Back to Basics Purvey of Neither Mars nor Venus

Within elevated volatility likely lies a new cycle from late 2009 with a quality overlay remaining a quotient continuum. However, the April 2 2009 meeting of G-20 leaders is likely to be high stakes in reviving the art of leadership in political, in monetary and business affairs. We regard Europe as the weak link as quality and grasp of basics is neither purvey of Mars nor Venus. Despite different political systems, we see leadership similarities from U.S. President Obama elected in difficult economic times with potential for 10% unemployment and Chinese Premier Wen in the August 2008 Sichuan earthquake and displacement of some 20 million migrant workers.

Incremental vision is not served by European Commission president questioning the ability of China (and by implication other emerging countries) for a “culture of a common setting of rules”, of the German Finance Minister enunciating again claims of United States terminal decline, this time from financial debacle or overemphasizing soft targets like eliminating tax havens. Germany and the ECB need only look to post war efforts by Chancellor Adenhauer/Finance Minister Erhard and the Bundesbank to tune empathy and delivery. The next monetary challenge will likely be managing the withdrawal of liquidity but immediately upcoming, we see potential trillion dollar plus toxic asset auctioned spin off under public/private TALF sponsorship in the U.S. as freeing up prices potentially and freeing up of financial capital by massive quantitative easing from the Federal Reserve, from the Bank of Japan, the Bank of England and others including in intent the Swiss National Bank.

Click HERE to read the complete article.