FT Alphaville had an interesting article last week about deflationary pressure on commodities coming from a slowdown in China. Link below the fold.

The market has rallied well off of its lows from Q3, and investor sentiment seems to be picking up. I’m skeptical though. There are a number of critical factors that could derail the recent rally, many of which I feel are being overlooked.

I’ve been trying to write a piece about the markets, but there’s really only so many ways that you can say “Europe is still a mess and volatility is still high.” Here are some of my thoughts on what to expect going forward.

Bloomberg had an editorial on Iraq’s economy that is worth reading. The authors argue that if Iraq can create a welcoming investment climate for foreign capital, particularly oil E&P companies, Iraq could become a powerhouse in its region. Link below the fold.

Part of what made David Einhorn so noted in the investment community was when his hedge fund shorted Allied Capital, a firm that ultimately was revealed to be using fraudulent accounting methods, but many players in the market did not believe so until later. Einhorn’s book, Fooling Some of the People All of the Time chronicles what happened, and it was a great read.

I was going to follow up on my last piece about ways to safely find yield in this environment, but the European crisis has caught most of my attention. Today, an editorial in The Telegraph (a prominent British newspaper) called for a reorganization, i.e.: breakup, of the European Monetary Union. Link below the fold.

Last quarter ended poorly across asset classes. Yield is hard to find, and equities plunged. With continued concerns in Europe as well as China, it may pay to play defense this coming quarter.

Steve Jobs, founder and former CEO of Apple, passed away today. I firmly believe that in time, Steve Jobs will be remembered alongside Andrew Carnegie and JP Morgan as a truly historic innovator in American business.

SuperCycles was written by Arun Motianey, who was a managing director and head of macro research and strategy for Citigroup Global Wealth Management. Currently, he works for Roubini Global Economics. SuperCycles gives his thoughts on how economic trends and the business cycle moves, and what the implications are for this current recession.

At the end of the Cold War, Romania’s dictator Nicolae Ceausescu sent his secret police to quell protests. The protestors overwhelmed the police, so he then ordered in the Romanian Army. The problem was, the Army was also tired of him, so they tracked him down, had a little trial, and then shot him and his wife 90 times. Looks like it’s going to be a long work week for Qaddafi tomorrow!

Now that CFA Program studying is done for the time being, I’ve been able to get started on a stack of recreational reading that has been piling up. The US Army/Marine Corps Counterinsurgency Field Manual written by General David Petraeus and Lt. General James Amos received over two million downloads when it was first posted on the internet—clearly showing a huge interest by more than just a military audience. It’s worth reading, not just for the history and understanding our current conflicts, but for the leadership skills that it imparts.

While I still believe that a deal is going to get passed, let’s assume for a minute that there isn’t a deal. Ultimately, after a default, the government is going to get their act together, and bond holders will get full recovery. The hidden X-factor though, which is a bigger cause for concern, is what happens to US credit default swaps.

Friday gave us a brutal jobs report, with the rise in non-farm payrolls off about 80 percent from consensus estimates. Clearly, the economy is not recovering as fast as hoped for. A big reason why is that deleveraging hasn’t finished yet, and home equity continues to get whacked. Expect this to continue for some time.