Source: Investment Outlook Sept 2009

  • Growth has stopped due to DDR: deleveraging, deglobalization, and reregulation
  • this will lead to slower growth for the next… 10 to 20 years
  • why?
    • the game of foreign countries making things and US consuming them in exchange for debt is over
    • private free enterprise is dead and the fist of visible government is taking its place
    • changes in global economic leadership… emergence of china
    • US homeownership will continue to decline
  • there are a number of broken business or economic models that forever change the world we know it… (the era of buy on dip may be over for some time)
  • I repeat: the “New Normal” cannot be easily modeled econometrically, quantitatively, or statistically
  • investing implications:
    • global policy rates will remain low for extended time
    • extent and duration of QE are critical to investing
    • investors should “shake hands with government”
    • Asia, and Asia-connected (Australia and Brazil) will dominate future growth
    • dollar is vulnerable
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