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

• Mohamed El-Erian and Ramin Toloui (Financial Times): How to fill the gaps left by dollar decline, November 5, 2009. We should expect to see more discussion in the next few years on new types of reserve assets.

• James West (GoldSeek): Gold price is no bubble, November 4, 2009. The price performance of gold recently has all sorts of armchair economists waxing philosophical on the idea that this is the advent of a price “bubble”. While certainly everyone has and is entitled to their opinion, there are other features of humanity that we all possess, and much like many opinions, are best obscured from view. Declaring that gold is in a “bubble” demonstrates complete ignorance of or disregard for

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

• George Soros (Financial Times): Do not ignore the need for financial reform, October 25, 2009. It is not the right time to enact permanent reforms. The financial system is far from equilibrium. The short-term needs are the opposite of what is needed in the long term.

• Paul Sandison: The two main threats to democracy and modern capitalism, October 20, 2009. In the present burgeoning economic crisis, already well over a hundred million people across the globe have been thrown into poverty, despair, sickness and are struggling to avoid a premature death. Billions of people abroad are vowing never to allow the United States and the United Kingdom to do this to them again. The remaining question is whether the

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

• Gillian Tett (Financial Times): Rally fuelled by cheap money brings a sense of foreboding, October 22, 2009. It is crystal clear that the longer that money remains ultra cheap, the more traders will have an incentive to gamble (particularly if they privately suspect that today’s boom will be short-lived and want to score big over the next year). Somehow all this feels horribly familiar; I just hope that my sense of foreboding turns out to be wrong.

• Doug Kass (TheStreet.com): The earnings season racket, October 21, 2009. If end demand doesn’t pick up (and pick up quickly), the 2010 earnings outlook for many industries (such as semiconductors and other beneficiaries of restocking) will be in jeopardy, as

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.

• John Authers (Financial Times): Triumph of common sense over benchmarks, October 3, 2009. Rather than watch everyone herd towards benchmarks, while charging fees for active management, in future perhaps a lot of money will be managed passively and the rest will be allocated to investors who can show they have skill, and who have the freedom to go wherever they believe they can profit.

• Randall Forsyth (Barron’s): Is this a real bull or “Red Bull” market? October 2, 2009. After the caffeine rush of the third quarter, stocks and Treasuries give way to less stimulating market action.

• Paul Krugman (The New York Times): Mission not accomplished, October 2, 2009. Stocks are up. Ben

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

• Caroline Baum, Bloomberg Bond traders are boubters, lemmings or sissies, September 28, 2009. Where are those gunslingers of yesteryear, ready at a moment’s notice to assert themselves in the marketplace, challenge the Fed on its easy-money stance and punish the federal government for its profligate spending? Why are bond traders so blasé when short-term interest rates have nowhere to go but up, the US economy is recovering, the Fed is ending its purchases of Treasury notes and bonds, the Treasury is continuing to sell notes and bonds, the dollar is sinking, and foreign central banks are making noises about the out-of- control US budget deficit?

• Jeremy Warner (Telegraph): The dollar is dead - long live the renminbi, September 25, 2009.

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.

•John Hussman (Hussman Funds): Showtime for visible roots and fruit, September 8, 2009. In my view, the next 12-16 weeks will be extremely important in shedding light on any incipient economic recovery. Investors have become so used to the idea that stocks often foreshadow economic strength that actual, convincing evidence has been dispensable - beyond the excitement over “less bad” economic news. The next 12-16 weeks will change that.

• Alan Blinder (The New York Times): The wait for financial reform, September 5, 2009. Back during the Obama transition, the newly designated chief of staff, Rahm Emanuel, enunciated what I’ll call the Emanuel Principle: “You don’t ever want a crisis to go to waste,” he said. “It’s an

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

• Doug Kass (TheStreet.com): Market has likely topped, August 26, 2009. Markets top during times of enthusiasm. I believe that the markets are now overshooting to the upside and that the US stock market has likely peaked for the year.

• Phil Izzo (The Wall Street Journal): Economists react: Bernanke reappointment is “good news“, August 25, 2009. Economists, lawmakers, bloggers and others weigh inPresident Obama’s decision to reappoint Fed Chairman Ben Bernanke.

• Mohamed El-Erian (FT Alphaville): Bernanke’s four point ‘to-do’ list, August 25, 2009. Pimco’s chief executive comments on Ben Bernanke’s reappointment for a second term at Chairman of the Federal Reserve.

• Ambrose Evans-Pritchard (Telegraph): The troubling side of

Mortgage delinquencies move higher…Euro pushed higher by European data…Economist predicts Norway will be first to raise…Mexico to leave rates unchanged…And Now… Today’s Pfennig!

Good day… And happy Friday! The data released yesterday morning was a mixed bag, as the leading indicators climbed for a fourth straight month and the Philadelphia fed reported a big jump in their gauge of activity, but the initial jobless claims unexpectedly rose. Unemployment in the US will continue to be a drag on the economy, slowing any recovery and possibly pushing the US back into recession (or as some predict a depression). Today we will get some news on the housing market, and while the media will pump up the fact that month on month sales continue to rise, another report released yesterday showed mortgage delinquencies hit a record high in July. The proportion of homeowners delinquent on their mortgage or in foreclosure rose to its

I yesterday published a short post on Chinese equities and said: “… it looks if more downside is in store for the Shanghai Composite Index and it would not come as a surprise if lower Chinese equities serve as the catalyst for a well-deserved pullback in global stock markets.” With the MSCI World Index, the MSCI Emerging Markets Index and the major US indices coming off the boil yesterday, China may already have started leading world markets lower.

On a number of occasions recently I have asserted that the stock market has become disconnected from the economy. Mohamed El-Erian, CEO and co-CIO of Pimco, yesterday shared this view in an interview with CNBC. He said: “The stock market has gotten way ahead of the reality on the ground.” Arguing that markets are on a “sugar high”, he added: “Stock investors are making overly optimistic assumptions. The key

With investors taking heart from better-than-expected earnings announcements (albeit only as a result of cost cutting negating a decline in revenue), the major US equity indices reached new highs for the year on Thursday/Friday and the S&P 500 Index closed in on the roundophobia 1,000 level.

Newsweek’s cover declared “The recession is over”, but a footnote stated “Good luck surviving the recovery”, implying a hard slog ahead.

Elsewhere, Washington hosted a US-China Strategic Dialogue, as the Chinese is increasingly focusing on America’s deficit, the value of the greenback and the implications for its Treasury holdings. After almost doubling, a mid-week sell-off in Chinese stocks raised concerns about the sustainability of the Chinese economic recovery and repercussions for the rest of the fragile global economy.

Unsurprisingly, four of the clips included in this week’s video compilation deal with Chinese -related issues. Covering these and other topical issues are David Rosenberg,