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From Kirsten Bischoff, Opalesque New York:

When looking at the 2010 global economic environment one might borrow some phrasing from former Secretary of Defense Donald Rumsfeld, "There are known-knowns. There are things we know we know. We also know there are known-unknowns. That is to say, we know there are some things we do not know. But there are also unknown-unknowns, the ones we don't know we don't know."

A tongue twister for sure, but as 2010 gets underway, many managers are trying to make a very similar determination. Will events this year stay within the realities of imaginable scenarios we can prepare for and adjust risk for? Or are market participants likely to feel as bowled over as they did during 2008, with market activity that was beyond what most had prepared for?

"2010 will be a year of unpredictable and unquantifiable events," surmises the team at California-based macro firm, SEAL Capital.

Hedge funds across the board took risk off the table toward the end of 2009, even sitting out some of the final market gains because of expectations for a market correction. After gaining back a large portion of 2008 performance losses, managers did not want to lose the renewed faith that investors had in them by giving back gains. The beginning of 2010 has proven their fears to have validity.

As SEAL Capital points out in their 2010 Outlook Report, although ......................

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