By Bob Blandeburgo Associate Editor Money Morning

Stimulus measures in Japan helped the world’s second-largest economy grow at its fastest pace in more than two years, but it’s unlikely policymakers will reduce spending despite the nation’s rapidly growing debt.

Gross domestic product (GDP) in Japan grew at 4.8% annual rate in the third quarter, surpassing all the forecasts of 20 economists polled by Bloomberg News. That follows a revised gain of 2.7% in the three months ended June 30, according to Japan’s Cabinet Office. Japan’s economy grew 1.2% on a quarterly basis.

“The turnaround in public investment has definitely contributed to the rebound in GDP, so if they do start to cut it’ll weigh on growth,” Hiromichi Shirakawa, chief Japan economist at Credit Suisse Group AG (NYSE ADR: CS), told Bloomberg.

Stimulus measures around the world helped Japan’s exports grow 6.4%, but as global economies withdraw stimulus measures,

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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.

• Daniel Gross (Newsweek): The greatest trade ever, November 10, 2009. How hedge fund manager John Paulson bet against the real estate bubble and made $15 billion in a single year.

• abc News: SocGen’s top analyst sees market lows next year, November 9, 2009. Albert Edwards, a top analyst with French bank Societe Generale, expects global markets to hit a new low in 2010, adding that he would not be surprised if the global economy enters another recession next year. Edwards, one of the leading equities bears and a long-term critic of the policies of Western central banks, is skeptical of popular opinion that extreme policy response will safeguard the West against a repeat of Japan’s lost decade of the 1990’s.

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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.

• Richard Ennis (CFA Institute): The uncorrelated return myth, November/December 2009.

• Peter Clarke (Financial Times): How to avoid a repeat of the Great Crash, October 28, 2009. The chain of events leading from a collapse in stock prices on Wall Street to a Great Depression has leapt from history with an entirely fresh verisimilitude. John Authers (Financial Times): GDP grows, but pain remains, October 29, 2009. US GDP numbers were a good enough reason to halt the return of risk aversion, but the key to whether risk appetite can return depends on US employment data.

• Economist.com: As joyless recovery, October 29, 2009. New figures suggest that America has at last moved out of recession.

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Renewed fears that the global economic recovery is faltering shook investors across Asia, sending stock markets in the region sharply lower Thursday.  The Nikkei fell below the 10,000 mark for the first time in three weeks.  Dollar and yen rose as hedge funds sold off risky positions and traders trimmed their appetite for risk. 

The Nikkei 225 stock average fell 1.8% to 9,891.10 and Hong Kong’s Hang Seng index plunged 2.3% to 21,264.99 points. In Mainland China, the Shanghai Composite Index dropped 2.3% to close at 2,960.47.  All other major indices in the region ended in the red.   

On Wednesday, US stocks tumbled after a weaker-than-anticipated new home sales report aggravated concerns that the seven-month old rally has gone ahead of any economic recovery.  To add to the bearish sentiment Goldman Sachs lowered its projection for the third-quarter gross domestic product.  The government's report on third-quarter GDP is due

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The first Russian-assembled Opel car, the result of a joint venture between General Motors and the Avtotor plant, has been completed.  RusAl has reported its 2008 losses, saying that it sustained a $5.98 billion hit due to the financial crisis.  The state may start guaranteeing corporate infrastructure bonds by the end of the year as the ruble continues to gain thanks to oil revenues and subsequent renewed investor interest.  The Moscow-Vladivostok time difference is hampering business relations, says United Russia's Gennady Lazarev, who wants it to be shortened.  Russia's economic activity was finally back on the rise last quarter, but 'gross domestic product was still 9.4% below year-earlier levels, underscoring the amount of damage the recession and lower oil prices have wreaked on Russia's economy'. ...

Short-Term Deficits Pale in Comparison to Unfunded Liabilities on the Horizon

Dwindling U.S. economic activity and accelerating government spending resulted in a record $455 billion federal budget deficit for fiscal year 2008. During the same trying period, the total national debt increased to about $10 trillion, and the forecast for 2009 was for an even larger deficit and more government borrowing.

As the numbers continue to escalate, how can we put the magnitude of the current national debt in perspective? Are there risks involved when government pushes the payment of its obligations into the future? And could it be that government action to reform entitlements such as Social Security and Medicare is all but imminent?

It’s All Relative

To better comprehend the size and scope of the national debt, it helps to measure it against the size of the overall economy. At $10 trillion in 2008, the national debt represented 69.5% of gross domestic

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... at least not yet that is. Let us see how the rest in Europe will fair.

(From Bloomberg)

U.K. gross domestic product unexpectedly dropped in the third quarter as enduring slumps in services, manufacturing and construction kept the economy mired in its longest recession on record.

Gross domestic product dropped 0.4 percent from the previous three months, the Office for National Statistics said today in London. Economists predicted a 0.2 percent increase, according to the median of 33 forecasts in a Bloomberg News survey. The economy has now contracted in six quarters, the most since records began in 1955.

Chancellor of the Exchequer Alistair Darling said this week he will focus on spurring economic growth as he struggles to cement a recovery in time for a general election due by June. Today’s data may add to pressure on Bank of England officials to expand bond purchases at their Nov. 5 decision after

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Banco Santander, S.A. (STD) has raised $8.1 billion (14.1 billion Brazilian reals) in a record initial public offering (IPO) of its Brazilian operations as the bank seeks growth away from the ailing Spanish economy. The Brazilian arm sold 600 million shares for 23.50 reals ($13.43) per share, to the public through a concurrent offering in Brazil and New York. The price was in the middle of the expected range of 22 reals to 25 reals. Santander had initially filed to sell 525 million units, with each representing 55 common shares and 50 preferred shares, but the offering was increased by 75 million units to meet demand from investors. In the U.S., the new stock will trade on the Big Board under the ticker symbol "BSBR." Trading of the units will begin on the New York and Sao Paulo stock exchange begins today. The IPO ...

Billionaire investor George Soros said yesterday (Monday) that the U.S. recovery would be a slow one because of all the “basically bankrupt” financial companies impeding it.

U.S. Federal Reserve Chairman Ben S. Bernanke and Congress agreed Friday that the financial system – not the American taxpayer – should bear the costs of bank bailouts. Sheila Bair, head of the Federal Deposit Insurance Corp. (FDIC), wants the banks to ante up $45 billion – three years’ worth of deposit-insurance premiums – to bail out the fund that insures bank deposits.

When it comes to bank stocks, we all know that there were a number of Money Morning readers shrewd enough to buy Citigroup Inc. (NYSE: C) shares when the foundering giant’s stock price was below $1 a share.

If you’re one of those investors, good for you: With Citi’s shares now trading at nearly $4.70 a share,

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

• Matt Taibbi (Taibblog): An inside look at how Goldman Sachs lobbies the Senate, September 29, 2009.

Samuel Brittan (Financial Times): A cool look at the current deficit hysteria, October 1, 2009. In the early Victorian period the debt ratio was nearly 200 per cent and almost reached that level again in the early 1920s.

• Edmund Conway (Telegraph):  An inconvenient truth: financial crises are inevitable, October 1, 2009. The IMF’s new early warning system to avoid crises such as the credit crunch is doomed to disappoint.

• Edward Harrison (Credit Writedowns): The recession is over but the depression has just begun, October 1, 2009. This post discusses why we are in a depression, not

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