By aggressive leaning against this core of capital markets, politicians and central banks risk prolonging the agony instead of assuaging it. In the markets, it is crucial for authorities to allow the risk portion to function in the risk-reward spectrum, as the Swiss National Bank enforced, notwithstanding reported internal commercial bank angst. Instead of the consensus focus on earnings leverage, we see for most sectors, operational depth as crucial for revenues. For investors, we see the implications as clear in favoring quality but also and contrary to myriad opinions, in likely continuation of enhanced volatility. For corporations and investors alike, this likely means maintaining an investment barbell to mid 2011 of higher than normal cash for this point in recovery, low returns notwithstanding.
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