Our Market view - 2010
December 2010
The dawn of a new era - The ultimate outcome of the financial crisis that began in 2008 may very well be the changing of the guard in terms of global economic leadership – and, according to at least one leading financial institution, the beginning of an Asian-led economic “super-cycle”.
October 2010
Sustainable recovery or double-dip recession? - Regional divergence in terms of global economic growth has persisted in recent months. While China has been impressively resilient, the US, Europe and Japan continue to languish.
August-September 2010
No universal panacea for economic ills - Despite attempts to show unity in public, there are clearly differences of opinion among governments as to the optimal policy to ensure a sustainable global economic recovery.
July 2010
Growth conundrum - A two-speed global economic adjustment has emerged in recent months. While countries such as China and India continue to power ahead, the economies of Europe and the US are barely showing signs of life. In the western world, it is fair to say that we have left the recession behind us, at least for now, but this does mean that a sustainable economic recovery is underway.
May/June 2010
A Question of Balance - Global financial markets are in turmoil again. To a large extent, this is the result of economic imbalances caused by a fundamental change in the dynamics of capital flows. These imbalances have long been in existence but they have intensified in the wake of the recent financial crisis. If unchecked, they have the potential to undermine the nascent global recovery.
April 2010
Apocalypse later - To judge by the reaction in equity markets to last month’s agreement to bail out the ailing Greek economy from financial disaster, neutral observers might be forgiven for thinking that the crisis has passed. Had those observers reflected on subsequent developments in the bond markets, however, they would have drawn an altogether different conclusion: that the crisis is very much alive.
March 2010
In the last edition of Investment News (December 2009), we asked “where’s the growth?” Since then, the question has lost neither its relevance nor its urgency. For all the media ballyhoo about the major economies emerging from recession, optimism about a sustainable global economic recovery has yet to be corroborated by hard evidence from the real world.
February 2010
Paper jam - One of the central pillars in the authorities’ policy response to the financial crisis last year was to take interest rates as low as feasibly possible as part of a drive to provide cheap, abundant liquidity. Another key tactic in this regard was “quantitative easing”, whereby money is effectively printed for central banks to purchase assets from cash-strapped institutions and companies. Arguments about their efficacy aside, these initiatives have created an unsustainable liquidity bubble. At some point, central banks will seek to withdraw these facilities (some have already tentatively begun to do this), as they implement their “exit strategies”.
January 2010
Sovereign debt concerns - In the final weeks of 2009, the debt crisis, which had hitherto been centred at the banking and corporate levels, began to assume an altogether different dimension. Revelations of financial difficulties in Dubai were compounded by news of an actual credit downgrade for Greece and the threat of one for Spain, with the spotlight then moving to Ireland, Italy, Portugal and even the UK.
