Check out all the great contributions that were
published during the past week on RGE’s Nouriel
Roubini’s Global EconoMonitor,
RGE Analyst’s EconoMonitor, Finance
& Markets Monitor, Peterson
Institute for International Economics Monitor,
Global Macro EconoMonitor, U.S.
EconoMonitor, Emerging Markets Monitor, Asia
EconoMonitor, Latin
America EconoMonitor and Europe
EconoMonitor.

On
Nouriel
Roubini’s Global EconoMonitor, Nouriel discusses the
seriousness of global imbalances, which raise the risks considerably of future
financial crises and asset bubbles. 
While this financial crisis has temporarily reduced the magnitude of the
global imbalances, it would be a mistake to assume that rebalancing is taking
place naturally.  Please read A
Balanced Global Diet.

In U.S. Real GDP Growth: Should We Really Get Excited? Nouriel Roubini and Christian Menegatti react to
the Q3 U.S. GDP report and analyze the shape of the recovery and the outlook
for the U.S. consumer.

As
Investors worldwide are borrowing dollars to buy assets including equities and
commodities, Nouriel warns that we have “the mother of all carry trades.”  See Bloomberg’s
Reporting of my Remarks…

Nouriel
also discusses the state of the economy, the dollar’s weakness, the prospect of
gold, and fixing the banks at My
Morning Interviews/Videos with CNBC’s Squawk Box.

Also see Bloomberg Reports Roubini in Good Company as
Investor with Most Wisdom.

On the RGE Analyst’s EconoMonitor, RGE Analysts take a closer look at which countries
are most likely to implement capital controls following Brazil’s actions on
October 20.  The article points out that capital controls and other forms
of intervention are ineffective at reverting appreciative forces on the currencies,
but they can ease the pace.  Please read Are Capital Controls in Fashion Again?

In Pakistan’s Surging Violence: How Big a Risk?  Kavitha
Cherian and Arpitha Bykere throw light on the political and security
vulnerabilities Pakistan faces in the wake of recent terrorist attacks.
Instability in Pakistan has broad ramifications on regional security given
Pakistan’s nuclear arsenal and has increased pressure on the fragile civilian
government. Additionally the sustained military operations have weighed on
Pakistan’s economic growth during 2008-09 and slowed policy implementation
putting Pakistan’s balance of payments at risk.

In If Infrastructure Investment is Hot, Why Can’t Funds
Raise Money? Monika Brown notes
that business boomed over the past decade for unlisted infrastructure funds as
private investment, mostly by pension funds, in infrastructure projects
grew.  However, fund raising by unlisted
infrastructure funds slowed to a relative trickle in 2009, despite no change in
allocation to these investments by pension funds. What’s the reason for the
sudden change of interest in the infrastructure funds?

On the Finance & Markets Monitor, Joseph Mason sheds light on the complexities of
the corporate governance industry, which was believed to be related to firm
performance.  The depths
of this recession has elicited a call for financial regulation and a
restructuring of financial instruments, but the risks of “getting it wrong” are
serious and could affect U.S. economic performance and competitiveness.  Don’t miss What
if Regulating Executive Pay Doesn’t Work? A Brief Primer on the Limits to
Knowledge in Corporate Governance Research.

In
The
Next Step in the Bank Explosion Cycle??? Reggie Middleton
expounds on the currency risk of the “mother of all carry trades” as some of
the largest and most respected banks in the world are heavily leveraged into
this trade in one way or another.

In trying to answer Why Do Bankers Make So Much Money? Rick Bookstaber considers whether banks operate in
a competitive market and whether workers get paid commensurately with their
talent.

Also on the Finance & Markets Monitor:

Why Wall Street Reform is Stuck in Reverse by Robert Reich

Richard Berstein: Once a Huge Market Bear, Now a
Bull by Edward Harrison

Too Big to Fail: Why The Big Banks Should Be Broken
Up, But Why The White House and Congress Don’t Want To by Robert Reich

The Private-Sector Solution to the Bonus Problem by Models & Agents

What a Tangled Web Mortgage Securitizers Weave… by Barry Ritholtz

Gold Market – Accident Waiting to Happen or Crime
Scene? by Prieur du Plessis

Patchwork Fixes, Conflicting Motives, And Other
Things To Avoid: Some Lessons From the Regulated Non-Financial Sectors by Simon Johnson

Jeremy Grantham: The Market is 25% Overvalued; 15%
Correction Coming by Edward
Harrison

On the Peterson Institute for
International Economics Monitor,
Gary Clyde Hufbauer and Jisun Kim examine the nexus of the WTO and climate
change.  Please read The World Trade Organization and Climate Change:
Challenges and Options

On the Global Macro EconoMonitor, Yves Smith presents a piece by Richard Alford that
speaks to the fact that the G20 and Bernanke do not appear to have established
anything in the current or promised policy mix that will actually address the
global imbalance issue, and therefore a return to unstable global imbalances
seems inevitable.  See Guest Post: Global Rebalancing: The G20 and Bernanke
Versions,

In Reserve Accumulation and Easy Money Helped to Cause
the Subprime Crisis, Mark Thoma
presents interesting analysis from Guillermo Calvo who sketches an outline of a
theoretical framework to explain the crisis and presents the real sector impact
as well as policy implications.

On
the U.S.
EconoMonitor, James Hamilton argues that regardless
of your interpretation of how this financial crisis arose, it would have made
far more sense to address these problems with proper regulatory supervision
prior to the crisis instead of targeted liquidity operations after the crisis
unfolds, and asserts that such unconventional operations should not be part of
the central bank’s arsenal of tools in the future.  Please read Evaluating
the New Tool of Monetary Policy.

In
Tax
Credits, Screwdrivers, and Supply and Demand Curves,
James Kwak uncovers who the homebuyer tax credit is really helping.

David
E. Altig makes a compelling argument for The
Growing Case for a Jobless Recovery.

Also
on the U.S. EconoMonitor:

Why
State and Local Governments Need More Stimulus Funds
by Mark Thoma

Breakdown
of Single Family Homes by Price by Barry Ritholtz

Case
Shiller: Home Prices Fall More Slowly by Barry Ritholtz

Searching
for the Ghost of Tom Joad Amidst the Financial Crisis by
J Clinton Hill

Has
the US Financial System been Nationalized? by Fabius
Maximus

On the Emerging Markets Monitor, Heiko Hesse and Tigran Poghosyan provide the first
empirical evidence linking oil prices to bank performance in oil-exporting
economies, which suggests that easily observed oil prices could inform
macro-prudential regulation in these countries and mitigate pro-cyclical bank
lending.  See Oil Prices and Bank Profitability: Evidence from
Major Oil-Exporting Countries in the Middle East and North Africa.

On the Asia EconoMonitor, Rumi Malott Morales discusses the turf war on the
field of ASEAN between Japan and Australia about the role of the U.S. in the
region, while China is focusing its energy on winning friends through
investment and infrastructure development in Asia and is prepared to assume the
regional leadership mantle currently abandoned by the U.S.  Please read The Dragon in the Alphabet Soup.

In Chinese Railways and Speculating Pig Farmers, despite last week’s excellent economic numbers and
the subsequent cheerleading by many, Michael Pettis continues to stress his
concerns over investment that doesn’t make economic sense, unemployment for
college grads, currency intervention between trade surplus countries, and the
potential for asset bubbles.

On the Latin America EconoMonitor, Nicolas Eyzaguirre discusses the benefits of
having “fiscal space” and highlights the value of strengthening fiscal policy
frameworks in the future, so that all countries can be better prepared for
future episodes of unfavorable conditions. 
Read Latin America and the Caribbean: Finding Space for
Countercyclical Fiscal Policy.

On
the Europe EconoMonitor, Edward
Harrison puts forward an answer for why London housing prices can be on the
rise while the rest of the economy is surprisingly contracting.  See If the UK
Economy is Still in Recession, why are London House Prices Hitting New Records?

Don’t miss Edward Hugh’s in-depth analysis of the
economic data out of France, Germany, and Spain in the following:

The French
Rebound Continues In October While Germany Moves Sideways

Beyond the
Consensus on European Bank Credit