Thu, Dec 18, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

World outlook and risks: Asset manager sees vulnerability in developed countries, IMF lowers forecast

Friday, July 25, 2014

Benedicte Gravrand, Opalesque Geneva:

Vulnerable to shocks Syz & Co, a Swiss bank and asset manager, has just issued its own economic outlook, defining three major risks weighing on the world’s markets.

The first risk would be short term; if economic growth in the U.S. is too strong and inflation accelerates, that would force the Fed to tighten its monetary policy much sooner than expected, bringing volatility to the bond and credit markets, and consequently to the stock market. Today’s market is not ready for that.

The second risk concerns China. Growth of private credit has grown there farther than nominal growth for several years, which means that growth will likely lessen, and that credit is inflating faster than growth. There may be a bursting of the bubble, leading to negative economic performance in China, and eventually in the rest of the world. This would create deflationary shock, as what happened in the 1990s in emerging countries – which were not as big as China. And in those days, developed countries’ central banks had what it takes to combat these exogenous shocks.

Today’s ultra-accommodative monetary policies and low reserves mean that developed countries are vulnerable to such shocks on growth or inflation. This is the main risk that weighs on the markets, according to Syz.

World growth forecast down due to "tempor......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Investing - Big hedge funds win again on PetSmart, Riverbed, RBS sells real estate loans to hedge fund Cerberus, Talisman energy speculation: Which hedge funds could benefit?[more]

    Big hedge funds win again on PetSmart, Riverbed From CNBC.com: Another week, another set of wins for activist investors. On Sunday, pet supply retailer PetSmart agreed to the largest leveraged buyout of the year at $8.7 billion. Hedge fund firm JANA Partners had been pushing for a sale a

  2. Outlook - Hedge fund manager who remembers 1998 rout says prepare for pain, Bond guru Bill Gross predicts U.S. economic growth to dip to 2%[more]

    Hedge fund manager who remembers 1998 rout says prepare for pain From Bloomberg.com: Stephen Jen landed in Hong Kong in early January 1997 as Morgan Stanley’s newly minted exchange-rate strategist for Asia. He was soon working around the clock when investors began targeting the region’s

  3. Opalesque Exclusive: U.S. legal receivables fund launched in August[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: Investing in asset-backed receivables is a strategy that has been an integral part of the alternative investment space within the overall fixed income asset c

  4. Comment - High fees and low performance hit hedge funds[more]

    From FT.com: Disenchantment over high fees and lackluster performance may finally be turning the tide against hedge funds, fresh data suggest. Despite generally weak returns since the global financial crisis, hedge funds have enjoyed positive net inflows every year since 2010. This helped assets und

  5. Performance - Lansdowne, Man Group, other hedge funds profit from shorts in oil, Turmoil boosts hedge funds that bet against Russia, oil, CTAs post strongest returns since December 2010[more]

    Lansdowne, Man Group, other hedge funds profit from shorts in oil From Valuewalk.com: The rising short interest in oil companies implies that the worst for oil is yet to come. Data from Markit shows that short exposure in energy sector of S&P 500 is still looming close to the highest mar