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Benedicte Gravrand, Opalesque Geneva:
While the U.S. Fed is embarking on a new quantitative easing programme, a tax-cut regime (agreed last week), and enjoying a healthy Treasury bond market, Europe, dominated by the return of the sovereign-debt crisis and fears of contagion, is arranging spending cuts, tax increases and reviewing its banking and currency systems. As The Economist said this week, America is injecting itself with another dose of stimulus steroids just when Europe is checking into rehab and enduring cold turkey.
All felt the impact of the Eurozone turbulences this year (Greece, Ireland, Spain first, Portugal and Italy to follow), says Palladio Alternative Research in its 2011 Macro investment themes & Hedge fund strategies report. Budget deficits, lack of coordination in European policy, contradictory communication have generated systemic risk and sharp volatility. Market timing was and still remains impossible to predict.
Some indeed believe that the current European difficulties will lead to a volatile cycle of market pressure and policy response.
Christopher Probyn, chief economist at State Street Global Advisors in Boston, talked to Opalesque when he visited Geneva last month, before participating in a panel discussion at a 100-Women-in-Hedge-Fund's session about the greatest sovereign credit risks.
PIGS countries (Portugal, Ireland, Greece, Spain) have set a recovery t...................... To view our full article Click here
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