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from Global Investing:

Weekly Radar: From fiscal cliff to fiscal tiff…

The new year starts with a markets 'whoosh', thanks to some form of detente in DC -- though this one was already motoring in 2012. The New Year’s Eve rally was the biggest final day gain in the S&P500 since 1974, for what it's worth.  And for investment almanac obsessives, Wednesday's 2%+ gains are a good start to so-called “five-day-rule”, where net gains in the S&P500 over the first five trading days of the year have led to a positive year for equity year overall on 87 percent of 62 years since 1950.

So do we have a fiscal green light stateside for global investors? Or does it just lead us all to another precipice in two months time? Well, markets seem to have voted loudly for the former so far. And to the extent that at least some bi-partisan progress reduces the risk of policy accident and renewed recession, then that's justified. And Wall St's relief went global and viral, with eurostocks up almost 3% and emerging markets up over 2% on Wednesday. Even the febrile bond markets sat up and took notice, with core US and German yields jumping higher while riskier Italian and Spanish yields skidded to their lowest in several months.

So is all that New Year euphoria premature given we will likely be back in  the political trenches again next month?  Maybe, but there's good reason to retain last year's optimism for a number of basic reasons. As seasoned euro crisis watchers know well, the world doesn’t end at self-imposed deadlines. The worst that tends to happen is they are extended and there is even a chance of – Shock! Horror! – a compromise. Never rule out a disastrous policy accident completely, but it’s wise not to make it a central scenario either. In short, markets seem to be getting a bit smarter at parsing politics. Tactical volatility or headline-based trading wasn't terribly lucrative last year, where are fundamental and value based investing fared better.  And the big issue about the cliff is that the wrangling has sidelined a lot of corporate planning and investment due to the uncertainties about new tax codes as much as any specific measures. While there’s still some considerable fog around that, a little of the horizon can now be seen and political winds seem less daunting than they once did. If even a little of that pent up business spending does start to come through, it will arrive the slipstream of a decent cyclical upswing.  China is moving in tandem meantime. The euro zone remains stuck in a funk but will also likely be stabilised at least by U.S. and Chinese  over the coming months. Global factory activity expanded again in December for the first time since May.

Fiscal tiffs aside,  the trade of 2012 was to have faith in the tenacity (if not necessarily the long-term success) of the major central banks pursuit of reflation and there’s nothing to suggest a change there as we move into 2013. What could go wrong? Well, lots as always. And there will surely be plenty of down days moving into the debt ceiling deadline in late February. We can be certain of few things, but one is that stocks will not rise 2% every day this year. Jitters about US debt downgrades will have their day and hard-talking from negotiators will jar periodically. But some deal will likely be done one way or the other. It may well store up problems for the future, but it is very hard to trade that now. As to the longer-term US fiscal health?  As ugly as it looks, most economists are convinced there's little or no hope of a medium-term fiscal recovery if growth craters in the interim and another recession looms. It’s also worth noting that the U.S. primary deficit fell last year and is expected to fall further in 2013. So as long as the Fed plays ball for now...

from Russell Boyce:

Asia – A Week in Pictures, March 27, 2011

Japan continues to dominate the file from Asia with new photograhers rotating in to cover the twists and turns of this complex and tragic  story.  In a country were the nation rarely buries its dead, the site of mass graves is quite a shocking scene to behold. Holes the length of football pitches are dug in the ground with mechanical digggers and divided into individual plots by the military and are then filled with the coffins of the victims of the tsunami. Family members come to weep and pray over the graves. Some are namless and marked only with DNA details, others bear the names of the victims. There is not enough power or fuel to cremate the thousands of bodies that are being recovered from the disaster zone. 

JAPAN-QUAKE/

Members of the Japan Ground Self-Defense Force carry a coffin of a victim of the earthquake and tsunami to be buried at a temporary mass grave site in Higashi-Matsushima, in Miyagi prefecture, northern Japan March 24, 2011. REUTERS/Yuriko Nakao

from Afghan Journal:

Happy New Year Mr President

AFGHANISTANU.S. President Barack Obama welcomed the Persian New Year (1390, which started on Monday) with a video message, as he has done every year of his presidency.

Nawroz festival (also spelt nowroz, nowruz and several other ways) falls on spring equinox and is celebrated across a wide swathe of Central Asia and surrounding areas -- it is a public holiday in Iran, Afghanistan, Tajikistan, Iraqi Kurdistan, Azerbaijan, Turkmenistan, Uzbekistan, Kashmir and Kyrgyzstan, according to Wikipedia.

from Tales from the Trail:

Washington Extra – New Year state of mind

New Year often means out with the old and in with the new.

On Capitol Hill, the new 112th Congress will start its 2-year run that will end after the 2012 presidential election. (For numerologists -- that's an awful lot of 2s).

Today was Nancy Pelosi's last day as the first Madam Speaker. The most powerful woman in American politics and second in line to the presidency turns into House minority leader next. Her exit line: "No regrets." USA/

from Entrepreneurial:

SMBs make hopeful New Year’s resolutions

-- Lisa Barone is a contributor for Small Business Trends. This article originally appeared here. --

While it may have been an unfriendly economic climate over the past few years, small business owners are hopeful heading into 2011. Sixty percent of small business owners polled said they expect their business to swell over the next 12 months, signaling not only good spirits, but a 6-percent increase over December 2008. That’s according to a recent Intuit, Inc poll of 1,000 small business owners from across the United States. And what do SMB owners plan to do with the increased cash flow their businesses attract?

from Oddly Enough Blog:

Life in the presidential fast lane…

Blog Guy, I read that President Barack Obama is on vacation in Hawaii. But I guess if you're the President, you're still busy all the time. I mean, the pressure, the demands. What did he do yesterday, for example?

shaved ice combo 490

Let me access his schedule. Um, it looks like the big project for yesterday was "decide on shaved ice."

from Oddly Enough Blog:

Happy New Year from Nicole Kidman and me!

Wow, Blog Guy, another year down the toilet. And what a goofy year it was.

I'll say!  I was talking about that with my blog staff at our holiday party, which as you can see was quite a glamorous affair...

BRITAIN/

What do all those people on your staff do anyway, Blog Guy?

Lots of stuff. They scour the world for odd pictures and video and stories for me. I mean, what did you think, that junk just comes to me on some machine?

from The Great Debate:

Welcome to the Teenies, sorry about those returns

saft2.jpg
-James Saft is a Reuters columnist. The opinions expressed are his own-

As we say goodbye to a decade so abysmal it never even earned a nickname, it is time to take bets on how the coming 10 years will shape up in economics and financial markets.

Welcome, then, to the Teenies, a word that will describe the decade as well as the small returns in financial markets and the shrinking financial sector it will bring.

from The Great Debate:

Out with the old year, in with the new

[CROSSPOST blog: 7 post: 10820]

Original Post Text:
Despite the incessant drumbeat of poor economic data -- consumer confidence fell to a record low in December and the price of single-family homes plunged in October -- the majority of Americans are optimistic about what is in store in 2009.

The Marist College canvassed 1,003 Americans about their expectations for 2009 on December 9 and 10 -- days after the National Bureau of Economic Research confirmed the United States had been mired in a recession since December 2007.

from Ask...:

Out with the old year, in with the new

Despite the incessant drumbeat of poor economic data -- consumer confidence fell to a record low in December and the price of single-family homes plunged in October -- the majority of Americans are optimistic about what is in store in 2009.

The Marist College canvassed 1,003 Americans about their expectations for 2009 on December 9 and 10 -- days after the National Bureau of Economic Research confirmed the United States had been mired in a recession since December 2007.

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