially with the rapid growth of incomes in China in the last decade. With a decline in growth for Yum Brands in China the company has decided to spin off its operations in China into a separate company, in the hope of giving the local company more room to respond to competitive changes in the food retail store business. As Chinese consumers urban disposable income showed rapid growth from 7700 yuan in 2002 to 23,700 in 2015, the market for food retail chains has changed. With this growth came other competitors such as Pizza Express, a UK chain at the higher end with local Chinese partners, and at the lower end Taiwanese competitors Ting Hsin International Group with its Discos fried chicken chain competing with KFC Yum Brands stores. Local Chinese competitors also moved upscale with Xiabuxiabu Catering serving hot pot, for consumers to cook meat and vegetable in broth doing it themselves. Other factors hurt Yum Brands growth and brand respect with the media reporting use of growth hormones and antibiotics by Kentucy fried chicken suppliers in 2012. And a local media report in 2014 saying that a KFC supplier supplied expired meat hurt sales with adecline of 14% in the fiscal 3rd quarter 2015. The opinion for Pizza Hut, a Yum brand has changed from as recently as 2012, with one survey showing a drop from 39% to 25% for consumers who see it as a desirable brand. A Beijing teacher for example now sees Pizza Hut as a cheap option compared to spending 128 yuan or $20 on a better quality pancetta and sun dried tomato pizza. More discriminating Chinese consumers means this trend will continue, and the media constantly looking for flaws in quality standards. As many companies are finding out the Chinese market is not going to be easy for the complacent....

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The continuing decline in copper prices in Nov. 2015, and the Federal Reserve's decision to hold off on raising rates, are the subject of this comment.

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Google's You Tube video service first affirms the right to show a video about a Brazilian candidate in a local government election, and then blocks the video after a court in Sao Paulo orders the arrest of the head of Google's affiliate in Brazil. Brazilian election laws ban personal criticism of candidates in elections.

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The concerns raised about the manner in which internet service providers make decisions about what constitutes "hate speech." The need for oversight and public scrutiny over these decisions so that they do not remain opaque, as in the case of the anti-Islamic video of Sept 2012. Tim Wu of Columbia University raises questions about the need for more clarity on how these decisions are made. Other concerns raised relate to preserving public safety.

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The origins of the crude anti-Islamic video, a 14 minute trailer, produced in S. California by Steve Klein, a Vietnam war veteran whose son was severely wounded in Iraq. He is an insurance salesman from Hemet, near Los Angeles. It was translated into Arabic and reposted twice on YouTube to Muslim viewers. Klein is known for anti-Muslim actions. It shows Egptian security forces watching as homes of Coptic Christians were burned, and then goes to cartoonish scenes showing the Prophet Muhammad as a child of uncertain parentage, a womanizer, child molester and so on. It raises many questions about how stuff that is incendiary or induces hate and violence or other material is kept off sites such as YouTube which use new technology for which there is no proper oversight representing the public interest.