The US economy is currently in a slowdown. How significant is this?  If we assume that trend growth for GDP is 4%, as was widely believed to be the case pre 2008, then 2.5% GDP growth would have indicated an economy failing to recover fully in its latest cycle, which would be quite negative. If,

Corporate balance sheets have been significantly repaired since the crisis of 2008. On the other hand, sovereign balance sheets became and remain in poor condition. Most countries have addressed this problem by instituting programs of debt monetization with, as an associated bonus feature, artificially low interest rates across the relevant term structure.

The first quarter of 2013 has ended with risk assets mostly higher than at the end of 2012. It would seem that the optimism that greeted the new year was well placed. Indeed many of the problems in the world have been solved, patched or postponed.

The cool thing about the Euro is that it doesn’t really work, and yet, the politicians in Europe insist on having it. This creates periodic buying opportunities. Here is an indirect Euro ‘we’ll hold it together come hell or high water’ trade.

Inflation is an emerging market problem created in the developed markets. Equities are being boosted by factors other than fundamentals, which is fine. We invest and spend in nominal terms, it pays to stay invested and it costs to not be invested. Uncertainty prolongs trends, consensus ends them. Until bullishness reaches an extreme, the trend