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Worried economists, Commerzbank to use Artificial Intelligence for hedge FoF optimization, Harry Kat says his FundCreator hedge fund replication model able to create `zero correlation fund`

Tuesday, June 19, 2007

Benedicte Gravrand reports ‘live’ from the GAIM conference, Monaco:

The State of the World Economy

Two geo-political experts, Charles Dumas of London-based Lombard Street Research (author of ‘The Bill from the China Shop’) and Hagai Segal of New York University (London), together with The Economist’ U.S. editor Zanny Minton Beddoes, discussed the transition the world economy is currently going through. Economists see the economy as suffering symptoms of fairy-tale state, and have been predicting doom and gloom for quite a while. The panel went through those very motions, with some interesting observations.

In a climate of uncertainty, the main worries are 1) the risk of inflation; 2) U.S. economy proving to be weaker for longer than expected; 3) the political risks (U.S. anti-Chinese legislations being possible); 4) unforeseen political chocks to have bigger impact on financial markets.

  • Consumer spending in the U.S. remaining high despite trade deficit proves that the U.S. economy is resilient – although it has gone down slightly of late.
  • Europe is a microcosm of global saving and investments (Europe exports mainly to Europe) and growth rates may be inhibited.
  • Stock markets are not seriously overvalued, and prices are not necessarily associated with inflation.
  • Metals present new market opportunities.
  • There are underlying problems arising from policy mistakes (in the U.S.)......................

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