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 opportunity to do important things that you would otherwise avoid.” He was right. But I fear that the Emanuel Principle is about to be violated in the case of financial reform. We are barely emerging from the greatest financial crisis since the 1930s. From last September to March, it was downright frightening. Yet by the time Congress left town for its summer recess, financial reform appeared to be losing steam.

• Investor’s Business Daily: Other people’s money, September 4, 2009.
The jobless rate has hit a 26-year high. More than 200,000 jobs were lost last month. Yet the White House continues to claim its stimulus legislation is working. When does the charade end?

• Ambrose Evans-Pritchard (Telegraph): Bears still growl at the Sanctum Sanctorum of the policy elites, September 4, 2009.
Any attempt by the US to inflate its way out of this debt trap risks setting off a “disorderly collapse of the dollar”. Washington will not opt for this deliberately. Unfortunately, it may drift into such an outcome as the path of least political resistance. Yes, but I can see plenty of other candidates for this sort of beggar-thy-neighbour somnambulism. Others may yet beat the US to currency debauchery.

• Jo Winterbottom (Reuters): “U-shaped” recovery is possible, September 4, 2009.
Nouriel Roubini, a leading economist who predicted the scale of global financial troubles, said a U-shaped recovery is possible, with leading economies undeperforming perhaps for 3 years. He said there is also an increasing risk of a “double-dip” scenario, however.

• Jennifer Ablan (Reuters): Double-dip recession risk rising: El-Erian, September 4, 2009.
US economy faces an increasing risk of stalled growth in 2010, the chief executive of top bond fund Pimco said on Friday, adding that rallies in the equity and bond markets have outpaced economic trends. Despite signs that an economic recovery is taking shape, a soft job market and flat incomes could hinder a sustained recovery, Mohamed El-Erian, Pimco’s CEO, told Reuters in an interview.

• Wolfgang Münchau (Financial Times): Europe’s failure of ambition stunts growth, September 6, 2009
In the long term the eurozone will probably survive. But it may wither, as potential growth and living standards are falling.

Did you enjoy this post? If so, click here to subscribe to updates to Investment Postcards from Cape Town by e-mail.