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Date Submitted: 06/13/2011 03:26 AM
LBS Conference on Asset Management (12/11/2010)
John Authers
* Is there really a risk free rate in the current economic situation?
* Is there an uncorrelated asset?
* 2007 Credit risk, 2008 Liquidity Risk, 2009 Market Risk, 2010 Sovereignty Risk
* Fixed income leaders: PIMCO, BLACKROCK
* Chinese inflation concerns have led to higher interest rates and an appreciation of their currency which has led to current falls in equity markets.
* Irish default 2012 has led to fears of contagion across EU
* QE, buy US treasuries, increase price of bonds, lower interest rates, depreciate USD, exports more competitive and stimulate internal demand to lower risk of deflation.
* Is there a bon d bubble? Not in the classic bubble speculative mania sense. But there is an artificial repression in the market. The governments are making sure that the markets stay high through regulation and pension policies.
Credit Risk Panel
George Spentzos
* In an era of credit risks: sovereign, corporate, etc
* Accumulation of sovereign debt has led to high level of uncertainty
* Demographics are becoming increasingly important
* Where to invest? When there is a weak USD, and a weak GDP growth scenario
* Below trend growth recovery
* Best returns in the past year: gold, emerging market corporate markets.
* Emerging markets don’t carry same baggage as developed countries, they’ve had better fiscal policies.
* Corporate debt is highly correlated to what is going on in emerging market. Many developed country corporations have operations in emerging markets. They have higher betas and hence, higher returns. Balance sheets have been cleaned up and default has become less likely.
* However, sovereigns still polluted.
Louis Gargour
* In a world where fundamentals don’t matter, perceptions do.
* Banking isn’t the alluring industry it used to be.
* Gold: Bretton Woods, back to the same issues, G-20 protectionist policies...