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Bennet Sedacca Jun 02, 2008 2:15 pm

“Our understanding of the best practice in monetary policy evolved during Alan Greenspan's tenure at the Federal Reserve, and it will continue to evolve in the future.”
- Federal Reserve Chairman Ben Bernanke


About ten days ago, I was interviewed on Fox Business News as a part of a Minyanville daily Fox News ritual. The first question I was asked was "What inning of the credit crisis do you think we are in?" I have to confess that the answer I gave was one that I heard one morning on the way to the office. A British economist on Bloomberg Radio stated that "We have heard the National Anthem but we haven’t had the Seventh Inning Stretch." I have to admit that I couldn’t have said it better myself.

On a recent business trip to New York City and Greenwich, I had the pleasure of speaking with some of the brightest professionals in our industry. My biggest take away from the trip and meetings was that the over-40 crowd is concentrating mostly on the macro-economic or big picture. At Atlantic Advisors, that is where have always begun and let our big picture beliefs guide our asset allocation decisions and let other, more cyclical indicators such as investor sentiment, valuations, cyclicality and short interest influence actual portfolio positioning.

Another important takeaway was that the older and more experienced investors were the more concerned they were. After all, if you haven’t lived through a credit crisis, it's hard to fully appreciate what that unwinding of a credit crisis looks like. When we consider that the build-up of credit and derivatives during this past cycle is so unprecedented, the more difficult the unwind is likely to be.

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· Merrill says gap between rich and poor will worsen

· Governments must curb rising prices, insists bank

* Andrew Clark in New York

* The Guardian,
* Friday May 23 2008

Riots, protests and political unrest could multiply in the developing world as soaring inflation widens the gap between the "haves" and the "have nots", an investment bank predicted yesterday.

Economists at Merrill Lynch view inflation as an "accident waiting to happen". As prices for food and commodities surge, the bank expects global inflation to rise from 3.5% to 4.9% this year. In emerging markets, the average rate is to be 7.3%.

The cost of food and fuel has already been cited as a factor leading to violence in Haiti, protests by Argentinian farmers and riots in sub-Saharan Africa, including attacks on immigrants in South African townships.

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By Ambrose Evans-Pritchard, International Business Editor

Last Updated: 12:01am BST 15/05/2008

The OECD's early warning signal is flashing clear signs of economic weakness across the world, with mounting evidence that China, India, and Brazil may soon succumb to the downturn.

A crowded street in Delhi: OECD warning as stagflation goes global
Rush hour: a crowded street in Delhi. There are fears that
India could soon succumb to the downturn

The closely-watched gauge -- known as the Composite Leading Indicators (CLI) -- has picked up a sharp deterioration in the eurozone in March, notably in Italy and France where the advance signals are falling even faster than in Britain. The measure tends to anticipate the industrial cycle by about six months.

While growth continues to power ahead in most emerging markets, rampant inflation is starting to damage business confidence. "The latest data point to a potential downturn in Brazil, China, and India," said the OECD, the club of rich nations.

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