Global Demand for U.S. Assets Rose in November, Treasury Says – By Vincent Del Giudice – (Bloomberg) — International demand for long-term U.S. stocks, bonds and financial assets rose in November as private investors purchased a record amount of government securities, a Treasury Department report showed. Net buying of long-term equities, notes and bonds totaled $126.8 billion for the month, compared with net buying of $19.3 billion in October, the Treasury said in Washington. – BusinessWeek
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What the Yield Curve Is Telling Us About Financial Markets – Matteo Radaelli – …. However, equity markets recorded their highest returns when the spread between the long term rates and the short term rates was above 1% but below 2%. … Finally, we should consider the predictive power of the yield slope with respect to the government bond market. A very steep yield curve has usually been followed by a decline in long term rates and an increase in short term rates. … – Seeking Alpha
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Printing More Money as a Capital Illusion – by JACOB GAFFNEY – good summary – HousingWire
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CHINESE GDP SOARS TO 10.7%, INFLATION FEARS RISE – TPC – Chinese GDP surprised to the upside as the government reported 10.7% growth. Analysts had been expecting 10.5% growth. The data was met with mixed reactions. While the growth is certainly encouraging there are increasing fears of overheating as consumer prices increased 1.9%. – The Pragmatic Capitalist
good charts – MORGAN STANLEY: THE DOLLAR COULD SOAR 10% – – TPC – Byron Wien and Gary Shilling aren’t the only ones betting on a dollar rally in 2009. A recent research piece from Morgan Stanley’s FX team says the dollar rally could continue and rally as much as 10% as it appears attractive compared to most other G4 currencies. Based on Morgan Stanley’s valuation metrics the dollar is now substantially below its fair value – The Pragmatic Capitalist
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Tipping Point for Greece – Sovereign risk is still lurking around the corner. As we hear about large states like Illinois entering into insolvency, we should probably keep an eye on the bigger picture. Unfortunately for Greece, they have not been able to leave the spotlight. With a sovereign CDS level spiking to 343 bps, traders are speculating that there is about a 25% chance they will default within the next five years. – Surly Trader
The Asian Tiger – Foreign Policy Magazine had a nice editorial article titled “Think Again: Asia’s Rise” that goes against the sentiment that Asia, and specifically China, will reign as the global juggernaut within a few decades. Among the insightful datapoints: The region produces 30% of global economic output, but per capita GDP is $5,800 vs $48,000 in the United States – has 9 more points – Surly Trader
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If the Public Has Its Way, Expect Recession or Stagflation – Kimball Corson – If the Massachusetts vote is any indication of public sentiment at large – and many believe it is — and our Congressional representatives understand and react to that sentiment, we may yet face renewed recession or perhaps, more likely, stagflation. There are significant probabilities for these events. Here is why? – Wandering the Oceans
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DJ Reit Index at Support – Chart of the Day – … While REITs have been trending up sharply for ten months, REITs currently trade 50% below their February 2007 peak. As today’s chart illustrates, the Dow Jones Wilshire REIT Index has just broken below support (green line) of its upward sloping trend channel. … – Chart of the Day
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Russian Central Bank Ditches The USA And Dives Into Canadian Dollar Reserves – Vincent Fernando – Money Game at Business Insider