The next stage of the housing crisis?

On the MSN Top Stocks blog, Anthony Mirhaydari reviews some recent research about the housing crisis, and puts forward the possibility that large numbers of homeowners with Alt-A and Prime mortgages will go into foreclosure or walk away due to unemployment and being underwater on the loan.

Learning the wrong lessons from the crisis

Niall Ferguson writes in the New York Times Magazine about social psychology and financial crises.  Why they are never anticipated, and why we may be learning the wrong lessons.

Economy: Are collapse scenarios still within the realm of possibility?

In the last week or so, I have seen the pessimistic case for the economy argued pretty forcefully in several places, including by Big Jake on the Seeking Alpha site. I’m tending to give these some credence, mainly because the optimistic case just isn’t that convincing to me.

Investing in emerging markets is not diversification

On the Seeking Alpha site, Geoff Considine argues that the received wisdom of a few years back that the BRIC economies and other emerging markets had “decoupled” from the developed word is clearly wrong. Not only that, but swings in emerging economy markets will amplify those of the US.

Inverse leveraged ETFs a new source of systemic risk?

Paul Kedrosky on the Seeking Alpha site links to a Barclays Global research paper explaining why leveraged ETFs, particularly inverse (short side) funds, pose a systemic risk to the market. The inverse ETFs have a “magnified hedging demand” relative to long ETFs.