A Tale of Two Markets

The Shanghai has turned down this evening after opening up and looks to continue the downtrend. That is one ugly chart. Meanwhile, the S&P500 looks like it really wants to resolve its wedge formation to the upside. After a year of head fakes, bull and bear traps, traders may have lost a little trust in the charts, however. A good employment number on Friday may provide a nice catalyst for some resolution

America: What to Do with North Korea?

North Korea’s dear leader, Kim II, died a few days ago. His 3rd son is now in charge, as Kim III, Kim Jong Un (pictured). There is no better time to talk about North Korea than now, as evidenced by some timely expert opinions. So it’s time for me to chip in my two cents. I will briefly but succinctly answer five pertinent questions as follows

Chart of the Day: U.S. Real Earnings through November 2011

Only three positive months in the last year. Lots of pain out there. Be charitable this holiday season, our friends. The return is tremendous

U.S. Exposure to Europe – Unknowns Unknowns

As Eurocrats dissemble, ratios that quantify U.S. financial system exposure to European insolvency are dated, even as they are published

Stephen Roach on the IMF bailout, Chinese banks and US consumers

Here’s a good all-encompassing Bloomberg TV video with Morgan Stanley’s Stephen Roach from Friday. He is not impressed with the IMF plans that the Europeans are working on, calling the numbers “chump change”. Roach also talks about the US and Chinese economies as well.

The video is below followed by the copy from Bloomberg

More on how post credit bubble fiscal austerity leads to depression

Britain’s economy is a shambles as the negative impact of austerity has been made plain. Now, mind you, it was already clear from a leaked Greek bailout document that expansionary fiscal consolidation has failed in Greece. But now the OECD’s double dip warning for Britain should make this plain to all

Weekend Developments and Their Significance Going Forward

There have been several important developments over the weekend which are likely to support the euro at the start of the week, after falling for the past four consecutive weeks and recording a 7-week low before the weekend. However, I continue to expect corrective gains in the euro will be short-lived and subject to headline risks. I still think that the $1.29 year end target for the euro is reasonable

PIMCO’s Mohamed El-Erian: US recession odds are 50%

Pacific Investment Management Co.’s Chief Executive Officer Mohamed A. El-Erian told Bloomberg TV’s Betty Liu and Dominic Chu this morning that U.S. economic conditions are “terrifying” as the nation struggles to recover from recession. El-Erian also said the odds of the U.S. returning to recession are as high as 50%

News Links: Downgrade watch begins as debt panel concedes defeat

Downgrade watch begins as debt panel concedes defeat – The Hill’s On The Money Credit rating agencies reiterated Monday that the U.S. is at risk of a downgrade following the announcement that the supercommittee has failed. Standard & Poor’s warned lawmakers not to try and roll back the $1.2 trillion in automatic cuts set to

Dollar Softer Amid Consolidation

The US dollar is trading with a softer bias in what largely appears to be a consolidation. The euro held support near $1.34, sterling near $1.56 and Aussie near $0.9800. The news stream is light and corrective forces are seen in equities, which are mostly higher, and bond markets, which are mostly lower. Emerging market currencies are also generally firmer

National Solvency and the Special Case of the US Dollar

The US can run budget deficits that help to fuel current account deficits without worry about government or national insolvency precisely because the rest of the world wants Dollars. But surely that cannot be true of any other nation. Today, the US Dollar is the international reserve currency—making the US special. Isn’t the US special? Let us examine this argument

Chart of the day: Definitive guide to the European debt web

The BBC has a terrific chart tool that gives you a good feel for exactly how much the sovereign debtors in each of the European countries owes and to which other countries. The great thing about this chart is that it also shows you the debt flows outside of the European periphery i.e. for France and Germany, as well as for Japan, the US and Britain in both directions