Is This Time Different? … No!

There is a growing view that investment returns in financial markets are increasingly driven by central bank policy action rather than fundamentals (such as the macroeconomic outlook, business cycles  and corporate earnings) prompting questions to be raised about the very nature of free market investing. We have already seen the impact of government policy play […]

Growth Chill About to Hit the US

At the start of 2012, the consensus view was for a mild recession in the Euro Area, deceleration of growth in emerging markets (with a soft landing in China) and below trend growth in the US. In late January, we ascribed an 80% probability that the US is on the brink of a recession with […]

The End of Financial Vandalism – Moving Forward to the Real Economy

“You’re entitled to your own opinion, but not your own facts.” – Author Unknown

History shows that the pace of change is generally slow but accelerates due to either a technological breakthrough or a major crisis. The invention of the steam engine resulted in a major rise in productivity while the Second World War led to the Bretton Woods monetary system. What change has the recent financial crisis brought? A few months later we made our peace by blaming it all on sub-prime debt, greedy bankers and the decision to let Lehman Brothers fail. However, a lot of questions still remain unanswered.

At Auvest, we believe that asking the right questions is as important as finding the answers and this is what we have attempted to do in this report. The challenge we faced was to condense an internal research project that was much bigger in size and scope into something that would be concise and yet do justice to the subject. We hope that this report will raise a few questions while providing a perspective on the past drivers of global growth, an analysis of the current crisis and its implications and an overview of the opportunities and challenges in the coming years.