worsened today’s large imbalances. Indeed, they have created an uncertain environment,damaging confidence for long-term investment.To be sure, government officials will likely continue to intervene in our capital markets shouldeconomic conditions continue to deteriorate. These actions may cause bullish shifts insentiment as well as powerful relief rallies, especially given that investors have grown toembrace central bank intervention as a panacea. However, in the absence of significant fiscalstimulus (both in the U.S. and Europe), monetary authorities may find themselves unable tostop the eventual process of restructuring that needs to take place.The coming years are likely to remain turbulent as China continues on its course to become the “world’s consumer,” as the U.S. was for many decades, while the U.S. and most of Europeretool their economies to feed China’s eventual insatiable consumer demand. There are wildcards in regard to the long-term direction of the global economy however, the mostsignificant being in the presidential election this coming November.Regardless, if world leaders can successfully navigate the treacherous waters of globalrestructuring over the coming years, eventually today’s seemingly endless period of weakeconomic performance will lay the foundation for a powerful secular bull market that may lastfor decades.Until then, investing today will require flexibility, risk management, and a willingness toembrace the fact that buy-and-hold investing has taken a back seat for the time being.-------------------------------------------Current Investment EnvironmentBoth bulls and bears are wrestling for control of U.S. equity markets. Recently Europeannounced a solid step forward towards fiscal union, agreeing to institute a region-wide banking regulator by the end of the year, while core-countries allowed the use of bailout fundsfor direct capital injections to ailing banks. Officials also renounced the preferred status of the bailout funds vs. peripheral sovereign debt, putting to rest the lingering concern of seniority over sovereign bondholders. In the U.S., the housing market has provided forincreased optimism that the worse is finally over for the real estate market. The job market, while slowing, is showing signs of resiliency. Alternatively confidence in any Eurozone solution has waned markedly after 19, 20 (lostcount) summits without a sustainable resolution. Moreover, economic data has beendepression-like in the Greek and Spanish economies, while Germany is showing signs of infection. Finally, Eurozone austerity is having a profound effect on the Chinese economyand may be hitting U.S. shores given last week’s ISM manufacturing data.