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First Quarter 2010 GTAA Macro

First Quarter 2010 GTAA Macro

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Published by zerohedge

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Published by: zerohedge on Jan 12, 2010
Copyright:Attribution Non-commercial


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o a ac casse oca on
 January 9
 , 2009
Damien Cleusix
Clue6 First Quarter 2010
am en c ue .com
 It’s frightening to think that you might not know something, but more frightening to think that, by and large, the world is run by people who have faith that they know exactly what’s going on”
A. Tversky
“The best investors do not target return; they focus first on risk, and only then decide whether the projected return justifiestaking each particular risk”
S. Klarman
“Risk means that more things can happen than will happen “
E. Dimson
“The more you bet, the more you win…when you win”
Las Vegas saying
Clue6 First Quarter 2010
Executive Summary
collapse has been avoided
thanks to the resolve of Central banks and governments around the world
we will
still have
. ,changing accounting rules and providing huge amount of emergency liquidity) and lower interest payments pushing debt toasset lower and improving interest coverage but they can not do this forever…The recession which probably ended sometimes during the summer was not a typical inventory-led one were more that 75% of 
the decline is due to de-stocking. It was the beginning of a "balance sheet" recession which is going to haunt us for many yearswith poor growth and intermittent relapse into recession (here we are talking about developed leveraged countries, financiallyunleveraged developing countries will suffer because of their operating leverage but will end up as winners if they do the rightreform)The
deleveraging process in unavoidable
. Analysts have spent a great deal of time commenting on the collapse of creditavailability but we think the biggest problem for growth in the medium-term will be a lack of credit demand. Many householdsand companies have realized that they could go under and they are going to build a buffer...
Nationalism and protectionism
will gain in popularity while there is a big risk of 
going on a rampage (we see astrong risk of this cyclical ERROR like the commercial banks reserve increase in the 30’s or the VTA hike in Japan in the 90’shere) after doing too little for so many years…Populism will be a winning strategies for politicians, even more than before…The current macro data has surprised on the upside with the success of the cash for clunkers schemes around the world (whichprobably added up to 4% to US growth in the third quarter), various forms of help for first time home buyers, the socializationof the credit market in the US and Europe or the credit explosion in China...
We continue to see the current improvement as anormal snap back from the worst macro environment since the 30's. It should not be confounded with a strong recovery.
Clue6 First Quarter 2010

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