2011

The probability of a German-led fiscal union in Europe is greater than the consensus suspects given its arguments that only an ECB backstop and a European bond will prevent the end of the greater experiment. In addition, the argument is…

For years I have been arguing that the Achilles heel of the Chinese growth model is the unsustainable rise in debt that comes as a necessary consequence of capital misallocation fueled by bank lending. Capital misallocation, I argued, was…

News links for 3 December 2011

My takeaway from two days in DC is that Europe is headed to a blood in the streets outcome. While ECB funding remains ongoing even as it’s uncertain, in any case, the underlying theme remains austerity. There is no plan B.

A breakdown of employment gains and losses by industry plus an excerpt of what the BLS had to say about this morning’s employment report

The prevailing view amongst euro area policy makers seems to be that saving Italy from default is necessary and that the only politically justifiable way to effect this rescue is to move to fiscal integration. All of the statements by…

As often is the case, economic data can be a bit of a Rorschach test, in that reasonable people can see and value different aspects of the report. This holds for today's US employment report. The headlines were good--140k private sector…

News links from 2 December 2011 include links on the European sovereign debt crisis, the UK economy, the latest on mortgages and technology as well as other stories.

Bottom line: the numbers are decent but they beat expectations. Markets are in a bullish end of year tape painting frame of mind, so stocks will rally. Daddy needs a bonus so Santa is indeed coming to town. The Santa Claus rally is on.

The dollar is trading on an easier footing as risk improves ahead of payrolls and hope of EZ action. US private payrolls expected to come in at 150k; strong report likely to be supportive of sentiment. Merkel calls for treaty changes in…