This post provides links to some thought-provoking articles I have read over the past few days that you may also find of interest.
• Tom Lauricella (The Wall Street Journal): Is this bull cyclical or secular?, June 15, 2009.
Many investors are now calling the rebound in stocks since early March the start of a new bull market. But it could be only a temporary respite from a longer-term bear market dating back to the beginning of this decade.
• Andy Xie (Caijing.com.cn): Tight spot for Fed, blind spot for investors, June 8, 2009.
If you are a speculator and confident you can get out before it crashes, this is your market. If you think this market is for real, you are making a mistake and should get out as soon as possible. If you lost money during your last three market entries, stay away from this one – as far as you can.
• John Hussman (Hussman Funds): The outlook is not up, but very widely sideways, June 15, 2009.
Investors hoping to ride a “wave of liquidity” may eventually discover that the wave leads to a plunge over the falls.
• Kai Ryssdal (American Public Media, Marketplace): Taking stock: Lessons from history, June 9, 2009.
Revered economist and monetary policy expert Dr. Anna Schwartz talks with Kai Ryssdal about how the Federal Reserve and government have performed while in the economic hot seat. She isn’t too pleased.
• Jonathan Nitzan and Shimshon Bichler: Contours of crisis III: Systemic fear and forward-looking finance, June 2009.
Capitalism may survive this upheaval, as it survived the Great Depression. But its continuation may well entail a significant transformation – one that restructures both the architecture of power and the ideology of the powerful.
• Will Hutton (The Observer): Paul Krugman’s fear for lost decade, June 14, 2009.
As analysts and media hailed the tentative emergence of green shoots last week, Nobel Prize-winning economist Paul Krugman caused international shock with a prediction that the world economy would stagnate just as badly, and for just as long, as Japan’s did in the 1990s. In an exclusive interview, he talks to Will Hutton about his anxiety for the future – and how Gordon Brown might have saved Britain from the blight that hangs over the West.
• Paul Krugman (The New York Times): Stay the course, June 14, 2009.
A few months ago the US economy was in danger of falling into depression. Aggressive monetary policy and deficit spending have, for the time being, averted that danger. And suddenly critics are demanding that we call the whole thing off, and revert to business as usual. Those demands should be ignored. It’s much too soon to give up on policies that have, at most, pulled us a few inches back from the edge of the abyss.
• Wolfgang Münchau (Financial Times): Optimism is not enough for a global recovery, June 15, 2009.
Instead of solving the problems to generate a recovery, the political strategies have consisted of waiting for a recovery to solve the problem. As everybody expects the others to move first, nobody moves. In the meantime, the problems grow worse.
• Bill Fleckenstein (MSN Money): Printing money isn’t the cure, June 15, 2009.
The economy needs strong medicine, and it’s getting a big dose of it. But the side effects are dangerous, and the prognosis for a quick recovery is poor.
• The Economist: The big sweat, June 11, 2009.
Banking catastrophes and recession have led to vast increases in rich countries’ public debts. Getting their finances back into shape will be painful
• The Economist: Public debt – The biggest hill in history, June 11, 2009.
The right and wrong ways to deal with the rich world’s fiscal mess.
• Duncan Niederauer (Financial Times): Principles that must guide financial regulation, June 16, 2009.
It is time to overhaul the financial regulatory structure, writes Duncan Niederauer, who looks at what principles should frame a truly modern and proactive regulatory architecture of the 21st century.
• Peter Morici (New America Foundation): Recalibrating US-China, June 11, 2009.
The United States now confronts its greatest economic challenges since the Great Depression. Fixing credit markets and energy policy are largely domestic challenges, whereas recalibrating trade with China requires cooperation from Beijing. However, such cooperation requires fundamental changes in Chinese industrial policies and a departure from maintaining an undervalued yuan to spur industrial development.
• Gideon Rachman (Financial Times): Democracy could still win in Iran, June 16, 2009.
In the short term, events in the country are depressing and alarming – a stolen election, violence in the streets, repression. In the long term, the weekend has provided heartening evidence that Iran, and the Middle East in general, need not be immune to the great wave of democratisation that has swept the world since the late 1970s.
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