Morning Reading – January 6, 2011

PIMCO //William H. Gross: Off With Our Heads!

  • American politicians and citizens alike have no clear vision of the costs of a seemingly perpetual trillion-dollar annual deficit.
  • Policy stimulus is focused on maintaining current consumption as opposed to making the United States more competitive in the global marketplace.
  • Dollar depreciation will sap the purchasing power of U.S. consumers, as well as the global valuation of dollar denominated assets.

The Wall Street Journal // Deal Journal: You Decide: Goldman’s Facebook Pitch or Nigerian Email ‘Opportunity’

To be offered private stock in Facebook, wealthy clients of Goldman Sachs had to have a spare $2 million lying around. But even the hoi polloi may have a similar pitch sitting in their email inboxes right now.

The Big Picture: Surprise! Ratings Agencies Still Suck!

More shocking news about the inept rating agencies…

Mandel on Innovation and Growth: A Bizarre Labor Market (with data)

As we start the New Year, we face what is perhaps the most unpredictable and bizarre labor market I can remember. This morning the Conference Board released the December Help-Wanted Online report, which apparently shows a sharp increase in labor demand over the past year in most occupations. However,  the BLS  employment by occupation data shows no corresponding gain, even in occupations with soaring want ads.  Nor does the unemployment by occupation data show any corresponding movements.

FT Alphaville: Europe’s 2011 pressure points

Courtesy of Nomura — some possible European ’stress’ dates to look out for this year (just think of 2010’s Irish guarantees in September or Spanish redemptions in July)…

FT Alphaville: Waiting for a senior bank bond haircut…

Here’s the action in European financial CDS as the market waits for the European Commission to release a consultation paper outlining its plans to haircut senior bank (not sovereign) bondholders. According to Ambrose Evans-Pritchard of the Telegraph this will happen today, Thursday, which means we’re seeing this…

FT Alphaville: Does RBS need to take an Irish hit?

Will RBS be the next bank to increase bad loan provisions for Ireland?

FT BeyondBRICs: Indian food: even more expensive

Food prices in India are rocketing ever higher by the day: the latest figures out on Thursday show them up by the largest amount in more than a year – over 18 per cent – toward the end of December. This can only add to pressure on the central bank to tighten monetary policy.

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