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Monthly Archives: March 2010

The ‘Dumb Money’ on Wall Street

Charlie Rose interview of Michael Lewis, author of Liar’s Poker, and of recent book The Big Short.

(click to play the interview)

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Is the bond market current shifting?

Interview of John Taylor on US debt overhang and Fed’s decision to stop buying mortgage backed securities.

Shiller comments on recent housing data

(click to enlarge)

Watch the interview:

Nikkei and Nasdaq: Is history going to repeat?

That America may enter a Japan-like very slow growth for quite some time is still not completely out of woods. The United States is not Japan, but the aftermath of a great asset bubble can never be underestimated.

(click to enlarge; h/t: Big Picture)

China to launch stock index future on April 16

Reports WSJ:

China said it will introduce stock-index futures April 16, ending years of preparations that signaled policy indecision over the financial derivatives designed for risk-hedging, but also seen as vulnerable to speculative forces.

The announcement by the China Financial Futures Exchange, which will host the index futures, will give investors a means to bet on the direction of major share indexes and also allow them to make money when the market falls. It is expected to boost demand for index heavyweights such as major blue chips when trading resumes Monday.

Investors have eagerly anticipated the launch, which will expand options in a market where, up to now, being bullish has been the only choice because there has been little to shield investors in the face of a sharp decline. However, Chinese investors’ lack of experience in dealing with risky investment tools such as margin trading and short selling, and the country’s perilous experience with futures trading, form a big question mark over the index futures’ ultimate fate.

full text here

Greenspan on current state of economy

A few interesting points to note:

1. (this is not new in his thinking) It’s not only real economy that drives equity market: but also it’s the other way around: equity market also drives real economy. The channel is stock prices help ratings of corporate debt.

2. He is very worried about US fiscal situation;

3. China is a bubble waiting to burst. But the impact will be uncertain.

Is Larry Summers quitting Obama?

Larry Summers may leave his current post at the end of the year.

Watch this video analysis:

Geely acquires Volvo – Now is official

This is another landmark acquisition after Lenovo’s purchase of IBM personal computer division more than five years ago, reports WSJ:

The chairman of China’s Zhejiang Geely Holding Group Co. traveled to Sweden Friday to finalize his company’s acquisition of Ford Motor Co.’s Volvo car unit, a landmark deal for China’s burgeoning car industry that also poses serious challenges for Geely.

Geely Chairman Li Shufu is expected to preside over the signing of the deal in Sweden as early as Sunday, according to two people close to the Chinese company. Under the preliminary agreement, Geely will pay $1.8 billion for Ford’s unprofitable Swedish car brand, with loans and other financial backing from banks in China, the U.S. and Europe, including low-interest loans guaranteed by the governments of Sweden and Belgium, one of the two people said. Geely’s Hong Kong-listed unit, Geely Automobile Holdings Ltd., and some Chinese local governments also would invest in the deal, the person said. He wouldn’t identify those investors.

A final deal would be the culmination of years of planning by Geely and intensive negotiations with Ford over the last 18 months. The deal would make Volvo one of the most prominent foreign brands to be purchased by a Chinese company, and would mark the first time a Chinese company has acquired the full operations of a major foreign auto maker.

It would also be the biggest step so far in a broader push by China to create a handful of globally competitive auto makers out of an industry that today is largely fragmented. That effort has had mixed success: Beijing Automotive Industry Holding Co. reached an agreement in December to acquire certain assets of General Motors Co.’s Saab unit, but another Chinese company, Sichuan Tengzhong Heavy Industrial Machinery, last month abandoned a planned purchase of GM’s Hummer unit after failing to gain Chinese government approval.

Also watch this video report from CNN: