The Economist (March 13th - March 19th 2010)

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Business Week - March, 22 2010

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Gold Chart and Commentary

World Financial Report, March 12, 2010

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Christopher Thornberg: Double Dip Is Coming in 2011

In a recent presentation in Orlando, Christopher Thornberg noted the likelihood of a double dip in 2011. Thornberg famously predicted the real estate bubble, disastrous downturn in California and the high probability of recession in 2008. He is a former economist at UCLA and currently works at Beacon Economics, the firm he founded. I relied heavily on Thornberg’s analysis in helping to side-step the housing debacle and I have found his research to be not only straight forward, but well reasoned.

Thornberg says the economic recovery is mostly government induced and could lead to a double dip as the government steps aside and attempts to hand over the baton to the private sector. In the presentation Thornberg noted the continuing concerns:

• The bad news: we haven’t completely fixed the problems, instead the economy is being driven by government policy

• The worse news: government policy is causing its own set of problems: namely public debt and the potential for inflation (more)
  

The Fundamental Flaw of Europe's Common Currency

The euro is under attack like never before, as the promises on which it was based turn out to be lies. Hedge funds are speculating against Greek debt, while euro-zone politicians work behind the scenes to cobble together rescue packages. But fundamental flaws in the monetary union need to be fixed if Europe's common currency is to survive. By SPIEGEL staff.

German Chancellor Angela Merkel was full of praise and recognition for Greek Prime Minister Georgios Papandreou. His government, Merkel said on Friday evening after the two leaders had met to discuss the Greek financial crisis, had performed "a massive feat of strength." The Greeks, Merkel continued, had implemented a package of measures, which impressed the capital markets, "in a remarkably short space of time." (more)

Is Goldman Sachs a bubble ready to burst?

One of the best lessons I've learned over my career as an investment analyst is the myth of excellent management or "great execution" is really just that – a myth.

When I see companies in troubled industries reporting quarter after quarter of great results, while all of their peers are getting killed, I know a fraud is going on. I remember in the early 2000s, WorldCom kept reporting profits when all of the other long-distance carriers were getting killed. I knew it couldn't last. And it didn't. WorldCom's accounting was revealed to be a fraud – the company was counting its network access costs as capital expenses. Once the real numbers came out, the company collapsed in what was the largest bankruptcy in American history at that point. (more)