When China announced its colossal $600-billion stimulus package back in November, we cautioned investors against irrational exuberance on the overall impact it would have on commodities, stocks and heavy equipment.

Now that the dust has cleared, it appears that the China plan is not entirely as big as advertised — further diminishing the halo effect on the global economy.

When originally unveiled, China’s $600-billion plan proposed a massive infrastructure build-out through 2010 to help create jobs and shift the country away from it’s over-reliance on exports, which have suffered from the global recession.

The announcement was framed as a brand-new initiative. The blueprint China laid out before the world included projects for low-cost housing, airports, roads, highways and aid to farmers. Pundits saw the investment by China as an overnight boom for raw materials, although we took a wait-and-see approach.

Asian stock markets surged on news. Japan’s Nikkei index jumped 5.8% while Hong Kong’s

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Debt prices plummet, dollar gains… U.S. stocks fall on profit-taking but rise in Europe…  Dollar at 3-week high vs euro on hopes for stimulus plan… Oil gains as Gaza fighting raises Mideast supply worries.

News about a planned U.S. stimulus package helped pull investors into the dollar on Monday but U.S. Treasury prices slumped on fears a price bubble is about to pop in the face of a massive wave of fresh debt.

European equities advanced for the fifth session in a row, spurred by gains in shares of oil companies on the back of rising crude prices. U.S. stocks were mostly lower as investors took profits on the rally that was racked up in thin trading last week.

Oil prices hit a three-week high as Israel’s deepening incursion into Gaza and a Russian gas dispute heightened fears about supplies.

Prospects for a swelling supply of government debt

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President-elect Barack Obama’s transition team is reportedly putting the finishing touches on an economic recovery plan that could run from $675 billion to $1 trillion, though many experts believe the program will most like range between $700 billion and $800 billion.

Briefings for top congressional Democrats were to start either over the weekend or today (Monday), a senior transition-team official told The Associated Press late last week. President-elect Obama is slated to meet today with House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., in a Democratic strategy session that is likely to focus on the economic recovery package.

It’s time to look forward, not back. The 111th Congress meets tomorrow (Tuesday), and a comprehensive economic stimulus package is at the top of its agenda.  Hopefully, the lawmakers can put partisan bickering aside (fat chance) and have a bill in place for President-elect Barack

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The year 2008 was for the global equity markets the worst in history. Capital outflow reached record 14 trillion dollars. The crisis of the financial system and the worst recession since 1970, froze investor confidence. MSCI index of global shares in the year fell by a record 44%.br /br /One of the worst performance posted stock market in Russia. Benchmark RTS Index closed the year 72% lower. The second worst result in the world has seen China's stock index, the SSE Composite lost a record 65% after the boom in 2006 and 2007 brought the growth of over 300%.br /br /In the U.S., the Dow Jones index ended the last trading day a profit of 2.2% over the year but lost 34% of which was the worst loss since the Great Depression in 1931. Only two titles, retailers Wal-Mart Stores (WMT) and Mc Donalds (MCD), closed the ...

Euro gains, then loses, then gains…  Inflation and Commodities…  The euro turns 10!  Risk Aversion remains but is waning… And Now… Today’s Pfennig! Remember those Wild Swings I talked about yesterday? The Wild Swings that could be a result of thin volumes in this the second week of Christmas. Well… We witnessed them in earnest yesterday! As I signed off yesterday, I told you that the euro had rallied 2 whole figures to 1.43 and change. Well, that rally dissipated throughout the morning, and by late in the day the single unit was 1.39 and change… WOW! Now that’s a Wild Swing!

You can point to profit taking as the reason for the move,

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Pessimism about the U.S. economy and financial market is so thick right now you could cut it with a knife. I’ll be the first to admit that times are tough. But Americans have seen tough times before. And we have always prevailed.

Too many investment myths have gone unchallenged lately. Today I plan to refute them - and explain why financial markets are likely to perform much better than most investors believe in the year ahead.

Let’s begin by examining the four biggest investment myths circulating right now…

Investment Myth #1: The Era of Free Markets is Over

It’s true that many of the apostles of free-market economics have begged Congress for government intervention during the current credit crisis. But nobody is seriously arguing that Uncle Sam should nationalize the economy, set wages and prices, or establish production quotas.

The free market still constitutes the best means of securing

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The 4 Biggest Investment Myths of 2008

by Alexander Green, Chairman, Investment U Investment Director, The Oxford Club Monday, December 29, 2008: Issue #907

Pessimism about the U.S. economy and financial market is so thick right now you could cut it with a knife.

I’ll be the first to admit that times are tough. But Americans have seen tough times before. And we have always prevailed.

Too many investment myths have gone unchallenged lately. Today I plan to refute them - and explain why financial markets are likely to perform much better than most investors believe in the year ahead.

Let’s begin by examining the four biggest investment myths circulating right now…

Investment Myth #1: The Era of Free Markets is Over

It’s true that many of the apostles of free-market economics have begged Congress for government intervention during the current credit crisis. But nobody is seriously arguing that

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Dollar plunges to 13-1/2 year trough vs yen, below 88… European, U.S. government debt touch fresh historic lows… Morgan Stanley’s, PNB Paribas’ losses lead stocks lower… Oil slips; OPEC’s record cut doesn’t offset demand slide

The dollar fell anew against the euro and yen while yields on U.S. and European government debt traded at or near historic lows on Wednesday, a day after the bold credit easing by the Federal Reserve to combat a worsening recession.

Oil prices dropped as much as $3 a barrel after dealers said a record supply cut by the Organization of Petroleum Exporting Countries would not be enough to counter slumping energy demand brought on by the global economic downturn.

Equity markets on either side of the Atlantic slid as the initial enthusiasm over the Fed’s surprisingly aggressive interest rate cut on Tuesday gave way to weak financial results at key banks and

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Risk-taking revived but uncertainty lingers… U.S. dollar hits 2-month low vs euro, down vs yen… Don’t let go of recession trades just yet - JPMorgan

Asian stocks climbed nearly 4 percent on Monday on renewed hopes the U.S. automaker industry would be rescued, strengthening willingness to take risks and knocking the U.S. dollar to a two-month low against the euro.

Investors have been funnelling capital back to emerging Asia for the last few weeks and word the White House was considering using some of $700 billion meant to rescue financial institutions for the struggling car manufacturers extended the trend.

European stock index futures were also pointing to opening gains of at least 2 percent.

However, worsening U.S. economic data, a rapidly growing fiscal deficit and the likelihood the Federal Reserve will cut interest rates again this week all combined to weaken the dollar.

“The

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NYSE CEO: More Consolidation Coming

Duncan Niederauer sees more shakeout taking place in the exchange industry. At least that is what the NYSE Euronext chief executive said during a speech on Thursday, according to Dow Jones Newswires' Jacob Bunge.

Niederauer also said the NYSE Euronext is planning to register its London-based clearinghouse as a U.S. trust bank, the article added.

You can read the full report here.

 

From Top To Bottom & Back

Whether the Dow Jones Industrial Average bottomed on Nov. 20 is debatable, notes John Prestbo.

But the executive director of Dow Jones Indexes writes in his latest MarketWatch column that whether stock indexes have hit a trough or not, it's likely any rebound will take some time to work through the economy. He goes on to trace the history of bear markets and put the Dow's recent performance into some sort of perspective.

You can read the story

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