links for 2010-10-04

…the rest of the world is beginning to mimic the technique China has perfected: manipulating currencies for national advantage, while resisting political pressure from trading partners.

The SEC’s focus on high frequency traders should be instead on the proliferation of high frequency products. The traders are the good guys in the Man versus Machine debate. My worries are about the 30-some sponsors of Exchange Traded Funds (ETFs) who are said to be creating all sorts of new ready-to-exploit pricing inefficiencies in small capitalization stocks, sectors, industry ETFs, ETF futures, ETF options, and ETF fund-of-funds.

The IMF report – "Will It Hurt? Macroeconomic Effects of Fiscal Consolidation" – implicitly argues that austerity will do more damage than so far admitted.

Chinese companies spent a record $32 billion last year buying energy and resources assets abroad.