Stocks took off this morning, but are giving up their gains in the afternoon. We’ll see how we close. The watchwords for today, according to Art Cashin, are “nimble” and “cautious.”
Here are some things you might want to read …
Good, sobering chart on jobs (hat-tip Jesse)
And here’s a scary chart from The Automatic Earth, showing total credit market debt as a percent of GDP. As you can see, we’re far beyond anything seen during the Great Depression.
Gosh, how they love to scare me so.
It is Japan we should be worrying about, not America (Hat-tip Yves)
Japan is drifting helplessly towards a dramatic fiscal crisis. For 20 years the world’s second-largest economy has been able to borrow cheaply from a captive bond market, feeding its addiction to Keynesian deficit spending – and allowing it to push public debt beyond the point of no return.
Stiglitz Says U.S. Is Paying for Failure to Nationalize Banks
“We have this very strange situation today in America where we have given banks hundreds of billions of dollars and the president has to beg the banks to lend and they refuse,” Stiglitz said. “What we did was the wrong thing. It has weakened the economy and has increased our deficit, making it more difficult for the future.”
Mother of all carry trades faces an inevitable bust
By Nouriel Roubini
“One day this bubble will burst, leading to the biggest co-ordinated asset bust ever: if factors lead the dollar to reverse and suddenly appreciate – as was seen in previous reversals, such as the yen-funded carry trade – the leveraged carry trade will have to be suddenly closed as investors cover their dollar shorts. A stampede will occur as closing long leveraged risky asset positions across all asset classes funded by dollar shorts triggers a co-ordinated collapse of all those risky assets – equities, commodities, emerging market asset classes and credit instruments.”
XX Sean’s note – Mr. Roubini is right – all trends end – but I think he’s way, WAY too early on this one. Still, maybe he’s right — we’ll see how the greenback ends the week.
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