Alex Borer

“Perception is still worse than reality, but the latter is deteriorating further. So far, there has been no credible solution for the European debt crisis. Liquidity issues are addressed, but not the sovereign solvency problem. US public finances are no in better shape, which limits fiscal policy responses. In terms of monetary policy, hopes for new creative measures remain, but the timing and effectiveness of these are highly uncertain. Economic indicators and market behavior signal an increased probability of a global recession. We have become even more defensive and reduce equity exposure by 5 per cent in favour of liquidity.”