Evercore Pan Asset

The Greek bailout relies on forecasts of modest growth in Greece from next year onwards. The EU and Greece will have to work hard on policies which can generate that growth. Without it tax revenues will disappoint, and the Greek state will need more special borrowings from the EU and IMF.

Many western funds have little or nothing in some of the great emerging markets of the world.  Over the last quarter they have watched these markets rally strongly. Some will start to ask themselves whether they too should buy into this large part of the world economy which is succeeding in growing rapidly.

The Greek talks to intensify the austerity package show that the Euro crisis is far from over. It is good news that Spain and Italy can borrow at acceptable rates for the time being,but somehow the Euro area leaders have to find a way to stimulate growth to make the adjustments easier.

The new year has started well for investors in riskier assets. The money easing in the US, UK & now in Euroland from the ECB is helping. So too is the shift to easier money in the emerging market world. Our increase in Chinese investment late last year is paying off.

It looks as if the two Anglo Saxon economies of the US and the UK have struck it lucky.  Rising estimates of shale gas could change the assets/liability balance and the trade accounts of these two economies for the better, as the finds are firmed up & extraction is developed.