Below a good piece from Kevin Gaynor, one of Nomura's Sceptical Strategists.
I had the pleasure to meet him and Bob Janjuah a few months ago and recently exchanged a few e-mails with Bob.
I guess their predictions have been on track with what we've talked about earlier this year. Therefore, one more reason to analyze their views, findings, etc.
These are experienced 'realists' who, despite defending that we're suffering from serious structural economic problems in Developed Economies, still point to bullish views in certain asset classes. Eearlier this year it was risk-markets. This time USD and Bonds on the back of ending monetary stimulus in the US that should reduce the amount of USD available (liquidity), therefore impacting economic growth and risk-markets.
Weekend reading, for when the kids are running around the house like maniacs and your husband is watching some soccer match.
2011 05 13 - The Sceptical Strategist - Kevin Gaynor - The Correlation Collision Part 2
*Disclaimer: charts and data are presented as I receive/see them. Sources are usually not checked for validation and my own calculations are of 'back of the envelope'-type. I am aware that some math that I do myself might be wrong and/or misleading to some extent. In financial markets the rate of change of economic data is often more important than the actual level and the perception of 'what is priced in' is more important than 'what is actually going to happen'. This is actually the way people pick entry and exit points. So... yes, sometimes you might say 'This guy is an idiot, this is way wrong!' with a high conviction, being right. Not to worry. Markets are made of expectations and the clash of conviction between its participants. Portfolio managers know that being an idiot is sometimes profitable and being smart is often a bad choice. It is all reality, sometimes good, sometimes bad. By the way: corrections to my analysis and intelligent debate is welcome. theintriguedtrader AT gmail do com