Lakshman Achuthan,Research Director of the Economic Cycle Research Institute,thinks the global industrial growth rate is slowing.The question is,does the slowdown turn into an outright recession?Every time you have a slowdown,the risk of recession does go up.
Confidence absolutely factors into Mr.Achuthan's work.It is a large driver of the business cycle,both from the consumer and the corporate side.You have a giant era of pessimism following a crisis.That's exactly what you're seeing now,Mr.Achuthan believes.
Byron Wien,a Vice-President at The Blackstone Group,L.P.,notes that people aren't buying stocks because they're worried there's a structural impairment.We're deleveraging,and on that basis growth is gonna be slow.This is a fear trade.
Since 2000,there's been zero return on equities.One percent return on Treasuries is better than zero.Eighty percent of the time,the market does go up over the course of a decade,but the days of a 15% return over a 20 year period are not coming back,Mr.Wien cautioned.
Treasury yields have been pushed to record lows as investors distrustful of the recovery seek the traditional safe havens.
The Blackstone Group,L.P.(BX)
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