The Financial System: More Dangerous than an Al Qaeda Attack? – John Lounsbury – … The quote is from a penetrating indictment of the state of the financial world, written by Frank Rich yesterday in The New York Times. The danger that Rich refers to as greater than Al Qaeda is our financial system. This Op Ed is as good a description of the viper we call finance as I have read. While the average man on the street is likely to recognize the name Al Qaeda, many will probably shrug their shoulders at the mention of CDO or MBS. A mention of other financial derivatives based on the aforementioned unrecognized instruments will just deepen the glaze covering the eyes of Mr. Average American … – Seeking Alpha
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Let’s Hope These 4 Things Don’t Happen – By Rick Newman – (on housing, stocks, debt, consumer) – US News Yahoo
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long and a must read – Blowing Up – How Nassim Taleb turned the inevitability of disaster into an investment strategy – hattip John Cervarich – Gladwell.com
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read this – intuition is wrong – Interest Rates vs. the Stock Market: DIA, SPY, QQQQ, TBT, PST – BY Thomas H. Kee Jr. – … For example, because higher interest rates often dampen economic activity, one might argue that the Market weakens during increasing rate cycles. Evidenced by the graph below, that is not the case. In fact, during tightening cycles, the Market actually performs well. … – Stock Traders Daily
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Crisis chart of the day: The correlation between severity and probability – by Felix Salmon – The World Economic Forum has released its annual Global Risks report, which kicks off with this chart: … But the really scary thing, for me, is the pretty clear positive correlation between severity and likelihood: the trillion-dollar risks all have a significant probability of happening, with the most severe risk of all — a global asset price collapse — being associated with a probability of well over 20%. … – Reuters Blogs
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Government Bonds — the New Junk? – By RANDALL W. FORSYTH – That’s gold’s message, more than inflation. – FROM GREECE TO CALIFORNIA TO JAPAN, markets are beginning to worry about what traditionally is deemed a risk-free asset: government debt securities. And that arguably lies behind the rise in the price of gold. – Barron’s
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Indirect Bidders Are Fleeing The Short Bond – Submitted by Tyler Durden – … Indirect bidders (aka Foreign Investors) continue to bid up US Government securities, their interest in the short end of the curve has not only declined, but accelerated redemptions have left Indirects with a heavily weighted long bond exposure. – has curve thoughts and great graphs – … – Zero Hedge