Prieur’s readings (December 19, 2009)

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This post provides links to a number of interesting articles I have read over the past few days that you may also enjoy.

• Mark Hulbert (MarketWatch): The golden detour: Contrarians still cautious about gold, December 18, 2009.
Gold timers’ behavior this week leads contrarians to conclude that gold’s correction is not yet over.

• Gillian Tett (Financial Times): Secrets strengthen case for CDS exchange, December 17, 2009.
Until recently, not many western politicians – let alone those in Greece – knew much about sovereign credit default swaps. Even fewer cared. But I suspect that is about to change. And since the CDS market is apt to be a leading indicator for other markets (just look, again, at the recent experience of Greece), the movement of spreads is starting to grab attention from investors and politicians alike.

• Richard Posner (The Becker-Posner Blog): Should we jettison GDP as an economic measure? December 14, 2009.
To view a change in GDP from negative to positive as signifying the end of a depression (by which criterion the Great Depression ended in 1933 and again in 1938) is to misunderstand the utility of GDP as a measure of economic activity.

• The Economist: The great stabilization, December 17, 2009.
The recession was less calamitous than many feared. Its aftermath will be more dangerous than many expect.

Reading break:

Considering the short-term technical picture of US stock markets, Adam Hewison ( provides valuable insight with short analyses of the Dow Jones Industrial Index and the Nasdaq Index respectively. Click here and here to access the presentations.

• Damian Paletta (The Wall Street Journal): Agencies in a brawl for control over banks, December 18, 2009.
In the darkest days of the financial crisis a year ago, Sheila Bair was hailed for having predicted the housing bust. Today, the chief of the Federal Deposit Insurance Corp. is fighting for her agency’s future.

• Charles Pierce ( Bostonian of the year – the watchdog: Elizabeth Warren, December 20, 2009.
It seemed as if the banks and other firms got a $700 billion bonanza and the American taxpayer got the shaft. But along came this straight-shooting Harvard professor to oversee the bailout, someone who pledged to look out for the middle class and brought a sense of sanity to the economic crisis. For this we give her our top honors this year.

• Robert Cutler (Asia Times): China – blindfolded on a cliff edge, December 18, 2009.

Easy money has strongly encouraged speculation in real estate and the stock market. These sectors are already in bubble mode, and the government fears bursting them.

• Mo Ibrahim (Financial Times): Africa must exploit all energy sources, December 18, 2009.
Creative thinking and co-operation are the key to turning on the lights for the next generation of Africans, helping them to lift themselves out of poverty, while ensuring that we safeguard our planet.

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