Colin is an investment writer and television presenter specialising in macroeconomics and the financial markets. He is the founder of "In the Long Run", an alternative investment consultancy in 2010 advising hedge funds on sales, marketing and business development. He is also a member of the advisory committee of Asia Alternative Investments Network. Colin holds prestigious qualifications from Columbia University in the City of New York, Yale University and the University of Michigan.
· Despite the fourth quarter shakeout in stocks, real estate values keep rising · Financial conditions remain key, especially in a low rate environment · Isolated instances of weakness have yet to breed contagion · The reversal of central bank tightening has averted a more widespread correction
China is evolving from a current account surplus to deficit country Increased domestic consumption and dis-saving by an ageing population drives the trend Lower investment in developed countries may be assuaged by major central banks Emerging and Frontier markets will struggle to replace China's long-term investment
The next wave of quantitative easing (QE) will be different, credit spreads will be controlled. The Federal Reserve (FED) may continue to tighten but few other central banks can follow. The European Central Bank (ECB) balance sheet reduction might occur if a crisis does not arrive first. Interest rates are likely to remain structurally lower than before 2008.
New research from the Peterson Institute suggests bond yields may fall once more. Demographic forces and unfunded state liabilities point to an inevitable reckoning. The next financial crisis may be assuaged with a mix of fiscal expansion plus QQE. Pension fund return expectations for bonds and stocks need to be revised lower.