I owe you all a post on the European elections. And my weekly will probably cover that topic since it is the most important one this week. For now, I just wanted to highlight the coming fiscal cliff from 31 December to 2 January when all of the US temporary tax and stimulus measures expire. The set up for having these things expire risks a new recession and such a downturn would be ugly, especially given the elevated level of US S&P earnings expectations and the relative P/E ratio of the US market. In Europe, people are worried about the political situation and stocks have not risen as they have in the US. So the potential for a real bear market is there.
Read Stan Collender’s piece for more on the fiscal cliff. The way he portrays it, we are looking at a second recession in 2013 as am I. And the reasons I expect one are exactly the reasons the fiscal cliff is looming. See here from 2009.
That’s it. Here are the links.
- The Cliff: Coming Soon To A Poliical Theater Near You | Stan Collender’s Capital Gains and Games
- Alex Tanney Trick Shot Quarterback – Better Than Johnny Mac – YouTube
- A new way of thinking about the global machine – FT.com
- BBC News – Bankia boss resigns as rescue looms
- Buenos Aires, la ciudad más cara y más barata del mundo – 07.05.2012 – lanacion.com
- How to Get the Balance Right: Fiscal Policy At a Time of Crisis « iMFdirect – The IMF Blog
- Shale Gas Hype: Subprime 2.0? « naked capitalism
- Wahl in Frankreich: Franzosen bringen Merkels Vormacht in Gefahr | FTD.de
- La girlfriend blanche de l’étudiant Obama | Big Picture
- Le Figaro – International : L’Allemagne ajuste son tandem avec la France
- IMF’s Lagarde: Let EU Bailout Funds Go To Banks Without Sovereign Pit Stop – Forbes
- Civil rights march, Washington, 1963 | Retronaut
- June Carter, Nashville, 1956 | Retronaut
- Queen Live at Frankfurt, 1977 | Retronaut
- Alfred Hitchcock in LA, 1939 | Retronaut
- Merkel’s CDU Sees Worst Result in Schleswig-Holstein Since 1950 – Bloomberg
- Mortgage rates hit new record lows – Lansner on Real Estate : The Orange County Register
- Why monetary policy matters less every day – Marginal Revolution
- Economic View – Forget Europe. Worry About India. – NYTimes.com
- Australia the most ‘obvious’ bubble in 30 years, says economist | Investing | Financial Post
- Le Figaro – Sociétés : Le géant chinois Huawei défie Apple et Samsung
- China’s Population Crash Could Upend U.S. Policy – Bloomberg
- EU’s Olli Rehn signals end of ‘Merkozy’ austerity drive – Telegraph
- Europe must balance austerity with growth: EU’s Rehn | Reuters
- France faces 40pc house price slump – Telegraph
- Canadians Dominate World’s 10 Strongest Banks – Bloomberg
- EconoMonitor : EconoMonitor » Wise Up to the Proper Flaws of Monthly NFP Data
- Exclusive: How Obama’s Early Career Success Was Built on Fronting for Chicago Real Estate and Finance « naked capitalism