Links: 2009-01-12

The earnings season starts soon and we shall see how much the latest upturn lasts. I expect stocks to decline this year. Remember, there was a huge rally in 1930 before reality set in. I do see today as similar. That’s my commentary for today. Below are the links.

By the way, I am a big Boston Red Sox and Jim Rice fan. Rice was finally elected to the Baseball Hall of Fame with Ricky Henderson. It’s about time.

Enjoy the links.

Realtors’ Former Top Economist Says Don’t Blame the Messenger – WSJ (David Lereah was a shill for the NAR promoting the housing bubble just a few years ago.  Now, they won’t return his calls. Hat tip: Tim Iacono)

Lessons from shorting JGBs – the credible promise to be reckless – Bronte Capital (John Hempton is spot on in his analysis: Treasuries are a bubble with a poor risk/reward, just like JGBs once were.  The question iswhen can you short them, then)

TIPS Irresistible to Gross as Protection Is ‘Cheap’ – Bloomberg.com (Here, on the other hand, TIPS present a great risk/reward)

President Bush Reflects On His Mistakes (Again) – Swampland (I don’t find Bush particularly introspective.  Read this and decide how you feel.)

Poland hopes Obama will back missile shield – Reuters

Nuclear fears as danger plant is reopened in gas war with Russia – Times Online

Russia Should Be Offered NATO Membership, Joschka Fischer Says – Bloomberg.com (This is a very interesting piece of analysis from Germany’s former Foreign Minister)

Zimbabwe introduces $50 billion note – CNN (hat tip: egghat)

Deutsche Bank – FT Lex (This Lex column basically says that Deutsche Bank needs a bailout in the aftermath of the Commerzbank bailout.  My understnding is that Deutsche has a lot of CRE exposure)

Bundesbank Says Counterfeit Banknotes in Germany Rose in 2008 – Bloomberg.com (Word has it the average German is very suspicous of Euro notes printed in Portugal, Italy, Spain, Greece.  Apparently, there is a reason for general skepticism.)

Board (in)competence and the subprime crisis – VoxEU

Good news at last? The recession will be over sooner than you think – VoxEU

Further bank aid must include pay limits: Dodd – Reuters

Oil falls 7 percent to below $38 as demand weakens – Reuters (My $25 call is looking a heck of a lot better than just a wekk ago)

Banks rip up credit derivatives – FT Alphaville (This is a very positive story.  I would like to see the OTC derivatives market shrink even more)

Eight reasons why we are in a depression – Marginal Revolution

A scary analogy – Paul Krugman, NY Times (and a good one)