U.S. stocks closed higher for the second consecutive day, helped by strength in shares of commodity-related companies even as major retailers said they remain cautious ahead of the holiday season.  At the end of a session that lacked conviction, major stock indexes managed to reach their fresh 13-month highs.  A smaller-than-anticipated rise in industrial production also weighed on sentiments.

Waning risk appetites sent gold prices up 20 cents to a fresh all-time high of $1,139.40.  Treasuries rose, pushing corresponding yields lower.  The yield on the benchmark 10-year note slipped to 3.33% from 3.34% late Monday.  Crude prices closed above $79 per barrel.  Copper prices rose to 14-months highs on expectations that China demand will remain robust.

A perpetual decline in the value of the dollar and record low interest rates in the US have driven stocks higher as investors, seeking higher return on their investments, have sought refuge in

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This post provides links to a number of interesting articles I have read over the past few days that you may also enjoy.

• OUPblog: Oxford Word of the Year 2009: Unfriend, November 16, 2009. Every year the New Oxford American Dictionary prepares for the holidays by making its biggest announcement of the year.  This announcement is usually applauded by some and derided by others and the ongoing conversation it sparks is always a lot of fun, so I encourage you to let us know what you think in the comments.

Without further ado, the 2009 Word of the Year is: “unfriend”. “Unfriend” - verb - to remove someone as a “friend” on a social networking site such as Facebook.

• Martin Wolf (Financial Times): Grim truths Obama should have told Hu, November 17, 2009. Obama

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The National Saving Identity states:

CA ≡ (T-G) + (S-I)

Where CA is the current account, (T-G) is the consolidated government budget balance, and (S-I) is the private sector saving-investment balance. Figure 1 depicts the profound shifts that have occurred in these components (normalized by nominal GDP).

Figure 1: Net government saving (blue), net private saving-investment balance, (red) and current account (green), all normalized by nominal GDP. NBER defined recessions shaded gray; assumes latest recession ends 2009Q2. Source: BEA, GDP 2009Q2 3rd release, Tables 3.1, 4.1, 5.1.

Note that I've omitted the statistical discrepancy which makes these items add up exactly.

How much of the recent shift in the net private saving is due to changes in personal saving (as opposed to corporate behavior)? Actually quite a bit. Of the 2.6 ppts shift in net private saving since 08Q1, 2.9 ppts is accounted for by the shift in personal

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This post provides links to a number of interesting articles I have read over the past few days that you may also enjoy.

• Gerard Lyons (Times Online): Discovering if we learnt the lessons of Black Monday, October 19, 2009. Today (Monday) is the twenty-second anniversary of Black Monday. On this day in 1987 stock markets around the world crashed. The Dow Jones fell 22.6 per cent in one day, London shed one fifth of its value over two days. The newspapers and television were full of pictures of traders in panic. Sound familiar? Reflecting on 1987 is interesting in its own right and has lessons for today.

• Allan Dodds Frank (The Daily Beast): Hedge fund dominoes, October 18, 2009. Friday’s insider-trading charges against the founder of Galleon could be the tip of the iceberg. Other hedge funds and the McKinsey consulting

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The Dow Jones industrial average rose 61 points on Thursday as traders reacted to news that retailers last month had their first sales gain in more than a year.  A closely watched gauge of sales at major retailers rose 0.1% in September. Still, most stores posted sales declines -- though smaller than in recent months -- even as their figures are compared with last September when business plummeted as the financial meltdown ballooned.  While still tepid, it was the first monthly rise in the International Council of Shopping Centers-Goldman Sachs tally since July 2008. 

On Thursday, the European Central Bank and Bank of England left interest rates unchanged.  Sentiment also received a boost from domestic corporate borrowing, which rose for the eight straight week. 

The growing optimism surrounding consumer spending, which is crucial for an economic recovery, followed late Wednesday's good results from Alcoa.  The company surprised investors with

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A Labor Department report issued Thursday Oct. 8 shows initial claims for unemployment fell 33,000 from the prior week’s revised total to 521,000, the lowest level since the beginning of 2009. This figure was 19k less than the Thomson Reuters survey, giving some cause for hope amid a generally depressed economic outlook.

With the four-week average down to 539,750, there is strong evidence of a recovery in the labor market to many investors. The second lowest point this year being reached, on the graph of this closely watched statistic, indicates too many economists that the propensity for hiring by companies is up and that layoffs are less likely. Nevertheless the unemployment figures are still well-above the accepted 325,000 for initial claims, which signifies a robust economy.

The outstanding number of claimants also fell 1.8%, defying analysts’ expectations of a growing pool of recipients. For the week ending Sept. 19, the total

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US stocks ended slightly lower on Wednesday even as the IMF noted that the world economy was recovering from the crisis faster than expected.  However, the agency cautioned that the improvements were in part due to stimulus measures taken by governments and central banks, and being driven by higher growth in Asia.  Revised second quarter GDP indicated the economy shrank at a 0.7% annual rate, compared to the initially reported 1% contraction and better than the expected 1.2% drop.

On Wednesday, the Dow ended down 29.92, or 0.3%, at 9,712.28 after falling nearly 134 points at one stage.  The S&P 500 index fell 3.53, or 0.3%, to 1,057.08.  The Nasdaq fell 1.62, or 0.1%, to 2,122.42.  US stocks by and large closed lower as profit taking affected major indexes on the final trading day of what had been a strong third quarter for the market.  Sentiment was essentially dampened

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US stocks ended slightly lower on Wednesday even as the IMF noted that the world economy was recovering from the crisis faster than expected.  However, the agency cautioned that the improvements were in part due to stimulus measures taken by governments and central banks, and being driven by higher growth in Asia.  Revised second quarter GDP indicated the economy shrank at a 0.7% annual rate, compared to the initially reported 1% contraction and better than the expected 1.2% drop.

On Wednesday, the Dow ended down 29.92, or 0.3%, at 9,712.28 after falling nearly 134 points at one stage.  The S&P 500 index fell 3.53, or 0.3%, to 1,057.08.  The Nasdaq fell 1.62, or 0.1%, to 2,122.42.  US stocks by and large closed lower as profit taking affected major indexes on the final trading day of what had been a strong third quarter for the market.  Sentiment was essentially dampened

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This analysis from Dr. Marc Faber is adapted from our exclusive webcast Global Investing Outlook, which originally aired in early September. Dr. Faber, based in Hong Kong, is a prominent international investor and a member of the influential Barronrsquo;s Roundtable. I would argue that the weaker the economy is, the more fiscal stimulus will be applied and the more money printing will take place under Fed Chairman Mr. Bernanke, who is historyrsquo;s greatest money printer. As a government, you can print money, increase your debt and put everything on the governmentrsquo;s balance sheet, but it is unlikely to help the typical household in the United States. It may help Wall Street and it may help some asset markets, but not the American standard of living. If money printing would make countries rich, Zimbabwe would be the richest country in the world. If you pursue a monetary policy aimed at driving down and keeping interest ...

This analysis from Dr. Marc Faber is adapted from our exclusive webcast Global Investing Outlook, which originally aired in early September. Dr. Faber, based in Hong Kong, is a prominent international investor and a member of the influential Barronrsquo;s Roundtable. I would argue that the weaker the economy is, the more fiscal stimulus will be applied and the more money printing will take place under Fed Chairman Mr. Bernanke, who is historyrsquo;s greatest money printer. As a government, you can print money, increase your debt and put everything on the governmentrsquo;s balance sheet, but it is unlikely to help the typical household in the United States. It may help Wall Street and it may help some asset markets, but not the American standard of living. If money printing would make countries rich, Zimbabwe would be the richest country in the world. If you pursue a monetary policy aimed at driving down and keeping interest ...