Caution: Leveraged ETFs – the rules of the game – As volatility returns to the markets, it’s worth revisiting leveraged ETFs and the tracking error associated with these products. – has 5 observations – Sober Look Blog

also a previous post on this at Sober Look …

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Picture du Jour: Prepare for higher inflation – Posted by Prieur du Plessis – … The graph below shows the historical relationship between the annual change in the oil price and the year-on-year change in the US Consumer Price Index. Should the oil price remain around current levels, the CPI is bound to rise markedly. … – Investment Postcards from Cape Town 
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It is Japan we should be worrying about, not America – By Ambrose Evans-Pritchard – Japan is drifting helplessly towards a dramatic fiscal crisis. For 20 years the world’s second-largest economy has been able to borrow cheaply from a captive bond market, feeding its addiction to Keynesian deficit spending – and allowing it to push public debt beyond the point of no return. – Telegraph.co.uk

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Video: James Grant - Editor, Grant’s Interest Rate Observer – This week on Consuelo Mack WealthTrack: why the economic recovery could be much stronger than anticipated, and the ballooning federal deficit much more damaging. Consuelo sits down for a rare one-on-one interview with contrarian market observer and historian James Grant, publisher of the influential newsletter, Grant’s Interest Rate Observer. – WealthTrack.com  October 30, 2009  
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The Economy’s Shape Is A Mystery That Isn’t Important To Solve – Mark Sunshine – … However, it doesn’t make a lot of difference what shape the recovery takes, i.e., if it is a “W”, “V”, “U” or “L”, so long as the benefits of the recovery are concentrated in only a few hands … The U.S. is at a cross roads that it hasn’t faced in decades. Unless the Administration works quickly to level the playing field so that small businesses can get the same access to capital as big businesses there are going to be unintended consequences to U.S. society for generations to come … – The Sunshine Report
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Do more – Too Little of a Good Thing - By PAUL KRUGMAN - The good news is that the American Recovery and Reinvestment Act, a k a the Obama stimulus plan, is working just about the way textbook macroeconomics said it would. But that’s also the bad news — because the same textbook analysis says that the stimulus was far too small given the scale of our economic problems. Unless something changes drastically, we’re looking at many years of high unemployment … – NY Times Opinion