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Jamil Baz Benedicte Gravrand, Opalesque Geneva:
At the beginning of this year, financial outlooks were polarised. In the end, the bulls were happy during the first half of the year and the bears saw what they expected in the second half of the year.
The FTSE 100 index, which started 2009 at around 4560, stayed around the 6000 level in early 2011 till August when it went down to 5000. It is now at around 5400, having lost 10% YTD. The S&P500, which was at around 930 in early 2009, went from 1270 in early 2011 to highs of 1600 before lowering to 1170 in August. Now at around 1240, it lost almost 3% YTD.
British investment management firm GLG, which recently invited an audience of pension trustees and investment consultants to discuss the market’s next direction, has just published a synopsis of what was said.
Jamil Baz, who joined GLG Partners in 2008 as Chief Investment Strategist, reports that "a lot has changed since 2007 but then again nothing has changed. The US total debt to GDP ratio was 350% back then and, after a raft of central bank intervention, it remains close to that level now."
It is leverage that is the most important issue today, he says. The deleveraging process has yet to start; and it may take forever to resolve the financial crisis. If you think that an excess of 200% of debt to GDP is unsusta...................... To view our full article Click here
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