Prieur’s readings (September 30, 2009)
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 (TheStreet.com): Madman at the gates, September 29, 2009.
Despite the strong share price momentum and optimistic economic/profit consensus, I continue to hold on to the variant view that the markets have likely peaked for the year based on the existence of nontraditional headwinds, an end to decades of aggressive credit expansion and financial inventiveness, a still-vulnerable housing recovery (in the form of outsized phantom inventory challenges) and a still-fragile consumer — among other factors.
• Joshua Zumbrun (Forbes): Reasons to remain wary about housing, September 29, 2009.
After signs of life this summer, here are eight factors to watch that could extend the bust.
• Tim Duy (Tim Duy’s Fed Watch): Rushing to the exits, September 24, 2009.
A missive from a former colleague prompted me to reconsider the Fed’s behavior in light of their most recent forecast and the evolution of economic data. That in turn started to shed light on some little pieces of information sitting on my computer that I knew were important, but just couldn’t quite see how they fit. And has left me somewhat concerned that the Fed may be more likely than I believed to stifle the pace of the recovery by, at a minimum, halting the growth of policy accommodation.
• Paul Krugman (The New York Times): The 4 percent solution, September 28, 2009.
On Wednesday I’ll be part of a panel at CAP discussing the long-run fiscal outlook and what to do about it. And I’ve been trying to figure out just how big the long-run problem is. Herewith some back-of-the-envelope thoughts.
• John Tamny (RealClearMarkets): The Fed continues to operate blindly, September 29, 2009.
For those who’d been optimistic that Federal Reserve officials might eventually wake up to the true nature of inflation, last week’s FOMC meeting likely dashed all hope. The Fed continues to reveal a shocking blindness about inflation’s actual causes, and instead comforts itself with the false notion that subpar economic growth is inflation’s cure.
• Marin Wolf (Financial Times): Why narrow banking alone is not the finance solution, September 29, 2009.
Demanding that banks act as narrow utilities solves the problem of the financial system taking control of the power to print money, but would need to be paired with a ban on other forms of banking. Such radical ideas may yet be entertained.
• Jeffrey Sachs (Financial Times): America has passed on the baton, September 29, 2009.
The G20 is an experiment. On its makeshift scaffolding the success of the planet now rests.
• Barbara Kiviat (Time): Common mistakes even smart investors make, September 29, 2009.
As chief investment strategist of Legg Mason Capital Management, Michael Mauboussin’s job is to understand the world and then make money off of it. What he’s found over the years is that investors, like any other group of people, are prone to make mistakes that stem from faulty approaches to decision-making.
• Naomi Klein (The Nation): America’s teacher, September 23, 2009.
On September 17, in the midst of the publicity blitz for his cinematic takedown of the capitalist order, Moore talked with Nation columnist Naomi Klein by phone about the film, the roots of our economic crisis and the promise and peril of the present political moment.
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