A lot of moving parts in a busy busy world

Below is a link to another good piece by Nouriel Roubini (on oft quoted favorite) and Ian Bremmer (author of “The Fat Tail: The Power of Political Knowledge for Strategic Investing” (Oxford University Press, 2009).  In short, they lay out what they believe the Fed must do to navigate this ongoing crisis and prevent or mitigate the next one.  There are many things that the Fed alone must do correctly to avoid either causing another recession/deflation (as they drain the sea of liquidity during a recovery) or another yet-unknown bubble (by leaving rates too low for too long as Greenspan did in 2003-2005).

The Fed is just one institution and there are many things it must get right.  There are many institutions (e.g., Congress, banks, investors) and many countries acting on the global financial stage.  There are many opportunities in the world today.  There are many potential pitfalls.  Real diversitification is more important than ever.  As we describe it, US investors have moved from a checkers to a chess world.  This requires a fresh look at how portfolios are constructed and managed.

http://online.wsj.com/article/SB10001424052748704471504574446941541499588.html?mod=WSJ_hpp_sections_opinion

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: