• 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.