As the time for Barack Obama to take office moves ever closer, his policy team is coming into view. Obama has appointed a slew of economic advisors including Tim Geithner, Larry Summers and Paul Volcker. In addition, he looks to have filled out the key positions in his White House staff and to have nominated veterans to other key posts including Hillary Clinton, Bill Richardson, and Tom Daschle. Meanwhile Defense Secretary Robert Gates is likely to stay on. While opinions about the appointments are mixed, reviews about decisiveness and leadership have been favorable.
On the other hand, the reviews about Bush and Paulson’s handling of the economy and credit crisis still suffers with many commentators faulting Paulson for having changed the TARP design multiple times.
Below are the top links to these and other interesting political stories.
Obama to name Volcker to head markets panel | Politics | Reuters
Another View: TARP Is an Incipient Disaster — DealBook – New York Times
Finance and the Credit Crisis
In the world of finance, despite decent stock market returns, most of the news coming out is fairly grim. And this is a global phenomenon. Toyota had it’s ratings cut. Dividends are shrinking across the board, Canada looks likely to move into recession. BHP Billiton and Rio Tinto is a commodities merger that will never happen. Porsche is going to miss targets. Oh, and house price in the U.S> are still falling. The list goes on. In my view, the most important story is China because they are slowing at a rapid rate and the government is stepping up the stimulus, both fiscal and monetary. Below are the biggest stories out there starting with China.
Obviously, we are in a bear market given that stocks have been cut in half and the news flow continues to be negative. However, Jeremy Grantham and James Montier, two so-called perma bears are loving life because they see a lot of good value amongst the corporate carcasses waylaid by the global downturn. Warren Buffett is bullish and looking good these days as some of his bets seem to be paying off. That said, one must recognize that we are still in a bear market and that means that not all stocks can increase. In fact, Grantham sees the S&P potentially falling to 600 next year amid the grim economic news. Grantham has a must-see interview with Consuelo Mack that I have linked below. I share his views both in terms of the number of values available and the likely fall in broader indices. His most intersting statement was when he said it is times like these that matter in an asset allocator’s performance. Anyone can make money in a bull market. Bear markets separate the men from the boys.
Below are the important links in the markets. Note the lead stories about Middle Eastern investors being more concerned with their own problems than investing in Western markets.
As always, feel free to see all the important news links in the news feed, which you can access here.
I hope to get out an update to my credit crisis timeline before this day ends. However, forgive me if I do not. I am off to a turkey fest this afternoon and foresee me stuffing my face by 4PM.
I wish you all well over Thanksgiving.