This post provides links to a number of interesting articles I have read over the past few days that you may also enjoy.
• Doug Kass (The Street.com): The animal spirits, November 27, 2009.
Successful investing is anticipating the anticipations of others, and despite the renewed and more plentiful calls for S&P 1200 by year-end, it might be time to anticipate a reversal of fortune – an unpopular, unimaginable and unexpected outsized market decline.
• Jim Krane (Financial Times): Dubai gambles with its financial reputation, November 26, 2009.
The government’s decision to postpone debt repayments could make the emirate’s rivals more attractive, persuading international companies to decamp to Doha or Abu Dhabi.
• The Economist: A developing bull market, November 26, 2009.
Low yields on cash are sending investors far afield.
• Aline Van Duyn (Financial Times): Drag of structured debt is impossible to ignore, November 27, 2009.
As investors and policymakers peer into 2010, and as pressure continues on banks to start lending again, the drag of structured securities cannot be ignored. At the very least, their presence will throw sand into the banking system and slow it down. The nature of distressed structured bonds means the clean-up process will be extremely lengthy.
• Floyd Norris (The New York Times): Keeping derivatives in the dark, November 26, 2009.
If Mr. Geithner is vulnerable, it is because the efforts of the administration and the Federal Reserve to save the banking system worked too well. The fears of collapse that were present early this year have faded away, and been replaced by a general feeling of resentment. The banks seem to be on the verge of harnessing that feeling of resentment to preserve a major profit center. In terms of lobbying, it will be a remarkable achievement.
• Paul Krugman (The New York Times): Taxing the speculators, November 26, 2009.
Should we use taxes to deter financial speculation? Yes, say top British officials, who oversee the City of London, one of the world’s two great banking centers. Other European governments agree – and they’re right. Unfortunately, United States officials – especially Timothy Geithner, the Treasury secretary – are dead set against the proposal. Let’s hope they reconsider: a financial transactions tax is an idea whose time has come.
• Simon Johnson (The New Republic): Will increased capital requirements kill a recovery? Morgan Stanley wants you to think so. November 25, 2009.
Just when momentum was starting to build for increased capital requirements as the core element of an approach that will reign in reckless risk-taking, Morgan Stanley effectively demolishes the idea.
• Gordon Chang (Forbes): Chinese banks in the tank, November 27, 2009.
How long can China keep rolling over bad debt?
