Daily Reading – January 3, 2011

Guardian.co.uk: Albert Edwards, SocGen bear, takes a bite out of China

There is an air of optimism among investors and a confidence among economists that a much feared double-dip recession has been avoided. A tough moment, then, to be bearish?

Not for Albert Edwards, the best known and longest-standing bear in the City. He has seen nothing to dent his Ice Age thesis – the term he coined as long ago as 1996 to describe the relative decline of equities versus bonds. He thinks there may still be another Japanese-style economic “lost decade” to endure. “Big structural bear markets take 19 years on average and have four recessions,” he says. “We’ve had two.”

The Big Picture: What to Expect in 2011

No surprise here: The markets begin 2011 on a high note, with futures forecasting strong gains for the first day of trading.

This should be no surprise — fund managers who wanted the losers off of their books are sitting with a bit of cash, and it gets put to work the first opportunity.

The Big Picture: FDIC Bank Closings for 2010

Here is a look at bank closings for the year 2010 (note this does not include any closings the last 2 weeks of the year).

Calculated Risk: WSJ: Key to Real-Estate Rebound

The key to recovery in real estate is absorbing the excess supply. Lawler makes two key points: 1) We need job growth (and that would mean household formation absorbing the excess supply) and, 2) Housing completions are at record lows (not adding to the excess supply).

Calculated Risk: Krugman: Deep Hole Economics

If there’s one piece of economic wisdom I hope people will grasp this year, it’s this: Even though we may finally have stopped digging, we’re still near the bottom of a very deep hole.


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