As the Annus Horribilis finally comes to an end, many forecasters in the policy and financial communities have been left licking their wounds. This effort from Moises Naim and his team at Foreign Policy tries to capture the best of the worst and is certainly worth a look…

This time series from Robert Shiller puts recent house price fluctuations and their associated derivatives in an important historical perspective…

Prescient words from Lebanese poet Khalil Gibran in 1934…
Pity the nation that wears a cloth it does not weave,
eats a bread it does not harvest,
and drinks a wine that flows not from its own wine-press.
Pity the nation that acclaims the bully as hero,
and that deems the glittering conqueror bountiful.
Pity the nation that despises a passion in its dream,
yet submits in its awakening.

Economist John Kenneth Galbraith once noted that the financial memory is limited to 20 or 30 years. Author Mark Twain once suggested that history might not repeat itself but certainly rhymes. Together, these two simple observations may help to explain why so many of our structural crises are simply echoes of previous human folly…

Over-the-counter gambling on the markets has been around much longer than modern derivatives pundits would have you believe. The New York Times was warning against “casino capitalism” as early as 1905, when side bets on market movements were both commonplace and unregulated, and won the attention of an American government still swaggering after its victory over the mega-trust companies of the late 19th century. The following 60 Minutes segment discusses both the nature of CDS instruments and how they’ve become just as dangerous today as they were in the “bucket rooms” or gambling houses of the 1920s…

With all eyes on traditional residential mortgages, analysts are now looking for clues in related asset classes for any signs of recessionary contagion. In his weekly review of the U.S. economy, Nouriel Roubini highlights the vulnerability of commercial mortgage back securities – which typically lag their residential cousins by 2 years – as well as plunging retail sales, a worsening inventory cycle, and the soaring fiscal deficit…