Worthwhile Reading - Jan 2nd Edition

A chorus of Cassandras, and Ignoring the Oracles: You are with the free markets, or against them. Justin Lahart, WSJ.

Will banks and financial markets recover in 2009? Nouriel Roubini, RGE.

The Dismal Economist's joyless triumph. Joseph Stiglitz, at RealClearMarkets.

2009 forecast: that bad, huh? Accrued Interest.

Fighting the last depression: the Fed's policy errors. Lawrence Officer and Ari Officer, Time. (hat tip: The Automatic Earth)
I noted this theme, that the Fed is fighting the last war, earlier as a concern of Anna Schwartz's, as well as Tim Duy's (and mine). But I do not share view of the Officers that the Fed's current policies are breeding incipient inflation; the problem will remain deflation, not inflation, until such time that the process of deleveraging is complete and the debt bubble has been rationalized to the point that debt levels are supportable on the basis of income levels and consumption is stabilized at a sustainable level. And that's not on the horizon anytime soon.

And, while discussing why the barrage of government policies have so far failed...

Only full disclosure of toxic debts will get the West moving again. Liam Halligan, Telegraph.

Everyone is working hard to increase global trade imbalances. Michael Pettis, China Financial Markets.

China 2009: The confidence deficit. Business Week. (hat tip: The Automatic Earth, again)
key quote:

That worries Pettis: He cites both the slowing pace of appreciation of the yuan and the reinstatement of a host of export rebates as signs that Beijing instead may try to support economic growth by boosting exports, a move that could spark waves of global protectionism. "If China makes the same mistakes the U.S. did, and thinks they can export their way out of this problem and don't have to massively boost domestic demand, then we have a repeat of the 1930s. So far China is acting like it thinks it can export its way out of this problem. I am very, very worried,"