The Second Half Recovery Is Going To Disappoint On The Downside

If we don't have enough job creation there's not enough labor income. Therefore, there's not enough consumption and consumer companies are going to be depressed. Therefore, the recovery is going to remain weak. The markets are expecting now a robust recovery in the second half of the year. I think the recovery is going to disappoint on the downside. - in CNBC

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The Perfect Storm

My prediction for the perfect storm is not this year or next year but 2013, because everybody is kicking the can down the road. We now have a problem in the US after the election if we don't resolve our fiscal problems. China is overheating...eventually it's going to have a hard landing. - in CNBC

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One In Three Chance Of A "Perfect Storm"

There is a one in three chance a "perfect storm" of fiscal woe in the United States, a slowdown in China, European debt restructuring, and stagnation in Japan will converge to stunt global economic growth beginning in 2013. - in Boston.com

Tickers: Tickers: ProShares UltraShort S&P500 (ETF) (SDS), SPDR S&P 500 ETF (SPY), iShares Russell 2000 Index (ETF) (IWM), ProShares UltraShort QQQ (ETF) (QID), SPDR Dow Jones Industrial Average ETF (DIA), iPath S&P 500 VIX Short-Term Futures ETN (NYSE:VXX), iShares MSCI Emerging Markets Indx (ETF) (EEM), iShares FTSE/Xinhua China 25 Index (ETF) (NYSE:FXI), iShares MSCI Japan Index (ETF) (NYSE:EWJ)

The Muddle-Through Approach To The Eurozone Crisis Has Failed To Resolve The Fundamental Problems Of Economic And Competitiveness Divergence Within The Union

The muddle-through approach to the eurozone crisis has failed to resolve the fundamental problems of economic and competitiveness divergence within the Union.

If this continues the euro will move toward disorderly debt workouts and eventually a break-up of the monetary union itself as some of the weaker members crash out. - in Mindful Money

Tickers: iShares MSCI Spain Index (ETF) (Public, NYSE:EWP), iShares MSCI Germany Index Fund (ETF) (Public, NYSE:EWG), iShares MSCI Italy Index (ETF) (Public, NYSE:EWI), iShares MSCI United Kingdom Index (ETF) (Public, NYSE:EWU), iShares MSCI Netherlands Investable(ETF) (Public, NYSE:EWN)

Economic Outlook

Optimists argue that the global economy has merely hit a “soft patch". Firms and consumers reacted to this year’s shocks by “temporarily” slowing consumption, capital spending, and job creation. As long as the shocks don’t worsen (and as some become less acute), confidence and growth will recover in the second half of the year, and stock markets will rally again.

But there are good reasons to believe that we are experiencing a more persistent slump. First, the problems of the eurozone periphery are in some cases problems of actual insolvency, not illiquidity: large and rising public and private deficits and debt; damaged financial systems that need to be cleaned up and recapitalized; massive loss of competitiveness; lack of economic growth; and rising unemployment… - in WSJ

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Second, the factors slowing U.S. growth are chronic... Third, economic growth has been flat on average in the U.K. over the last couple of quarters, with front-loaded fiscal austerity coming at a time when rising inflation is preventing the Bank of England from easing monetary policy.

Debt In Greece, Ireland & Portugal Will Need To Be Restructed

“It is no longer possible to deny that public and/or private debts in Greece, Ireland, and Portugal will need to be restructured.” - in Barron`s

Tickers: National Bank of Greece (ADR) (NYSE:NBG), Bank of Ireland (ADR) (NYSE:IRE)

Growth In Canada Is Anemic

Growth in Canada is anemic in spite of tail winds from commodity prices as head winds from US & global tail risks remain. - in Nouriel`s Twitter

Tickers: iShares MSCI Canada Index (ETF) (NYSE:EWC)

Greece and Portugal May Go Back To The Drachma And Escudo

"I don't rule out that Greece and Portugal...may go back to the drachma and escudo on a wave of populist governments." - in AsiaOne

There`s A Bubble In Contemporary Art

"There is a bubble in contemporary art" - in Nouriel`s Twitter

Monetary Union: The Risks Of A Break-Up

“The euro will move towards disorderly debt workouts, and eventually a break-up of the monetary union itself, as some of the weaker members crash out. The crisis is evolving and scenarios that are treated as inconceivable today may not be so far-fetched five years from now. - in thetrumpet.com

Kicking The Can Down The Road

There are already elements of fragility. Everybody’s kicking the can down the road of too much public and private debt. The can is becoming heavier and heavier, and bigger on debt, and all these problems may come to a head by 2013 at the latest.” - at a media briefing in Singapore

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China`s Hard Landing

"There is a meaningful probability of a hard landing in China after 2013." - in a financial conference, Singapore

Tickers: iShares FTSE/Xinhua China 25 Index (ETF) (NYSE:FXI), Morgan Stanley China A Share Fund, Inc. (NYSE:CAF), PowerShares Gld Drg Haltr USX China(ETF) (NYSE:PGJ), United States Oil Fund LP (ETF) (NYSE:USO)

India Should Hike Rates

A commodity price shock increases inflation and reduces growth. It creates a policy trade-off for authorities: Should I care about growth and postpone raising rates, or should I care about inflation by tightening at the cost of hurting growth? It creates, definitely, much more complicated policy challenges.

In India’s case, further tightening is reasonably warranted, given that growth has been robust and inflation has picked up, and also considering that policy rates remain negative in real terms. - in www.business-standard.com

I Don`t Think There Is A Bond Bubble

"At current levels, U.S. treasuries are fairly valued. I don't think there is a bond bubble.

Every time there is a global bout of risk aversion, and every other week there is another tail risk or black swan event, people dump the euro, dump yen and go to the safety of the U.S. dollar and U.S. treasuries." - in Reuters

Tickers: ProShares UltraShort 20+ Year Trea (ETF) (NYSE:TBT), iShares Barclays 20+ Yr Treas.Bond (ETF) (NYSE:TLT), iShares Lehman 7-10 Yr Treas. Bond (ETF) (NYSE:IEF)

The Housing Market Is Already Double Dipping

“One sector of the market that is already double-dipping is the housing market, residential real estate,” he said. Before all is said and done, almost 50% percent of houses are going to be in negative equity.” - in a conference, Waldorf Astoria Hotel NYC