Developments in the European Monetary Union and the United States have raised new questions about whether political systems can deliver timely solutions to medium-term fiscal imbalances. However, the authors do not believe these imbalances will derail the global recovery, lead to problematic inflation, or prevent companies from making money.
U.S. interest rates are unlikely to spike at the end of QE2 because the market has already priced in the completion of Fed purchases, but moves toward fiscal consolidation in Europe are likely to damp economic growth. Policymakers need to proceed cautiously with normalization as they have little ammunition left to battle renewed weakness in aggrega...
Concerns about excess government debt and inflation have increased interest in gold and raised its price. Gold is a commodity that behaves more like a currency, providing no investment return beyond price fluctuation. Gold's high price undermines its protective characteristics, making it more vulnerable to declines as monetary policy normalizes.
The consolidation phase for equities appears to be reaching an end, causing Credit Suisse to reverse part of a tactical downgrade from February and take equities to 2 percent overweight on a one- to three-month basis. That rate would be increased if the markets fell further or the outlook for China became clearer.
This report by the World Economic Forum looks at the strategic importance of long-term investing for financial stability and the role of wealthy families as long-term investors alongside institutional actors such as sovereign wealth funds, endowment foundations, pension funds, and other entities.
Investors buy gold out of fear that the economic and political infrastructure we count on when we buy stocks and bonds is degrading. And gold booms inevitably end with a bust. The better strategy may be to build a reasonably sized position in diversified commodities, including gold; play close attention to sound entry points; and rebalance religiou...
Articles in this publication consider the impact of long-term debt reduction on the economy and investments, a less taxing way to own hedge funds, whether equities have reached the end of an era, the interplay of the end of QE2 and municipal bonds, and assurance that we are far from having the decline of the dollar be a policy concern.
To achieve lower borrowing costs and longer payment schedules for bond-issuing eurozone countries, bond alchemists (or policymakers) must ensure that the banks holding periphery bonds don't suffer significant losses, that the issuing countries can return to the markets, and that investors are confident the countries won't default.
The authors examine a range of topics, including the narrowing gap between returns on different asset classes, signs of the coming economic upturn, the strategy of alternating between risk-on and risk-off modes, inflation and economic crises around the world, performance of specific asset classes, and innovation as China's next growth driver.
The hedge fund industry is reinventing business models and best practices to address regulatory changes and investor demands for enhanced fund transparency, liquidity, and efficiency. Investors, fund managers, and regulators are looking to third-party administrators to provide objective risk assessment and reporting.
The U.S. economy lacks clear drivers of sustained growth, and there is no "quick fix" for the housing and structurally high unemployment situations. While there is much debate about what the federal government can and cannot do to change this dynamic, it is hard to see any real solution other than a gradual, often volatile recovery pattern over sev...
The debt issues faced by the developed world, macro imbalances, and the unpredictability of global policy actions make this an especially uncertain environment. However, the Fed continues to make low-risk assets very unappealing. Overall, global equities appear reasonably priced in light of the paltry real returns on bonds.
This summary report of the second quarter provides a high-level view of global economic data as well as global and U.S. economic trends. In addition, it examines individual market segments, including U.S. fixed income, U.S. equity, global equity, international equity, hedge funds, private equity, and real assets.
While some people are crying out that the U.S. economy is dead or dying, the economy itself seems to be protesting otherwise. Look for continued slow but steady growth in the United States and globally, with commodity prices stabilizing and Japanese supply chain worries easing. But policy and market action are needed to restore investors' confidenc...
The world continues to work through a long-term structural shift of economic and political influence to a group of emerging economies, most notably China and India, while the developed world fights the hangover of more than a decade of excessive spending and debt accumulation. These long-term structural changes should drive patterns of economic gro...