Key points for 2008:
- high growth, higher risks
- US remains the focus of risk
- Emerging market sill in the hot seat
- Beware of swans! (the things you never have seen, expect to see and all of a sudden they’re in front of you - like 9/11)
US: uncertainties remain. The
Forecast: 40% chance of
Three issues to keep in mind:
- an issue for
- central banks can mitigate this - Fed cuts discounts rate, bank pump money into markets
- lessons from
Deleveraging issue (“this is the serious one”)
- asset increase goes into reverse (because people have lost trust)
- margin calls, insolvencies
- central banks powerless
EU: a solid performance, but beware headwinds.
The ICs (
And the rest of
What does all this mean?
More trouble ahead?
The great bubble bursts (balance sheet inflation is unsustainable, less liquidity, fewer M&As, less froth)
Oil market shock - short-term risk on the downside (emerging markets are at risk from a downwards commodity correction)
Conclusion: Risk never disappeared, it just went into hiding.
This keynote was set up to help us understand the context of our work and the opportunities this economic context gives us.