Yesterday, we saw a late-day sell-off, led by bank shares as investors grow increasingly nervous about the “stress test” results. I think Geithner and company are more than capable of massaging those numbers any way that investors want. So I wouldn’t worry about the numbers from the stress test. I would worry about the reality that Wall Street and Washington are ignoring.
Here’s what I’m reading …
IMF Warns Over Parallels to Great Depression
This recession is likely to be “unusually long and severe, and the recovery sluggish,” said the Fund, releasing two advance chapters from its World Economic Outlook. However, it warned there is a risk that it could spiral down into a full-blown slump unless further action is taken to stop “feedback effects” gathering force.
XX Sean’s note — here’s a nifty chart to go with that story …
Hat-tip: Calculated Risk
China May Expect Iron Ore Prices to Drop 40%
Japanese media have reported that Japanese steelmakers have agreed to a 30% price cut with three iron giants, BHP Billiton and Rio Tinto of Australia, and Vale of Brazil.
CISA Secretary General Shan Shanghua earlier declared that since steel prices had returned to 1994 levels, so too should the iron ore price, and this year’s iron ore price should be cut by at least 40%.
China: U.S Needs Adult Economic Supervision
Chinese Premier Wen Jiabao called for more surveillance of countries that issue major reserve currencies, according to published reports Saturday.
Wen did not specify the United States in his remarks at the Boao Forum for Asia in China’s Hainan Province. But Chinese officials have recently expressed their concern about their country’s investments in dollar-denominated assets.
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- Monday Morning Reading (02/23/09)
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