Interesting articles: modern central banking test, China problems, sovereign wealth funds and more
Morgan Stanley’s Steven Roach writes about Greenspan bubble legacy, and speculates whether the not to distant future will write the missing chapter about modern central banking, a quote: “The exit strategy is painfully simple: Ultimately, it is up to Ben Bernanke – and whether he has both the wisdom and the courage to break the daisy chain of the “Greenspan put.” If he doesn’t, I am convinced that this liquidity-driven era of excesses and imbalances will ultimately go down in history as the outgrowth of a huge failure for modern-day central banking. In the meantime, prepare for the downside – spillover risks are bound to intensify as yet another post-bubble shakeout unfolds.”
Morgan Stanley Steven Jen writes about the consequences of emergence of sovereign wealth funds (SWFs).
The Economist article on global imbalances, inconclusive, as every other article dealing with such topic.
Bloomberg quotes Chine premier Wen Jiabao speaking unsutainable Chinese growth. The key risk appears that China will … accelerate and disequlibria will deteriorate even more.