Possibility of World Slump if Government Stimulus Withdrawn

China warns that current economic data is not as rosy as it seems. The economy still faces with many challenges, including high unemployment, weak investment and consumption, rising commodity costs and fluctuating currencies. These challenges, if not taken into consideration, will cause the global economy to face yet another recession in 2010 or 2011. However, governments around the world would be faced with other long term problems such as inflation, government deficits and protectionism.

Inventory Cycle Points to V-Shaped Rebound

US Companies are trying to slowdown the dramatic draw down of inventories. To replenish this draw down, it is likely that companies will pick up production very quickly and start a hiring binge.

Weak Spending Holds Back Wall Street

The latest US data has reflected that consumer spending has fallen for the first time in 5 months. This suggests that the recovery might be slow and protracted prompting fears in the market causing US equities to fall.

AIG Dismantled by Non-US Buyers as Dollar Falls

A perfect storm has occurred for Asian and European investors to take advantage of. They have managed to buy up bits and pieces of AIG's divisions at low prices to complement their own businesses. Two factors created the perfect storm, (1) depreciation of the dollar and (2) the dearth of US investors. This resulted in many of AIG's crown jewels being sold off to buyers from other countries.

Asia's Central Bankers Aims to Lean Against Asset Prices

With the lesson learnt from the financial meltdown in the US, Asia's policy makers have begun an unprecedented move to deflate asset bubbles. To do this they have begun to utilize monetary policy and supervisory and regulatory policy (i.e. barring interest-only loans for housing projects).

Central Banks Hitting Asset Bubbles Show No Faith in Greenspan

During the days when Alan Greenspan was the Fed Chairman, he noted that monetary policy is a blunt instrument to regulate asset prices. What he possibly meant with that statement is that one would find it difficult to deflate asset bubbles by increasing interest rates. However, with the financial crisis fresh in the public's mind, central bankers are now looking at interest rates as a means to regulate asset prices. A new era has dawn upon us where central bankers would need to study the valuation of the assets within its borders and decide on the appropriate level of interest rates.

Galleon Traders

Galleon Traders' founder has been charged with insider trading. This is to be expected as many investors have pointed out that the source of alpha for the hedge fund has been unexplainable. This has raised many concerns on Wall Street. The man himself is currently out on $100 million dollar bail.