Thu, Sep 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. SEC charges 19 investment firms and one trader for breach of Rule 105[more]

    Benedicte Gravrand, Opalesque Geneva: The Securities and Exchange Commission (SEC) started a push to enhance the enforcement of Rule 105 of Regulation M last year to uncover hedge funds and private equity firms that have illegally participated in an offering of a stock after short selling it duri

  2. Fund managers, bullish on Europe, anticipate monetary policy separation of Fed and ECB[more]

    Komfie Manalo, Opalesque Asia: At least 202 fund managers with $556bn of assets under management said that while the European Central Bank (ECB) has eased its monetary policy that sent sentiments towards Europe to pick up, the Fed is expected to hike its rate in the spring of 2015. Investor

  3. Investors looking at other sources for hedge fund-like returns[more]

    Komfie Manalo, Opalesque Asia: Investors who are always on the lookout for higher gains are looking at alternative sources of income, particularly exchange-traded fund industry that generates hedge fund-like returns, according to

  4. News Briefs - Limited partners of investment managers may be subject to self-employment taxes, Just one week left until NYC's Rocktoberfest[more]

    Limited partners of investment managers may be subject to self-employment taxes On September 5, 2014, the Internal Revenue Service (“IRS”) issued Chief Counsel Advice 201436049, concluding that members of an investment manager were subject to self-employment taxes with respect to their e

  5. Opalesque Exclusive: Old Hill Partners launches specialty finance fund[more]

    Bailey McCann, Opalesque New York: Asset-backed lending is starting to heat up again after a prolonged credit squeeze. The Financial Times reports that a record £18.9bn was borrowed from asset-based lenders in the three months to the end of June. Much of this lending is driven by advanc