Articles of Interest, Sunday 9/25/11

Help Wanted:

"Has our leadership lost its mind? Do these people go home on weekends to some offshore island, where everyone’s retirement fund is doing fine, everyone’s kids have jobs and no one’s mortgage is under water? Where is the urgency? This is code red. We are facing a possible global financial contagion triggered by European banks choking with sovereign debt spreading their woes to an already weakened U.S. financial system" Thomas Friedman, 9/25/11

El-Erian Sees Global Economy Slowing Next Year:

"Former U.S. Treasury Secretary Lawrence Summers said he has been to 20 years of IMF gatherings, and “there’s not been a prior meeting at which matters have had more gravity and at which I’ve been more concerned about the future of the global economy.”

"Billionaire investor George Soros said “something needs to be done” to safeguard Europe’s banks because Greece may be unable to avoid default."

Allentown

I believe PIMCO's Bill Gross provides a thoughtful analysis of the challenges that a developed nation like the US faces, in a global environment where developing nations are much more competitive than the developed ones.

Bill's own summary of his article:

"...The global economy is suffering from a lack of aggregate demand. With insufficient demand, nations compete furiously for their share of the diminishing growth pie..."

"...In the U.S. and Euroland, many policies only temporarily bolster consumption while failing to address the fundamental problem of developed economies: Job growth is moving inexorably to developing economies because they are more competitive..."

"...Unless developed economies learn to compete the old-fashioned way – by making more goods and making them better – the smart money will continue to move offshore to Asia, Brazil and their developing economy counterparts, both in asset and in currency space..."