Morning Reading – December 13, 2010

The New York Times: A Secretive Banking Elite Rules Trading in Derivatives

On the third Wednesday of every month, the nine members of an elite Wall Street society gather in Midtown Manhattan.

The men share a common goal: to protect the interests of big banks in the vast market for derivatives, one of the most profitable — and controversial — fields in finance. They also share a common secret: The details of their meetings, even their identities, have been strictly confidential.

The Economist: The Economist poll of forecasters, December averages

The Economist: Thinking small

Nuclear power: Combining several small reactors based on simple, proven designs could be a better approach than building big ones Alphaville: EFSF capitulation

What seems to be happening with the EFSF then, is the slow realisation that the facility (for many, many reasons) cannot cover all of Europe’s funding needs. Alphaville: China’s non-appearing rate hike

The red hot inflation figures out of China on Friday make it all the more curious why China is pursuing what FT Alphaville calls an “anything-but-rate-hikes” strategy — evident in its move on Friday to raise banks’ reserve requirements, rather than deliver a much-awaited interest rate increase

Zero Hedge: CLSA’s Complete 2011 China Outlook

After a few days ago we released the “definitive” factual presentation on China courtesy of HSBC, today we look at the future of the only country that matters (and which according to Goldman was the only saving grace for America, decoupling and what not, before the firm went full propaganda retard) with CLSA’s complete (124 pages) and historically very authoritative 2011 outlook on China.

Zero Hedge: CLSA’ Chris Wood On Why Chinese Inflation Is Not That Big Of A Deal, And Other Issues

When it comes to China, few people are as erudite (if somewhat biased) as CLSA’s Chris Wood. Below we present his latest thoughts on the world’s most populous country, which after tonight’s inflation news is sure to be in the headline news for at least a few days, or at least until an iPad 2 prototype is shockingly stolen from Apple’s offices.

Can Turtles Fly?: John Maynard Keynes – A great investor

Many readers have likely heard of John Maynard Keynes, arguably the most influential economist of the 20th century. Keynes is most famous for debunking the old theories of classical economics and developing a systematic way of analyzing macroeconomics with consideration of politics and philosophy. Yet, I’ll bet that only a few readers would know that he was also one of the top investors of all time. Investing wasn’t Keynes’ main job and he wasn’t exactly a money manager so his investing activities aren’t widely known.

The Big Picture: The Illustrated History of the U.S. Credit Collapse

We constructed these charts with data from today’s release of the Federal Reserve’s Flow of Funds. They are both stunning and frightening as they illustrate the cardiac arrest that took place in the credit markets. The collapse in credit issuance/borrowing began in 2008 and would have been net negative without the Federal government. In 2009, for example, the Federal government was 141 percent of total net credit borrowings.

The Big Picture: FDIC Bank Failure Update

In the beginning of the year, I thought we might blow past 2009′s totals, but it looks like 2010 is going to just barely outpace last year. Strong start, but we look like we will end up within a similar total to last year…

The Big Picture: Investing Losses: Death by Opinion

As the chart suggests, these turn out to be amongst the more expensive expressions of opinion that investors have. By definition, if you are relying on other people’s opinions, then you have been making investment decisions based on how these people play to your squishy emotions.

The Big Picture: Wankin’ Bankers

An Irishman abroad tells it like it is !! 🙂 BeyondBRICs: Week ahead, Dec 13-19: Putin you through

As if the tug-of-war around the Nobel peace prize ceremony wasn’t enough, there’s more heavyweight diplomacy this week. US and Chinese officials meet in Washington for trade talks; perhaps – as they prod Chinese government procurement and other sores – they can take heart from the peaceful resolution of the banana wars, whose one-year anniversary is celebrated on Wednesday.

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